Your Money: Your Portfolio Has To Match Your Financial Plan

Your Money: Your Portfolio Has To Match Your Financial Plan

Several years ago, when I was teaching people how to trade growth stocks, I was teaching a seminar in Dallas. Or Denver. Or San Diego. I really don’t remember, but one attendee stands out, even to this day.

He was a friendly enough guy, sitting in the first or second row. I liked to walk around and introduce myself to attendees before the seminar got under way, so I found myself talking to this gentleman and his friend. Turned out he was a postal worker, and he had a question for me.

He asked whether the seminar would cover options trading. As it was limited to trading growth stocks, I explained that it would not, but that we had some resources on our corporate website. He nodded, and said, “I need to get into options, because my daughter is starting college next year, and I have to find a quick way to pay for it.”

My heart sank, although I kept a straight face in front of this guy. I knew his plan – if you could even call it that – was doomed. I wonder how he ended up paying for his daughter’s education. 

I understand that it can take years to get around to financial planning, and in every case, I would say the old “better late than never” adage applies.

Plenty of people begin planning after they have racked up debt, or made financial mistakes, and that’s fine. Nobody’s perfect, despite the 26-year-olds who call a popular radio show host to scream about being debt free, including their homes. They are in the minority.

But the situation with the would-be options trader reminds me: Too many people rush into the trading vehicles, and really have no plan for their money. I understand this temptation, and for years I was part of the problem. I was showing people charts of  “potential big winners,” but not giving them one ounce of context for how Apple or Lululemon or Green Mountain Coffee Roasters – or any stock, for that matter – would help them achieve their unique financial objectives.

After a few more years as a trading coach, and even after a stint hosting a radio show focused on stock trading, I began to have a sick feeling that I was enabling people’s addictions, not helping them better their financial situations.

These days, as an advisor with New Mexico-based Portfolio, I help people develop a plan, rather than decide which stocks look hot at the moment. Because the truth is: People benefit from a portfolio that is carefully constructed around their needs, not from a seminar instructor who advises them to load up on six or seven growth stocks, and call it a day. (Fortunately for them, these seminar instructors – and they are everywhere – have no fiduciary duty to their customers. So they can pretty much tell you to buy or sell anything, even though their advice is couched with language telling you that it is not a “recommendation.”)

Here’s the upshot: Your portfolio has to match your financial plan. A portfolio of growth stocks, penny stocks, blue chips, small caps – whatever – is just floating around in the atmosphere. It has no bearing on your personal financial objectives.

So while stock trading can be an adrenalin rush at times, it’s not the way to achieve your goals. Get yourself a financial plan. Over the long haul, having peace of mind beats a short-lived high from a temporary trading gain.

Editor’s note: Kate Stalter is a financial advisor with New Mexico-based Portfolio LLC. Prior to joining the firm, she was a stock-trading coach and radio host. She is a regular columnist for’s RealMoney,, and Morningstar Advisor Magazine.  She has an MBA from Northwestern University’s Kellogg School of Management. Kate works with financial planning clients in Los Alamos, Santa Fe, and throughout northern New Mexico.

Direct contact:, Twitter: @KateStalter



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