Updates & Principles

“A cynic is not merely one who reads bitter lessons from the past; he is one who is prematurely disappointed in the future.”-Sydney Harris

My mission is to live a generous rewarding and enriched life and to help others do the same.  I apply this to so many areas of my life: personal, business and philanthropic. Today I want to focus a little bit more on the financial aspects of this mission and the principles I use to guide my own investments and those of my clients. Even in times of uncertainty, my philosophies remain steadfast.

Watch for more on recent events and how strong principles can help you weather any storm.



Hi there. Mike Brady with Generosity Wealth Management, a comprehensive full-service financial services firm headquartered right here in Boulder Colorado. Although you can see from my backdrop I am actually up at my cabin in Dubois Wyoming where I spend every summer, I continue to work here, I have wonderful views, as a matter of fact I was going to record this video outside of our rustic cabin but it was too sunny and I kept squinting. So, I’m going to put up on the screen a couple of photos that I’ve taken this morning so you can get an idea of what I look at when I’m looking outside of the windows of my office up here. It’s wonderful. I hope that you also have an opportunity to get away. Frankly, I was stay at home anyway in Boulder so we may as well do the stay at home here with quick jonts down to Boulder as needed.

Generosity Wealth Management Dubois Wyoming Retreat

Today I want to talk about, of course, the current situation and put that, of course, into context, but I also want to talk about some key principles. Because one of the books that I have really liked over the years was the Millionaire Next Door. And what he talked about in that book is there are certain key, how can I say, attitudes and behaviors of millionaires that we can all learn from. And I’m going to take that and I’m going to take it also kind of on the flipside of some key things that I’ve seen that we should avoid so I’m going to talk about some key principles. I sound like a broken record many times, particularly if you listen to my videos a lot because these key principles sneak into every single one of my videos it feels like because they are foundational and a basis for long-term, in my opinion, getting to where you want to be with your financial goals.

Now, so far this year we’ve had an unbelievably good couple of months. I’m recording this on Thursday I think it’s the 11th or the 12th, I think that’s the 11th, and nobody saw this happening so quickly two months ago. And one of the key principles that I have is humility. It’s amazing to me that when people talk about the future or they hear someone talking about the future they talk with such confidence that they almost believe that it’s going to happen and then when it doesn’t they somehow forget and then the next person around gives them such confidence about what is the future and that’s not very helpful so I’m going to come back to this key principle.

Up on the screen I have shown over the last 25 years the ups and downs in the S&P 500, which is an unmanaged Stock market index.

Now, while we have gone through a couple of really difficult times like 2008 and of this year, which was very sharp, very painful in a very short amount of time, I would argue that someone who has been around for 30 years doing this professionally working with clients, et cetera, is 2000, 2001 and 2002 were some of the most difficult years, not because they were the lowest but because it was one year followed by another by another. Duration and losing the faith after a while is what really dooms many people in my experience. Those people who lost the faith and then went in to go into money market or CDs around 2002/2003 did not see the nice upswings that happen over the next ten or 15 years. Up on the screen you’re going to see an arrow next to where we are now.

I think nobody foresaw the sharp upswing in the stock market over the last two, two and a half months or so. I’m recording this on Thursday and so yes today is a down day, yes it’s going to get lots of good news coverage and very newsworthy. There’s an old adage that the stock market takes the stairs up and the elevator down and that just means that it’s kind of 200, 300 points et cetera, et cetera, and then it gives it up very quickly. One of my key principles, which I’m going to get to in a minute, is being overly optimistic or being overly pessimistic. If only you look at the negatives you’re doing yourself a disservice and I think that you’re going to be unhappy along this path.

Let’s go to another chart.

This is a chart that shows since the last major financial crisis in 2008. And there were ten major pullbacks along that, ten major pull backs of which the worst one was this last March. It is important for us to remember that it is a long-term strategy, you don’t take short-term events and extrapolate them into long-term decisions if your goals are long-term. Now, one thing that people periodically say to me is hey I’m 70 years old, maybe I’m 75 years old I’m always looking short-term. I remember my grandmother she was in her 80s and she was very feisty and she says Mike, I’m not buying green bananas, which I always thought was very funny and I still do. You still have a long time horizon I would argue because you don’t want to outlive your money and unless you know you’re going to die in the next six to 12 months let’s all hope that you’re living five, ten, 20 plus years even if you are of course retired and living off your money. Most people that I meet with don’t want to outlive their money and they want to pass on the most that they can to the charities they care about or their heirs. And so, we can still invest for a multiple year time horizon therefore we should not allow our emotions to be controlled on a daily, weekly or even a monthly basis so it just is not helpful to you and it’s going to make you very unhappy.

