Helping you achieve your personal vision based upon your individual needs, goals and risk tolerance..

Read This Before You React to Those Shocking Headlines About the Stock Market Dip

On August 14, 2019, the headlines were dire:

  • “Dow Plummets 800 Points on Worsening Global Recession Fears” (Fox Business)
  • “Dow Plummets More Than 800 Points on Recession Red Flag” (New York Post)
  • “Dow Tanks 800 Points in Worst Day of 2019 After Bond Market Sends Recession Warning” (CNBC)

Those headlines are indeed alarming…but there was a complete disconnect between what had actually happened and what the headlines implied. The dip was normal. As the MarketWatch chart below shows, this market dip was nothing unusual—and less than what we see about every two months!

Market corrections 1928–2018:

  • 5 percent—About every 2 months
  • 10 percent—About every 8 months
  • 20 percent—About every 30 months

The News Media Aim to Sell Advertising, Not to Educate

People often forget that the business of the news media is not to inform and educate, but rather to sell advertising. Whether they lean the left, right or center, media outlets must attract viewers and readers so they can sell advertising and make a profit. To do so, the media use sensational and often frightening headlines. The use of “click bait” is a widespread phenomenon on the internet. Click bait is content whose main purpose is to attract attention and encourage visitors to click on a link to a particular web page.

With the Dow Jones Industrial Average (DJIA) at 25,000 on August 14th, the drop of 800 points was less than 3.3 percent—again, something we see every few months! Just a 5 percent dip, which has been the average every two months for the past 90 years, would have been 1,250 points, or 50 percent more!

As of September 20, 2019, the DJIA was at 26,900. A normal dip for that number, of 10 percent, would be 2,690 points. You will notice that the media generally ignore the percentage change and rarely give any context. We expect to see 1,000-point swings and more in the coming year. Does that really matter? Only if you panic.

The Benefit of Keeping Your Emotions in Check

Dalbar, Inc., is an independent company that evaluates, audits and rates business practices, customer performance and service. Each year since 1994, Dalbar has conducted its Quantitative Analysis of Investor Behavior (QAIB) study to analyze investor returns. The company has consistently found that the average investor earns much less than market indices would suggest.

Hypothetical Growth of $100,000 over 20 years

Average Mutual Fund Investor – $214,220 Vs. Average Mutual Fund $346,8301.

Source: Quantitative Analysis of Investor Behavior by Dalbar, Inc. (March 2019)

The average investor makes far less than the fund averages largely due to moving in and out of their investments at the wrong time. We are not suggesting someone blindly buy and hold, nor are we suggesting that you can time the markets. We recommend developing and monitoring an overall plan and making changes based on your needs or the overall allocation, rather than headlines or short-term fluctuations.

Panic and Poor Timing Can Cost You

People who panic during these normal dips and sell off their stocks pay a significant price for doing so. The average investor has given up almost half of his or her potential return over the past 20 years by engaging in self-destructive behaviors such as the following:

  • Trying to time the market
  • Chasing hot investments
  • Abandoning their investment plans
  • Reflexively avoiding out-of-favor areas

In March 2019, Dalbar found that the average investor was a net withdrawer of funds in 2018, but poor timing caused a loss of 9.42 percent on the year, compared to an S&P 500 index that retreated only 4.38 percent.

Stick to Your Plan

We have developed and refined a process that accounts for both short- and long-term volatility. The key is to stick with your plan. We expect increased volatility in the markets and even more dire comments and forecasts by the media as we approach the election next year. Those who have a comprehensive plan and stick with it should not be concerned about what lies ahead. Those who do not have a plan, or act emotionally, could pay a significant price for doing so.

Before you react to the headlines you read, take a deep breath, and remember that your well-developed financial plan is designed for performance over the long term.

