The Federal Reserve Bank of St. Louis recently wrote about the tendency of households to grow wealthier as they age. There are lessons in the story that many could apply, to their benefit.

Incomes, of course, influence wealth. Think of income as a faucet running into a tub. The drain at the bottom is where expenses go. The water level in the tub is your store of wealth. You can increase the water level by improving the flow in or restricting the flow out. You can increase wealth by increasing income or reducing expenses.

But there are three more subtle things going on, according to the study. Liquidity, having adequate wealth in safe and liquid forms, buffers against emergencies. It helps people avoid selling assets at bad prices because they need money. And liquidity helps prevent expensive debt defaults and other issues with credit.

Diversification is important, too. Over time, households tend to accumulate more wealth in financial assets and business holdings as well as real estate. When wealth is spread across a number of kinds of assets, a shock in one area is less likely to upset everything.

Leverage, or the relationship of debts to assets, can be an indicator of wealth. Too much debt increases the risk from a negative surprise. Borrowing can be expensive, too. Caution with leverage is generally correlated with household wealth.

Notice how the idea of resilience runs through these more subtle factors. It isn’t that households with more wealth always avoid bad luck or negative surprises. Everybody has those from time to time. Rather, those households are better equipped to deal with adversity because they have liquidity and diversification, and leverage has been kept in check.

Most people do not start out in life with plenty of resources and extra income and an ideal financial position. Many need a working lifetime to accumulate wealth on which to retire. Over the years, liquidity and diversification become larger factors and use of leverage usually declines. These are the factors that explain why households usually become wealthier over time.

As always, call or write if you would like to discuss some aspect of your situation.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Since the Chicago Cubs don’t need that phrase any more, we thought we would borrow it for this essay about the months and years ahead.

Some of our favorite times of the year are still ahead of us for 2016. Gatherings and holidays and time with friends and family will fill the next few weeks.

Even so, we’ve had to get busy to be ready for the new year. Three things are causing a lot of evolution and change in our shop. Regulatory initiatives and market forces play a role. But the biggest thing is our intent to operate more effeciently, to invest more effectively, and to take care of business for you.

1. The systematic communication programs are helping us reach many of you every week with key perspectives. Some people want to know each day what we think is most interesting or pertinent. For them, we are on Facebook, Twitter, and LinkedIn.

2. We have a new focus on helping clients address their need for stable value elements in their portfolios—in addition to our research-driven focused investment holdings. Clients will be able to specify that a portion of their portfolio be invested with capital preservation as the primary objective.

3. Block trading and systematic programs are making our portfolios more responsive to changing conditions than ever before.

4. We have long offered diversification away from our traditional focused approach to investing. Now we are formalizing that into a separate offering.

So in 2017, we plan to be better equipped than ever before to manage your needs with appropriate portfolios and plans. Two things will never change: our commitment to core investment principles, and the knowledge that the better off you are, the better off we are likely to be.

Happy holidays, and here’s to a healthy, prosperous New Year! Thank you all.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Those closest to me know that I am not as smart as my bride, but I am smart. I am not as kind as my late brother John, but I am kind. I am not as focused as my brother Bill, but I am focused. What I do seem to have the most of: perspective.

At this moment in history, we need perspective more than anything else. Here goes.

The freer each one of us is to unlock the highest fraction of our own potential, the better off we all will be. If you believe that, you likely were dismayed by the presidential campaign. My object is not to apologize or rationalize the appeals to our basest and most tribal instincts.

Some proposed the theory that the country needed strong medicine to fix its illness, even though the medicine has unpleasant side effects. Maybe that is correct. Maybe not.

What we do know is that America is built on a system of checks and balances. There is a system, there are institutions, there is always the will of the people. Any clear-eyed review of history shows the imperfection of humans and human institutions—we do not think we will achieve heaven on earth any time soon. But we have tended to correct our worst excesses and get back on a better path, sooner or later.

From an economic perspective, we are looking at a mixed bag. Millions of us have seen in our own work and businesses the deleterious effects of regulation that costs more than it is worth. We may reach a better balance, and hopefully that pendulum won’t swing too far the other way.

As for the protectionist trade policies promoted on the campaign trail, one can only hope that was a cynical ploy. We would do ourselves no favor by paying $400 for $200 televisions, or by engaging in trade wars that would shell out our exports and hurt workers and farmers.

In health care, there is a chance that the hash we have now, which replaced the prior hash, may be replaced with something better. (There is also a chance that life and death changes will harm fellow citizens.)

We would best be served by trying to figure out what the middle 60% or 70% of us can agree on. Partisanship has been a poor substitute for citizenship. There is much to do on many fronts—we have many challenges.

We will survive. Mistakes will be made. We will overreact. And we will come back, and come back, and come back. It is what we do. Keep the faith. Do what you can. Elevate the discourse.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Our values and principles drive our strategies and tactics. We are paying special attention to three themes in today’s investment markets.

There is going to be a lot of innovation and change in personal transportation in the years ahead. Some of us are already driving cars that warn us when we drift from our lanes, or have another driver in our blind spot, or actually apply the brakes when a hazard appears. Hybrid and electric vehicles are gaining market share from traditional gasoline engines. Whether these technologies lead to self-driving, emission-free cars or not, continuous technological improvements will be part of the landscape.

The suppliers of sophisticated vehicle components and controls and electronic displays may be beneficiaries of the innovation wave, no matter which manufacturers do the best.

Health care broadly defined has come under pressure in the markets for a variety of reasons. Politicians have jumped on the pricing scandals that seem to reveal greed or corruption. Health insurance costs are skyrocketing for some kinds of coverage as our payment system has been transformed from one kind of hash into a different kind of hash.

At the same time, the biopharmaceutical companies offer real cures and solid advances in the treatment of diseases, with amazing things coming. We human beings value life and health and will pay for it. If we own a selection of the largest profitable companies in this space, we may have the opportunity for above-average returns from currently depressed levels. No guarantees, of course.

The third theme is mature in some respects, since we’ve followed it for years. Energy and natural resource companies remain attractive. Prices remain substantially lower than the peak levels of a few years ago, trends are pointing in the right direction, future supplies have been constrained by low prices and global demand is generally strong.

We believe these three themes—the evolution of the auto, biopharma, and natural resources—honor our principles. When we seek bargains and to avoid stampedes in the markets, we gravitate towards sectors that have solid prospects and haven’t become over-priced by becoming too popular. These are our opinions, of course, not facts or guarantees. Please call or write if you would like to discuss whether these themes might be appropriate for your portfolio.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.