Disqus - Latest Comments for jackcalhoun

Re: Financial Plans are a JOKE

jackcalhoun — Fri, 09 Oct 2009 09:50:20 -0000

Very provocative, Carl -- you know how to grab the idle surfer's attention!

The space shuttle analogy is a good one. Without a flight plan the shuttle can't even get started, but once it IS started the plan requires constant adjustment and correction. Same with financial plans; it is the act of going through the process that helps people get their priorities in order, develop goals and get a general sense of well being that they have a plan in place. But then it falls to the planner, who is the pilot, to keep the ship on the right path, factor in new developments, and be sure that where the client is heading is still where they want to be heading.

The investment industry has made financial plans a commodity, and I'm glad you're exposing that flaw for the investing public to see!

Re: The Assumer

jackcalhoun — Wed, 30 Sep 2009 14:58:21 -0000

You are right on with this Carl. I remember when we got our first optimizer at our firm back in the early '90s and it was telling us to allocate our clients 100% to "Cable TV". (Still not sure how that was an asset class to begin with!). My partner and I began putting constraints on the different asset classes until we had so many constraints that we finally looked at each other and said "What's the point?"

Software should be used to show clients what could happen -- not will happen, or even will likely happen. It should help clients get in touch with how they would feel if their portfolio experienced certain scenarios so we can get a sense of whether they are emotionally ready for those scenarios. But it should never be sold to the client that we are charting a certain path in clear waters thanks to what the software is spitting out.