While Nero Fiddled…

Regardless of your political persuasion, you’re probably a little unhappy at the moment (the moment being Aug. 9). Following the political theater surrounding Congress raising the debt ceiling, and the Tea Party Republicans flexing their newfound muscle in forcing some budget cuts, Standard & Poor’s downgraded the United States’ debt on Aug. 5. The first day that U.S. markets could respond to the downgrade, the Dow dropped 634 points, or 5.6%, while the S&P 500 fell 6.7% as every stock in the index fell. The VIX, meanwhile, closed at 48 on Aug. 8, its highest level since March 2009. Our national political system appears dysfunctional, with our so-called leaders seemingly more interested in making partisan points and making good sound bites than in having a serious debate—even allowing for that now dirty word, compromise—than in directly addressing the big issues the country faces.

As you read these words, however, the markets will have moved on. Whether that move will end up in double-dip territory or a resumption of growth, I don’t know, but the basics of your business will remain the same. You build plans, you manage client expectations, you learn from what the past teaches you and you implement investing, tax, estate planning and charitable giving strategies that provide your clients with a better chance of meeting their goals than if they were on their own.

But to be successful, you can’t just be a market whiz: As you well know, advisors who live only by the performance sword will be bloodied by that same sword. There are plenty of lessons to be learned by some recent research conducted by Investment Advisor’s online counterpart, AdvisorOne, with the assistance of Philip Palaveev, and an advisor benchmarking survey from our partners Dan Inveen and Eliza DePardo (yes, all of them are Moss Adams alumni).