Following the series on teaching children about money, I found myself trying to find new ways to compare finances to things we interact with regularly. So at the risk of sounding cheesy, I’ll start with the example of a football team.
General Manager: You
Quarterback: Financial Advisor (or if you are a DIYer, also you)
Offensive Lineman: Cash – The offensive line is expected to first protect. In periods of market volatility, having cash on hand can be incredibly valuable. First, it allows you to have a place to access funds without having to sell a particular asset that might be at a loss. Second, like a lineman, you can react and “get down field” by deploying cash to buy undervalued assets.
Running Back: Bonds – The Running back is seen on every play. You expect them to slowly push the ball forward. Their primary job is to get a few consistent yards – or in the case of bonds, interest.
Tight End: Dividend Paying Stocks – The Tight End is expected to first block – or in the case of these stocks, pay a dividend. A few times a game (unless it’s Gronk!) they are expected to get up field and catch a pass – like appreciation in a stock.
Wide Receiver: Growth Stocks – The Wide Receiver is not necessarily seen every play. They can be virtually non-existent for an entire half. But 3 or4 big catches can make or break a game. Similarly, growth stocks may be quiet for days, months or a year. But it’s the big “plays” that make them worthwhile.
Disclaimer: Alex Voorhees and Reston Wealth Management do not provide legal, accounting or tax advice. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified investment, tax or legal advisor. The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or strategies may be appropriate for you, consult your financial advisor prior to investing. No strategy assures success or protects against loss.
You should consider the investment objectives, risks, charges and expenses of any investment carefully before investing.