Ryan Shuchman of Cornerstone Financial Services: Investing During The Pandemic; What Should I Do With My Money Considering All of the Volatility and Uncertainty Today

Investment strategy conversations need to start around three key pillars — risk, goals and timing. Generalized advice that is not tailored to each individual can potentially lead to the wrong outcome.

As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Ryan Shuchman.

Ryan Shuchman is a senior partner at Cornerstone Financial Services in Southfield, Mich. As a financial advisor, Ryan works to craft personalized and sophisticated roadmaps for financial success. Ryan is a graduate of the University of Michigan and received his MBA in finance from DePaul University.

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?

My career in finance starts about 15 years ago serving business owners and investors with the purchase and sale of companies. After a successful career serving these very high net-worth individuals, I wanted a practice that could serve a broader range of clients. So today my client base includes high net-worth individuals, successful professionals and families with a broad range of financial means and goals.

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?

Some of my new clients, with income approaching $500,000 a year, were saving less per month than those making $100,000 a year. In these cases, my first job is to create them a detailed family budget and account for every penny their spending, then work to solve the issue. The lesson here is focus not on how much you make, but how much you spend and therefore save.

Are you working on any exciting new projects now? How do you think that will help people?

Our team’s significant new project this year is centered around estate planning. On-going tax law changes are going to have a notable impact on many families. Planning, strategy review and execution are going to be critical and many steps may need to be taken prior to year-end 2021. Most people think about the estate tax as a rich person problem. But what about a family farm that is worth millions simply due to its land value? Small business owners may also find themselves over new, lower limits. We want to help navigate what are going to be challenging transitions across a range of scenarios.

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?

My friends and family have been 100% supportive of my business and trusted that I would always put client needs first with a service mentality. Their willingness to suggest to their contacts with financial challenges that they reach out for an initial discussion is the reason I am fortunate to serve so many wonderful clients today.

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?

First, I like to remind my clients that some news sources are more product than journalism. Accordingly, some news cycle products are “fear focused” because emotion draws eyeballs and sells ads. So instead, my advice to clients is to reduce screen time and communicate with family and friends. Ask them how they are feeling? What are their concerns and how are they dealing with them? Share ideas and focus on what are perceived issues versus real ones.

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?

Investment strategy conversations need to start around three key pillars — risk, goals and timing. Generalized advice that is not tailored to each individual can potentially lead to the wrong outcome. With that said, if a client with a stable income, 30- or 40-years-old, had $500 a month to invest, averaging into the market is one of many acceptable strategies. The caveat here would be that the $500 needs to be long-term investment assets, not for near-term savings. Another key is that despite volatility this strategy requires strong will power not to also buy and sell the invested principal. Timing the market will not work.

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?

Economic indicators, corporate earnings, some travel statistics and restaurant activity all indicate we are well into a recovery. We are recommending clients who took risk off the table re-consider their strategy and add exposure to benefit from the continued growth. For younger investors, with a higher risk tolerance, consider reducing fixed income exposure and adding equities.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

We track a variety of sectors, but we view infrastructure and clean energy as two that are likely well positioned to benefit. This is due to the current market and political dynamics.

Are there alternative investments that you think more people should look more deeply at?

Real estate is currently a very interesting option for alternatives. Sectors including retail and office space are selling at discounts, but remain critical aspects of our economy. We are advising our clients on how to gain exposure to real estate investment vehicles which can opportunistically capture long-term upside via this market dynamic.

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?

Assuming they having a high-risk tolerance, I may suggest they explore a low-cost index fund with a mix of growth focused domestic equities.

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?

Here is an essential that is absolutely critical to keep top of mind. Time and compounding interest are an investor’s most powerful tool. For example, if a 25-year-old saves $1,000 a year at 6% interest, they will have over $42,000 at age 45. However, if they wait to start saving until 35, then they will need to save $2,700 a year to reach the same savings amount at age 45.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“You are only as good as your last performance.” In work or relationships, never rely on what you did before, deliver great results today.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

Focus on the people and passions that bring you true happiness. Money can support these factors, but will not bring happiness alone.