A Quick Update

Our last letter generated a great deal of feedback; between the election and the fiscal cliff it seems everyone is on edge and paying close attention. While most of the feedback was positive, a few emails suggested we were critical of the President, while a few others suggested we were too diplomatic and ought to be “placing blame where it belongs.” Obviously we are here to do neither – or at least I thought it was obvious. Maybe not so much?

We got some excellent (and free!) advice from a client who has had a long and highly successful career in media, from editor of newspapers to professor in or Dean of Media departments of several major universities. He was not surprised people were sensitive; he suggested we were likely to get a few critical responses no matter what. Nonetheless, he had a couple of great suggestions, which we intend to follow as best we can.

The first was to stop assuming people remember what our philosophy and purpose are here, just because we mentioned it two years ago. Make sure to say it. OK, so here it is:

Our philosophy is one of respect for all of our clients and colleagues and fellow professionals. That includes respect for their political points of view; as a firm we do not have any political point of view and avoid politics altogether to the extent possible. When it is not possible to pursue our purpose without at least mentioning politics, we seek to outline the players and the issues in an objective way, focusing not on who is right/wrong, to blame, gets the credit, etc., but on what the outcomes may be, and why that is important to you, our client, a long-term investor.

Our purpose is to try to contribute something useful to your understanding of what is happening right now and long term, in support of maintaining a disciplined approach to investing in the face of myriad fears and distractions.

His other advice was to warm up the style, it sounds cool and aloof, off-putting (in other words, we sound Republican). Well, between a science undergrad with economics, an MBA, and years of managing money before becoming an advisor, I see the problem for myself, and several others of us have similar backgrounds. Been trained to be dry as dust, just the facts. We’re feeling pretty good about ourselves if we merely manage to avoid jargon like convexity and contango. All I can promise is our best efforts here.

OK, so what’s the news?

The bad news – the market started dropping in mid-October as we headed into the election, and dropped sharply the day after the election. It has continued dropping since. The market is not liking something important. One suspects fear of continued inaction on the fiscal cliff.

S&P 500 Index

The good news – the market turned around a bit Friday on signals from Washington that maybe, possibly, there might be room for a deal, and is up solidly today (Monday). Stay tuned; you simply can’t predict the next move, and all is not surely lost.

Wall Street Journal:  First Talks Bring Hope of Broad Budget Deal

Americans interested in getting the national debt crisis under control likely will have to endure cuts to popular programs like defense, Social Security — and the nationalized health insurance program known as Obamacare.

CNBC Article: Obamacare, Host of Others Need Slashing: Simpson-Bowles

 

Alan Simpson and Erskine Bowles
Alan Simpson and Erskine Bowles, co-chairmen of President Obama’s deficit commission

Simpson Bowles Redux

This week several of us had the pleasure of attending the 2012 Schwab IMPACT Conference, at which we learned many things. Perhaps the very best part was the last talk, by none other than Simpson and Bowles! As you will recall from an earlier letter of ours, these two gentlemen, a Republican and a Democrat, both highly successful and now essentially retired from politics, were tasked by President Obama early in his first term with creating a proposed solution to the debt and the deficit, which they did.

The idea was to create a bipartisan approach that could draw broad support. As we all know, there was no follow up to their proposal, but it has been mentioned many times since, and now the whole idea is being revived; some people think they might hold the key to a solution.

They spoke plainly and forcefully. A good summary of the talk, and a video of an interview with them, is contained in a CNBC article released shortly afterwards. Let me remind you that we are not offering you our opinion here; these gentlemen are center stage in this issue in Washington, they were appointed by the President, and are a Republican and a Democrat. This is useful information for you, whether you like what they have to say or not. Some of you won’t. But we all need to know where this thing might be headed. If we go “over the cliff” we will be starting a new chapter; perhaps we won’t have to.

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
Roger Hewins
Roger Hewins

President

Roger Hewins is the President of Hewins Financial Advisors, based in North Palm Beach, FL. Roger has more than 30 years of experience in investment management, helping bring the sophisticated financial advice typically reserved for large institutional clients to everyday investors, from high-net-worth individuals and families to small businesses and retirement plans.

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A Quick Update

time to read: 3 min