Investing in a Time of Turmoil: Advice from Female Wealth Managers

Over the next month, we’ll be speaking to seasoned financial advisors on how investors can—and why they should—show up during this volatile time.

Female founders need funders more than ever to show up during this time. Angel investors, however, are reluctant to invest because of market volatility, and many seasoned funders are balking. This has left women-owned companies, many in the middle of fundraising when COVID-19 hit, facing a major loss of capital, while also navigating budget cuts and managing affected employees.

So what is the solution? And how should investors approach deals over the next few months? See below for the best tips from female wealth managers.

Alli McCartney

Managing Director with UBS Private Wealth Management

On how to approach investing during the crisis

“Don’t panic; turn off the news, don’t look at your screen, and make educated decisions with advisors that are specific to you, your life, your family, and your investments.”

On why you should invest through a gender lens

“The numbers have proven time and time again that diverse founding teams and entrepreneurs—women especially—tend to manage and project in the most conservative way possible, frequently under-promising and over-delivering, and have a natural bias for collaboration, innovation, and conservatism.”

On how to make the most of your portfolio for the future

“The world will not look the same coming out of this as it did coming into this. There will be different norms in terms of technology, the way we work, the way we socialize, and of what we expect from our government and our healthcare system. So, a great way to have a diversified portfolio and a diversified view and exposure to what the world will become is through diversified entrepreneurs.”

On mission-driven investing

“Every investor, and especially every woman, needs to put herself first. You need to manage your own ability to finance your life, and then when you continue to have the capital to put to work, putting it to work now is both the right thing to do and the right time to do it. It’s almost a karmic, spiritual, and political move to finance growth in the pockets and segments of the world that you feel is most important to elevate.”

Kristin O’Keeffe Merrick

Financial Advisor at O’Keeffe Financial Partners, LLC.

On avoiding making investment decisions based on fear

“Investing should always be longterm; you should be considering the big picture. What has fundamentally changed in your objectives in terms of putting money to work? We have to try to peel away the fear we’re dealing with right now because investing should always be about growth opportunities and earning potentials.”

On why the market isn’t as bleak as it looks

“This is not a financial crisis. This is a public health crisis. I don’t have a crystal ball, but I do have almost 20 years of experience watching these market, so I can get a general sense of the difference between pure fear and what I’m seeing now, which is a little bit more of like, Okay, this is our life right now and we’re going to get through this.

On why investing now is how to get the best deals

“I don’t think the crisis is over and I don’t think we’re not ever going to see the market go down again. But I do think that we might have found a little bit of bottoming. I’ve seen clients buying today and yesterday; I’ve seen people coming who’ve been up on cash saying, This is a really good opportunity to get involved at discount prices. Because people love to go discount shopping, right?”

Wendy Holmes

Managing Director of Wealth Management at Wittenberg Holmes Partners

On why your assets should fall into three buckets: liquidity, longevity, and legacy

“Everyone has the same fear and trepidation around putting money to work in this type of environment. Which is why my advice would be to have a plan and stick to it. That plan should include your liquidity, longevity and legacy. Your liquidity is your cash, which should be able to cover six months to two years worth of expenses. I know that’s a lot for people who are younger, newer, or starting out, but for people who are seasoned, having cash means you don’t have to disrupt investments during this environment. Your longevity is your investments. For a younger investor, it’s their 401k, where you’re not going to touch that money for a period of time—that is your longterm nest egg, you don’t look at it in the context of the daily fluctuations in the market. Over long periods of time, cash is going to be a big drag on your portfolio because cash loses purchasing power and will reduce in value. Stocks will reliably beat cash over a 20 to 30 year investment time horizon. Then there’s your legacy bucket. For many of entrepreneurs, their legacy is actually their business. It’s your illiquid investment, the thing that you can’t sell but that has the potential to grow quite a bit over a long period of time. The conversations we we always need to have—but now more than ever—is for our clients to look at their assets in those three frameworks, as opposed to watching market moves on a day to day.”

On avoiding making short term decisions

“This is a health crisis with financial repercussions; the economy was healthy going into it. Day-to-day, the volatility and uncertainty will continue, but you don’t need to make decisions based on short term market movements for your long term money. In your longevity bucket, don’t make a decision for money that has a five, seven, or 10-year time horizon.”

On how female founders are a smart investment

“We know that only 2.8 percent of dollars go to female entrepreneurs. But the data is there, that female-founded and run businesses are more successful. In this environment, those who traditionally have held the purse strings are seeing the ability and efficacy of women to juggle, be nimble, and get smart quickly. My hope is this will lead to that light bulb that says, “Wait a minute, this are where the good ideas are,” and hopefully, we’ll see more women getting the commitments of capital that they need to stay in business.”

On choosing the right financial advisor

“I don’t care if you’re getting your highlights done, starting a business, or getting childcare, ask for two to three referrals. Interview them and make sure you’re aligned. As a financial advisor, I know everything about my clients’ lives, it’s so personal. Make sure that whoever you’re working with takes it that personally and feels that compelled to give you the truth. A lot of times it’s not what clients want to hear, but it’s what we need to say in order to best prepare them for what their challenges are. Everyone has different needs, different goals and objectives, and different levels of risk tolerance. Our job is to hear what’s being said and to give a clear framework of what we can and can’t do. Many times we’re some of the only people that really understand the big picture; we know about personal challenges in marriage, issues with children. It is a very, very personal relationship, so I would encourage you to connect with someone who can really be helpful.”

On drawing up your blueprint before you invest

“Start your blueprint by asking: Is your will updated? Do you have a medical power of attorney? Are your testament and estate documents in order?  Will your family is provided for? Are the guardians named for your children? Who has your healthcare proxy? Before we even talk about how you’re invested, are those affairs in order, first? In some cases these documents are even more important than your asset allocation. It doesn’t matter what your asset allocation is if your assets aren’t going to the people that you want them to go to, or your children aren’t being cared for by the people you would like to designate. For a lot of clients, especially when everyone is busy running their businesses and families, that stuff tends to fall to the bottom of the list. Now is the time to make sure everything is updated.”

On how to set investment goals

“We all have different tastes and styles. We might look at a blank piece of land and when we go to hire an architect, we all have a different type of dream house. One might be modern, one might be traditional. But regardless, we hire that architect to help us create the vision of what we see for our dream path, or the style of home we want to live in. That’s what good wealth managers are. We’re the architects. They take your vision, your hopes, your dreams, what you have to work with, your resources, and they draft the roadmap. Everybody’s roadmap is going to be really different. The mistake investors make, oftentimes when they don’t work with advisor, is they go out and buy their cabinet finishes before they have their roadmap. We’ve all made that mistake where we’ve bought a sofa or a drape before even knowing what the room looks like. So what does this mean? Don’t make your investment decisions without the roadmap. Your longevity investments, your legacy investments, and your cash should all fit within that roadmap framework.”

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