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A Note From Our CIO Thumbnail

A Note From Our CIO


As you no doubt know by now, over the last week we have witnessed the failure of no less than four banks (as of the time of this writing). This has increased fear and anxiety for many Americans. While these events may be causing you some degree of trepidation, my note to you today is written in hopes that we can calm some of those fears.

It might not surprise you, but times like this also tend to cause significant anxiety amongst professional financial advisors and money managers. While we are certain that many of our colleagues at other firms are indeed under high stress, we are not. It is my hope that the reasons we are not anxious will help you reduce any anxiety you may be experiencing.

It was more than 25 years ago when I first started in this industry. I have seen a lot. I remember talking to clients in early 2001 after witnessing the dot com bubble bursting and the resulting stock market losses of 2000. I remember talking to those same clients in early 2002, assuring them that the markets are rarely down three years in a row … only to then witness a third year of losses.

But since I started my career in February of 1999, my practice was not very large when the dot com bubble burst. However, by the time the Global Financial Crisis (GFC) came about, I had been blessed with tremendous growth in clients. This time, as we entered that crisis, my team and I were responsible for a lot more. There was a lot more at stake.

As I reflect back, especially on the GFC, I remember the stress and anxiety I was under. I remember turning to my former broker dealer for answers. I also distinctly remember how my inner spirit was not comfortable with what I was being told and how I was being led.

Fast forward to today, and – speaking for myself, and I believe everyone on our team - I am not stressed. I am not full of anxiety. That does not mean that I am enjoying witnessing banks fail again. Nor does it mean that I know how all of this is going to turn out. I am simply not stressed because of what I did since going through the Global Financial Crisis.

As I shepherded clients through that crisis, I embarked on the most intense studying I have ever been through; far more intensive than my days at NC State and far more than when I was studying for any of my other professional designations. Ultimately, these studies resulted in three outcomes. First, my personal library of books expanded by leaps and bounds. Second, I obtained the Chartered Market Technician designation (CMT). Finally, and the point of my note to you today, I built out a rules-based multi-strategy investment management process so I would have a framework on how to navigate tough market environments.

While no amount of studying can guarantee success as an investor, the journey of learning that I have been on ever since the GFC has reshaped how I look at the investment arena. While I knew I got into this business to be a financial planner, I had come to realize that the firm that I was building had two distinctly different components. On one hand, we were – and still are – financial planners. We serve clients from a holistic standpoint, guiding you over the entirety of a financial plan for hopefully the remainder of your lives. But we are also asset managers. The bursting of the dot com bubble and the Global Financial Crisis made plain to me that this industry does a lousy job of preparing advisors for how to manage money.

One of my favorite verses from scripture is Colossians 3:23 which states, “Whatever you do, work at it with all your heart, working unto the Lord, not unto man.” This is what drove me to rebuild how I manage money for clients. For several years now – especially since I took the practice to the independent channel – we have been managing money for clients with a multi-strategy investment process. In short, there is no such thing as an investment approach that works 100% of the time. So, we diversify our investment strategies. We also believe that the majority of our clients are more interested in protection on the downside than they are in getting all of the upside of markets. While no process is perfect, this framework has helped us manage the assets that are under our care with a heart devoid of anxiety and a head clear of fear.

One of our core principles that shapes how we manage money for our clients in this rules-based approach is to limit our losses. We will produce a video in the coming days to explain this further, but for now know that losses work geometrically against you. Once you’ve suffered a large loss, it is difficult to get it back. As a result, we work to limit our losses because we do not want a small loss to turn into a big loss.

Recently, according to CNBC and Fidelity Investments retirees lost 23% in their 401(k) accounts last year. The CNBC article also mentions that the “average individual retirement account also plunged 20% year over year”. That is not what our clients experienced with us last year. Yes, individual results certainly varied. But even our most aggressive model did not suffer as bad as this stat from Fidelity. Ultimately, we are quite proud of how our multi-strategy investment management approach performed in 2022. We are equally proud of how it is guiding us to manage risk in the current volatile market.

Finally, last week, Karen and I were reading an industry survey that stated that 22% of clients had fired their advisor over the last year or two. This is exactly opposite of what we have been experiencing. We have been experiencing tremendous growth. We have you, our clients, to thank for that as our growth has mostly come from you introducing us to your friends, colleagues, etc. For that, we all thank you. And please know that we have capacity to serve additional clients and, as we reach capacity, we will add qualified team members so that we can continue to grow and serve you. We have a strong team and we are quite proud of the results from the last 12-15 months. From the number of referrals that we are receiving, it seems you are too.

While this note is being sent to all, by no means should it replace a conversation if you are anxious. Please respond back to this note or just give us a call if you would like to talk further. It is an honor to serve you.


This information is intended to be educational.  Hicks & Associates Wealth Management does not provide tax or legal advice. You should consult with a qualified tax, legal or financial professional before making any decisions. Investment advisory services are offered through Hicks & Associates Wealth Management, LLC (“Hicks & Associates”), an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply a certain level of skill or training. More information about Hicks & Associates can be found in Form ADV Part 2 or Form CRS which is available on our website. Past performance is no guarantee of future returns. Hicks & Associates reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. The visuals shown are for illustrative purposes only and do not guarantee success or certain level of performance. This material contains projections, forecasts, estimates, beliefs and similar information (“forward looking information”). Forward looking information is subject to inherent uncertainties and qualifications and is based on numerous assumptions, in each case whether or not identified herein. This information may be taken, in part, from external sources. We believe these external sources to be reliable, but no warranty is made as to accuracy. This material is not financial advice or an offer to sell any product. There is no guarantee of the future performance of any Hicks & Associates portfolio. The investment strategies discussed may not be suitable for all investors. Before investing, consider your investment objectives and Hicks & Associates charges and expenses. All investment strategies have the potential for profit or loss.