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“Increased communication with all clients is important” with Cicily Maton

Increased communication with all clients is important, but it is especially important for those who are older, who live alone, and who you know from experience are more anxious and fearful. Reinsuring clients that what they are feeling is normal, reminding them of prior events that were similar that we all lived through can help […]

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Increased communication with all clients is important, but it is especially important for those who are older, who live alone, and who you know from experience are more anxious and fearful. Reinsuring clients that what they are feeling is normal, reminding them of prior events that were similar that we all lived through can help build confidence that they will be “ok”. Reminders that they should eat well, get enough sleep, exercise, get outside in nature, limit exposure to the news and reach out to family and friends are all things that can help deal with the uncertainty of living in time of crisis.

Asa part of my series about “Investing During the Pandemic”, I had the pleasure of interviewing Cicily Maton, CFP®, CeFT®

Cicily Maton has been a financial planner for over 30 years. Her early experience was working with clients going through divorce, and that lead to focusing on all of life’s transitions, and how to help clients make better financial decisions while experiencing a crisis.

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?

Inthe early ’80s I was changing professional direction and was introduced to a new, emerging profession with a certification, Certified Financial Planner. I immediately recognized that this was an opportunity to be a part of building a new profession, and at the same time, be able to help people in forging a fulfilling life for the future.

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?

At an FPA conference I attended a presentation by Dr. Richard Thaler, a professor of economy at the University of Chicago. He was doing research on behavior finance. He asked each of us to take a test. The test measured two things, how many answers you correctly answered and the degree to which you were confident about your answers. It was an early lesson on over-confidence. It was a lesson I have never forgotten. Over confidence can lead you to making errors in judgement that can be detrimental to your long-term financial health.

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

At the present time, I am organizing a series of Zoom meeting for our clients to provide a format for people to share their feelings, fears, regrets, hopes for the future. In this time of social isolation, people do not have enough outlets to deal with loneliness and grief.

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?

In my long career there are many, but the story of Nazrudin, a group of forward-thinking planners, was by far the most important influencer, for it was this group of planners that included Richard Wagner and George Kinder, “founders” of the life planning movement. The original group also included Susan Bradley, founder of the Sudden Money Institute and Ed Jacobson, author of “Appreciative Inquiry.”

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?

Increased communication with all clients is important, but it is especially important for those who are older, who live alone, and who you know from experience are more anxious and fearful. Reinsuring clients that what they are feeling is normal, reminding them of prior events that were similar that we all lived through can help build confidence that they will be “ok”. Reminders that they should eat well, get enough sleep, exercise, get outside in nature, limit exposure to the news and reach out to family and friends are all things that can help deal with the uncertainty of living in time of crisis.

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?

It would depend on their age (all other things being equal). For younger people, I suggest that they maintain their normal monthly investing. On the other hand, for someone older, perhaps putting the money in a savings account would make them feel more confident that they were at least saving for their goals but not taking any market risk. For someone in the middle, perhaps reducing the amount into the S&P 500 Index fund and putting the balance in the savings account would keep up the habit of monthly investing while limiting their market risk.

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?

I might suggest that they consider paying now for future vacations, as many of those expenses like transportation and lodging are cheap now but will be expensive later. Or remodeling your house while workers may be very reasonable now, but expensive later.

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

There are most likely many, but only those who are emotionally able to handle losses should pin their hopes on winning big.

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

Alternative investments are much the same as exciting and lucrative investment opportunities- best left to those who can afford to lose it all.

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?

Put the $10,000 into a well-diversified portfolio and do not look at it for 10 years.

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?

This assumes that insurances are in place and there is an emergency fund to cover at least 6 months of living expenses. 1. Investing is a long-term commitment. You can check returns from time to time, but short-term returns have little or nothing to do with reaching your goals. 2. Develop a diversified strategy. No one sector or country will always be gaining or in favor, but in a diversified portfolio some will be up, and some will be down, but added together, your portfolio will help you reach your goals. 3. Watch the fees. If you are paying too much in fees, it will dilute your returns over time. 4. Curb your expectations. Do not pay too much attention to cocktail talk (I just bought this stock and it hit the ceiling). What you don’t hear is the ones that hit the basement. It is also advisable to have a reasonable expectation about the returns on your portfolio. Comparing returns to someone else’s or an index is like comparing apples to oranges. 5. Never lose sight that the stock market in the short-term is not the investor’s friend, but the long-term investor will benefit from the short-term volatility.

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