© Morgan Stanley Smith Barney LLC. Member SIPC.
Wealth Management
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Boston, MA 02109
Tel: 617-589-3234
QUARTERLY MEMO
TO CLIENTS AND FRIENDS
FALL 2022
In every single bear market I’ve seen, too many to count, there’s a time when people say, “I’m not looking anymore.” We’re in that now, after a punishing several months. What’s the antidote to “I’m not looking anymore”? Time is the biggest antidote… If you own quality value stocks that were bought at prices that were not at all time highs, time will be your friend. It also will help if they pay dividends; cash flow while you wait for anxiety to turn to relief and even, someday… the time when you enjoy checking the numbers. Whatever the issues and problems in life, the relentless parade of bad news, the times eventually change for the better, and markets again become a fine place for your money… everything moves in cycles.
You should also be assured that w e always have a plan in place for your invested money, a plan based on your long term needs and a practical, non emotional blueprint for your financial future. We have no model portfolio, no one size fits all. Every portfolio is structured just for you.
Here’s an illustration of what’s important in difficult market times. Say that a client has an account worth about $1 million. They need, and will withdraw, about $50,000 annually to contribute to funding ‘the good life’ according to their definition of that. In anxious times, they don’t need to liquidate the entire million dollar account. They only need to make sure they get the $50,000 annual withdrawals. This gives time for the plan, time to wait until the next bull market emerges. And it always does.
A few words about where we are now. After decades in the business, I know that you cannot ‘time’ markets. If you’re an ‘in and out’ trader, in action every day, don’t bother reading this. In my opinion every trader I’ve ever seen lost most of their money, sooner or later. I repeat, you cannot time markets. Because no one can predict when conditions start to improve, you have to be in there to participate when greed replaces fear.
And it always does.
So we are still focusing on dividend payers, financials, healthcare, defense, real companies with strong balance sheets. We are also nibbling, gently, in several of the great growth companies that we have not owned in the past and that seem to us, if we move slowly into them, that they will reward us in the future. A quick word about taxes. I know that last year there were a lot of capital gains taken as stocks hit their targets in those strong markets. This year, the tax bite will be a lot less and we start the beginning of October, our annual check on every taxable account to try and diminish as much tax obligation as we can.
This curbing of inflation that the Fed has initiated, painful as it is in the short run, eventually will clear the air for the inevitable cycle that takes us to better times.
For this moment we are sticking to our guns, owning quality names which seem attractive to us. I repeat. Continue to take the annual distributions you need to give yourself ‘the good life’ according to your definition of those words. Travel. Go out to dinners with friends. Go to concerts and the theatre. Read more books. Let us do the worrying for you. Call us anytime to expand on these thoughts. And as always, we love to hear your own eyes and ears intel about what you’re seeing in your own daily lives that can contribute to our knowledge, all the better to serve you.
Enjoy the autumn.
John D. Spooner
lots of titles 🙂
The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Wealth Management or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.
Morgan Stanley Smith Barney LLC offers a wide array of brokerage and advisory services to its clients, each of which may create a different type of relationship with different obligations to you. Please visit us at http://www.morganstanleyindividual.com or consult with your Financial Advisor to understand these differences.
Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.
Morgan Stanley Smith Barney LLC. Member SIPC.
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