2020 SFWP Annual Letter

Dear Friends,

During the year 2020, I observed impactful IPOs, home purchases, marriages, and new children reshape your lives. I saw some of you lose jobs, experience illness, and navigate major career transitions. It has brought me great joy to see how, without exception, you made it through stronger and better on the other side.

2020 emphasized that injustice and inequity are real and that we humans live on a fragile planet. But history shows us that overcoming challenges is what humans do. And I remain an optimist, believing that unprecedented challenges continue to offer us opportunities to grow and prosper. I would like to share a few reflections from this past year with you.

Long-Term Focus

This was a year that accentuated the value of a long-term focus. While markets plummeted in March those who recognized the value of remaining invested in a diversified portfolio and took the opportunity to invest additional available cash were rewarded. As expected, global publicly traded equity markets rallied much faster than the world economy.  Those willing to methodically invest in the depressed equities benefitted from outsized returns as areas of the markets rebounded. The price of long-term growth is this volatility. But the rewards are well worth the stomach-ache and have followed the same positive trend since the market crash of 1929. Moving forward, while we cannot predict the next major market pullback or global crises, or even how the COVID19 pandemic's story will end, Warren Buffet’s admonition to “be fearful when others are greedy, and greedy when others are fearful” continues to ring true.

Having a long-term focus also means ensuring that in the short-term our finances have been de-risked and 2020 was a good year to have our house in order. Maintaining appropriate cash on hand for short-term goals, and protecting our families through appropriate life, health, and disability insurance creates a safety net for us to withstand short-term personal challenges like the loss of a job or illness while allowing us to take advantage of opportunities brought in times of upheaval.

Sustainable Investing

Our world has long operated under the assumptions that carbon emissions have no impact on profits, fossil fuels are an unlimited resource, businesses without minority and women leaders have no intrinsic disadvantages, and treating a company's community or different human elements of a supply chain with less equity is not a business concern. But the world is changing and 2020 provided a key inflection point. In the past, the question was whether investing in businesses that prioritize environmental care, leadership equity and meaningfully invest in their communities and employees would underperform competitors who focused on profits alone. Instead, 2020 demonstrated the opposite to be true. Companies committed to environmental stewardship, diverse leadership, and social responsibility experienced markedly less downside while maintaining the upside of their competition. Turns out, nice guys and gals don't finish last. I do not believe that this is a one-time blip in the history of markets or our modern economy.

In light of this SFWP has taken action. Firstly, after extensive research, I began to implement portfolios containing funds that only meet the highest level of sustainability goals for clients that sought to align their values with their investments. Secondly, I also continue to engage in research and reflect on how the ultra-low-fee portfolios that the majority of SFWP's clients utilize will incorporate sustainability. These portfolios will continue to prioritize low-cost index fund investing while incorporating the year's lessons about the changing nature of the world as a way of both mitigating risk and enhancing returns.

The Value of Time, Experiences, and People

I approach the way SFWP operates with the belief that time is one of our most precious assets. I doubt that, upon reflection, any of us would trade away the next 20 years of life for 20 million dollars. I know I wouldn't. The uncertainty of 2020 brought a new perspective on this reality and I often thought about shaping the way this company serves you in light of this. My ongoing commitment is to empower peace around your financial decisions while freeing you to devote more of your time to the people, experiences, and passions that drive your joy.  I continue to relish these life discussions with you as we explore your passions and tangibly pave the way for you to further align your time and finances with an abundant life.

Gratitude

2020 has been a year of incredible growth for San Francisco Wealth Planning by any metric. This growth has been driven by an unceasing wave of referrals from existing clients. It's an incredible joy to work with the friends of those I admire and appreciate. Some of my best memories of this year are conversations I have had with you. I am deeply grateful.

I look forward with anticipation to see what this next season of life brings. It's a joy to partner with you as we enjoy this journey.

With much warmth,

Matthias