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I don't want to say this is you, but…

The average investor is emotionally tied to their financial risks. Losing money is one risk. Upsetting your spouse is another risk. So is taking investment advice from an internet influencer.

Problem is, investment advice is easy to find — it's everywhere. But not all advice is good advice. And when you don't know what's true and what's hype, you buy or sell based on emotions, not data.

On today's episode, Pat Bowen, president of One Capital Management, finds that many individual investors trade on emotions. They’d be better off with diversified, long term strategies. Pat believes that you must manage your investment risks to meet your financial goals.

Hot investments come and go — don't let them leave you cold.

Listen now to discover how a long-term investment strategy maximizes your financial gains!

Show Highlights Include:

  • Why access to financial information is no longer the gatekeeper to riches (0:53)
  • The stable “three-legged stool” to look for in your investment advisor (4:35)
  • Why the myth of “buy low, sell high” is impossible to achieve — and how to make money anyway (7:45)
  • How to diversify your portfolio to maximize your returns — without swings in your earnings (8:28)
  • Hate taxes? Here's why you need to plan your major money moves for the next 2 years (14:55)
  • Why having a “personal trainer” for your investments increases your gains (23:58)
  • How does your favorite YouTube investment advisor get paid? (Hint: it's not from good advice) (32:01)

If you want to download the Summer 2021 Playbook mentioned during this show, head to https://onecapital.com/ and click on the “Idea Lab” tab to download the report for free. 

To schedule your complimentary retirement track review, head to https://onecapitalmanagement.com. You can also call us at 805-410-5454 or text the word ‘TRACK’ and we’ll reach out to you.

Read Full Transcript

Welcome to Make your Money Matter, the show that aims to change the way we think about financial advice. So, you can make better decisions.

Brad Barrett is a managing director and partner at One Capital Management, a wealth management firm serving nearly 1500 clients nationwide. With over $2.5 billion in assets, they’re a group of advisors dedicated to ensuring their clients achieve their investment and retirement goals. And now here's your host Brad Barrett. [00:26.1]

Brad: Welcome to Make your Money Matter, the show dedicated to helping you create a better relationship with your money. I'm your host, Brad Barrett, and it's my goal to help you distill the best ideas when it comes to your finances so you can make more confident money moves. Here at One Capital Management, our mission is simple to help our clients and you listeners take control of your finances and build the life you deserve. Friends, today the challenge is no longer the access to information, but rather it's finding the right information, and more importantly, how that applies to you. And that's my commitment to you here each and every week here on the Make your Money Matter podcast, because after all your money matters. And before we get started, if you haven't already done so you can go to our website onecapitalmanagement.com. You can download and subscribe the Make your Money Matter podcast. You can also download it, subscribe the podcast on any platform where you would download a podcast, whether that's Spotify, SoundCloud, the iTunes, apple app on your phone, Google podcasts, let us know how we're doing as well, give us feedback. It's always good to hear from everyone. And as I say each and every week, if you like the show, share it with someone. If you don't like the show, I guess don't share it with someone. [01:41.0]

But this week's a good one because in week nine and episode nine of the Make your Money Matter podcast, we went through, what's called One Capital Management's Client Experience. And there we focused on an overview, really starting with one of the three legs of our firm. And each one of those legs starts from client servicing to portfolio management and advising. Not in any necessary order per se, but with that in mind today, we wanted to focus on the portfolio management aspect of One Capital Management. We focused on week nine. And for those who haven't listened, I definitely recommend going back to episode nine, the One Capital Management's Client Experience overview, where we focused on the client, servicing our associate team, which really ends up being the first line of communication for all of our clients. So, for all of you clients listening, it's a great episode to kind of go through, how we structured and what our vision was for the client servicing. [02:36.9]

And today's episode, we want to welcome back on Pat Bowen, the President of our firm, who has been instrumental and fundamental in the design of both the client servicing portion of One Capital Management, as well as the portfolio management team and our investment committee. So welcome to Make your Money Matter. Again, today spoke a couple of weeks ago on our episode, Make your Money Matter regarding our client experience and something we focus on heavily here at the firm. And again, with us as Pat Bowen, the president of our firm we're excited to have you back on Pat. [03:11.4]

Pat: Thank you.

