Our shareholder letter

Each January, our firm distributes a shareholder letter to our clients which reiterates our guiding principles and covers important planning themes.  We view clients as shareholders in our practice, ongoing communication is critical in our partnership together as this strengthens our mutual trust in one another.  A portion of this letter is shared below.

Looking back, I believe the single most positive thing we were able to help clients accomplish in 2020 was the ability to tune out noise and not react to current events.  Sitting still in a financial storm and continuously acting on a plan takes courage and faith.  A solid financial plumbing system that is run by automation in addition to a financial plan and planner makes a difference.  Automation is a great tool in moving the right monies to the right account for the right purpose.  This includes building cash reserves for opportunities and TBD events along with thinking positively about tomorrow.

The key to a good plumbing system is ample cash reserves before you begin investing.  So many have this backwards and are anxious to invest driven by the fear of missing out.  I wonder how many investors know exactly how much cash they need before moving forward and investing?  By ignoring your short-term cash needs you put your financial house at risk.  Investing without a plan and cash reserves often will lead to pulling money from the market in inopportune times as company values routinely contract (see 2020).  Company values often expand over the long term as well (see 2020) and to capture that price growth you must stay in the market and not react to cash.  One of several keys to becoming a successful investor is not interrupting these dollars from compounding and letting your plan work.

Habits are everything, we view our work with clients as enhancing the good habits many of them already possess.  These habits include carrying little debt, investing beyond maximized retirement contributions, and living well with what they have.  Quantifying “enough” from both a time and financial perspective is an important planning theme we believe in.  Spoiler alert, the alternative of following the herd chasing “more” is rather disappointing.  The earlier you realize this and focus on what’s right for you and those you care about the happier you become.  Raising awareness on habits (good and bad) is helpful in achieving what you want by subtle changes in behavior.  It’s not big changes, but the small ones repeated often that add up over six months, a year, ten years, and longer.

If you would like a fresh start to the year from a financial perspective and perhaps want to explore questions around planning and your possibilities in a low-key conversation, we’d be happy to chat with you.

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