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The thought of summing up these last eighteen months in a short letter is laughable.  There are just way too many layers to this beast.  From the first few months of 2020 when our lives and the market were upended by a microscopic force of nature to the now welcome return to an emerging semblance of normalcy in our daily rhythms, we’ve witnessed an incredibly complex confluence of events and circumstances.  Through conversations with many of you, we know that our collective optimism about life and money has been tested, and the testing has been an invitation to dig in to the question of what optimism really means to each of us.  We can’t overstate how encouraging you have been to us as we’ve had the opportunity to explore that question together.


It’s remarkable that in this letter a year ago, we were reflecting on 50 million U.S. job losses in a few short months, a swift and dramatic decline in global economic activity, and at the same time witnessing just the beginning of an impressive rally in financial markets off of the panic lows seen in the darkest days of the pandemic.  Since then, we’ve breezed through (ha!) an election, vaccine rollout, and an accelerating re-opening of the economy as pandemic-related restrictions ease and businesses and consumers are spending again.  Jobs are coming back, company profits are up, landlords are back to collecting rents, and the stock and real estate markets have roared to all-time highs as we close the first half of 2021.


Consider a few numbers for context:

  • The U.S. unemployment rate is back down to 5.9% after peaking at 14.8% in April 2020
  • The average price of a U.S. home is up 15% from a year ago (Case-Shiller 20-city composite, April 2021)
  • The earnings of S&P 500 companies is expected to grow 56% in 2021, based on analyst consensus estimates on 6/30/21
  • As of June 30, the S&P 500 stock index was 39% higher than the same time last year and 27% higher than the previous all-time high before the pandemic.


Remarkable indeed!  Perhaps more than anything we’d emphasize that these past eighteen months in the market have been a near perfect case in point as to why we believe it imperative to maintain a consistent and disciplined long-term investment strategy.  Time and again, seasons of turbulence and fear in the market threaten to shake us loose from our foundations.  In fact, the events of the past year were unprecedented in many ways (as they often are!) and that feeling of the unknown can produce a strong temptation to bail if we’re not strongly anchored in our conviction that a disciplined approach to investing in good assets at reasonable prices will produce a bright future of attractive returns over the long run.


We’re thrilled with the strong recent returns we’ve seen in client accounts over the past few years, and our long experience in the market also gives us a healthy caution against extrapolating the recent strong market returns into the future.  Specifically, investment markets have had a lot of help from government spending and an extremely favorable monetary policy stance from the U.S. Federal Reserve and other global central banks.  Signs of inflation, which have yet to translate into any significant market-shaking move in long-term interest rates, bear watching and we’re doing our best to position the portfolio for that potential event.


On the planning front, we’ve still got a keen eye on potential tax changes being considered at both the federal and state level.  Specifically, we’re focused on potential increases in corporate tax rates, taxes on long-term capital gains (both Federal and in Washington state), and estate-related taxes.  In fact, our planning team should have an update on that front in a letter and blog post next week.  Additionally, we’ve recently highlighted a state-specific planning issue relating to long-term care that we believe is both timely and relevant to a broad cross-section of Washington state residents.  Please don’t hesitate to reach out if we haven’t already spoken with you about this and we can be of help.


In addition to these specific issues, we’ve enjoyed having more and more opportunities to help clients generally walk through many of life’s big decisions and transitions including business sales, generational wealth transfer, retirement, caring for family, and charitable giving.   We’re profoundly grateful for the chance.


As the last eighteen months has proved, life can throw some serious curveballs and the circumstances of any given day, month, or year can be enough to challenge our optimism.  We want to see an invitation in those times to rise above in the hopes of rediscovering what really matters and it’s our privilege to do that with and right beside you.


Finally, wanted to share a quick firm highlight as we added another member to your team: Pascale Dumesnil.  She brings exciting new energy and expertise to our planning effort and we’re looking forward to how she’ll help us keep getting better for you.  Please feel free to reach out to her to say hello and welcome her if you haven’t had the chance to meet her already.


Truly, we’ve never been more excited about this team and our ability to help.  If you know anyone who might benefit from having Tschetter Group as an advocate in their corner, please let us know.  We’d be happy to make the connection.  And, as always, we’re here if you have any questions or if there’s anything we can do for you.


Warm regards,


Throughout my entire career, I’ve been researching investments and managing portfolios, which is a passion, but the real joy for me is connecting that expertise and experience with clients through lifelong relationships. In other words, it’s the “why” and the “who” that turn my crank, not the “what.” Life is most fulfilling when I spend my time and energy in a way that is aligned with what and whom I love. I’m grateful to have that alignment in my work.