Spinning yarn 

My wife, Erika, and I took our family on a trip to New York to visit her family for 4th of July.  We spent two days in Manhattan before renting a car and driving to Kueka Lake (pronounced Q-ka) for some much-needed relaxation and enjoyed lake time. We fished, hiked, boated, kayaked, and even tried stand up paddleboard.

We also waited in lines, slogged through rain, drove for hours on end, and paid $7 for a bottle of water.

What’s the point Phil? 

The point is that storytelling matters.

In this case, the story of the 2nd quarter is one of surprising inflation, markets that took a significant hit, and bonds that seem to be on a road to nowhere. Things like spending down ratio and sequence of return risk somehow made their way out of planning textbooks and into conversations with clients. While this education is a great thing, it offers me a chance to be a good advisor and counselor by saying:

In three years, we will look back on this period and tell a very different story than what we are feeling at this moment. I have said this before, but something I learned from a seasoned and amazing mentor in St. Petersburg, ironically named Bubba (Bubba only because he dressed and spoke like the American version of an Oxford man), was during the bowels of the 2008-2009 recession. Bubba taught me, “It is human nature to think what is happening now will continue in perpetuity, when the only thing we know for certain, is it will not.”

In three years, we can have the conversation about the smart planning moves, the emotions we ignored for the better of our plan, or the trips we took. On the other hand, we can talk about financial metrics, keys, and numbers that truthfully, very few of us understand anyway.

Luckily for me, our clients take the planning approach to heart and are following their plans, which gives them a better than average shot of seeing them succeed. One good thing about grey hair is that throughout the difficult and stressful times, it also gave you the wisdom that comes along with those hairs. Of course, I am being metaphorical, considering my lion-like mane of dark brown waves.

And now, here this:

Quarterly returns:

Nasdaq:           -22.28%

DJIA:              -10.78%

SP500:            -16.10%

Diversification anyone?

What I’m watching: Redux from Q1

  1. Kings, well if you didn’t see the series, it was terrific. The Kings fought hard and had some comebacks, but could get past the Oilers in seven games. The Oilers went on to face the Avalanche and got smothered (see what I did). Anyway, great season for the hometown Kings. Season tickets go on sale, use the code PhilRulez, and nothing will happen.
  2. Twitter! In the courts. Elon said no, so off to Delaware they go.

 Q2 What I’m watching

  1. Earnings season – interesting to see what effect inflation has on earnings and forward earnings.
  2. Interest rates – the market is pricing interest rate increases in, I am assuming the Fed and J. Powell will oblige, not much drama there.
  3. Defense spending and Ukrainian assistance. Discussing with some politico friends of mine the amount of spending and defense companies that may benefit from a prolonged overseas war with which we are not a part (wink wink). Remember back to 2001, we were already in a major recession with high unemployment when the towers came down, spurring defense and industrial spending? Will government contracts bail us out again?
  4. The little guy. Seems to me the mom-and-pop shops are the businesses that are taking it on the chin more than anyone. Changing business landscape, hard costs are climbing, and no one to hire, but when you do, you have to pay them double and hope they stick around. Might be tough for a while.
  5. Luckily the start of college football is around the corner.


Philip Clark, CPWA®, CFP®, CLU®| Director – Wealth Management
Direct: 626.788.3947 | philip.clark@krostwealth.com


This information should not be construed as tax advice, nor should be taken as financial planning advice. Please consult your tax professional. These opinions are based on observations and research and are not intended to predict or depict performance of any investment. These views are as of the close of business on 04/29/2021 and are subject to change based on subsequent developments. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. These views should not be construed as a recommendation to buy or sell any securities. Past performance does not guarantee future results.

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