Updates At Chaim Investment Advisors, Spring 2022

My wife Maia and I had a new baby daughter on February 28th of 2022. It’s a tradition to not publicly talk about imminent pregnancies until comments can no longer be avoided, and we decided to mostly do that this time around as we had done last time.

I took some time off from new projects for a number of weeks and am now back to 100% full time. My target had been to be back by the start of Passover and that was mostly kept to. Of course I am in no way “caught up” as will be hit on in the next section a bit as well, but I am catching up.

We now have 2 daughters under two years old- Amirah, born May 2020 and Sofia Ziva born this February. Maia is being a full time mom currently, which makes it all possible so to speak. Since the pandemic, we’ve both been parent/work from home full time and I do believe both little Sofia and Amirah have really benefited from that fact, never having known a time when mom or dad had to go “to the office” so to speak.

Thus far in 2022, I’ve worked with 29 new projects/households/businesses. Total Assets Under Advisement in these projects have totaled about $17.1 Million. There are about 15-20 additional upcoming projects staged out over the Spring upcoming as well.

That would usually be a pretty busy year. I usually think of 100 projects in a year as a lofty annual goal for a Financial Planner and it looks possible I’ll actually go over that number this year with the current trajectory.

I say that would usually be high because I also somehow managed to take 6 weeks of paternity leave in the middle (well, partial paternity leave at least). It was about that busy of a Fall/Winter end of 2021 as well. Cumulatively, it’s been quite a past 18 months for Chaim Investment Advisors!

I get this question every year, and I have pretty much the same answer every year. As a mostly Hourly-Rate planner with a few dozen ongoing clients, I don’t plan to ever have so many ongoing clients that I won’t need and want to work with new folks. If I’d focused on building that kind of business, I’d actually be pretty much at that point already with the length of time I’ve been running this firm. I have a schedule of new clients every month and have worked that way for many years now. Over time, I’ve come to like this way of doing things a lot more each year that goes by, and at this point I can’t see myself ever changing my focus to just managing ongoing accounts.

There will likely, many years from now, come a time when I have worked with such a large critical mass of people that just doing annual check ups and maintenance with everyone I’ve already worked with will take up most of my time. I become aware every once in a while that recurring projects are a bigger slice of my calendar, but there’s still never been a month where such updates are a larger share of the workflow than new ones. I do love seeing familiar faces and longstanding clients come back, watching their families, businesses, and lives (and of course portfolios) grow and change over time.

The way I think about it now, so much of the enjoyment of my work comes from helping folks out with planning problems, coming up with creative solutions, and doing financial education that new projects are always of interest.

Most advisors also start a lot later in life than I did in the advising role. I’m only 38 years old and have done this for the better part of 10 years now. There’s still a good 20 years ahead of me before I’d consider “taking it easy” in that manner.

It’s difficult to put in a few words what is happening in markets right now. This will be the focus of upcoming blogs and podcasts. There is a lot to say about them.

In short, however, I’d place things under these headers:

1. Growth Stocks are suffering from investors choosing Value (cheap earnings), Quality (safe, well managed balance sheets), and shifting toward asset pricing models that project higher risk free returns from conservative assets (from rising yields) and lower today dollar values of future earnings (from inflation). That doesn’t mean that Growth segments are “dying,” “over,” or anything else too dramatic. It does mean that investors are scared of inflation and eyeing higher rewards from low risks than they’re used to being able to obtain.
2. Inflation is at a generational high in the United States. A lot of investors did not see this coming. I had originally started talking about inflationary fundamentals that Donald Trump was stacking on our domestic economy back in 2017, but my expectations of what that would translate to were so much lower that I will also count myself among the people who did not see inflation reaching its current high water mark. This is going to be our next topic of conversation, as it’s a big one. 
3. Yields are going up and that’s bad for existing bonds, but on the other side of that, there’s also a yield curve inversion (1) that makes a lot of folks in the asset management world think that current bond losses from rising yields are less permanent than many investors are aware. That is, the bond market is pricing in lower yields in the future for longer bonds than shorter bonds, which means in brief: a) the market thinks yields will have to go back down not long after being raised, just like last time and every other time in the past 20 years, and b) selling bonds now because they’re losing money is very similar to selling stocks when they’re losing money (something that requires a lot of thought given the poor track record of that variety of market timing).
4. Russia & Ukraine. It’s very difficult to know precisely what is happening there, what Russia’s intentions are, what Ukraine’s actual resources are, and ultimately what will happen. Russian Geopolitics (especially Russian modern history) was my area of study in college. This time feels very different to me as a person who’s studied Putin in depth from his early career to today. On the other hand, that may be part of the “game,” and I’m assuming that at the end of the current phase of the war, we will see many parallels to the grueling, unfathomably destructive war for Grozny early in the Putin years. The next generation of Russia’s Center-Right will make all the difference in which direction things go from here, and that’s not something I can purport to understand well. I do not expect the Left in Russia to be particularly successful at opposing the war domestically, but I also am not willing to wager anything on that given the volatility and opacity of the present regime.
5. Recession Risks. The hot topic in finance right now is “recession risk.” Everyone wants to make a name in calling the next recession, just as it always is in finance. There are plenty of reasons to think that a recession might not happen, however. There are plenty of ways that this moment in the market feels like 2011, a time during which I was very active as an investor, setting the stage for my entrance into the formal finance industry. At that time, I was very interested in buying, and feel the same way at this time. No recession materialized in 2011 and there is every possibility that no recession will materialize this time. Nonetheless, this will be another of the next topics I discuss either here or on the podcast.