At RZH Advisors, we love celebrating milestones with our clients, friends, and team members.
Celebrating New Beginnings
The RZH family is thrilled to announce the arrival of three beautiful new bundles of joy! Please join us in congratulating our team members and their families on these joyous occasions:
As November approaches, it’s natural to wonder about the impact of presidential elections on investment strategies. Every four years, the political landscape undergoes a potential seismic shift, and investors often brace themselves for possible market turbulence. During presidential election years, a common question we hear, regardless of your political party affiliation is: what happens to the markets and my portfolio if the winning candidate does not align with my political views? And since we have no way to know for certain who will win, should we consider changing our investment plan? While we acknowledge the concerns inherent in asking these questions, it is essential to separate the noise from the facts. It’s time to debunk the myth that the political party in power determines stock market success.
The Myth of Party Influence
One common misconception is that the political affiliation of the incoming president significantly influences stock market performance. Historically, there’s been a prevailing belief that Republican administrations are better for markets due to their pro-business policies. Conversely, some argue that Democratic leadership fosters economic growth, which translates into positive market outcomes. Empirical evidence shows that the stock market is indifferent to which political party occupies the White House and numerous studies have debunked the notion that stock market returns are tied to the party affiliation of the president[1]. The S&P 500 index, which represents a broad cross-section of the U.S. equity market, has demonstrated remarkable resilience, irrespective of who sits in the Oval Office.
Data-Driven Insights
An investment of $1,000 in the S&P 500 when Franklin Delanor Roosevelt (“FDR”) was elected president in 1933 would have grown to over $21,000,000 by December 31, 2023[2]. During that time there have been seven Republican and eight Democratic presidents. Looking at this another way, the annualized median performance of the Dow Jones Industrial Average (“DJIA”) since the early 1900s was 7.9% under Republican Presidents and 7.7% under Democratic Presidents[3]. Regardless of which political party occupies the White House, the stock market has exhibited positive returns in the vast majority of cases. This resilience underscores corporate America’s ability to adapt to changing political landscapes and economic policies.
SOURCES: Capital Group, RIMES, Standard & Poor’s. Chart illustrates the growth of a hypothetical $1,000 investment in S&P 500 Index beginning on March 4, 1933 (the date of Franklin D. Roosevelt’s first inauguration) through December 31, 2023, assuming dividend reinvest, and taxes paid from an alternative source. Dates of party control are based on inauguration dates. Values are based on total returns in USD shown on a logarithmic scale. Investors cannot directly purchase an index. Past performance does not guarantee future results and individual investment performance will vary.
Simply put, investment markets hate uncertainty, and the backdrop of a presidential election year creates a heightened level of volatility in the capital markets. Historically, this trend persists through the campaigns and ultimately the volatility reduces further once a president is elected. It’s important to note that regardless of which party is elected, after the election, markets have often exhibited upwards trajectories, reaffirming the resilience of a long-term investment strategy. So far 2024 has held true to historical trends with increased volatility in the earlier stages of the year with both the Dow Jones Industrial Average and the S&P 500 reaching new all-time highs[4]. As fewer questions remain and more becomes clear, we expected that this heightened level of volatility may subside.
Factors Driving Market Performance
Instead of fixating on political rhetoric, it is important to adhere to the principles outlined in your financial plan. Investors can mitigate the impact of election-related volatility by maintaining a diversified portfolio and staying committed to a long-term investment strategy.
While presidential elections may introduce temporary fluctuations in market sentiment, it’s crucial to maintain a disciplined approach to investing. Rather than attempting to time the market based on political conjecture, we believe investors should prioritize asset allocation, risk management, and financial planning objectives. In the customized plans we’ve crafted for each of you, we’ve established a unique strategy tailored to help you achieve your financial goals. The key is to stick to this strategy, even through investment uncertainties and periods of market volatility. The financial controls that we build into our portfolio allow our clients to weather these bouts of volatility and not have to trade during this uncertainty.
