CNBC's No. 1 financial advisor has a golden rule: ‘We do not time the market'

• Heritage Investment Group came in at No. 1 on CNBC’s list of the top 100 financial advisors in the U.S. for 2024.
• The secret to the firm's success is taking a very long-term view, says its president Frederick MacLean: "We do not engage in market timing, stock picking or tactical asset allocation on any level, and we do not react to market movements or economic news."

Frederick MacLean, president of Heritage Investment Group, doesn't mind if you call his strategy boring. In fact, there's not much that could unsettle him or his approach.   

Heritage Investment Group, which ranked No. 1 on CNBC's list of the top 100 financial advisors in the U.S. for 2024, is committed to one golden rule, he said: "We do not time the market for any reason."

Even with the stock market hitting record-high levels, cooling inflation, slowing job growth and the first Federal Reserve rate cut since 2020 — a super-sized half-point, no less — all on the cusp of an upcoming U.S. presidential election, MacLean is steadfast in his philosophy.

To navigate the ups and downs, MacLean said, the firm maintains a longer time horizon.

"We are very long-term investors, we do not engage in market timing, stock picking or tactical asset allocation on any level, and we do not react to market movements or economic news,' he explained.

In fact, these days, having "a sound investment process is more important than ever," he said.

Portfolios are built "to let you weather whatever the upcoming storm is," MacLean said. "Our use of appropriate asset allocations, rebalancing and proper investment vehicles allows our clients to stay the course."

"Markets are extremely efficient," according to MacLean, and "the rate cut is a good example."

The three major averages initially slid on news that the Fed dialed back interest rates by a half point on Sept. 18, but then climbed higher and ended the week with the Dow Jones Industrial Average and S&P 500 rising to new all-time highs on Sept 20.

The advantages of 'quiet discipline'

Trying to time the market is almost always a losing bet, other financial experts also say. That's because it's impossible to know when good and bad days will occur.

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published earlier this year.

"We could be accused of being boring, but our quiet discipline through the years has certainly been an integral part of our success," MacLean said.

This approach also allows the firm to focus on the planning aspect on the business, MacLean said, including retirement and estate planning, cash flow management and tax strategies.

"From the outset, we recognized the need for objective, fiduciary advice that is critical for long-term investor success," MacLean said.

That has also been key in their ability to reach the next generation of clients, a hurdle other financial advisory firms have struggled with achieving.

"It's natural for clients to recommend us to their kids," MacLean said.

It helps that everyone at the 20-person firm is on the same page.

Heritage, which started in 1993 and has offices in Tampa, Orlando and Pompano Beach, Florida, is largely a family business "formed out of an estate planning law firm that my parents founded in 1974," MacLean said.

MacLean works with his sister, his son and a few of his oldest friends, including Timothy Slattery, who is the chief investment officer.

Together, Heritage Investment Group has $1.7 billion under management and more than 2,050 accounts.