How wealth managers can help clients lift the lid on sustainable investments

As everyone knows, the pandemic lockdown in spring 2020 shuttered economies around the world, sending markets into a tailspin and creating widespread anxiety as people began to fall ill from the disease and health agencies scrambled to find answers. Since then, with the advent of vaccines and other public health measures, the world has slowly returned to something approaching “pre-pandemic normal,” though concerns remain, especially with the current rise of the delta variant and other mutations of the coronavirus that causes the disease.

20210816 American Flag and European Union - BigStock.jpg

A Good Recovery

How has the US economy performed during the recovery period, as compared with that of the Eurozone?  In the first quarter of 2021, at roughly the same time as the vaccine rollout, US gross domestic product (GDP) grew at an annual rate of 6.4%, which followed a 4.3% growth rate in the last quarter of 2020. By contrast, the GDP in the Eurozone shrank by 0.6% during the first quarter of the year.

Since then, as we moved into the summer and widespread easing of lockdown measures in the US, domestic GDP appears to have responded with a robust growth rate of 6.5%, though this is an advance measurement, as final figures for July are still being tabulated by the US Bureau of Economic Analysis ( At the same time, the Eurozone presented evidence of a return to growth mode, moving out of contraction and expanding at a rate of about 2%. From the lows of the 2020 lockdown, this represents an improvement in the European economy of almost 14%.

How about employment? By the end of the first quarter of 2021, unemployment in the US stood at 6%, compared with the pre-pandemic low of 3.5% unemployment in February 2020, just before the lockdowns. By the end of Q2 2021, the rate stood at about 5.4%, greatly improved from the double-digit highs during the lockdown, but still above pre-pandemic levels. In the Eurozone, meanwhile, unemployment stood at 8.1% at the end of the first quarter of 2021, and since then has improved slightly, to 7.7%.


The Way Back

The US economy seems to be leading the world back toward recovery. Of course, as always, uncertainties remain. The current surge of the delta variant is still worrisome, because if infection, hospitalization, and death rates increase to alarming levels, businesses, consumers, and states will likely begin to consider more drastic measures in order to curb the spread and conserve space in hospitals so that the most critically ill can receive adequate care. One encouraging trend, however, is that more individuals are making the personal decision to receive the vaccine. As the percentage of COVID-resistant individuals in the population increases, the less we will need to be concerned about rising infection rates or a return to the stringent measures of early 2020. That will be a good thing for everybody.

As professional, fiduciary wealth managers and financial advisors, we stay abreast of current developments and the latest financial research in order to provide our clients with the facts and recommendations they need to create robust financial plans for the future. To read our recent article about investments for long-term returns, click here.

Do I stay or do I go: Clients and assets in motion

One aspect of the COVID-19 pandemic that few seem to be talking (or writing) about is the impact of those hundreds of thousands of COVID deaths on the life insurance industry—and on policyholders. A recent panel discussion using actuarial data estimated that if the current pandemic were to reach death rates equal to 1918—clearly a worst-case scenario now that vaccines are widely available—the increased insurance payouts would total $117 billion.  A lower estimate, which is more in line with the existing data on coronavirus morbidity, would put that figure at $20 billion.  In either case, the government-mandated reserves (money basically held in escrow to pay out to policyholders) of 70% of the total death benefit face amounts is more than sufficient to cover even the higher of these additional costs.

20160711 Life insurance BigStock.png

Another impact that can be overlooked in this equation is that life insurance sales have declined during the pandemic year. This happened in part due to the slowdown throughout the economy and also in part due to the fact that life insurance agents were forced to sell remotely rather than face-to-face.  But, at the same time, fewer people with existing life insurance are cancelling their contracts or declining to pay premiums—almost certainly because the risk of dying has increased.

The full impact on the life insurance industry won’t be known for another few months, but you can get a sense of it by looking at the decline in stock prices of the major life insurance companies (see chart). The blue line at the top is the S&P 500 index, which took a big hit in March of 2020 and has largely recovered since.  The insurance companies, which were expected to be among the biggest losers as people realized the scope and severity of the pandemic, saw their stock values decline even more, but have since recovered—albeit at a lower level.


