Annual ADV Update

It’s that time of year again that we have updated our firm disclosure documents and have included a copy for your records.

Form ADV Part 2A (also known as the “brochure”) describes the investment advisory services we provide to our clients, as well as any conflicts of interest or other business practices that are inherent to your relationship with our firm and is updated on annual basis. Click to open our most recent brochure that was amended February 13, 2020 and click here for our privacy policy.

As with all documents, you are encouraged to review our disclosure brochure and to ask any questions that you may have.

You are also able to download this brochure from the SEC’s website: by searching for our firm by either its name or unique identification number which is 289906.

A Note on the Markets

It seems that the Coronavirus has finally gripped Wall Street. While this week certainly hasn’t been good as the S&P 500 has declined by about 10.5%, this is the 18th time since the stock market bottomed in 2009 that the S&P 500 is more than 5% off its high and the 9th time it is more than 10% off its high.

Of the 83,000 global cases 95% have been found in mainland China. China has implemented strict lock down protocols and as cases continue to pop up outside of China, it is expected that those countries may take similar measures to contain the virus. While US markets are just now starting to react, Chinese stocks began a similar decline in mid January and have seen some stabilization already as businesses have started to open and people begin to go back to work. That said, until the virus is controlled, no one knows what the true impact will be globally, but we can take a look at history:

  • SARS in 2003-04, also originating in China – Over 38 days, the S&P 500 declined by 12.8%
  • The bird flu epidemic in 2005-2006
  • In 2009, a new strain of swine flu
  • The Ebola outbreak in autumn of 2014
  • The mosquito-borne Zika virus outbreak in 2016-17 – the S&P 500 declined by 12.9%

On January 1st of 2003, the S&P 500 started at 879.82. Seventeen years, six epidemics and a global financial crisis later, it has closed almost three and a half times higher at 2,978.76 (this doesn’t even include the dividends earned all those years!). Since the market bottomed on Christmas Eve in 2018, the S&P 500 was up a spectacular 44%, after today’s close, the S&P 500 is still up 26% from our previous bottom! I suspect that any drop in earnings or economic activity that may occur will be short lived.

The headlines can be pretty scary stuff and the news media has no hesitancy to play on those emotions. At times like this, I want to remind you that the media has a very different agenda than you. They get paid for readers and clicks, not helping you reach your long-term goals. It’s important to remember that the planning we do on an on going basis is to prepare for events just like these, the unexpected and unpredictable.

As Warren Buffet was quoted, “The real question is: Has the 10-year or 20-year outlook for American business changed in the last 24 or 48 hours?” While world economics are more globally tied together, it’s hard to believe that long-term fundamentals have changed significantly.

As always, I welcome your inquiries on this or any other topic.