Hi All - I have some much-needed summer travel coming up. Beyond the White-Labeled client letter, I doubt I’ll publish much until mid or late July.
The last few months have been a whirlwind for me. Funerals, a wedding, countless client meetings, new client relationships, travel, work ON the business, work IN the business, birthdays, writing, religious commitments, kids, and family. I’m exhausted, and I probably overcommitted myself. As I’m sure you can relate, honoring our commitments can be a joyful yet tiring slog.
Anyways, I hope you also have some time for rejuvenation this summer. That has been my biggest lesson of 2023. If I don’t schedule rejuvenation, I’ll never allow myself to have it. And I’ll continue to cycle from burnout to pass out to burnout.
We are not the heroes of our client’s journey; they are. But we do have our own heroic journeys to honor. And heroic journeys demand rest, rejuvenation, resets, and retraining from time to time. I hope you allow yourself that gift, just as much as I hope to learn to allow myself that gift.
Anyways, here is the June Investment Update. I made it accessible this month for all readers because we have several new friends on the list.
Enjoy!
The Crisis du Jour
Lloyd: What’s the soup du jour?
Waitress: It’s the soup of the day.
Lloyd: Mmmm. That sounds good. I’ll have that.
Client: Excuse me, Ms. Flo, CFP®? What’s the crisis du jour?
Ms Flo, CFP®: It is the story they sell you on, to sell you other things.
Client: Mmm. That sounds good. I’ll have that.
Who could say what the crisis du jour is?
It appears to change daily.
It was the debt ceiling.
But that wasn’t really a big deal. Like a B-list influencer pretending to be on par with Angelina Jolie, it was a very little deal masquerading as a big deal.
As I wrote in our June White-Label Client Letter:
As you’re likely aware, Democrats and Republicans struck a deal over Memorial Day weekend after both sides made compromises from their original negotiation stance.
This was always the plan, by the way. A deal was achievable and easily accomplished. That’s plain to see now that it is done. The brinkmanship is fanfare to gain as much power at the negotiating table as possible.
As citizens, we are free to resent it, but we shouldn’t fall for it as investors.
Unfortunately, we do. Time and time again.
Here’s a rule of thumb:
When it is being sold as a crisis with unique implications for stock prices, it’s not a crisis for long-term diversified investors. Instead, it is a sales pitch for unnecessary activity.
The Euro Crisis? Not a crisis!
Brexit? Not a Crisis!
Y2K? Not a crisis?
Look at this wonderful chart below from Dimensional. This chart has legitimate crises, but not for long-term diversified investors. And in between the noted events, imagine a thousand other concerns and panics floated by the media and other Cassandras.
Interestingly, no one cares about stocks when confronting a true crisis because it’s A CRISIS. Though we were in constant contact with our clients at the onset of the Coronavirus pandemic, I received very few “Are we going to be okay?” emails regarding the rapidly evolving bear market.
Why?
Because people were more concerned with the existential implications of “Are we going to be okay?”
Now, that’s a crisis!
But this year, we’ve heard investors cry wolf on earnings, the debt ceiling, profit margins, China, inflation, capex, interest rate, and, gasp, recession.
And yet, the S&P 500 and global stocks have sneakily rallied.
This is good news! Have you been spreading it?
Because despite significant gains in stocks this year, US households have been focused on interest rates.
The 5% in hand appears to be larger than the retirement and legacy-defining investment in the bush.
Never forget that this is the work.
We don't get out of bed to argue about fees or business structures, play office, participate in endless study groups, tweet, or fiddle with our tech stack.
We are called to jump to our feet, yelling with encouragement and excitement, “Buy stocks! All of them! And hold them until you need the cash.”
Because, my goodness, the alarm is ringing.
And it’s not the crisis du jour.
It’s the risk of millions of underfunded retirements, unachieved goals, and ephemeral legacies.