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Quarterly Commentary – Q4 2020

Deus ex machina

One of the few, albeit minor, benefits to an epically challenging 2020 was when blockbuster movies started being released straight to our homes. For example, the new Wonder Woman 1984 appeared on HBO on Christmas Day, offering two hours and thirty-five minutes of escape from reality. We won’t rate the movie in this commentary, but (spoiler alert!) we will say that we were not fans of them bringing back Chris Pine’s deceased character using some silly gimmick in the plot.

This gimmick is also known as a deus ex machina, a Latin term that dates back to the dramas of ancient Greece and Rome. Merriam-Webster defines deus ex machina as a “person or thing that appears or is introduced suddenly and unexpectedly and provides a contrived solution to an apparently insoluble difficulty.” In other words, if you have a problem for which there is no solution, you simply change the rules to fix it. When this device is used in literature or media, it is often unsatisfying and uncomfortable for the audience. We may willingly suspend our belief to enjoy a new world with new rules (e.g., one with a superhuman Amazon running around with a truth lasso), but once the rules have been created for this new world, they should not keep changing every five minutes.

If it is frustrating when this happens in the movies, it is even more disconcerting when it happens in real life. In many ways, it feels like this phenomenon keeps appearing in the modern world of finance as fiscal and monetary authorities keep changing the rules by which the game is played. Some examples include interest rates being held at zero or negative levels or trillions of dollars/euros/yen being printed globally under new monetary theory that fiscal solvency is irrelevant. The extremes of 2020 only exacerbated these distortions of reality and it is tempting to shut your eyes to the manipulations and hope that our government really has found a way to defy the truths of finance. Hope, however, is not a sound strategy. Instead, we need to keep our eyes wide open to the imbalances and risks that exist in our world today. If those in charge keep changing the rules, then we need to be willing to find a different game.

 

Stocks continue defying the laws of gravity and common sense

Most probably would have guessed that a global pandemic would have been negative for the stock market. Not so! Fiscal stimulus, in conjunction with early and sweeping monetary stimulus by the Federal Reserve (Fed), created the easiest financial conditions on record and flooded the market with liquidity, driving stocks higher in 2020. The fourth quarter also saw the introduction of two high-efficacy COVID-19 vaccines by Pfizer and Moderna, as well as prospects for additional stimulus, which propelled risk assets to new heights by the close of the year.

So not only has the market recovered the steep losses first suffered when the extent of the pandemic became apparent in early 2020, but it has since surpassed pre-pandemic levels to a meaningful degree. This is in the face of declining earnings and a great deal of uncertainty about when and to what extent those earnings will recover. To be sure, there have been some “winners” that came out of 2020. The pandemic shock has been transformational for the economy, bifurcating it into “haves” and “have-nots.” This bifurcation has benefited the so called “stay-at-home” sectors of the market, in particular technology, while decimating other sectors such as retail, travel and entertainment. While some of these shifts may prove to be temporary, others will be permanent, and still others have accelerated longer-term trends that were already in place.

At the end of 2020, markets seemed to be pricing in a degree of optimism and certainty regarding the path forward that did not appear to reflect the underlying challenges facing the U.S. economy. In our opinion, uncertainty still remains elevated with respect to both the short-term path of the recovery as well as the long-term transformation of the post-pandemic economy. The discrepancy between stock performance and earnings in 2020 served to only further exacerbate stretched valuations. Also, it is important not to forget about the revolutionary amounts of debt it took to keep things afloat, which we believe will reverberate through future generations. Is this really an environment where it is logical for stocks to be making new all-time highs?

 

Investor speculation adds fuel to the fire

While massive government stimulus has been a major driver of the recovery in stocks, investor behavior has also played a key role. Historically, two main indicators that point to how investors are engaging in more speculative behavior are heightened margin levels and abundant initial public offerings (IPOs). Starting with margin, this is simply debt that brokerages extend to their account holders, using their existing securities as collateral. Past market peaks have tended to coincide with high levels of margin debt. This is not surprising as it is human nature to become greedy when stocks go up and borrow to buy even more stock. Toward the end of 2020, margin debt topped $700 billion, a new high and well above levels that have been seen since the dot-com bubble.

Also consistent with previous market pinnacles, private companies are going public at a heightened rate. As you can see in the chart below, 2020 has had many more IPOs than in recent history.

