October 2019 Letter to Clients

October 1, 2019
Joel Adams and Bray Creech

October 2019

Hope has bred change again and again. To be hopeless is to disregard history.
– Ava DuVernay

DuVernay is a filmmaker whose directorial work includes Selma, the criminal justice documentary 13th and Disney’s A Wrinkle in Time, which made her the highest grossing black woman director in U.S. box office history. She is a winner of Emmy, BAFTA and Peabody awards, and an Academy award nominee.

While impeachment proceedings have dominated the headlines in recent days, we believe there are more influential items to monitor in the coming weeks — namely trade talks in early October, as well as the beginning of earnings season. Our colleagues at Raymond James view impeachment as unlikely with the Republican-controlled Senate, and the biggest short-term risk to the stock market could be a possible knee-jerk reaction if a “smoking gun” is uncovered in the probe.

History shows that there’s no reliable way to predict what will happen in the capital markets, which is why diversification and asset allocation are the wisest strategies for supporting your long-term goals. Attempting to time the capital markets and liquidating assets during periods of perceived volatility can lead to big losses. Investing for the long term while managing volatility can result in a better outcome.

Institutional investors, such as pension funds and endowments, know this very well. That’s a major reason why institutions consistently outperform individual investors. And it’s why we practice an institutional approach that’s focused on long-term results and balanced asset allocation, rather than short-term market movements.

We are pleased that Business Roundtable, a group of CEOs from nearly 200 major U.S. corporations, issued a statement in August with a new definition of the “purpose of a corporation.” The re-imagined idea of a corporation drops the age-old notion that these entities function first and foremost to serve their shareholders and to maximize profits. Instead, corporations have a commitment to all stakeholders, which includes employees, suppliers, customers and the environment.

This is not an abandonment of the free market system but rather an effort to share the benefits of the free market system more broadly. “The American dream is alive, but fraying,” said Jamie Dimon, CEO of JPMorgan Chase & Co. and chairman of Business Roundtable, in a press release.

“CEOs work to generate profits and return value to shareholders, but the best-run companies do more. They put the customer first and invest in their employees and communities. In the end, it’s the most promising way to build long-term value,” said Tricia Griffith, President and CEO of Progressive Corporation and a member of Business Roundtable.

As many of our clients know, we believe that climate change and social inequality are among the most important issues facing the world today. That’s why we’re increasingly concerned with investing in companies that have sustainable business practices. We refer to this as Environmental, Social and Governance investing – or ESG, for short.

Studies have shown that companies operating in a sustainable manner may provide better investment performance. There are many possible reasons for this, ranging from the ability to attract and retain better human capital to sustainable sourcing. Companies that ignore ESG factors may become vulnerable to increased regulation, be required to pay punitive fines, suffer a negative reputation, or find that their goods and services are more appropriate for yesterday’s economy, rather than the economy of tomorrow.

This fall, we will launch a new service for our clients called Everplans, which is a legacy planning tool that guides you through the process of securely storing and sharing your vital documents and final wishes. This life and legacy platform is built to help you compile all the details about your will, trusts, doctors and more. It offers a simple, step-by-step guide through legal, financial, health care and personal decisions — a tool that ensures wishes are met and loved ones aren’t left with a hassle. We’ve created our own accounts with Everplans, and we’re testing it right now for ourselves. Everplans was also vetted through the Raymond James procurement process, including legal, IT and risk audits. Sometime in October or November, we will send an email to our clients to invite you to join, if you so choose. The cost is on us.

Finally, we’d like to end on a note of hope. We remain optimistic for the long-term prospects of our country, our planet, and the human condition. It is easy to get cynical about the future, especially with the constant barrage of negative news that often feels like drinking water from a fire hose. But we agree with Ava DuVernay that “to be hopeless is to disregard history.” In the last century, we saw a global depression, two world wars, the Cold War, the assassination of one President and the resignation of another, 9/11 — to name just a few. And yet, we survived. Climate change is our next big global challenge. But as long as there is hope in the world, we remain optimistic about that challenge too.

It is our greatest pleasure to work with you. Thank you for the opportunity. Have a wonderful Fall.


Joel B. Adams, Jr.  CPWA®        Bray Creech MBA, CPA, CFP®

The opinions expressed here are those of Joel Adams and Bray Creech and not necessarily Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. This material is being provided for information purposes only and is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. All investing involves risks and no investment strategy, including diversification, can ensure a profit or guarantee against a loss. Utilizing an ESG investment strategy may result in investment returns that may be lower or higher than if decisions were based solely on investment considerations.