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A Reason, A Season or a Lifetime

My daughter Emily is getting married in our backyard this weekend, and as I am not allowed to make a speech during the reception (no one is allowed to!), I thought that I would use my monthly investor letter for that purpose!

We meet people for a reason, for a season, or for a lifetime.

 I can’t take credit for this anonymous poem, but it makes me think about all the people that we meet and have had a connected experience with. Yet the bonds that we forge with the people we befriend  are to differing degrees.

There have been many people who’ve come into my life for a reason — usually the reason was to help each other or support each other through a trying time or virgin experience. I think about my roommates in college freshman year at UVM; best buds navigating living on our own for the first time and enjoying the best of Burlington Vermont. Or my cigar buddies at Morton’s steakhouse in DC who helped me suffer through a stressful job with the FDIC right after the global financial crisis. There’s no doubt in my mind that we all met for a reason, and then they were gone, despite pretenses to stay in touch.

I think back to the seasons in life when Emily and my other two kids were born. Friends that we relied on to enjoy that season of our life such as John & Maureen or Gerry & Mary Sue or Teddy & Cassie, all had kids at the same time as Suzi and me, so we bonded through this season of diapers and play dates and weekend excursions to the Bronx Zoo. Three kids in 4 ½ years kept us very busy, so busy that my wife barely remembers the entire season of the Clinton administration!

But the kids grew up, I took a job in Charlotte, and the get togethers with our friends went from every couple of months to every couple of years, to just sending cards during the holiday season.

Then there is the lifetime friend, someone who sees you through life’s ups and downs. When we meet that person for the first time, we don’t instantly know that they will be a forever friend, but we know that they are special. When you meet your very own Suzi or Katie, in a very short while you just know, like Emily and I did, that I’m going to keep this friend forever. 

Believe it or not, investing is a lot like life.

We hold some assets for a reason — such as when your employer gives you company stock options. They’re great when they come along at the right time, and they make you feel good about working for the company. But when it comes time to sell those shares out of your portfolio so that you can buy a house or change jobs, you don’t have the same attachment to those shares in your portfolio, do you? You held them for a reason.

Other asset classes we own for a season. Usually this would refer to a cyclical rotation such as moving out of growth stocks and into value stocks or moving from large caps to small caps. A better example might be owning fixed income bonds during a multi-year Fed easing cycle like we may be entering now. Locking in these higher bond rates as the Fed eases allows you to clip coupons as rates go lower and your bond prices go higher. At least until the Fed takes the punch bowl away and starts to raise rates again at the bottom of the rate cycle and you’ll feel good about selling those bonds, like parting ways with a reliable friend during that season in the markets.

And that leads us to lifetime investments, those portfolio positions that you never need to, nor want to, sell. Everyone’s portfolio should have great companies like Microsoft (MSFT), Apple (AAPL), Duke Energy (DUK), Exxon Mobil (XOM) and Berkshire Hathaway (BRK.B) in them. These companies pay steady dividends that you fall in love with and want to hold on to forever, through good markets and bad, for as long as you both shall live.

I hope that my daughter Emily gets to clip many coupons and cash many dividends with the “lifetime” people in her new portfolio.

Written by Jim Claire

This Post Has One Comment

  1. Ron Brasten

    A great piece ole friend. Congratulations on your daughters marriage. Sounds like you are enjoying life.

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