Practicing Greatness
Kobe Bryant was a competitor. He was known to be the first guy in the gym and the last to leave. He had an insatiable desire to win, and, be the best he could possibly be in his profession. He entered the NBA straight out of High School and played his first NBA game just 18 years old. It was rare for a High School player to go straight to the NBA during his early era. Kobe had a lot to learn adjusting to the NBA. He made mistakes both on the court, and, off. He matured and became one of the greatest players of all time. Even in the midst of adversity, you could not take his courageous, intrepid spirit away from him. He was determined to overcome injury, his mistakes and persevere into a man that made impact. Tragically, Kobe, his daughter Gianna and 7 others died in a helicopter accident on January 26, 2020.
I am a big basketball fan. I grew up emulating Michael Jordan in my driveway. After Mike, came Kobe. Kobe took the reigns as the most prolific scorer after Jordan. In my opinion, Michael Jordan and Kobe Bryant are the two most “clutch” basketball players to ever play the game. They lived for the day to take the final shot. They did not buckle under pressure, they embraced it. Kobe played his final NBA game in 2016. After that, he was just getting started. He loved his daughters and was extremely involved as a family man. His “next chapter” in life was just getting started. He had promising businesses and even won an Oscar for an animated short story he wrote. Kobe was always up to learn something new and work hard at it. He was a life-long learner. He took his God-given talent and merged it with practice and discipline. It was a sad day to see him pass prematurely. It was a great reminder to “redeem the days”, make them each count.
While I was not Kobe’s Financial Advisor, I’d speculate that he had a plan. I know from his basketball career that Kobe had a close inner circle of sports therapists and trusted Advisors in his life to help him be the best he could be in basketball. I’d suspect he took the same approach in dealing with financial matters.
Just like Kobe had a tremendous amount of discipline to reach his basketball goals, it takes discipline to achieve financial goals. It’s making hard, short-term sacrifices for long term gain. It’s “living like no one else so later you can live and give like no one else” Dave Ramsey It’s saying “no” to that vacation you really want to take because you’ll have to put the whole thing on a credit card. It’s putting away 10% of your income into a retirement account instead of buying a new toy. It’s doing a budget and taking control of your financial life so you can have financial peace. Now I am by no means saying a trip to Hawaii or a new toy is “bad”, but, all in good timing.
I’ve always said to clients that you can experience financial peace, even if you are not where you want to be. It’s about having the plan in place that creates the peace. You are working towards something. You have goals in mind, you have disciplines in place to help reach those goals. As I enter my 16th year as a Financial Advisor, I am reminded of the privilege I have to help people on their financial journey. Some days I get to help people get their initial plan together. Other days I get to help usher in retirement! At Intrepid, our investment and financial planning processes took years of thought, research and implementation to become what they are today. I continue to be a life-long learner and am grateful for the team that is in place. We are committed to excellence. We realize we are here to help facilitate and guide our clients on their journey towards financial peace and freedom! God bless.
Positive Quote:
"As I sit here now, when I take off my shoe and I look down at my scar, I see beauty in it. I see all the hard work, all the sacrifices. I see the journey that it took to get back to this point of being healthy. And I see beauty in that struggle. That’s what makes it beautiful.”
- Kobe Bryant
Fun Fact
Our boys completed their first Spartan Kids Race in January!
The Markets
Annual Market Review 2019
The year began with the government stymied by a shutdown, and ended with articles of impeachment levied against the president. In between, both domestic and global economies showed signs of slowing, all while the trade war between the United States and China loomed throughout the year. Nevertheless, investors remained relatively bullish toward stocks, pushing several major indexes to record highs.
While domestic economic growth may have slowed in 2019 compared to 2018, it showed resilience and stamina. The third-quarter gross domestic product expanded at an annualized rate of 2.1% — moderately down from 2018's 3.0% rate, yet still strong enough to outpace global economic growth by a considerable margin. Consumer spending — which accounts for about two-thirds of the U.S. economy — surged, buoyed by a strong labor market, near-record unemployment, solid wage growth, and a burgeoning stock market. All told, the domestic economic expansion continued into its 11th straight year, the longest run in U.S. history.
Last year saw trade disputes between the United States and several of its trade partners reach an accord, but the trade war with China roared. The world's two largest economies engaged in a tit-for-tat skirmish, with each country volleying tariffs on their respective imports at the expense of the exporting nation. Coincidentally, a limited deal was announced just before the holiday shopping season, with the U.S. agreeing to forgo new tariffs and China assenting to allow more U.S. agricultural imports. Further negotiations are presumed, but the relationship between the economic giants remains tenuous at best.
Not only did the ongoing trade war affect global economies, but it also impacted domestic business investment, industrial production, and exports. Part of the justification cited by the Federal Reserve for lowering interest rates three times last year was weakness in business fixed investment and exports. As of November, new orders for durable goods were down 1.3% from the same period in 2018, and business (nonresidential) investment fell 2.3% in the third quarter.
The new year begins with a strong stock market and solid economic growth. The Secure Act, passed in late December, should change the retirement planning (and saving) landscape to some extent. However, the Treasury budget deficit for fiscal 2019 (October 2018-September 2019) exceeded $980 billion — 26% higher than the 2018 fiscal-year deficit. The trade war with China may cool with more mutual concessions, or accelerate, which would continue to dampen global economic growth. The new year will begin with the impeachment process and end with November's presidential election. What happens in between is anyone's guess. Will unemployment and inflation remain low? Will stocks continue to experience growth? Will oil and gas prices moderate or surge? Will the domestic economy continue to accelerate, or suffer a setback? Can the world economy recover, or will it continue to stagnate? If nothing else, 2020 looks to be an interesting year.
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Eye on the Year Ahead
The third quarter of the year will likely bring much of the same tumult as was found in the second quarter. Employment should remain strong, although wage growth has been relatively slow. It is worth noting that the Federal Open Market Committee has scaled back its views on economic growth and inflationary trends. In response, interest rates are not likely to increase in the foreseeable future and actually may be reduced. In any case, it appears that the ongoing trade war with China, coupled with tensions between the United States and Iran, will continue to impact the world economy and the U.S. stock market.
Data sources: Contribution provided by Forefield. Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.
I look forward to continuing to guide clients through 2019 and beyond. If you have a friend or family member that you think would benefit from working with me, please don’t hesitate to make the introduction. Thank you for your trust and business.
