Watch This Video Before Hiring a Financial Advisor

Hey there, this is Craig again. So this is the third part of a three part series trying to give you some information about the three biggest risk to your investment portfolio. Do you have not checked out the other two that I did before this? You don't need to stop and go see those first, but I would encourage you to look for those and to perhaps find those because I think all three of them work together and they all are, can be very significant in life. But today is kind of the third of those installments, you know, and I kind of going off of the premise that this mindset that's happened here, that the stock market's up almost 30% last year, two years in a row, we've had great gains. So it's been huge years for investors. But years like this and the prior year bring their own set of challenges to us. Especially if you have a significant amount of money that is accumulated and losing money is not any more important or less important based on the value of your accounts. But when you have larger accounts, a million or more, then the swings look much more dramatic because a particular swing could be more than you made in a single year as you were saving to build those big IRAs up. So it just hurts a little bit more, It's a little bit more difficult to get your head around. But today I'm going to walk you through the last of those risks. And in strong market years, emotions run high. Hidden fees often go unnoticed and there's a temptation to chase performance and we gotta be really careful about that. So if you're almost retired or you're already retired, avoiding the mistakes become even more critical. And just again to say this in case you're new to the channel, our information is purely educational. We don't manage investment portfolios or sell products. I've had 40 years in the industry, so this is purely an educational kind of peek behind the curtain to help you protect your retirement. Over those 40 years, I've watched what works really well, what doesn't work well. I've watched mistakes people made, I watched the things that people did that worked really well for them. And I guess that's probably the biggest blessing of my career is just being able to be a fly on the wall. And so many people invited me into their lives to watch this. But in our last videos discussed the impact of emotions on investment decision making and how significant paying those unnecessary fees. So the second part of the series was on the fees and I showed you that the difference between a very small fee account and a 1% fee account is a couple million dollars of value to you by the time you get to the end of your lifetime. So anyway, let's jump in. Let's get started with the third risk and the final in our three part series. And that third risk is really just the underperformance that you would get by active managers. When the market surges big like it has the last two years, it's kind of tempting to think that an active manager maybe can, can do even better. So just hang in there and it's going to be great. But history shows that most active managers who have a great year fail to keep up with markets in the future, even if those years are good. That if we look at data that compares the S&P 500 index versus active managers, the data says that only 40% of active managed funds where they have a manager and they're moving things around will beat the market over a one year period. So the good news is 40% of them may beat the market in any given year. But if we look at longer periods of time, five years, 10 years, that number drops down to only 10 to 15% of those fund managers will do better than the overall market left totally unvetted. And you just kind of put it in an SB&S and P500 index. Why it seems worse or to me why it exacerbates. The problem in really great years is if your manager didn't deliver anywhere close to a 30% return in 2024, then you need to ask are their fees worth it? What's their long term track record? And of course you have to evaluate on a risk adjusted basis because you maybe had most of your money sitting in bonds and we certainly wouldn't expect 30% in bonds. But if you have money in stock holdings, you want to make sure that your manager is keeping up. And really a year like this gives you a great opportunity to evaluate, you know, did your portfolio keep up with the market? Are the fees eating away at your gain silently and you didn't really even think about that? Or are you making emotional decisions now because you've had a couple great markets and now you discover you look at your overall allocation and you're taking a lot more risk than you would have four or five or 10 years ago. So look, when, when the big market years, because they don't happen every year, when they do happen, you got to remember to stay, go back to the fundamentals of protecting your wealth. Lock in progress, avoid unnecessary risk, and really focus in on what truly works over the long period of time. If you like this kind of stuff, click the like button for me. Subscribe to the channel. I've got a free ebook I want to give you. I think it's very well done. It's got a lot of great information, and I take all three of these and I really expand on those. Show you a lot of facts, a lot of nice little pictures to look at, so it's not all just detailed financial garbage. If you'll download it, it's the three biggest risk to your portfolio and the three criteria to know it was time to switch managers. So I hope this has been a little bit helpful to you. I've enjoyed doing the series, I've enjoyed doing the ebook, and I hope you take a minute, download it, and maybe it'll make a difference in your life. Take care. Have a great day. God bless you.