The Young Investors Society Global Youth Investment Summit winners from the Global Stock Pitch and Case Study Competition each won a Summer internship at an investment firm.
Below, you can read Sebastian’s experience at Advisory Group for Life.
“This summer, I interned at Advisory Group for Life, a financial planning firm serving 300+ households. Under founder Steve Barrus, I learned the key concepts of building financial plans that are fully tailored to a client’s needs. On Day 1, we learned the basics of bucketing, which is the process of allocating money based on when and where you will need to spend it. Aside from investing, a good financial plan must account for a client’s income needs, risk appetite, and the amount of emergency cash in an “emergency” account, through the weathering storm of inflation and the occasional down year. One thing that I found very moving was a diagram showing two portfolios of retired individuals, one which began investing in 1998, and one which began investing in 2001. The 1998 portfolio saw great returns heading into the dotcom bubble, building some protection against what was to come. The 1998 portfolio, after necessary withdrawals, never ran out of money. The 2001 portfolio, which saw multiple consecutive down years towards the beginning, ran out of money way before the 1998 one did. This lesson taught me to diversify investments for retired clients, rotating away from traditional public equities and into money market funds and municipal bonds, among other things. Mixed with some corporate AAA rated credit at a 5-6% yield, money market funds and a short-term treasury rolling strategy could achieve the necessary 4.5% average annual yield I found necessary to maintain a client’s ability to cover expenses without running out of money, assuming 3% inflation. I took lessons with me from this internship that I will carry with me throughout my career and my life when making personal financial decisions. I appreciate everybody at YIS and Advisory Group for Life for allowing me this opportunity.”
~Sebastian G.
Crossroads School for Arts & Sciences, California