From the Crow’s Nest – April Edition

Greetings!

Welcome to the April 2014 edition of Views from the Crows Nest. A lot has transpired in the interval since our 2014 Annual Forecast Issue, and it appears that market action is now heating up again. Are you prepared to dance to “The European Shuffle?”

The last six months have been extraordinarily busy for our firm, with a focus on transitioning clients to the Portfolio Managers that we approved and hired in late 2013. While making major changes of any kind is never easy, early success (solid investment performance) following the transition has confirmed the prudence of our decision to hire new investment partners. I like it when the first steps taken together are in a positive direction.

It’s really quite remarkable how easily one can discern lower stress in hindsight. The proverbial frog that boils to death in a slowly warming pot cannot adequately perceive its own peril simply because the change is gradual, not unlike Jim Dines’ laser-focused expression, “Those inside the bubble cannot see the bubble.” Thank goodness for those who care enough to pop our own bubble when they see what we cannot or will not perceive.

Those with the courage to stand tall with us even when it gets messy are a blessing. This leads to a series of curious questions for readers:

  • When it comes to managing your financial wealth, whom do you trust to help you see your blind spots before they lead to a fatal blow? Is it a talking head, a favorite investment newsletter, a trusted long-time advisor, or someone else?
  • Whom do you trust enough to protect you from your own very natural human imperfections, especially during periods of mass fear or mass greed?
  • What kinds of checks and balances do you have on yourself in respect of money management, including cash flow management and investment decisions?
  • Have the financial and emotional wounds inflicted by having trusted sincere but ineffective/incompetent/naive people led you to find someone trustworthy as well as effective, competent and wise…or have you decided that no one else is trustworthy?
  • What are you doing to heal those old money wounds?
  • Whether you are self-managing or delegating investment decisions, how will you know when a refusal to change a current tactic is based on an “assertion of unhealthy ego” or prudence and discernment?
  • What specific checks and balances are in place to override strong opinions that evidence is proving to be inaccurate?
  • Whether it’s money or anything else that we identify closely with, how do you discern between those who are primarily focused on “getting it right” versus those whose ego demands “being right?”
  • Who rises above the surface to advise you when your money is riding the ocean currents and winds…and who is your trusted fixed beacon on shore, directing you safely into harbour? Who is your Lighthouse?
  • If you are open to finding your own Lighthouse, does it make the most sense to do that for the first time in the middle of a storm, or perhaps explore this issue before the wind, rain and swells threaten your vessel?

These questions literally just flooded into my consciousness as I sat down to re-connect with readers through this newsletter. As I review them, I realize that they all speak to allowing ourselves to be vulnerable…and that these questions apply to our broader lives, not just to money management.

Vulnerability is likely one of the most frightening words in the English language, especially for males, since we usually associate vulnerability with weakness and/or inferiority. As you read the word vulnerability, how do you feel? Did you notice a knot in your chest or stomach, or did you immediately go back into your head to the relative “safety” of your rational thoughts?

Brene Brown is a leading global authority on these matters. Though I’ve never met her, I consider her work to be a great gift to me and my family. Perhaps her viral TED Talkmight shed some light on this subject for you? In my experience, you cannot trust anything or anyone without some measure of vulnerability.

As I’ve stated many times in recent client meetings, our working hypothesis of the financial markets remains intact as of today. In plain terms, our view is that U.S. equities remain the asset class of choice for over-weighting in portfolios for the next 16-20 months.

We appear to be in the early stages of a normal seasonal pullback in stock prices in North America. Following a 14% rally (excluding currency gains) between Oct 8, 2013 and April 2, 2014, some rest is in order for the S&P 500, while the Nasdaq 100 is already stumbling after an exhausting sprint.

From my vantage point, the Euro (pean) socialist experiment is starting to quiver under its own weight, primed to implode via its own sovereign debt crisis. Will the catalyst be a seemingly inevitable outright invasion of eastern Ukraine, escalation of tensions involving Syria, a derivatives-based implosion of a major French bank, or further scandalous revelations of “elitist privilege” (read: corruption) involving IMF head (and former Obama legal colleague) Christine Lagarde? Or will it be something totally different and apparently un-related?

Irrespective of the catalyst that eventually becomes consensus, the time is nigh for raising the quality of defense being played in investment portfolios. We all need to have reasonable expectations around managing downside risk, but where’s the harm in realizing some big gains on the more aggressive elements within a portfolio? What would be so bad about locking in some recent gains with the intention of re-deploying that capital when equities are once again available at cheaper valuations than today?

