Good morning & happy Monday!
I’ve grown most not from victories, but setbacks. If winning is God’s reward, then losing is how he teaches us.
Serena Williams, legendary tennis player
Serena Williams recently announced her retirement from the sport of tennis where she has won 24 Grand Slam titles, more than any other tennis athlete. Her perspective on the lessons losing can provide in the above quote is very insightful.
The first half of 2022 it felt like we were doing nothing but losing when it comes to investing. Aggressive portfolio, conservative portfolio, stocks, bonds … all of them were negative.
In sporting competitions there is a winner and a loser, only occasionally can there be a tie. There are seasons in life where we can feel like we are winning and there are other seasons of life where is seems like the losses are piling up.
The author of Rich Dad, Poor Dad (amongst other books) is quoted as saying “The rich are those who play to win. The middle class plays not to lose.” In my nearly 2 ½ decade career I can attest that there is a lot of truth to that statement.
Why do we so often play to not lose instead of playing to win?
I am excited as my 2 favorite sports (football & hockey) are returning for new seasons. As a fan, I’m not sure there is anything more frustrating than to be ahead in a game and then coast in the 4th quarter of a football game or the 3rd period of a hockey game. The team that is trailing is playing their hearts out and the team holding on to the lead is simply trying not to blow the lead. How many times have we seen that ‘just don’t lose’ mindset come back to bite a team in the butt?
Yet, so many people play simply ‘not to lose’ in life, including in their investment strategy.
But not you my friends! Not you!
Because you have a plan. You have discipline. You have intentionality.
Sticking with this sports theme, if we are a financial team then I have the high honor of being the head coach with great support from Christy and Monique. Our job is for you to win. If you win then we win. Intentional Wealth is intentionally financially structured so that we both are rewarded based on your success. We all know that a winning team needs amazing players … you are the player in this analogy. You are the one on the field. Here recently it was you getting beat up on the field with recent market pullback.
Now, it’s far too early to declare victory, but as of this point we are heading in the right direction. The low for the challenging year of 2022 took place on June 16th where the S&P 500 closed @ 3,666.77 (a freaky number, I know). Friday the S&P 500 closed at 4,057.66. We started the year at 4,766.18. That means that from 1/1/2022 to 6/16/2022 the S&P500 value decreased by 23.07% (not including dividends). From 6/16/2022 through Friday the market is up 10.66%. Year-to-date the S&P 500 is still down 14.87%. Now we diversify far beyond the S&P 500, but that is the best broad-based U.S. equity index, so that is why I’m using it for a reference point. (All S&P 500 values provided by Yahoo! Finance)
The reason I go through this exercise is because this week the year 2022 will be 2/3rds over (September 1st) … if 2022 were a hockey game we would be entering the 3rd period this week. So, here’s my locker room pep talk between the 2nd & 3rd period:
Team, it’s been a tough game.
In the first period we got our teeth kicked in. It seemed like no matter what we did we just kept falling further behind.
But you stayed in the game and you kept fighting! You did not give up on our game plan! And in the 2nd period we started coming gaining ground.
And now here we are within striking distance and opportunity to win this game.
Now, I don’t know how this game ends (don’t know if 2022 will be positive or negative year), but I know if you keep playing like this we will have many, many victories to come.
Don’t give up, don’t lose sight of what we are building, don’t lose hope. Amazing things lay ahead if you stick to the plan. Keep playing to win!
Ok, maybe a little cheesy but I hope it gets the point across 😊 I’m thrilled to report that over 98% of our client base stuck to the plan and many of you took advantage of pullback with additional purchases, Roth conversions, tax loss harvesting, and other strategies we discussed during this market downturn. I am so incredibly proud of my team!!!
As Serena Williams said in her quote to start off this memo … I believe that we are all better off because of the lessons the losses have taught us.
I am so honored to be your head financial coach. If I or and any of the coaching staff (Christy & Monique) can provide any assistance to you along the journey please do not hesitate to reach out.
Make it a great week ahead!