Letter to Stakeholders, April 2024

Tuesday, April 16th, 11:32 am EST. This time of year, the second half of April, is what stock market analysts call “earning season.” It’s when a large assortment of companies report their first quarter earnings and predict their earnings for the rest of the year. The short-term gyrations of our stock market tend to vacillate based on whether our largest retailers, banks, energy and technology companies report and predict strong earnings. So far this year’s performance has risen based on an expectation of much lower interest rates. The Federal Reserve Bank has not yet made lower rates happen. Without lower interest rates to make borrowing money cheaper (easier), only reported and predicted corporate earnings are left to give analysts positive predictions for the stock market. So we await the reporting, the analysis and the predictions. And then we watch the market reaction.

This is what they talk about all day on CNBC (Consumer News Business Channel). It’s a channel about predictions and opinions and some news shared in between. I ignored this channel earlier in my career, then the pandemic hit in 2020 and I couldn’t work without it on in the background. I’ve learned how to compare and contrast world and corporate affairs and juxtapose them next to economic theory. And with that information I too can make predictions and share opinions. But that’s not why you pay for our services.

Allocation is Destiny

The challenge set out in front of any investment adviser is how they plan to allocate investments across asset classes, minimize fees and taxes. After doing that with a reasonable estimation of return, a comprehensive wealth adviser will apply that return to the financial plan driven by the clients’ goals (and concerns). This is what we’ve done with you. You don’t see us reallocating your account very often because the original allocation is tied to your plan. The past few years of market returns – 2021 to 2023 – have mostly offset themselves. We are now in a place where world events, domestic policy and interest rates are being analyzed after “boring” corporate earnings.  We are getting back to a pre-pandemic normal when more than large technology companies are the fastest growing. Over the next months we will tighten our allocations including adding our next tranche of structured notes. Our never-ending goal is to build portfolios that are proactive rather than reactive. Business news is interesting, just not as important as your goals and your life.

Stakeholder Spotlight

We are lucky to have connections to a network of clients and a team of advisors who are doing important work. This month’s stakeholder spotlight shines on Virginia locals Scott and Anna Nurmi. Scott and Anna have been supporting “In Concert for Cancer” (ICFC) for over a decade. Their mission is to present live and exclusive music performances to support and inspire everyone touched by cancer. Their nonprofit raises funds and awareness for cancer vaccine treatment and research. Two weeks ago they debuted a new song and video that they are sharing with the White House for their “Cancer Moonshot Initiative” and the National Cancer Institute. The song features Ray Parker Jr. (Ghostbusters), Jim Peterik (Eye of Tiger, Vehicle + many other top 10 hits), Dennis DeYoung (Styx) and Grammy nominated saxophonist Mindi Adair.  When you listen to this song/watch the video, if you feel the urge to share it, please do.

Looking Forward

This and next month we will continue our “Spring Check-In,” meetings that will update you on your retirement projections, structured notes, how we are investing in you this year and any and all updates you have for us. We can’t wait to connect with you.

Carpe Diem.

Jason J. Howell, CFP®, CPWA®, CSRIC®

President

Jason Howell Company is a family wealth management firm that strengthens families making the transition from first generation success to family wealth. We envision a world where wealthy families give, grow and govern themselves in ways that enrich their local communities. We do this by reducing the fear, isolation and guilt associated with financial success.

Jason J. Howell, CFP®, CPWA®, CSRIC® and Douglas W. Tees, MBA, CFP® CAP®, CBDA  have spent a lot of time in the Washington, DC area, and are aware that many people who are first generation wealth suffer from a kind of "financial imposter syndrome."  Successful entrepreneurs and family businesses are always looking over their shoulder; government contractors worry about the next contract; former Capitol Hill staffers privately wonder if they should "feel bad" for the money they now make. Imposter syndrome is common among people who work for the many corporate headquarters based in this area as well. These feelings get in the way of properly managing family wealth. We empower them to get organized, build a team of advisors and make decisions.

Our typical "first generation wealth" families include dual income parents who work, save and have just the right amount of fun. For long-time, family owned businesses we focus on much family preservation as we do wealth preservation. 

First generation wealth success stories and family business owners realize that they:

• Need to “do something” with the cash in their checking/savings
• Need to eventually diversify their portfolio away from the family business
• Need an investment strategy for “up” and “down” markets
• Need a plan to mitigate market, credit, inflation, and political risks
• Need to start tax planning instead of just tax paying
• Need to be sure they are choosing the right work benefits
• Need to reduce financial miscommunications between family members
• Need to separate business finances from personal finances
• Need to separate family wealth from individual wealth
• Need a plan to provide space for both family and individual philanthropy 
• Need to plan for money while alive and for what happens after death