December 2023
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Waiting Is Rewarded
On 3 January 2022, almost two years after the first Covid-related market decline, the S&P 500 index reached an all-time high.
Precipitated by ongoing global inflation and a rising interest rate cycle, markets then started a decline that officially became a bear market (a decline of more than 20% from the previous high) around June 2022.
As is always the case during a decline, investors looked for ways to control the situation. Some switched into portfolios that gave them a sense of security (bonds!!), and some decided that earning 5% + on cash was a good trade-off.
We now know that this decline, like the others before it, was temporary. Granted, "temporary" is a relative term, and for investors who had to endure two full years of uncertainty, it certainly did not feel short. However, long-term market returns are reserved for those who are able to practice patience when it is most needed.
Those who have remained invested until now, many contributing additional capital, have seen their discipline bear fruit. As I write this, 717 days after the previous market high on 3rd January 2022, the S&P 500 is on the cusp of making a new high.
How many of your clients can be counted amongst those who stuck to their personalised plan? How many clients switched money they won't need for another two decades into cash when it was offering 5%?
Make no mistake: while some are seeking new ways to reduce the value of the work we do, our mature counsel to our clients over the last two years may have paid for our fees for a decade.
Take courage from this as you go into a well-deserved break, and get ready for more (as yet unknown) battles in 2024.
"Human nature is a failed investor" - Nick Murray
📰 Articles & Blogs
ALL TIME HIGHS [3 minutes]. Celebrating the resilience of the global stock markets.
Untangling Behavioral Finance and the Psychology of Financial Planning [11 minutes]. A look at the fascinating intersection of behavioural finance and the psychology of financial planning.
The Full Reset [6 minutes]. What do you need a clean start on?
Be the Doctor, Not the Pharmacist [6 minutes]. First, diagnose.
My Favorite Investment Writing of 2023 [6 minutes]. A holiday compilation.
Eight marketing maxims [2 minutes]. Transform the way you approach your business.
Shut up and take our money, investors say of financial advice [3 minutes]. Investors are eager to pay for advice.
🎧 Podcasts
TRAP: 34 - Centres of Influence [87 minutes]. The TRAP pack discuss ways to leverage centres of influence.
Delivering Advice That's Easy To Implement By Making It Reasonable Not Rational [29 minutes]. Lack of follow-through and implementation of advice is a widespread problem.
📚 Book Recommendations
Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger. A new print of a must-have book.
👏 Encore
The friendly professional [1 minute]
Six Minutes That Will Change Everything [6 minutes]
The Ten Best Business Books of 2023 [3 minutes]
Poison Arrow [6 minutes]
The problems with flat out [2 minutes]