It’s always easier to find a ready buyer when there’s some meat left on the bone…otherwise why would anyone else want to buy it from you? After all, the purpose of investing is to make a reasonable risk-adjusted gain when the winds are favourable, and then protect those gains wherever possible. If one is habitually focused on selling the exact top tick and buying the exact bottom tick (i.e. perfectionism), then an unhealthy ego is likely getting in the way. The truth hurts when it ought to.

Japan is also starting to shows signs of an impending sovereign debt crisis as well. Domestic bonds usually rally when domestic stocks falter…based on capital flows. Given the recent stagnation of the Nikkei index, Japanese Govt Bonds (JGB’s) should be stronger. Simply put, JGB’s are not receiving significant inflows while major capital is quietly flowing out of their stocks. Destination: U.S. large cap equities.

Though I am not usually drawn to literary fiction, I am compelled to recommend a title that I am currently engrossed in. One Great Year is a brilliantly-woven tapestry of human struggle, the great wisdom of ancient indigenous peoples on many continents, and of course love. If a man named Bubba can win the Masters and bawl like a child in unrestrained joy while the world cheers and tears up with him…you too can enjoy a great story that just might open your eyes – and heart – to the wisdom of the ages! The co-authors of One Great Year – Rene and Tamara – are fabulous people, too!

Patience, Discipline and Love help you manifest wealth, health and happiness, so focus on these.

Cheers,

Andrew H. Ruhland, CFP, CIM

President, Integrated Wealth Management, AND

Enthusiastic Professional Disruptor

2014 Annual “Forecast”

Greetings!

Welcome to the 2014 Annual “Forecast” edition of Views from the Crows Nest. One of the many challenges with publishing a document that is intended to cover a one year period is that so much can change in a year.

Another challenge is choosing a theme, especially now when my creative faculties are wide open to receiving wisdom from countless sources. It’s not always this easy, so I’m deeply grateful when I am blessed with an almost embarrassing abundance of ideas, opportunities and new connections.

The most obvious challenge, though, is getting the actual forecasts themselves accurate enough to actually be useful and helpful to readers. The reality is that high-quality forecasts and advice are only as useful as they are timely, so forecasts that are too broad can actually be counter-productive.

In last year’s Annual Forecast, I described a personal shift away from day to day market action, choosing instead to take a broader view of markets. This shift was a manifestation of a very conscious personal decision to let go of perfectionism as a means of achieving much more important big-picture goals.

This led to literally life-changing insights in the wake of an early-spring near-death and long-distance health crisis within our diverse blended family. Life has a way of bringing forward new obstacles even as we challenge our fears and self-limiting beliefs.

Even things like my personal pet-peeve of being on schedule have been challenged recently. I publicly stated that this newsletter would be published prior to welcoming 2014, but several unplanned and time-sensitive family priorities arose. Shift happens. While it’s more than a little annoying to be faced with one major challenge after another, each obstacle reveals new learning that far exceeds the challenge.

In the spirit noted immediately above, the events that delayed this publication also provided additional opportunities to shape the clay that has been dropped in my lap over the last few weeks. So from my deep personal frustration of being late, the great gift of heightened clarity has emerged, and the clutter has faded (thanks RW!). Life is wonderful and mysterious when we go with the flow, isn’t it?

So, as we all shift in response to life challenges, it seems utterly obvious that this missive’s theme must be about YOU THE READER who has invested the time to consume the buffet that I now spread before you…after a rambling appetizer, no less!

This edition is about YOU because you are the only one who can ever decide anything for yourself. You are the person who chooses to save or spend, to take a break or work harder, to engage meaningfully with your family or to hide in avoidance behaviours, to integrate the wisdom of others or refuse to change your opinions, to trust or remain in fear.

You are the person who creates exactly what you have and will experience in the past, present and future. If you are reading this, you’ve likely already accepted personal responsibility for your financial independence. Congratulations for getting this far!

You might also be looking for answers to the big investment questions about the future. While I have some very clear ideas on what I believe will happen over the next year in investment markets, that’s NOT where my strengths lie, so that’s not how I will best add value to your life…integration and application of universal wisdom is my core strength – it’s what brings me “flow.”

What matters most in investment management is the real-time decisions made by each person who carries the responsibility of managing money for anyone. So, the questions below are for every reader, whether they manage portfolios for clients or for themselves and their family only.

Buckle up for this exciting journey down the rabbit hole of embracing and leveraging your strengths…and facing, feeling and releasing your greatest fears. I promise that there are abundant rewards at the end of this journey, though the rewards may be different than you anticipate. The less you resist, the easier this will be, and the greater the learning. It has taken me a long time to learn the foregoing.

