Nobody Knows

Nobody Knows

December 02, 2022

Next year, Tyson and I will celebrate our 25th anniversary in this wonderful craft of the financial
advisory profession.  In that (almost) 25 years, we have been blessed by many things. Wonderful mentors, meaningful client relationships, loads of learning opportunities and the impacts of all of those together have made us into who we are today. With all those blessings has come some hardships and challenges along the way, too, with a handful of those being strong market contractions. Two events that were watershed moments were the 2008 Great Financial Recession and the more recent pandemic; in which we all felt the effects. However, what I have been thinking about over the last few months is not about those specific events or some of the other smaller news/market events that have been the apocalypse du jour; rather, it is that leading up to and during
these events, it was proven nobody knows what’s next. 

In an attempt to help make my point, let’s use some of the events over the last couple years to perhaps bring better clarity.

The pandemic - While we’ve experienced these events in the past and the chance of another was always possible, nobody predicted it—especially how rapidly and catastrophically its effects would be felt around the world.

The market - As stock markets contracted around the world at a historic pace, and as COVID lockdowns were put into place, nobody predicted the strength of the human race nor the resiliency of the economies and markets around the globe. While the S&P 500 fell over 35% in just 30 trading days, it fully recovered from that incredible loss in less than six months.

Variants - Just when we thought we may have eclipsed the surge of COVID, nobody predicted we would be hit with first Delta and then the Omicron variants.

Rising inflation - A swift spike in inflation the likes of which has not been seen in over 40 years. From the fourth quarter of 2021 to the spring of 2022, we all experienced unpredicted and significant price increases from vital daily goods like groceries and gas prices to consumer products and building supplies.

Ukraine Invasion - A cracked despot invades a neighboring country, putting into question the potential for nuclear war. Yet, nobody predicted the resolve and strength of the Ukrainian people or the world at large to fight back against this type of tyranny.

Interest rates - As the fires of inflation burn, nobody can predict how far the Federal Reserve will have to go to tame its effects.

The future - recession, mid-term elections, continued supply chain disruption and/or rising tensions between China and Taiwan.

Perhaps the most important part of all of this is that while nobody predicted the past events or outcomes of the above, many certainly tried. Rest assured, they will do the same with the events we have yet to live out. Whether it be the talking heads of NBC, Fox or Bloomberg, they all compete
daily for our attention and espouse every opinion as fact and many outcomes as disastrous. Those drumbeats or that noise can be hard to ignore, but we know better. 

In times like these, or the unknowns of the future, we have the perspective of history’s lessons and use that to lean into our principles with rational optimism. We are goal-focused, plan-driven, long-term investors who understand the markets, and great companies of the world reward those who remain steadfast and patient. We seek to sustain and build your wealth not measured in days or months, but rather years and decades. This perspective helps us to not only create the desired income in your retirement but to also pass that wealth on as a legacy to those you care about most. 

Make no mistake, there will be thousands of stories or events of the future that, like the past, nobody will predict, and that’s my point. Say it with me, the future is unknown and that’s okay…that’s life. This is why we have built your plans and investment strategies to survive the difficult times as they come and yet keep you positioned to participate as markets rise, as they do a majority of the time. No matter what may lie ahead of us in the months or years to come, know we are honored to have the opportunity to walk alongside you as we navigate that future together.