Mid-Quarter Newsletter – June 2021


Hear Our Story Video

We’ve been busy capturing some exciting video content these last few months as we prepare to launch a new look on our website. As a firm, we wanted to create a video to give our clients and our community the opportunity to learn more about us: how we began, why we believe in investing in alternatives, how we define our mission of “empowering better investors,” what we think sets us apart as a company, and what our vision is for the future of Morton Capital.

We hope you enjoy this behind-the-scenes look into our company. Click below to meet our leadership team and hear our story.

Watch the video here.


Why Is Everyone Talking About Inflation?

Inflation has been a hot topic over the last couple of months. Core consumer prices, which are how much you pay for typical goods and services (excluding much more variable food and energy prices), rose 0.9% last month, the biggest monthly gain since April 1982. The combination of higher labor and material costs is leading to a larger pickup in inflation at a time when governmental policies are supporting faster economic growth. The Federal Reserve has told investors that it will continue to support the economy, with the goal of achieving full employment, so it’s willing to let inflation run “hotter” than before. The question is whether or not these factors will lead to a short-term but temporary bump in inflation or a sustained and problematic increase.

There are several global trends that are helping make the case for higher sustained inflation going forward. For years, globalization had been a force keeping inflationary pressures in check, as manufacturing and consumer goods production moved to emerging economies with cheaper labor. This trend appears to be reversing and many countries, including the U.S., are looking to bring manufacturing jobs back home. Another important global trend supporting inflation is the push toward decarbonization to offset the damage and danger of climate change. Demand for renewable sources of energy will continue to push up prices on base materials like silver, copper, nickel and lithium, as these are essential components to implementing these technologies. A third, and perhaps more important, factor has been the explosion in global debt following the COVID-19 pandemic. The ratio of global debt to gross domestic product (the total value of goods and services in an entire year!) rose to 356% in 2020, up 35% from 2019. For perspective, this ratio only rose 10% in 2008 following the Global Financial Crisis. Given this huge amount of debt, policies have to support higher inflation so that debt burdens can be paid back in future years with cheaper dollars.

As fiduciaries, we must be aware of the risk of higher inflation and its resulting erosion of purchasing power in our clients’ portfolios. We’ve been concerned about increasing inflation for many years now, and have consequently built certain positions into the portfolio that we believe can act as hedges against the depreciation of fiat currencies, which don’t have intrinsic value on their own. For example, our positions in gold and mining companies, as well as our focus on real assets (real estate equity and lending strategies backed by real assets), we believe will remain resilient and maintain their true value in an inflationary environment. In the face of rising inflation pressures and expectations, we’ll continue to monitor the overall landscape and incorporate additional real assets and inflation hedges as we see fit


Information presented herein is for educational purposes only. It should not be taken as a recommendation, offer or solicitation to buy or sell any security or asset class, and should not be considered investment advice. Certain investment opportunities discussed herein may only be available to eligible clients and are presented for illustrative purposes only. Past performance is not indicative of future results. All investments involve risk including the loss of principal.


What to Expect from an In-Depth Financial Plan

 Here at Morton, creating a financial plan is one of the key steps to our clients getting the most life out of their wealth. But what does creating a financial plan look like for you, our clients? Contrary to what you might think, a financial plan is not something that your advisory team does for you; it’s something that you and your advisory team do together.

Your advisory team will work behind the scenes with Morton’s financial planning team to craft your plan, but it’s only with your participation in the process that we can create a plan that will serve as a road map for your financial success. There are a lot of strategies in financial planning that can help solve issues, but the more information you give us about your financial life, the better we can determine which of those planning strategies are right for you. After all, if you buy a sweater in the wrong size—no matter how beautiful—you won’t be able to wear it. If, however, you spend the time upfront taking your measurements, you’ll end up with a sweater that actually fits you. In financial planning, just like in life, one size does not fit all.
That’s why, over the course of the next several weeks, we’ll be publishing a series of posts on the various components of an in-depth financial plan: cash flow, retirement, insurance, investments, tax, and estate. Our goal is to educate you on what to expect in the financial planning process so that you can fully partner with us: what topics we’ll bring up, what documents we’ll ask for, and why all of this is important to create a full picture of your financial situation.

