“‘Never’ is a long time, Marian.”
– Shane, in the movie of the same name, 1953
November is in the rearview mirror. With 11 months down and one to go, 2022 so far has been an unusual year, to put it mildly. First and foremost, the prices of both stocks and bonds have moved together to the downside. Most investors never have experienced such a phenomenon and in fact have clung to the belief that such a phenomenon never could happen. Never is a long time, however. The historical data in the investment world can be overwhelming, and what the data say is that stock and bond prices can and do move to the downside together about 5% of the time. Two thousand twenty-two has been one of those 5% times. Two thousand twenty-three? At the macro level, we suspect that the more traditional relationship between the two markets will reemerge, and are encouraged by a number of factors. At the micro level, the Value style of investing has been the place to be this year by a wide margin, and we expect Value’s outperformance to continue for quite some time. Onward and upward.
Eleven months down and one to go… that means December is upon us and the late-December/ early-January trading program is just a few weeks away. As usual, this will be our largest trading program of the year, and the buy/sell disciplines will be very specific. Also, taxable clients should note that once again we will do our best to manage this process as effectively as possible from a tax standpoint. Consistent with client circumstances, in other words, trading losses will be taken this year in order to offset gains taken earlier in 2022. Trading gains, on the other hand, will be taken in January 2023. Bottom line: one more layer of complexity, but well worth the effort.
Finally, our custom this time of year is to ask all clients and other friends of the firm that most important of all questions: Are we doing all that we could and should be doing for you? We bow to the importance of investment results to be sure, but know as well how important client service is. In the past, for example, we’ve discussed the Path Ahead work that we’ve done for many clients and others. The goal: given an existing or prospective client’s circumstances and range of
expected NIA investment returns, to determine portfolio market values and the purchasing power of those assets at various points down the road. Valuable information, but just one example of how we become a trusted member of each client’s team of professional advisers. The four of us are NIA, and we are in the ultimate personal service business. We can help in many ways.
That’s about it for now. From the four of us to our wonderful clients and friends, here’s to the Happiest of Holiday Seasons.