Arbor Wealth: Justified, Elmore Leonard and The Iron Bowl

Margaret R. McDowell
Margaret R. McDowell

"Don’t scab for the bosses … don’t listen to their lies;

Poor folks ain’t got a chance … unless they organize.” — from “Which Side Are You On?” written by Florence Reece in 1931

It’s filmed in California. And its characters emanate from an Elmore Leonard novel based in Miami. But the real storylines for the TV series “Justified” evolved from Harlan County, Kentucky, history in the 1930’s.

Coal mine owners used violent and brutal tactics to prevent union organization there. In one confrontation at a local bridge, four men were killed in an open exchange of gunfire.

Union man Sam Reece was hunted by hired thugs, who broke into his house and terrorized his family. Later that night, Sam’s wife Florence wrote the lyrics for “Which Side Are You On?" matching it with the gospel tune “Lay the Lilly Low." Its message is somewhat akin to choosing sides in the Alabama-Auburn rivalry. Neutrality was not an option.

All of this is to introduce the topic of whether investors should work with a financial advisor. Since you know I’m an advisor, you may wonder, as in the song title above: “Which side is she on?” Truthfully, I’m on the side of whatever is in the investor’s best interests, and I think most advisors would say the same.

Using an advisor doesn’t work in a couple of scenarios. The first is one in which the investor hires an advisor, but then continues to order trades which are against the advisor’s better judgment. Investors who have an extremely short timeline are also usually better served not to hire an advisor. Most advisors will tell you that it takes a three-year timeline to judge the efficacy of their work in investor accounts. Many folks consider themselves long term investors until markets take a nosedive. If the investor wants results in six weeks, he’s usually better off handling his own affairs.

Conversely, investors who wish to turn over trading supervision to an advisor, and who have a longer timeline, are often well served by professional assistance. Say the advisor’s fee is 1 percent. The investor simply asks himself, “Could I have performed 1 percent better managing my own accounts than did my advisor?” If the answer is no, then the money is well spent.

A recent Vanguard study estimates that advisors who “offer behavioral coaching, asset allocation, spending strategy, cost-effective investments and rebalancing” can frequently add 3 percent to an investor’s annual account value. Advisors can keep an investor grounded and suggest when to harvest gains during market upticks, and can help you put on the brakes if you’re about to take an emotional jump with your accounts during a downturn. Such an advisor with a big picture perspective, one who can talk you “off the ledge”, may be well worth hiring.

Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, is the founder of Arbor Wealth Management, LLC, (850-608-6121 —, a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.