Conclusion
We remind clients that investing in a presidential election year requires a solid financial plan, a focus on long-term fundamentals, and adhering to a well-defined strategy, regardless of who occupies the White House. While political headlines may grab attention, they often have limited bearing on overall market performance. By staying informed, maintaining a diversified portfolio, and adhering to sound investment principles, we can help you better manage election-related uncertainties.
We are always here for you, thank you for being our clients and trusting us with your financial journey, it is a genuine privilege to serve you.
If you are interested in learning more, Capital Group does a great job of compiling this data every 4 years. Please click here to read their full report.
Best regards,
Brendan McEwan, CFP® CIMA®
Senior Financial Advisor
[1] “Investing and Politics”, BESPOKE Investment Group, 2024
[2] “Guide to Investing in an election year”, Capital Group, 2024 Edition. The calculation assumes a hypothetical $1,000 investment in the S&P 500 Index beginning on March 4, 1933 (the date of Franklin D. Roosevelt’s first inauguration) through December 31, 2023, assuming dividend reinvest, and taxes paid from an alternative source. Full calculation methodology available upon request. Investors cannot purchase an index directly.
[3] “Investing and Politics”, BESPOKE Investment Group, 2024. DJIA returns Under US Presidents Since 1900. Percent change is calculated through for the period of September 14, 1901 – March 20, 2024.
[4] “S&P 500 jumps 1% to post record close, ending session above 5,300 for the first time”. May 15, 2024. https://www.cnbc.com/2024/05/14/stock-market-today-live-updates.html.
RZH Advisors proudly announces that Carl Zuckerberg, Co-Founder and Chief Investment Strategist, has been recognized by Barron’s as one of the Top 1200 Financial Advisors for 20241. This prestigious accolade is a testament to Carl’s dedication to our clients – striving to continuously improve their lives and strengthen their financial position.
Barron’s, one of the most respected publications in the financial industry, conducts an extensive review process to identify the top financial advisors across the United States. Their methodology includes assessing factors such as quality of practice, business growth, regulatory record, assets under management, and philanthropic work. Carl’s inclusion in this notable list highlights both his and RZH’s commitment to clients and their financial success.
With over 30 years of experience in the financial services industry, Carl guides the firm’s investment management and portfolio construction process. He is known for his holistic, yet disciplined, approach to investment management and his ability to demystify investing while crafting solutions to meet each client’s unique needs and goals. And, just like the numerous accolades Carl has received in the past, this recognition belongs to every team member at RZH.
“I am grateful to be named to Barron’s Top 1200 Financial Advisors for 2024,” said Carl. “However, this recognition really reflects the trust and confidence that our clients have placed in all of us at RZH Advisors. It is truly our remarkably talented team, who collectively, produce such outstanding results for those we serve.”
Congratulations Carl and thank you for helping RZH clients embrace life to the full extent of their wealth!
To learn more about the methodology used by Barrons for the Top 1200 Financial Advisors ranking please click HERE.
1. Barron’s “2024 Top 1200 Advisor Rankings by State” was published on March 15, 2024, based on assets under management, revenue produced for the firm, regulatory record, quality of practice, and philanthropic work as of September 30, 2023. The data used in this ranking is provided by individual advisors in conjunction with regulatory databases. No compensation was exchanged in consideration for this ranking.
“In spite of the cost of living, it’s still popular” – Kathy Norris
This witticism aptly captures the current state of the U.S. economy, where inflation remains persistently high. Americans, renowned for their robust spending habits, continue to prioritize maintaining their lifestyles, further complicating economic predictions.
This has led to increased market volatility over the last few weeks as pundits extrapolate this to mean that the Federal Reserve will be slower to lower interest rates than previously anticipated. Through March of this year, the stock market rallied assuming Fed rate cuts were imminent. However, an abrupt change in perception led to a recent 5.3% decline in stock values over three weeks, with bond prices also dropping as interest rates rose.1
I usually find it less necessary to write newsletters during bullish market phases. Research indicates that overloading investors with information can sometimes lead to unneeded anxiety. As Warren Buffet’s longtime partner, Charlie Munger, once said “the first rule of compounding is to never interrupt it unnecessarily.” (Charlie was a national treasure who we sadly lost in November, just days away from his 100th birthday. Warren credits Charlie with much of Berkshire Hathaway’s success.)