In a year of a global pandemic, where our economy collapsed in terms of output and we lost 20 million jobs in just a few months, does it make sense that the IPO market was robust? Perhaps it would have been more prudent for companies to take a breather and wait until there was more certainty surrounding their near-term futures. After all, look at the middle of the chart in 2008 and 2009, where IPO activity collapsed. This makes a lot more sense in an economic downturn. But not this time, because despite all the uncertainty, in 2020 investors have been eager to take a chance on pretty much any and all IPOs. It is irrelevant if these companies have earnings; in fact, looking at the numbers you would think it was discouraged since about 80% of these 2020 IPOs had negative earnings.

Far from caring about earnings, speculative investors have pushed these stocks higher, to the point where their valuations often reach ridiculous levels very quickly. An example of a recent IPO in this category is QuantumScape, an up-and-coming entrant into the electronic vehicle battery space. With Elon Musk and Tesla making headlines, this is obviously a very hot area of the market, so it is no wonder that this company attracted investor interest. But despite the company’s exciting potential, THEY HAVE YET TO SELL A SINGLE BATTERY. The technology, while very promising, is not yet proven. So what valuation did investors give this pre-revenue company? Nearly $50 billion. To put that in context, that market cap is roughly double the size of Panasonic, which is the battery maker for Tesla cars. Panasonic has a number of other business lines as well and has been around for decades, but the market likes shiny new toys in this speculative environment, so QuantumScape reached a height of $50 billion before getting slashed back down to a meager $20 billion.

Another hot 2020 IPO was Airbnb, the popular company that allows you to rent a home or apartment online. This was a company that got hit pretty hard with the pandemic and its revenue in 2020 was down a good amount from the year before. Also, on $2.5 billion of sales, it lost an impressive $700 million. This is a company that has never made a profit in a calendar year. Yet it was rewarded with a $100 billion valuation when it went public. To put that in perspective, Starbucks, a truly global brand and moneymaker, has a valuation of a little more than $100 billion. FedEx, a massive company that has done well during this pandemic, is worth about $70 billion. These types of IPO valuations are completely disconnected from reality and reflect a speculative fervor that has seized market participants, not dissimilar from the tech frenzy that gripped markets prior to the dot-com bubble bursting.

 

If you don’t like the rules, then change the game

Most investors need to make their investments work for them over the long term to meet their financial goals. Even for those who have large cushions built-in, it is still prudent to make sure that you can stay ahead of inflation, which we see as being a meaningful risk in the years ahead. So what is the solution when we are faced with an investment landscape that includes massive debt imbalances from government intervention and frenzied investor speculation? Though the situation with traditional markets seems dire, we are not intimidated and instead feel increasingly confident in our approach to portfolio management. Three key aspects to our approach include:

1) With traditional stocks, focus on what you can control.

While our target stock allocations are at their lowest in our firm’s history, this does not mean that we do not own any stocks. There are a number of reasons why stocks are a prudent part of a long-term portfolio, not the least of which is that if the Fed continues pumping money into the system, we could continue to see stocks benefit from asset price inflation. At the end of the day, we do not believe that this is a long-term recipe for success. But the proverbial end of the day could potentially be far off and, in the meantime, stocks can continue to benefit from the tremendous liquidity in the system. One key is making sure that stocks are at an appropriate level in the portfolio given their potential for meaningful volatility. Another key is making sure you maintain diversification and do not allow FOMO (fear of missing out) to push you to overweight the hottest, most overvalued tech stock in the market. Finally, while we cannot control market valuations and performance, there are some attributes of this investment that we can control: namely, fees and tax efficiency. If we access our stock allocations using vehicles with relatively low fees and high levels of tax efficiency, this can help maximize returns for the long run.

2) Take advantage of speculative behavior (safely) when you can.

While we have no interest in being swept up in the speculative fervor of negative-earning IPOs, that does not mean that there aren’t ways to profit from the space. An increasing number of companies are choosing to go public through the use of special purpose acquisition companies (SPACs). SPACs, also known as blank-check companies, are pools of capital raised by a sponsor, such as a well-known businessman or asset manager, with the goal of finding a company to take public. At the onset, a SPAC is funded entirely with Treasuries. The manager that Morton Capital utilizes in this space looks to take advantage of a structural inefficiency that allows investors to participate in the initial jump up in SPAC prices following the announcement of a deal without actually having to own the stock and assume the downside risk. Thus, investors can participate in some of the upside from these SPAC IPOs with the downside being the yield on Treasury bonds. Needless to say, there are quite a few moving parts to this strategy, as well as logistical requirements and minimum sizes. If you are interested in learning more, please contact your Morton Capital wealth advisor.

