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Patrick Healey of ‘Caliber Financial Partners’: “Know your risk tolerance”

…Know your risk tolerance. If you’re generally somebody that gives into their emotions and gets caught up in some of the short-term volatility in the equity markets, you should probably invest in an index fund or hire a a financial advisor that has experience and can guide you through that volatility. Someone who checks their […]

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…Know your risk tolerance. If you’re generally somebody that gives into their emotions and gets caught up in some of the short-term volatility in the equity markets, you should probably invest in an index fund or hire a a financial advisor that has experience and can guide you through that volatility. Someone who checks their emotions at the door. One of the best ways I earned my money as an advisor is by keeping clients from making irrational and emotional mistakes. I insist on having discretionary authority over client accounts because they would be their own worst enemy otherwise.


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

Patrick Healey, founder and president of Caliber Financial Partners, is a more than 20-year veteran of the financial services industry with an extensive background in structured finance, investment banking, and equity research. Patrick is an avid traveler, endurance athlete, and wine enthusiast, and he applies this same passion for life as he does in working with clients.


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?

I’ve been in financial services my entire career. When I got out of college back in the mid-nineties, I worked for two different wall street investment banks. I worked for Lehman brothers for almost eight years in structured finance. while I was at Lehman, I went to NYU for graduate school, and one of the areas that I studied in addition to finance was entrepreneurship. And, you know, it’s really hard to use that kind of a skillset in a large firm like Lehman.

And so, after I left Lehman, I was looking for something more entrepreneurial to do, but something that really leveraged my finance experience. It was a time when looking for jobs after the financial crisis of 2008 was challenging. I had my securities license and I decided to start an advisory business within a large insurance company. During the financial crisis it was a challenging time to be starting a new business, especially as a financial advisor. But I survived that period and I’ve since thrived, and I’ve been running my own firm, Caliber Financial Partners, for the past 8 years.

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?

So not when I first started in the industry, but after I left Lehman and before I became a financial advisor, I worked for a day trading firm for six or eight months. Technically speaking, it’s in the financial services sector, but that is a very, very difficult business to be successful at on a consistent basis. I always joke that you look at the top 10 list of Forbes billionaires, and you don’t see any day traders on that list. There are some people that are very good at it and I’m not trying to knock the industry, but it was not the type of thing that I could be successful at. I do a lot of fundamental analysis and research companies and a lot of the folks I was working with that were traders didn’t even know the companies they were investing in. They were investing based off of charts and ticker symbols. It is incredibly quick-paced and an often times frustrating business to be in. I did learn a lot about reading charts and picked up experience on identifying entry points for investments, but it was the most expensive learning experience I’ve ever had.

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

I don’t really work on projects as part of my practice. I spend a lot of my time doing investment analysis and research so that I’m better equipped to serve clients. From a practice management standpoint, as a result of the pandemic, I’ve started considering whether it makes sense and is feasible for me to run a virtual office as opposed to having a physical office. A lot of clients as a result of the pandemic are more comfortable or only comfortable with having virtual meetings and so that’s something I may consider, operating my office virtually, if it will make people more comfortable and have a positive impact on current and prospective clients lives.

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?

Some of my early bosses that really took a chance on me when I was coming out of college, when I really didn’t have experience, I am very grateful to. One of them is actually a client of mine currently. I had a lot of great memories at the first firm I worked at, DLJ. My first two bosses there really took a chance on me when I was a recent grad, a time when you really need that first opportunity. Everyone’s looking for somebody that has experience, but the only way you get the experience is if somebody takes a chance on you. I maintained a very close relationship with all of my previous bosses and one of whom is now a client of mine, so it really came full circle for me.

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?

I think it’s important not to be too fixated on the never-ending news cycle because while media provides useful information, it’s also a business and we’ve seen certain media factions get very political and report based on political inclinations so it’s important to take everything with a grain of salt.

It is important to diversify the way you digest news, what sources you’re paying the closest attention to and researching those sources and stories beyond just what is being presented to you. Make sure you research the sources where you get that information. It’s tempting have a conviction bias if you have a certain belief politically or with respect to certain social issues and so in order to confirm or rethink some of that bias, I think it’s important to digest news from various sources. Also, trying to surround yourself to the extent that it’s safe and healthy to do so with the people closest to you is important. If anyone has been totally on their own just constantly being fed negative news it can be very trying mentally.

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?

So, I’m going to caveat my answer by saying I don’t provide advice over a short-term period of time. It’s impossible to predict what’s going to happen in the market over a two- or three-month time cycle. What you should do investment wise depends a lot on your risk profile. We’re at an all-time high in the equity markets. I personally think that will continue. 2020 was an interesting year in the sense that all that volatility happened in March and early April, and then we’ve seen the market recover. I think the underlying economy still has a lot of work to do to get back to a healthy state. The financial markets on the other hand are very forward-looking and so we’ve seen equity prices continue to rally.

If you have a long-term time horizon and you want to invest on a monthly or systematic basis, there is less concern about what’s going to happen in the next month or two. If you’re really trying to time the market, which I think is a fruitless endeavor, especially for an inexperienced investor, then you probably should sit on the sidelines with that money.

