Letter to Stakeholders, May 2022

Read or Listen (below):

Tuesday, May 10, 10:56 am EST. Spring is upon us, even if it feels like Winter in your portfolio. After our Spring “Check-in” meeting, Doug and I could tell you were braced for months like these. Ups and downs (or “volatility”) in the market is why you hired us in the first place: to provide a steady eye on the markets and a steady hand on your portfolio. You chose us for the same reasons that surgeons don’t operate on their family members: “personal feelings may unduly influence his or her professional medical judgement.”

We like to say anecdotally that you are a member of our “family of clients,” but we never forget that you are the king or queen of your money. Our ethics demand us to deliver professional service; in a few words, that means doing the work but also sharing answers to “What in the heck is going on with your portfolio? And “Is it affecting your life plan?” Good questions.

Your Portfolio

Your life plan has not been affected by the recent “sell off” of the market. The stock market typically “drops” about 10%+ once every two years. The last two pandemic years were an anomaly, but we planned for volatility. When we wrote up your plan and designed your portfolio, we had market “corrections” in mind. You are on track.

Does this mean we do nothing when “corrections” happen? No. We “buy low and sell high” meaning we sell the bonds and cash in your portfolio when stocks drop enough to make a real difference. This allows us to help you take advantage of the “downs” in the market (like you did in March of 2020). Your portfolio is important to us. Our expertise tells us that staying in the market is the best way to benefit from it. Said another way, “Time in the market beats timing the market.” But you might still be asking, “What the heck is going on?”

What is Going on with the Markets?

Last month we predicted that the small March “bounce” in your portfolio could be short lived. Unfortunately, the technology part of the stock market proved us right with its first five-week “losing” streak since 2012. You might ask if stocks aren’t working, how about bonds? For the first time in 50 years bonds and stock are down (over 10%!) year to date…at the same time! Rising inflation is eating away at typical bond returns; increasing interest rates are hurting our technology companies; China can’t get past their own way on COVID (shutting down factories); and (most of) Europe may ban the use of Russian oil raising their energy costs. When the largest economies in the world are facing economic doubt and challenge, the stock market will react negatively. These doubts may linger for months or a year (or two). We will stay vigilant. 

Perspective

Our economy does not operate in a vacuum but rather a continuum. Supply and demand forces act much like Isaac Newton’s Third Law of Motion (thanks Professor Dave): every action has an equal and opposite reaction. 2020’s drop off in demand for oil and retail services was an economic system shock. Our economy is still “reacting” and so are the oil companies.  

One of the bright spots in our US economy is the unemployment rate which stands at 3.6% after adding 428,000 jobs in April. That’s the lowest rate of unemployment since just before the pandemic took over our lives.  Most of these job gains have come in the service sector  where your neighbors are starting to spend their share of the $2.5 trillion in excess savings since the pandemic began. Inflation is reducing those savings and wealth inequality is still a reality, but a US recession is still at arm’s length -for now. Whatever happens we will work your plan, which includes adjusting your portfolio when we identify opportunity.

And for a far less wordy perspective, read the “rollercoaster take” of my friend Chuck -who is also a financial planner – on the markets here.

Stakeholder Spotlight

This month’s spotlight is on Lorna Magill, CPA, CGMA, who introduced our firm to Carrie Rich, Co-Founder and CEO of the Global Good Fund (GGF).  The GGF is a nonprofit social enterprise that empowers entrepreneurs – called “fellows” –who are solving social issues related to education, healthcare, the environment, financial inclusion and economic mobility. On Thursday I am going to attend their annual summit to serve as a future mentor to one of these social entrepreneurs.   

It's well known that successful people say “no to almost everything” but “yes” to the things that really matter.  Introductions to organizations like the GGF are great opportunities for Doug and me to say “Yes.” Thank you Lorna. To all of you, keep those introductions coming.  

Here’s to saying “Yes!”

Jason J. Howell, CFP®, CPWA®, CSRIC®

President

Jason Howell Company is an independent, family wealth management firm run by two owners who believe you should feel good about money.

Jason J. Howell, CFP®, CPWA®, CSRIC® and Douglas W. Tees, MBA, CFP®  are each married to patient wives and are dedicated to their kids. Jason and Doug have built a firm with a great reputation. The firm is based in Northern Virginia but serves clients (virtually) all throughout the United States.  

Our firm owners believe that dual-income parents with high achieving kids want to feel good about their financial success. They just need to know how. You have a plan for your life and causes you believe in. We fit that plan to your finances so you can feel confident, excited, generous, hopeful and good about your money.

Our process begins with our responsible Investment Strategy and by equipping our clients with three (3) tools for creating wealth that's well, useful: 

1. Your Personal ROADMAP (PR) which identifies 40 to 60 recommendations to improve your financial plan (the "what")
2. Your Implementation Guide (IG) which priorities (by month) when you ought to implement those recommendations (the "when")
3. Your Family Constitution (FC) which clarifies how those recommendations connect to your values (the "why")

We call this process Family Governance. It goes beyond traditional financial planning by adding a "values" component. Whose values? Your values. 

To feel good about your money, just book an introductory call here: Introductory Call