“A bend in the road is not the end of the road…Unless you fail to make the turn.”
Helen Keller (June 27, 1880 – June 1, 1968)
An American Author, Political Activist and Lecturer
She was the first deaf and blind person to earn a Bachelor of Arts degree.
Planning Client Commentary
Innovation & You
Helen Keller is an excellent example of someone who continuously looked for new ways to achieve what previously was considered the impossible or nearly impossible. This is borne out by her numerous accomplishments, such as becoming the first deaf and blind person to receive a Bachelor of Arts degree. There is no doubt that innovation was required at each turn of the road to overcome the various challenges she faced.
When thinking of innovation, “wealth planning” may not be something that immediately comes to mind. Other companies, industries, and terms come to mind for most: Apple, technology, Silicon Valley, improvement, etc. However, wealth planning has changed significantly over the past decade, and the pace of change and innovation in the industry is continually increasing.
As an example, developing a personal balance sheet formerly required manual collection and input of all important data as of a particular date, demanding a substantial amount of time. Furthermore, the information would become obsolete the very next day as each asset and liability changes. Technology now automates this process by using electronic wealth planning tools to create an updated balance sheet on a daily basis. Now clients and wealth planners can spend their time focusing on the important decisions that planning helps address. Because of this, accurate information is now readily available when potentially life-changing decisions must be made.
Another advancement that can be considered innovative is the automation of budgeting tools and expense tracking. Using advanced wealth planning technology, clients can electronically connect bank accounts and credit cards that automatically consolidate on a personal planning website to reflect daily balances and transactions. This makes budgeting – tracking what you spend and where you spend it – a much easier process. In this way, clients and their wealth planners are not spending hours at a time detailing on a spreadsheet what was spent at Starbucks or the grocery store; technology does all that for us each day. Now when time is spent thinking about spending, it is focused on the higher level aspects, like whether spending is reflecting values and is in line with your financial ability.
As a friendly reminder our clients have access to all of these innovations and so much more on your personal planning site located here!
Innovation has allowed us to bypass some wealth planning roadblocks that kept many families from thinking about their big picture regularly. There are numerous other examples just like these that are reasons wealth planning is becoming more robust and rewarding than ever. That being said, even with all the improvements we have seen so far, there are still more that our industry must find and develop to keep making continuous wealth planning more accessible, easier, and more impactful for everyone.
Our team will never rest in the pursuit of improvement and innovation, particularly in light of how rewarding these advancements can be for families working hard to lead their best lives and leave powerful legacies.
Investing Client Commentary
A bend in the road…
Global equity markets declined significantly in the third quarter as uncertainty about China’s economy and the U.S. Federal Reserve’s continued delay on raising interest rates sparked a surge in volatility. It is notable that it has been four years since the U.S. markets have seen a pullback greater than 10%. We currently believe the recent decline is nothing more than a long overdue correction, a “bend in the road,” so to speak, on our long investing journey. We don’t believe this market decline is forecasting a recession around the corner. Instead, we see an economy that is still expanding; jobs are being created and housing starts and auto sales continue to show strength.
Making the turn…
We see market corrections creating opportunities because they provide entry points into certain asset classes that may have previously seemed too richly priced for us to buy, or they may provide the opportunity to add to existing holdings at lower prices. Rebalancing portfolios during periods of market turmoil is equivalent to “making the turn” on the road of investing. It helps maintain the agreed upon risk level of your portfolio based upon the asset allocation guidelines within your Investment Policy Statement. We understand that buying investments after a significant decline can feel like the wrong course of action, but history shows it to be rewarded. Studies on the merits of having a rebalancing discipline show that “…historically, significant rebalancing opportunities into equities have occurred after strongly negative market events” and that “investors who did not rebalance their portfolios by increasing their allocation to equities at these difficult times may have not only missed out on the subsequent equity returns, but also did not maintain the asset-class exposures of their target asset allocation.” 1 History is full of asset class winners and losers that shift in rank over and over again. The question is – can one resist the temptation to sell the “loser” at the wrong time and instead see it for what it is – a buying opportunity in advance of the ever shifting market sentiment? The titles of asset classes that are in or out of favor will change, but we believe the benefits of diversification and portfolio rebalancing should continue to reward investors over the long-term.
As always, we appreciate the continued trust you have placed in our team and welcome your questions and comments concerning your investments.
Your Investment Team,