To ease the pain of self-exploration, I will use questions designed to pierce several layers and rapidly arrive at the problems to be solved. Some questions may not apply to you, but those which elicit the strongest reaction – especially denial of the question’s relevance to you – are likely the arrows that have hit closest to your own greatest fears.

If it hurts, it can and should be healed. I ask only those questions which I can help you answer; to do otherwise would be cruel. I’ve experienced or repeatedly witnessed the themes of every question, so I personally understand the suffering from memory, not theory.

There are no wrong answers, no passing or failing grade, no comparison with classmates, colleagues or family…this is about you, and especially what you do with the wisdom discovered within yourself.

Ready, set, grow!

1)     What are you really great at? Make a list of 3-5 activities that you are exceptionally skilled at.
2)     What do you love most to do? Make a list of 3-5 activities that are so enjoyable they can cause you to lose track of time, and do NOT cause fatigue.
3)     What are the 3-5 activities that help you to build your wealth (in ALL its forms), to reduce your stress, to spark you to evolve personally and to improve your relationships with yourself and others?
4)     What are the common themes among your answers to these first three questions?
5)     What are the biggest frustrations, stresses and practical problems you experience on a recurring basis?
6)     What are the biggest frustrations, stresses and practical problems that you cause for the most important people in your world? Yes, you need to ask them, and then listen without defending yourself, so they know you really want to know. They also need to be given time to think about their answers. Prepare to feel the joyful pain of being vulnerable…vulnerability is the birthplace of creativity, innovation and self-actualization so dive head-long into this darkness!
7)     Are you willing to make some changes in order to focus most of your time and energy on the answers to 4) above?
8)     What are your personal obstacles to making these changes?
9)     How often do you experience frustration by not feeling appreciated for the good things that you do for others?
10)  What is stopping you from stepping forward and allowing others to see you confidently doing what you love, and loving what you do?
11)  When you daydream, do your thoughts wander to what could go wrong, or to what could go well?
12)  Do you dismiss the ideas of others if they contradict your own views or understanding of how things work?
13)  How comfortable are you with uncertainty and mystery?
14)  Are you willing to accept that the probability of reaching your financial (or other) goals is directly related to the depth of your belief in your ability to achieve them?
15)  Are you willing to accept the “radical possibility” that the depth of your belief in your ability to achieve anything is directly related to your core beliefs around your worthiness to achieve your goals?
16)  How open are you to sharing the abundance you have created?
17)  How open are you to learning about new and different ways of sharing your abundance with others?
18)  How open are you to the possibility that being different than the mainstream (disruptor, contrarian, etc) is actually helpful to society at large?
19)  Are you willing to consider the possibility that the popular way of trying to solve a particular problem is not the most effective way of solving the problem…and in fact may help perpetuate the problem itself?
20)  How open are you to allowing trustworthy people to help you solve the problems that are you blocking you from living into your fullest potential?

What you choose to do with these questions and the answers is up to you, just like everything else. Free will is sooooo awesome!

At the beginning of this exciting new year of change, I wish each of you the gifts of vulnerability, self understanding and mostly self acceptance. Happy 2014, everyone!

Patience, Discipline and Love help you manifest wealth, health and happiness, so focus on these.

Cheers,

Andrew H. Ruhland, CFP, CIM
President, Integrated Wealth Management, AND
Enthusiastic Professional Disruptor

Views from the Crows Nest: December 2013 Issue

Welcome to this edition of Views from the Crowsnest. It’s been many months since I sat down to peck out my newsletter. We’ve been busy with important AND time-sensitive matters, as our Client Families always come first. It’s good to be back.

My wife and I love to watch comedy as we relax before bed, and one of my favorite stand-up routines from the Montreal Comedy Festival is a rant from a humorist whose character is a bombastic pub owner from GREAT BRITAIN! In answer to the question about why Brits and Canadians don’t have their own dream, like our neighbours with “The American Dream,” he answers quite poignantly, “It’s because we’re awake.”

The Renaissance Era in western civilization took place following many centuries of tight control of the scientific, creative and philosophical communities by the Catholic Church. The severity of this centralized control was a significant factor in the scope and force of the eventual bursting of the shackles…not unlike compressing a spring that cannot be permanently constrained.
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Views from the Crows Nest: July 2013 Issue

Welcome to the July edition of Views from the Crows Nest.

Calgary summers are short, and so this edition will be, too.

