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“No size fits all.” With Jason Hartman & Laura Kate McHugh

While no one size fits all — my immediate answer is don’t stop what you’re doing, stay the course! Investing in an index fund when you have a long-time horizon is a great way to build wealth. If you didn’t invest in late March or early April, you would have missed the opportunity to secure […]

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While no one size fits all — my immediate answer is don’t stop what you’re doing, stay the course! Investing in an index fund when you have a long-time horizon is a great way to build wealth. If you didn’t invest in late March or early April, you would have missed the opportunity to secure the market lows. In the short-term, it is very difficult to predict the day-to-day movement of the market so don’t try to time it! We often tell clients, we cannot tell you what the market will do tomorrow but over 10, 15, 20 years — the odds are in your favor.

If your time horizon isn’t long (at least 5, ideally 10+ years) you may want to consider adding conservative assets to your savings like fixed income. We use ultra-short bond exchange traded funds (ETFs) for near-term goals. There is no guaranteed way to get rich quick, so short-term goals are not an opportunity to take a lot of risk.


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

Laura is a Portfolio Manager at Spinnaker Trust in Portland, Maine. As part of a team of investment, tax, trust and estate planning experts, her priority is to determine each client’s unique financial thumbprint and enable them to achieve their financial goals so they can live their best life. When she’s not helping clients realize their ideal financial life, Laura likes to be immersed in Maine’s beaches, mountains, lakes — and enjoy Portland’s vibrant restaurant scene.


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?

Igrew up in a house with Squawk Box on every morning, but always felt like the anchors were speaking in another language. I got my undergraduate degree at Bentley University where I was exposed to finance courses. At the time, I was destined to be a Marketing major with an emphasis on the Environment (sounds very millennial looking back…). I started working in marketing, but craved the opportunity to study the markets and work with individuals and families to help them translate their financial planning 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?

My favorite story is a financial planning one. I was working with a couple that were very successful at timing the real estate market, they were having fun running short-term rentals. We ran through various planning scenarios — one being to sell the rentals over time. They nearly cried when the realized they already had enough to fund their goals. It was such a relief for them to be able to choose to work. Getting to see someone change their lifestyle is very rewarding. I get to work with very smart individuals who have created a tremendous amount of wealth, but they’re not an expert at what I do. Working together and trusting a professional even when you think you’re on the right track is always a good idea.

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

Traditionally, when you meet with an advisor you can expect to discuss the markets, review your portfolio performance and asset allocation, and discuss any changes. This is still an essential part of the financial plan, but doesn’t leave a client with any certainty (especially if the market is down). Spinnaker Trust has expanded our conversations with clients to include goals-based plans. We are challenging our clients to think about the big picture, the purpose of their wealth, and how they would like to enjoy it. Having a goals-based plan in the middle of a pandemic is an easy way to confirm you’re still on track — even if your portfolio is down — we’ve planned for this.

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?

Finance tends to be a male dominated industry; I was lucky to grow up with a renegade of a mother! She was often the only lady at the table in her industry. I am grateful to all the woman who have been amazing colleagues, friends and mentors. Finding your style and fit in a wealth management practice is essential and I’m grateful to the folks at Spinnaker Trust for creating an amazing culture. Our president, chief investment officer, chief trust officer, chief operating officer, and four of six principals are all women.

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?

Get outside — I’m lucky to be part of a community with access to urban trails and land trusts. Take the opportunity to see what is available in your community — you may learn that there is a great urban oasis to explore.

Buy Local — I’ve been participating in a weekly flower CSA. Normally, I’d never have time to drive out to a farm and pick up flowers — isn’t that what Whole Foods is for? But I am enjoying the reverse commute. It is a great opportunity to tune out for an hour and support a local business.

Tune in — to something you like. Turn off the news — you won’t miss any major highlights; they replay the good stuff. Start an audible, I find myself tuning in while on a walk with the dog, cooking dinner, etc.

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?

While no one size fits all — my immediate answer is don’t stop what you’re doing, stay the course! Investing in an index fund when you have a long-time horizon is a great way to build wealth. If you didn’t invest in late March or early April, you would have missed the opportunity to secure the market lows. In the short-term, it is very difficult to predict the day-to-day movement of the market so don’t try to time it! We often tell clients, we cannot tell you what the market will do tomorrow but over 10, 15, 20 years — the odds are in your favor.

