The 4 Questions You'll Get at Holiday Parties This Year

The real question: Is there any chance I will get a second chance at locking in a higher interest rate?

How about answering:  Interest rates are cyclical, but it looks like the higher rate cycle has changed direction. Interest rates and inflation have a shared relationship. The Federal reserve has wanted inflation to come down. Raising interest rates theoretically slows the economy. Then the Fed can lower rates again.  The general assumption is inflation is somewhat under control, rates are expected to decline.  If you are a fixed income investor, you should start locking in higher rates now while they are still available.

3. Is a strong U.S. dollar a good thing? 

Doesn’t it sound like this makes sense? Who wants the word “weak” associated with their country? 

The real question: Why should a strong dollar worry me?

How about answering: We are fortunate the US dollar has long been the world’s reserve currency. OPEC’s oil is priced in dollars. When the dollar is weak, U.S. manufactured goods are more competitive in the world market. When the dollar is strong, they are more expensive in local currency. As a traveler, you want a strong dollar, because it goes further on vacation in Europe. Those European travelers think twice about visiting the U.S. because everything is more expensive for them.

4. How often should I be hearing from my advisor? 

The flashing lights for potential prospect should be visible now.

The real question: I cannot remember the last time I heard from my advisor. Is this normal?

How about answering: Like many things, it varies client by client. Some clients want you to be available when they call and that’s it. Others, like surgeons or airline pilots, might be difficult to reach. Let us assume we are talking about a regular person.

You and your advisor should talk about how often you want to hear from them and your preferred channel of communication. An annual portfolio review should be the absolute minimum. It makes sense to revisit your financial plan annually, which should be a separate meeting. A quarterly review call, checking in and talking about your portfolio makes sense too. That would be six conversations.

There will be other times your advisor needs your attention immediately. There will be times when you want to speak to them. All these calls should be during business hours on workdays.

It might vary by advisor, but this is how I do it. It is why I have a smaller clientele than other advisors.