I’m sure we all remember the days when we would receive 40 or 50 Christmas cards and Christmas letters each year. It seems that we all knew someone who would send a Christmas letter at the end of January. Upon receipt we would smile and say, “Some people will be late to their own funerals.” Well this letter is my January client letter in February. Thanks to a really nice “Covid vacation” I was sick most if not all of January, causing many of my work projects to get derailed. The good news is that my good health has returned and I’m catching up quickly on past due projects. I hope you and your loved ones have been healthy.
I want to begin my letter by encouraging you to take the time to read the letter fully and to contact my office if any of the “calls to action” are relevant. While my letter is generic across all of my client families, the material we share highlight what we are doing and why we are doing it. To encourage 100% readership I’m going to do four things in my client communications:
- First, I write the letter myself to make sure it conveys my biggest priorities.
- Second, we will be marking email with a “highly important” icon so that it stands out. Those who receive letters by mail will see “important” stamped on the envelope.
- Third, I will endeavor to be brief to respect your time. If at times I err on the side of brevity I’ll ask in advance for your forgiveness.
- Fourth, I will put “call outs for action” in bold so they can be more easily seen.
All of these actions are necessary because of the fast pasted and chaotic news cycle as well as because recently it came to my attention that my letters are not always being read.
I’d like to make two comments regarding what would normally be covered in January client letters, the 2021 year in review and New Year goals. Regarding 2021 I’m reminded of two things. Firstly that unexpected black swans can and do happen, for instance Omicron. Black swans are the reason we diversify your financial portfolio and also why your goal as an investor should not be to beat any index, like the S&P500. Secondly, while we know that the financial markets will eventually correct and even crash, no one knows exactly when. This is why it is extremely important that our buy criteria doesn’t get “stretched”. If an investor compromises their risk tolerance and/or their investing criteria, they inevitably are invested 100% at the stock market peak. I find it much more prudent to be diligent in my buy criteria, which forces me to have cash at market peaks. Simply put, because I can’t find anything I think is a reasonable price I’m not buying.
Regarding 2022 goals I’m energized and excited to see how we can improve your financial life this year. Our mission statement is “to improve your world which improves the world”. Our goal is to do it as effectively as is possible.
Regarding your financial goals,If you have made new financial goals or resolutions, please contact me so that I can integrate your new goals with our investing efforts. This is also true if your life circumstances or resources have changed.
In terms of helping you as an investor I have three strategies that are designed to help me improve your financial life in 2022.
- Continue to be risk aware so that we are as prepared as possible for market selloffs.
- Continue and increase the use of risk transfer investments so that investments will continue to appreciate but be in a defensible position in case of market selloffs.
- Continue to diversify across expanding and growing areas of the economy.
In conclusion, I am excited to see what we can accomplish this year. This is perhaps the most excited I have been about my role as an advisor in many years. It was very rewarding to help people in 2021.
If you have any recommendations on how Applied Financial Wisdom can be more effective in helping you please let me know. It would mean a lot to me. Also, if you are interested in the three investing strategies above please contact me. We will be implementing changes with those who contact us proactively first. And then progressing through all of our client families through the remainder of the year.
Christopher M. Ruspi, CMT, CFP®