More than a Money Manager.

The Financial Crisis Taught Investors What They Didn’t Learn in Investing 101

Posted by Manish Khatta on April 10, 2018

This year (2018) will mark the 10-year anniversary of the global financial crisis, which also ushered in the worst economic downturn in the U.S. since the Great Depression and one of the worst bear stock markets in recent history. Those who lived through that troubling period (like us) remember the extreme swings in volatility and the compounding losses. When the bear market finally bottomed out in March 2009, the S&P 500 Index had shed 56% of its value.

A bear market of that magnitude is rare—according to Yardeni Research, only one other bear market since 1929 has been worse. (That was between 1930-32, when the S&P 500 lost 83% of its value.) However, Investors should pay attention to the magnitude of losses, perhaps more so than their frequency, because of the time it takes to recover from these kinds of extreme losses.

In the case of the last bear market, it took around four years for the S&P 500 to make up all of its lost ground. Add to that the 517 days from peak-to-trough of the bear market itself, and you get a total of five-and-a-half years of time lost trying to reclaim market value.

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Topics: Risk Management

The Advisor Experience Update Part 2

Posted by Jennifer Burton on March 29, 2018

Technology is changing the way the financial service industry conducts business. It is not only something you should have in place, it is something your clients will expect. Several members of our team have been busy attending conferences where technology partners are spotlighted in order to find integrations and solutions to improve the financial advisor workflow. Conferences that were once densely populated with mutual fund sponsors are now packed with FinTech companies popping up seemingly overnight offering new and innovative services. The downside is that we have never met a tech sales person that can say the word “no!”. Part of our job at Potomac is to stay on the forefront of FinTech innovations and look for ways to make our platform more robust by offering additional integrations.

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Topics: Advisor Resources

Your clients’ biggest asset is also their most at-risk

Posted by Jeff Goodnow on March 14, 2018

After many years of working, saving and investing for the future, many households eventually arrive at a point where they have accumulated significant assets, both in terms of number and value. I am talking not just about real assets such as houses, property, vehicles, collectibles and more, but also financial assets including holdings in investment and retirement accounts like 401(k)s and 403(b)s.

For many people, especially those who are further along in their careers and nearing retirement, their financial holdings may represent their largest asset. For a good number of them, these assets are bigger than the equity value they have built up in their primary residence.

These assets are also the most at-risk from a loss in value. While individuals can insure property and belongings against loss (for example, home insurance protecting against loss from a fire), there really is no insurance available for financial holdings. At least not in the traditional sense.

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Topics: Risk Management

5 Steps Advisors Should Take in an Aging Bull Market

Posted by Jennifer Burton on February 20, 2018

The average bull market lasts just over five years. The current bull market has persisted for almost nine. As stocks continue to rise and major U.S. indices repeatedly hit record highs, it can be easy for financial advisors and clients to become complacent.

However, the recent spike in market volatility has provided an opportunity for investors to experience drawdowns for the first time in over a year. Rather than giving into market inertia, advisors should use this aging bull market and rise in volatility as an opportunity to reevaluate client goals, allocations, and risk preferences.

An object in motion tends to stay in motion; that is, until acted upon by an outside force. There are five simple steps advisors can take before a correction or bear market catches you and your clients off guard and erases a good portion of the gains earned over the last nine years.

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Topics: Risk Management

Ultimately we like to say that we are "More than a Money Manager. This is a small business run by people not robots. We talk, we plan, we execute together, as partners working to achieve the same goal."

Here are some topics you'll read about in our blog:

  • Our risk management techniques that make investing a smoother ride.
  • An inside view of our industry including the ugly nobody wants to talk about.
  • Our trials and tribulations growing and implementing technology.
  • Our company culture and the people behind the process.
  • Our great advisor partnerships, small business success stories and much more…

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