Stay the Course

The Rocky movie series is a well-known rags to riches story. But what many people don’t know is the struggle that Sylvester Stallone, the movie’s star, went through to get it produced and the perseverance he demonstrated along the way. Stallone’s goal had always been to become a popular actor, but his career just wasn’t cooperating. After a string of insignificant and uncredited roles, he had hit rock bottom with no car and just $106 in the bank. Stallone had to keep his eyes set on his end goal to get him through the lean, challenging years.

Like Stallone, we have to find ways to overcome obstacles that get in the way of our financial goals. As we approach a polarizing presidential election amidst a global pandemic, there are plenty of uncertainties that are sure to make progress hard to see.

The Markets hate uncertainty, as we have witnessed with their response to this very challenging year. The major U.S. stock indices each finished at record highs in mid-February, but as the Coronavirus emerged and the U.S. economy locked down, each index fell over 30%, bottoming out on March 23rd.

Following the economic downturn, unemployment spiked dramatically, consumer spending plummeted, and interest rates fell to near zero. The U.S. is averaging around 40,000 new Covid-19 cases daily; the death toll has surpassed 200,000. Leading infectious disease expert Dr. Anthony Fauci has been widely quoted as saying, “it’s unlikely we’ll have a definitive answer” on a vaccine by the November 3rd election.

The bipartisan gap in President Trump’s approval ratings (81%) is wider than any other U.S. president in the modern era of polling dating back to President Eisenhower. All of these factors have played a role in what has been a highly volatile year in the market.

The question on the minds of many who are concerned about their financial future is do we stick to the plan or do we pivot?

Our response at Mosaic Family Wealth: stay the course.

Over the next few weeks leading up to the election, you will see numerous headlines and articles discussing economic scenarios based on the various potential outcomes of the presidential and senate elections. Historically speaking, those outcomes just don’t matter. Ignore them.

There is no discernible pattern in market performance based on the political party that is in the White House or that controls Congress. Since 1929, the average return of the S&P 500 during a presidential term is 10.3%, and the average return in the year following an election is only slightly lower.

Stallone wrote Rocky as a starring vehicle for himself. And although the script was a hit, generating an impressive $306,000 offer, the producers didn’t want him to star. But Stallone had the determination and fought for his end-goal. He turned down the offer and was able to convince producers to give him his shot. Rocky went on to receive nine Oscar nominations and get three wins, including Best Picture, and grossed over $200 million. The Rocky series and its spinoff Creed have grossed over $1.6 billion combined and have cemented Stallone as one of the most bankable movie stars of his generation with an estimated net worth of 400 million dollars.

It’s tempting for investors to pivot away from their plan in times of uncertainty. What history teaches us is that Markets reward long-term investors for staying disciplined through market cycles and punish emotional, reactionary investment decisions. Missing just a handful of days with strong market performance creates a significant drag on portfolio returns.

The seasoned and experienced team at Mosaic Family wealth are in this fight with you for the long-haul. We are long-term investors with a well thought out financial plan based around your unique goals. When we worked with you to create your plan, we knew that markets wouldn’t go up forever, we knew there would be times of uncertainty. We accounted for your risk tolerance and time horizon to help you reach your goals. We have been ready all along to help you hang in there. More volatility may be coming, and that’s okay.

Stick to your plan.

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Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing in this content is intended to be, and you should not consider anything in this content to be, investment, accounting, tax, or legal advice. If you would like investment, accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs.

Mosaic Family Wealth, LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Mosaic Family Wealth, LLC and its representatives are properly licensed or exempt from licensure.

6 Things Business Leaders Should Focus on in Uncertain Times

You’ve heard it said over and over again this year… these are unprecedented times we are living in. No one would have predicted a year with such wide-ranging challenges, from a pandemic to hurricanes and fires, to historic unemployment and the economic fallout that has been unleashed around the world. As a professional that owns or runs a business, you’ve probably had to adjust and adapt in unexpected ways. Some of you have felt as if your scrambling and scraping to get by instead, putting stress on long-term stability.

The level of uncertainty that has been forced upon us has been beyond disconcerting. Determining which moves to make to preserve financial stability and future opportunity has been tough. A turbulent economy and unsure times don’t always have to spell bad news though. Like with previous major downturns, there are ways to weather these storms.

Times like these require us to fine-tune and re-focus some of the key business strategies we utilize during normal times. With a bit of enhanced thinking and strategizing the expert team at Mosaic Family Wealth can help you ensure long-term survival rather than feeling as if an imminent collapse is coming.