We are here to help you. Our team has worked with clients for more than 30 years and has the experience, insight and expertise to guide you through what lies ahead. Please contact our team with questions or concerns, whether you are a client or ours or not. We are happy to provide a second opinion, without cost or obligation, even if you already have an established portfolio or plan. Carver Financial Services, Inc. 440-974-0808 or carverfinancialservices@raymondjames.com.

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1. Dalbar computed the Average Stock Fund Investor Return (above, “Driven by Emotions”) by using industry cash flow reports from the Investment Company Institute. The Average Stock Fund Return (above, “Emotions Held In Check”) figures represent the average return for all funds listed in Lipper’s U.S. Diversified Equity fund classification model. The average annual return for these two was 3.9% and 6.4% respectively.

This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of the professionals at Carver Financial Services, Inc., and not necessarily those of Raymond James. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Investing involves risk, and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Examples provided are hypothetical for illustration purposes only. Actual investor results will vary. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional The fact that buy and hold has been a successful strategy in the past does not guarantee that it will continue to be successful in the future. The performance shown is not indicative of any particular investment. Past performance is not a guarantee of future results. Individuals cannot invest directly in any index. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal.

Carver Financial Services Wins Fast Track 50 Award for Lake & Geauga Counties for 2019

September 2019, Carver Financial was recognized as one of the Lake-Geauga Fast Track 50 winners for the 13th year in a row.

The Fast Track 50 recognizes the contribution of local companies to Lake and Geauga county economies. The Fast Track 50 Committee compiles a list of the fastest-growing companies in Ohio’s Lake and Geauga counties. Companies are ranked by sales and employment growth over the previous five-year period and the top 50 are recognized. Carver Financial Services Inc. has consistently been recognized on this list for the last nine years.

The 2019 Lake-Geauga Fast Track 50 honors companies and individuals in Lake and Geauga counties who have shown growth. The Fast Track 50 Committee compiles a list of the fastest-growing companies in Ohio’s Lake and Geauga counties. Companies can nominate themselves. To be eligible for the award, companies must be located within the two-county region, be organized as a for-profit business, and must meet a minimum sales profit. Companies are ranked by sales and employment growth over the previous five-year period and the top 50 are recognized. Winners are chosen by a math formula: 80% of weight is given to sales growth and 20% of the weight is given to employee growth. To more fairly compare larger and smaller companies, the Fast Track 50 is divided into Established and Emerging categories. For 2019, Established companies must report revenue of at least $2.75 million in 2018, the baseline year for all evaluations. Emerging companies are required to have 2018 sales of between $250,000 and $2.75 million. There are 25 companies on each list. Out of 100 firms nominated, 50 received the award. This ranking is not indicative of future performance, is not an endorsement, and may not be representative of individual clients’ experience. Neither Raymond James nor any of its Financial Advisors pay a fee in exchange for this award/rating. Raymond James is not affiliated with The Fast Track 50 Award.

 

Case Western Reserve Names Carver Financial to its 2019 Weatherhead 100 List

September 2019 – Carver Financial Services, Inc. was named by Case Western Reserve University to its 2019 Weatherhead 100 list. Companies recognized on this prestigious Weatherhead 100 list are honored for their percent of revenue growth over the past five years.

The rankings are based on data from the following: 12-month period of net sales from 2014 – 2018, 2014 net sales must be at least $100,000, headquartered in Ashland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Richland, Stark, Summit, Trumbull or Wayne County, not a franchise or subsidiary of another company between 2014 – 2018 and must be a for-profit organization. Neither Raymond James nor any of its financial advisors pay a fee in exchange for this award/rating. Case Western Reserve University and Weatherhead 100 is not affiliated with Raymond James.

Randy Carver Ranked Among Barron’s 2019 Top 100 Independent Wealth Advisors

September 2019 – Randy Carver was once again included on the 2019 Barron’s list of the “Top 100 Independent Wealth Advisors” in the country. Randy has been included on this prestigious list of top wealth advisors every year since 2010.

