Month: November 2017

Have We Mentioned How Wonderful You Are?

© Can Stock Photo / mikdam

The foundational theory here at 228 Main is people can gain effective perspectives and productive attitudes about investing. It doesn’t matter if you were born that way or were capable of learning, you as a group are special. We believe your behavior is one of the keys to long term investment results.

Consequently, while some colleagues live with frustration as untrained customers fall prey to counterproductive behavior—selling out low, chasing performance, jumping on fads—you and we are appreciated for our mutual faith in each other. No wonder some advisors are looking for an exit strategy, and I’m planning to work to age 92!

You do the difficult things, like going against the crowd, listening to people at the salon or barbershop or café or water cooler, and yet still stay the course. A benefit of my long commute is time to think about the business. I spent a day recently pondering this: how might we make things better for you?

If we change our pricing philosophy to reflect total household assets under our management, including results through the years, we honor your role in creating those results. And if we price new clients a little higher for an initial period, we can offer small discounts for longevity to you longer-term clients. This would better reflect our values.

This presents two issues. One, we tinkered with the schedule over the years, and sometimes failed to update existing clients to the new schedule. Two, our general philosophy has been to use a volume discount based on net invested capital, excluding changes due to investment results. We need to figure out how to implement changes in a way that makes sense to you. We have no intention of chasing anyone down and asking them for more money. Our growth allows us to offer breaks where they have been earned (after all, it is ultimately you to whom we owe that growth!) without needing to claw back money from any clients.

Clients, you have heard us express admiration for the very special group to which you belong. We talk about the mutual benefits of our shared perspectives on investing. We have said in as many ways as we know how that your behavior is large factor in investment outcomes. The one thing we have not done is align the economics of our shop with those noble sentiments.

We are committed to doing so. We will be communicating the results of our work in the near future. If you have any questions about this or any other pertinent topic, email us or call.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Eternal Truths and Changing Times

© Can Stock Photo / devon

228 Main Street, the real-world inspiration for 228Main.com, sits in the middle of beautiful downtown Louisville, Nebraska. The village was platted out just after the Civil War; some descendants of its founders are reading these words.

The building, a typical commercial Victorian structure of the kind that dots small town Main Streets through much of the country, was built at the end of the 19th century. It housed The Louisville Courier newspaper and print shop. More than a century later, it is the center of the business universe for our 21st century digital communications, descended one might say from those earlier forms of media.

When The Louisville Courier began publishing, there was no traffic on the roads to neighboring towns during much of the winter and spring. Horses and wagons could not navigate the muddy roads, especially along the Platte River bottom. The newspaper could only serve the village, and little else.

228Main.com was similarly conceived as a way to communicate with a small community: you who are our friends or clients or both. We provide answers to the questions you ask us, tell the stories that we used to tell only one or two people at a time, and a lot more. 228Main.com is a way to keep our community informed, people who share an understanding about life and investing that we believe is special.

Unlike The Louisville Courier, 228Main is not limited geographically. Since it began in 2015, 26,000 views of its pages came from the United States, and another 3,000 from all over the world—103 other countries. We really do not have time to concern ourselves with anyone but you; the interest of others is perhaps a sign that our work is on the right track.

We recite this history to illustrate that some things are fundamental and unchanging—principles, values, community, human nature. But methods and tactics and the routines of daily life and other things evolve and change. Our object is two-fold: to understand and apply the universal truths, and also keep abreast of the changing times. This seems to be working for you and for us.

Clients, two way communication is vital to get you to your goals. If you would like to discuss any pertinent topic, or update us on your life and objectives, please call us or email.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

It’s Open Season!

© Can Stock Photo / kingjon

In recent years we have learned a lot more than we ever wanted to about two things. Potentially catastrophic health situations taught us a lesson about insurance and benefits and health care providers. We aren’t the experts—we are not telling you what to do—but we do know a thing or two.

Medicare recipients face the same basic choice that many working age people have confronted. Do you accept some limitations on the doctors and facilities and treatments you might use in return for lower costs or other minor advantages? Or do you go with more expensive arrangements that give you greater choice?

Like many important decisions, this highly personal decision would be a lot easier if we had a crystal ball. If you are healthy and stay healthy, the less expensive plan saves money. But if you want or need specialized care from premier providers, the more expensive option may be more likely to cover superior choices.