The first thing that people who currently have a life policy should know is that their policies will cover them if they pass away due to COVID-19, because life insurance companies are not allowed to change the terms of coverage or the stipulated premiums for policies that are already in force.  A more interesting question is whether rates will become more expensive in the future.  It is probable that people who have survived a coronavirus infection will have to disclose this on their future policy applications and may have to pay higher rates, due to the possibility of prolonged health effects. 

Premium Futures

A number of insurance companies are following the lead of other industries and offering grace periods on premiums for people who have suffered economic hardship as a result of the pandemic.  People who have group coverage through their employer with MetLife, for example, can continue to receive coverage for 12 months after they are furloughed or laid off, provided they keep paying the premiums.  Northwestern Mutual allows customers to suspend their premium payments for 90 days due to economic hardship and still remain covered, while MassMutual has gone so far as to offer free three-year term policies to people in some of the riskiest corners of the economy: frontline workers such as in-hospital personnel and first responders.

If you are concerned about the lingering effects of the pandemic on your insurance coverage, your investments, or any other aspect of your financial plan, we can provide research-based answers. Please contact us to schedule a time to talk things over.

Inflation: Where Have You Been, and Where Are You Going?

We are accustomed to regular reports on the rate of inflation from the US Department of Labor. Inflation, measured by the amount of increase in the cost of commonly purchased goods and services as measured by the Consumer Price Index (CPI), has been running at a relatively low level for a number of years now. In fact, we finished 2020 with the CPI in the 1.4-1.6% range, well within what the Federal Reserve considers a manageable level of inflation for a recovering economy. Lately, there has been more talk of rising inflation, as the post-COVID economy heats up.20180406 - Inflation 101 - BigStock_0.png

For many months inflation stayed persistently low. This has surprised many, given the enormous amounts of money that have been pumped into the economy since the Great Recession and especially over the last pandemic year.

Normally, when a larger money supply is chasing the same or a lower amount of goods and services, we would expect the cost of those goods and services to increase, due to the law of supply and demand. But despite the dramatic increase in the monetary supply, inflation remained tame for quite some time, in the view of the Fed.

Part of the answer may be that we were looking in the wrong place for inflation. Rather than measuring it by increases in the CPI, perhaps costs were increasing in other areas that aren’t included in the CPI: home purchases and investment income.

US housing prices, in the aggregate, rose 8.4% last year, and median listing prices for houses on the market were up 14.4%—two numbers that would be considered highly inflationary.  And if we are looking for the pain caused by inflation, then you can point to the housing affordability crisis that is emerging in 2021. But the cost of purchasing a home, unlike rent, is not factored into the CPI, because when you buy a home you are acquiring an asset, not a consumable good or service.

The cost of acquiring income from an investment portfolio provides an even more dramatic example. When you consider that high stock prices reduce the value of dividends proportionately and low bond rates make interest income more expensive, the cost to “buy” $1,000 a year of income in the investment markets has risen considerably. Historically, if you invested $25,000 in a portfolio evenly divided between stocks and bonds, that portfolio would generate $1,000 a year of income. Today, to achieve that same amount of income from a 50/50 portfolio, you would need to invest roughly $80,000.

But the economic winds appear to be shifting. While real estate and the cost of acquiring investment income, as described above, remain at historically high levels, the rest of the economy appears to be showing signs of entering a more inflationary environment. The Fed, until recently, insisted that this trend was “transitory” and that inflation was unlikely to rise to unmanageable levels. But recent comments may indicate a less sanguine view about inflation. A few days ago, Fed chair Jerome Powell conceded that inflation was running “higher than we expected and a little bit more persistent.” He also insisted that the Fed would do what was necessary—including higher interest rates—to keep inflation in check. Talk of higher rates, in turn, tends to roil the financial markets, as this is seen as making it more expensive for businesses to operate, thus depressing stock prices. And, in fact, in recent weeks, most of the down days in the markets have been related to perceptions of rising inflation and the prospect of Fed tightening.

As fiduciary wealth advisors, we provide research-based, market-tested advice for navigating the economic environment and mitigating risk. If you have questions about how inflation could be affecting your portfolio or your plans for retirement, click here contact us to schedule an appointment. We would value the opportunity to help you find answers.