3) Lend on assets, not to zombies.

The more debt that piles up in the system, the riskier it is to loan money to companies that may be challenged when paying back that debt. The stock market is currently plagued with the highest level of zombie companies in its history (representing around 20% of the largest U.S. companies according to a late 2020 study by Bloomberg). A zombie company is defined as a company that generates insufficient earnings to pay its debt service and has to continually borrow to stay in business. Instead of lending to companies that need a constant supply of cheap debt to survive, our focus has been on making loans on tangible assets. This includes making private loans to companies that are cash-strapped but have real assets that can be sold if the company does not survive. It also includes making loans to borrowers on assets such as real estate, including mortgage loans in both the private and public markets. The key to any strong asset-based loan is how conservatively the manager values the collateral assets that back the loan and what type of cushion the manager leaves to account for any changing values over time. Another preference of ours is to invest in managers that make short- term loans for periods where there is better clarity around the values of the assets. In an environment where traditional bonds offer little reward with plenty of risk, finding managers with expertise in asset- based lending can add meaningful downside protection as well as opportunities for heightened cash flow.

We recognize that these are trying times with a great deal of uncertainty pervading all aspects of life. Instead of being intimidated by the uncertainty in financial markets, we hope that our clients feel empowered by our willingness to look beyond the traditional game, where the rules keep changing, and instead find investments with fundamentals that still make sense. If you have any questions about your portfolio or financial plan, please do not hesitate to reach out to your Morton Capital wealth advisor. As always, we appreciate your continued confidence and support.

Best Regards,

 

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 investment opportunities discussed herein may only be available to eligible clients. References to specific investments are for illustrative purposes only and should not be interpreted as recommendations to purchase/ sell such securities. This is not a representation that the investments described are suitable or appropriate for any person. It should not be assumed that MC will make investment recommendations in the future that are consistent with the views expressed herein. MC makes no representations as to the actual composition or performance of any security.

The indices referenced in this document are provided to allow for comparison to well-known and widely recognized asset classes and asset class categories. YTD returns shown are from 12-31-2019 through 12-31-2020 and Q4 returns are from 10-01-2020 through 12-31-2020. 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 MC. In addition, MC’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 MC’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 www.adviserinfo.sec.gov.

2020 Reflections | Year End Letter

NEW YEAR’S WISHES

As we look back over 2020, this year has turned out very differently than we expected at the start. As the world has slowed down to keep everyone safe, Morton Capital has continued its work to bring an essential service to our clients and community. As you’ll see from the highlights below, we are more dedicated than ever when it comes to our team and our clients. We would like to thank you for allowing us to continue to be part of your story, especially during such a challenging time.

 

MC TEAM AND GROWTH

In 2020, initiatives around hiring, team development, and firm growth continued to be a focus.

  • MC was named one of the Best Places to Work for Financial Advisors by Investment News for the second year in a row. This list highlights the top 75 firms nationwide in the financial advice industry.

  • We implemented our Employee Value Proposition, a commitment by MC and its team members to create an organization full of meaning and purpose and that champions our core values.
  • We launched our Mentor/Mentee program, which pairs team members across the firm to provide support and development around such skills as leadership, presentation skills, and written communication.
  • We held our first Core Values Awards, highlighting team members who exemplify each of our five core values.

  • This year, we began working more closely with Talia Jacqueline of Visceral Impact to help with team development and to teach us about the psychology of communication.
  • MC hired talented new people across several teams, including the advisory, compliance, client service and private investments teams. New hires included:
    • Brian Mann (Wealth Advisor), Mollie Privett (CFP®, Client Service Associate), Thao Truong (CFP®, Associate Wealth Advisor), Sherry Uchuion (Compliance Administrator), Jessica Hull (Client Service Administrator), Cameron Meek (Client Service Administrator), Trent Paddon (Client Service Administrator), Lauren Salas (Private Investments Administrator), and Judy Lee (Private Investments Administrator)
  • Across the firm, leaders met with team members to discuss individual, personalized career path timelines, for a total of 45 firm-wide.