So, when my phone started ringing more than usual lately, with clients nervous about this new (downward) volatility, I knew it was time to reach out.
The Fed’s goal going into 2022 was to defeat inflation through “demand destruction.” They took a sledgehammer to the economy, using 11 interest rate hikes and quantitative tightening to break inflation. The Fed rate hikes which began on March 17, 2022, also created a dreaded “inverted yield curve” which the media assured us would throw the country into a recession at any moment. We were told to brace for a “hard landing”. Robert Shiller paraded around on TV, his CAPE Ratio – which implied that stocks were grossly overvalued, was surely correct and famed money manager Jeremy Grantham (on August 31, 2022) said this would lead to “an epic crash.” Since then, other headlines have tried to separate our clients from their investments and seek the perceived safety of cash.
The inflation mania peaked soon after, in the fall of 2022, and despite these dire forecasts our advice remained steadfast. I wrote a newsletter on September 27, 2022, reiterating our continued guidance to stay focused, continue working the plan, and not change course because of doomsday predictions. I wrote: “I believe that making investment policy based on predictions, instead of evidence, is very dangerous.” “The worst plan is the one not followed – especially in the face of provocation such as this market environment and media hysteria.” Current events, and the market’s gyrations in response, are the third rail of investing.
Fortunately, RZH clients heeded this advice and those in the public who panicked, adrift without an advisor, missed out on a stock market advance of 45% since my September 2022 newsletter.2 Yes…over the next 19 months or so, the S&P 500 (with dividends) produced over four years’ worth of average returns.3 There was no “landing” at all, hard or soft. The US economy just kept cruising, corporate earnings kept growing and stock prices followed suit.
This reinforces our philosophy that a thoughtfully crafted, plan-driven, stress-tested portfolio makes current events irrelevant to what we do. And it further reinforces our mantra; the markets cannot be consistently timed, and the economy cannot be reliably forecast.
As we face 2024, we expect continued volatility, influenced by global conflicts, domestic unrest, sticky inflation, and a presidential election which is sure to be a spectacle.
So, during such times of fear and uncertainty, it is always prudent to revisit some core tenants of our investment philosophy:
General Principles of the RZH Investment Philosophy
Our mission remains – to help our clients and their families embrace life to the full extent of their wealth, knowing they have a plan in place which makes short-term market fluctuations irrelevant to their financial security.
We are always here for you and continuously available to discuss market dynamics or how your financial plan and portfolio is prepared for future uncertainties.
Thank you for being our clients and trusting us with your financial journey, it is a genuine privilege to serve you.
Best wishes for a wonderful summer!
Carl J. Zuckerberg, CFP®, AIF®, CIMA®
Principal, Chief Investment Strategist
1. Performance calculated using Vanguard S&P 500 ETF (“VOO”) closing price as proxy for S&P 500 Index for the period March 28, 2024, through April 19, 2024, assuming dividend reinvest. Full calculation methodology available upon request.
2. Performance calculated using Vanguard S&P 500 ETF (“VOO”) closing price as proxy for S&P 500 Index for the period September 27, 2022, through May 6, 2024, assuming dividend reinvest. Full calculation methodology available upon request.
3. “Average returns” refers to average annual returns of the S&P 500 index from 1926-2023 of 10.1% as published in the Dimensional Fund Advisors Matrix Book, Historical Returns Data.
RZH Advisors is pleased to announce that Carl Zuckerberg, Founding Principal, has been named to the inaugural 2024 InvestmentNews Top Financial Advisors ranking. This list highlights some of the industry’s finest advisors who provide clients with trusted advice, unbiased investment guidance and comprehensive wealth management.
