long term planning

Connect the Dots

© Can Stock Photo / bradcalkins

Do you remember the “connect the dots” pictures for children? By drawing lines from one dot to the next, the players discover that a coherent picture emerges from a seemingly disorganized collection of dots on the page.

Likewise, our work involves creating a picture that makes sense out of all the things going on in the world. In our version, though, there’s no handy numbering guide to draw our attention to the relevant dots.

Instead there seems to be an infinite number of dots in the world. So our first task is to do some sorting. For example, a vast mass of information is available about the day-to-day movement of the stock market. We can sort out any dots that fit into the category “the market goes up and down”—and then discard them. They are not pertinent for long-term investors.

Time horizon plays a large role in sorting as well. There is a wealth of opinions about nearly any investment alternative. A short-term technical analyst may have an opinion that is useful to a day trader but worthless to investors who are thinking in terms of years or decades.

But our work involves more than sorting out what to ignore. We frequently need to dig deeper—to read SEC filings, to research what happened in prior cycles years ago, and to look up many years of operating results. In other words, we still have to be able to find some of the specific dots we know are needed to complete the picture.

For example, we believe that inflation in the next few years will exceed consensus expectations. There is little information from the past decade supporting this view, in our opinion, but as we dig deeper, the patterns going back many decades suggest we may have it right. (No guarantees.)

Another way of saying all of this is that perspective, context, and background matter as we try to connect the dots. We are fortunate to have time to think deeply—and clients who value our methods and our work are a big plus. Together, we’ll create the picture.

Clients, if you would like to talk about this or anything else on your agenda, 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.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Only Thirty Years Left

© Can Stock Photo / stokkete

In the merry month of May a long time ago, I graduated from college in a new cheap suit and embarked on my career in financial services. The first entry on the resume was life insurance agent, the Prudential Insurance Company of America.

The insurance companies managed their affairs with vast armies of file clerks and secretaries and bookkeepers, filling towers of offices in major cities. There were no computers on desktops, long distance telephone calls cost a lot of money, and typing a letter was surprisingly time consuming.

Just a few years before, the New York Stock Exchange got so far behind in its record-keeping that it was forced to stay closed on Wednesdays for months in order to catch up the paperwork. This was due to the record trading volume of…wait for it…TWELVE MILLION SHARES A DAY.

Needless to say, times have changed a lot since I got in business.

I don’t understand how it happened, but I am turning age 62 this month. My plan to work to age 92 may be keeping me young. Between our digital communications, expansion of the team, reworking our systems and processes, keeping up with economic and market developments, and talking to you, there isn’t really time to feel old.

Thinking about the arc of this career so far, I began in the 20th century with a company founded in the 19th century. And now we are at the vanguard of the 21st century.

It feels like this unfolding age was made for us. We understand how to communicate with you in the new media. Being straightforward is a big edge when everything you say and do is visible. Word of mouth is a speed-of-light phenomena nowadays.

At this milestone, with so much left to do, we are grateful to be alive and part of it. With the best clients in the world and support by LPL Financial, we are very fortunate.

Clients, thank you all, again, for everything. If we can do anything for you, email us or call. Here’s to a great thirty years ahead, for you and for us.


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

Leibman Financial Services and LPL Financial are not affiliated.

Playing the Long Game

© Can Stock Photo / JamieWilson

The more we think about it, the more striking it is. We are talking about the connections between major decisions and strategies in other parts of life, and effective investing.

Lengthening your time horizon enables you to look past normal market ups and downs, and perhaps enjoy long term gains. On the other hand, a short-term focus leaves people with a choice of potentially safer but stagnant accounts, or day-trading. Our experience leads us to believe that playing the long game pays. No guarantees, of course.

Likewise, thinking about where you want to be seven or fourteen or twenty-one years from now gives you a framework that shapes the choices you make day to day. You may be more likely to make progress toward your major goals in life. Not playing the long game may hurt your chances.

Many have had the experience of enjoying some product or service that seemed to be priced at unbelievable bargain levels. When we were young, a wonderful barbecue ribs place opened up nearby. Great food, all you could eat, an unbelievable price. There was nothing else like it. Customers flocked to it—we went back again and again.

For a few months, that is. Until it closed without notice or warning. The proprietor had not been thinking about the long game. He knew it was important to deliver a great experience to large numbers of customers. But he wasn’t paying attention to the need to cover his overhead and make a decent return. A dining room full of happy customers, the short term indicator, was not enough.

As customers, we would have been better off to pay sustainable prices to keep the restauranteur in business. His place might have become one of those beloved institutions that last generations. Instead, we got bargains on good food for a few months—then it was over.

In our business, we often counsel people about investments or insurance they originally purchased from an agent or advisor prior to becoming our client. Often some level of confusion or frustration has crept into their understanding of what they have. We are always happy help clear things up.

But this is an object lesson to us about the importance of being there for you. We are always thinking about the long game for our enterprise, too. 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.

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

Invest Wisely, Spend Well

© Can Stock Photo / bpm82

A client came in, hat in hand, apologizing profusely for requesting the withdrawal of a few thousand dollars. He seemed sure the request would upset me.