  • Advancements through those career path timelines included:
    • Menachem Striks (Chief Compliance Officer), Sarah Ellis (Client Experience Manager), Dan Charoenrath (Director of Operations), Olivia Payne (Associate Wealth Advisor), Chris Wahl (Associate Wealth Advisor), Benjamin Markman (Trader), Elana Yaffe (Financial Planning Associate), Edward Garcia (Paraplanner), Patrick Garcia (Fund Relationship Manager), Moriah Bowles (Client Service Technical Specialist), Austin Overholt (Client Service Administrator), Kierstan Lewis (Private Investments Administrator)
  • We enhanced leadership development initiatives and the number of team retreats.
  • Two of our team members became new partners in the firm: Wealth Advisor Chris Galeski and Chief Compliance Officer Menachem Striks.
  • Through the hard work and dedication of our team, we were able to add 40 new client households to the MC community. We now manage over 1,000 client households and surpassed $2 billion in assets under management (AUM).
  • Three team members welcomed beautiful babies Aila (Chris Galeski), Anderson (Carly Powell), and Presley (Patrick Garcia) this year.

 

INVESTMENT RESEARCH, FINANCIAL PLANNING, AND WEALTH AND LEGACY PLANNING

We work diligently behind the scenes to source great investment opportunities for our clients. To give you a peek behind the curtain, this year:

  • Our investments team had over 180 calls on new potential investment opportunities.
  • Out of all the new strategies reviewed, we introduced 3 new strategies.
  • Our CIO, Meghan Pinchuk, and our investment research, private investments, and portfolio management teams collaborated on an “Investment Approach” video that highlights the core tenets of our investment philosophy.

Financial planning and wealth and legacy planning are key ingredients to helping our clients get the most life out of their wealth, and we continually work, year after year, to refine and expand our planning offerings. This year, we:

  • Introduced a five-month-long Paraplanner training program to provide a strong foundation for our Paraplanners, both those staying on the Financial Planning Team career path and for those moving along the advisory team career path.
  • Expanded our Financial Planning and Wealth and Legacy Planning Teams to five members.
  • Reviewed and completed over 250 financial plans.
  • Completed over 130 Wealth and Legacy Planning meetings with Wealth Planner Brian Standing.
  • Held 48 education sessions for our team members around estate planning, insurance, tax strategies, and retirement planning.

 

MC IN THE COMMUNITY

Earlier this year, as a result of a company-wide innovation tournament, we formed an internal committee dedicated to pursuing charitable initiatives in the community. Our team members at MC feel passionately about giving back to the community, not just financially but also with our time and energy. Here are a few of our 2020 charitable initiatives:

  • Community Give Back – We were able to help 22 individuals/families with complimentary financial planning advice at a time when many are having to make extremely hard financial decisions.
  • Get Moving Fitness Challenge – In November, we chose Feeding America as the recipient of our first-ever fitness challenge for charity. Every time a team member exercised for 30 minutes, MC donated $5. We are excited to report that our team members were active 532 times, logging more than 250 hours and raising $2,660!
  • Holiday care packages – In December, we collected non-perishables, toiletries, and other supplies to send to the military overseas. We were able to send over 150 holiday care packages this year.

 

INDUSTRY RECOGNITION, ENHANCEMENT, AND EDUCATION

 Education is incredibly important to us at MC, as is enhancing our offering through technology and marketing initiatives. We are also pleased to share below how our firm and team members are making an impact in the financial services industry.

  • Virtual conferences:
    • COO Stacey McKinnon’s “Good to Great” presentation at Bob Veres’s virtual 2020 Insider’s Forum
  • In addition to being featured on industry forums and at conferences, MC hosted our own live webinars for the first time this year.
    • CEO Jeff Sarti and CIO Meghan Pinchuk presented market review webinars over the past four quarters.
    • Our advisory team hosted our six-part “Staying Connected During COVID-19 webinar series.
  • We launched MC’s social media presence, writing hundreds of posts over the course of this year, including advisor-written articles, our This Is Wealth series, and book stack posts of what our team has been reading.

  • To support our increased use of home offices and virtual client meetings, we expanded our technology infrastructure to include Zoom’s cloud-based phone service and the appointment scheduling software Calendly.
  • We updated our reporting process to shift to more on-demand access of portfolio performance through our online client portals rather than traditional quarterly performance reviews.
  • In February, we closed out our popular Financial Bites educational lunch series.
  • Our team members continued to work towards increasing their knowledge by obtaining additional certifications that enhance our offering.
    • Series 65 license (wealth management): Olivia Payne, Benjamin Markman, and Chris Wahl
    • CFP® certification (financial planning): Mollie Privett

Even in such a challenging year, it has been important to us to continue to pursue knowledge and growth to become even better stewards of our clients’ wealth. This year, more than ever, we feel truly grateful for your continued confidence in us and wish you and your family a happy, and healthy, new year.