We believe that committing to doing a financial plan is committing to investing in yourself. The success of your plan is directly impacted by how much time and effort you want to invest in the process. If you make the commitment, we can help empower you to make informed decisions so that you’re in control of your wealth and success, whatever that means for you. Might that be a lofty goal? Yes. Is it worth it so that you can sleep at night and achieve what you want in life? Absolutely. You may still be able to make an ill-fitting sweater work, but don’t you deserve a sweater that fits you just right? Here at Morton, we think so too.


Presented for informational purposes only. You should seek financial, tax and legal advice from your professional advisors before implementing any transactions and/or strategies concerning your financial plan.


New Podcast: The Ripcord Moment

Our Senior Vice President and Wealth Advisor, Joe Seetoo, recently kicked off his passion project called The Ripcord Moment, a podcast dedicated to empowering business owners through the exit planning process. Each episode of the podcast focuses on the experiences of business owners and their team of advisors who have made the jump and successfully handed off their business to the next generation, existing partners or strategic buyers.

Subscribe to the podcast and listen to the latest episodes of The Ripcord Moment by clicking below.

Also available to listen on Apple and Spotify
Listen to The Ripcord Moment Podcast here


Welcome, Brian and Sherry

Brian Mann
Wealth Advisor

What does wealth mean to you?
“Get the most life out of your wealth” have been words to live and work by at Morton Capital for years. Notice how the word “life” comes before the word “wealth”? That’s intentional. I don’t think my definition of wealth has changed over the years—it’s still very much associated with accumulating money. What has changed, however, is that my wife and children have completely transformed and refocused my purpose behind actually building wealth. Now, wealth to me feels much more like a means to an end, the “end” being a life spent using the money I earn on the people and experiences that produce lasting and meaningful memories. I want to continue to go on dates with my wife. I want my children to experience the world. And I want the time and freedom to enjoy the little things along the way. THAT’s my wealthy life.

What inspires you about the work you do at MC?
I’m inspired by the prospect of doing well by doing good and by helping clients uncover what values guide their lives (and investing accordingly). I started my career working at Human Rights First in Washington, D.C., advocating for and defending the rights of immigrants and refugees, so doing good is incredibly important to me. On a daily basis, I have the privilege of speaking with my clients about sustainable and values-based investing, and I’m able to design financial plans and portfolios that allow them to speak with their dollars. At Morton Capital, we’ve been deeply involved in our local communities and charities and offering investments in socially conscious funds for years. True to our mission and investment philosophy, I’m proud that we consistently seek knowledge and resources that allow our clients to pursue these investments at our firm.

What’s a fun fact that most people may not know about you?
I learned to scuba dive in the Philippines but am still terrified of any large marine animals.


Sherry Uchuion
Compliance Administrator

What does wealth mean to you?
Wealth is often defined in terms of possessions and the abundance of quantifiable things, but what if we were to consider the unmeasurable aspects of our lives the most precious? To me, wealth has always been about those moments in between: the slow mornings with your family making breakfast, taking the day to be outside with your friends, or having the ability to be present for your partner in times of celebration and times of despair. I have always defined my wealth by how I spend my time, because unlike any other currency, time is one that cannot simply be replaced.

What inspires you about the work you do at MC?
I’m inspired daily by the entire team at MC. The best part of what I do here is providing support so that my coworkers feel confident that they’re delivering the best possible service to our clients.

What’s a fun fact that most people may not know about you?
I was a piano teacher for almost 10 years and I taught students from the age of three years old all the way up to adulthood.

How Business Owners Can Find Opportunity in Chaos

While 2020 may seem like a difficult time to be a business owner, there are hidden opportunities to grow in the chaos, especially if you think of opportunity as the ability to make positive changes in your business regardless of what’s going on around you. Below are five things that every business owner should consider in this environment to capitalize on potential opportunities for growth.