Barron’s produced the listing of top advisors after weighing factors such as client assets under management, philanthropic work, compliance record and the overall quality of their practices. Investment performance is not a criterion because client objectives and risk tolerances vary, and advisors rarely have audited performance reports*. There are more than 300,000 licensed financial advisors in the United States so being named one of the top 100 independent advisors is a notable recognition.

To see the full listing click here.

*Carver Financial Services Inc. is an independent firm. Raymond James is not affiliated with Barron’s. Neither Raymond James nor any of its Financial Advisors have paid a fee in exchange for this recognition. This recognition is not indicative of future investment performance, is not an endorsement, and may not be representative of individual clients’ experience.

Barron’s Top 100 Independent Financial Advisors, 2019. Barron’s is a registered trademark of Dow Jones & Company, L.P. All rights reserved. The rankings are based on data provided by over 4,000 individual advisors and their firms and include qualitative and quantitative criteria. Data points that relate to quality of practice include professionals with a minimum of 7 years financial services experience, acceptable compliance records (no criminal U4 issues), client retention reports, charitable and philanthropic work, quality of practice, designations held, offering services beyond investments offered including estates and trusts, and more. Financial Advisors are quantitatively rated based on varying types of revenues produced and assets under management by the financial professional, with weightings associated for each.

Randy Carver Named to Forbes’ 2019 List of Top 250 Wealth Advisors in the U.S.

September 12, 2019 – FORBES published their 2019 list of Top 250 Wealth Advisors in the United States. This is the fourth year in a row that Randy Carver, President of Carver Financial Services Inc. and registered Principal with Raymond James Financial Services Inc., was included in this prestigious list. There were more than 30,600 nominations received, seven were recognized in Ohio, with Randy Carver being ranked #104.

Randy’s Profile – https://www.forbes.com/profile/randy-carver/#7ebea526739a

The Forbes ranking of Top Wealth Advisors, developed by SHOOK Research is based on an algorithm of qualitative criteria and quantitative data. Those advisors that are considered have a minimum of seven years of experience, and the algorithm weighs factors like revenue trends, AUM, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. This ranking is not indicative of an advisor’s future performance, is not an endorsement, and may not be representative of individual clients’ experience. Neither Raymond James nor any of its Financial Advisors or RIA firms pay a fee in exchange for this award/rating. Raymond James is not affiliated with Forbes or Shook Research, LLC. Data provided by SHOOKTM Research, LLC. Data as of 6/30/19. America’s Top Wealth Advisors (Forbes.com Sept. 2019).

Randy Carver and The Story of Carver Financial Services

When life knocks you down, you have two choices: stay down or get up.  —Tom Krause

I have been an entrepreneur ever since I was six years old.  

My first business involved me gathering dandelions, bunching them into bouquets and selling them door-to-door around the neighborhood. I was selling seed packets and wrapping paper at the age of eight. By ten I was making and selling jam.

Then, my world was turned upside-down at the age of twelve when I was diagnosed with non-Hodgkin’s lymphoma. For the next three years, doctors worked to remove the complete lobe of my left lung, parts of my right lung, my spleen and my thymus. Later, a surgery to remove another mass paralyzed my vocal cord, leaving me with the raspy voice, that I have today.

Those three years were among the toughest of my life. The constant chemotherapy, radiation therapy, and surgeries took an incredible toll on me, which was only made worse by the fact that I was being treated for the wrong disease. While I had been diagnosed with non-Hodgkin’s lymphoma, we discovered years later that I actually had malignant thymoma—an entirely different disease.

As a result of the treatment and illness, I missed a lot of school—most of sixth grade, all of seventh and eighth grade, and most of ninth grade.  Despite this, I was learning constantly. The Wall Street Journal became a daily companion, teaching me about financial markets and investing. I also enjoyed watching the hit TV show M*A*S*H.  Alan Alda, the best surgeon in the unit, had the ability to deal with the worst circumstances and still have fun. This example helped to shape my personal values. We can use our experiences to be the best at something, help others overcome adversity and still not take ourselves too seriously.     

