A Great Year – Facts over Feelings

According to recent statistics, the fastest growing mental health issue is anxiety.  Anxiety is now the most common mental illness in the US, affecting over 40 million people, the majority young adults. The Anxiety and Depression Association of America (ADAA) estimates that just 36.9% are receiving treatment and the consequences of this are huge. Left untreated, anxiety often operates as a ‘gateway’ disorder – the isolation it encourages leading to drug and alcohol abuse, and depression.  Cognitive Behavior Therapy (CBT) is one of the most prescribed non-medication treatments. If you are anxious about flying, your gut may be screaming “Don’t get on the plane!” as you think of numerous disaster scenarios that could happen when you fly.  However over 99.99% of flights have no issues and when they do the plane does not crash.

It is important to remember one of the core lessons of cognitive behavior therapy is that feelings aren’t facts.  I (Mitch) have struggled with this at times over the years and know first hand how not limiting negative “what if” scenarios from taking over can be debilitating. If something feels bad, that doesn’t mean it is bad. If something seems scary, that doesn’t mean it is dangerous.

As technological advances provide access to more information for our brains to process, anxiety has risen as we struggle to process the vast amounts of information we receive.  For our financial world, there is no shortage of information and much of it is negative as news sources battle to get our attention.  This was true in 2023 with headlines around massive inflation, large banking failures (e.g. Silicon Valley Bank), U.S. government shutdown, wars (e.g. Ukraine-Russian), and rumors of wars (e.g. China invading Taiwan).  2023 never really “felt good” to most investors.  However, facts are not feelings!  If we all had followed our feelings, we may have avoided the markets in 2023.  Research shows that a rules based investment strategy with a longer term focus can help us avoid behavioral investing mistakes and 2023 was a perfect example.

2023 – Excellent Performance for Portfolios

Despite often being challenged or criticized, diversified portfolios performed very well in 2023 and reinforced the virtues of this type of disciplined approach. Following the losses in 2022, both stocks and bonds rebounded strongly in 2023, led by stocks which were up between 12% and 24% globally depending on the index. Additionally, our EFA alternative investment strategies have provided strong double-digit returns in the last two years. These strategies have performed well in a sideways and “up and down” market, pursing defined outcomes (often 10%+) with hedged stock market exposure.

Year End Tax Statements and Tax Season

For taxable accounts, most tax statements should be ready by the end of February.  For self-employed and business owners, between now and tax filing we welcome the opportunity to connect and help you maximize Solo 401K and/or SEP contributions, so please reach out as needed.  As always, we are extremely grateful for each of you and thank you for your partnership!

Welcome Carlin Graham to the EFinancial Alliance Team

We are excited to announce the addition of Carlin Graham as Client Services Consultant.  Carlin has experience in all phases of 401K/Qualified Retirement Plan support and a great resource for client success.


Mitch Anderson                                                Destin Tompkins