Fourth Quarter 2016 – 30 IN 30

The year 2017 represents my 30th year in the career of stock broker/investment representative/financial consultant. I left my university career to begin working with clients planning for and experiencing retirement. A popular ESPN series of sports stories, called 30 For 30, led me to writing this article on the 30 most important things I have learned, or had reinforced, during my 30 years in this career.

We should start with Scott Peck’s three principles to live by which he developed in his 1978 book The Road Less Traveled. 1) Delay your gratification. 2) Tell the truth in all situations. 3) Take responsibility for your own actions. Vary from these three principles, as investor or advisor, and damage will result.

My first investment was made in 1961 as a 16 year-old through a broker named Buddy Videl. Twenty-six years later, Buddy was still a broker with the firm I joined. Before I began advising any client, Buddy took me aside and said, 4) “Frank, there are three things you need to keep in mind when you recommend a security to a client: quality, quality and quality.” Later, I added a corollary 5) A penny stock is like a penny slot machine, a guaranteed loser in the long run.

Once I was on my own, I began learning some more specific investing tips, such as

6) Best investments are made when you are fearful,

7) Do not sell a security because it has made great gains, and

8) Do not make investments based on one research analyst’s recommendation. Always seek a consensus.

9) Do not invest in one style, like Top Stocks, but diversify among multiple approaches.

10) Avoid crowds. If everyone is jumping on board, don’t. If you do, do not look for three years!

11) Never believe a hot tip, especially when it comes third-handed, like “My brother-in-law was told by someone who knows!”

12) Understand, that some “other” investors will claim perfection, like the Las Vegas regulars who never lose. Know that if you are right more than 50% of the time you can do fine. An important guideline is

13) Surround your investing within a structure, keeping your emotions contained. If your maximum stock exposure is 60%, then that is where you stop adding, regardless of your excitement.

14) Market bottoms are after you get calls from investors saying, “Stop the bleeding!” And

15) Market tops follow investor calls saying, “I deserve to make higher returns.”

Aside from investing, I have learned

16) If one cannot deal with rejection, then the financial consulting career is not for you.

17) Only work with associates with whom you would choose to be in a foxhole with, i.e. work relationships require trust, loyalty and people who will watch your back. I have worked with the very best and learned with some others. Also, regardless of how hungry you may be,

18) Work for clients you like and respect, i.e. avoid bad people and stay with the good till the very end.

19) Knowing yourself is the greatest wisdom, so

20) Emphasize your strengths and

21) Work with associates & staff who compensate for your weaknesses.

22) Whenever you write an emotional response, do not send it until rereading it 48 hours later.

23) When you get in a rut, talk with the people for whom you work and they will remind you of your value.

24) Keep perspective in difficult times, either the “End-Times” are here or things will get better!

25) Sustaining a lifestyle throughout retirement is the primary goal of investors.

26) There are three parts to a retirement plan, ranked by importance & your ability to control a) Expenditures, b) Investment allocation, c) Market returns.

27) Financial success does not buy the happiness that health and relationships do.

28) The worst experience for a financial consultant is to watch a client overspend and deplete their nest egg.

29) Finally, in bad and good times, listen to your spouse. Who else knows you well enough to lead you?

30) One who loves their job, never works a day in their life! Amen.


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