Prologue from Nick...

 

It extends and develops the theme, begun last month, that the continuing geopolitical chaos represents a rare opportunity for advisors to drive a wedge, in our clients’ minds, between any current events “crisis” and rational investment policy.

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With the market up one percent one day and down as much the next – based on headlines no one can begin to understand, and outcomes no one can begin to predict – this is our chance to restate the great truths. We don’t care what the headlines are. We don’t even care how the market reacts to the headlines. We have a lifetime plan for our clients, and that plan always works in the long run.

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The ultimate irony in recent days has been that the maelstrom of confusion about Iran, oil prices, resurgent inflation and softening employment has been completely overshadowed by the only thing that ever really matters: earnings. And what we’re seeing right now is an earnings breakout for the ages.

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We aren’t speculators in “the stock market.” We’re patient, disciplined, long-term owners of great American companies that are simply shooting the lights out. It isn’t intuitive to our clients that these are two wildly disparate states of being. Nor will it be, unless and until we enforce this distinction enthusiastically.

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Client’s Corner examines the growing phenomenon of younger investors taking risks they don’t understand and that they don’t need to take instead of harnessing the effortless genius of equity compounding over time. Lastly, after something of a dry spell in this feature, we offer three Ask Nick colloquies that speak to widespread advisor concerns.