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Mid-Quarter Newsletter – March 2021

Congrats to the MC Team!

For the third consecutive year, and ranking #2 on the 2021 list, we feel incredibly honored to be recognized on the prestigious annual Best Places to Work for Financial Advisors list by InvestmentNews.

Each year, InvestmentNews recognizes standout employers in the financial advice industry. These firms, ranging from small practices with fewer than 20 people to large companies with over 700, go beyond offering attractive benefits and perks and create work atmospheres that empower their employees with the skills and confidence necessary to deliver the best possible investment and financial planning guidance to clients.

We are SO PROUD of each and every one of our team members for helping us earn this distinction. Without them, this would never be possible.

Click here to read the full article and explore the list.

 

Revisiting Your Savings Strategy

With many service industries shuttered due to quarantine measures—not to mention the seemingly never-ending stay-at-home orders—the opportunity for spending money has significantly decreased over the last year (though the at-home-entertainment budget might have increased). According to the U.S. Bureau of Economic Analysis, the result has been a record-high savings rate for households with disposable income: the personal savings rate hit 32.2% in April 2020, breaking the previous record of 17.3% in May 1975 (FactSet). Since having fewer opportunities to spend may continue to be the case until the vaccine is fully rolled out, now is a great time to revisit your current savings strategies, especially when it comes to emergency fund savings, retirement savings, and paying down debt.

Read more

 

Untold Truths of Acting in Your Clients’ Best Interest – Interview With Our CIO, Meghan Pinchuk

Our Chief Operating Officer, Stacey McKinnon, recently sat down with Meghan Pinchuk, our Chief Investment Officer, to talk about “Untold Truth # 5 – Don’t just invest with the herd” from Stacey’s industry white paper and why Morton Capital feels investing in asset classes outside of stocks and bonds helps protect our clients.

These types of investments come in all different shapes and sizes and in this interview, Meghan shares how we execute our alternative investment philosophy, including how we source and structure our investments.

They also talk about why it was important for Meghan to build a resilient enterprise when she took over running the firm with Jeff Sarti in 2013, her love for learning, and how the most successful clients are generally engaged, humble, and open-minded.

Click here to read Stacey’s industry white paper on the “Untold Truths of Acting in Your Clients’ Best Interest.”

View more of Stacey’s interviews from the Untold Truths series featuring industry experts such as Michael Kites, Chief Financial Planning Nerd at Kitces.com, and Philip Palaveev, CEO of The Ensemble Practice, LLC, here.

Watch the interview here.

 

The Madness of Crowds

In 1841, Charles Mackay, a Scottish journalist and author, published his study of crowd psychology, called Extraordinary Popular Delusions and the Madness of Crowds. In the first volume of his study, he examined economic mass manias, notably the tulip mania in Holland in the 1630s. Due to a bull market in tulip bulbs, many in Holland abandoned their businesses to grow tulips, trade them, or become tulip brokers. Even banks got involved and started accepting tulips as collateral, thus fueling the speculative bubble. Not long after, the mania collapsed in waves of panic selling, leaving many people financially ruined and shocking the Dutch economy.

Throughout history, there have been many examples of similar mass manias driven by crowd behavior, even in spheres beyond the financial markets. However, in today’s era, social media’s ability to quickly mobilize crowds for a single purpose has introduced a new level of risk. When joining crowds, individuals tend to develop a herd-like mentality. Regardless of their character, intelligence, and education, once in a group, individuals get swept up in the collective mind and may engage in riskier behavior than they otherwise might have on their own.

One recent example of this type of behavior was the price manipulation in GameStop stock earlier this year. This price manipulation was initiated by the r/WallStreetBets Reddit forum, which has over 9 million subscribers and is known for its aggressive trading strategies. In this instance, the crowd had decided that by buying GameStop stock, they would somehow be able to redistribute gains from hedge funds that had profited from betting against the struggling video game retailer into the hands of ordinary people. The power of the crowd caused the price of shares to shoot up by nearly 2,500% in the month of January, at one point trading at a volume nearly twice that of Apple. [1]

What happened with GameStop clearly shows the extent to which the financial markets are susceptible to the mobilization of investment crowds. And while a large group of people can indeed wield enough power to move markets, without investment fundamentals or appropriate risk management backing amateur investors’ moves, their gambling behavior may result in devastating consequences, just as it did during tulip mania nearly 400 years ago.

[1] Yahoo Finance

 

Welcome Lauren and Mollie

Lauren Salas
Private Investments Administrator

Lauren joined Morton Capital in June 2020 as a Private Investments Administrator. Previously, she worked as the Business Operations Coordinator for eight branches of an HVAC distributor in the Northern California region. She graduated from New Mexico State University with a Bachelor of Business Administration in marketing and managerial leadership. She is currently studying for the Series 65 exam. In her free time, Lauren enjoys going to the beach, camping, and traveling.

 

Mollie Privett
Client Service Associate, CFP®

Mollie joined Morton Capital in July 2020 as a Client Service Administrator before moving into a Client Service Associate role on the advisory team. Mollie graduated magna cum laude with a bachelor’s degree in business management from California State University, Long Beach, in 2017. Throughout her roles at prior companies as a Financial Representative and Client Service Specialist, she earned her life, health and disability insurance license, Series 6 license, Series 63 license, and her CERTIFIED FINANCIAL PLANNER™ certification. She is extremely passionate about helping others, solving problems, and communicating effectively. Outside of work, Mollie loves spending time with her family and friends, going to the beach, writing poetry, cooking plant-based meals, and being in nature.

 

MC Team Fitness Challenge For Safe Passage Youth Foundation

Making a healthy impact and supporting the community continue to be main focuses of ours. At the beginning of January, we kicked off our “Get Moving” initiative where our entire team participated in a fitness challenge to raise money for Safe Passage Youth Foundation, a local organization that provides daily nutrition and emergency COVID relief to hundreds of children (grades K-12) and their families. For every workout or outdoor activity each team member completed, MC made a donation to Safe Passage. In all, our team completed over 700 workouts and raised over $3,500. We are grateful for the opportunity to be a part of this wonderful cause in our local community.

Learn more about Safe Passage here.