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Financial Planning Insights from Bob Dockendorff JD, LL.M



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Remember Your Training

Don't freak out when the market goes south.

Since Monday the Dow Jones has tumbled further than any week since October 2008. The equity markets are officially in correction territory and most experts are attributing the selloff to the effects of the coronavirus.

In light of the market mania, it can be difficult to stick to fundamentals and very easy to abandon your prior planning and hard work.

Just remember:

  1. Have an investment plan
  2. Don’t sell out of fear

“Remember Your Training”

This reminds me of a story about an amateur pilot that had an engine explosion in a small plane while flying over a major city. It was an otherwise beautiful day and he was flying up to Vermont from Massachusetts with the help of a trained professional co-pilot.

All of a sudden, flying over Boston, there was a big explosion in the front of the aircraft. Smoke flumed into the air, oil spat at the windshield, and there was no longer an engine powering the plane. 

The amateur pilot looked over at the professional pilot, who was white as a ghost and could barely speak. He was young, and despite thousands of flight hours, he’d never been in an emergency situation. He wouldn’t be any help.

The amateur pilot simply thought, “Remember your training.” Even in a dire situation with a high chance of catastrophe, it can only help to stay calm and go back to the manual to understand best practices for the situation at hand.

“The manual” takes away the need to rely on your judgment in a time of anxiety and panic. All the steps and actions are laid out for you. This guide was written by experienced professionals with moments of crisis in mind. It was designed to give you the best probability of success during nightmare situations.

So, in this literal “trial by fire” moment, the pilot followed instructions to check if the radio still worked. It did.

He sent out a call to all local airports that he would need to make an emergency landing. Based on his currently altitude, he could actually glide a certain distance without an engine. After discussing his situation with flight control, a local airport cleared the runway.

A few extremely stressful minutes later, he successful landed the plane on a runway at a small airport and stepped out of the plane without a scratch.

Why We Build Investment Plans

Sitting with clients during a first meeting we have to ask all sorts of funny questions about how those clients deal with risk. We also go over all their goals and determine (1) how they’ll use the money and, perhaps most importantly, (2) when they’ll need it.

To many clients this seems somewhat silly—they just want to invest their money.

What we’re doing, though, is setting the manual for the portfolio to give us training in times of crisis. 

We need to maintain a certain level of risk to growth, and also shield assets for withdrawals.

Our plan assumes that massive equity downturns will occur several times over the investment lifetime.

The goal is not to anticipate when they’ll happen and avoid them. It’s to know that we can experience them and still meet our goals.

Perhaps the greatest benefit that an investment manager can provide is to encourage clients to keep their cool during these times and reassure them that they can still meet their financial and investment goals, despite market volatility. This is what can make investment portfolios bullet proof, and also give investors peace of mind in stressful times.

  1. If you have an investment plan, stick to it.
  2. If you don’t have one—don’t “fear sell” or time the market. Even if it works once you will have developed a bad habit that will catch up with you at some point. 

The manual says know your risk, stick to the plan, and keep saving. That will give the highest probability of success.

About the Author

Robert E. Dockendorff, JD, LL.M

Robert E. Dockendorff, JD, LL.M

Robert Dockendorff is a Vice President of Claro Advisors, LLC. Bob serves as an Advisor at Claro, where he helps clients achieve financial goals through careful analysis and the development of long-term plans that encourage consistent, achievable actions. Bob also enjoys sharing helpful financial planning insights on his blog and is an active contributor on Investopedia's Advisor Insights website.

Prior to joining Claro, Bob was a Senior Associate Financial Counselor at The Colony Group, supporting a team of financial counselors with research and analysis on all areas of wealth management and financial planning for high net worth individuals. He also focused on the implementation of investment, estate, and tax planning tailored to the specific goals of diverse clients. Prior to joining The Colony Group, Bob worked as a Tax Associate at the international accounting firm Ernst & Young, where he conducted tax research for multi-national businesses. Bob received a Bachelor of Arts in Philosophy from the University of Vermont. After college, Bob earned a Juris Doctor from Suffolk University Law School, Cum Laude, and an LL.M in Taxation from Boston University Law School. Bob has previously passed the FINRA Series 65 and the MA Life and Health Insurance Producer Exam. In his spare time, Bob enjoys the mountains, the beach, and playing golf. Bob resides in Hingham, MA with his wife Caitlin and two sons, Charlie and Tommy.

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