As a recognized authority within the investment advisor community, InvestmentNews conducted an exhaustive research study spanning 12 months to identify and showcase the industry’s top performers. In this thorough assessment, Carl was ranked as one of the top 10 financial advisors in the industry.
As Carl puts it, this award is really a reflection of RZH. “I must emphasize that this achievement is not solely mine to claim. It is a testament to the remarkable team of professionals at RZH Advisors. Our success in delivering impactful results for our clients stems from the collective efforts of our talented and dedicated individuals. No one person can take credit for our accomplishments. It is truly a team effort, day in and day out. Thank you to everyone at RZH!”
At RZH, we take pride in our outstanding team and the camaraderie we share as we pursue our mission of helping clients embrace life to the full extent of their wealth. Serving our clients is a privilege we hold dear, and we are grateful for the opportunity to be a part of their journey.
The full ranking methodology can be found here.
RZH Advisors is pleased to announce the appointment of Lauren Rowland as Partner. This promotion reflects Lauren’s outstanding contributions to our clients and the firm over the past three years.
Lauren joined RZH Advisors in 2020 and quickly established herself as a key member of the team. With a strong background in financial planning and a deep understanding of the unique challenges faced by high-net-worth individuals, Lauren has consistently demonstrated an ability to navigate complex financial situations.
Lauren is especially adept at understanding a client’s true dreams and aspirations, crafting bespoke solutions to achieve these goals. This focus and dedication has played a pivotal role in solidifying RZH Advisors’ reputation as a trusted partner in wealth management allowing our clients to “Embrace Life to the Full Extent of their Wealth”.
“Lauren Rowland’s promotion to Partner is a testament to her exceptional skills, commitment, and the value she brings to our clients,” said Carl Zuckerberg, Chief Investment Strategist & Co-Founder. Spencer Cooper, Chief Wealth Strategist continues, “Her ability to tackle complex financial planning needs with precision and creativity has been a driving force behind our firm’s success. We are confident that Lauren will continue to excel in her new role and contribute to the growth of RZH Advisors.”
Lauren’s promotion reflects RZH Advisors’ commitment to recognizing and nurturing talent within the organization. As a Partner, Lauren will assume new management responsibilities and play a key role in shaping the firm’s strategic direction, fostering client relationships, and contributing to the overall success of RZH Advisors and our clients.
On Friday, January 19, the S&P 500 Index closed at a record high, completing the bear market cycle, and ending a two-year period below its last peak on January 3, 20221. The S&P 500 continued moving higher this week. While a two-year gap between closing highs might seem lengthy, historically, it is shorter than average.
The chart below illustrates S&P 500 bear markets since 1950. It shows that the duration of the 2022 bear market was milder than average. The average peak-to-trough for bear markets has historically been 391 days, while the 2022 bear market only lasted 282 days. The average number of days to new highs has historically been 1,166 days, however, this market recaptured its high in only 746 days.
“New All-Time Highs After a Bear Market”. January 21, 2024. https://awealthofcommonsense.com/2024/01/new-all-time-highs-after-a-bear-market/
While the 2022 bear market was less severe than average, if you were to read the predictions of many highly respected “experts”, you may not have believed this was possible… “Why a global recession is inevitable in 2023”was the actual headline of an article in The Economist written on November 18th, 2022.2 We referenced this in our February 2023 newsletter titled “The Recession Guessing Game”. In this newsletter we state, “If past predictions are any indication, 2023 will likely surprise us with results far from consensus. No one has ever been able to consistently predict what will happen in the economy.” We continue to believe that the only proven strategy to endure the ups and downs of the markets is to approach investing with a well-thought-out plan and disciplined approach.
In addition to The Economist’s headline, other dire predictions had people nervous about investing last year as well. Jeremy Grantham predicted that, “The S&P 500 could tank by over 50%…”3 Jamie Dimon warned Americans to “brace yourself for an economic hurricane…”4 Finally, Goldman Sachs predicted that the bear market would “get deeper in 2023…”5
Fortunately, these ominous predictions did not materialize, and resilient US companies were able to persevere. Similar predictions continue to make headlines today, but the truth remains – predicting how the markets will perform is a difficult task. As Yogi Berra stated: “It is difficult to make predictions, especially about the future.” RZH continues to abide by our mantra; the economy cannot be consistently forecast, and the markets cannot be consistently timed.
