Latest news with #ClarisFinancialAdvisors
CNBC
08-05-2025
- Business
- CNBC
Americans believe real estate, gold are the best long-term investments. They're wrong, advisors say
Some Americans believe real estate and gold are the best long-term investments. Advisors think that's misguided. About 37% of surveyed U.S. adults view real estate as the best investment for the long haul, according to a new report by Gallup, a global analytics and advisory firm. That figure is roughly unchanged from 36% last year. Gold was the second-most-popular choice, with 23% of surveyed respondents. That's five points higher than last year. To compare, just 16% put their faith in stocks or mutual funds as the best long-term investment — a decline of six percentage points from 2024's report, Gallup found. The firm polled 1,006 adults in early April. Here's a look at other stories impacting the financial advisor business. Financial advisors caution that this preference is likely more about buzz than fundamentals. Be careful about getting caught up in the hype, said certified financial planner Lee Baker, the founder, owner and president of Claris Financial Advisors in Atlanta. Carolyn McClanahan, a CFP and founder of Life Planning Partners in Jacksonville, Florida, agreed: "People are always chasing what's hot, and that's the stupidest thing you could do." Here's what investors need to know about gold and real estate, and how to incorporate them in your portfolio. Baker understands why people like the idea of real estate and gold: Both are tangible objects versus stocks. "You buy a house, you can see it, feel it, touch it. Your investment in stocks perhaps doesn't feel real," said Baker, a member of CNBC's Financial Advisor Council. While the preference for gold grew this year, the share of Gallup respondents who think it's the best long-term investment is still below the record high of 34% in 2011. Back then, gold investors sought refuge amid high unemployment, a crippled housing market and volatile stocks, Gallup noted. Gold prices have been trending upward this spring. Spot gold prices hit an all-time high of above $3,500 per ounce in late April. One year ago, prices were about $2,200 to $2,300 an ounce. Real estate has also drawn more interest in recent years amid high demand from buyers and accelerating prices. The median sale price for an existing home in the U.S. in March was $403,700, according to Bankrate. That is down from the record high of $426,900 in June. While real estate and gold are two assets that can appreciate in value over time, the stock market will generally grow at a much higher rate, experts say. The annualized total return of S&P 500 stocks is 10.29% over the 30-year period ending in April, per Morningstar Direct data. Over the same time frame, the annualized total return for real estate is 8.78% and for gold, 7.38%. McClanahan also points out that unlike gold and real estate, stocks are diversified assets, meaning you're spreading out your cash versus concentrating it into one investment. "When you talk about stocks, you're not talking about one big asset," she said. "You're talking about thousands and thousands of companies that do different things." McClanahan is also a member of the CNBC FA Council. While the tangibility of gold and real estate may provide a sense of comfort, it also makes them illiquid, or difficult to cash out, McClanahan said. If you are among the Americans that want exposure to real estate or gold, there are different ways to do it wisely, experts say. For real estate, financial advisors say investors might look into real estate investment trusts, also known as REITs, or consider investments that bundle real estate stocks, like exchange-traded funds. An REIT is a publicly traded company that invests in different types of income-producing residential or commercial real estate, such as apartments or office buildings. In many cases, you can buy shares of publicly traded REITs like you would a stock, or shares of a REIT mutual fund or exchange-traded fund. REIT investors typically make money through dividend payments. Real estate mutual funds and exchange-traded funds will typically invest in multiple REITs and in the real estate market broadly. It's even more diversified than investing in a single REIT. Either way, you're exposed to real estate without concentrating into a single property, and it will help diversify your portfolio, McClanahan said. Similar to gold — instead of stocking up on gold bullions, consider investing in gold through ETFs. That way you avoid having to deal with finding a place to store or hide physical gold, you wash off the stress of it getting stolen or making sure it's covered by your home insurance policy, experts say. "With the ETF, you actually get the value of the return of gold, but you don't actually own it," McClanahan said.
