Dear Friends,

The year was 1983 and it was a great year for the NCAA Basketball Tournament. There were so many great teams like UNC with Michael Jordan, Houston with “Phi Slamma Jamma”, 7’4″ Ralph Samson at UVA and many others. Even the CBS theme music was “Freeze Frame” by the J. Geils Band. I mean come on! Despite all these great teams the winner that year was a 10 loss NC State team coached by the legendary Jim Valvano. Now almost 40 years later it is still coming down to the wire and anything can happen. This year UCLA was one of the last 4 teams out of 68 to make the tournament, but yet they make it to the Final Four. Although they ultimately lost to the #1 overall seed, Gonzaga, in dramatic fashion 93-90 on a half-court shot with 1 second left in overtime, they showed you can achieve success if you are in the tournament. But you have to be in it!

Just over a year ago, it was hard to be invested in the stock market. The market was in free fall with lockdowns sweeping the nation. Who knew the ultimate damage our economy would experience? Those who didn’t panic and abandon investing were rewarded with the market rebounding up 50% or more since then. Diversification and rebalancing worked as designed and paid off nicely, but it is hard when it seems like the world is falling apart. While the COVID-19 pandemic is an extreme example, there are always headwinds and negative headlines that create risk factors including a few of the current ones:

Inflation and Rising Interest Rates: How concerned should we be?
There are two factors that are contributing to increased inflation risk: massive government stimulus and misallocation of goods, services, and capital coming out of the pandemic which creates supply and pricing disconnects. We believe competition and free markets will eventually resolve the latter. The issue of massive government stimulus and its potential future implications is more complex which leads us to…

What is MMT (Modern Monetary Theory) and do we need Bitcoin for that?
Recently President Biden approved the $1.9 trillion stimulus bill, and people are receiving stimulus checks based on their incomes. The problem is that there is not currently a defined way to pay for all of this and the current administration is divided on how to solve this. One group argues for higher taxes which could slow the economy and the other group argues that deficits don’t matter for nations that have their own fiat currency. The argument, known as Modern Monetary Theory, is that those countries (the US being the primary one) can print as much money with impunity as long as enough demand exists for their currency and treasuries. Many believe that overspending by sovereign nations is fueling the rise of alternative currencies like bitcoin, which also can be viewed as a store of value. Our view is diversification is the still the answer with exposure to many different asset classes, including currencies, to minimize inflation and interest rate risks among others.

Discover Yourself: Enneagram Test
Do you know your Enneagram number? We believe it is a helpful tool for both understanding ourselves and how we relate to those around us. For anyone who responds by May 1st we are offering a free test through our friend/ Enneagram coach Dorrie Presson. Send an email to [email protected] titled “Enneagram”.

We are thankful to work together for the benefit of your families and businesses!

Mitch and Destin