An analogy as suitable to investors as it is to business leaders….

Good to Great  “Why Some Companies Make the Leap…and Others Don’t” by Jim Collins; Harper Collins Publishers, 2001.

(Think “Investors” for “Companies” and “the market and strategiest” as you read the following passage.  The “She” is a direct quote and was not altered by this provider.)

Freedom (and Responsibility) within a Framework   pgs 124-125

Picture an airline pilot.  She settles into the cockpit, surrounded by dozens of complicated switches and sophisticated gauges, sitting atop a massive $84 million piece of machinery.  As passengers thump and stuff their bags into overhead bins and flight attendants scurry about trying to get everyone settled in, she begins her preflight checklist. Step by methodical step, she systematically moves through every required item. 

Cleared for departure, she begins working with air traffic control, following precise instructions – which direction to take out of the gate, which way to taxi, which runway to use, which direction to take off.  She doesn’t throttle up and hurtle the jet into the air until she is cleared for takeoff.  Once aloft, she communicates continually with flight-control centers and stays within the tight boundaries of the commercial air traffic system.

On approach, however, she hits a ferocious thunder–and-hail storm.  Blasting winds, crossways and unpredictable, tilt the wings down to the left, then down to the right.  Looking out the windows, passengers can’t see the ground, only the thinning and thickening globs of gray clouds and the spatter of rain on the windows.  The flight attendants announce, “Ladies and gentlemen, we’ve been asked to remain seated for the remainder of the flight.  Please put your seats in the upright and locked position and place all your carry-on baggage under the seat in front of you.  We should be on the ground shortly.”

“Not too shortly, I hope, “think the less experienced travelers, unnerved by the roiling wind and momentary flashes of lightning.  But the experienced travelers just go on reading magazines, chatting with seatmates and preparing for their meetings.  “I’ve been through all this before,” they think.  “She’ll only land if it’s safe.” 

Sure enough, on final approach-wheels down as a quarter of a million pounds of steel glides down at 130 miles per hours – passengers suddenly hear the engines whine and feel themselves thrust back into their seats.  The plane accelerates back into the sky.  It banks around in a big arc back toward the airport.  The pilot takes a moment to click on the intercom:  “Sorry, folks.  We were getting some bad crosswinds there.  We’re going to give it another try.”  On the next go, the winds calm just enough and she brings the plane down, safely.”

Think:  Your investments are your vehicle to the future.  Who should be piloting this vehicle?

What systems, structures, and capabilities should be in place?  When you hit a storm, what is your inclination…take over control of the plane? Call the attendant and insist on landing?  

Vow never to fly again?  or continue to read your magazine and let the experienced professionals address the adversity?  

Story continues…….from my experience. 

On May 8, 2003 I flew from Rochester to Salt Lake City on United Airlines.  One of the features of United is the ability to listen to the pilot communicate with air traffic controllers on the inter-plane system.  The flight over the Midwest was especially turbulent, with lightning off in the distance.  As you may recall, this was a wicked tornado season with an exceptional number of tornadoes causing severe damage to many communities.  Well, unknown to the passengers, we were flying over them. 

I was interested in hearing the exchange among these flight professionals since this was clearly not a typical flight.  I was impressed by the cool cooperation and the coordination that happened between the pilot and the various controllers as we moved from district to district over the country. The pilot (a she!) was very efficient in describing her positions and her assessments of conditions from her view.  The controllers responded with additional input and directions.  Together they wove us out of harm’s way for a slightly late arrival.  Most of the passengers were unaware of the exchange.  Some were overtly distressed.  Others calmly sat through the journey.  A few heatedly complained about being late.  One man knowingly commented that all she had to do was climb farther up and we would have been on time!

I thought of the AssetMark analogy.  There are more resources that contribute expertise to this program than meets the average investor’s eye.  The obvious group is the strategist who coordinates the portfolios at your particular level.  AssetMark plays a role as the traffic controller.  They watch the progress of the strategists to be sure that they are aligned for the appropriate risk/reward profile.  They provide assessments of the sub-advisors who run the various portfolios within the strategy.  AssetMark is the ground and service crew who gets you on and off the plane…from the point of being appropriately ticketed, reporting on the progress, attempting to make it a comfortable journey by getting you what you need during the trip, then delivering you safely to your ultimate destination. 

As investors we have journeyed around the tornadoes.  We may have taken a different route than you expected.  It has caused a bit of a time delay.  The experienced professionals have worked together to get us back on track and moving forward.  They are our best bet for the future. 

Our investment partners navigate on our behalf. 

Registered Representatives offering Securities through American Portfolios Financial Services, Inc. Member: FINRA, SIPC. Investment Advisory services are offered through American Portfolios Advisors Inc., an SEC Registered Investment Advisor. Waterstone Financial Services and American Portfolio Advisors are not affiliated.