In February, my youngest son Gabriel graduated from Saybrook University in Seattle with a Master’s Degree in Industrial Psychology with a focus on Organizational Systems. In March, he and his wife Jaimee  (who has trouble spelling her name correctly)  moved to Bellingham to escape the big city and be closer to family. Gabe’s extensive and impressive work over the past few years has deepened his understanding of human psychology and how it applies to all aspects of our lives, even investing.  This, combined with the fact that he is an excellent listener who genuinely cares about people made him an excellent new hire for Financial Plan, Inc.  We also favored having a master of psychology on staff, since we’re all a little crazy around here. As a management trainee,  Gabriel will be involved in many aspects of the practice including scheduling appointments, computer software support, data downloads and account reconciliation,  opening and transferring accounts, and fielding basic service requests.


Beginning next year, Gabe will become an associate advisor under the supervision of one or more lead advisors.  He will enter into the CFP® program;  a rigorous two year course.  Under CFP® supervision he will be involved in basic research, dispensing basic advice, running service meetings, and executing lead advisor recommendations.  After a minimum of five years, Gabe’s career path is to become a lead advisor; advising clients and writing comprehensive financial plans. We feel confident that Gabe will be particularly well-suited to helping our clients with the behavioral aspect of investing.  He is extremely sharp, and wise beyond his years.  Many of you will remember Gabe’s accident seven years ago and how that changed his life.  Gabe remembers your kindness and concern throughout that difficult time, and now I am happy that he will be able to help many of you to succeed financially. On top of all that,  Gabe is a pleasure to be with in the office.  Please make a point to introduce yourself when you come in.  Welcome,  Gabe!  


During 2014, the US market was the best performing of all developed countries.  The large cap US market as measured by the S&P 500 outpaced all international markets, and this drove many investors to question the wisdom of international diversification.  Some American investors are unwilling to invest in any foreign markets.  (Predictably, many British investors confine themselves to the English market, some Japanese investors will only invest in Japan, etc.)  As Nathan Twining illustrated in our last newsletter,  this is not a wise strategy.  By diversifying into international securities,  we can lower risk without lowering expected return over long time periods. As if to re-iterate our point, international and emerging markets followed that newsletter with stellar returns, nearly doubling those of US Markets.  Domestic , International, and Emerging markets do not always move together.  The direction and relative returns often change quickly.  Attempting to predict the timing of their fluctuations is futile, and almost always damaging to long-term success.


The timing of last quarter’s newsletter regarding our advice on foreign markets and the good returns of those markets was a lucky coincidence. Neither we nor anyone else has predictive power over the markets; in fact, our clients capturing these returns and benefits is due to our acknowledgment of that fact.  Maintaining discipline is the only way to consistently capture the benefits of pragmatic investing.