Taking on risk is more palatable for investors, now that a half decade has passed since the sub-prime mortgage crisis of 2007 to 2009. It is inaccurate to say that risk is not trendy; risk has always been linked to investing aimed at accumulating wealth. Yet, a look at today’s market, along with the activity reported by major financial media, indicates that many investors who pulled out of the market five years ago are back in.

And that’s where they ought to be, if you ask Edward Huffman, owner of Huffman Financial Services, Inc., Dobbs Ferry, New York.

Even though he jokingly admits he himself should have, “headed for the hills,” leading, with his client investors hot on his heels during what is now called “the Great Recession,” Huffman knows his clients belong in the market.

But only in a very specific niche, in his opinion: And that niche is mutual funds.

Nothing else. Mutual funds are something that Huffman, with his statistical background, can easily monitor and track.

“We spend our time tracking mutual funds. That is what we do,” Huffman said. “We tell our clients, ‘We are not trying to get you 20 percent return per year.’ We tell them, if we can do what the market does over time – say 10 to 12 percent per year – we feel successful. We want clients who want that slow and steady type of progress with their investment. Not someone who wants to hit the home run and do day trading.”

Long-term investors give Huffman the opportunity to build relationships as he helps his clients grow their assets during the accumulation phase of retirement planning. He gets to know their families, their careers and their aspirations. In each monthly newsletter sent out to clients, Huffman features achievements and happenings amongst his client community.
Along with their joys, he also knows their fears.

He knows many are still scared, despite the passage of time since October 2008, when the Dow Jones Industrial Average, the S&P 500 and the NYSE took serious nose dives leaving many investors with losses of 40 percent.

“I call it, ‘The Great Fear,’” Huffman said. “Because that is exactly what it did to so many people. It made them scared. In 2008, we basically had a systemic failure of our monetary system. That is indeed a great fear that does not just go away.”

Huffman tells his clients that today, everything about investing is a little bit different than it was before the Great Recession. Transparency of investing is now paramount. The mutual fund options a client exercises must come with a crystal clear prospectus – or else, steer clear. Their awareness of risk must be heightened, yet enlightened and informed.

The reality of investing is that some risk must be on the table for a gain to occur. “That has always been the standard,” Huffman said. Yet, today, that standard comes wrapped up in a package acknowledging the dangers.

“The ability to accumulate money risk-free just does not exist anymore,” Huffman said. “You are forced to take risk. For some, that risk may be more than for others, but there will always have to be some risk to make some gain.”

That’s where his statistical knowledge comes into play.

As a former secondary mathematics teacher who became “a bit too bored with fractions,” as he explains it, Huffman's years spent as a Statistical Editor for the No-Load Fund Investor Newsletter, which also published the handbook for No-Load Fund Investors, now directly benefits his clients.

The newsletter was owned by Sheldon Jacobs, who started a sister company investment firm in 1987. Huffman’s first job with Jacobs was to track the performance of mutual funds for the magazine to report. Soon he began managing client accounts – and also found his calling.

In 1990, Huffman began managing money for family and friends. In 2000, he hung out his own shingle. Starting with $8 million in assets under management, Huffman currently has $30 million in client assets under his management. He does not advertise. He doesn’t run a website. Clients come to him by word of mouth referral only. He knows it doesn't produce record-breaking growth, but that isn’t his interest.

“We are not greedy. We are not trying to be an accumulator of assets under management just to be able to put up some big number,” Huffman said. “You have to ask yourself, ‘What is my goal?’ Is your goal to have a lot of assets under management or is your goal to help your clients. I am here for my clients.”