Essex Financial President and CEO Chuck Cumello, appeared on MoneyLife Podcast with Chuck Jaffe to discuss his macro-economic outlook and key trends he’s seeing in the market.

Part 2 of 2

Essex Financial
5 min readOct 29, 2017

Chuck Jaffe — Money Life: That raises an interesting question because we spend a lot of time on the show — more time than we’d like — talking politics. Not politics per se, but the impact on the market. And I mentioned the blog post; that I liked the blog that you have at www.Essex.financial. And your most recent post was looking at a political side of things, but it wasn’t so much what do you think about the president and what he’s doing. It was how politics and what we’re seeing is affecting the behavior of your clients. Which is different because we can all kind of look and go: “Okay we now sort of think the Trump trade is mostly been priced out, with the exception of maybe what folks are hoping for if we get some sort of tax reform”. And we’ve had that discussion with a lot of people. What we haven’t said is what people are actually doing. And you’ve found that while you don’t normally talk politics with your clients, how people are acting depends on what lens they are viewing this country through right now, doesn’t it?

Chuck Cumello — Essex Financial: It is. I think you’re referring to a piece that got posted on I think Wealth Management.com. But it has, and that’s been for us and our advisers here at the firm one of the bigger challenges. In that never before — obviously the divisions of the country are well reported, well documented and seem to occur on a daily sometimes if not hourly basis — but never have we seen the visceral reaction that clients have and how they view that if you’re one side of the political spectrum, and one side the view towards President Trump, you think it’s the end of the world and you know there is nothing but horrible bad times ahead.

Where on the flip side if you’re more bullish on the president and a supporter of the president then — I think in the piece I wrote, you’re asking questions about how you can borrow more money to invest more money in the market. So it really has been a challenge for our advisors to sort of manage that divide. And also really sort of be there — I think as I put in that piece — to be the sort of sounding board and the well-educated well-read voice of reason to help walk people through this. Because you certainly don’t want to let an emotional reaction potentially adversely affect a solid long-term plan. So at the end of the day, we’re trying to bridge that divide and walk people through it. Without any question this time period — depending upon someone’s leanings on the political spectrum — really have affected behavior.

Chuck Jaffe — Money Life: That being the case, are you reining both groups in towards the middle? Is the ultimate test here you know when you’re talking to clients: “Okay look; if you’re exuberant about Trump don’t be too exuberant in your portfolio, and if you’re full of rage over Trump don’t get your portfolio to where you’re missing out”?

Chuck Cumello — Essex Financial: Right, it really boils down to our fundamental belief of how we work with our clients which is; their investment policy statements are exactly what they are looking to accomplish with their assets that they’ve entrusted us to manage. You know, what drives someone’s asset allocation is a host, a multitude of factors. It’s their time frame, it’s their risk tolerance, it’s their income need. None of that stuff generally has changed just because there is a different president. Their psychology and emotion around it might have. But really what we’re trying to do is — depending upon someone’s belief — making sure that their parameters that we’re operating under are still the same.

Now Chuck, that being said you brought up a great point. Let’s say again you think it’s the end of the world — well you know what, maybe your risk tolerance now has come way down. Maybe you feel that this president is going to lead to bad things in the market, then certainly we can make some adjustments to someone’s portfolio. But we do that by trying to educate them that this market ebbs and flows, and the president has only so much impact depending upon what topic you may be talking about, and trying to get people to focus on truly what their long-term goals are.

Now, at the same time, you try to control the greed factor. I think it’s been well documented that there’s the human fear greed scale. Depending upon where and what event might be occurring, we very much try — and an advisor’s time is spent — the vast majority of time is just that. Managing clients’ emotions and making sure that that emotional reaction does not upset good solid long term financial planning. So we do certainly try to reign in on the people that want to be extremely bullish, and on the flip side try to make sure that someone who is nervous about the market doesn’t get completely out of the market because they are convinced something is going to happen. Our job is to walk that very fine line of making sure that somebody’s portfolio adequately reflects what they are looking to accomplish with those hard-earned moneys and what they’ve entrusted us with. It is certainly not easy but at the same time it’s why we’re here and why we play a very very important role in our client’s lives.

Chuck Jaffe — Money Life: Well Chuck this has been great. The only problem is, I’m out of time before I’m out of questions. So hopefully you’ll come back and chat with us again at some point.

Chuck Cumello — Essex Financial: I would certainly love to Chuck; I really appreciate the opportunity.

Chuck Jaffe — Money Life: Chuck Cumello everybody. He is the president and chief executive officer at Essex Financial. Their website is www.Essex.financial. That’s where you go for more information. Alright we just hit the half way poll of the September 21st edition of Money Life. That just means we’re picking up speed. Halfway … we’ve got lots more to go, so settle back, relax, don’t touch a dial, don’t touch a button, don’t touch anything. This is Money Life and we’ll be back with more in just a moment.

--

--

Essex Financial
0 Followers

Essex Financial advisors take a client-centric approach to wealth management and planning.