Aside from my parents, the person I credit most with getting me through that period was my surgeon, Dr. Robert Filler. He was the only person who, every time he saw me, would look me in the eye and say, “No, you are not going to die.” I’m convinced that his persistent attitude and aggressive approach to helping fight my disease are what ultimately saved me.

Through these experiences, I realized that life is short and needs to be enjoyed. Most of all, I learned that with a positive attitude and persistence, anything is possible. This was something I wanted to help others see so they could achieve their dreams and enjoy their lives.    

It was this mindset that spurred me on through the most difficult times, encouraging me to keep growing as an entrepreneur. At the age of fifteen, I started a catering business in my mom’s kitchen and then founded and ran two successful home-renovation companies. It was with these companies that I realized how building something tangible could help others and how much I personally enjoyed seeing the results of this. Ultimately, this would become the vision for Carver Financial Services Inc.      

First College, Then a Career

After enrolling at Oberlin College in Ohio, I quickly found that all that time spent reading The Wall Street Journal had paid off. To help pay my way, I would borrow money from my professors, and invest it in futures. After a while, I had become so successful with these efforts that one of my professors suggested that I should start teaching others how to invest as well. I took his advice and taught a college credit course on investing. 

In 1987, I graduated with a bachelor’s degree in economics. Originally, I planned to head home and resume my home renovation businesses. I enjoyed interacting with people and loved seeing tangible results of our work as we improved people’s homes. Instead, I took a job with a regional brokerage firm and moved to Mentor, Ohio, where I immediately began knocking on thousands of doors to open a new office for them. I had acquired enough clients in just four months to open my own branch in the spring of 1987.

With a lot of hard work and dedication, my office became one of the company’s most successful within three years.

I suffered another catastrophic setback in March of 1989. I was flying a single-engine plane and was forced to crash-land. I suffered collapsed lungs, broken ribs, a cracked larynx, and a crushed nose. For almost a year, I couldn’t speak. I would write notes, which my assistant would then take and read to my clients. Again, this was a very challenging period, but the experience helped me improve my listening skills and showed me the importance of working with a team, rather than working alone.

Not yet thirty, the bouts with adversity strengthened my sense of life’s fragility and made me even more determined to help others enjoy their lives. When I started in the financial services business, I believed that we could help people achieve their dreams. 

Turning Industry Standards Upside-Down

After three years, I realized that working for a large investment firm would never come close to aligning with my aspiration of helping people build their financial future based on their hopes, dreams and personal vision. I was happy to be helping people, but at the same time, realized that there was a problem with an industry model focused simply on selling investments, not providing outstanding customized experiences. I envisioned a company focused on personal service, where the investments were merely tools to help people achieve their personal vision.

Of the many things years of entrepreneurship had taught me, one key idea was that no matter what business you’re in, the best way to differentiate yourself is through exceptional client service and making a true difference in their lives.

Unfortunately, that wasn’t what I saw most financial advisors, or firms, focusing on. To them, the financial services industry was all about selling investments and getting new clients—not providing lifelong support to the people who had invested with them. In my view, that model of financial services was broken. Financial planners should be helping people create experiences and fulfill their vision of a happy life, not pushing investments. 

I felt that the company I worked for was no different—a product-focused firm that required its advisors to only sell a limited number of offerings. I felt we should be allowed to offer our clients the best possible financial solution, regardless of what company it came from. But unfortunately, our hands were tied.  

Compounding this problem was the focus on getting new clients, rather than providing an amazing service experience for existing ones. To me, this approach was completely backward, and not only didn’t help people with what they really needed—it did not make good business sense either. I knew that working for a large investment firm would always prevent me from providing the kinds of service and experiences, that our clients deserved. So, I decided to set out on my own and build a new model focused on creating holistic experiences for our clients who we would work with for life.

