July Client Letter

On Riding Waves and Zooming Out

Hi there!

It's been a heck of a first half of the year. Notably, I keep hearing from fellow advisors that they haven’t even had time to think about the markets. If that’s you, might I point you to a recent post:

Triple Whammy I: Too Much Work

One of my core beliefs is that even as the financial planning industry seems to turn from sound investing as a key offering, clients want true investment expertise more than ever.

Focusing on diversification and lower fees only go so far. I invite you to form a philosophy of investing if you haven’t already. What is the ‘why’ of your portfolio recommendations? What data supports this? Why is this philosophy historically durable?

The July white-labeled client letter for paid subscribers attempts to speak to that in a client-friendly way. Bear markets, like the one we are experiencing, are a feature, not a bug. It’s tempting to want to do away with them, yet then the historically outsized returns of stocks would also go away.

And by outsized, I mean outsized: Since the 19th century, U.S. stock returns have outpaced inflation by 6-7% annually, depending on the time frame. In other words, historically, a dollar invested has, on average, doubled in excess of inflation every 10-12 years.

Here’s a fun tool to play around with if you’re interested. https://dqydj.com/sp-500-return-calculator/

Start with the high inflationary 1970’s. Then zoom out and do 1970-1995. Things always look better when we zoom out.

I suspect this time will be no different.

Your cause is righteous. Keep up the amazing work.

Photo by Muhamad Reza Junianto on Unsplash

Your white-labeled monthly client newsletter is linked below. Just click on the Dropbox link and download it from there. A whole bunch of disclosures is included at the bottom of this email, but I urge you to follow these simple guardrails: