RZH Announcement: Welcoming New RZH Team Members

Dear RZH Community,

At RZH Advisors, we believe that our clients are at the heart of everything we do. We are dedicated to consistently exceeding your expectations and remain committed to helping you embrace life to the full extent of your wealth.

In pursuit of our mission, we are thrilled to introduce three new exceptional team members who have joined our firm in the last 18 months. We are confident these talented individuals will help us bolster our wealth management offering and help ensure outstanding client service and experience.

To strengthen our team we have hired the following individuals who bring a wealth of expertise and a passion for client success to RZH. We are proud to introduce:

Brendan McEwan, Senior Financial Advisor, CFP®

Brendan is a seasoned financial advisor who joined us in March 2022, after relocating to Connecticut with his wife and young daughter. Brendan brings more than twelve years of experience working with high-net-worth individuals and families, celebrities, and professional athletes. Brendan’s passion is to help clients understand complex financial topics.

At RZH, Brendan works closely with Carl and Spencer to develop our comprehensive financial plans and has been instrumental in educating our younger clientele as we embark on the single largest generational transfer of wealth in our lifetime.

Brendan is also an avid rower and competes at the Head of the Charles Regatta in Boston every year! We are thrilled to have Brendan on our team, and for those who haven’t met him yet, we’re looking forward to making an introduction very soon!

Jean Paul Atallah, Chief Operating Officer and Chief Compliance Officer

Absorbing the roles and responsibilities of business operations and compliance formerly overseen by Carl, Spencer, and Dana (before her retirement), Jean Paul joined RZH in June 2022, to consolidate these responsibilities into one department. By centralizing our operations, compliance, accounting and human resources obligations, Carl and Spencer have increased the bandwidth dedicated to our clients and their holistic wealth management needs.

Jean Paul brings more than ten years of experience in optimizing operations for large wealth management firms. He has been instrumental in fine-tuning our operations and ensuring that all our systems, resources and team members have the tools and technology needed to work efficiently and create lasting impressions with our clients.

Jean Paul is proud of his Lebanese heritage; he speaks fluent Arabic and as a life-long resident of Connecticut, remains actively involved in the large and vibrant Lebanese community in Greater Waterbury.

Rita Levon, Client Service Associate

Rita is the newest member of the RZH team, joining us in March 2023. With more than ten years of financial services and banking experience, Rita is responsible for supporting the RZH partners and financial advisors by coordinating the needs of our clients.

Prior to joining RZH, Rita was a client service associate at Union Savings Bank and Newtown Savings Bank. Her best trait is her ability to connect with people; she looks forward to building lasting relationships with our clients. She is detail-oriented and will assist Susan and Candice with various client servicing needs.

Rita is a Connecticut native, growing up in Danbury. In her spare time, she loves spending time outdoors with her two children and enjoys going to the beach, hiking, gardening, and practicing yoga. 

Looking Forward to the Future

Brendan, Jean Paul, and Rita have demonstrated that they share our core values and are committed to upholding our company’s principles of exceptional client service. We are confident that their combined experience and dedication will leave a lasting impression on all RZH clients.

Before we look forward to the future, we would be remiss not to express our heartfelt gratitude and thanks to our existing team members who have contributed immensely to our success. Their unwavering commitment and hard work have been instrumental in achieving our goals, and we look forward to accomplishing even more together.

RZH Advisors remains laser-focused on client service, maintaining strong relationships, and pursuing new opportunities. To that end, we have been working diligently to incorporate new internal technologies and processes, allowing us to optimize and streamline the operational side of our business. We believe that we have some of the most cutting-edge technology in the marketplace, freeing us from operational burdens and allowing us to bring you enhanced client experiences and offerings.

Our most recent initiative is the onboarding of a state-of-the-art Client Relationship Management (“CRM”) system that will empower us with a holistic Client 360 approach. This new CRM works with our existing technology to automate certain administrative tasks, giving us more time for client interactions. We are excited about the future and confident that our expanded team and enhanced technology will greatly benefit our clients.

And finally, to our cherished clients, thank you for your ongoing trust and support during these increasingly volatile market cycles. RZH Advisors would not be the firm we are today without your support, and we look forward to many, many more years of continued partnership.

