Reflecting on 2023

Think back 10 years to 2014. How likely would it have been to predict what has happened since then? With great confidence, I can add that 'not likely' is how we could all respond.

What about last year? Still not likely. While 2023 ended on a positive note for investors, it was hardly a certain outcome. We recognized the uncertainty during some of our summer client meetings. Will the government shut down? Will the debt ceiling be raised, and if not, what happens? What will happen with rates/inflation? Are we headed into a recession? How will war(s) impact us? All are reasonable questions with uncertain answers at the time. Now we know the answers to some of those questions and have added more for the coming years. 

2023 ended more positively than most predicted, but upside variability is not where our emotions are trained to focus. We tend to fear and feel downside risk or loss much more acutely than we do upside risk or reward. That can be useful insight, but hard to remember at the right time. 

Since we cannot predict, we prepare.  

Preparing builds resilience into the foundation and reveals a range of potential outcomes. 

How does our process help prepare for uncertainties? 

Making decisions based on values and priorities can be a steadying force as we navigate uncertainty. Taking time to fully develop those values and priorities is tougher work than it seems, but it is possible and rewarding. Having clarity makes tough decisions easier.  

As our name suggests, we want to keep the focus on the planning that leads to the achievement of your priorities in alignment with your values. Good planning has room for variability. It involves preparing for the unknown: estate planning, family dynamics, income and expense variability, a changing tax environment, employer benefits, retirement planning, inflation, a range of expected returns, etc. 

We prepare by regularly reviewing our assumptions and adjusting as necessary. We look to historical ranges for guidance, but not for certainty.  We’ve seen significant changes over time in many areas of clients' lives and in policy changes. Your plan should adjust too! It's not set in stone. It should update too, but in a deliberate way. Making changes on the fly based on reflex hardly ever benefits investors long-term.

As we begin 2024, it’s a good time to revisit the assumptions from your financial plan and be sure they still reflect your intentions, whatever may come next.