INVESTING CAN BE INTIMIDATING. How can you make smart decisions in a volatile market? We spoke with Jason Maas and Andy Burish, Managing Directors of The Burish Group at UBS, to learn their best advice for handling your money. Here are five of their tips.
Don’t Let Your Money Depreciate
Funds in a savings account often earn no more than a few decimals of a percentage point on the dollar (the average percentage yield is only .40%). With inflation rising, that money isn’t just not earning anything – it’s actually worth less every year. “It’s typical that people leave their money in a savings account instead of putting it to work,” says Burish. That can be a real mistake over the long-term. Smart investing should keep pace with inflation instead of allowing your money to lose value in a savings account.
Calm Down and Breathe
If the past three years have taught us anything, it’s that the market can sometimes be frightening. “Human behavior is prone to be fearful when investing,” Burish says. “One might not know how to ride the waves.” There can be peaks and there can be valleys. “There are emotional dangers to investing,” Maas says. He points to the example of someone suddenly selling their investments during a downtime – or investing far too much during a boom. Both can have serious financial consequences, and both can be avoided by working with an experienced advisor with a cooler head.
Find an Advisor You Can Trust
Maas compares a good financial advisor to a trusted co-pilot. “If you don’t believe your advisor has your best interests at heart, if you don’t believe they have the skillset or the experience, if you’re questioning their abilities or motive, then you’re undermining your entire reason for having an advisor in the first place,” says Maas. “You really want to find someone who can guide you and be with you every step of the way, someone you trust through ups and downs.”
How do you find that co-pilot? Obviously, some of it comes down to a personality fit – the kind of personal read you get on an advisor when you meet them and talk about your future – but Maas also points out an important tool you can use to check out a potential advisor. BrokerCheck (brokercheck.finra.org) is a free tool from FINRA (Financial Industry Regulatory Authority) that can help investors research the professional backgrounds of advisors, letting you know their employment history, regulatory actions, arbitrations, complaints and more. It gives you a useful snapshot of their history to judge.
Hedge Your Bets
Stocks and bonds aren’t the only investments out there. Maas and Burish both help manage their clients’ investment risk by using “alternative investments” to diversify their portfolios. A lot of investments fall into that umbrella, but some big ones are real estate, private credit and hedge funds. In 2022, stocks and bonds dipped, providing a negative return on average, so many investors who had a percentage in alternatives were better hedged against that loss. Burish aims to diversify portfolios with about 15-25% in alternative investments, and often incorporates investment in assets outside the U.S.
Plan for Now; Plan for the Future; And Plan for Your Legacy
Step one of any meeting with a financial advisor is all about outlining goals. Are you looking to retire in thirty years? Or maybe ten? Do you want to leave a sizeable amount of your estate to your children? How much money do you need in the short-term to maintain your standard of living? Burish and Maas both group these goals into three strategies: liquidity, longevity and legacy. Liquidity is money available for short-term needs; longevity is money to invest and grow in the longer term; and legacy is what you want to leave behind. For example, one client might have a significant portion of their money in safe, relatively low-return investments to ensure they have liquidity for the next three years, then another portion in higher-return investments to draw on over the next two decades; and a portion of their money dedicated to reaching their legacy goal. “This strategy helps us step outside the current moment in the market and really consider the full picture,” Maas says. “It’s a crucial framework for making good decisions.”
Andy Burish and Jason Maas are Financial Advisors with UBS Financial Services Inc. a subsidiary of UBS Group AG. Member FINRA/SIPC in 8020 Excelsior Drive, Madison, WI, 53717. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. Investors should be aware that alternative investments are speculative, subject to substantial risks (including the risks associated with limited liquidity, the use of leverage, short sales and concentrated investments), may involve complex tax structures and strategies, and may not be appropriate to all investors. Alternative investments may be illiquid, they may not be required to provide periodic pricing or valuation information to investors, there may be delays in distributing tax information to investors, they are not subject to the same regulatory requirements as mutual funds, and they may be subject to high fees and expenses, which will reduce profits. Alternative investments are not deposits or obligations of, or guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency. They should not constitute an entire investment program.
The views expressed herein are those of the author and may not necessarily reflect the views of UBS Financial Services Inc Neither UBS Financial Services Inc. nor its employees (including its Financial Advisors) provide tax or legal advice. You should consult with your legal counsel and/or your accountant or tax professional regarding the legal or tax implications of a particular suggestion, strategy or investment, including any estate planning strategies, before you invest or implement.
As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an SEC-registered broker-dealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that you understand the ways in which we conduct business, and that you carefully read the agreements and disclosures that we provide to you about the products or services we offer. For more information, please review client relationship summary provided at ubs.com/relationshipsummary, or ask your UBS Financial Advisor for a copy. IS2303578; Expiration 6/30/2024
This story is part of Milwaukee Magazine’s July issue.
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