August 2024 Newsletter
Guest Appearance–Notes from ‘A Discussion with Jamie Dimon’, 7.18.24 -11 am.
This 45 minute webinar was a rare casual conversation with the advisor audience.
Integrated throughout his discussion was core Kinder Life Planning principles: What are your three most essential elements? JD: Family, Country, JPMorgan. What’s your key values: make the world a better place; live deliberately and respectfully. What are the key professional drivers: Constantly learn/strive to learn (from others and reading); work hard/work smart; thoughtful use of time.
Current views:
World – These are scary times. We are on knife’s edge with wars, growing tensions and uncertainty of leadership throughout the world. The US as a stabilizing world leader requires deep engagement, strategic long-term thinking for trade policy and diplomacy. The biggest risk – cybersecurity. The US – Keep together, tap the best and brightest; the power of clear policy: economic development and debt address thru growth strategies, proper tax, less regulation that benefit all citizens. (Currently debt is high amidst most countries.) “Keep the world free and safe.” Artificial Intelligence (AI). JPM has used AI since 2012. The world currently has a vision of the potential. We are all gaining experience and building infrastructure. There may be a lull in market prices as companies meaningfully integrate new competencies and use it for increased profitability. It will take 15-20 years for the intended powerful impact.
There are lots of solid data to support the market advances. There are reasons for some caution. Markets have a tendency to over-appreciate the near term and under-appreciate the long term. AI will lead to all sorts of business transformations and productivity gains in the long term. In the meantime, there are near-term costs, capacity constraints and learning curves in bringing this all mainstream. Distractions of geopolitics and consumer spending slowdowns can change the focus.
AssetMark 7.12.24
Why We Need Recessions…we fail without them
Economic recessions/contractions serve the same beneficial purpose as forest fires.
They serve to:
- Reallocate labor and capital from less productive to more productive.
- Eliminate the slow growing and stagnant
- Retire outdated and backward-looking industries
- Drive innovative training and education for new types of jobs.
Without these corrective forces, the economy eventually becomes sickly, stops growing and declines. A healthy, thriving macro economy requires some pain: recessions, growing unemployment, and corporate bankruptcies. Julex July 12, 2024
A Reminder How Strategists Work:
Investment discipline is not to forecast, but to identify using a honed methodology– to align outlook with prevailing, observable, measurable conditions. “What are the conditions now?” and “How have those conditions historically been resolved?”
A General Description of Tactical Portfolio Strategy:
Tactical strategy emerges as a prudent alternative to traditionally diversified allocation portfolios. Tactical (adapting) strategies offering dynamic exposure based on rigorous market analysis. It’s managing fixed income during "risk-off' phases. It’s pivoting to equities (types may vary) in "risk-on" scenarios. The strategy is engineered for adaptability and to seek performance with less risk. The impact requires time.
Our tactical strategists are monitored monthly, quarterly and annually for strength of their methodologies, disciplines in execution, consistency and experience of staff.
Connect for a Strategy Review:
We will connect starting fall for a big picture review of your portfolio strategies. (Note plural!) Our clients have diversification of
complimenting strategies for risk management as well as asset classes.
Get Spoofed by Market Volatility and Consider Selling:
Acknowledge REGRET. It’s helpful to keep in mind that anytime you change part of your investment position, there will be regret. If you sell part of your holdings, and the market continues to advance, you’ll regret having sold anything. If you sell part of your holdings and the market declines, you’ll regret not having sold more. The same is true for purchases. There will always be regret. The key is to realize this up front and choose an acceptable level of regret. You do that by examining your exposure to risk, considering both potential returns and potential losses. (John Hussman, Ring my Bell July 2024)
Our Market Mantra: Our investment partners navigate on our behalf.
- Let the strategists monitor the markets and our portfolios.
- Let our platform partners monitor the strategists for consistency and competency.
- Let us live our lives with a focus on our most essential elements.
In October American Portfolios (AP) will merge with other independent broker-dealers into Osaic. This network will upgrade systems for advisor and client services and support. We expect this merger will strengthen the elements of technology, regulatory supervision and cybersecurity. It will hopefully add to the quality of delivery. This back-office shift will NOT require paperwork from clients. It MAY require new portal links and passwords. You will be well contacted and informed. (Remember, we’re going to do a quick strategy review as well!)
We recognize again Gabe Fleisher, one of our long-time journalists of choice. He started writing his daily anewsletter at age 9 with an audience of one, Mom. Roths found him online at age 14. He has recently graduated from Georgetown where he was recognized in Wash DC with journalist credentials. Roths now subscribe to his ongoing career.
His goal is fair and factual reporting. Review this resource as a way of observing the ways of Washington DC. Pass Gabe’s work to the young people in your circles who are interested in the ways of the world or may have journalistic interests!
View this non-political sample for his unique insight:
Click here for this article.