(We aren’t kidding about not being experts. Consult advocacy groups or online resources or professionals in the field. This is general information only.)

A long time ago, I was confronted with the option of joining an HMO plan, back when they were first invented. At first blush, the possibility of ever being powerless to switch to the doctors and facilities I believed would save my life was intolerable. We have always paid more to have more flexibility. This is a personal preference.

Lots of times, the centers of excellence—premier health care institutions—are simply not covered by Medicare Advantage plans or HMO’s. (Know your own plan; this essay does not replace information you need about your situation!) Care at the Mayo Clinic, Cleveland Clinic, etc. is not inexpensive.

The only point we want to make is that Medicare Open Enrollment Season, when you might switch from HMO-type Medicare Advantage Plans to Traditional Medicare, runs through December 7th. If you switch in this period, you may purchase supplemental or MediGap coverage with no questions about pre-existing conditions, regardless of health.

The moral of the story is, if your health has changed for the worse and you want more choice of medical providers, NOW is the time to dig in and figure it out. Open season comes but once a year on Medicare. You might start at www.medicare.gov to begin your education.

Clients, we usually end our stories with a request to call or email us if you want to talk more. In this case, please do not! We just told you all we know. (If you are in an employer plan, not yet on Medicare, you may face a similar situation. Talk to your HR department or benefits people.)


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

About Those Good Old Days

© Can Stock Photo / Chuckee

A client recently expressed a desire to return to the good old days, when we didn’t have all this turmoil and trouble. Wouldn’t we all like that?

But we human beings have some quirks. One of them is the universal sense that, back in the misty past, things were normal, or stable. This idea may not stand up to scrutiny.

If we confine our study just to the economy and markets, the history we’ve lived through has this to say:

1. In the early 1970’s, a mania centering on big blue chip stocks hit the market. It was thought that you could just buy them at any price, and own them forever while they went up and up—“one decision stocks” they were called. Prices ballooned to extremely high levels. The major stock market averages peaked, then sold off more than 50%1.

2. The 1970’s also saw a pair of Arab oil embargoes that resulted in spiking gasoline prices, shortages, gas stations out of gas, and rationing. Over the course of the decade, inflation rose, eventually going over 10%. Unemployment went over 10% in the mid-decade recession2.

3. The early 1980’s began with back-to-back recessions, 15% mortgage interest rates, and inflation at unprecedented levels. The unemployment rate went over 10% again. Long term bonds declined in price as interest rates rose. A mania in oil stocks that began in the 70’s ended badly early in the decade3. The biggest one-day plunge in the Dow Jones Industrial Average ever—22% in a single day—happened in 19871.

4. The 1990’s began with the cleanup from the savings and loan crisis. The Federal deposit guarantee fund had gone broke, along with thousands of financial institutions. The value of housing, which began to fall nationwide in the late 1980’s, didn’t recover until 19924. The bond market suffered its first annual loss in seventy years in 1994.

5. Clients, most of you remember the bursting of the tech bubble in 2000, the attacks on 9/11, and the so-called Great Recession of 2008-2009. You already know the fine points; it was not good fun for investors.

6. The current decade, free of recessions so far, has had a lot of ups and downs. The downgrading of US Treasury debt and the recurring Greek financial crisis were two of the main events. The zero-interest-rate policy of the Federal Reserve distorted prices in some sectors of the investment markets, some observers believe.

The resilience of the equity markets over these many decades is astonishing to us. We had all these challenges and issues, and somehow the country came out on the other side, every time. We suspect this general trend will continue. The problems of today will give way to solutions– and new problems–tomorrow. That seems to be how it works.

In the meantime, financial strategies that have worked through the decades may be the best way to approach the future. There will be winners and losers in every change and challenge. We may not be able to get back to those mythical good old days, but we can make the most of what we have to work with.

Clients, if you wish to discuss this, or your situation, please email or call.

1S&P Dow Jones Indices, https://us.spindices.com/indices/equity/dow-jones-industrial-average

2Federal Reserve Economic Data, Federal Reserve Bank of St. Louis, Unemployment and Inflation

3Federal Reserve Economic Data, Federal Reserve Bank of St. Louis, Oil Prices

4Federal Reserve Economic Data, Federal Reserve Bank of St. Louis, Housing Prices


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Stock investing involves risk including loss of principal.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.