Best regards,

Carl and Spencer

RZH News – SVB Special Memo

The biggest story in the markets this week was the rapid collapse of Silicon Valley Bank (SVB), the 16th largest bank in the country. This was the second-largest bank failure in US history. SVB did business primarily with the technology and venture capital industry. (If you’d like to know why this happened, please feel free to call us or read this piece by Fidelity: Click Here)


Below are a few important pieces of information for RZH clients:

  • RZH does not conduct business with SVB and RZH has no known exposure to this event.
  • The investments RZH uses for our clients do not have any direct exposure to SVB.
  • Our custodian, Fidelity, has informed us that the money market funds used in your accounts do not have any exposure to SVB.

As is often the case during the early stages of such an event we are dealing with incomplete and imperfect information – we will learn much more in the days ahead. However, according to Jurrien Timmer, Director of Global Macro at Fidelity, “The good news is that this seems to be an isolated incident, or at least a problem that may be limited to some smaller banks…In my view, this does not appear to be a situation that could become systemic, like the sub-prime mortgage collapse did in 2007.”

Cash deposits at US banks are insured up to $250,000 per depositor, per bank ($250,000 per person / $500,000 per couple). If you are worried about the amount of cash held at your local bank, please call us as we have other solutions available. Fidelity’s money market funds are currently yielding over 4% and we can buy short-term US Treasury bonds yielding around 5%.

RZH will be monitoring this situation closely and will keep you informed of any actions we believe are prudent or necessary. Please feel free to reach out to us with any questions or to discuss this further.

Best regards,

Carl J. Zuckerberg, CFP®, AIF®, CIMA®
Principal, Chief Investment Strategist

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RZH Insights – A Roller Coaster of a Riddle

What goes down 12%, then up 11%, then down 20%, then up 17%, then down 9%, then up 5% then down 11%? You unfortunately already know the answer…it’s this year’s stock market! These are the actual movements since January 1st, leaving the S&P 500 down 22% for the year.

Are you exhausted yet? You are not alone, most RZH clients are as well.

For an explanation of why this is happening please refer to my Q2 memo HERE. Since then, we’ve had even worse inflation news and an even stronger response from the Federal Reserve which has triggered this latest downturn. The market is adjusting to higher interest rates, less liquidity, and the realization that the era of the “Fed put” is over.

Is there any precedent for this – yes:

  • There have been 14 bear markets (including this one) and 13 recessions since World War II – an average of one about every 6 years.
  • The average bear market decline is -32.7% which implies that this bear market could see further downside. I would not be surprised to see this, especially given the myriad of global geopolitical risks, continued inflation surprises, and the Fed’s desire to remove liquidity from the system.
  • The good news is that the average bear market lasts 367 days, so we may already be 75% of the way through this one.
  • A silver lining is that you can finally earn some interest on cash and bonds. A two-year Treasury bond yields over 4% – up from .26% just a year ago

Each bear market and recession is unique in its own way. This one is unlike anything we’ve seen before given the confluence of the pandemic, excessive government stimulus, persistent inflation, European energy crisis, supply chain shocks, the Ukraine war, etc.  Every bear market causes feelings of panic and despair. They make you question your investment plan and previously held investing beliefs. All bear markets are painful – every single one of them.

Emotions are running high, and an important part of our job is to help clients reject emotional responses in favor of rational decision-making. Bear markets are when individuals and families protect their long-term wealth and ensure a more predictable future by not panicking and instead sticking to a well-designed plan. Our clients have custom-tailored financial plans whereby each dollar invested has a specific role in achieving an important personal objective. The worst plan is the one not followed, especially in the face of provocation such as this market environment and media hysteria.

Neither I (nor any other honest person) knows when this will end, but we do know that it will end. To plan any differently would be ignoring 200 years of history. I believe that forming investment policy based on predictions, instead of evidence, is very dangerous.

In the meantime, it is more important than ever to follow the pre-mentioned bear market/recession playbook: keep 1-2 years of cash flow needs on the sidelines, maintain 4-5 additional years of investment-grade short/intermediate-term bonds and own predominately large-cap, blue-chip stocks. It is equally important to keep working on your plan by rebalancing, tax-loss-harvesting, avoiding large expenses when the market is down, and investing available cash to take advantage of depressed stock prices. For more on this please re-read Dana’s Three Bucket Theory memo HERE. 