Make sure you are well-versed on the following business areas:

  1. Finances: Add It Up

    Many business owners tend to loosen the reigns when cash flow is solid, and profits are on track. To ensure long-term success we encourage leaders to make plans for the down days too. This requires having a strong handle on key numbers and planning for the unexpected. Even if you have financial management in place, never take your eye off the bottom line, or the details that contribute to the success of your enterprises. Two important performance metrics you should track are:

    • Cash flow – As the lifeline of your business, plan in advance to compensate for the inevitable cash flow fluctuations, making sure to maintain sufficient reserves
    • Profit Margins – Make sure you understand the factors that fuel your long-term profitability and stay aware of potential vulnerabilities to help you prepare to handle unexpected changes.

    Having a strong handle on the financial aspects of your businesses provides clarity, gives you flexibility, and informs the best strategies to implement when times are tough.

  2. Clients: Double Down on Value

    For many people, investing more in your clients seems counter-intuitive during economic downturns. Most tend to cut costs to maintain falling profit margins, usually at the expense of client services or engagement.Remembering that clients are the lifeblood of a thriving business though might encourage you to do all you can to preserve client value. When the economy gets better and business owners have more stability, those organizations that remained committed to enhanced engagement will see a long-term payoff.It’s okay to pivot your approach to make this work. Value is not always equal to giving things away. Consider other ways you might be able to serve your core audience, perhaps through the development of rewards programs, buy-one-get-one offers, time-limited deals, donations to civic causes triggered by purchase volume, etc. Value can also be created by adding new features or expanding how a product is used. If your business is service-based, consider offering free clinics that educate your audience, or host consulting hours or provide white-papers or blog posts on relevant topics.

  3. Marketing: Renew Your Positioning

    Another area that often gets chopped from the budget when the going gets tough is marketing. This can be among the worst moves you can make since it eliminates one of the most crucial ways to make sure you are seen by your clients and differentiated from your competitors.Instead of canceling all marketing efforts, it’s better to find time to review the performance of each channel or tactic and streamline based on an understanding of the activities that are driving the biggest value to the bottom line. You might uncover parts of your marketing strategy that have been dead weight for a while or not yielding as much impact as you assumed. Make sure you have a qualified marketing expert helping you as they can identify trends, guide you on best practices, and help you understand how much flexibility and time is needed before a tactic demonstrates value.Once you have a handle on the big picture area related to the corporation, turn the focus onto yourself as a leader.

  4. Time: Every Minute Counts

    There’s nothing more valuable in the life of a business owner than time. During tough economic periods, this is even more true. Owners and business leaders should be spending the majority of their time on activities that help grow the business. From investor meetings to product reviews, staffing discussions, and growth planning, by freeing your time to focus on the future of the business you will be able to be better prepared for shifting market conditions.One of the keys to maximizing your time is having trustworthy people you can delegate to. By delegating more of the day to day responsibilities to key team members, you are freeing yourself to be the tip of the spear, opening up new opportunities, and keeping your focus on growth and opportunity.Make sure you choose someone that can perform to your level of expectations when you delegate. Provide them with clear direction, appropriate resourcing, authority to complete the work, and then trust them to succeed on your behalf. Avoid the boomerang effect that often happens with engaged leaders. Choose wisely so that your delegate becomes a help not a hindrance to your progress.

  5. Personal Development: Become a Better Leader

    When is the last time you considered investing in yourself? Investing in yourself is investing in your business. To be a high performing leader you need to find people that can pour into you as much as you pour into your business. It’s time to find a certified and experienced coach or a trusted and seasoned mentor. (Or both!) Perspective is often hard when you are in the hustle and bustle of making your enterprise successful. It’s challenging to find time to reflect, plan, or strategize. And you probably have even less time to analyze ways you can personally become better and deepen your experience.Establishing a coaching and/or mentor relationship formalizes this ultra-important time that all leaders should have. As little as 30-minutes each week can be the meaningful input you need to be able to see beyond the immediate moment and define ways to keep growing and improving for the long-term.Getting advice and direction from someone with professional expertise or years of experience can be a huge turning point for you.

  6. Vision: Bring It into Focus

    At Mosaic Family Wealth we believe that all successful business owners and leaders need to find the way to go beyond success towards significance. It’s about having purpose behind what you do and figuring out how to do more than just accumulate wealth but make an impact.The starting point is a clear vision for yourself and your business. It’s important to remember why you got into business in the first place. During economic hardships, having a clear understanding of where we intended to go helps us to do regular reality checks on our progress and adjustments when needed. Seeing the big picture can be enough to spark a renewed passion that will get you through the tough times.

Benjamin Franklin once said that by “failing to prepare you are preparing to fail.” As a successful businessperson, being confident about tough times is about being prepared both organizationally and personally. Our team of seasoned advisors is ready to help.

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Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing in this content is intended to be, and you should not consider anything in this content to be, investment, accounting, tax, or legal advice. If you would like investment, accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs.

Mosaic Family Wealth, LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Mosaic Family Wealth, LLC and its representatives are properly licensed or exempt from licensure.