By Steve Hiraga
For the majority of my life I had anywhere from zero to five ties. There was my first tie, a clip-on that I wore for Easter services, my First Communion and probably my grandfathers’ funerals. Over the past five or ten years I managed to accumulate a lot of ties and now only about half are clip-ons. I didn’t make a conscious decision to own a lot of ties, it just happened. They are an easy gift and really, one I’m happy to get. I think I’m worried about wearing the same tie too often, so the more the merrier. I really do like ties though; I now know more than the one knot I learned in high school and I can kind of identify knots when I’m standing in front of somebody wearing a tie. I am probably slightly judging your knot game and I assume you’re judging mine.
My problem with ties comes when I need to choose one since I haven’t committed to the Mark Zuckerberg “wear the same thing every day” philosophy. I could close my eyes and pull any random tie from my closet and wrap it around my collar but there would be the great risk of it not matching my shirt, suit, belt, socks, and shoes. Horror. Obviously I don’t walk around wearing only ties because I’m not in a fraternity in an 80’s movie. The tie is part of an entire outfit which I’ve committed to. It’s either going to work or it isn’t; red, blue, black; solid, striped, pattern. How is this tie going to bring it all together and make this outfit a success for the day?
As a financial advisor I have found that on occasion, outside of the office people will ask me if I think they should buy a specific bond. Just kidding, nobody ever asks about buying a bond; they ask if they should buy a specific stock. I thought I would explain what goes into my response and why it is usually vague, noncommittal, and hopefully, the start of a longer conversation.
First off, there are thousands of stocks traded on the New York Stock Exchange and NASDAQ, not to mention the stocks listed on the other minor exchanges and stocks traded over the counter. It would be a poor use of my time to develop a strong opinion on all of those stocks. Sure, I may have an opinion on a significant number of those, but probably not to the extent that one would feel comfortable investing or not investing in it.
More importantly though, even if I was very familiar with the stock, I would still be making a recommendation with incomplete information. Not with regards to the stock, but the person asking. I don’t know anything else about their current financial situation, their tolerance for risk, or their understanding of volatility in the market.
If you would like a proper recommendation, be prepared to have a discussion about your entire financial profile. Are you already invested in stocks in the same sector as the company you’re asking about? If so, are you investing in growth of the sector or the company? Or is it a value play? What’s your debt situation? Are you chasing gains that will merely offset your interest rates? Would your investable assets be better deployed towards lowering principal?
This is what it means to be a fiduciary, the role I serve for my clients. It’s the role of all advisors at SBA. We are required to do what is in the best interests of our clients; empowering them to make their own financial decisions and if needed, teach you a new knot or two.