Brad: And you know, really in our conversations over the past month or so, we've been talking about really continuing the dialogue. We all got a lot of great feedback from the client experience podcasts we did. We spoke mostly then around our servicing, on the client service experience for our associate team and the design there. And I wanted to shift to our investment management, really the engine that drives the ship with regards to the service we provide. And when we talk about client experience and the services that our clients receive, one of the main things that are coming to us here for is our investment acumen. Our decision-making all this stuff that you and I talk about daily, we as a firm talk about. So, I kind of want to lead off with the question of when you were designing this with our partner, Steve Kelly, our Chief Investment Officer, and, and the team that you had in place. What was some of the things you set out to achieve? What are the goals in the overall design of our investment management division? [04:08.4]

Pat: To be clear too, though, back in those early days, the team was Steve.

Brad: Yeah.

Pat: And Steve. All right, and then there was me, there was Don and Dan, but we weren't in there doing the investment research and the security selection in that process. Steve was, was there doing it. He didn't have much of a team, but it was a lot of hard work with just the four of us. But let me try to attach this whole thing to the other third leg, if you will, to the stool. The first one we talked about was client experience.

Brad: Hmm…hmm.

Pat: That's one. There's the advisory, which I know you're spending time on in these podcasts, which is the role that an advisor like you play in the entire process, which my view is the most important piece to this whole puzzle.

Brad: It's definitely the connector between the sides.

Pat: And then the investment team. The role there is to execute on the plan that was designed by the advisor and the client working together. You bring the expertise, they bring goals, objectives, where they're trying to get to what they're trying to achieve with their wealth and their money. You're applying what we do here to that create a plan. Now our investment department, the investment management team has to go execute. So, I put them into those three distinct camps because we have three distinct services, we have to provide in each of those and expertise. So now the question you asked is, tell me about the investment department. So back in those early days, it was, we used to say this a lot. How do we find out, find ways? What do we need to do to achieve the return our clients need on an individual client basis? Every family is different, got a different roadmap, different plan, different destination. What do we need to do to achieve that? It's a rate of return, ultimately, that we have to achieve. [06:06.7]

Brad: Hmm…hmm.

Pat: How do we get there with the least amount of risk we can possibly achieve? So, all along through the years, we're trying to figure out how do we tamp down that risk? And it gets into that's our investment philosophy of what we're trying to achieve. Then it's a strategy. And the investment team then has to go and figure out ways to achieve those objectives, controlling and managing risk as best we can and then you get security selection.

Brad: You know, you said something there, that was interesting, we talk about the security selection and a lot of portfolio management, investment management really is risk management.

Pat: Yes. [06:43.9]

Brad: I think a lot of people listening and a lot of clients sometimes investing and achieving that rate of return, especially the ones that were stated out in the wealth forecast we're putting together for our clients and the designing of their unique plan, managing the risk within that portfolio is a large part of the investment, make the investment decision-Making all of that stuff that comes into play. So, it's interesting when you say that, that way, because I think a lot of people, when they talk about investing really want to focus on, okay, what stocks you have, all the stuff that you have in there, those kinds of things. But the reality is we're looking at are all of the data points that revolve around risks or standard deviation, all that kind of stuff that comes through. And so, if you don't mind, I'll before we move on, I kind of want to elaborate on that because risk management, I kind of made a note here, as you were saying, that is such a large part to that. So, when you talk about risk management, when it comes to our investing, what do you mean by that exactly? [07:33.1]

Pat: So, you're right. It doesn't come to see individual, if we own this. I think a common perception is I only got, I have to buy things that only go up. I can't buy things that don't do well. That's not true. There is, that's impossible to achieve that. You cannot be perfect. You have to try to find investments that are going to do well over time. And we'll get into that later on where we think of businesses and companies and how those are slightly different things. But if there are things that don't behave well, that don't perform, like you thought they would, then how do you manage that risk? And when do you get out? But you've got to put together these portfolios of things that just behave differently in the short run. Okay, stocks will do one thing during a given certain environment, a global economic environment. And bonds, the safety of principle side of the portfolio, and they'll generate some income. There's your return. It's not going to be as high as it is inequities over time, but it's also going to be a much smoother pattern of returns. Your experience is going to be much more peaceful, owning bonds for the most part as long as you're managing risk there. [08:45.7]

