Broker Check

2015 Client Letter: Mid-Year Update

September 17, 2015

Mid Year Update


I hope each of you have had a tremendous start to the summer. I’d like to provide a brief update on things happening around our Firm, along with some commentary on the global markets and their impact on our portfolios.

Firm Updates

Lucy’s Visit To Dimensional

As many of you know, Lucy Zimmerman joined our team last December. Lucy predominantly works out of our Middleburg office, is a Registered Paraplanner, and fully licensed. Lucy was able to find time for a visit to Dimensional Funds’ home office during a recent trip to Austin, TX. This provided a wonderful opportunity to expose Lucy to the day-to-day work being done by academics, portfolio managers, and a host of other Dimensional representatives. Direct exposure to Dimensional’s operation helps our team members better explain to our clients the investment principles we so strongly believe in.

Dimensional Stewardship Award

Morningstar recently awarded Dimensional their highest rating (A) for fund family stewardship. Morningstar’s Stewardship Grade is based on the premise that good stewards are more likely to provide shareholders a better experience than poorer stewards. A few of the factors that impact this award are disclosure, quality of communication, compliance, performance, and others. While there are many great investment companies out there, we are incredibly proud to partner with one that is acknowledged for putting the interests of their investors above all else. The attached article provides specific details.

Licensed Team Members

Congratulations to Jordan Braithwaite and Akhtar Khan for recently passing their Series 65 exam. The Series 65 exam is designed to test an individual’s knowledge and ability to advise clients in the area of investing and discuss general financial concepts. In addition, Lucy Zimmerman recently passed the Series 66 exam. The Series 66 now qualifies Lucy to act as an Investment Advisor Representative and as a securities agent representing a broker dealer.

These accomplishments not only display a general commitment to our industry, but a desire to improve their knowledge and capabilities when interacting with you. We’re very proud of them.

Investment Committee

The Firm created a new Investment Committee in late 2013 as we became a Registered Investment Advisor (RIA) with the Commonwealth of Virginia. The committee meets quarterly and is tasked with searching the financial landscape to identify and review new investment opportunities. While our partnership with Dimensional Funds is the cornerstone of our approach, we’re continually looking for new opportunities that will compliment the investment principles we so firmly believe in. Each potential investment is put through a rigorous test to ensure its potential use will meet our Firm’s high standard.

Market Commentary

We’ve witnessed new events take place in the U.S. and around the world during the first half of this year: Supreme Court rulings, a terrible earthquake in Nepal, and others. In addition, familiar themes from previous years have reemerged: most notably Greece and the Eurozone. These events have had varying impact on global equity markets. They remind us that unpredictability across markets remains the one true constant. Given all this, we see investors with the courage to follow a disciplined investment approach being rewarded.

We stood alongside each of you last year, as our diversified approach didn’t keep pace with the U.S. market rally that occurred in December. Like many of you, we were a bit disappointed but understood that an uptick in one sector doesn’t mean we abandon our principles. Experience tells us that those who fight the urge to rotate investments and chase returns will ultimately come out ahead. When it comes to investing, patience is undoubtedly a virtue.

In 6 short months we’ve seen markets regress toward the mean. The S&P 500 was flat through the first 2 quarters of this year. Depending on your specific asset allocation, the portfolios we manage are up anywhere from 0.55% – 2.61%. Of all things, the international sector is up 8.90%! Who could have possibly known the international markets would thrive through the first half of this year given all the uncertainty surrounding Greece? Please know we’re closely following the issues as they unfold in Greece and the Eurozone. However, we believe making any sort of financial or investment decision based on a news event is not in your best interest. Despite its attraction on CNBC, event-based-investing does not lead to long-term success. After all, Greece’s economy is about the size of Metropolitan Miami!

It’s difficult to say where markets will go from here. Will 2015 be a year to remember or forget? We take comfort in understanding the answer to that question is anyone’s guess. We know markets process information in a rapidly efficient manner. This allows us to focus on those things we as investors can control: Global Diversification, broad ownership of Small companies, and minimizing fees where possible.

Thank you for your ongoing support. We wish you and your families a safe & healthy summer. As always, please don’t hesitate to reach out to us with any questions.

The shooting incident in Chattanooga, TN yesterday serves as an unfortunate reminder of how precious our time together can be. We would like to send out our thoughts and prayers to the families impacted by this horrific event.


Jeffrey A. Hahn Thomas R. Wiseman, II

Managing Director/CCO

Thomas R. Wiseman, II