At RZH we’ve successfully navigated through many bear markets and recessions. I’m sure this won’t be the last. We are always here to talk this through with you and answer your questions. Thank you for being our clients. It is a privilege to serve you.

Best regards,

Extra content: The majority of our equity holdings are those which comprise the S&P 500 and their international counterparts. This is not a random set of stocks or merely a “passive” index. Unbeknownst to many, the S&P 500 is a thoughtfully selected and carefully managed portfolio of the largest, most soundly financed, best managed, most profitable, most innovative, and most transparent companies serving America and the world. For an insightful explanation of how to think about these stocks (versus the “stock market”) please click on THIS MEMO or ask me to walk you through a seminar I gave on this topic. The bottom line is that the long-term upward trend of stocks does not occur in a straight line. So, perhaps consider the accompanying volatility as simply the price of admission to owning an asset class that has produced compounded returns of 10% annually.

Some material, content, and statistics are derived from Ben Carlson’s blog A Wealth of Common Sense, and the Nick Murray Interactive newsletter

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RZH Insights – The Stock Market in 2022 – Bumps and Bruises

Dear Clients and Friends of RZH:

After a wonderful 2021 and an all-time high reached on January 3rd, the stock market is off to one of its worst starts ever with the S&P 500 falling 9% in January. Small cap stocks have declined 14% and the tech-focused NASDAQ has dropped 15%.

All of us at RZH understand how stressful this is and why you may be worried. Volatility of this magnitude can certainly have you upset about lower portfolio values and make you potentially question your plan.

The cause of this volatility has to do with investor concerns over how the Federal Reserve (the Fed) is planning to fight inflation, which is at a 40-year high. Specifically, investors worry about the Fed’s ability to temper escalating inflation without hampering the growing economy. Some fear the Fed has been too slow to act and will launch an aggressive rate-hike strategy. And if interest rates rise significantly, they also worry the economy and corporate earnings may suffer. Higher interest rates make it more expensive for people to borrow money for purchases such as homes, cars, and major appliances. It also leads to higher costs for companies to finance new plants, equipment, and acquisitions. Cumulatively this stalls economic growth. Higher interest rates also cause the capital markets to reprice the value of all investments relative to one another – as interest rates are an important component of valuation models. And if this was not enough, there are still lingering supply chain issues, a persistent pandemic, and geopolitical tensions between Russia and Ukraine.

While the declines have been sudden, they are not unusual in order of magnitude. As noted in my December 2018 memo, 10% corrections happen about once every 15 months – it’s just that they don’t usually happen over four weeks! So, while the velocity of the decline is unusual the actual decline (9% so far) is not – relative to how stocks behave historically. Also, the stock market has typically reacted negatively to past interest rate hikes by the Fed. Because of this, we are not worried about “why” all of this is happening.

To illustrate this in more relevant context: over the last five years the global stock market is up 100% and the S&P 500 by itself is up 133%. A 10% correction is perfectly normal, healthy and is to be expected after such an extraordinary run.

Due to historically frequent corrections, it is important to avoid pinning your portfolio value to its all-time high value and then worry about losing money from that high point. The stock market fell 20% in late 2018 and 35% in early 2020. Pullbacks are simply a reality of being an equity investor. Since we accept that the stock market cannot be consistently timed by us or anyone, we believe that the only way to be sure of capturing the full premium return of stocks is to ride out their frequent but ultimately temporary declines.

So, what do we do at a time like this? We continue to work on your long-term plan and look for opportunities to be proactive. This could involve tax-loss harvesting, rebalancing, or deploying cash on the sidelines. We also stay disciplined to the RZH financial control of maintaining 5-7 years of cash flow needs invested in cash and bonds. This allows for consistency of lifestyle during volatile markets and avoids the need to sell stocks when it is not opportune to do so.

All of us at RZH understand our role as stewards and guardians of your capital and truly appreciate the faith and trust you have placed in us. Please know that we are completely focused on these events and are monitoring your portfolios and investments closely. Please feel free to reach out to us for an analysis of your personal portfolio and plan.

Best Regards,

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