covid-19

Light at the End of the Tunnel: Good News toward a Vaccine

photo shows an out-of-focus pink, purple, and light blue sunrise

For up there is down; for day there is night. Sunrise, sunset. You’ve heard this from us before. It’s been challenging for many of us to apply this same awareness to the global COVID-19 pandemic. Some of the earliest cases of the virus were detected this time last year, and many of us in the U.S. have been living much more restricted lifestyles since early spring of this year.

The changes we’ve made—limiting travel, exposure, contact, among others—have been a reasonable price to pay for the possibility of preserving the health and vitality of ourselves and those around us. And yet, it’s still been a long stretch. It’s had its tough moments.

But the sun keeps rising, we continue to count our blessings, and the latest scientific developments may help provide some hope.

Following a recently completed phase of a COVID-19 vaccine trial, the National Institutes of Health reported promising results, suggesting this latest “vaccine is safe and effective at preventing symptomatic COVID-19 in adults.”

This isn’t a victory by itself, but it’s certainly an important milestone in the journey forward. Many partners are working together to figure out the logistics: how a vaccine would be produced, stored, transported, distributed; how its effects would be monitored; and how other areas might be affected as the vaccine takes priority. All that is to say… it’s complex.

But it’s not impossible. And it’s not forever. It may feel like we’ve been traveling through a long, dark tunnel. Here’s the thing about tunnels: they’ve got exits. It’s possible that things are dark and that we’re still on our way.

Let’s keep our heads up, toward that glimmer of light ahead.

Clients, when you’d like to talk about what all this means for you, your plans, and your planning, reach out.


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How to Live in Your Life

photo shows a red pencil and two options with checkboxes that read "today" and "tomorrow"

In the spring, we checked in with friends and family as work and school and much of life was in upheaval. Some folks were struggling more than others. We talked with one friend who sat through meetings in the office about how the switch to remote work was going to be handled when (not if) the team went that direction.

“I heard what they were saying, but I didn’t believe it,” our friend said. Within days, the team was out of the office. The friend was home three weeks before it finally sank in: work had gone remote.

Have you ever felt that way? Like your body has moved somewhere but your mind is refusing to catch up?

“It just feels like I’m waiting for Monday, like we’ll be back any day now,” the friend said.

The shock of change can have lots of effects on us, and we do not fault anyone going through this thought process. It made us wonder, though… What is the pandemic teaching us about time horizons?

You’ve heard this from us before: “long-term investing” is a little redundant. as we believe better chances for success lie in longer time horizons. It’s easy to outperform a strategy for short-term goals if you’re playing the long game.

2020 has been a months-long lesson in this perspective, hasn’t it? As spring turned to summer, a lot of folks had to come to grips with the idea that we could be in this situation for a while.

We are all about taking things one at a time, about taking life one day at a time—but how would our day-to-day change if we were geared toward the long term?

“I could be here a while…”

How could that phrase change your home life? Your retirement goals? Where you want to wake up each day? Your grocery and shopping routines?

Clients, what a time of change and reckoning we’re living through. But we’d like to help you do just that: live through it. Live in it.

When you’d like to talk about this or anything else, please write or call.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

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

HOW TO RETIRE: PANDEMIC EDITION

photo shows a small wooden wall clock and a calendar with sticky notes and push pins

What a year! The events of 2020 have reached into every facet of our lives. Many careers have been changed or upended.

People working happily at advanced ages have told us they are leery of workplace exposures, so many are on leave or have retired. Others have been displaced from jobs they would have preferred to keep. And some are helping descendants cope with “distance learning” or a loss of childcare options instead of working at jobs.

One friend retired just before the pandemic, planning an ambitious travel schedule. That isn’t happening. And another, who had planned to retire, now works from home: they figure they might as well keep working, since they cannot travel or engage in activities they had planned for retirement.