Fortunately, historical trends do provide some guidance and reasons for optimism. Throughout history, instances where there’s been a minimum one-year gap between S&P 500 highs have typically resulted in strong performance in the subsequent year. Since 1950, the average gain of the S&P 500 for the 12 months following a new high with a gap of a year or more was 14%.6
In June 2023, we published a newsletter titled “The Stealth Bull Market”, which discussed the remarkable turnaround of the S&P 500 amidst various negative factors, including inflation, Federal Reserve interest rate speculation, a banking crisis, US/China tensions, and a debt ceiling emergency. Several of these issues remain unresolved, with the addition of the Israel–Hamas war and uncertainties related to the upcoming US presidential election. Despite these ongoing uncertainties and negative news, the S&P 500 continues to reach new highs. While these topics may dominate headlines in the coming year, we remain optimistic that the financial plans we’ve developed for our clients position them to continue living their best lives, regardless of short-term market volatility.
Our goal remains to help our clients and their families reach their long-term goals, knowing they have a plan in place, making short-term market fluctuations irrelevant to their financial security. We are always here for you and encourage you to reach out for more perspective on market cycles or insights into how your portfolio is positioned to deal with an unpredictable future.
Thank you for being our clients!
Best Regards,
Brendan McEwan CFP® CIMA®
Senior Financial Advisor
[1] “S&P 500 Historical Performance”. https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC
[2] “Why a Global Recession is Inevitable in 2023”. November 18, 2022. https://www.economist.com/the-world-ahead/2022/11/18/why-a-global-recession-is-inevitable-in-2023
[3] “Brace for the S&P 500 to plunge 50% and a painful recession to strike as the ‘everything bubble’ bursts, elite investor Jeremy Grantham warns”. March 21, 2023. https://finance.yahoo.com/news/brace-p-500-plunge-50-134507664.html
[4] “Jamie Dimon says ‘brace yourself’ for an economic hurricane caused by the Fed and Ukraine war”. June 1, 2022. https://www.cnbc.com/2022/06/01/jamie-dimon-says-brace-yourself-for-an-economic-hurricane-caused-by-the-fed-and-ukraine-war.html
[5] “The Bear Market in Global Stocks is Forecast to Get Deeper in 2023”. November 23, 2022. https://www.goldmansachs.com/intelligence/pages/why-the-bear-market-in-global-stocks-is-forecast-to-get-deeper-in-2023.html
[6] “The stock market took a long pause between record highs. History says this is great news.” January 23, 2024. https://finance.yahoo.com/news/the-stock-market-took-a-long-pause-between-record-highs-history-says-this-is-great-news-110401610.html
I’m not sure if anyone noticed, but the US stock market (as measured by the Dow Jones Industrial Average) just hit an ALL-TIME HIGH! Similarly, the broader S&P 500 index is nearly there as well, sitting just about 1% below its record high.[1]
As a friend of RZH, you know this comes as no surprise to me. This contrasts with the media’s reaction, which has been one of surprise, especially given their focus on negative narratives during the S&P 500’s impressive 34% total return since last fall.[2] (My last newsletter lists many of the reasons you were told not to invest in 2023)
It’s not surprising that Wall Street banks have been relatively quiet about this as well – considering their forecasts[3] for the S&P 500’s 2023 closing (The Index reached 4,738 as of Thursday, December 14, 2023)
Clients of RZH participated fully in this rebound. However, the last 14 months have served as a stark reminder of the risks of hesitancy, as the average investor probably thought that it was best to “wait for the dust to settle.”