I’m opposed to clients giving their hard-earned money away to scammers or nephews buying bars, so I inquired as to the use of the funds. It turns out that his home needed a modification to accommodate his wife’s changing health.

Of course, I told him that I would be upset if he didn’t use his wealth to make the home improvement. Relieved, he told me that his previous advisor would get agitated about any withdrawals from his investment accounts. It sounded as if that advisor forgot whose money it was.

We devote most of our time and attention and thoughts and words to our version of investing wisely. But what is it all for? There is no reason to be the richest person in the cemetery.

A more balanced view is captured in the short phrase, ‘invest wisely, spend well.’ We aren’t suggesting that you chop down the orchard to sell it as firewood. But it is OK to use the fruit crop to make life better for you and people you care about.

The same lesson was driven home by other friends. In their 70’s, this couple took their extended family on a vacation to a fabulous destination. In the telling, she raved about how great it was while he silently shook his head. I asked him if he had a different opinion. He said they should have started those trips twenty years before.

Many of us need to be diligent about saving and cautious about spending in our working years. Building toward financial independence in the face of everyday expenses can be a struggle. If we do it right, the struggle fades away as the years go by. At a certain point, we may need to warm up more to the idea of spending well.

Clients, we are always thinking about your long term financial position. Your situation seven or fourteen years from now matters—we plan on being here, and we plan on you being here too. But the idea isn’t to pile up the most money you can—it is to strive to have the resources to do what you want and need to do.

Invest wisely. Spend well. If you would like to discuss how this applies to you, 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.

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

The AMZN Power of Long Time Horizons

canstockphoto41867294

Jeffrey Bezos founded the online retailer Amazon. He built it into one of the most revolutionary and valuable businesses on the planet. We are not here to discuss Amazon as an investment, but there is a key lesson for our clients in his explanation of this success:

“If everything you do needs to work on a three-year time horizon, then you are competing with a lot of people. But if you’re willing to invest on a seven-year time horizon, you are now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue.”

The investment parallel is clear: just by lengthening the time horizon, you can live with the short term volatility that is inherent in the pursuit of long term investment results.

Those with a short time horizon—an insistence that market values be stable day to day or month to month—can generally expect meager returns. Stable values and liquidity both cost a premium, and if you want both you’re not left with much room for returns.

The ‘time horizons’ framework has interesting theoretical corollaries. It seems to us that investor time horizons, and tolerance for volatility, are smaller now than ever before. (This is an opinion based on anecdotal observation, not a fact.) But if this is the case, the competition for long term results is lighter than before.

Another aspect is that if the demand for stability is high, then the price of stability may be high—and the rewards for enduring volatility may also prove to be high since fewer are willing to do it. Again, this is based on our opinion, no guarantees!

By the same logic, we generally believe that investing in far-sighted companies rather than short-sighted companies makes sense. This is not to say that we are interested in pursuing every visionary out there—we know from experience that it is entirely possible to pay too much for a vision of the future, even if it does come to pass. But we are interested in long term results and prefer to invest in companies that share our time horizon.

Clients, we are grateful for you. As a group, you tend to understand living with volatility, and staying focused on the long term. We believe this has been good for you—and for us. Call or email if you would like to discuss your situation in more detail.


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.

Investing involves risk, including possible loss of principal.

Two Ideas About Time

© Can Stock Photo / Klementiev

Two ideas about time affect our plans and planning when it comes to investing. There is conflict between these ideas, so we need to examine them more closely.

The concept of compounding wealth over time is alluring and powerful. Something that doubles every eight years would be sixteen times the money in thirty-two years!

What does thirty-two years mean in the context of planning for a lifetime? It is the distance between age 30 and when people begin to retire. Of two people at age 60, one of them might reasonably expect to be alive thirty-two years later. You may think that thirty-two years sounds like a very, very long time. But 62 year olds will tell you that age 30 seems like yesterday. Thirty-two years clearly is a pertinent time frame for life planning.

This is key because long time horizons are generally tied to long term investment results.

The other idea about time rests in one of the ultimate truths of our existence. We may think about the past, or plan for the future, but where we live each second is RIGHT HERE, RIGHT NOW! The survival of the human species in earlier ages probably required us to be vigilant of potential threats and lurking dangers at all times. There was nothing to be gained by thinking about tomorrow if a lion was going to eat you today.

So human nature has a bias toward focusing on the present. This manifests itself in unhelpful ways in modern society. We tend to think that current trends or conditions will persist—even when they are unsustainable. Some of us seem to believe there will always be time later to take care of longer-term priorities or goals. We have trouble picturing future changes.

The focus on the present also may explain why so many lack the context and background that history can provide. We have heard people say “This has never happened before” about many things that are a recurring feature of our history. By not understanding challenges overcome in the past, today’s problems may trigger an unwarranted sense of danger.

The focus on the present is in conflict with the idea of compounding wealth over time. Our role is to try to make sure that people have what they need for the present, have a cushion for emergencies, and keep a long term focus for their long term investments.

In other words, balance is key. Call or write if you would like to talk about the balance in your plans and planning.


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