Thirty Years of Insight
November 15, 2011By Dave Polstra, CPA, CFP®, CIMA®
Thirty years ago, in October of 1981 at age 24, I began my career in wealth management. Three weeks earlier, I had turned in my resignation letter to my boss at Arthur Andersen & Co. who promptly replied, “So you’re going to be a financial advisor? You’ll never make it.” I thought, “Ugh, maybe he’s right.” There was a lot of chaos and turmoil at that time. Our country was in the midst of a recession with no end in sight, inflation had reached 11 percent and the Dow Jones Industrial Average was in a free fall. The future truly looked dismal, but I decided to move forward with my plans.
So with 1981 as a backdrop and the fortitude to succeed in my new profession, what have I learned over the past 30 years? Volumes of insight and wisdom. Let me share some of those insights with you:
People don’t make money in the investment markets when the news is “all good.” As hard as it may sound, the best time to invest in the markets is when no one else wants to. The direst news usually causes investment assets to go on sale. People love to buy items on sale; very few investors have the fortitude to buy stocks on sale. Our emotions most often get in the way, encouraging us to retreat and hide when the news is bad and to wait until things get better before moving forward.
I will never forget October 19, 1987. Known today as “Black Monday,” the Dow Jones Industrial Average dropped over 22 percent ... in one day — the biggest one-day fall in history! Everyone was in a panic. I
was about to place trades for a new client and the markets were plummeting. Even though I had strong convictions to move forward with the strategy we had previously agreed to, I called my clients to be sure they were comfortable. “Absolutely, full speed ahead,” was the wife’s gutsy reply. “We don’t get the opportunity to buy stocks on sale very often. Place the trades!” They are very happy about that decision to this day.
Some of my most gratifying moments as an advisor these past 30 years have come shortly after sharp market declines, when clients experience the results of staying in their financial strategy after the markets
and economy rebound. Watching other investors make mistakes like bailing out at the bottom and the long-lasting impact it can have gives me the continued confidence to deliver and execute on solid advice.
What money can and cannot buy. I’ve learned that there are some things that money simply cannot buy. Money can buy medicine, but it can’t buy health. It can buy books, but it can’t buy intelligence. And it can buy laughter, but it can’t buy happiness. Early on in my career I was referred to a successful doctor and her husband. My first appointment with them was in the evening at their very large house. I remember looking around and saying to myself, “They’ve got more spotlights outside their house than I have light bulbs inside my house! These folks must have it made.” Two hours later, after listening to this couple argue over their finances, I realized that money can buy a house, but it can’t buy a happy home. Life is much more than money.
Money: crippler or motivator? And finally, I’ve learned that wealth can be a crippler or a motivator. Too much money can cripple and de-motivate, particularly if the money is inherited instead of selfmade. And of course, it can also be a motivator for one to work hard and contribute to society in a responsible way.
These past 30 years have gone by so quickly and are filled with lessons learned about managing wealth and advising clients on all aspects of their finances. Truly, these experiences have culminated into helping clients build and preserve wealth through both prosperous and difficult economic times.