Click here to read the full article.

Wade Calvert, Morton Capital, Wealth Advisor & Partner

Fourth Quarter 2018 Commentary

What a Difference a Year Makes

While the stock market correction in the fourth quarter dominated headlines, the real news in 2018 was that the vast majority of asset classes produced negative returns. According to a Deutsche Bank study, 90% of the 70 asset classes they track delivered negative returns for 2018—the highest percentage as far back as 1901, when they began tracking the data. This is in stark contrast to the prior year when almost all asset classes had positive returns.

While these extremes in performance are dramatic, the most important takeaway, in our opinion, is that most traditional asset classes moved in the same direction in both years. We have often talked about the ineffective diversification that traditional (i.e., stock and bond only) portfolios have provided in recent years and may potentially provide going forward. This lack of diversification benefit is welcomed by investors in years like 2017, when everything is up, but less so in years like 2018, where everything is down without there really being anywhere to hide.

The Dual Narratives of 2018

Looking more closely at 2018’s performance, two polar opposite narratives dominated the beginning and the end of the year. The U.S. markets began 2018 with high hopes that tax reform and deregulation would drive an acceleration in the rate of capital investment, thus improving productivity and bolstering economic growth and corporate earnings outlooks. According to Bloomberg, while tax reform has been positive on the margin for capital spending, a large share of the tax windfall has been allocated to corporate share repurchases (i.e., financial engineering). While tax cuts contributed to the rally in the first nine months of the year, it was short-lived as earnings slowed as a result of the lack of investment in productivity. Most indices severely corrected in the fourth quarter and ended the year down or flat. The one bright spot for in the quarter was gold, which acted as an effective hedge during this period of market stress. The table below summarizes the fourth quarter and year-to-date (YTD) performance for selected indices.

We have frequently been asked to comment on what caused the U.S. market’s swoon in the fourth quarter. There was certainly no shortage of potential problem areas: the Fed raised interest rates by 25 basis points (0.25%) for the fourth time in the year, trade tensions with China continued, global economies started showing signs of slowing down, the Democrats took control of the House but the Republicans maintained their majority in the Senate, the White House experienced continued personnel turnover, and there was even a partial government shutdown late in December. None of these events, in our opinion, were significant enough to be considered a catalyst for the market downturn, however. Interest rates have been on the rise for the better part of three years, trade tensions dominated headlines for much of the year, and political uncertainty has been evident almost on a daily basis. Rather than pointing to any one event as the cause of the downturn, it seems most likely to us that markets simply got ahead of themselves in 2017 and the first nine months of 2018. Looking forward, we anticipate that there could be further volatility as the stimulus from tax cuts and government spending wanes and both economic and corporate profit growth rates decelerate.

Morton Capital’s Approach

In our year-end communication regarding the recent market volatility, we emphasized our core beliefs as it pertains to developing long-term plans and managing our clients’ portfolios. Undoubtedly, the markets become more difficult to navigate late in the business cycle, as markets search for new equilibrium and more rational valuation levels. Our core beliefs have helped guide us through challenging markets in the past, and we believe will do so again going forward. Our core beliefs encompass the following:

    • Risk Management

    Investors have to take risk to make money, but deciding what type of risk and how much to take given certain environments can be key to long-term success. In the current environment, where we believe valuations are elevated, the key is finding investments where we have conviction that the return potential justifies the risk being taken. Over the last few years, we have been reducing our exposure to traditional asset classes as euphoric investors have bid up prices and chased yields. These allocations have typically gone to more lending-related strategies, where we believe investors can make relatively attractive returns without having to suffer through stock-like volatility. Where appropriate, we have also increased our allocations to private alternative investments, where there can be a premium for taking on illiquidity.