The Power of Purpose in Reaching Audacious Goals

We find that people who have reached the highest levels of success and built truly significant wealth tend to share a number of key traits that are responsible for their amazing results.

One of the most important traits is a strong sense of purpose that drives what they do to become highly successful. There is typically a clear connection between having a strong sense of purpose and achieving excellence.

202102 202108 63095 Power of Purpose.jpg

With that in mind, take a minute to ask:

  • What makes you excited about getting up in the morning?
  • What do you want to do every day you possibly can?
  • If you want to become extremely wealthy, are you concentrating on things that create personal wealth?

Your Long-Term Goals

A strong sense of purpose must be accompanied by specific long-term goals that you are profoundly committed to achieving. In our experience, the self-made Super Rich (those with a net worth of $500 million or more) have an intense desire to accomplish the long-term goals they’ve set out as part of their overall strong sense of purpose. 

Your goals and purpose can address many things, of course, from being the greatest spouse imaginable to creating beautiful works of art. That said, there may be little in the way of economic rewards from those two goals. If you desire monetary gain, your strong sense of purpose must reflect this desire. If your purpose is to become extraordinarily wealthy, your long-term goals must align with the right activities. 

Your long-term goals should provide you with clarity and resolve. Together, they make up the lens that should filter and direct all your significant decisions and activities. In deciding on different courses of action at various stages of your journey, regularly consider whether each choice gets you closer to your long-term goals.

For long-term goals to truly support your strong sense of purpose, they must be ambitious. We generally find that the Super Rich’s long-term goals are not easily attainable—not even with a significant amount of effort.

Warning: Simply having long-term goals is not enough to actually reach them. You must have intermediate steps along the way to reach your ambitious long-term goals. Think of those intermediate goals as rungs on a ladder of ascending goals, bringing you incrementally closer to achieving your purpose. As you reach each intermediate goal, you will experience satisfaction and be further energized—your strong sense of purpose will be reinforced, making it easier to keep moving higher. 

Perseverance and Focus

A strong sense of purpose can also be instrumental in helping you persevere and focus. 

Let’s face it: It is very likely that you will stumble and fall somewhere along your route toward your long-term goals. No matter how talented you are or how much energy you put into something, the odds of everything working in your favor all the time are probably near zero. By having a strong sense of purpose, you are able to move forward when confronted with inevitable obstacles and failures along the way. 

A strong sense of purpose can also help keep you tightly focused on what is important and what is not. Too often, “shiny objects”—such as unrelated business ventures or interesting ideas that are not closely connected to what we really want—distract us. With a strong sense of purpose, you can likely better concentrate your time, efforts and resources on reaching your intermediate goals that lay the path to your ambitious long-term goals.

The upshot: Never lose sight of your strong sense of purpose. Let it act like a magnet, pulling you ever forward.

Important: While focus and perseverance are crucial, don’t overlook the need for some flexibility along the way. As circumstances change, your intermediate-term goals may need to be refined—while always remaining in service of your larger purpose and longer-term objectives.

The dark side

Be aware, however, that a strong sense of purpose can have a dark, disturbing side. When your strong sense of purpose becomes an obsession, the results can be bad—even destructive. This can happen if you become fixated on your purpose and goals to the exclusion of virtually everything else. In such instances, we have seen otherwise decent people do whatever it takes—no matter how dishonest or even horrendous—to achieve their long-term goals, and then justify their actions. 

Excelling at the highest levels requires making sacrifices. In fact, most people make compromises between wants and self-set obligations all the time. The issue is: How much are you willing to give up and how much are you willing to push to achieve your ambitious long-term goals? 

You should be very clear about where you draw your lines—what you are willing and not willing to do. Nothing “just happens.” You make choices. The good news is that morally questionable and/or illegal actions are not required to successfully pursue your purpose. 


Can you achieve great success in life without a strong sense of purpose and the various goals that go along with it? In some cases, yes—it’s possible. But in those instances, we find that success usually occurs with lots of unnecessary stumbling and wasted time and effort. 

The better approach, in our opinion, is to get crystal clear on what you really want, build out the goals to support that vision and take informed, deliberate actions at each and every step. That’s the way of the self-made Super Rich—and it’s hard to argue with their success!