Impressively, this recovery occurred WITHOUT government stimulus, lower interest rates, or corporate tax cuts. It took place amidst looming recession fears, the highest interest rates in two decades, and inflation levels not seen since the 1970s. Once again, America’s corporations demonstrated their resilience and ability to overcome, innovate, and manage their way through challenging times.
What’s next? Your guess is as good as mine, as we head into a presidential election year which is guaranteed to be a circus. What I do know is that the markets cannot be consistently timed and the economy cannot be consistently forecast. Yet, the enduring strength of equities as the core of your portfolio is undeniable. More importantly, having a thoughtful plan in place makes all the difference when it comes to navigating a period like 2022-2023.
Thank you for entrusting us with your planning and helping steward your important assets. It is an honor and privilege we cherish daily.
The entire team at RZH extends our best wishes to you and your loved ones for a joyous holiday season and a prosperous New Year!
Carl J. Zuckerberg, CFP®, AIF®, CIMA®
Principal, Chief Investment Strategist
Please click here for important disclosure information.
[1] Yahoo! Finance as of December 14, 2023.
[2] Yahoo! Finance, S&P 500 Historical Data from October 12, 2022 through December 14, 2023, including reinvested dividends.
[3] Ro, Sam. “Wall Street’s 2023 outlook for stocks.” December 4, 2022, https://www.tker.co/p/wall-street-2023-stock-market-outlook
We are excited to share that RZH Advisors has earned a spot on the prestigious 2023 Forbes|SHOOK list of “America’s Top RIA Firms.” Out of over 15,000 RIA (Registered Investment Advisor) firms nationwide, we have been ranked within the top 1%. This honor reflects our team’s unwavering commitment, hard work and capabilities, as well as the invaluable trust and confidence our clients have bestowed upon us.
At RZH, our goal has always been to deliver tailor-made, thoughtful financial guidance that caters to the distinct needs of each client. Being recognized by Forbes|SHOOK not only celebrates our achievements thus far but also inspires us to continue setting higher standards and help our clients embrace life to the full extent of their wealth.
A heartfelt THANK YOU to our clients for your trust and confidence, which means the world to us. We also wish to express our deepest gratitude to our dedicated team members, whose tireless efforts, great skill, and steadfast dedication to client success are pivotal in attaining this accolade.
To review the complete Forbes|SHOOK list of Top RIA Firms and important ranking methodology please CLICK HERE.
Best regards,
Carl J. Zuckerberg, CFP®, AIF®, CIMA®
Principal, Chief Investment Strategist
Click here to read important disclosure information regarding rankings methodology.
2023 seems to have been an exhausting year in the markets and for the world in general. The Israel-Hamas conflict has cast a dark cloud of uncertainty over the world and challenged the strength and legitimacy of this year’s stock market recovery. The following is a list of challenges the market has contended with in 2023:
The media, with its penchant for sensationalism, has magnified each of these issues, inducing fear among investors and testing their risk appetite. The phrase “This time is different,” often a red flag in investing circles, has been heard all too frequently this year.
Yet, with all of this negativity and pessimism, the greatest companies have once again shown their resilience, ingenuity and resourcefulness to adapt and overcome these challenges. An index of some of the largest and best-managed companies in the world (the S&P 500) has risen 28% from its low last October and almost 20% this year.1 On January 11th, I wrote “Don’t be surprised… if the markets turn higher well in advance of things settling down. This is normally how market recoveries start as the stock market is famous for generating a strong rally well before a recession is over and before Fed policymakers end their tightening cycle.” Still, it’s a paradox that even with a recent bull market in stocks, the prevailing sentiment among investors feels more bearish. As of this writing, we are only about 5% from the all-time high of the S&P 500.2
Such is the tumultuous journey of a dedicated, long-term equity investor. The entry ticket to an asset class that has historically delivered over 10% annual growth is the constant barrage of market volatility and apocalyptic predictions. Returns are lumpy and they can be discouraging for extended periods of time. Yet, history has shown that disciplined investors, those who eschew market timing and speculation while aligning with knowledgeable financial advisors, have seen their wealth grow exponentially. To wit:
Over the past 50 years, a period that encapsulates the investing lifespan of many reading this memo, the stock market has delivered an average annual return of about 10.3%.3 However, this journey was far from smooth. It was disrupted by 12 bear markets (declines of 20%+), each accompanied by its unique set of doomsday prophecies (aka: “This time is different”). Some of these downturns were particularly brutal, with investors seeing their portfolios decline roughly 50% during the ’73/’74, ’01/’02, and ’07/’08 market crashes. Yet, with all this destruction (12 bear markets and losing half your money three times), $1,000,000 grew to about $133,000,000.4 Yes, rub your eyes, you read that correctly… $133 million!