    • True Diversification

    We define a truly diversified portfolio as one with multiple drivers of return. If stocks and bonds have the potential to move in lockstep during a downturn, then a broader and more dynamic alternative approach to diversification is necessary to be effective. While lack of access and due diligence expertise may keep other firms from investing in alternatives, Morton Capital has been at the forefront of incorporating innovative asset classes such as real estate equity, private lending and reinsurance into our clients’ portfolios. These asset classes should not move in lockstep with the market and should better manage risk if we encounter a sustained correction.

    • Cash Flow

    In designing our client portfolios, we have always shown a preference for investments that can generate immediate or reasonably fast cash flow. While long-term buy-and-hold strategies can be successful, we prefer to be paid while we wait. In the current low-interest-rate environment, we have tilted our public stock portfolio to more dividend-paying stocks and have sought higher levels of cash flow in the private lending space as a replacement for traditional low-yielding bonds. We believe these cash flow-focused assets, especially in the private lending space, will generate more attractive and consistent outcomes for our clients while simultaneously supporting their lifestyles.

Follow Your Plan—Reacting Can Hurt Performance

At some point or another, we have all experienced the frustrating gridlock on the 405 or 101 freeways during rush hour. While traffic is slow for everyone, some drivers keep changing lanes hoping to get ahead. We, on the other hand, stay in our lane and end up passing them a little down the road. Given the heightened levels of volatility and the associated uncertainty, it is understandable that emotions may run high, causing investors to make changes to their portfolios. It is widely studied that one of the costliest mistakes investors make is to sell some of their riskier holdings and hope to buy them back later when things get “better.” Dimensional Fund Advisors has performed a study on the returns of the S&P 500 Index from 1990 to the end of 2017 to prove that market timing is a futile practice. As illustrated in the graph below, if investors missed the 25 single best days in the market during this timeframe, their annualized return would have dropped from 9.81% to 4.53%. Such underperformance will undoubtedly have a major adverse impact on an investor’s financial plan.

Forecasting the future path of the markets or the economy is never easy, and we are not in the business of predictions. As your partner and advisor, we can, however, encourage you to stay disciplined and not overreact to short-term volatility in the markets. In developing a plan to meet your financial goals, we have considered your objectives, income, cash flow requirements, and tolerance to assume risk. Maintaining a diversified portfolio and target asset allocations consistent with our philosophy is an important discipline. While there is an urge to want to be active and make changes, the reality is that every decision is an active decision, including a decision not to make changes.

Please do not hesitate to contact your Morton Capital wealth advisory team if you have any questions or would like to review your portfolio or plan in more detail. As always, we appreciate your continued confidence and trust.

Morton Capital Investment Team



Disclosures: This commentary is mailed quarterly to our clients and friends and is for information purposes only. This document should not be taken as a recommendation, offer or solicitation to buy or sell any individual security or asset class, and should not be considered investment advice. This memorandum expresses the views of the author and are subject to change without notice. All information contained herein is current only as of the earlier of the date hereof and the date on which it is delivered by Morton Capital (MC) to the intended recipient, or such other date indicated with respect to specific information. Certain information contained herein is based on or derived from information provided by independent third-party sources. The author believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information. Any performance information contained herein is for illustrative purposes only.

Certain private investment opportunities discussed herein may only be available to eligible clients and can only be made after careful review and completion of applicable offering documents. Private investments are speculative and involve a high degree of risk.

The indices referenced in this document are provided to allow for comparison to well-known and widely recognized asset classes and asset class categories. Q4 returns shown are from 09-28-2018 through 12-31-2018 and the 2018 Year-To-Date returns are from 12-29-2017 through 12-31-2018. Index returns shown do not reflect the deduction of any fees or expenses. The volatility of the benchmarks may be materially different from the performance of MCM. In addition, MCM’s recommendations may differ significantly from the securities that comprise the benchmarks. Indices are unmanaged, and an investment cannot be made directly in an index.

Past performance is not indicative of future results. All investments involve risk including the loss of principal. Details on MCM’s advisory services, fees and investment strategies, including a summary of risks surrounding the strategies, can be found in our Form ADV Part 2A. A copy may be obtained at