January 2022 (USA version)
Dear [FIRST NAME GOES HERE]
[personal and/or company update]
Enjoy this month's instalment of our newsletter. As always, it is packed with links that you may find interesting.
The Stock Markets
The only benchmark we focus on is our clients not running out of money and also achieving all of their financial and life goals.
The Unimportant Numbers - 1 Month ending 31 December 2021
UK - FTSE All Share Index: +4.7%
USA - S&P 500 Index: +4.5%
Global - MSCI World Index: +4.0%
South Africa - JSE All Share Index: +4.8%
The Important Numbers - 30 Years
Investing in the Great Companies of the World have produced life-changing returns for the disciplined and patient investor over the last 30 years, the average length of a two-person retirement.
UK - FTSE All Share Index: +8.0% per annum
USA - S&P 500 Index: +10.2% per annum
Global - MSCI World Index: +8.1% per annum
South Africa - JSE All Share Index: +14.4% per annum
Monthly figures are a distraction from your long term goals, we'll help you avoid the noise.
Who Do You Want To Be A Hero To?
The start of a New Year, one fresh with possibilities, seems like the perfect time to turn over a new leaf. We know that there are things we should start doing, things we could do better, and things we probably need to stop.
However, from experience, we know that our resolutions are likely to be forgotten by the start of February (or sooner). Before we know it, the usual concerns and pressures of daily life return, and our carefully created list gets put aside.
New insight often comes from asking new and better questions. So, if starting another year with a list of habits you'd like to develop isn't inspiring you, we suggest that you ask yourself this question: Who do you want to be a hero to?
Being Useful
We've all had personal heroes or people who’ve had a significant impact on our lives. These are people who have shaped and guided us to become the people we are today. Some are still present today, adding tremendous value to our lives in various ways. These are people whom we would do anything for.
Asking yourself whose lives you would like to have a similar impact on cuts away a lot of distraction and noise. You immediately know what to focus on and how you can contribute uniquely to the progress being made in that person's life. It gives you a true north.
Rather than a list of habits that may impress others before you eventually stop doing them, can you narrow down and define your purpose in life by identifying the people you genuinely care about and how you can create value for them?
Every time you act in this way, being useful to others, who you are becomes clearer to you. In the process, your own capabilities grow, allowing you to become even more valuable to the people that matter.
You Can Be A Hero In All Areas Of Life
Being a hero is a way of looking at your relationships in everyday situations. It's about being fascinated and motivated to help someone else get to where they're trying to go.
This framework can be helpful in all areas of our lives, helping us to become better people at home, at work, and in our societies.
You may want to be a hero to a spouse, child, other family members, or close friends. Turning your focus to how you can be useful to them forces you to consider what they need rather than what you want. With this mindset, it's almost impossible to live selfishly.
At work, it will set the foundations for being a better colleague or manager and help you to serve your clients better. Thinking about how you can be a hero to your clients or customers helps to focus your intentions. In society, you may identify marginalised people or causes you can be a hero to in a small or big way.
In summary, by changing your thinking, you can see your life not as a list of things you should be doing but as a list of people you strive to be more and more useful to.
Serving Others
We hope that as you start the year with clarity about how you can become more and more valuable to those you care about, you become free from the self-centeredness that seems to trap so many others in today's world.
We want you to know that we want to be a hero to you and that we are always available for any needs you may have. We look forward to continuing our meaningful engagement with you in the coming year and hope that 2022 will be a prosperous one for you and your families.
🐉 The Real Enemy
The number one enemy of the long-term investor is the financial dragon called inflation (the silent but steady increase of prices over time).
Over the last 30 years (about the length of an average two-person retirement), inflation in the USA has resulted in an item costing $1 in 1992 now costing $2.02 in 2022. Your purchasing power has halved!
But $1 invested in the US share market is worth $11.43 today, and that's ignoring 30 years of dividends! And this during a three-decade period that included the dot-com bubble, the great financial crisis, and the Covid-19 pandemic.
And what did you have to do to earn this? Two (behavioural) things:
1. Invest and stare out of the window (much harder than it sounds).
2. Be willing to see your investment value decrease by about -15% on average every year without being panicked into selling. Think of the yearly declines as hurricanes, unpleasant but they pass.
Guiding you through these periods of volatility is why we exist.
🛑 Ignore the media
The media is not a friend of the disciplined and patient investor. Ignoring the key determinants of lifetime investor returns, the media prefer to focus on short-term returns, market predictions, and negative news.
We present the following as an antidote to the onslaught of negative news:
13 Animals That Made a Comeback in 2021
📰 Read
The Secret To Better Habits in 2022 [10 minutes]. The only way to excellence is through repeated action.
What We Control, and What We Don't [3 minutes]. Which one are you focusing on?
How to Worry Less About Money [5 minutes]. Our anxiety reflects deeper concerns that money can’t solve.
The Many Worlds of Enough [17 minutes]. Enough is elusive because when you reach it, you’re no longer the person that once desired it.
Always Ask for What You Want [4 minutes]. The right kind of risks are asymmetrical.
Are You Outcome-Focused? [9 minutes]. Focus on the process, not the outcome.
I Have A Few Questions [2 minutes]. Good questions for anyone to ask at the start of a new year.
🎧 Listen
Money is a story [24 minutes]. What story do you tell yourself?
🍿 Watch
🖼️ A Picture is Worth a 1000 Words
The World’s Biggest Startups: Top Unicorns of 2021
We hope that you enjoyed this month’s newsletter. Please let us know what you enjoyed, or write back with any of your own news.
Please forward to a friend, relative, or colleague.
As always, we're here for you.
See you next month,