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Minyan Mailbag: Fiscal Literacy

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Thanks Sarah!

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Editor's Note: Minyanville is a community of people who share an interest in fiscal literacy. As perspective is an important aspect of our daily routine, we share this email with hopes that it adds balance to your process

Toddo,

Apropos of some of your recent comments regarding people that are so thirsty for knowledge, they'll "drink the sand", I just got off the phone with the mother of one of our clients. We manage a court-supervised Special Needs Trust for her disabled 6 year old son, and she had a few questions about the quarterly report she had received. In the course of the conversation she mentioned that she and her husband had recently consolidated all of their accounts with a financial planner and she liked being able to look at their stocks online and check the balances every day, and that "it was kind of fun watching them go up"!

At that point, I had a feeling what was coming next, and sure enough, she had shown the report to their financial planner and he "had some concerns" about the portfolio, thought it was invested "much too conservatively for the child's long term time horizon" and with way too much cash. She then said the financial planner would be happy to call me and discuss a "more appropriate allocation" for her son.

Having dealt with these questions many times in the past, I gave our standard response which is that I would be happy to talk to him, but that we were an Independent Trustee serving at the appointment of the Court, that we make our own investment decisions, and as a fiduciary, particularly for Special Needs Trusts, capital preservation is the primary objective. (As we say internally here at the office, Rule #1 is Don't Lose the Client's Money, Rules #2,3,4,5 - See Rule #1.)

In my head, however, I was thinking that I would really like to see what her financial planner had them invested in - and what her reaction is going to be when it stops "going up every day". So I guess this is a lengthy way of saying that I very much concur with your opinion that there is still much work to be done in the area of fiscal literacy, and I hope that Minyanville will be a big part of that.

Minyan Sarah

p.s. I know you don't do "advice" in MV, but I'm taking some of yours anyway, and taking my first summer vacation in 6 years next week (in the middle of earnings season no less!).

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