On the equity side, they could go up wonderfully one year and they could be down the next year. And then if you can spread that out by geography, by company size, by actual individual industries or sectors you're in. You know, there's that old, simple analogy of, if you have a, a fellow and let's just use Hawaii as an example. If all he sells is sunscreen, well, he's going to have a pretty good business, but it does rain sometimes. Well, the guy down the street selling umbrellas, if you just simply diversified your own little stand to sell sunscreen and umbrellas, you're probably going to be able to sell something to somebody every single day. [09:23.5]

Brad: And allocate the right amount of umbrellas relative to sunscreen, which is exactly what we do here relative to small cap, mid-cap, large cap, fixed income equities.

Pat: Yep. That’s it, that was the simple concept to start with and then build upon that. Okay, what else do I need? Well, maybe I ought to sell water too. People, get thirsty when it's sunny and hot out. They also still need to drink water even when it's raining. So, it was to continue to build upon those things, to find things that behave differently in the short run, that you can now run a portfolio that has a much smoother pattern of returns, a little more predictable and certainly easier to live with. And the advisor has that role of from time to time when things aren't going so well. We had 2008, we had 2009. We had the.com bubble burst and some people can even feel and go back into the 80’s and into the 73, 74. Not all of our clients can go back that far with an experience.

Brad: Hmm…hmm.

Pat: Meaning they lived it. We had one earlier, as you know, last year. I mean, that was one of the shortest-lived ones in one month.

Brad: Right. [10:33.7]

Pat: When this COVID thing started. So, it's, how do we manage and help them get through those. Let the portfolios do what they're going to do. And then the advisor has that important role of helping the behavior.
Let's help you emotionally get through this period of time. And if we've educated clients about how we do things and they understand it, it'll be easier for them to live through those periods of volatility.

Brad: And that's an interesting aspect you bring up that again, a lot like risk management in the investing arena. People tend to also misunderstand the behavioral finance traits that a lot of clients and really all of us as humans bring to the table. And you mentioned a couple of them, one is experience. So, for many listening and for many people, when they're looking at investing, those are maybe younger twenties, thirties, forties, and haven't lived through some of those 08’s, 09’s, 01’s, you know, 87, 73, those, all those aspects that come around when, when historical corrections or recession periods happen. There's really two types of behavioral finance traits. There is circumstantial the things that we live through, right? [11:43.4]

Pat: Hmm…hmm.

Brad: Whether they're good or bad, how that shapes us, that's true of life as well. There's also the fundamental, essentially the God-given, this is how I am. I'm either neurotic, you know, the one way, or I'm very peaceful and very organized in other ways. And those two forces really drive when it comes to a topic like investing from the advisor side, as we build a allocation and investment policy statement. And when we talk about that, I think it's really great to hear that as the design for this team is we take that into consideration.

Pat: That’s true.

Brad: I don't think a lot of firms do. More I see it nowadays. They're more fund managers, more designing for a seeking alpha really only, and not truly taking into what you just said, the behaviors of our clients. And I think that's the, that three-legged stool you mentioned of our associates servicing level, our advisors, really sitting with the clients, going through the development of it, and then the investment management piece component to it. Cause risk management, the behavioral psyche.

Pat: Hmm…hmm.

Brad: If you will, of a client all matters when it comes to an investment. Decision-Making. [12:40.2]

Pat: Absolutely. So, take that. Okay. You, as an advisor, you have worked with a family. Worked together to build a plan. Now we have an investment policy, you have an allocation, I can handle X amount of risk, and I need Y amount of return over time to achieve what I want. So, we then arrive at some allocation, a split between equities, which is higher return, but you got to live with more short-term variability of returns. A lot of people want to call it volatility or risk. It's not the risk of going to zero and losing your money. It's the variability of returns, which behaviorally gets uncomfortable.

Brad: Yeah.

Pat: From time to time. Then you have the balanced side, the fixed income to bring the overall portfolio, variability of returns down, making it, as we talked about earlier, a little more predictable.

Brad: Hmm…hmm.

Pat: Now go to the investment team. So, you've got two sides. I think to that, that piece of this entire business. I'm trying to simplify things as I think about how we build the company and serve families. And in that side, I think of it as two ways to do this. First, you have to figure out what are we going to own? We got to go do research to figure out the best ideas and opportunities. That is one of the critical components to how we designed our investment team as we did. And I want to go into that in a moment. [14:06.3]

Brad: Hmm…hmm.

Pat: The other side is how do you actually execute it? And you get to the individual client level where you can have a portfolio manager who will execute the trades, the buys, the cells, what are we buying? What are we selling? How much do we want to own of this? And how much do we want to sell of that? And on and on different asset classes, all the way to company names. That all comes from the investment committee and team and then the portfolio managers execute at the client level. There are other parts to the execution, client's behavior, what about their taxes? When do we execute on some of these trades we're approaching now the end of the calendar year, the end of a tax year, and every client's going to be different. Our natural inclination would default us to say later in the year, if we can defer realizing more gains now to next year, let's do it. Let's not pile on more taxes in this current year. But the second question you have to ask is, well, what are my tax rates, the client, what are my client's tax rates this year? What will they be next year? Because naturally I'd want to defer. However, if the tax rates are likely to be higher next year, it could be something that comes through tax code changes, or it frankly could be the client's going to make a lot more money next year, or they're going to have a, a real estate sale. That's going to definitely happen next year or a business sale. Well, we know taxes are going to be higher next year. We don't want to hold these things two years or three years. We better sell them this year. Create that the gain, which creates a tax liability, but we'll try and manage every one of them to every client's specific situation. And that I think is a little bit of, I don't really want to say magic, but that's a bit of our, I think our advantage, some people like to call it an edge. I think it's what makes us different. [16:07.9]

Brad: It’s amazing rounding first base and second base on so many things, how much of a difference that can make. Cause when I hear that a lot, so to sum it up as communication. Being in communicate, which we talked a lot about in our OCM client experience.

Pat: Hmm…hmm.

Brad: An episode a couple of weeks ago was if we do our job of communicating, not just in our discovery meeting and the initial onset, which many advisors out there will do. And then they'll just kind of like essentially lose sight of the client and, and time will go by. But communication is a great way to sum that up. I'm just rounding that first bit, doing what we need to be doing on a consistent basis to help understand our client's concepts, cause you can't have a conversation like you were saying in August or September, as you're heading towards the fourth quarter of the calendar year with a client you haven't spoken to in a year since maybe last fourth quarter, and truly to understand where are you at? Did you happen to sell your home or your business? Or are you looking at that? Are you concerned about current discussions around tax rate increases, which is happening as we speak? [17:01.0]

Pat: Hmm…hmm.

Brad: we all know this, right? So, communication to you, the secret sauce or the magic, if you will, like you're talking about, I love what you said that because it's a lot of people said, well, there's something unique about that in reality is to us, it's really just inherent. We use that word a lot here is that's the core of who we are. It’s like, let's just be good humans and advisors to our clients and do the right things. And one of those can be as simple as communicating with them. [17:32.1]

Pat: That's the key. If we don't have that, how is our portfolio manager, the client's portfolio manager, how are they going to execute to maximize the effectiveness right? At the end of the day, it's the amount of money you actually get to keep. It's not necessarily what you earned, it's what you get to keep. To maximize what you get to keep the communication flow is the advisor and the client and the advisor relays that to the portfolio management team and then they can execute with the best information. I don't want to let anyone think that it's always going to be perfect, but boy, you can achieve better outcomes if you just make those extra efforts. And that is what we always talk about around here. How do we make the extra effort for better outcomes? We're going to strive for perfection. We know we will fail in probably that goal, but boy, we're going to have better outcomes for our clients. [18:32.7]

Brad: Absolutely. So, with that, talking about the design, the set up for it, let's go into that second half you were talking about the execution. So now we have the plan set up. We're getting the team dialed in with regards to the allocation. We're looking at the behavioral traits, the special instruction, naming all of the things that you know, the concept of types of accounts, you mentioned that as well in the setup. We're as a working as a team here, when the advisors are talking with our portfolio managers for the client, they may have a tax deferred account, an IRA, a Roth 401k, those kinds of asset classes, right? As well as, not as classes, sorry, but types of accounts. And we may also have a taxable account, trust account, individual account. Those are two different animals when it comes to the execution of the plan to you talked about a little bit. So, I was just curious. Now let's go into the granular of now of our portfolio managers, our associate portfolio managers, how they're executing the trades and then essentially up to the central decision-making we have a bar investment committee. Cause I mean it will be really good for people to hear. Maybe we start there at the investment committee side. [19:30.4]

Pat: Yeah.

Brad: The central decision-making you guys set up, which I think that is something magic. I've been around, read a lot. You and I both have studied our colleagues if you will. And I there's a big difference, I think when it comes to the centralization of our decision-making as a firm, which we've held true, the entirety of the firm. Maybe talk a bit about that.

Pat: Yeah. And that, that was the key element to, can we go build a company that manages money for families? And you can execute so that every client, no matter when they started, when they came along, no matter what the size of the client, that they're all always going to get the best thinking of our firm. So, let's get a team and build a team of really smart people, experience different temperaments, different talents, different convictions, and you put them in a room to debate, what should we own? And they have to produce evidence research to convince each other, depending on who's presenting a particular investment idea, they have to convince each other in the team of why we should be investing in X, Y, or Z. And when they do that and the group has now made the decision, yes, should own this, every client now is going to get that in their portfolio. Well, why? Cause that's one of our best ideas and every client should get it. And every client now should get it in the same weight that we determined as appropriate, whether it's 2% or two and a half or one, whatever, it might be. [20:53.8]

Brad: Right.

Pat: Driven by conviction and also manage risk. You could have high, high conviction in a particular company, let's say that you want to own in the stock portfolio. But we know the higher you allocate, the more you allocate to that one individual name, the more portfolio risk or variability you will start to create. And that gets to a threshold where we have to tamp it back down. And it's go back to a little bit of that baseball. You don't have to hit a bunch of home runs and grand slams. You just got to get people on and get them around.

Brad: Yep.

Pat: The objective is, is touch three bases and then home plate. And that's a run and your team is ahead. [21:45.4]

Brad: I mean, the, the planning we do here, it's a 99 game. This isn't a, let's just get a bunch of grand slams and innings one and two, and then we think we're ahead and we're winning.

Pat: Yep. It's all it is.

Brad: Yeah.

Pat: Yeah. It is simple. It's just not easy to do. And there's a bit of an ability through research to let logic drive decisions versus emotion.

Brad: That's something I love that you said that. That is something we talk about with clients constantly. I think one of the big differentiators between the understanding of like, well, we're just a human and I'm just a human, what makes you better at investing or being a portfolio manager? Now I'm going to discount for a second. Disregard I should say education experience, background specifically in economics or financial management or whatever, right. But I always think it's the unbiased approach we take to managing our client's assets. Even someone like myself or you who've been in this industry 20 plus years managing our own accounts. We're still human beings and we might find us drifting towards trading for emotion. It's our money. One of the things I've always said to clients is that we have the luxury, if you will, of managing clients and looking at everything as it is without emotion. Managing that portfolio, without the concern of what's my wife gonna think about my trading or vice versa. What's my family gonna think if I hit this trade and, and it's going to go down and, or what am I going to think about myself? I think a lot of people listening, I've talked about people with regards to our radio program on our podcast that struggle sometimes with a lot of the information that's out there about investing. I mean, basically you can go set up a brokerage account anywhere you want nowadays Right? You and I both know this. [23:28.1]

Pat: By the way, that's why some of the custodians out there are hiring a lot of people.

Brad: Yeah.

Pat: Thousands right now.

Brad: It’s, it’s.

Pat: Because the number of individual accounts that people have opened and many of them for ages 30 and younger.

Brad: Yup.

Pat: There's been a massive wave.

Brad: And, and there's nothing wrong with that per se. It's actually a blessed thing. The difference between going from an investment platform where you can trade and actually having an advisor really comes to discipline and discernment within your own investment philosophy. And so, I think a lot of times we talked about that is when you have someone it's like, I don't want to liken this way, but it's like having a trainer in a way. When you're working out, right. Are you going to be more motivated daily, weekly, monthly, and then continue that year over year to always hit the gym, or does it help you to have an accountability partner? A lot of advice comes around that law or investment decision comes around that. But when it comes to actually making the trade, having that, that unbiased approach, having that objective, if you will approach really helps make the difference. And I think that's a big thing that in glug, we need to hear when it comes to investing, because the concern of relinquishing the trust or the overall operations of in managing people's life savings. I mean, where every time we talk about this, it's never lost on us as a firm. And I think we all can agree these advisors to the portfolio managers, the trust that our clients give us. The ability to say we are building trust with you, knowing that these savings that I've amassed over 20, 30, 40 years, we're now entrusting you to help us continue to build that, protect it, and also get into that next phase of life that might be retirement. Whether that's being financially free at 40, for someone listening, or that's seven years old after working for 40 years and maybe building a business there's retirement is a vague term sometimes. [25:12.4]

Pat: Yeah.

Brad: For a lot of people. And I'm don't mean to get off topic with that. But when you boil that down into the investment management approach, really taking that objective point of view, and you mentioned something about research because that's a lot of the hard to do. It's it's easily said, but really hard to actually execute. I think our research and what we've built with our ETF research team. Maybe talk a little about that and how we structured that from a, from an R&D perspective. [25:37.3]

Pat: Okay. The one thing I do want to just touch on, cause you said a couple of things that I wanted to, about removing the emotion from the investment decision thing I would tell you is that's why I don't actually manage my own account.

Brad: Same.

Pat: The firm is managing my money. The investment team is actually the ones running it. I set an asset allocation. They execute. I frankly don't even log in to look at my account.

Brad: It's funny. I tell clients that I'm the same way Veronica and I, our assets are managed by the, by the team. A lot of those, same portfolio management managing my clients.

Pat: Yeah.

Brad: I don't look. [26:09.5]

Pat: Yep. I know it's going to be there. I know how well the firm is doing. I know how they are doing. I just let it go. So that's an important piece to this whole thing. Another part of this is what we want to encourage our advisors. And I think they all do an outstanding job at this, is where we have individuals and it's their own wealth. It's so important as you said, it's emotional. And then we try to remove emotion at the investment decision-making process. The advisor sits between and what's so important, I think. And I think our, again, our advisors do a wonderful job at this is emotionally though, they become vested in their client's best interest and their client's plan, their client's values, their dreams, their goals, their objectives, they, the advisors become vested in that with the client. And they bring that passion for the objective to the process so that the investment team knows this is what we're trying to achieve, exactly like this for this client, please go execute the plan. So, the research side, you know, we particularly said, we need to have more people who are very skilled. I will bring, you know, doesn't always require a high level of education, but a lot of times it's helpful. There are techniques so that you can practice by looking at data and information and studying and studying markets and trends in how the world of business and commerce behaves. By looking at data and information, studying it and there's a lot of it to then look at it logically and make decisions based on what it's telling you. [27:59.3]

Brad: Hmm.

Pat: You know, I, I would say that the, the softer side on the portfolio management side, there's two parts I mentioned earlier, businesses and companies. To separate those, well a business. Let's just think of it as if you're in the software business. Well, what do you do? Well, we design and build software and then sell it. And it serves a purpose

Brad: Right.

Pat: Could run your email. It could allow you to make presentations or spreadsheets to calculate things. That's our business. And there's a lot of them out there in the software industry. They are run by companies. Companies are the people, and this is where our investment team has to look at. Not just is this a good business to be in, but is these people from the top all the way through? Are they the right people to be in business with? And that's when you make that decision to buy that company. The final piece to that is do you got to overpay? You pay too much to get it, or do we get it at a good price? And that simply is what our team is built to do. And that's their challenge every single day. Can we find a great business with great people, the company, and can we get it at a great price? Because at the end of the day, you have to have great business, great people, but you better get it at the right price. If you overpay, that's going to determine the return you make on that investment. [29:28.8]

Brad: It's amazing. That is so accurate. I remember, I remember when I was a kid, my grandfather, who's still, he's 92 years old, still meant he loves the stock market. Always was around, had an old military guy and he always talks about it. But he always told me, he always told me something and you just hit on it from a much more elaborate standpoint, something we believe here at our core, which is you always make your money on the buy.

Pat: That's it.

Brad: You know, it's funny and that's true of a, how else it's true of anything really, right? If you, if you research it enough and understand what you are buying, realizing whether or not you're paying a premium for it, or at a discount, if you're paying a premium, how long is it going to take to make the money back? Those are all little granular things that come in and that's so true of just life in general and other asset classes tend to be a stock or a company, right? It can be your house. It can be something else you're buying. And it's amazing that simple fundamental philosophy can come into a firm like ours and we're knocking on the door of managing $4 billion for clients and growing. I mean, it's, it's, it's so great for, I think people to hear, I know as an advisor, we talk about internally and that's one of the main reasons for this medium, if you will, of our radio program and our podcasts, to make sure that we kind of talk about these core fundamentals that can be overlooked sometimes out there and almost get misconstrued with all the other information that's out there. [30:39.3]

I say this in the intro, as many of you have heard before, you know, there's so much information out there and it's like hard to discern what's right, where are these sources coming from? I mean, you and I can go set up a, a pseudonym name and write a white paper and some someone out there might think it's the gospel. It's, it's weird. It's crazy in the Internet's done that for us. And when it comes to investing the philosophy of that and taking away some of the nerves, the emotions, and really designing a plan, which really gets back to our core thesis here is building a plan. The roadmap allows a lot of these things we talked about today when it comes to the investment management component of it, to be able to place into that plan. [31:09.8]

Pat: Yeah. You talked about noise too. I'm not sure if you saw this was in The Wallstreet Journal I think in the last week, it might've been over the weekend. And that highlighted a few folks and people right now, again, doesn't matter about education, we've talked about. There's a lot of brilliant investment people over the history of the world who weren't necessarily formally educated in the world of investing and securities analysis, etc. So that's not necessarily a requirement, but there are a lot of people today that are not professionally investing. And what struck me about this is they're making a lot of money, personal income through the shows they're producing. Let's say it's a YouTube show and what have you and then. They're not getting paid because they're giving good investment ideas or good investment advice, they're getting paid because they're entertaining. [32:23.1]

Brad: Yes.

Pat: And the entertainment is giving them subscribers and that's how they're making money.

Brad: It's ironic in a way, isn't it?

Pat: It is something I cannot get my head around.

Brad: It is really hard as the word influencers out there, it's like, when you, there's certain things we influence, but when start influencing about investing, and if people are out there and you start getting this world where you've got to look at the source, okay, it's an incredible point. We see it constantly. Whether it, I actually didn't see that article, I'd say I'm interested or kind of take a look at that. But every time I get like an ad on social media or something like that, or things like that on one, what's their background for this. And are they in the business? Like we are. Sitting kneecap to kneecap or nowadays virtually with a client, but really going through a proper discovery to understand what their goals interests are, relationships, values, all those things that matter when you build a plan versus just talking about a singular aspect, like paying your house off or not, leasing or financing a car. All these other things, you can just go Google it right now on Instagram or Facebook or whatever else and find some, one talking about something and you look at it is that person getting paid by a mortgage company who happened to sponsor that set at. [33:40.2]

Pat: Yeah.

Brad: And it's just, we know it's out there. And I think for us, it's really tried and true. I like, I love that you mentioned that because on those listening, it's really good to understand what's right for you. And what's, you know, and we always say, we can always make a, you can the old saying, right, you can lead a horse to water. You can even give it some salt to make them thirsty, more thirsty, but you can't make them drink. So, you got to make the decisions like, is it right for you to, do you find it easier to trust someone who you're paying a subscription model to, and really believe in trust in that or really seeking counsel around your entire picture.

Pat: Yeah.

Brad: And how a decision you might make on a brokerage account you want to set up versus maybe that 401k that you just started at a new company, or maybe it's the company you're working for for 20 years. [34:22.7]

Pat: And some of them that I saw, they're not paid even as a subscription, they're getting paid by advertisers.

Brad: Yeah.

Pat: Because their show is popular. Why is it popular? Cause it's entertaining. I mean, to be candid, that's also true of the CNBCs of the world.

Brad: Yup.

Pat: And they put people on that also can entertain.

Brad: Hmm…hmm.

Pat: Capture the audience. The more people you have, the more eyeballs as they say, the more you can charge for advertising. [34:54.9]

Brad: And with that, about two years ago, when we started this conversation about this exact podcast we're talking about right now and the radio program. I think for all listening, one of the things that we agreed upon was with that said that we see that's out there was, is being the unknown we feel expert in this space of giving advice and seeking that true relationship with a client. This is a great medium to be out there to make sure that we are among those voices, but among those voices in the proper way. Not with paid ads, there's no intention of that. The idea is to talk to our clients on a weekly basis, through a medium that they can stop, start whenever they want to go to the grocery store, listening to us at the gym right now, whatever it may be. And then those that have heard about us or, or heard of us at the radio program or other outlets through our advisors, to be able to kind of see the central decision making we have here and what differs between one of those influencers or something like that. And it's just the fact that we're talking about is kind of weird and funny in a way, if you look back at a career of like, this was not the case even 10 years ago. [36:03.7]

Pat: It's changed dramatically with the, the advent of the internet. I mean, I don't want to date myself too much. But when I started, there was no internet that was usable.

Brad: Yeah.

Pat: We didn't even have email actually. Everything we did was on paper and pick up telephones and call other offices to execute things for clients. And we would have an overnight courier service that we would, everything we had done that day was some form of paper. And it was, you know, triplicates or quadruplicates, and you'd keep a copy and shoved them into an overnight pouch. And the pouch would get on an airplane to New York and it would end up New York in the morning and then they would go execute on these things. [36:48.2]

Brad: You're dating yourself, man. I get it.

Pat: By the way, I'm only 51.

Brad: I know.

Pat: That's not that long ago.

Brad: It happened fast.

Pat: So, it has changed.

Brad: Yeah.

Pat: And there is this influence and I think one of the other things, when you approached us in the firm and said, I think we should do this, aside from making sure that we stayed on the side of, of being the right voice, the logical voice, the sound voice. And even though there's listeners, that'll be listening to this, that aren't our clients, it didn't matter. We still wanted to say the right things and give the same kind of guidance, share our opinions and views that we would share with somebody that was sitting right here as a client that was asking us for help. And the other side of it was, we said, this might be a good idea because frankly, there are more people that need to hear the logical sound rooted in, in fact, in logic voice, there was a lot more people that we should be reaching out to. And this has allowed us to amplify that voice.

Brad: Yup.

Pat: And I hope we continue on this path because I think, and as the listenership continues to grow, et cetera, we're going to be reaching more people.

Brad: Yeah.

Pat: And there is only going to be good outcomes from that. [38:12.5]

Brad: Yeah. It's just, you said it perfectly. Having that guy who's living in his mom's basement doing a show on a really good camera and it can kind of talk well doesn't necessarily translate into proper bison and with all listening right now, you know, if you haven't met with your own advisor, or if you're looking provides, you can reach out to us because what we're saying here is a lot of our central decision-making, but it really comes down to a one-on-one meeting to, through that, you know, nothing we're saying here, and by the way, this is also true of other advice, real simple. This is more recommendation, not advices, be careful what you listen to and act on right away. Really seek that counsel and find that person and build trust and find a fiduciary, someone who's working on your side, always in the best interest. And this technology is listening to us, you know what I mean technology is a disruptor. If you don't believe us, go try to Google blockbuster on your Blackberry. [38:58.7]

It's just, you know, I mean, there's countless amounts of things that's going to come up, that it's just interesting so. I really enjoyed that today, I think we had a, we might pick up on this a little bit more in our monthly OCM client experience. I know I definitely want to talk about that third leg. We've been talking about around the advisor side and for many listening right now who have an advisor here at One Capital Management you're going to see a lot of the history and we're going to do more of our advisor spotlights with them individually here as well. But you know, really talking about the design of the investment committee and the investment team that we have more portfolio managers down to the research and development to the diversification as much of an overused term, that that may be nowadays how much it matters you know, when it comes to stock selection, correlation of different types of assets in the same portfolio, all of which we talked about today. [39:44.9]

But if you want to find more information about us, you can go to our website at onecapitalmanagement.com. and as always, you can reach out to us (805) 409-8150. I don't want to thank you for today, it was great to being back.

Pat: Good to see you again. Thank you very much.

Brad: Likewise. [39:59.8]

The information in this podcast is educational and general in nature and does not take into consideration the listener's personal circumstances. Therefore, it is not intended to be a substitute for specific individualized, financial, legal, or tax advice.

To determine which strategies or investments may be suitable for you consult the appropriate qualified professional prior to making a final decision. [40:23.0]

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