I promise I do not make this stuff up. This is a conversation that occurred earlier this week. No names, of course. Not only are the actual words included, but my thoughts are thrown in for a little entertainment.
“Hey Matt, thanks for returning my call.”
“Yes ma’am, what can I help you with?”
“On your 1 to 5 scale, where is my money invested currently?”
happy that this client remembered my risk tolerance question, and the corresponding scale that went along with it
“Well Mrs. Roberts, when we last spoke, I explained that on a 1 to 5 scale with 1 being conservative and 5 being aggressive, I had you invested at about a 2.5. Is that still where you wish to be? Has anything changed in your financial life?”
doing my job…tirelessly
“What percentage do I have invested in stocks?”
“As of last night’s close, 42%.”
starting to worry that this investor is about to make a big mistake
“Well, my PASTOR said something last week that got me a-thinking.”
oh no…her PASTOR? this is gonna be good
“He said to take the number 100, and subtract out your age, and that is the percentage that you should have invested in stocks. Well, by my math, since I am 60, I should only have 40% invested in stocks. What are your thoughts on that?”
“My first thought is: how does your Pastor have time to read the Bible and preach the word all while being a part time asset allocator?”
did I say that out loud?
“Being a good advisor is a full time job for me, and even then, sometimes I struggle to maintain a family life. He is either a part time Pastor or a part time portfolio manager. Neither of those are part time jobs.
“Mrs. Roberts, moving your portfolio from 42% stocks to 40% stocks would be splitting hairs and will not make a meaningful difference in reducing the overall risk. Said another way, this is like slowing your car from 42 mph to 40 mph….it really doesn’t make a difference. Personally, I would not change anything because this mix has been designed to meet your goal, and your goal was to grow your account to <insert her hypothetical figure> in 8 years while taking a small amount of risk. If you are concerned that we are taking too much risk, we should reduce your account to 30-35% equities, which will reduce the risk, but it will also require an additional 3-4 years before you hit that goal of
“Well, I don’t want to do that. Thanks for talking me through this.”
debating whether to just let her hang up, or to tackle the real issue here
“Hang on a sec, ma’am, there is a bigger issue here that I would like to address.”
did you really believe that I would let this go?
“I am concerned that you are taking financial advice from your Pastor. I mean, you’ve never asked me to explain a Bible verse to you. Would you ask your mechanic for a medical diagnosis? Or, better yet, I wonder what your gardener’s thoughts are on the O.J. Simpson defense. I am being sarcastic here, but you see my point, right?”
takes a bow
“Hahaha, yeah I see your point.”
We are all role players, folks. People love to say that Michael Jordan never won a title before the Bulls added Scottie Pippen and Horace Grant. While this is true, it is an incomplete story. The Bulls added those guys AND several role players. John Paxson was my favorite role player on the 1991-1993 3-peat team…he knew his role. He was a short, slow white guy who’s only job was to spot up and drill jump shots when opposing defenses doubled MJ, Pippen, or Horace Grant. He did it so well…remember the clinching game in 1991 vs. the Lakers? He wore them out in the 4th quarter. Also, in 1993, he hit the winning shot vs. the Suns (pictured). On the 1996-1998 Bulls 3-peat, his role was occupied by Steve Kerr. He did the same thing.
Those guys knew their role, and they executed it. They never tried to post up, demand the ball, and back their defender down to the block only to drop step to the inside and gorilla-dunk on the opponent’s head. Never happened.
Those guys knew their role. Pastors should know their role. Attorneys should know their role…and I should know my role. My role is to manage your portfolio.
Ask your Pastor the Bible questions…ask me the money questions.