Mid-Year Insights 2024: Timeless Truths, Market Observations, and Practice Updates

Here are three key insights that I believe are essential for navigating the rest of the year and beyond. 

These insights are grounded in the principles that have guided our successful financial planning and investment strategies.

The three key areas: Some timeless truths that guide our financial planning, a few observations on the markets so far this year, and an update on what we’re doing in our practice to keep you on track toward your financial goals.

In my latest video, podcast and blog post you’ll learn:

• Timeless truths for financial success
• General principles of our investment strategy
• Market commentary for the first half of 2024
• Current observations and insights
• Updates on our practice

Timeless Financial Principles

At the core of our approach is a steadfast commitment to being goal-focused, plan-driven, long-term equity investors. 

Our primary objective is to create financial plans that help you achieve your most cherished lifetime goals. 

We work closely with you to stay focused on these goals, brainstorm creative strategies to help you reach them, and meticulously track your progress.

Our investment philosophy is rooted in the belief that the best way to capture the full premium compound return of equities is by remaining fully invested at all times. 

We do not attempt to predict economic trends or time the markets, as we believe these efforts are unlikely to be successful consistently. 

Instead, we are prepared to ride out the frequent, often significant, but historically temporary declines in equity markets. 

We trust in the power of equity compounding to deliver long-term benefits, even during challenging periods.

Market Observations for the First Half of 2024

Looking at the first half of 2024, there are a couple of key observations worth noting. The bulk of our clients’ portfolios are invested in global and U.S. equities, and the performance has been solid. The U.S. economy has continued to grow, albeit modestly, and the equity markets have responded positively to accelerating earnings growth.

Inflation has slowed, though not without some resistance, and as a result, monetary policy remains restrictive. 

Interest rates are still well above the inflation rate, which is exactly where long-term investors should want them to be. 

The priority remains getting inflation down to the target of 2%. History shows that inflation, not market crashes, poses the biggest long-term risk to your retirement.

Even without the stimulus of rate cuts, the equity markets have advanced across a broad front. 

The major stock indexes have reached new highs, driven by strengthening earnings. 

For example, Bloomberg estimates that earnings for the S&P 500 will increase by 8.8% this year, with a further 13.6% growth expected in 2025. 

It’s earnings, not headlines or political events, that ultimately drive the long-term value of our core investment asset—a diversified portfolio of ownership equity in enduringly successful companies.

Practice Updates: Enhancing Our Service to You

It’s been a busy year for our practice, and we’ve made some significant strides to ensure we continue providing the highest quality advice as we grow. 

We’ve brought on three new shareholders to help us maintain our commitment to excellence. 

Additionally, we’ve been refining our systems and processes to better serve your needs.

We have expanded our client’s plan reviews to include more detailed information on mortgages, particularly for those utilizing the Smith Maneuver and similar strategies. We’ve also added more depth to our estate planning services and increased the accuracy of our tax tracking, enabling us to plan future tax refunds more effectively.

One of the most exciting aspects of our work is developing creative tax and investment strategies that make a meaningful difference in our clients’ financial plans. 

We’ve also been actively working with the CRA to resolve issues for our clients, particularly those with significant tax refunds. Service at the CRA continues to be slow, but we’re dedicated to advocating on your behalf.

Additionally, a few of our clients have established charitable foundations, which we believe are among the most effective ways to make a lasting impact in the world.

Final Thoughts

As we continue to focus on the fundamental strengths of our core asset—equities—and the importance of your financial plan to your life, we are better able to tune out the noise and avoid emotional overreactions to market fluctuations. 

I have great confidence in the financial plans we have developed together, the creative strategies many of you are implementing, and the portfolios managed by our dedicated portfolio managers.

Finally, I want to extend a heartfelt thank you to our clients. Connecting with you on all aspects of your financial life is incredibly fulfilling for us, and it is truly a privilege to serve you.

Let’s continue to work together to achieve your financial goals, stay focused on what truly matters, and make the most of what 2024 has to offer.

Ed