No matter what 2020 has thrown at you, the basics of retirement planning have not changed. It is a five-step process. We need to figure out…

  1. how much money it takes to run the life we prefer,
  2. monthly income amounts and timing from Social Security or pensions,
  3. lump sums required for one-time goals or needs, like a bucket list trip or boat,
  4. lump sums available from savings, investments, 401(k) plans, and other wealth, and
  5. the sustainable monthly cash flow that might be withdrawn from net long-term investments, after the lump sums are accounted for (we help people with this step).

There are nuances to each step—options to analyze, lifestyle decision to make. Retirement planning works out best when it is a process over time. We have noticed that people learn more about their objectives and their finances as time goes on, and things change. So your retirement plan adapts and changes over time, too.

If the pandemic has shaken things up for you as it has for others—or if it has just gotten to be that time—call or email us when you are ready to work on your plans and planning. Clients, if changes need to be incorporated in your plans, let’s keep talking.

We’re glad to help.

It’s a Whole New Ball Game

picture shows sunrise behind dewy grass

Millions of us are living through new experiences. The global pandemic has affected many aspects of daily life. Sportscasters and others have used the expression “It’s a whole new ball game” to describe suddenly changed circumstances.

It seems apt now. The rate of change—and the stakes—in this pandemic can feel overwhelming and disorienting. And yet we wonder…

We humans start out knowing nothing about anything, right? Babyhood was a whole new ball game, along with getting teeth, walking, going to kindergarten, making friends (and enemies), and all the other developments in our lives.

So how is it that we have each managed to adapt and deal with this lifetime of ever-changing circumstances, coped with each and every “whole new ball game”? What lessons are there as we each deal with our current set of changes?

Some of the answers might be found in our own pasts, the things that have taught us perspective. Maybe the answers are in our goals and priorities: they could guide the way through. No matter what we each face now, the overall challenge of change remains.

We might revise the old saying and conclude, “It’s always a whole new ball game.”

Clients, if you’d like to discuss this or anything else, write or call.

Work from Where?

woman at desk with feet up working with paper, pen, and a computer in a home office

Location, location, location—this real estate cliché is now dominating conversations about the changing world of work. Many businesses are learning a thing or two about the value of where work happens, and many leaders have said they intend to keep at least part of their workforce remote even after we’re through the limitations of COVID-19.

We’ve been thinking a lot about locale in recent years. I picked up a snowbird routine in 2010, and we launched our digital presence in earnest in 2015. Some of our “office” staff are rarely in the office—the one at 228 Main Street, at least.

From these experiences, we’ve learned a lesson that many business leaders are grappling with now: the fundamental question may not be where work needs to happen, but how it needs to happen. We’ve even shared with you about what we call the “URL–IRL connection,” the way our work online and our work in-person go together.

Yes, right now, the pandemic is putting some clear constraints on the question of location, but it would be a pity to come away from this challenging time with the wrong lesson. It’s not that WFH (“working from home”) is universally superior to working in a company office setting. It’s not that an office is superior to a WFH arrangement.

As Forbes contributor Laurel Farrer explained, what would happen if we focused on work as a thing we do and not a place we go? The short answer is that we make decisions based on the fundamentals. What do I need to get my work done?

Clients, we will continue to adapt—to changes in our lives, to changes in your needs, and to the world around us. Wherever life takes us, our work keeps us connected to you. And we are so grateful for that. Write or call anytime.

Caps, Gowns, and the Coronavirus

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COVID-19 has caused shifts and pivots across organizations and even whole industries. Along the way, many folks have decided to delay or cancel what would’ve been some wonderful milestones: a long-awaited family trip, a wedding, a move across country.

Some families will still be wrestling with such decisions for the months—and maybe years!—to come.

A college education is a common enough savings category, but some are rethinking their investment goals with so many changes coming for institutions.

We realize it can be hard to get perspective right now. The stress of the upcoming school year is looming, and prospective students will be making huge decisions based on information that seems to keep changing.

We wouldn’t dream of suggesting the “right answer” for you or your family. Here, however, we’d like to offer a little distance on some of the issues at the heart of this topic.

