Letter to Stakeholders, October 2024

Monday, October 14th, 11:46 am EST. We are less than a month away until our US Presidential election day. I have already voted. I chose the candidate most likely to support our democracy, our US allies, our disadvantaged, our environment, our civil discourse and our daughter’s choices. The next time you receive our Letter to Stakeholders, we will (hopefully) have settled the election. I still expect ups and downs in your market performance for this year but I have been inspired by the strength of our US economy which has carried the world – and your balances – higher this Fall. 

Like you we have friends and family – and clients! – who were effected by Hurricanes Helene and Milton. The strength of those hurricanes points to part of why we became a firm that incorporated sustainable investing back in 2020: we felt like we needed to do something about the climate. One of our clients, Lawrence MacDonald has been doing something. Since retiring, Lawrence has written Am I Too Old to Save the Planet: A Boomer’s Guide to Climate Action. Recently Lawrence pointed me to the Climate Emergency Fund (CEF) which “raises funds and supports grants to the disruptive climate movement” of which Lawrence is most definitely a part. If watching the weather these past few weeks has inspired you to do something, CEF may spark your interest.

E is for Existential   

FEMA (federal) funding for future climate catastrophes is now in question. Politicized disaster relief is becoming normalized alongside weather-related misinformation. But they are not the existential threats posed by hot wars in Sudan, the Middle East and Eastern Europe. Having just awarded the Nobel Peace Prize to atomic bomb survivors of Hiroshima and Nagasaki, I was disheartened to read through the (long read) New York Times article on The Price we are paying as United States citizens to refurbish, renew and reimagine our nuclear arsenal. Our investment in building submarines in Connecticut, Rhode Island and Virginia; our investment for processing uranium in Tennessee; our manufacturing of missiles in Wyoming, North Dakota, Colorado, Nebraska and Montana; our manufacturing of plutonium pits in New Mexico and South Carolina; all point to why author and columnist Fareed Zakaria calls this “The most dangerous moment since the Cold War.” Our federal government and our states, have a lot to manage. These are the times when we literally need our leaders to lead. Climate and war are not critically important issues because they affect capital markets; they affect capital markets because they are critically important. We continually monitor what’s critically important as we survey your investment opportunities and risks.

Investment Opportunities

This past month we invested another 5% of client portfolios into structured notes. As a review, structured notes are tools that allow us to “structure” investments to lessen the ups and downs (volatility) and risk in qualifying portfolios. Last week I had an opportunity to interview the President of Halo Investments, Jason Barsema, with whom we partner to auction these investments. His thoughts on three-dimensional investing including liquidity, income, growth, protection and volatility were unique and compelling. Enjoy the interview here. 

Last week I also heard a fascinating CNBC interview with the CEO of BlackRock, Larry Fink. Along with seven other co-founders, Larry has built BlackRock into the largest asset management firm in the world: $11.5 trillion. Larry’s belief in 1988 was that “more and more of the world’s economic growth would be financed through capital markets.”  He was right (to the tune of $11.5 trillion and counting)! This matters because regardless of catastrophe over the past nearly 4 decades, the United States of America has had the advantage of our capital markets to respond. To hear Larry to tell it, we are the “envy of the world” because we have both strong banking and strong capital markets. It has helped our country’s ability to recover from recession faster than any other. In this year’s annual “Chairman’s Letter to Investors” and in the CNBC interview, Larry alludes to the growth of private credit as a resource for corporate borrowers as bank lending has tightened. This exemplifies our US advantage in capital markets. We are continuing to explore investments in private credit, sustainable infrastructure and other non-public investments to support stability in your portfolios now and well into the future.  

Fall Check-Ins

How are you doing? I am glad we can take the opportunity to “check-in” with you during this election season, which happens to be a serious moment in world history. You will receive a reminder to schedule yours (if you haven’t already booked). I look forward to our conversation. Joe S., we especially enjoyed meeting with you.

Jason J. Howell, CFP®, CPWA®, CSRIC® 

President

Jason Howell Company is a family wealth management firm that strengthens the finances of 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