Reflections on my First 15 Years as a Financial Advisor

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1 Reflections on my First 15 Years as a Financial Advisor This June will make 15 years advising clients on managing their wealth. We all face milestones in our lives and for some reason this one seems important in my career. June 2015 The graph below displays the S&P 500 returns 15 years prior to starting my career as a financial advisor. As you can see from the chart below, it wasn't hard to see why I chose this industry in 2000; making money looked easy, almost too easy looking back now! The next graph displays the S&P 500 returns 15 years since starting my career as a financial advisor. Little did I know that we would experience several events in the stock market, interest rates and real estate that haven't occurred for a generation or more. It's been an interesting ride, one full of incredible learning and experiences that have differed quite dramatically from theory and averages. 1/5

2 Source for all S&P 500 data in this newsletter: The S&P is an unmanaged index which cannot be invested into directly and does not reflect fees, expenses, or sales charges. Past performance is no guarantee of future results. Here is a year by year look back on some of my key takeaways over the last 15 years: Year 2000 Most every possession I owned fit in the back of a GMC Jimmy yet I thought I knew just about everything. I believed the majority of theories I was taught in finance classes at Virginia Tech. I thought recent history was a solid guide to the future. I thought I would be retired by age 35 (don't laugh, everyone graduating in finance thought the same; I felt a monkey could make double digit investment returns). S&P % Year 2001 I didn't remember learning anything about how markets will react when terrorists fly jets into landmark buildings in the heart of the world financial district on a beautiful September morning. S&P % Year 2002 Realization that just because the US stock market had not gone down three years in a row before, it CAN happen. S&P % Year 2003 When the majority of people believe the markets are going lower it is hard to convince someone to put more money into an investment even though you are confident it is a great opportunity. S&P % Year 2004 When you have been dating your college sweetheart for eight years, it's time you better 2/5

3 get with the program. She doesn't really care that the stock market has been down three of the first four years of your career where 90+% of the people who started when you did have left the industry; best not to skimp on the ring. S&P % Year 2005 You think about your insurance coverages, your access to the best doctors in the world, your bucket list, and your estate plan more than your portfolio when you hear a doctor tell your 54 year old seemingly healthy mother three weeks after your wedding she has an unknown primary cancer that will take her life inside of 12 months. S&P % Year 2006 Be careful planning around rules of thumb or average life expectancies and designing your Social Security, pensions, and insurance coverages around what seems like the most likely outcome. Hedge your bets just in case things that seem so obvious turn out not to be. My mother passed away at age 55 and was just 18 months into retirement. Note I can assure you my mother didn't care about the S&P 500; she cared that her surviving family would be okay. S&P % Year 2007 While it is not easy, life goes on after the loss of a spouse, parent, or sibling. You are thankful when you have your financial affairs in order to make the transition and life afterward a little easier. It is impossible to predict when you need to get your affairs in order; life is often infinitely more unpredictable than the markets. S&P % Year 2008 The markets do not care what is going on in your life or when you need your money. Just because something has never happened before doesn't mean it can't happen. During this time, most large financial institutions in the US and worldwide would have failed if it were not for government intervention on a scale most thought unfathomable. For the first time since the Great Depression, having your money in a bank was no longer considered safe if you were over the FDIC limits (the limit was raised from $100K to $250K to restore calm). When events happen few believe are possible, it is normal that fear takes over. S&P % Year 2009 Only in times of great market stress do most people start to focus primarily on risk management versus returns. It is also the only time most truly appreciate the protections they have built in their portfolio strategies. Remember...every storm eventually runs out of rain. S&P % (S&P 500 declined another 24.6 % bottoming on March 9th before rebounding) Year 2010 What doesn't kill you generally makes you stronger, and time does heal the scars of loss, both personal and financial. Periods of stress provide an opportunity to gain perspective 3/5

4 and valuable lessons; however, it is also important to avoid living in fear of those events continuing indefinitely. S&P % Year 2011 Realization that children change everything and they are expensive, especially when they come two at a time. S&P % Year 2012 Realizing that most people don't believe they can live past age 100 but it is quite expensive when you do. While some may believe money is not important when you reach that age, to the contrary it seems to be more important if you care about being a burden on your family, having quality of life, and a sense of control. It was comforting to keep the promise I made to my grandmother that she could stay in her own home until she was ready to leave. She passed away in her home at the age of 105.5, which is now my office. S&P % Year 2013 Most people don't realize it takes a 100% gain to recover a 50% loss. When the need to focus on risk mitigation is highest many people have forgotten about risk and are now primarily focused on returns which creates both opportunities and risk and the need for sound advice. S&P % Year 2014 Things can continue to happen that don't seem rational; like baby girls being born that doctors said would never happen and the stock market moving to all time highs with historically high valuations without any meaningful pullback. S&P % Year 2015 The last fifteen years has taught me most of the theories based on averages never actually work that way in real life, yet there is no shortage of people that still believe and promote them, which is almost amusing. True wealth management requires a comprehensive approach, with a long term view that focuses on knowing your goals and your unique risk tolerance and managing the two together, realizing life often throws us curve balls that the markets don't really care about. That is why it is so important to plan; as part of that process it is a good idea to have a plan B and preferably a plan C so you can turn risks into opportunities. S&P 500 TBD (no shortage of people predicting much higher levels and others saying a significant crash is imminent) In summary, I guess the difference 15 years makes, you stop believing the hype in both directions, from the raging bulls and eternal optimists to the perma bears and doomsayers. You realize you don't know near as much as you thought you did, nor do many of the so called experts. While both life and the markets are quite unpredictable, there are prudent ways to manage risk, hedge your bets, and take advantage of opportunities. True success is measured in your own personal situation, which is truly unique, not in comparison to others. This takes time, knowledge, fortitude, commitment, 4/5

5 and an intense focus on the big rocks from both the client and the advisor, not the quick fix, latest fad, a talking head or an article that comes and goes depending on what is happening in the world. When the chips are down, no one cares what the S&P 500 or some arbitrary index or benchmark is doing or did. The question is always the same; "Do I have enough?" and "Will my family be ok?" It is that simple, yet that complex. It has been extremely rewarding to work with many families and help them achieve the clarity and peace of mind to be able to affirmatively answer those questions in an unpredictable world, and in several cases, personally witness the transfer of wealth from one generation to the next. Our goal is to bring perspective to your situation by focusing on what is truly important so you can plan for the future. Thank you for your continued trust and the honor to serve your family. I look forward to working with you for many years to come. Sincerely, Trent Byerly Wealth Manager Phone: (540) Fax: (540) Securities offered through First Allied Securities, Inc. A Registered Broker/Dealer Member FINRA/SIPC. Advisory services offered through First Allied Advisory Services a Registered Investment Adviser. This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Citations. 1 quotes.lifehack.org/quote/denis waitley/you must stick to your conviction but/ [4/16/15] 2 fortune.com/2015/04/16/taming the bear market/ [4/16/15] 3 tinyurl.com/odyle9s [12/25/13] Forward this This was sent to trent@byerlywealth.com by trent@byerlywealth.com Update Profile/ Address Rapid removal with SafeUnsubscribe Privacy Policy. Byerly Wealth Management 4186 Scenic Hwy Mt. Solon VA /5