Follow the Leader

20 Hiker

May, 2020. 

By Jeff Headrick, Financial Planner

 

“Over the last few weeks, I have given some thought about what it means to be a leader. Not just a leader in business, politics, or the championship team, but about what it means to be a leader in my own home, in my interactions with friends old and new, and even how I’m leading myself. This post starts with the family, has the stock market at its core, and ends with a story about a U.S. Marine that is hoping to inspire us all.”

Follow the Leader 

As a kid I remember playing follow the leader. You may remember that this game required following the leader regardless of where they went. Certainly, a precarious place to be in— but then I guess it depends on the quality of the leadership.

My young son Jeff follows in my footsteps. I am often amazed, sometimes even startled, by the choices he makes based on what he sees me do. It makes me feel both honored and a little scared at the same time. I guess I better watch my step. We are playing a real-life version of follow the leader.

As a business professional I often lead as well. I’m in the business of rendering financial advice, and people tend to put a lot of stock in my ability to lead them. When people sign on with me as a client, they know that they are hiring me to work with them through good times and bad. And it’s during these times of crisis that I try even harder to lead in a way that is steady, consistent, and easy to follow.

Bonds, Bonds

Though I have had many clients debate with me over the years about the wisdom of holding bonds in their portfolio, I’m not hearing many arguments now. This is an area that we have led our clients in that has benefited them even during this current crisis. For example, from January 1, 2020 until April 26, 2020, the seven equity (stock) classes we track were all in the negative. US small caps were down most at -29.64%*. US large-cap growth stocks were down the least at -4.2%.*

On the other hand, of the seven fixed income (bond) asset classes we track, six of the seven were positive over the same timeframe. Long-term treasury bonds were up the most at +25.26%*. Muni bonds were down the least at a manageable -1.09%.

Downturn

We (Inspire Financial Planning) have also been proselytizing the inevitability of a market downturn during the previous two years (See articles below written in 2018 and 2019). While we did not see Covid-19 coming, we let our client base know repeatedly that the time is always “now” (bear market preparation has been conducted at Inspire by investing in a highly diversified global portfolio of stocks and bonds) to prepare for market downturns. Especially after the most recent 12 years of bliss in the stock market. Something just had to give. And it did.

Take this all with a grain of salt. While I have many years of experience in this industry, I can and do make mistakes. That’s why it’s critical for us all to question our leaders from time to time—we all need each other! We all make each other better.

God Isn’t Done with Me Yet

As a believer, my ultimate image of leadership is Jesus. Though I have to admit, this is such a lofty goal sometimes I just settle for using David as an example. Through reading the word it’s easy to get inspired to learn what so many before us have had to endure. And how so many rose above their circumstances to a brighter day.

And though I still make mistakes as I lead, and as God is still crafting me to become the man that he hopes me to be, I take quiet satisfaction in knowing that it’s all going to be okay. Whether it’s a time of harvest, or a time of struggle in the desert, it is all going to be okay.

God Isn’t Done with You Yet

At Inspire Financial Planning, we have clients who are in different seasons of life. Some are prospering right now-- and some may be facing battles that I know nothing about. But regardless of your situation always keep in mind that God is not done with you yet. This is most likely not the end, but simply a season of your life that will soon pass like all else does.

During this season of crisis, I challenge you to examine how you are leading. Sometimes it’s under this lens that we can more clearly see the path we are walking. Start by leading yourself well, then on to those you love, and so on. If you are more prone to follow—and we all are on occasion---examine if you do this with an attitude of grace or resentment. Leading well, and following well are both critical during any season, and particularly so during times of adversity.

Leading and Inspiring Semper Fidelis Style

Finally, you might look to my neighbor if you need inspiration leading or following with grace. His name is Russell Larkins and he just set out to run across America for a worthy cause. Russell is a former U.S. Marine (once a Marine always a Marine), and certainly an inspiration to us all. For more on this story see the video below.

Russell Larkins U.S. Marine, Wilmingtonian, and Runner of many miles

If we can be of service in any way, please give us a call at (910) 448-1450. We are here to serve.

*Investment Sources:

AlphaStar Market Monitor

Previous Inspire Financial Planning Market Downturn/ Bear Market Posts

Three Ways to Prepare for a Market Crash

Bear Market on The Horizon

Stock Market Deja Vu

 

About the Author

Jeff Headrick is an independent financial planner and wealth manager with Inspire Financial Planning. When Jeff was still in his teens his father died unexpectedly. While his father was a hard worker and a good provider, he did not have a solid financial plan in place when he died. This left Jeff’s family at a difficult  financial crossroad.

This personal experience, coupled with being inspired by Sir John Templeton, Warren Buffett, Dave Ramsey, and the laws of compound interest, prompted Jeff to enter the financial services industry in 1999. He has been helping people with their financial planning ever since.

Jeff lives in Wilmington, NC with his wife and two children. He spends most of his spare time just across the Intracoastal Waterway in Wrightsville Beach, enjoying the beauty of the NC Coast.


Charts and graphs contained herein should not serve as the sole determining factor for making investment decisions. All hypothetical scenarios are for illustrative purposes only. Investment Advisory Services offered through AlphaStar Capital Management, LLC a SEC Registered Investment Adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Diversification does not guarantee profit nor is it guaranteed to protect assets. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results.

 You cannot invest directly in an index. Consult your financial professional before making any investment decision. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

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