Quarter-End Snapshot: Q1 2018
from J. Carter Tolleson
After a relatively smooth ride in the public markets last year, 2018 has ushered in more volatility and “noise” than we have seen in a while. This is the time we find that Tolleson Wealth Management shines. Our investment strategy and core beliefs around asset protection is a key strength we offer to our client families.
Additionally, the firm has continued to receive recognition by industry groups and national publications that not only acknowledges our service, but also our culture and business model.
InvestmentNews named us a Best Place to Work for Financial Advisors, measuring areas such as culture, benefits, career paths and more. Tolleson Wealth Management President Richard Joyner was listed #2 in Barron’s Top Advisor Rankings. The national Private Asset Management Awards announced us as best multi-family office.
While it has never been our goal to collect trophies, it’s always nice to receive these accolades from peers and other industry groups. Receiving that national award for best multi-family office back in February was a real honor and certainly one worth celebrating.
But I am especially proud of our people and what we have all built together, which is what makes Tolleson Wealth Management so special. The Best Place to Work award judged the firm on career opportunities, employee satisfaction and overall company culture. We pay a tremendous amount of attention to – and strongly believe – our people are vitally important to creating and maintaining the high quality of service we provide.
We are also very proud of Richard Joyner’s #2 advisor ranking in the state of Texas. This honor is well deserved and highlights our commitment to providing the best advice and service possible. Richard was one of the few, if any, advisors on the list that worked for a private and independent advisory firm or multi-family office; a unique distinction that we are very pleased with. As President of Tolleson Wealth Management and our lead advisor, this recognition emphasizes our commitment to talent and to providing thoughtful advice and service to our client families.
As always, it is an honor and a privilege to serve you and your family.
Storms and Market Turbulence
Weather is a newsworthy topic lately— from the devastating Hurricane Harvey and Irma this past fall to now Nor’eastern winter storms hitting as we enter spring. Those of us in Texas likely know people either rebuilding or repairing their home, making them less susceptible to future hurricane damage. When we think of how we protect our assets, a similar pattern also rings true for how we construct a solid foundation for client portfolios.
Even though financial markets experienced one of those rare instances where nothing seemed to go wrong in 2017 (unlike what mother nature has given us lately), we see the first three months of this year as a normal part of the market cycle. The markets soared in January due to corporations benefitting from tax reform pushed through by the Trump Administration, but ended up hitting a few unexpected bumps in the road in February and March. Even though investors should expect this from time to time, many were caught by surprise after such strong investment returns in 2017.
There are two long-standing trends that supported the bull market over the last nine years that we anticipated as possible headwinds in 2018: higher inflation expectations and interest rates. They both came to fruition early in the year as wage growth unexpectedly picked up in January. Although this is a sign that the economy continues to improve, it caused investors to worry that higher inflation (the increasing prices of goods) would weigh on future market returns. As a result, interest rates spiked and equity markets rapidly sold off into correction territory (down 10%).
Since then, reports of inflation data are in line with expectations and interest rates lowered slightly as investors absorbed the information and acknowledged that global economic growth, corporate fundamentals and earnings growth all remain strong.
Geopolitical risks (potential trade wars) and worries of increasing regulation over social media caught headlines towards the end of the quarter, further adding to volatility in the equity markets. While much of this news has some investors beginning to fear a bigger storm rolling in, the big picture remains the same: improving economic and earnings growth, interest rates creeping higher and valuations remaining high relative to long-term history of fixed income and equities.
Weather is often unpredictable and can cause much destruction – we’ve seen it happen time and time again. The financial markets can sometimes echo that uncertainty as we don’t know exactly when the next financial markets storm will hit or to what magnitude. Our long-standing approach of constructing well-diversified, high-quality portfolios is essential to how we plan for the unknown, allowing clients peace of mind when they need it most.
Family Education & Governance
from Tracy Fulton, Executive Vice President
Family. The most important thing in our lives is also the bedrock of our purpose at Tolleson Wealth Management. As our firm grew from John Tolleson’s single-family office to the multi-family office of today, we’ve learned that wealth solutions are multifaceted. Financial health is often just as important as emotional health within our families. Whether you have created the wealth, inherited it or even married into it, each of us needs an opportunity to learn how to navigate the unique complexities it brings.
Twice a year, we offer client families the opportunity to hear from recently published authors and engaging speakers on topics that relate to the needs of our client families. Whether the topic is on happiness or having difficult conversations with children about wealth, our Family Education Speaker Series touches on subjects that are motivational and thought provoking. The intimate discussions are tailored to the unique needs of our clients and allow them to understand they are not alone in the challenges they face.
Speaker Eileen Rockefeller shared her insight by saying, “The real richness and power comes not from the amount of money, but from our connection to ourselves and one another.” Best-selling author Tom Rath shared with us the power of well-being using practical ways to implement personal strategies based on his practice and research. Adam Braun, author of “The Promise of the Pencil” spoke on the benefit of philanthropy within the family system and among generations. The takeaways from these events are unique for each person in the room, but can bring powerful shared wisdom that help strengthen a family’s unity and bring an inspiring motivation to everyday life.
from Richard Joyner, President
The Philanthropy Services team of Tolleson Wealth Management was created to help our client families share their values, vision and excellence across generations through philanthropy. One way we do this is by creating “junior advisory boards” for younger family members to learn about giving. Through these junior advisor boards, members of the next generation develop the skills to research and make charitable grants. We also create opportunities for family participation in philanthropic projects. For example, in recent months client families have come together to build bicycles for after-school clubs and host parties for homeless children. These family projects were paired with a family grant to the charity.
Tolleson Wealth Management employees also come together to support our community. In the past six months, our employees have picked up power tools, hammers and hard hats while spending the day with Habitat for Humanity, provided homework help after school for students at a community center and delivered school supplies to a child care facility. In addition, we support our employees’ volunteerism by deepening the impact of the time they spend. In March, the five employees who had given the most hours of their time in 2017 were given the opportunity to make a grant of up to $500 to the charity of their choice.