Investment Anatomy

Dean Junkans is on a mission to get the word out on investing. As the chief investment officer for California-based Wells Fargo Private Bank, Junkans spends a lot of time thinking about the wants and needs of individual investors. His unit has more than $260 billion (that’s with a “b”) under advisement. Junkans and his staff crank out weekly newsletters, advisories, and tidbits on markets, strategy, and tactics—and then, of course, there’s all the face-to-face work with investors.

Junkans’s desire to make investing more accessible to people has resulted in a book he has written during his spare time, The Anatomy of Investing, which will be published this month (click here to read an excerpt). The book is an easy-to-understand journey through the ins and outs of accumulating, organizing, and keeping one’s wealth. There’s never a dull moment as Junkans gives gun-shy investors a strong dose of common-sense investing tips without any scheme-of-the-moment stuff.

As the chief investment officer for a private bank that is focused on individual investors, how have you been counseling your clients lately?

D. J.: First of all, we have to listen a lot. Private investors need to share their feelings about the market. With the markets as they’ve been, we have been increasing the number of our in-person meetings, conference calls, and written communications. We have weekly pieces that go out to clients, where we’ve been trying to hit on topics of concern. Whatever that might be, we try to address it head on and let people talk about it. People need to process their feelings.

What are your clients most worried about?

D. J.: A lot of different things. They are worried about preserving principal; about the financial system. They are worrying about things that they used to think were safe that they don’t necessarily think are safe anymore—even cash reserves. Seeing oil double in price in a relatively short period I think scared a lot of people, and the follow-on effect of inflation made matters worse. And yet, over the course of my career, what I’ve also found to be true is that I can always list about eight to 10 things to worry about in the market or the economy, and it just sort of rotates to a different set of worries.

Have you developed any kind of theory as to what is actually moving this market? It seems to toggle between oil prices and ups and downs of the financial sector.

D. J.: First of all, I think the important thing is for private investors to stick to their long-term plan, barring some significant change in their personal situation. One of the key values an advisor brings to private investors is to help them stick to their long-term plan, much like a personal trainer might help a person stick to an exercise plan. We earn our money in this kind of environment. Emotionally, a lot of people want to throw in the towel and head for the sidelines, figuring that they’ll wait for more “clarity” in the market. Unfortunately, when that clarity arrives, it’s almost always too late. You’ve already missed the big return potential because markets are forward looking. They anticipate things long before they happen.