We are not trendy at all. Treasure Coast Financial Planning has no debt. During the Great Recession, we did not lay anybody off as our big competitors axed staff while using government money to give themselves multi-million-dollar bonuses. During the pandemic, we took no free government money. We have no celebrities or politicians on our board.
I do not wish to jump to conclusions about Silicon Valley Bank or the other banks in the news. The problems with some, such as Credit Suisse, have been known to professionals for some time, perhaps years. Much of what we think that we know may turn out not to be true as reporters race to be the first to grab headlines. However, I have some general comments. The board of directors at Silicon Valley Bank seems to have very little expertise. I am not sure that any of them could perform the basic calculations required to pass the CFP Board examination. It appears that competence was not a requirement to be a board member. Reports claim that the bank’s portfolio consisted of long-term bonds and loans to startups. Readers of the TCFP newsletter know that when rates rise, the value of growth stocks declines. I have hammered home for more than a year that we shortened maturities and increased credit quality in our portfolios because of the danger of rising rates. I find it astounding that anyone would invest most of their cash in two asset classes that are adversely impacted by Fed rate hikes. Jerome Powell told us what he was going to do. Every reader of The Wall Street Journal or The Economist knew this.
We at Treasure Coast Financial Planning can use financial calculators, which is why we did not need government money during either of the last two crises. Because we are financially conservative, we pass on trendy investments. Sometimes this hurts us, particularly when the talking heads on television are touting crypto, videoconferencing, fake meat, failed game stores, and expensive bicycles. That financial calculator thing just doesn’t sell on the boob tube. People would switch channels.
It does help us avoid disaster though. This is important because most of our clients are savers who rely on their money to take care of their families, support charity, and live the dignified retirements they deserve. The trendy can keep their celebrities, we get immense satisfaction when clients send us photos from exotic places, particularly when they are carrying TCFP thermoses.