Kicking off 2023
I spent some of the last two weeks really trying to define the reason Stone Lake Wealth Management exists . The clearest and simplest expression of how I hope to serve clients comes from two bullet points.
- To construct personalized core portfolios suitable for the bulk of the client's long terms savings and wealth.
- To protect the client's wealth from permanent and catastrophic impairment due to bad investment behaviors and decisions, especially in times of panic or euphoria.
The last three years have been remarkable in the compressed intensity of global shocks they have delivered. We had a global pandemic, the first ground war in Europe since WWII and the first global inflation shock in 40+ years. Through it all I hope I have delivered on these two points and I can promise each and every one of you that I will continue to work hard to do so.
Below is an excerpt from a new years article by one of my favorite authors on finance and markets, Jason Zweig. He is currently a columnist for the WSJ. I am sending it out because I think it perfectly and succinctly expresses my own wish list for clients.
Wishing all of you a very, very Happy New Year!!
Sumit Kumar
Four Wishes for 2023
By Jason Zweig
Welcome to 2023.
Instead of making New Year's resolutions, I'm making New Year's wishes.
If my wishes come true for you, you will be a better investor and, most likely, a happier person.
May you learn that trading isn't the same as investing. In her great New Year's Day article "Rookie Traders Are Calling It Quits, and Their Families Are Thrilled," my colleague Rachel Ensign describes someone who spent "up to 10 hours a day trading" during the pandemic, "wearing an earpiece to listen to CNBC while doing chores." That isn't investing. That's being taken hostage by the brokerage industry.
May you think clearly about other people's agendas. All too many fund managers and many financial advisers put your money where their mouth is. Extreme forecasts — inflation will soar or collapse, stocks will boom or bust, bitcoin will hit $1 million — are publicity magnets for the firms that make them. But they're usually wealth killers for the firms' clients. You will lose money if such forecasts are wrong, but the firm won't, as it will still harvest fees no matter how much your account shrinks.
May you remember that making money is a lot easier than keeping it. Sometimes, anybody can get rich quick. Just think of 2021. But staying rich is a lot harder. In 2022, just about everything went down, and nothing went down more than all the crap that had gone up the most the year before. If you treat investing like a game, you'll have fun — until you have nothing left. If you treat it like a lifelong undertaking, you won't get to brag a lot, but decades from now you will have plenty to show for it.
May you distinguish between being rich and being wealthy. As the blogger Morgan Housel has written, being wealthy confers the freedom not to spend money. To be wealthy, as opposed to merely rich, means no longer having to use your money to prove anything — to yourself or anybody else. Your money is what you have, not who you are. You spend it not to make a statement, but to create experiences with family and friends or to give something back to the society that made your wealth possible in the first place. Being able to enrich the lives of those you care about is the ultimate form of wealth.
Sumit Kumar, Greenwich CT