Advice for Safeguarding Your Wealth Portfolio

We are so proud that Willow Creek Wealth Advisor Rawson Gulick was included in North Bay Business Journal’s 26 views on how to safeguard your wealth portfolio amid coronavirus, economic turmoil. Thank you, North Bay Business Journal, for putting together this wonderful resource filled with great advice for navigating these chaotic times.

Rawson Gulick, CFP® CAIA
Wealth Advisor

How has the COVID-19 pandemic changed your relationship with clients? And how it’s changed the demands clients are making of your services?

Over the years, Willow Creek Wealth Management has been intentional about cultivating a welcoming atmosphere for our clients.

The pandemic has certainly changed the way we meet with clients, but it has not changed that intention or the outcome. We meet with many clients over video calls and have found it to be surprisingly intimate. Clients are comfortable in their homes, and while we look forward to inviting them to meet in our offices once again, this format is proving to allow for rich conversations.

And humorously, those moments that include dogs and children are less of a distraction and more of a way for us to know our clients even better.

Nothing has changed regarding our service offering. We continue to provide comprehensive planning and investment management. We still offer those in-person services that are required, such as notary services. If anything, our clients see us now more than ever as their trusted advisor.

Tell us the general trends you have seen in portfolios for your clients in the first and second quarter of 2020 and if most of your clients increased activity, decreased it or held steady on their path.

We took the opportunity in March to rebalance our clients’ portfolios, and many clients have proactively contacted us to inquire about increasing their allocation to stocks.

The rebalancing process can be difficult to swallow for some people, but rebalancing is the embodiment of true discipline and adds real value to the portfolio management process. It is the essence of buying low and selling high.

We find that if a client had the discipline to stay the course during the financial crisis of 2008/2009, they saw the impact of long-term investing through very difficult times. Those are the clients that are more likely to stay the course when market volatility increases.

We are also seeing that clients are more and more interested in investing alongside their values. The COVID-19 pandemic has highlighted just how important living sustainably is and that their investment dollars have an impact on how corporations behave. The general awareness of issues around the environment and society has definitely increased in our client conversations.

Are there permanent changes that you see in your business which are the result of the COVID-19 pandemic and/or the economic disruption it has caused? Why are they likely to permanent, or if not, why not?

From a business operations standpoint, we found ourselves well-positioned to pivot to the new work-from-home dynamic and continue to seamlessly serve our clients.

We have spent the past few years investing heavily in our technology infrastructure to support such a situation, and like many across Sonoma County, we, unfortunately, had recently tested our disaster recovery processes during the Kincade Fire in 2019. In terms of team collaboration, we have even further embraced virtual meetings and communications tools, such as Slack and Zoom, and we have been able to maintain a cohesive and effective team even as we are spread amongst various locations.

We have found that clients have largely embraced the new reliance on virtual meetings, and, in many cases, it has humanized everyone even further and created deeper personal bonds. While we anticipate that a time will come when we can return to the office, we certainly foresee many of these recent changes having some permanent and positive impacts.

For example, additional remote work flexibility for employees and less reliance on in-person meetings with clients, both of which we believe will be positive changes in terms of work-life balance, broader geographic reach for new client relationships, and a wider talent pool from which to attract future team members.

What’s your advice on the future to your clients? If it’s stay the course- how’s that advice received by clients.

Our advice is to follow a disciplined plan and look beyond today’s concerns to the long-term growth potential of markets.

So yes, stay the course. Client responses have ranged from “yes, of course,” to “but isn’t this time different?”

Many of our clients have been with Willow Creek through more than one financial rollercoaster and have seen the benefits of sticking to the plan. For those who are experiencing this as an investor for the first time, we remind them that the constant is that market volatility will never feel good and will always be scary for different reasons. Investors who act on their emotions of fear (and greed) are those who tend to make mistakes.

Are you already seeing an influx of new clients as the result of the economy uncertainty- or is it more likely that people are less likely to seek professional wealth management assistance in times like this? If so, why?

This is a time when people have been forced to slow down, for better or worse.

What has resulted, in our observation, is that many are taking a step back and being more intentional about how they want their lives to look as we work toward a new normal. New clients are looking for someone to partner with to help them structure the financial aspects of their life to support that new vision. We are seeing healthy new client activity and believe that it would be even stronger if the economic uncertainty did not also include social distancing and health risks.

What mistakes do you see individual investors making in the current financial climate?

By far, the biggest mistakes we see are making investment decisions from a position of fear and anxiety and short-term thinking. Investors often seek safety in volatile markets and move to cash, which instead just locks in losses.

The false sense of safety of holding cash can lead to unintended consequences, including missing out on a significant rise in the market or a decline in purchasing power, which will make it all the more difficult to reach your goals.

Another mistake we see is chasing returns.

When the financial news media flashes high flying stocks at us, it can be difficult to resist jumping on the bandwagon.

But today’s winners are usually tomorrow’s losers. When we see a handful of large company stocks soaring, it may be hard to remember the past.

For example, U.S. Large Cap was the best performing segment of the global market over the last ten years. However, the ten years prior to that it was the worst performing, known as “the lost decade.” The future is unknowable. Holding a portfolio that is broadly diversified has the best opportunity to grow over the long-term.