Too much of almost anything is bad for us, including essential elements of a healthy lifestyle. Food, drink, sunshine, and exercise in moderation are excellent, but in excess they can be destructive.

The same holds true of information consumption. In respect of our investment portfolio, the mainstream financial industry would have us believe that more information is always better. The typical hooks that broader media use include: conflict (very polarized market opinions), celebrity (what the richest and famous Wall Street types are saying), fear of missing out on gains (greed), and fear of losing capital (this is the big hot-button).

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Views from the Crows Nest: June 2013 Issue

Welcome to the June edition of Views from the Crows Nest.

There are certain times – like now – when investment markets appear to be in a state of “suspended animation.” And it’s extreme times like these when the disconnection of markets from common sense, logic and rational valuation puts our Patience and Discipline to the test in an almost overwhelming way. Rest assured, a major tipping point is coming soon, perhaps even before the next edition of this newsletter.

Since the equity markets hit their crisis bottom in early March 2009, many investors have been waiting for the second half of the global debt hurricane to hit. This bias, based on then-recent experience, makes it difficult for many to ride an uptrend with patience…after having been burned significantly by market declines that mainstream “experts” said were simply not possible. It’s also incredibly difficult to forget the emotional and financial pain caused by the 2008-9 financial crises.

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Views from the Crows Nest: May 2013 Issue

Welcome to the May 2013 Views from the Crowsnest.

The great gold trader Jessie Livermore is credited with saying “The biggest profits are in your patience.” This wisdom rings true whether you are still invested in US equities which continue to rise seemingly incessantly, or you are waiting to play the downside in equity markets.

And if you’ve already exited most or all of the equity positions in your portfolio, you may find yourself feeling rather impatient while waiting for the current market euphoria to end. Patience, indeed.

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Views from the Crows Nest: April 2013 Issue

The interval since my last Views from the Crows Nest

has been longer than usual. When one is faced with a family member in a health crisis, financial markets don’t graciously pause while we deal with these priorities. Thus we still need to attend to markets with a calm focus, which left no time for writing.

After a surreal and determined rise in the face of ever-growing fundamental risks, broad U.S. equity markets appear to be nearing the end of seasonal strength. Defensive measures will be taken for any current stock-based positions once the markets confirm the upward trend has been broken. In the meantime, there may be some more upside left to capture. Market tension is high but that doesn’t  preclude a continued rise of prices for a week or two. Eventually we’ll get to that tipping point when bad news begins to get priced in again.

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Views from the Crows Nest: February 2013 Issue

“Mass Media Mimics Mass Mania”

Since our January edition of Views from the Crows Nest, equity markets continued their slow grind higher for almost two weeks. In the last two weeks we’ve finally begun to see signs of a short-term market top. One of the most reliable signs of an inflection point was delivered yet again by the mainstream media.

On Saturday February 2nd, uber-accurate gold market timer Mark Leibovit spoke at the World Outlook Financial Conference and remarked about a powerful headline in that day’s business section of the Globe & Mail. In reference to the equity market rally, they declared “The End of Fear.” We know from experience that “The Herd is always wrong at the extremes, but creates the trend in between.”

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Views from the Crows Nest: January 2013 Issue

Welcome to the January 2013 issue of Views from the Crows Nest.

Well, the folks in Washington D.C. certainly did another number on investment markets with a slightly- later-than-eleventh-hour “fiscal cliff fluff deal” that does nothing to address a life-threatening spending addiction by the US federal government. And now we get to listen to endless yammering about raising the debt ceiling.

Over the next six weeks this debate will escalate, with the predictable grandstanding, digging in of heels, standing on principle, then caving in at the last minute to prevent both a shutdown of the US Federal Government and any kind of default on outstanding US debt obligations. It will likely become the primary hot button topic for everyone, cause a significant rise in market anxiety and serve as a wonderful distraction from everything else that is happening. In a democracy, a nation gets the government it deserves.

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Views from the Crows Nest: 2013 Annual Forecast

Welcome to the 2013 Annual Forecast Issue of Views from the Crowsnest. Over the last six weeks we’ve been hunkered down in quiet contemplation of what 2013 may bring. The world continues to edge closer to the second major downturn in what I believe is The Second Great Depression.

Final editing of this edition is happening on December 30th, before the “fiscal cliff” negotiations have been resolved…so we could start 2013 with a bang, though we’re not certain where the gun is pointed! It’s better to be out of the markets and wishing you were in, than to be in and wishing you were out of the markets…so we’ve been rather conservatively positioned for over a week now.

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