Independence In Investing and Advising - A Celebration of Clarity

July 8, 2014 9:05:00 AM

I hope you all had a wonderful, long 4th of July Holiday weekend. It's a great time to revel in family, fireworks, and the fanfare of parades and neighborhood picnics. Patriotism permeates our communities, from decor, t-shirts and baseball hats to the respectful appreciation and honor given to our local veterans to the ever-present big blowout sale at your local everything.


I love the 4th of July because it's a melting pot of all these things and more. The 4th of July is America wrapped up in a day. I often think about our Founding Fathers and their vision and definition of independence. I move forward through the historical milestones and great leaders who helped to further define the spirit of our nation and our definition of independence. The 4th is a day that commemorates the signing of the Declaration Of Independence; a magnificent vision of a better system of government signed in 1776.


Today, our government, or as Thomas Jefferson and John Adams referred to it, our grand experiment remains ever evolving, ever defining the meaning of freedom and independence-forever on a road that clarifies and interprets the meanings of our founding values. An interesting historical note: both these past Presidents, who were often on different sides of the political aisle, corresponded frequently during their latter years and died on the same day... July 4th, 1826, the jubilee anniversary of America. The fruits of their labor were only 50 years old when they died, and yet they had already brought a better way of government and life to our citizens, and to the attention of the whole world.


Knowing your history and having an informed context gives greater meaning and understanding to events that occur in our every day lives. The 4th of July is an example of a day, like most Holidays, that tends to make us reflect on the events of the past and on what is truly most important to us today and tomorrow. Whether you're an investor or an advisor, it will come as no surprise that pursuing the American Dream doesn't come for free-and financial independence can make a big difference in one's ability to achieve their dreams.


Financial independence and Independence itself are all about freedom and equal access to opportunities. What you do with these liberties is up to you. That's why we believe it's all about Clarity™. At the end of the day, we are the Founding Fathers of our families and our clients. We need to have a philosophy and clear vision, a strategy or plan, the resilience and flexibility to face both adversity and opportunity, and the transparency that only knowledge and the sharing of knowledge bring. You may think, Wow-that's a lot! or maybe, How do you make sense of all the clutter and noise surrounding the financial markets to achieve this? And in all fairness, with a smile on my face, I would say. It ain't easy-but the price of independence is not only worth the effort it requires to obtain and sustain, it ennobles us-it's a gift that keeps on giving. How you define it is up to you, but financial independence and clarity in your investments are one of the keys to living a life with clarity.


Let's start at the beginning. Knowing what you own, and Knowing why you own it, sounds like powerful, common sense ideas, similar to those in our Declaration of Independence. But most investors and many advisors really don't know what's in their portfolios. It's somewhat understandable. After all the fireworks and fanfare, how often do we focus on our liberties? How frequently do we call to mind our forefathers and the sacrifices that have led us all to the unique place we are presently? If you invest in Mutual Funds, ETFs, Funds of Funds and the Flavor of the Day... good luck! That's why our portfolios are constructed with 25-35 companies. Companies that are well researched, in sectors we understand and offer excellent potential risk-adjusted return.


The clarity of our approach and investment philosophy allows investors to understand their investments and, in turn, better focus on the freedoms financial independence can bring, whether it's college, succession planning or retirement dreams. Clarity brings advisors the knowledge and freedom needed to best spend their time and serve their clients... during all market conditions.


Another historical tidbit: The Battle of Gettysburg ended on July 4th 1863 and was the turning point in the United States Civil War, our country's most gruesome and galvanizing event since the American War of Independence. Five years earlier, in 1858, Abraham Lincoln addressed his Republican colleagues after being nominated to run as the Republican candidate for the U.S. Senate, he gave his famous House Divided Speech. The first line of the speech reads, If we could first know where we are, and wither we are tending, we could then better judge what to do, and how to do it. The speech goes on to quote the synoptic gospels; A house divided against itself cannot stand, recounting a statement made by Jesus. Lincoln knew the strength of this truth and encouraged his colleagues to address the needs for a focused strategy that would support their philosophical beliefs and promise to public to abolish and end slavery.


Even with clear goals and the best of intentions, both investors and advisors can find themselves lacking a unified and cohesive strategy. Rather than reaching their objectives, they find themselves divided without a long-term strategy or plan of action. They become more susceptible to reactionary behavior and chasing the market or returns; they look to predictions and benchmarks, which may not be relevant to their needs, present market conditions or an indication of future results.


It's a busy world filled with wonder and challenges, responsibilities and liberties, setbacks and victories... with Clarity you can best live a life based on your definition of independence. Today, markets are reaching all time highs, there have been two major market setbacks in the last 10 years, and globalization offers many new investment opportunities and risks. So, even with a clear objective and a strategic plan, you need the flexibility or planned reactive posture to adjust and take advantage of opportunities that occur.


How you act in both the face of adversity as well as in victory defines your investment performance. Aligning yourself with experts in money management, financial research and planning who understand your goals allows you to seize the day. After all, one of the great gifts of America's independence is access to the U.S. Stock Market, where you can own a piece of a great company. Investor or advisor, remember, the war for financial independence is a long campaign, with many skirmishes and battles. As Betsy Ross and I like to say, Stick to the knitting! When you know what you own and why you own it, it is easier to see and react to opportunities to buy more of companies you want to own when they go on sale.


Financial independence also requires transparency-in portfolio holdings, strategic planning and tactics and especially in fees. Many investors and advisors think they understand or at least want to better understand how fees, holdings, trades and replacements are incurred or made concerning their portfolios and investments. Clarity and transparency go hand-in-hand-like stars and stripes and fireworks and clear skies. Seeing the big picture makes the colors on the canvas even brighter, the perspective more evocative and the subject matter more impactful.


I hope you all had a great time celebrating the 4th of July. I am proud to be an American every day. I am, like all of us, on a Road to Clarity™... one which highly values the notion of freedom and independence.

Mark Pearson

Mark Pearson

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