Here’s to a brighter year ahead.

Your Morton Team

Mid-Quarter Newsletter – November 2020

Year-End Tax Planning

Yes, it’s that time of year again: When it starts to get a bit nippy in Southern California and we have to wear long-sleeve shirts with our shorts and sandals. The time of year when things start to get a little cheerier and we look forward to the promise of a new year ahead (especially after 2020). Yes, you guessed it—it’s time for tax planning!

This year has been an eventful one, to say the least. Amid the social, medical, and political turmoil of 2020, there have been two laws passed that may affect your year-end tax-planning: the CARES Act and the SECURE Act (passed a lifetime ago in January). Let’s take a look at some key opportunities in the new laws, as well as some oldie-but-goodie strategies, to see what’s best for you.

  • Maximize your retirement savings
    • Did you turn 50 this year? If so, you’re entitled to a $6,500 catch-up contribution for your 401(k) plan and an extra $1,000 for traditional and Roth IRAs.
    • If you’ve already maxed out your 401(k) contribution, and your company retirement plan allows you to, consider contributing additional funds to your plan on a non-deductible basis. For 2020, the total contribution limit is $57,000 (made up of your first $19,500 employee elective deferral + any employer matching + any additional contributions you make).
    • If you’re over 70.5 and still working, the SECURE Act increased the age limit to contribute to your traditional IRA to 72.
      • Note, though, if you’re considering making a qualified charitable distribution (QCD), making a deductible IRA contribution may reduce how much of the QCD you can deduct.
    • Take advantage of deductions
      • Charitable deductions
        • The CARES Act increased the limit on charitable deductions in 2020 to 100% of AGI for cash contributions made to public charities.
          • Note: contributions made to a private foundation or a donor-advised fund do not qualify as qualified charitable contributions (QCCs) so the 60% AGI limitation for cash would apply.
        • If you don’t itemize deductions, the CARES Act also permits an above-the-line deduction of $300.
      • Consider a Roth conversion
        • If your income is lower this year—either due to COVID-19 and/or the CARES Act waiver of required minimum distributions for 2020—consider doing a Roth IRA conversion since you’ll already be in a lower tax bracket.
        • The SECURE Act requires that IRAs inherited by non-spouse beneficiaries be distributed within 10 years. Mitigate the tax impact on your heirs by converting funds from a pre-tax IRA to a Roth so the distributions to your heirs will be tax-free.
        • If a Roth conversion is appropriate for you, you can pair it with your QCC to offset the income recognized from converting pre-tax funds into a Roth.

If you’re interested in discussing any of the above strategies further, contact your wealth advisory team now. The last couple months of the year can get very busy with tax-planning requests, so processing times can be delayed at brokerage account custodians. If you and your advisor decide that one (or more) of these strategies is right for you, start early to ensure any transactions are processed by year end. The holidays are going to look a lot different this year, so perhaps a silver lining is the opportunity to be more strategic when it comes to another December tradition—tax planning.

Disclosures: This information is presented for educational purposes only. It is not written or intended as financial or tax advice and may not be relied on for purposes of avoiding any federal tax penalties under the Internal Revenue Code. You are encouraged to seek financial and tax advice from your professional advisors before implementing any transactions and/or strategies concerning your finances.

 

Schwab IMPACT Video & Sharkpreneur Podcast

Featuring our CEO, Jeff Sarti

Our CEO, Jeff Sarti, was featured at Charles Schwab’s virtual IMPACT conference. Thousands of investment advisory professionals gathered remotely to learn about how to think differently about the issues that matter most to their practices. This year Schwab highlighted four firms based on the impact they are making in the industry. In a year that has brought so much change, we are honored to be chosen. Watch the video below as Jeff shares his personal thoughts on serving our clients during these uncertain times.

Jeff was also featured on a recent episode of the Sharkpreneur podcast with host Seth Greene, one of the original sharks from the hit TV show Shark Tank. Jeff discusses Morton’s market outlook given the challenging economy and also explains how our three core beliefs drive our business decisions and empower our internal teams.

To watch Jeff’s video from the Schwab IMPACT conference or listen to his podcast with Seth Greene, click below or visit our Insights page on our website.

