Islands of Coherence
“I think 99 times and find nothing. I stop thinking, swim in silence, and the truth comes to me.”
– Albert Einstein (commonly attributed)
Pause. Breathe. What comes next?
Home stretch of 2025, and already a quarter century into the new millennium, we trust this letter finds you and yours healthy and well.
Markets and portfolios continue to run higher and, with no guarantees of course, we are currently witnessing the prospect of a third consecutive calendar year of U.S. market returns well above long-term averages. We are thrilled to see the progress for you.
In our view, a combination of tailwinds from stimulative monetary (low interest rates) and fiscal (high government spending and deficits) policies, along with the massive technological potential represented by artificial intelligence, have been driving recent gains. We observe an increase in the value of many investments outpacing earnings and cash flow growth. When this occurs, valuation measures rise and many of the valuation metrics we track are at or nearing historic highs. In this regard, we are content to hold two ideas in tension: we remain absolutely and profoundly confident in the prospects of staying invested in a sound and disciplined long-term strategy, while also recognizing the inevitability of short-term market cyclicality. It’s why we place such great emphasis on carefully customizing and balancing portfolios to meet each client’s unique goals and constraints, and why open communication in our partnership with you is both critical and deeply appreciated.
We also observe some dissonance between the “good news” as represented by exceptional market returns and how people may feel. Perhaps some of this can be attributed to the dizzying pace of political and technological change. We’ll admit, it is enough at times to leave us breathless and bewildered.
Change in the world around us is not new; it is ever-present. Our many decades of serving clients, navigating markets, and living life attest to this reality. However, we recognize that the evolution of media into a 24/7 barrage of reporting, opinions, images, and competing versions of “the truth” has turned up the volume on the daily stimuli we all contend with as we each find our way. Regardless of one’s circumstances, it occurs to us that a desire for coherence is something we all share—one of those qualities that’s hard to define or explain precisely, yet easy to recognize when experienced.
Perhaps something comes to mind? A moment on a walk or hike, a sunrise or sunset, somewhere in mile X of a long run, a beautiful golf shot, listening to or playing a great song, or a meal or party with loved ones. Can you place it for you? For my wife Kristi, she discovered it in the small garden outside our Seattle home. For me, it’s the thirty quiet minutes with coffee each morning before the family and the rest of my world wakes up. In these moments, we might notice a quieter hum, or maybe more like a whisper, that energizes us and encourages us to take the next step.
I’ll admit it may be bold, but it is our intention that your time spent with us becomes something like that for you—islands of coherence that help recenter and move you forward into your next step. Our goal is to align your money with what matters most to you, and have you count on us to deliver the preeminent investment and planning expertise needed along the way.
So, let’s pause. Breathe. What comes next?
With optimism,
Dustin
Important Disclosures
The content of this article is provided for general information purposes only and is presented solely as our opinion. The information was compiled from sources that we believe to be reliable, however, we cannot guarantee its accuracy, completeness, or timeliness. This article is based on the information available to us as of the date of this article and may change at any time. Tschetter Group does not provide tax and legal advice. Please consult your legal and tax professional for specific information.
Tschetter Group (“TG”) is a registered investment adviser with the Securities and Exchange Commission. The information provided by TG (or any portion thereof) may not be copied or distributed without TG’s prior written approval. All statements are current as of the date written and does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Different types of investments involve varying degrees of risk. Risk Disclosure Statement: All investments include a risk of loss that clients should be prepared to bear.
Sources: Tschetter Group
