Letter to Stakeholders, March 2022
Read or Listen (below):
Friday, March 4, 09:36 am EST. This past month a rogue leader of a foreign country decided to invade another country. The apparent goal was to take over that country’s resources and lead that country’s people as they once had in the 20th century. The attack, still ongoing, has proven how fragile peace and democracy has always been. “Government by the people,” is not possible while the power of government weapons careens out of control.
Russian government leaders, along with their physical and cyber weaponry, have the power to disrupt even larger economies than Ukraine’s economy. More importantly, they have the power to end civilization. This threat is hard to worry about in a serious way. In all likelihood, your life and your wealth will be spared in the medium term. But if the nuclear trigger is pulled; well, there won’t be anything left for any of us to worry about anyway.
Instead, if you are willing, focus on the lives of the mothers, fathers, brothers, sisters, sons and daughters of the Ukrainian people. An attack on any democracy – really on any human being – is an attack on all of us. That’s what being a “stakeholder” is all about. Your friends have already started sharing fundraisers for Ukraine on their birthdays. Whether you donate, volunteer, fight or just get educated, you are not helpless. We are all Ukrainians now.
Supply and Demand
It is impossible to separate the juxtaposition of geopolitical crisis, pandemic and threats to the global economy. As you (finally?) start leaving the house on a more regular basis, it will be obvious that gas prices are higher. Last week I reminded my students at George Mason University (celebrating 50 years of independence this year) that the laws of supply and demand (not U.S. Presidents) are typically to blame for gas prices. In 2020, demand for gas (oil) was so low that oil contract futures were selling for less than $0 per barrel. There was no room to store excess oil that was being pumped but not used. Today those same contracts are hitting decades long highs, at over $110 per barrel. What’s the difference? We’re driving more and we’re flying more. And now there are worldwide concerns about Russia’s ability to supply oil to Europeans (the United States gets most of its imported oil from Canada and Mexico). Demand is up.
Supply and demand pressures are of course to blame for inflation as well. Only a small (but growing) percentage of the Consumer Price Index (CPI) (the measure most often quoted for inflation) is the cost of gasoline. The biggest component of the CPI is a category called “shelter” at nearly 33%. The rising costs of housing is no longer limited to metropolitan areas but is now felt nationwide. The cost of cars and food (both at grocery stores and restaurants) are also going up. Even with wage increases, inflation is making day-to-day budgeting harder.
So what do you do? Last month I wrote about how “market sentiment” can drive stock market volatility (ups and downs). The “sadness sentiment” surrounding whether we are really going to “reopen,” whether inflation will get lower and whether we are really just going to let Ukraine fall, is economically upsetting. Yes, our seemingly cold, heartless economy has feelings too.
But you need not worry. You are not invested in Russia. We are “minding the store” of your financial plan. We look forward to connecting with you “live” this and next month for our “Spring Check-ins (book a timeslot here).” We will walk and talk this through together.
Next week we are pleased to present Aaron Tolson, CEO of Northern Virginia Food Rescue in our (somewhat) monthly zoominars. At a time when there is so much “negative sentiment,” Aaron and his team are going to share how they are working to eliminate hunger in the Commonwealth of Virginia, county by county. Through a combination of volunteers, food warehousing, the USDA Food Box program and a cool Food Rescue Hero app, they are making a difference. Will you join us next Wednesday at 3 pm? Register to join us LIVE here.
Today is the only day of the year that gives you a command: march forth! With each step forward, you set an example to the rest of the world. It has been 77 years since the end of World War II, the beginning of the United Nations and America’s leadership on this planet.
The “grand experiment” of the United States belongs to you now. You have done well. The work you continue to do on behalf of your family and your community has always been meaningful.
You are leaders. We are honored to serve you during the best of times, and the most anxious of times. We will do our part (with your finances) because we know you must do yours. Because what you do is important. So don’t let us keep you too much longer.
Jason J. Howell, CFP®, CPWA®, CSRIC®
Jason Howell Company (JHCo.) is an independent, family wealth management firm run by two owners who consider it their family business.
Principals Jason J. Howell, CFP®, CPWA®, CSRIC® and Douglas W. Tees, MBA, CFP® are both married to patient wives, still have young kids and are dedicated to continuing education and teaching others about money. Jason and Doug have built a firm with a great reputation. The firm is based in Northern Virginia but serves clients (virtually) all throughout the United States.
The principals believe that dual-income parents with high achieving kids should feel good about their financial success. And they just want to make money more meaningful. You have a plan for your life and the causes you believe in. They fit that plan to your finances so you can feel confident, excited, generous, hopeful and good about your money.
The process begins with building a financial plan a sustainable, responsible Investment Strategy (SRI, ESG) and a proactive plan for philanthropy.
To feel good about your money, just book an introductory call here: Introductory Call