Links:

Schwab IMPACT video link:  https://mortoncapital.com/schwabimpactvideo/

Sharkpreneur podcast link: https://mortoncapital.com/sharkpreneur-podcast-featuring-jeff-sarti-growing-to-2-billion-aum/

 

What Does “Money Printing” Really Mean?

In recent years, the term “money printing” has become commonplace with investment professionals, economists and politicians. But what does it actually mean? While the specific execution can be highly nuanced and rather complicated, at its core, money printing is when assets suddenly appear on the balance sheet of the Federal Reserve (Fed), which then facilitates the distribution of those assets to privately held banks. Contrary to its name, money printing doesn’t constitute the use of a physical printing press, but, in our electronic world, just requires the push of a button to make digital assets appear.  To better understand what money printing is and why we should care about it, let’s take a look at money printing in action over the last two global economic recessions.

 

Money printing during the Great Financial Crisis (GFC)

To ensure they can meet their obligations, banks must hold a certain amount of cash as reserves. In 2008, according to the FRED economic database, U.S. banks had very low cash levels (only around 3%!), which meant that, as millions of Americans defaulted on their mortgages, banks didn’t have the cash on hand to remain solvent on their own. The Fed stepped in and essentially created “cash” in banks’ accounts with a few keystrokes. The hope at the time was that this move would shore up bank balance sheets and allow them to start lending again to stimulate the economy. While the first objective was accomplished, the higher level of lending activity didn’t materialize, leading many to cite this example as evidence of how money printing was not economically stimulative or inflationary.

 

Money printing during COVID-19

Over the last several months, the financial media has highlighted numerous ways in which banks are now in better shape than in 2008. However, total debt as a percentage of the gross domestic product in the U.S. economy remains very high. High debt levels make the economy fragile to external shocks—COVID was an example of such a shock. As millions of people lost their jobs and businesses struggled to remain solvent, it quickly became clear that this round of money printing needed to channel money directly into people’s pockets rather than shore up the cash reserves of banks.

To provide the economy with trillions of dollars, the government passed a large fiscal package, which included increased unemployment benefits, stimulus checks and paycheck protection loans. To fund these fiscal outlays, the government had to issue even more Treasury securities, which the Fed stepped in to purchase as the buyer of last resort. Unlike during the GFC, money was poured directly into the economy. As a result, the money supply sharply increased.

The real risk of all of this money printing and fiscal stimulus is that there are now more dollars out there chasing the same number of goods. While money printing may not be obviously inflationary in the short term, it’s essentially adding powder to the inflation keg. Just because it hasn’t ignited yet doesn’t mean that all that extra powder won’t ultimately matter. While some investors may choose to ignore this risk, we’ve turned increasingly to real assets such as real estate and gold to protect client portfolios. Money printing may seem like a harmless push of a button, but its prevalence as the stimulative tool of choice for those in charge makes it especially important to understand and monitor.

Disclosure: This information is for educational purposes only. It should not be taken as a recommendation, offer or solicitation to buy or sell any individual security or asset class. This document expresses the views of Morton Capital and such views are subject to change without notice. Any investment strategy involves the risk of loss of capital. It should not be assumed that MC will make investment recommendations in the future that are consistent with the views expressed herein.

 

Welcome Judy and Cameron

Judy Lee

Private Investments Administrator

Judy Lee came to Morton Capital in March of 2020, after previously working in graphic design, copy editing, and project management for over 20 years. She brings a wealth of experience and organizational skills, having worked in the fields of publishing, product design/manufacturing, corporate/marketing design, and education. Judy graduated with a Bachelor of Arts degree in English from the University of California, Los Angeles. When not at work, she enjoys spending time with her family, collecting children’s books, cooking, watching Dodgers and Bruin sports, and serving at her church.

 

Cameron Meek

Client Service Administrator

Cameron Meek joined Morton Capital in May 2020 as a Client Service Administrator. Cameron is originally from North Dakota, and moved to California to pursue work in the entertainment industry before attending Pepperdine University. She graduated from Pepperdine with a degree in communications. Cameron enjoys spending time at the beach with friends, hiking, and trying new recipes.