Is it worth it? Schools are being forced to experiment with how they will structure classes and campus life, so as consumers, many families are questioning the value of the experience they’re paying for. To zoom out, we recommend remembering what a degree will mean for a person after they’re done with it.

Yes, we want students across the country to enjoy a safe, rich, and rewarding couple of years at school, but both the journey and the destination should be part of the equation.

One thing that the pandemic won’t suddenly change? The long-term value of a college degree.

“The lifetime payoff to earning a college degree is so very large, in health and wealth, that it dwarfs even high tuition costs,” writes economist Susan Dynarski. “College is an especially smart choice during a terrible job market.”

An education is not armor against all the problems ahead, but it may still be a sound investment and worthy savings goal for you or your family.
Clients, if you want to talk through this or anything else, call or write.

Can You See the Forest?

© Can Stock Photo / Elnur

The old saying, “Can’t see the forest for the trees,” refers to the difficulty we humans have in maintaining perspective, of keeping the larger context in mind. Our current challenges bring us reminders of this.

Recently we were discussing the prospects for investing in a food processing company. Market disruptions have knocked the cost of $1 of annual earning power down to $10 – an earnings yield of 10%. (Another way to say it: a price-earnings ratio of 10.) If one can purchase durable earning power in an enduring industry at valuations like that, the holding might be owned a very long time.

(No guarantees – there are a lot of assumptions in that last paragraph.)

A colleague asked us whether we were concerned about the impact of processing plant shutdowns. After agreeing that any shutdowns would likely be limited to a matter of weeks, this seemed to be one of those problems of perspective.

For none of the past few decades have the plants been shut down for a virus. Apart from the next few weeks, it seems unlikely that virus-related shutdowns will be much of a factor in the decades ahead.

The forest is that we humans will still need to eat in the future, and there is probably money to be made by meeting that need. The trees are the virus and the shutdowns and the disruptions. One of our key roles is working to see the big picture and striving to act accordingly. We need to be able to see the forest in spite of the trees.

Interestingly, the challenge of maintaining perspective may play a role in creating bargains. Investors who get too wrapped up in transitory effects may push prices to levels that don’t reflect the long term value. When current conditions fade, as they will, that value may become apparent. Again, no guarantees.

Clients, if you would like to talk about this or anything else, please 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.

Up In The Air

© Can Stock Photo / jefras

We have written before about the miracle of air travel. You can go from breakfast on the coast to lunch in the middle of the country, renting the use of an $80 million machine and the services of $1 million in payroll for just a couple hundred dollars.

It is no wonder that US passengers flew 57% more miles in a recent year than they had twenty years before. This record of growth included the disruption caused by terrorists on 9/11. Our commercial aviation system was used against us, to devastating effect. Dramatic changes in the flying experience resulted. But traffic volumes still grew over the long term.

The global COVID-19 pandemic has created a larger shock to air traffic volumes. Noted investor Warren Buffett, who had previously invested in four major US airlines, recently announced the sale of those holdings by his firm. Many are wondering what to think.

Our research and thinking will continue to evolve, but we do have thoughts to share.

  • Buffett had the luxury of selling out before news of his sales depressed the share prices. What we may choose to do today is a different set of choices than what could be done last month.
  • Although he is arguably the most successful investor in all of human history, he has proven to be wrong from time to time. (We treasure those moments when we were right and he was not– just ask us, we will tell you all about them.)
  • Buffett’s original idea, that he was buying $1 billion per year of earning power for an $8 billion investment in airline ownership, became obsolete. But perhaps the buyers of those shares have purchased $1 billion per year of future earning power for less money, $6 billion. No guarantees.

The future of air travel and participating companies is up in the air. But it seems likely to us that the miracle of air travel will sooner or later exert its charms over an increasing number of people from year to year. We are working to understand what this all means in terms of investment opportunities and challenges.

Clients, if you would like to talk about this or anything else, please email us or call.