 Because the type of firm that I envisioned didn’t exist, I created it. This was the beginning of Carver Financial Services Inc. in December of 1990.  

The Birth of a True Team

I established Carver Financial Services, Inc. with the vision statement of, “To make people’s lives better—our clients, our team and our community,” and partnered with Investment Management & Research, which is now Raymond James Financial Services, Inc. Our goal was to build a service company that used financial planning and wealth management to help people achieve their personal vision, while simplifying their lives. By partnering with a global firm, we could provide all of the services that any large investment firm could without the pressure to sell any specific product or service. 

While most financial advisors, and firms, focused only on their clients’ financial situations, we were passionate about helping people simplify their lives, seize opportunities to experience life’s greatest gifts, and continually enhance their lifestyles. The vision I had carried since childhood, to live life to the fullest AND to help others do the same, was implemented. 

Our approach proved to be a success. As our practice grew, I quickly realized I could not provide the service needed for all of our new clients by myself. It was time to grow our team.

Here again, we turned the existing model upside-down. Most financial services practices had one sales assistant for every three or four advisors, I wanted to do the opposite, hiring three or four highly skilled client concierges for every advisor. That way, our clients could get the attention they wanted, needed, and deserved from a team of concierges who could handle any and all administrative requests.

In growing our practice, it was important to have a firm that would be around for generations to come. Moreover, I envisioned a team of professionals who not only had outstanding credentials, but also the same values and vision that I did for our clients. To do that we built a team of experts who bring different skills and experience to the table to create a robust support system for an enduring practice. Furthermore, we needed to have younger members who would learn and provide intergenerational longevity to the team. While many financial services firms claim to take a team-based approach to financial planning, team members are usually incentivized based on what they do individually. Our team, on the other hand, works collaboratively and is compensated collectively.

Again, this unique approach paid off. Today we continue to add specific operational, administrative, and planning professionals to our team, and have continued to grow our advisory and support team as well.

Personal Vision Planning®

Over the years, we have developed and refined a process for leading clients to achieve their personal vision for the future, while enjoying the present. We call it Personal Vision Planning.

Personal Vision Planning is different from traditional financial planning or investment planning. We work with our clients to build a clear, personalized vision of what their retirement might look like, and then we plan out how they can get there. The planning is based on your Vision, not investments. Through this process, my team and I offer clients unbiased investment information and a wide range of financial products and services through Raymond James Financial Services, Inc. While we are an independent firm, we custody our assets with Raymond James and have access to all of the resources of a multi-billion dollar global firm whose offerings include, but are not limited to: investment banking, a trust company, an FDIC insured bank and hundreds of experts on a variety of topics of importance to our clients.

This focus on personal vision and quality of life, rather than on the money itself, is very important to me. As a survivor of cancer, a plane crash, and other extreme injuries, I’ve learned first-hand how precious each moment of each day truly is. Rather than simply helping people to grow wealth, Personal Vision Planning helps our clients to live their best lives possible.

Creating Unforgettable Client Services

All of us at Carver Financial Services are passionate about helping other’s enjoy life. In addition to the Personal Vision Planning, we create memorable life experiences for our clients by hosting unusual, once-in-a-lifetime trips and events. Overseas trips, educational and aspiration presentations by national speakers who are experts in various subjects and even a car show are just some of the experiences we offer each year.   

Always Evolving

Throughout this journey, nothing has made me prouder than to watch Carver Financial Services move from being “my firm” to “our firm.” United under the shared vision of making people’s lives better, we have continued to bring in new generations of team members so that the firm, just like our clients and their families, will be here to serve you and your family for generations to come. Understanding that unforeseen things happen we have both a detailed business continuity plan and business succession plan in place so that we will always be here to serve you and future generations, no matter what challenges we face. 