 

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Please contact your Wealth Advisor at Morton Capital if there are any changes in your personal or financial situation or any changes in your investment objectives, or if you wish to add, or to modify any reasonable restrictions to our investment advisory services. A copy of our current written disclosure statement (Form ADV Part 2) discussing our advisory services and fees continues to remain available for your review upon request. All e-mail sent to or from this address will be received or otherwise recorded by Morton Capital in accordance with SEC regulations and is subject to archival, monitoring, or review by someone other than the recipient. The information contained in this e-mail message is intended only for the personal and confidential use of the recipient(s) named above. If the reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that you have received this document in error and that any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately by e-mail, and delete the original message.

Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended by Morton Capital) will be profitable. Many factors affect performance including changes in market conditions and interest rates and changes in response to other economic, political or financial developments. There is no guarantee that a particular investment objective will be achieved and Morton makes no representations as to the actual composition or performance of any security.

Why Is Gold Going Up?

Gold is making headlines in 2020, as its performance leads most other asset classes year-to-date and investors are starting to take notice. In particular, Warren Buffet’s recent purchase of a gold mining stock has caught the attention of the media. Those who only think of gold as a “safe-haven” investment have been surprised by its strong performance even as the stock market rallied from its March low. But fundamentally, we believe that gold is not an investment at all. Instead, it’s just another form of money like the U.S. dollar or the Euro. So, if it’s not an investment, what’s driving this big rally in gold? While the answer can be complex, we’d argue that there are two main areas on which to focus when it comes to understanding the price of gold: the money supply and investor sentiment.

Read the full article by clicking the image below.

 

Mid-Quarter Newsletter – August 2020

Our Investment Philosophy

The last several months have been extraordinary to say the least and there are still so many unknowns in terms of the financial markets, our economy, and what our world will look like post-pandemic. As a firm, we have undoubtedly adapted how we communicate with our team, other business professionals, and our clients. Throughout all of these changes, the element of our business that has stayed consistent is our investment philosophy. At Morton Capital, we’ve always taken a different approach to investing—one that we believe is the best way to provide the returns our clients need for their lifestyle while trying to protect them from the swings of the market. Our beliefs have remained the same since our founder, Lon Morton, started our company almost 40 years ago and we take great pride in carrying on his legacy.

As we continue to communicate virtually, our Investment Team recently created a video that speaks to how we design portfolios to help our clients get the most life out of their wealth. Watch the video to meet the team and learn a little more about us.

Watch our Investment Approach Video here.

 

Financial Advisor Success Podcast & RIA White Paper
Featuring our COO, Stacey McKinnon

Our Chief Operating Officer, Stacey McKinnon, was featured on a recent episode of Michael Kitces’s Financial Advisor Success Podcast. Michael is a well-known speaker, writer, and editor in the financial services industry. In the episode “Scaling an Advisory Firm by Finding New Talent Outside the Financial Services Industry,” Stacey and Michael talked in-depth about how Morton has grown and evolved as a firm in recent years. Stacey touched on our culture of trust initiative in 2017, our non-traditional approach to hiring talent from outside the industry, and the way we’ve restructured our compensation model.

Stacey also co-authored an RIA white paper with the CEO of PFI Advisors, Matt Sonnen, called “The New RIA Workplace.” The industry report explores the changes firms have had to make to their businesses since stay-at-home orders began. It also shares the pros and cons of both office and remote work environments, how leaders and managers are maintaining company culture during these times, and what the office of the future could look like.

Click here to listen to Stacey’s podcast with Michael Kitces and read the RIA White paper here.

 

Why Is Gold Going Up?

Gold is making headlines in 2020, as its performance leads most other asset classes year-to-date and investors are starting to take notice. In particular, Warren Buffet’s recent purchase of a gold mining stock has caught the attention of the media. Those who only think of gold as a “safe-haven” investment have been surprised by its strong performance even as the stock market rallied from its March low. But fundamentally, we believe that gold is not an investment at all. Instead, it’s just another form of money like the U.S. dollar or the Euro. So, if it’s not an investment, what’s driving this big rally in gold? While the answer can be complex, we’d argue that there are two main areas on which to focus when it comes to understanding the price of gold: the money supply and investor sentiment. Read the Full Article here.

 

A Conversation About Change with Chris Galeski
Featuring Retired PGA Tour Player Peter Tomasulo 

Chris Galeski, Wealth Advisor and Partner at Morton Capital, speaks with Peter Tomasulo, retired PGA Tour player and Director of Investor Relations at Lyon Living. In this 30-minute video interview, they reflect on their former sporting careers, life lessons, family, and the triggers and milestones that opened the door for transition and career change.

 

Watch the video!