Reinforce Your Financial Foundation

Chris Williams |

I just returned from a trip with my family to Venice and London. It was such a great experience for all of us. I found new inspiration in the 6 days away.

The Rolling Stones’ “Gimme Shelter” was playing at a restaurant we enjoyed in London. Though the tune was originally released back in 1970, it’s still a fit in today’s world. It’s a heavy song if you look at the lyrics. I don’t think Mick Jagger was just referring to a place to lay his head every night – it was more than that. I hear him longing for a sense of safety and security. I am sure we can all relate.

As great songs can do, it lingered in my head long after. By the time we reached Venice, perspective (and shelter) had really sunk in. Venice is a city that has seen so much history, maintained its culture through the years, is fighting the effects of global warming, and yet still seems like a magical place. So many of those structures built so long ago are still there in the middle of all that water. To me, it’s a reminder of how well-engineered foundations can withstand so much; how well-built shelters can give us safety and security.


A Foundation for Your Shelter

I think about our place in the world in the context of the bigger arc of history – to draw what we can from the experiences of other generations so our loved ones can have a smoother ride on their own journey. Our accomplishments are helped along by many generations before us and the groundwork they laid.

While we are certainly in trying times for our country and the world – inflation surging, markets swinging up and down, and uncertainty reigning politically, I take comfort in knowing that we have such a good foundation under us all. And, just as the upheaval of the 60’s and 70’s eventually led to better days, with more innovation and new ideas, the upheaval today will lead to better things in the future. We at Vista are sure of it and want to help you and your family make the most of that future.

At Vista, our goal is to provide “shelter” from the short-term economic pains of the world so you can live the life you want and focus on the things most important to you. A well-structured foundation in your personal financial balance sheet helps the families we work with achieve that. Just like the buildings in Venice, even a sound initial foundation needs continuous evaluation, review, and maintenance.


The Architecture For Peak Success

When I sent out the most recent client update, I received several questions about how and why we do that. Most of the questions came down to 2 big aspects:

1. It sounds like market or at least economic timing. What’s up with that?

Any good investment strategy starts with a sound financial plan, which should lead to a good asset allocation strategy (across public and private markets and applied to your tax and estate planning dynamics). The plan and the allocation need to be tailored to you, your needs, and your time horizon. From there, it’s our job to make the necessary changes to give you the best chance of achieving the assumptions made in that plan AND adjust accordingly.

This industry tends to do aspects of the first two parts well (financial plan and asset allocation) but doesn’t always do much on the back end. That’s like building Venice 800 years ago and then letting it rot. As the inputs change (cost of money, inflation, geo-political shifts), it’s important that the inputs and assumptions to that financial plan are re-evaluated and the asset allocation is changed as necessary. The facts are different today than in the last 10+ years and we, as professionals, should be aware and adjust for our clients accordingly. If that isn’t happening, I think our industry is ultimately putting at risk the “shelter” we are hired to help provide.

2. We’ve seen tumultuous times in the past (including the Fed raising rates) so what’s the big deal?

The fundamentals are changing in a different way than they did in previous cycles. We are a country and a world that have built structures based on two big assumptions: low rates & low inflation. Quite simply, those dynamics have changed. The first one is over because our central bankers are telling us there is a new era, and the second is over because of decisions already made (lack of investment in oil and gas, lack of leadership in govts to deal with out-of-whack budgets, and an unwillingness to act in fiscally responsible ways in some businesses and households).

If you have a professionally prepared financial plan, chances are it is based on a Monte Carlo plan. That plan has inputs based on historical data from the late 70’s and early 80’s. If your advisor believes the last 40 years of increased global trade, lowering interest rates, and generally positive demographics in the developed western world are likely to repeat over the next 40 years, then all good. We simply don’t believe those dynamics are the foundation for future years and thus, we are adjusting assumptions about asset classes, their likely returns and volatility, and the cost inputs associated with them. That doesn’t mean the original plan isn’t a helpful tool. But, much like the original architectural plans in Venice, it needs modernization: updating.

If you haven’t done so recently, I urge you to reach out to your current advisor and ask about opportunities presented by the economic predicament. We think this year, this era, is a turning point. We believe it’s important that your advisors help reinforce what you’re building. By no means is this money stuff the most important thing in life but, as we say at Vista, it’s part of the foundation that then allows our clients to tend to the most important stuff. For me, that includes enriching experiences with family and friends. It’s personal for each of us, but we all need a solid structure to get there. If you want us to help build that with you, we would be honored to start a dialogue. Just give us a shout.

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Chris Williams, President & Co-Founder