Who knows what the future holds? Life is full of twists and turns. Some of them are wonderful, and others are life-threatening and awful. When we conquer difficulties, we learn that we can be or do anything, despite our circumstances. My experiences have shaped my passion to enjoy life and to be intentional about every action I take.

Our entire team is committed to helping you simplify your life, while enhancing your lifestyle as you live your future intentionally, with both a plan and a purpose. We are focused on sharing that journey with you, every step of the way. Our practice will continue to evolve while maintaining our vision of making people’s lives better. The things we do and the way we spend our time are so important and we appreciate you taking time to read this!  Please let us know whenever we can be of service—have an amazing day!   

You can reach Randy at randy.carver@raymondjames.com or 440-974–0808.

It’s not what you make that matters; it’s what you keep

The highest return isn’t always the one that puts the most in your pocket. Why? Because it’s not what you make that’s important, but what you keep—net of fees, expenses, and taxes.

When comparing returns on investments, we need to look at the net return, not the gross return. For example, a 10 percent taxable return could put less money in your pocket than a 6 percent tax-exempt return if you are in a 45 percent tax bracket. If you earn 10 percent on $100,000, you earn $10,000; however, if you pay 45 percent income tax, then you net only $5,500—which is less than the 6 percent ($6,000) tax-exempt return.

The lowest-cost investment is not always the best, either. For example, if an investment costs 2 percent per year but pays a net return (after an expense of 8 percent), that’s better than a 3 percent investment that’s free. Again, it’s not what you make, but what you keep—net of fees, expenses, and inflation.

You will sometimes hear about the “real rate of return” or “after-tax real rate of return.” It’s the actual financial benefit of an investment after you factor in taxes and inflation. If your investment earns 8 percent, but inflation averages 3 percent for the year, then your real (inflation-adjusted) rate of return is 5 percent. 

“Beware the investment activity that produces applause; the great moves are usually greeted by yawns.” —Warren Buffett

When comparing a return on a portfolio to a benchmark, such as the S&P 500, we need to compare both returns, net of income tax, fees, and expenses. Often, the benchmark that looks higher than a portfolio return does not account for expenses or income tax. Our team takes a very conservative tax, allocation and expense-management approach that focuses on the highest net return for you, based on your personal situation—not the return that appears to beat a benchmark or appears to be higher than it really is.

Benchmarks can be helpful in comparing your portfolio’s performance to an industry figure. But comparing a portfolio to the wrong benchmark can lead to a misperception of how well you are doing. Often, investors compare their portfolios to the S&P 500 stock benchmark, even though they own investments other than large-cap stocks. That is not a relevant comparison.

Another example is if you are invested to generate reliable current income, to help maintain your lifestyle on an inflation-adjusted basis. This is a very different objective than beating the S&P. The most important benchmark is whether or not you can meet your current income needs and future goals with a portfolio that also meets your risk tolerance.

Often the real value of your trusted advisor is not selecting investments, but developing and monitoring an allocation that works for you. The advisor can also help take emotion out of investment decisions and thereby increase your overall net return. In fact, according to a February 2019 study by Vanguard1, implementing the Vanguard Advisor’s Alpha framework can provide, on average, 3 percent* more return (net of their fee’s) than people can achieve on their own. This is the  

Looking at the largest return might not put the most money in your pocket. Moreover, a well-balanced portfolio may seem boring, yet this can provide a more suitable plan to help you reach your goal. Please contact our team with questions, to provide a second opinion or if we can otherwise be of service to you. Our goal is to help simplify your life and enhance your standard of living. 

1 https://advisors.vanguard.com/iwe/pdf/ISGQVAA.pdf

This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of the professionals at Carver Financial Services, Inc., and not necessarily those of Raymond James. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary.

Examples provided are hypothetical for illustration purposes only. Actual investor results will vary. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

* The actual amount of value-added may vary significantly, depending on client circumstances.