However, successful investing is not just about waiting it out and staying the course – far from it. I believe there are two overlooked, but vitally important, virtues associated with successful investing and multi-generational wealth creation: Humility and Optimism
Humility entails recognizing our limitations in predicting future events, be it unforeseen events like 9-11, the Financial Crisis of 2008, the COVID pandemic, the Silicon Valley Bank collapse or even Taylor Swift dating Travis Kelce.
Optimism, on the other hand, is an unwavering belief in a brighter future, underpinned by the conviction that challenges are transient and that “this too shall pass.” To grow $1 million dollars into $133 million over the last 50 years all you had to do…was believe in America and our relentless ability to adapt and innovate.
These are obviously learned skills as human nature is not programmed to be so thoughtful and carefree. Our instinct to avoid pain and self-preserve is very strong. These realizations have informed our financial planning and portfolio construction immensely. This is why we spend so much time getting to know each client intimately before crafting a plan for their assets. Our process involves extensive stress testing and scenario modeling. We then incorporate risk reduction redundancies and financial controls into our planning and portfolios. These tools empower us to fulfill our mission of helping our clients embrace life to the full extent of their wealth.
As we finish out 2023 and head into the holidays, we remain hopeful for more peaceful and civil times ahead with the humility that future events are unpredictable. Most importantly, all of us at RZH are immensely grateful for your friendship and support as we navigate this uncertain world together. The entire team at RZH is committed to standing by your side, and guiding you every step of the way. Your trust in us is a privilege, and we’re deeply grateful for it.
With warmest regards for a wonderful Thanksgiving,
Carl J. Zuckerberg, CFP®, AIF®, CIMA®
Principal, Chief Investment Strategist
Important Note Regarding RZH Investment Methodology: Illustrating the benefits of long-term investing by showing 50-year returns is easy to do and almost cliché at this point. We realize that not everyone has a 50-year time horizon. In practice, while we firmly believe that the economy cannot be consistently forecast nor markets consistently timed, we are acutely aware of the current environment and market dynamics. This means we will be strategic within asset classes and take advantage of evolving opportunities or reduce exposure to areas we believe have a greater chance of underperforming based on historical precedent or current observations.
For instance, there are many silver linings this year that we have leaned into. Most notably is that money market funds yield over 5%, bond yields of 5.5%+ are available with daily liquidity and no risk through US T-Bills, and growth stocks (RZH’s largest equity category) have risen over 35% due to the emergence of AI (artificial intelligence). Likewise, we have reduced emerging market exposure this summer and fall due to China’s declining economic health, aggressive geopolitical posturing, and autocratic risks. In the US we have reduced our allocation to small-cap stocks given their historical challenges in similar economic environments and periods of high interest rates.
Please click here for important disclosure information.
[1] Yahoo! Finance, S&P 500 Historical Data Calculator as of 11/17/2023.
[2] Yahoo! Finance, S&P 500 Historical Data Adjusted Close Price as of 01/03/2022.
[3] S&P Returns Calculator, https://dqydj.com/sp-500-return-calculator. Period shown 10/31/1973 – 10/31/2023.
[4] Assumes $1,000,000 invested on 12/31/1972 through 12/31/2022 with no additional contributions and/or withdrawals, dividend reinvest, taxes paid from an alternative source, and an assumed annual rate of return of 10.3%. Full calculation methodology available upon request.