Local pros offer investment advice for first-timers

Friday, January 12, 2018

The American economy witnessed a number of record breaking moments in 2017, which has sparked additional interest in the arena of investing. Levi Morris, financial advisor at Community State Bank, suggested common regrets by more experienced investors is not becoming interested earlier in their lives.

“Across the board, if you talk to (an investor) that’s older than you, unanimously they say ‘I wish I would have invested more and I wish I would have started younger,’” Morris said.

Dean Jacobsen, wealth advisor at Northwest Bank, said a good first step to entering the investing world would involve meeting with a financial advisor. Both Jacobsen and Morris said that asking questions is key.

“If someone is thinking of getting started in investing or getting in or out of the market, they should certainly have a financial advisor — someone they can bounce their ideas off of,” Jacobsen said.

“The biggest thing I would say to start is to ask questions,” Morris said. “It doesn’t have to start with an advisor, it can be with anyone you feel close with, that can be parents, coworkers, teachers, other friends, and also don’t be afraid to ask an advisor any questions. With what I do I’m finding that ... it’s way more complicated that you could ever imagine.”

Jacobsen and Cole Milbrath, financial advisor at Prairie Plans, offered suggestions on how to find the right financial advisor.

“The three most important things to consider when choosing a financial advisor would be No. 1, make sure your advisor has a fiduciary responsibility to you as an investor,” Jacobsen said. “No. 2, make sure you find someone you can communicate very quickly with and develop a strong relationship with. That communication process ultimately becomes one of the most important things going on with your advisor. No. 3, there has to be an investment philosophy that you as an investor can believe in.”

“How can we get from here to here?” Milbrath said. “... We’re problem solvers.”

The trio said that a great time to grow an interest in, or start asking questions about investing, is early on in an individual’s working career, although all three professionals suggested that there really isn’t a “wrong” time to start a plan.

“... The earlier you can start, the easier it is to plan,” Milbrath said. “That just kind of goes with anything in life. The earlier you can start something, the longer you have to play around with it, make adjustments, that kind of a thing. As far as what age group would be the best time to start, ... there’s no wrong time to start. ... Somebody at 20 years old is not going to have the same investment strategy as somebody that’s 60.”

“If you haven’t met with a financial advisor, today is the time regardless, to develop a plan,” Jacobsen said.

Jacobsen suggested potential investors should be thinking long term.

“The most important thing is to have a long term plan — to know what you’re trying to accomplish,” Jacobsen said. “... Develop your plan around that, then ... (once) you have a plan and don’t deviate from that plan, you continue to work that plan and that’s what keeps your focus.”

One of the many difficulties that face those just beginning to gain an interest in investing is their emotional ties to their investments.

“One thing that maybe gets almost everybody at some point or another, is where the market starts going down,” Milbrath said. “There’s that emotional factor that ‘My money’s disappearing as I’m watching it.’ They don’t like that and I don’t like that either. The misconception that maybe I see is that people feel that the market is always going to make money, that’s not the case. Somebody who’s just starting out working has 40 years ahead of them, they could see five or six market corrections in their working lifetime, that’s just part of the economy, there’s nothing we can do about it. To some degree, we play a little emotional support that way.”

“I’ve turned 75 percent psychologist and 25 percent financial advisor,” Levi Morris said. “When you talk to individuals each person is different, so you have to understand how they handle it, from an advisor’s standpoint.”

“You see in sports games, people have their emotions change and their focus changes,” Jacobsen said. “The good teams don’t get emotional, don’t lose their cool and keep their focus. When things are getting high don’t loose your cool, keep your focus and situate yourself for the recovery.”

Milbrath and Morris both noted that despite whether the market was trending one way or another, depending on the individual’s plan, opportunities are still available.

“A bull market is an up market, a bear market is a down market, in theory our strategy doesn’t change in either of those,” Milbrath said. “We’re still doing our research finding out which investments have the greatest upside. ...”

“The market does have its ups and downs,” Morris said. “If it does go down and you’re buying quarterly or monthly, each month you’re buying at a lower price, if it goes up of course your account goes up, if it goes down you’re buying at a cheaper price.”

Jacobsen reiterated that any investment choice is dependent on the individual.

“It would be wrong for any advisor to say ‘this is the time to invest,’ or ‘this isn’t the time to invest,’ without understanding the total situation for any investor,” Jacobsen said. “The answer is going to be different for everyone. To give advice without understanding the goals of the investor, recommendations shouldn’t be made.”

Morris said that a recent investing trend he has noticed involves an increase in young people starting their investment plans.

“Personally in the last month I’ve had three individuals that are one year out of high school start investing,” Morris said. “... The school now has that ‘Game of Life’ day for seniors where they teach them about how much life really costs, and it’s a big eye opener. ... You don’t realize how much things cost. ... I think these younger individuals are seeing that benefit and I think it also comes from home. If you have a situation where your parents are fond of the market and believe in its long-term benefit then they can push their kids to start that.

“(Seeing) that makes me feel fantastic, if there’s one group of people I would want to convince to do that it’s the younger age group, because they’re the ones that are going to see the biggest long term benefit. To see that growth, there’s nothing that can explain (how it feels) sitting across from someone and helping them achieve their goals.”

Respond to this story

Posting a comment requires free registration: