It’s been a year of milestones for Jackson Thornton Wealth Management. In September, we commemorated our 25th anniversary in the business and now, we’re proud to announce that we have crossed the $2 billion mark in Assets Under Management.
As I reflect on this achievement, many things come to mind that have impacted this milestone. First and foremost, the confidence that our clients show in us to guide them to reaching their financial goals. Next, the solid investment approach that has been tweaked, but not changed, over the last quarter century. In addition, our ability to provide sound financial advice allowed us to maximize the accumulation of wealth of our clients.
One of the biggest forces that has impacted this success is the power of compounding interest. I’ve always thought that an interesting fact about Warren Buffett is that 84% of his wealth has been accumulated since he reached age 66, a staggering $92 billion of wealth creation since then. He could have said in 1996 that $17 billion was enough and sold some or all of his stock portfolio. After all, there was an upcoming election won by a controversial Democratic candidate, a war in the Middle East and though he could not have known it, an upcoming crash in the stock market due to overvaluations in tech stocks. But he chose to stay invested, knowing that any issues that arose would be only temporary threats to his portfolio.
Compounding interest has also been a big factor in Jackson Thornton Wealth Management reaching this latest milestone. We reached $1 billion in Assets Under Management in 2017, taking 17 years to reach that level. We have obviously added clients since then, but we also pay out over $100 million each year to clients to fund their spending needs. It is interesting though to see the acceleration of growth since that initial milestone, adding the second billion dollars in just seven years.
This brought me to a thought about something that we frequently advise clients on that I believe has impacted this milestone. Whenever an investor is tempted to get out of the market because of the news of the day, the answer is always to stay invested.
- Did you just sell an asset or inherit some money? Go ahead and put it in the market.
- Investing money monthly, but don’t like the current valuations of stocks? Keep buying them.
- Don’t feel sure about the direction of the economy due to the Presidential election? Stay the course and stick with your plan.
If you look at investing through a long term lens, there has never been another right answer other than to keep your money in the market (or begin putting it there). The only benefit you might get otherwise is to avoid a temporary decline, which likely reinforces the poor decision you just made to stay on the sidelines.
We certainly understand that everyone can’t deal with the volatility of having their entire nest egg invested in the stock market – which is why we start by helping clients select an appropriate allocation of stocks and bonds for their portfolio that fits their risk tolerance. But from there, the message is still to stick with the well thought-out plan that you developed when heads were cooler and to remember: the right decision is always to put your money to work now.
By: Shaw Pritchett, President & Financial Advisor
Jackson Thornton Wealth Management
[email protected]
334-240-3679
