perspective

Growing Market Geniuses

photo shows two silvery arrows pointing opposite directions on a yellow background

Author F. Scott Fitzgerald wrote, “the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” 

What if I told you—the best clients in the world—that you (yes, each and every one of you) have that first-rate intelligence? 

See, there’s something in our work together that tests this idea, just about on a daily basis. When you join us, you learn to live with the volatility in the market: it goes up and down, and we accept this as a feature of the ride. 

Very often, it goes down faster and deeper than it goes up. We may expect a 5% drop around three times a year: we might see a 10% drop around every two years. Meanwhile, gains of 10% are few(er) and far(ther) between: we’ve only seen it twice in the S&P 500 this century and only four times in the whole of the last century. And those gains have usually come shortly after one of the big drops. 

But we wouldn’t be in this business if, in the long run, the market went down more than it went up. 

So what gives? There are two seemingly opposing ideas about the market: 

  1. Drops go down faster, farther than gains go up.
  2. It goes up more than it goes down. 

Clients know the secret: the first idea is all about daily events, and the second idea is about the long haul. No guarantees, of course, but it is possible that these things can both be true. We just care less about the former. 

Therefore, if you consider yourself a member of the best client base in the world, then I consider you to be of first-rate intelligence. 

We’ve grown a community of geniuses here at 228 Main. Want to talk more about what this means for you? Write or call, anytime. 


Content in this material is for general information only and 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 unmapped and my not be invested into directly. 


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We Walk a Bridge to the Future

Walking one of my favorite paths recently, I came to this modest bridge over a small stream.

It occurred to me that if I went across it, I would arrive in the future—say, a minute later. But carrying it one step farther, when you think about it, the whole rest of my life was waiting for me on the other side of that bridge.

(They say exercise and nature both boost creativity. Creativity—isn’t that a polite word for the thoughts and connections spinning in my head?)

When I woke up the next morning, the idea was still with me, and still growing. The whole rest of my life was waiting for me when I threw the covers off and got out of bed. The whole rest of my life was waiting for me when I walked out the door to begin the new day.

We strive to make the most of the moments as they come. And we treasure the lessons and memories we’ve accumulated. Life is partly a question of balancing the present moment—and the past—with the possibilities of the future.

The future is where things may be different and better; it is still malleable in a way the past is not.

Likewise, our work with you reflects these elements of time. We try to understand the past: where you are coming from. And the present: your current situation. And the future: what you are aiming for.

Balance among these things is vital. Thinking about the future, we may make tomorrow’s moments better. Understanding the past, we get a sense of the narrative and continuity of our lives. But the present moment is where we live, where we have the chance to find happiness.

Clients, if you are ready to improve our understanding of your past, or present, or future, please email us or call.


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A Lesson at One Chapter’s End

photo shows a stack of books with browned and gilded spines

In one of life’s great ironies, quite a few people pass away around retirement age, a short time before, or just after. Many of us have seen this up close: for me, it started with my father, then my oldest brother, then my wife. All passed away at the age of 62. 

Each had enjoyed life and family, found satisfaction in their work, had travelled some and seen some sights. None planned to be done when they were; all had plans for more.

We’re thinking recently about what could have been… and what could be. This is all about the past and the future. When we focus too much time and attention on those, our capacity to enjoy the present is diminished, the ability to just be

There’s a beautiful chaos in today, so staying present is a beautiful way to be. One way I interpret this idea: that we better have a little fun every day. This is the formulation that’s been popular in my home. My late wife Cathy once embroidered it on a small wall decoration. 

With appreciation for the past, and having made plans for the future, we were striving to have some fun every day. 

And I still do.  

The balance between the present and the future is a grounding influence on our work. Our saying “invest wisely, spend well” is all about that idea. Investing wisely is about the future; spending well is about the present. 

If you would like to talk about that balance in your life, or anything else, please email us or call. 


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Big Chance and No Chance

photo shows dice on felt

We’ve written before about how the stock market is not a casino, and in light of recent remarkable events, other professionals are reminding the public too.

What had been a $4 stock recently ran up to over $400. Although we heard a hundred different ideas about what the episode meant, we can almost certainly understand that no, the company did not actually become a hundred times more valuable.

We do not know the future, so I can’t tell you that buying after it made headlines is going to turn out poorly, but (in my opinion) you’d have far better odds at an actual casino.

Let’s think about that for a second. Have you ever put a little money on something that had the chance to turn out really big? A long shot at the race track, a chance on a huge lottery payout, or stock in a company that might make a lot of money if it doesn’t go broke?

