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“The only time to eat diet food is while you’re waiting for the steak to cook.” – Julia Child


I love the taste of an ice-cold Diet Coke. Especially with Mexican food. Apparently, the World Health Organization thinks I should not have too much of it though. Something about the artificial sweetener, I guess.


Sometimes the things that taste best aren’t the best things for the body. And sometimes the sweetest morsels in the market mask its underlying health. Such is for the craze around artificial intelligence (AI) in the first half of this year. Don’t get us wrong, the technology has all the makings to be truly transformative and is representative of one of the characteristics we love most about the dynamic and innovative American economy. In fact, it has sparked our collective imagination to wonder what new breakthroughs in discovery and productivity will emerge across industries of all stripes. Through our decades of experience, we’ve just learned not to get too carried away with the “next big thing.”


Thankfully though, the value of some of our long-standing holdings (Microsoft, Apple, Amazon, Google, Broadcom) benefited from the excitement, helping drive solid returns in our core investment strategies. Interestingly, the five largest companies in the S&P 500, which are all exposed to AI, accounted for more than 60% of the index return during the first half of the year.* Therefore, if one didn’t have exposure to this narrow bright spot in the U.S. stock market, investment results would have been decidedly lackluster.


Our founder, Dick Tschetter, recently said an assessment of the market based on the performance of the major indexes that are dominated by large technology companies is similar to declaring someone as healthy solely based on the appearance of their skin.


Broadly speaking, we believe the U.S. and global economies are still taking the medicine of higher interest rates and tighter financial conditions necessary to combat the inflationary pressures that emerged following years of loose monetary policy.  We’ve talked at length about this in previous letters (No Straight Lines & What Matters Most) and believe it will take time to play out and won’t be without its ups and downs.


In this dynamic environment, our investment team is constantly on its toes, pruning certain areas of your portfolio while adding to new areas of opportunity. We believe our disciplined, common sense approach to growing your invested wealth is like a well balanced diet designed to sustain the body’s health for the long run.


While we’re not afraid to add a little spice to the plate, we won’t lose sight that constant nourishment comes in the flavors of prudence, solid fundamentals, and careful consideration of price. We hope this finds you taking in the joyous warmth of summer and good times with family and friends. Enjoy those summer BBQs… oh, and the Diet Coke.


With rooted optimism,


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.