NBC News
13-03-2025
- Business
- NBC News
Wall Street turmoil rattles retirement savers, turning financial planners into therapists
Turmoil on Wall Street is keeping financial planners' phones ringing as 401(k) holders watch their retirement account balances fall with the stock markets they're tied to. For the most part, they're being told to sit tight and breathe through it. 'I've seen more concern and fear with clients that I've talked to over the last month or so than I have since the financial crisis,' said Jude Boudreaux, a senior financial planner at the Planning Center, a New Orleans-based firm. He added that this week has been especially hectic. 'People are really concerned.' Vanese Pitts said she watched her husband's 401(k) shed $8,000 on Monday, when a wide-ranging market selloff pushed the S&P 500 to its lowest close since September. The sharp downturn in recent days followed several weeks of losses on Wall Street that have left the stock index about 4.8% lower than where it started the year. Many 401(k)s follow the broad-based S&P closely. 'It was just insane,' said the 41-year-old, who's raising two kids alongside her husband, a software engineer, in Birmingham, Alabama. Pitts was among those who took to social media platforms to crowdsource advice and commiserate this week, as President Donald Trump's trade war with America's closest allies sends tremors through millions of savers' retirement investments. His chaotic rollout of new tariffs, the retaliatory levies they've triggered, and an ongoing purge of federal workers have stoked fears of rebounding inflation and a potential economic downturn. Lee Baker, founder and president of Claris Financial Advisors in Atlanta, said he'd been fielding anxious calls from clients — most of them in or near retirement — for the past week or so. He was surprised to hear so much concern 'from people who, mathematically, really don't have a problem in terms of making it through whatever this might be,' he said. I've seen more concern and fear with clients that I've talked to over the last month or so than I have since the financial crisis. Jude Boudreaux, The Planning Center, New Orleans 'Clients, particularly in times like these, don't want to hear, 'Essentially, do nothing. It's going to be all right,'' Baker said. That was the gist of Katie Szykman's mother's advice when the 23-year-old Philadelphian called in a panic. She had been contributing 6% of her paycheck to her employer's 403(b) — a type of retirement account offered by public schools and charities — for barely two years and watched more than $1,000 vanished in a matter of days, she said. 'My mom was like, 'Don't even touch it,'' said Szykman, who works in marketing at a local nonprofit. 'Everyone was always saying make sure you invest in your retirement, so [that was] the first thing I did once I got my first job outside of college. I can't say that I'm surprised. It just feels disheartening a little bit.' Szykman said she found some comfort knowing that downturns have occurred in recent decades and that 'people have gotten out of it.' Still, she feels frustrated having another economy-related issue to worry about — especially when 'it didn't have to be this way,' she said. 'Having that money just kind of diminish a little bit when groceries are so expensive, it just takes a little bit of an extra toll,' she added. Plenty of retirement savers have forgone the advice of Szykman's mother. Empower, a financial firm that administers retirement plans for some 19 million investors, told CNBC Wednesday that some account holders are increasingly shifting money toward safer investments. though the company emphasized that it's 'not seeing widespread capitulation despite the downturn.' While the activity accounts for only a sliver of overall balances, trading in 401(k)s has doubled over the past three weeks as savers yank money out of funds calibrated toward a target retirement date and those linked to big companies' stocks, according to the Alight Solutions 401(k) index. Lower-risk investments including government bonds, money market accounts and so-called stable value funds have swelled over the same period. Financial planners generally urge clients to think carefully before adjusting their 401(k)s, though changing the makeup of an account's portfolio is far different than withdrawing funds early, which entails paying a penalty. In terms of investments, Baker said those looking to build some cushion into their portfolios could look to TIPS, or Treasury inflation-protected securities, which are indexed to inflation to guard investors from a decline in purchasing power. TIPS funds have returned an average 3.4% so far this year, according to Morningstar, making it a top-performing bond fund category. He also pointed to a recent uptake in 'buffered products' like S&P 500-tracked exchange-traded funds, where high-performing assets are locked and evenly proportioned for a period of time. But investors who move in that direction should be comfortable missing out on potential gains, Baker warned. If markets reverse and bound higher, 'remember we had this conversation, because in this moment you were afraid,' he said. Some planners also advised having a good mix of international funds in their portfolios. Previously, 'international [stocks were] something that you kind of had to apologize for' as an adviser, said Samuel Deane, founder and president of Rora Wealth in Atlanta. But some ETFs that exclude U.S. stocks have been performing remarkably well, he said. Boudreaux agreed but pointed out that many international companies' revenues are heavily linked to the U.S. market, limiting the potential appeal of foreign stocks. 'It's a very globally connected world, and that applies to our investments also,' he said. Clients, particularly in times like these, don't want to hear, 'Essentially, do nothing. It's going to be all right.' Lee Baker, Claris Financial Advisors, Atlanta Planners also said it's OK to take a more conservative approach with future retirement contributions rather than touching what's already there. 'People are tightening up,' said Kevin Mahoney, founder of Illumint, a Washington, D.C.-based firm. 'So there's some uncertainty about spending or investing savings now. It's less about existing investments and more focus on potential investments that they might have planned.' And for investors nearer to retirement than others, now is also a good time to focus on cash flow, said Boudreaux. 'I like clients to have a good cash reserve heading into retirement,' he said. 'It allows them to be more selective when they sell from their portfolio, and to not have to sell every month if we are heading into a downturn.' 'The goal with any of these things is to respond — and not react,' he added. As difficult as it's been for Pitts to 'just let it stay and hope for the best,' she said she and her husband aren't touching their retirement funds. Instead, they're thinking about getting a financial adviser to help them protect their savings. 'Every day it's something different,' Pitts said. 'Something that's not good.'