If your time horizon isn’t long (at least 5, ideally 10+ years) you may want to consider adding conservative assets to your savings like fixed income. We use ultra-short bond exchange traded funds (ETFs) for near-term goals. There is no guaranteed way to get rich quick, so short-term goals are not an opportunity to take a lot of 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?

While Technology and Health Care are the obvious choices to benefit from what has transpired this year, those stocks are priced accordingly. The real opportunity is in more cyclical areas of the economy where business is quite depressed but not “broken” like travel and/or hospitality might be. Consider opportunities in select industrials, machinery, financials, as well as the small-mid cap space. Cyclical stocks will do exceptionally well if there is not a second wave of the virus and the economy starts on the path to normalization.

However, there are green shoots that come from times of change. Think of the personal changes your family is experiencing — are there any investment themes you can draw on?

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

International markets present an opportunity. Sentiment is very poor because the near-term outlook isn’t great. There is an opportunity for stock pickers to identify diamonds in the rough! Just because a stock is part of an unfavorable index doesn’t mean their business is broken. We are hearing from a lot of businesses that they are diversifying their supply chains away from China, think of what countries may benefit from this shift and consider buying a country or regional ETF to capture this thesis.

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

Alternatives are tricky, but in a low-interest rate environment we need to find creative ways to secure income for clients. Commercial real estate is about to go through quite a transition coming out of social distancing. Employers are looking to reduce their real estate portfolios and cities in general will see outflows of residences, but there could be an opportunity for some great long-term investments. Working with a professional management company would be essential.

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 encourage them to look at a total world index or build a portfolio using a US total market index (includes exposure to small & mid-cap companies) and an international index (with exposure to emerging markets & developed). While the US has been the place to be invested recently, we have a home-bias. Over long periods of time, international equity valuations look cheap compared to US equity.

I would also highlight that it would be prudent to consider an ESG fund. ESG (Environment, Social & Governance) is the new Socially Responsible Investing. I suggest ESG because we can see that over long periods of time, you’re not sacrificing performance to invest in the best companies. Companies conducting their business through the ESG lenses tend to outperform those that do not consider ESG factors.

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?

  1. It is ok to start small — you don’t have to wait until you have a big chunk of money to start investing. There are zero fee, zero commission mutual funds available with very low minimums. That’s unheard of compared to our parents’ generation who had to pay a broker a high commission to trade.
  2. Don’t get FOMO — we live in a world where data is everywhere. It is very easy to see a company with amazing returns and think — why did I buy this index fund when I could have put all my money in a single stock?! Be patient, you know the index works over long periods of time and saves you a lot of stress.
  3. Don’t time the market — You just need to jump in. What most people don’t have is a very long-time horizon, focus on establishing a disciplined savings rate and keeping the investments simple (like a low-cost index fund). In 2020 we’ve seen a tremendous amount of volatility but don’t beat yourself up if you made an investment on February 19, 2020 because by February 19, 2050 you’ll feel like a brilliant investor.
  4. Use the ROTH 401(k) — who knows what taxes will be in the future, but let’s not worry about that. Most companies are offering a ROTH 401(k) and a traditional 401(k). Take advantage of paying the taxes now and letting the ROTH 401(k) grow tax free over your lifetime.
  5. Avoid lifestyle creep — as you start to make more money, try to avoid the temptation to keep saving at the same dollar rate and enjoy the difference. Be sure your savings are a percentage of your income. Just because you can afford it doesn’t mean you actually need it. Try to remember when you’d scoff at the idea of paying $4.95 for a cold brew! A shift in mindset can make a big difference in your savings.

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

“Many hands make light work” — I say that not to sound lazy, but because I love the collaborative nature of problem solving. In wealth planning, I believe that by working together we yield the best results for our clients. It is also a lot more enjoyable to bounce ideas off your peers to collectively come up with best practices.

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. 🙂

For me, there is only one answer to this question. The mission of the equal justice movement must be realized if we are to truly be the country our ideals claim. We must eliminate racial injustice for good.

Thank you for the interview. We wish you only continued success!

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