Market voices: Financial services
Drew Catanese Managing Director Coastal Wealth
The field of behavioral economics exists because people as a whole are rational but people individually, when it comes to their finances, let their emotions into it too much. We set expectations with clients. We like to set strategies when times are calm, not when there’s a hurricane on its way. We find a plan, develop our strategies and put the right things in place now so when that black swan event happens, we have the plan in place already and know why it’s there. People hire professionals because we can help them take the emotion out of investment decisions and help make them rational decisions, both in good times and bad.
I would say that 90% of our job is to shape behavior. For many years, the financial planning community said that one could expect to withdraw about 4% of your capital that invested 60% equity/40% fixed income. They came back and revised that — now it’s at about 3.89% return. That’s because bond interest rates have gone down. Do I think we’ve fundamentally changed? I would say, no, we’ve stayed the same; however, we’re trying to elevate income. You may do more preferred equities as opposed to being heavily laden with bonds. Bonds are there, really, as a ballast for risk.
Terry Igo
CEO Tampa Bay Trust Company
Founder & CEO Continuum Wealth Partners
We remain highly positive for the 2021-22 time frame. We cannot look past 2023 with the financial tea leaves. We don’t see any major obstacles considering the unique physical location of being in Florida and its west coast, added to corporate profits and the outlook for corporate profits being strong with interest rates being low. Some people make a lot of noise about administration changes. Time will tell you it doesn’t matter who the president is as far as managing money goes. There are definitely going to be some changes, as happens on a four to eight-year basis. There’s always enough time to react to those changes. We don’t see it affecting us at all.
Low interest rates affect the future growth of investment opportunities and have forced us to go back to studying low interest rate environments around the world; Japan in particular. When you see a scenario like that play out, you look to incorporate that into the investment recommendations you make so that you don’t get caught in a similar trap. The goal is to shield our investments, our clients from suffering as a consequence. We correlated that in-depth analysis to previous examples we have around the country and then used it to navigate the national and local low interest rate environment.
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James Erb
| Invest: Tampa Bay 2021 | BANKING & FINANCE
Travis Jennings Founder & CEO Finance CAPE
