Arbor Wealth Management, LLC, will host a seminar, “2013 Market Outlook: Retirement and Income Generation,” at 10 a.m. and 5 p.m. Jan. 30 in the Arbor Wealth Conference. Firm founder and principal Margaret R. McDowell, ChFC®, AIF®, will lead a PowerPoint presentation that provides an overview of anticipated market trends in 2013. The presentation will also feature insights into how investors can utilize dividends from blue-chip stocks and coupon payments from bonds to create systematic, periodic income in portfolios. The Wall Street Journal recently interviewed Ms. McDowell concerning Arbor Wealth Management’s use of these dividend-payers in client portfolios. Income generation and investment strategies outlined are most appropriate for investors with $250,000 or more of investable assets. Arbor Wealth Management is a “Fee-Only” Registered Investment Advisory Firm. Arbor Wealth, which serves as a fiduciary to its clients, sells no products and accepts no commissions of any kind from any source. Call 850-608-6121 to reserve seating. Refreshments will be served.
Do-it-Yourself investors who have traditionally managed their own portfolios for years are now turning to professional investment advisors for portfolio management services. We asked Margaret R. McDowell, ChFC®, AIF® of Arbor Wealth Management, about this industry-wide trend.
Question: Why are so many folks who have managed their own investments in the past now seeking professional help?
Arbor Wealth: The investment and macro-economic landscape have become exceptionally complicated, especially in the last decade. And it takes a huge time commitment and a great degree of professional expertise to absorb and synthesize all this information. Most people would prefer to spend their days letting someone else worry about their investments so they can enjoy their free time. In our view, a formula for successful investing is part art, part science and part experience.
Question: Do you actually hear clients saying this?
Arbor Wealth: Constantly. They say, “I used to enjoy doing this, but it’s become more complicated and difficult now,” or “I just don’t want to do this anymore. I want to turn it over to someone I trust.” Or, “I know how much work it is to do it right, because I did it for 25 years. You take it over now.”
Question: How has the investment landscape grown more complicated?
Arbor Wealth: In many ways, but let’s just focus on yield. It’s still available, but you have to look so much harder and know so much more to find it. In the 90’s, you could practically throw a dart at the Dow and make money. Now, we’ve entered what we believe is a long-term secular bear market, an extended low-returns environment. And, it’s not enough anymore, in our opinion, to buy and hold a broad index fund, because you’ve got to take the laggards with the leaders, and the laggards will diminish your return. You’ve got to be selective in your choices of securities, and that means maintaining expert knowledge of a dynamic investment landscape.
Question: How has the 2008 meltdown changed the investment environment?
Arbor Wealth: It has driven many investors to seek only dividend payers, something we have been focusing on for years. The Wall Street Journal interviewed us recently about our use of dividend-payers. Getting paid from your investments is a virtual mantra at our firm. So regardless of which way the market moves, you still get paid. For many clients, it’s income first and then growth. We also have clients who want 100 percent growth and do not require income.
And of course, most savvy investors no longer accept the traditional “Buy and Hold” mentality. We offer a “Buy and Manage” investment style. After 2008, it’s not difficult to convince clients that we’re doing the right thing for them by providing ongoing oversight and periodic rebalancing.
Question: How do you avoid those sharp downturns?
Arbor Wealth: We employ a defensive investing style designed to minimize losses in down markets. Each of our portfolio strategies is custom created, so it varies with each client’s goals and risk tolerance, but for folks in retirement, wealth preservation is paramount. We emphasize U.S. corporations with a broad global footprint that offer staple consumer items, utilities, and essential service bonds. We may underperform an up market, but our goal is to outperform a down market.