Morris MacLeod Newsletter

Hard to believe it is already the middle of September. This morning the cool Fall air was quite noticeable. In our household September didn’t bring too much change. Easton is still loving his wonderful daycare and we are settling into Fall routines at the office. Seeing friends and family have their kids settle into school, and some off to university is a step our family is looking forward to, although very excited to be enjoying the calm of a sustained schedule this fall. These changes can be difficult and with change comes a swath of new emotions.

Staying grounded during emotional highs and lows can be one of the toughest parts of being an investor. One way we try to accomplish this is creating and then revisiting the client's Statement of Financial Purpose.

In the initial couple meetings, when we are onboarding a client, we spend time defining the Statement of Financial Purpose, which is akin to a company's mission statement. We then develop the values and desired outcomes from our actions. This becomes the foundation for decision making.

We see ads preying on the desire for certainty. When emotions are high this messaging is more attractive. The first step we go through is to re-evaluate the statement of financial purpose, and core values. Then we revisit the desired future state and whether we are still on track.

Once a step back from the emotional cloud, we are often able to see a little clearer. Frustration, fear, envy - they all fall back into normal perspective when seen through the lens of purpose, values and future state.

The same grounding process can be used when the markets are reaching new highs and you hear about this fancy new something that has grown wildly, "but the best is yet to come". We have all been jealous of reports about the person who boasts about a wildly successful return. Being envious has a similar emotional profile as fear. We ground ourselves by ensuring the statement of financial purpose, core values and desired future state are all still representative. Below is a simple example:

Statement of Financial Purpose:

Time with my family, creating lasting memories.

Core Values:

Short term liquidity and long term growth:

Liquidity to ensure we are able to take advantage of short term opportunities.

Long term growth to ensure we have the opportunity to provide a solid foundation for our children.

Desired Future State:

We will likely not retire in the traditional sense, but will be able to take on consulting and or project based challenges as we move into the advanced stage of our careers.

Our Children will have the opportunity to have their education paid for, and a downpayment for a home when they are ready.

Our children will be prepared to receive their inheritance and understand their roles and responsibilities that accompany this succession.

If something was to happen to one of us the surviving spouse would have the financial support to shoulder the added responsibilities.

If something were to happen to me my business partner would be able to continue to operate without financial hardship.

The current environment is focused on inflation which is at a multi-decade high. This has spurred the central banks to increase their rates which makes borrowing more expensive, not just for individuals, but for corporations and businesses as well.

The uncertainty caused by these developments has caused, and will likely continue to cause turmoil in the equity markets. There is no simple action that everyone should follow - it is highly personalized, based on your values and your desired future state.

If you are struggling with finding clarity, you are not alone. If you want to talk through your personal situation - me and my team are here to help bring you above the fog and get a sense of what all this actually means to your specific situation. You can also subscribe to the full newsletter for market commentary and additional resources on my website: www.morrismacleod.com