Our business in here is sound investing, not gambling or speculating, though I myself have considered the odds and laid my money down a time or two.

But this recent example buzzing in the news isn’t like that. It’s one of these situations where lots of people get caught up in something that has the same practical meaning as flushing money down the toilet.

It would be better to invest wisely, spend well, and plan for the long haul. For some, chasing those big chances can be fun in moderation. But we don’t advise it become a daily activity.

Jumping into something with even worse odds than those big chances? We wouldn’t count on anything longer than a long shot.

Clients, when you have questions or concerns, please reach out.


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What’s a Win?

photo shows a person with a hat and ponytail sitting on a cliff's edge

Maybe you’ve seen this type of picture on social media lately: the family perched on big rocks in the hillside or an orange sunset over the shoulder from the peak of a mountain. Plenty of our friends and relations have been enjoying more of the great outdoors in the past few weeks. Some have even been inspired to hike for the first time!

Those majestic views are such a treat, even experienced vicariously through my screen. But they had me thinking about those hikes and the challenges they pose.

Say you were planning a hike on a new trail. Maybe a two-mile trek would be a reasonable goal: challenging given the terrain, but totally possible. Yeah, it could actually be exciting to push yourself and make that happen! Two miles of work, the corresponding exercise endorphins, and gorgeous views?

That hike would be a win.

So you set off. After feeling the initial burn, you settle into a rhythm and are enjoying yourself. Maybe there’s more to gain here than you expected.

At the end of your planned route, you still feel like you have gas in the tank: on a whim, you travel on for two more miles.

You can’t believe it! This is farther than you’ve ever hiked in your life, more steps than you could ever have imagined! It is totally thrilling.

You check your watch. Time to head back, you suppose, but what a ride! It’s only once you look up that you realize what you’ve done. The gas in the tank was supposed to be for coasting back to comfort and safety.

Your reasonable win has become a burden. Your resources are low; it’s hard to enjoy what you did accomplish because of how little you’re left with now.

Mistakes like these aren’t always deadly or catastrophic—but they can certainly harm your goals and your wellbeing. For investors, the instinct to throw everything in on the way up (and up and up and up!) can mean that much harder of a fall when the reality sets in.

What’s a win? If you set your terms going in, you may be less tempted to risk your goal for some moonshot you didn’t need in the first place.

Clients, remember: we are all about your goals. If you feel them shifting or want to talk, call or email any time.

A COHERENT COMPOSITION

A sunset over a body of water

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On my morning walk recently, I captured a sunrise scene. Colorful clouds with interesting texture reflected perfectly in one of the Louisville lakes. I am strictly an amateur, but a good picture jumps in front of me once in a while.

Pondering later what goes into a successful photo, I came up with this list:

  • Choose a pertinent subject.
  • Frame the key elements, focusing on the important stuff.
  • Keep it centered and level.

The more I thought about it, the more I realized that this same formula is what goes into writing a blog post or telling a story. And it’s what we strive for in our work with you.

There are a thousand things we could talk about or think about, but you and I work on your highest priorities—the most pertinent subjects. Our goal is to frame them so you can make effective decisions. By keeping it level, we can use a balanced approach.

Clients, if you would like to work on your story, email us or call.

Go Hard, Breathe Easy

running feet (002)

Being calm seems to come easier to some. Maybe it’s a natural disposition, but for some folks we know, they went hard until they could breathe easy.

Many of our friends and clients have what they have as a result of a lifetime of work and savings. They’ve weathered storms and chose to ignore fads. They decided on some goals and set things to work toward those goals.

Those things didn’t happen all at once. But each of us can choose a little hard now to take it easier, later. The costs of deferring pain are sometimes far too high—and we don’t realize it until it’s too late. It’s credit payments that pile up. It’s deferred maintenance that we wake up one morning to discover is now an emergency. It’s a routine that felt too hard to keep up, and now our wellbeing is anything but well.

Is it possible to buy yourself some calm, even in times of challenge? Those may be the best times to invest in some calm.

Keep your emergency savings at a level that feels right for your family. Keep working your plans; make them automatic where possible.

Know that this challenge will not last forever. (In fact, a new best and a new worst will always await us. Such is life.) We can hope that each new challenge will be more meaningful. We can hope each will make us wiser and will cause less damage.

It won’t just happen that way. Some may be born with more calm, but some of us go hard until things aren’t so hard.

Can you work with something hard today? It may help you breathe easier tomorrow. Clients, if you would like to talk about this or anything else, please email us or call.