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 personally am still on the sidelines with a lot of the travel sector in terms of investments. I think you’ll see a bounce back in hotels when the vaccine has been widely disseminated. I think some of the other sectors like airlines and cruise lines, a lot of it will depend on what the future requirements are with respect to travel. People are accustomed to having a lot of freedom when they travel on vacation so the longer that that regulations remain in place after the vaccine has been widely distributed, I think will provide an overhang on the airline, the cruise line industry.

I think business travel is going to take a more permanent hit as a result of people realizing that they can conduct business virtually through zoom or conference calls. And so, I think it will take longer for business travel to resume.

Healthcare is going to be a very big winner coming off of the pandemic because people will realize just how important it is to incentivize and provide motivation for pharma and biotech to continue to invest into drug development so that we’re better prepared the next time something like this happens. And hopefully it won’t be for a very long time.

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

We haven’t really seen volatility in the market since early spring. When COVID hit there was a huge sell off to the tune of more than 30%, and it came fast and furious in less than two weeks. Since then, we haven’t really seen much in the way of volatility in the stock market. In terms of exciting opportunities today I think we will see some real market movement as a result of the new administration and government leanings. Sectors like energy, electric vehicles, cloud-based technology, online gaming and to a lesser extent, cannabis are all going to be the are winners as a result of changes in policy.

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

SPACs are taking over the market as we look as changes from just a few months ago to now. What you’re seeing as a result of the SPAC phenomenon is companies that would otherwise stay private for longer are coming to market sooner and they’re being advanced as publicly traded companies which provides a huge opportunity for the average retail investor. It’s exciting because these are companies that would otherwise be in the private equity sector and are now hitting the public markets. So, they’re going from what would traditionally be known as an alternative investment to a more traditional investment like a stock.

If a person in their thirties and forties came to you today and said that they have 10,000 dollars that they want to put away today for a long term investment what would you advise them to do with it?

10,000 dollars could get you a bit of diversification which is what I would push for. I would want to place maybe five high conviction bets. I would absolutely want to have a one in the electric vehichle stor. Tesla is the 800-pound gorilla in the room and their stock is through the roof, but I think long-term they are probably still going to be a market leader. I think you absolutely have to own Amazon and place focus on e-commerce. The logistics and distribution sector are going to continue to grow as well as society shifts toward technology in all aspects of day-to-day life. Additionally, long-term, there is a lot of momentum for cryptocurrencies and if you have to own one, you probably own Bitcoin.

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?

First off, know your risk tolerance. If you’re generally somebody that gives into their emotions and gets caught up in some of the short-term volatility in the equity markets, you should probably invest in an index fund or hire a a financial advisor that has experience and can guide you through that volatility. Someone who checks their emotions at the door. One of the best ways I earned my money as an advisor is by keeping clients from making irrational and emotional mistakes. I insist on having discretionary authority over client accounts because they would be their own worst enemy otherwise.

You have to develop a plan as well. If you’re just following the herd and getting caught up in hype and outside evaluations then you’re just gambling, you’re not being strategic. Every investment decision needs to have sound rationale and some sort of fundamental research behind it. You have to understand why you’re buying into a certain thing and you should be able to explain that decision to somebody in layman’s terms. And if you can’t, maybe it’s not something you should be investing in because it’s outside your area of expertise.

It’s important to map out your goals and to align your investment plan to meet those goals. That may seem intuitive, but you’d be surprised how many people start investing just for the sake of investing. For example, if you want to buy a house in five years you have to save for that house, not knowing what interest rates are going to be. So, you’re setting aside money that and as it gets closer to that date, your goal would then shift to insulating that money and not having any at risk investments like the stock market.

Finally, especially for an adult child, college planning needs to be a major thought process. It is really critical to evaluate the value that your son or daughter will receive from and institution of higher learning. It’s remarkable to me that colleges and universities have been able to increase tuition rates at three times the rate of inflation for the last 20 years. And it’s been a large contributor to our student loan crisis in our country. Before you, or your child, makes the decision to incur a tremendous amount of student debt, I think it’s important to consider why you’re doing so. Do not just picking a school based off of their football team or their school mascot, or the beauty of their campus, but pick a school that you really feel like you’re going to get substantial value from in the long run.

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

“Only in the dictionary, does success come before work.” If you want something in life, you have to put the work in for it. I think it’s amazing how our society today holds such a high sense of entitlement. I was raised in a middle-class family and my parents both instilled a strong work ethic in me. My mom is retired now, my dad works to this day. Putting in the work in school, putting in the work to advance yourself in a career and not just expecting that everything should be handed to you is such a key life lesson. You put the work in, you’re rewarded for it. And if you’re not immediately rewarded for it, then you put more work in until you get to the answer or the result that you want.

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. 🙂

It may sound ironic coming from a financial advisor, but I think there needs to be a push in society for people to truly focus on what makes them happy, especially professionally. When you’re picking a career, and this is probably more applicable for younger folks, whether they’re in college or as they’re growing up or even post-graduate and still in their early stages of life, pick a career that you’re passionate about. Money is important, it allows you to explore different things and gives you options in life but being passionate about what you do for a career is equally if not more important. If you are not happy with your job then everyday life, your home life, social life, etc. all will be negatively impacted so if there is one token of advice, I can pass on to society it would be that.

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

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