When I talk to executives and business owners as part of my work with family offices, private equity firms, and boards, I often hear comments like this: “I want to grow my business, but I do not have the time to address [you name the issue].”

The REAL issue is often that they are so busy working IN their business that they do not take the time to work ON their business. There is a tremendous difference.

Not 2008, not the early 1980s, but 2022 was the worst year for bonds on record, according to an analysis by investment historian Edward McQuarrie.

That’s more than a headline for financial advisors who have relied on fixed income as the less-volatile portion of their 70/30 or 60/40 portfolios – especially for their retirement-age clients. It’s a breakdown that can have lasting effects on those who can afford it the least, unless the advisor has a strategy for mitigating the risk of those impacts.

I happen to share a trainer with a local advisor. I hadn’t seen him since early 2022, so when I saw him recently, I asked him how his clients responded to the minting of a bear market in U.S. equities.

He shared that he was satisfied with the planning and preparation he had done with his clients because it yielded constructive dialogue and (mostly) content clients. However, he did join me in lamenting over the change in how many clients evaluate success during a bear market versus a bull.

We joked about how, when things are going well, the phone doesn’t ring and clients are fine with the occasional update in percentage terms. On the flip side, when markets decline, clients suddenly become very attuned and only want to know how many dollars they have lost. In short, the benchmark to which a client compares performance changes.

Well, here we are again.

It’s that time of year when many asset managers like to make predictions about the year ahead, while Blueprint Investment Partners calls attention to the foolishness of that exercise. As evidence, I give you this January  2022 tweet from Bloomberg media personality Jonathan Ferro, who recaps how 14 leading financial firms foresaw the S&P 500 ending 2022. 

Their guesses lend credence to my assertion that one of the only annual market predictions worth making is this: Following a consistent, disciplined investing process will lead to better outcomes than trusting the predictions of financial “experts.”

"When I see memos from Howard Marks in my mail,
they're the first thing I open and read." –Warren Buffett

Few (if any) money managers are better than Howard Marks of Oaktree Capital, in our opinion. I mean, can you get a bigger endorsement than Warren’s quote above? If you are not familiar with Howard's work, you can read his memos here.

In 2022, Howard perhaps unintentionally made a case for systematic investing generally, and trend following specifically, that we would be hard-pressed to match. From his July memo titled, “I Beg To Differ”:

“You can’t take the same actions as everyone else and expect to outperform.”