Many financial planners simply take all of a client’s financial information, and plug it into the company computer, which then produces a report outlining a suggested financial strategy.
The problem with this approach is that the computer bases its decisions on past performances of various investment choices. And as most investors know, past performance is not a guarantee of future results.
At Martin Financial Solutions, decisions are often made which take into account the natural cycles within which investment vehicles move. That means that assets that have recently been out of favor often become the best investment choices moving forward. A computer simply cannot recognize such cyclical turns in investments’ directions.
Cycle analysis is essential to successful long-term financial planning. While stock selection begins with fundamental analysis, and technical analysis is crucial for short-term market timing, cycles provide the context for the market’s intermediate- and longer-term trends.
But cycle analysis is just the tip of the iceberg where Martin Financial Solutions’ differentiators are concerned:
1. Trading decisions are made in-house at Martin Financial Solutions. Third party money managers are not used. Anecdotal evidence suggests that the vast majority of investment advisors outsource trading to third party money managers. That means that clients of such advisors cannot even speak to the person making the trades on their behalf.
A. By contrast, when clients call in to Martin Financial Solutions, they speak directly to the investment decision maker who places all buy and sell orders. Many investment advisors, for some strange reason, do not like to hear from clients. At Martin Financial Solutions, client telephone calls with questions, ideas, and concerns are welcomed.
B. Although it has become somewhat cliché to write about the importance of being contrarian when investing, it is actually more important today than it ever has been. The most dangerous times for most investors are when the market suffers from group-think, an almost unanimous chorus of sentiment leaning one way. When an investor joins that chorus of galvanized opinion, that investor is asking for trouble. The reason is very simple. When everyone has already bought into a certain premise, then there is no one left to buy into that premise. At that point, the only thing that can happen is that some of the investors decide to drop that premise. As soon as they do so, the pendulum starts to swing the other way. Thus, the most successful investors achieve their success by moving against herd mentality.
C. Since one must usually act alone as an individual contrarian in order to achieve investment success, investment groups and committees often get themselves into trouble. The larger the group or committee making the decisions, the more of a tendency there will be for them to suffer from group-think. Even a committee of just two people will have more of a tendency to move with the herd than a single investor who strives to act in a prudent contrarian manner. At Martin Financial Solutions, a single individual executes investment decisions that are not determined by any group or committee. Group-think is not part of the equation.
2. As an investment advisor firm, as opposed to a broker/dealer, Martin Financial Solutions is bound by law to operate in a fiduciary capacity. That means that Martin Financial Solutions must put client interests ahead of its own interests as well as the interests of its representatives.
3. When financial markets turn south in a bear market, Martin Financial Solutions is not opposed to investing client capital against the stock market in order to try to turn declining prices into gains. Unlike most investment advisors, Martin Financial Solutions is not “long only,” which is very important in weathering bear markets that occur during or near economic recessions. Martin Financial Solutions uses a proprietary blend of indicators to determine when such times arrive.
4. Martin Financial Solutions uses a trading platform that provides a trailing sell stop, which some large broker/dealers don’t offer to their agents. A trailing sell stop can be used to limit losses or lock in gains. While there are pros and cons to trailing sell stops, one favored time to use them is to lock in gains on investments that have moved upward parabolically.
5. The incentives of Martin Financial Solutions are aligned with those of its clients. The firm’s income grows as client assets grow. Since there isn’t a corporate sales quota nor is there an “approved partners list,” investment vehicles are chosen based purely on their projected effectiveness in attaining client goals.
At Martin Financial Solutions, there are no committees to suffer from groupthink, and none of the usual conflicts of interest associated with so many broker-dealers. Advice comes from experience and in-house analysis, not from an ivory tower. Clients experience frank and honest discussions, typically at kitchen tables and on front porches.