2 min read December 2022 — Invest: sat down with Chris Draughon, director of financial planning at First Coast Wealth Advisors, to discuss how they prepare for market downturns in their investment strategy, and his perspective on the technological advances of cryptocurrency concerning the current market landscape.
What have been some key highlights for First Coast Wealth Advisors this year?
Our priority is empowering clients to honor their financial goals, to live their lives without fear of the economy, financial markets, politics, etc. One of the ways we do that is by incorporating negative returns into our assumptions and demonstrating how they will not impact their long-term financial well-being. That has been very powerful this year, given the performance of investments.
The highlight of the year has been the influence rising interest rates have had on financial assets. We’ve been putting this experience into perspective with our clients, so they don’t lose sight of their long-term goals.
How has the mindset shifted in regard to your clients?
Our financial planning advice incorporates the possibility of market declines. When setting expectations with clients, we talk about the impact periodic negative returns like this year will have on their finances. As a result, when markets swoon, it doesn’t move the needle on a client’s retirement forecast. This has gone a long way to helping clients keep their emotions in check and not lose sight of the bigger picture. As a result, our client’s mindset has not changed. They remain focused on their goals knowing market fluctuations are temporary.
Do you have any predictions for cryptocurrency and the role it will play in the financial world going forward?
Cryptocurrency is a burgeoning asset class that has much maturing to do if it is to become widely accepted as legitimate. The number of currencies in the economy will consolidate over time, especially as regulation increases. Digital currency could remove friction in the economy that leads to disruptive growth in the financial services industry, particularly with payment systems and banking services.
How has your presence in the region grown in the last year, and what is your perspective on the region’s growth?
Northeast Florida, like much of the state, has seen an incredible amount of growth from new residents moving from other parts of the country during the COVID era. This explosion in population has been an excellent opportunity for financial planning firms like ours to sustain their growth.
Commensurate with an expanding population comes the challenges of building out infrastructure and maintaining the quality of life of residents. We need to get comfortable with the idea that Jacksonville and the surrounding area will look very similar to central and south Florida soon with respect to our roadways.
As a bespoke investment advisory practice, our focus has always been on serving our clients very well while being selective with our growth.
What trends or developments are you monitoring in the nearterm?
There are a couple of trends we are monitoring. From an investor’s point of view, 2022 will be remembered as the year during which the Federal Reserve raised interest rates at an unprecedented pace. Questions remain as to how long they will continue raising rates and keep them elevated. Although the effect of rising interest rates has not been pleasant (investors have seen the value of their portfolios decline), there may be a silver lining. Higher interest rates might lead to higher average annual portfolio returns. Investors may see better average annual returns over the next decade than they experienced over the last one.
From an industry point of view, we continue to be impressed with the number of technological innovations that enable us to serve clients better. One notable advance is the use of AI to improve productivity.
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