Joey Feste has played many roles over the course of his life, sometimes all at the same time. His primary role for the past 18 years has been working as the Senior Managing Partner for KM Capital Management based in Austin, Texas. Feste launched this company on his own in 2004 after having worked as a Registered Investment Advisor for Paine Webber and Morgan Stanley.
Joey Feste Discusses the Best Time to Start Investing
One lesson that Feste has learned in his 30 years working in wealth management and investing is that the investment market is much more available to average citizens than most people realize. However, he does stress how important it is for people considering investing to develop and maintain positive financial habits ahead of time. Here are his recommendations for anyone thinking about getting into the investment market:
- Pay off all high-interest accounts first, such as credit cards, medical debt, and car payments.
- Save money for an emergency fund that will cover basic living expenses for at least three months.
- Eliminate all unnecessary expenses and create a budget.
- Start putting money into savings every month.
Following these steps will free up money each month that can now go towards investments instead of debt payments.
Potential Investors Should Consider Their Motives and Needs
Joey Feste recommends that people spend time contemplating what their goals are with investing. Some people want to use investing as a way to earn funds for a large expense, such as making a down payment on a home or helping their children with college tuition. Others will not touch the money in their investment accounts until they retire. Those who want to invest as an opportunity to achieve short-term goals should select conservative stock options that allow them to draw out the funds when needed.
How New Investors Can Determine Their Risk Tolerance Level
Investing money in accounts such as stocks, bonds, and mutual funds can be an excellent way to increase wealth without people having to take on more jobs than they can manage. At the same time, investing is always a risk. Investments can lose money for a variety of reasons, including the current political climate, change in company leadership, or even the weather.
New investors need to be comfortable with the fact that their accounts will gain and lose value due to factors outside their control. According to Joey Feste, no one should start investing without an honest assessment of their financial situation and having a good understanding of how comfortable they feel with risk. Since he also recognizes that people knowing their own risk tolerance can be challenging, he recommends that they start by asking themselves these questions:
- Which is the greater concern, purchasing power or losing money?
- How much money is the investor willing to lose?
- How much anxiety would the investor expect to feel if the market goes into severe decline?
- What age does the investor plan to retire?
- Will the investor track their own investments? How often?
- How much time does the person have to put towards investing?
The answers to these questions should help people understand whether they have a conservative, moderate, or aggressive tolerance for risk. People with a conservative risk tolerance usually come to investing with little knowledge about it. Their main goal is to maintain the capital they already have, even if it means bypassing potential gains.
On the flip side, people who assess themselves to be aggressive investors have extensive market knowledge, including the current factors that influence market performance. The goal of people with an aggressive investing style is to maximize their returns. They willingly accept the risk of losing money in order to achieve this goal. Those with a moderate risk tolerance fall somewhere in the middle and are more apt to change their investment style than those at the two opposite extremes.
Regardless of how people rate themselves in relation to risk tolerance, they should act accordingly to ensure they feel comfortable with their decision to invest. Joey Feste often recommends that those in the conservative and moderate camps seek input from a financial advisor before choosing stocks for the first time.
Tips for Managing Risk for People of All Tolerance Levels
Most people have heard the expression not put all their eggs in one basket, and that is certainly true when it comes to investing. When Joey Feste collaborates with clients, one of the first things he stresses is to diversify their investments in a variety of areas. Selecting different asset classes and spreading investments among cash options, stocks, and bonds can both reduce risk and accelerate returns. He also lets clients know they can adjust their investment strategy should their goals change or when their accounts do not perform as expected.
Another suggestion Feste often makes to his clients is to invest in mutual funds. The unique design of mutual funds spreads the individual risk present in any investment across a wide range of stock options.
Joey Feste Jr. Serves as Vice President of His Father’s Company
Clients reviewing the leadership team at KM Capital Management will notice that working in the financial services industry is a family affair. Joey Feste Jr., son of the company founder, is the current Vice President of KM Capital Management and a Registered Investment Advisor Representative. Like his father before him, Joey Feste Jr. graduated from the University of Texas. While the elder Feste received a Bachelor of Arts in Economics, the younger Feste holds a Bachelor of Arts in Business Administration.
KM Capital Management Offers More Than Investment Advice to Athletes and Entertainers
Joey Feste launched his company 18 years ago with a single purpose in mind. He wanted to help professional athletes and entertainers preserve their wealth beyond their years of peak earning potential. Retirement comes early in these industries, especially for sports professionals who typically stop playing in their late 30s or early 40s.
Having a specialized financial platform has allowed Feste and his associates the opportunity to serve the unique needs of their clients. Besides portfolio management, KM Capital Management offers its clients general financial planning, retirement and estate planning, comprehensive tax management, bill management and bookkeeping, and insurance planning. The firm’s impressive results over the years have attracted some of the biggest names in sports and entertainment to KM Capital Management.
Although Joey Feste feels proud of what he has accomplished in his career, he views his work more as an opportunity to be of service than to revel in his own skills.