September-October 2013 | QUESTIONS ANSWERED




Jeff Montgomery of Montgomery Financial Services grew up knowing life in America from both sides of the fence, in that his family experienced both flush times and lean times. It was the latter of these that propelled the young Jeff to direct his life so that he might never find himself in that position again. The good news for us is that he has also dedicated himself to making sure it won't happen to us, either. What follows is editor-in-chief Jon Westman's interview with the very money-savvy Montgomery, who has some very important words to the wise.

Jeff, What is it that motivated you to choose the financial industry as your profession and become a financial coach? 
It really goes back to my childhood. My family ran into some hard financial times during the recession of the mid-70s. My dad owned a building business that went under, and we almost lost our home. My mom had to go back to work full-time just to make ends meet. Looking back, this greatly impacted my life and the decisions I made. I decided I wanted to learn everything I could about recessions and how the economy works. I chose to get my degree in economics and business and graduated from Towson University in 1991. I chose to become a coach because I really do believe financial coaches can help people achieve their dreams. That, to me, is what makes this an exciting and worthwhile profession. I think everyone deserves the chance to make their own dreams come true and, money is usually a part of that, so if I can help people make the right choices about investing and achieving those goals, that is a career well spent. 

What was the hardest lesson you had to learn about the investment industry? 
I think the hardest lesson I’ve learned is that the industry at large — the big brokerage firms, etc. — is not interested in really helping everyday investors. Most financial advisors out there are pushed to sell products and strategies that really aren’t good for investors long-term. It was a rude awakening when I figured that out, because it’s not good for the advisor, and it’s definitely not good for the investor. What really helps investors in the long run is to find a prudent investment strategy that works for them as an individual and stick with it for the long-term. Chasing what’s hot and the investment gimmick du jour leads investors to make very poor decisions that have a dramatically negative effect 

What are the biggest mistakes you see investors make when it comes to their investments?
The biggest mistake I see investors make is making changes to their portfolio or their investment strategy based on short-term market conditions. This could look like chasing a hot asset class that has performed well in the last few years, or it could look like jumping out of the market altogether during bad market cycles. Historically, the equity markets are the most efficient way to grow your wealth long-term. However, you have to stick with a prudent strategy and hang on through tough market conditions. 

What is the most important thing for investors to know about the investing process? 
I always say that you don’t have to know everything as long as you know the right things. In this case, the right things to know are that stock picking, market timing and track-record investing don’t work when it comes to achieving your goals. The good news is that you don’t need those things to be a very successful investor. The other big thing that I think people don’t realize is that investing is a lifelong commitment. I know that may sound a little heavy, but in reality, to get the results of investing in the stock market, it is a commitment of 15 to 30 years in a prudent investment strategy. 

How do you coach investors to remain disciplined with their investment strategies? 
Education and community. I want investors to really understand what they are doing with their investment strategies, and why. The better you understand your strategies, the more likely you are to stick with it. The community aspect comes into play with the education. It always helps to know that you aren’t in it alone. By bringing groups of investors together to learn and understand their investment strategy we are building a support structure for sticking with the program. 

Does your approach to investing work for everyone? 
My approach works for people willing to stick with it and be coachable. These people want to be involved in the process and understand it. 

What is different about the investment industry now from when you started?
I thought that long-term, prudent investment strategies would become the mainstream of investing for individuals because there is so much academic evidence to prove that it works. Unfortunately, I was very wrong. Technology has made investing into a game for many people, and it saddens me to know that between online trading, a lack of understanding and reinforcement from the media, investors are gambling away their futures. 

What kind of people or clients do you regularly work with? 
I work with people who are motivated to achieve their financial goals and are willing to let me help them. Not everyone is coachable and willing to do the work of understanding their investment strategy in order to get the results they want. 

What is the first step to getting started in this process? 
The first step is to do a complete inventory of your current investment situation. Really analyze where you are with your investment strategy, what you have done in the past, what has worked, what hasn’t, and determine what results you need to achieve. Being a successful investor is something that anyone can do with the right tools, strategies and 
knowledge. I look forward to helping investors achieve their financial goals for years to come. 


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