Jeffrey Bush of ‘Informed Family Financial Services’: Investing During The Pandemic; What Should I Do With My Money Considering All of the Volatility and Uncertainty Today
It is difficult to say which markets will recover first. You are trying to time the market if you try to select certain sectors. It is safer to take a broader approach and invest in more diverse areas of the market. It is relatively easy to get diversification. Buying index funds and certain ETFs can provide a lot of diversification. At my firm, we use our Riskalyze software to help us to quantify the exact diversification that each client needs.
As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Jeffrey E. Bush.
Jeffrey E. Bush is President of Informed Family Financial Services, a financial advisory firm dedicated to building long-term client relationships and directing them to their retirement financial goals. For more information, please visit www.informedfamily.com.
Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
Ever since elementary school I have been intrigued with numbers and as early as third grade I was finishing math tests before the rest of the class. I even remember my teacher writing that I was a mathematician on my report card. This love for numbers grew into a love of finance when I got to college and decided to major in accounting. After college, I realized that my calling was to become a financial advisor. This led me to where I am today, running my own company as the President of Informed Family Financial Services.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
Early in my financial planning career I worked as a captive agent for an insurance company. The job required me to meet annual sales quotas. When I was having trouble reaching these quotas, I realized this was not the job for me and tried to leave the business. Finding another job was not as an easy task although I eventually landed a job as a Financial Advisor with at an independent broker/dealer, USA Financial Securities. My success was not far behind switching jobs. I think the most important lesson that I learned was to never give up. Success will follow you if you work hard enough and listen to the right people.
Are you working on any exciting new projects now? How do you think that will help people?
I am excited about bringing on a new partner, effective January 1st, 2021. This will empower Informed Family Financial Services to serve our clients well into the foreseeable future and will position us for the next phase of growth in our firm.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I credit much of my success, as well as the success of my firm to the leadership team at USA Financial. When I joined their independent broker/dealer, I followed their path to become a successful financial advisor. USA Financial’s vision of what it takes to become successful has helped me through my career more than anything.
Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?
From a financial perspective, I have seen a lot over the past 26 years. I have been an advisor through major market declines: 2000–2002; 2008–09; 2020. It always comes back to the fundamentals. The markets always rebound given time in the market. It is the short-term, knee jerk reactions that tend to get investors in trouble. I have found that those with a solid financial plan and a long-term strategy will get through these types of markets (like what we have seen in 2020) with less stress. When my clients are feeling anxious, I support them by really listening to what they are saying. I then take the time to remind them about all the planning that we have done. I usually point them to the investments that have an element of safety.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long-term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?
I would tell them to keep doing what they are doing. Regular investing in the stock market is the best way to build wealth over the long term. Investors are rewarded for time in the market, not timing the market. No one knows when the dust will settle, and you can always find an excuse not to invest. Having an optimistic viewpoint is always helpful. If you study the history of the market, the trend is always up. The only exception that I would make to that is if you are investing for a relatively short-term need, such as planning for college within 5 years, or saving for a home. In those instances, having cash is a better alternative.
Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?
It is difficult to say which markets will recover first. You are trying to time the market if you try to select certain sectors. It is safer to take a broader approach and invest in more diverse areas of the market. It is relatively easy to get diversification. Buying index funds and certain ETFs can provide a lot of diversification. At my firm, we use our Riskalyze software to help us to quantify the exact diversification that each client needs.
Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?
No doubt. There are always opportunities in the market, but you can’t take advantage of them if you are sitting on the sidelines with cash. The key here is to be invested somewhere. You can take advantage of volatility and uncertainty with investments that you don’t need for a long time; for example, a 30-year old investing for retirement. If you are patient and have the time, you can make volatility work toward your advantage. For example, in 2020 the investors that were the most successful were the ones who either stayed with their strategy when the market was in a decline, or better yet, invested more and took advantage of cheaper prices when the market was going down.
Are there alternative investments that you think more people should look more deeply at?
I think the alternative investment that people should look more deeply at are precious metals such as gold and silver. These are good assets to hold as part of an overall financial plan because they are a good hedge against inflation. With low interest rates and a lot of government debt, these assets will continue to do well. Gold has done very well in 2020 and will continue to do so.
If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long-term investment what would you advise them to do with it?
I would tell them to put that money in a stock index fund and just let it go. Don’t try to time the market and just let the investment grow over time. When you have a 20 to 30-year time horizon, it is hard to go wrong with this strategy.
Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
- Invest early and often in the market
- Always spend less than you make
- Work at keeping consumer debt to a minimum
- When choosing a partner, make sure you completely understand their views on spending and debt management
- Take advantage of any employer matching with a retirement plan such as a 401k
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My favorite life lesson quote is, “Never give up.” When I look at my career as a Financial Advisor, the first five years were tough. There were many times where I thought about quitting. However, I just continued to work at it and eventually everything worked out because I never gave up.
