Meet the monetary advisor who has been ranked #1 by CNBC for 2 consecutive years

David Rea in Chobe National Park in Botswana.

Source: David Rea

For two years in a row, CNBC’s ranking among the top 100 financial advisors in the United States has not changed: Salem Investment Counselors takes first place.

CNBC recently spoke to Salem’s President David Rea about why he thinks his company has been ranked so highly – twice.

Salem Investment Counselors provides comprehensive financial planning and investment management to its clients, most of whom have net assets of $ 500,000 or more. Based in Winston-Salem, North Carolina, the company has more than $ 1.7 billion under management and has been in business since 1979.

Rea, whose mother was a housekeeper and whose father worked in the Indiana steel mills, has looked after some of his customers for nearly four decades and often meets many of their children and grandchildren. He attends his clients’ weddings and funerals. When a customer recently got sick, Rea drove to his house and they discussed his financial plans in his back yard, both in masks.

More from FA 100:
CNBC ranks as Top Rated Financial Advisory Firms of 2020
The stock market is currently fine, says the top advisor
Consultants use technology to help clients adapt to new environments

“To help people achieve their goals, you really have to get to know them,” he said. “And they get to know you, so there is a relationship that will help you get through the ups and downs.”

Rea has suffered his own losses. His first wife, Nancy, developed Lou Gehrig’s disease at age 38 and died of it at age 50.

“She was such a fighter,” said Rea. The two had four children together and were all under 25 at the time.

That experience helped him understand his own customers better, Rea said. “It makes you more empathetic,” he said. “They value people’s struggles more.”

Eventually, Rea remarried.

In the morning he and his wife Martha take a long walk or bike ride on the golf path they live on.

Around 8 a.m. Rea is at his desk. One of his favorite parts of the job, he said, is researching different companies and sectors that he can invest in.

David Rea and his four children: Thomas, Alissa, Mary and Sarah.

Source: David Rea

“Whether it’s the aging population or the energy transition to renewable energies, all of these topics are interesting and we’re trying to think about them,” he said.

Despite many companies moving to passive investing through index funds that mirror the market, Salem Investment Counselors continue to actively manage clients’ stock portfolios, and each client is typically invested in around 40 different companies.

“We can bet on our themes,” said Rea, adding that this has worked well for his clients.

“Belief in social media and the ability to make money from advertising made us invest in Facebook and Twitter,” said Rea. “Belief in the ease of e-commerce led us to invest in Amazon.”

Although the company buys and sells individual stocks, Rea says it usually stays invested in the same companies for a long time. His hero is Warren Buffett, who said if you don’t want to own a stock in 10 years, you shouldn’t own it for 10 minutes.

“He taught us a lot about long-term thinking,” said Rea.

Even so, he admitted that he made mistakes.

“You make a lot of mistakes,” said Rea. “You think you’ve done a good analysis of a company and it’s not getting executed, or the issue you bet on is not working and you have to move on.

“I’m not sure I’ve ever seen the 2008 Depth,” he added.

Regarding the coronavirus pandemic, Rea said, “It was a lot worse than we expected.”

Nevertheless, he remains hopeful for the future. His company is currently paying more attention to tele-health and streaming services. And he expects the pandemic to spawn a lot of medical innovations.

“If you are interested in the stock market, you have to be an optimist.”

Comments are closed.