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Bull Market Risk, Brokerage Accounts & Good Advice

Part of what I do in these pieces is to put into writing the conversations I have in client meetings. This month, three that have come up more than once:

My “play” investing account has done really well, and now I’m stressed about losing it.
Short-term strategies for your brokerage account to fund family goals.
A client who described a healthy advice relationship perfectly.

If any of this sounds familiar, feel free to pass it along.

Bull Market Risk

A common dynamic with new clients: one spouse has been managing the family’s investments for years. They went with the S&P 500, or they picked Apple, Amazon, and Google, and it worked. Really well.

Many of them started with $50K in their 20s or early 30s. Fast forward 15 years and steady contributions later, and they’re walking in with $500k to $1M+ sitting in a brokerage account, a family with real financial obligations, and a spouse who’s starting to feel the weight of managing it.

Here’s the thing: picking the right investments when you have $50,000 on the side at stake is a very different job from managing a portfolio when you have $1 million, two kids, a mortgage, and a lifestyle that depends on those accounts not losing 40% in the wrong year.

A 30% loss on $50,000 is painful. A 30% loss on $1,000,000 is $300,000. That’s money you lose sleep over.

Three things I tell these clients:

Everyone is a genius in a bull market. The stock market has been mostly up and to the right for the past 17 years. Let’s be humble about our stock-picking skills.
Accumulating and preserving wealth are different strategies. You should be doing both as your accounts and your list of responsibilities get bigger.
Don’t live, spend, and invest in such a way that a particular stock getting blown up radically changes your family’s priorities.

If you’re not sure how to build a strategy around that third one, that’s what we do.

Brokerage Accounts Funding Family Goals

The 401k is the most automated savings vehicle most people ever use. Money goes in before it hits your bank account. You don’t miss it, and you get the gift of decades-long compounding in return. The brokerage account is different. Most people set it up, contribute when they remember to, and think of it as an adventure fund.

Your taxable brokerage account is actually the most flexible financial tool you have. It can fund a kitchen renovation, a country club initiation, a wedding, a down payment, or tuition. When markets have been good, and the last few years have been very good, there’s often more growth in those accounts than people realize. Taking some of that growth to fund a real goal might not be a bad move. In many cases, it’s a great one: you’re harvesting gains at a high point, reducing concentration risk, and funding something meaningful without taking on debt.

The questions worth answering before you do:

How will the withdrawal be taxed, and how does that affect the budget?
Are the right priorities covered before making this move?
What’s the plan if markets are down when it comes time to liquidate?

It’s never just a brokerage decision. It’s always a planning decision.

Good Chemistry

Recently, a client had described our meeting with them as “a collaborative approach to decision-making, balancing immediate needs with long-term objectives, and maintaining a disciplined yet flexible financial plan.”

That’s a pretty good description of what we do.

But the version I liked better came from a client who referred a friend. He said that working together had helped him “not only plan for my financial future but also help with making everyday decisions that impact my financial future and balancing that with living life.”

A financial plan isn’t a document you update once a year. It’s a framework for every decision that touches your money. We’re regularly answering questions like:

Balancing the renovation with your savings gold.
Changing careers that involves a temporary drop in compensation.
That RSU grant is now 25% of your net worth.

The plan is worth something because it’s there when you need it, not just at the annual review.

If you’ve been making those decisions without that kind of structure behind you, that’s what the first call is for. financialcoachgroup.com/contact

Not intended as a recommendation or offer of any specific advice or services. All investments carry risk, and past performance does not guarantee future results. For detailed information about our fees, services, and background, please view our regulatory disclosure materials on the SEC Investment Adviser Public Disclosure Website (https://adviserinfo.sec.gov/firm/summary/170478).