On the screen though I am showing where we are right now.

Nobody saw two/three months ago what we have now and so now I’m going to start pivoting over to some key principles, which is the first one of humility. Anyone who talks absolutely about the future is crazy or a fool and I don’t want you to be that person if you’re listening to them. We can say hey I think this is what’s gonna happen, I want to increase my probability of the desired outcome that I have in the future so I do everything I can in order to situate in a certain way, but there’s no guarantees absolutely about the future in any aspect of our lives and finances are no different. So, humility is the first one. The second is having to understand everything. I don’t know about you but every day there’s always a reason why the market goes up or down and it vasawaits [ph] every day, the market is up it’s renewed optimism, the next day its down it’s real new pessimism about deaths, I mean all in 24 hours? That’s crazy. The mind is very logical and patternmaking and we look up at the clouds when we’re on a wonderful pasture and we see patterns. Our mind put together that that cloud is absolutely a sheep or a car or whatever it might be when of course our logical brains tell us that’s not the case. And so, many times our brain also starts to control the emotions and things that are going up we believe will always go up or things that are going down will always go down even if we look at the history of the unmanaged stock market indexes, unmanaged bond indexes that are diversified and that’s never always been the case. As a matter of fact, I’m going to put a chart up there, you’ve seen this before from me; a 50-50, and I’m circling it right now, a 50-50 stock and bond going back to 1950 has a 100 percent break even over five years. Yes a loss in one year, yes a loss in two or three years, but over five years a 50 percent of the S&P 500 and 50 percent of a bond index, which you should always be diversified and it was probably a bumpy ride along the way, is a 100 percent breakeven, although the future could be different. I have that humility as well that no one knows the future, but you know what, that’s something that I’m very interested in and when you find yourself being overly fearful or overly pessimistic it’s good to remember that and that’s why we have diversified portfolios.

The third thing is what is your conviction? That is a key principle. Are you invested for the long-term or the short-term? And it’s okay to be invested for the short-term, you just got to know which one it is. And if you are invested for the long-term, and in my mind I think of long-term of being two, three, five, ten years. If you are invested for the long-term then you’ve got to believe that the market is going to be higher over that long-term timeframe or otherwise why do you have any investments? I mean that makes no sense. Why would you invest in something if you truly believe that in a longer timeframe it’s going to be negative, you should just put that in your mattress or a safe or something some safety deposit box. So, what is your convection and stick to it; very important. Number four is being overly optimistic overly pessimistic. Bull markets many times turn into bubbles and add are people who are being overly optimistic. On the flipside there are overly pessimistic individuals as well and you take three steps forward two steps back, all they talk about are the two steps back. That’s not the full picture, that’s not the context and if we’re going to use logic and we’re going to use some rational thinking in approaching the problems that you have then you’ve got to be aware of the two, find something in between. That’s why I try to not be overly emotional in these videos. Every once in a while someone will come to me and say gosh this big event just happened one way or the other and you were so even keeled. And the answer is well yeah. One, I’ve seen pretty much, it feels like I’ve seen everything of the last 30 years so it’s hard to surprise me anymore. But even then I’m approaching things from a rational point of view in order to get to that end result. I see variables in an equation and I am focused on what is the solution that we want and I have yet to find that being emotional about it helps me with any of those variables and getting to the solution.

And then kind of the last thing is overly complicated and looking for quick and easy solutions. What do I mean by that? Have you ever found someone who wants to lose weight or get in shape and they have this really complicated system, they’re going from one diet to the next diet to the third diet and they just won’t stick with it or they’re looking for some get thin quick scheme, whether it’s this pill or that liposuction or something that’s ThighMaster whatever it might be they over complicate it, burn more calories than what you take in. Exercise X number of minutes, you know, 45 minutes every day or three times a week, do something that works for you but also don’t over complicate it. I had a situation where someone was referred to me, and by the way you should always refer people to me even if we’re not right for each other long-term, that’s for us to determine, but I always try to give them complementary advice and point them in the right direction. And this was actually someone who had been referred to me a long time ago and it’s very painful because they just can’t seem to make good decisions. Like the millionaire next-door they’re the opposite. There is something that this person brings that is really holding them back and I try to point that out to them. I’m sure that we all know someone who has just been unlucky in love and maybe they’re your best friend from when you were five years old and you look back at their life and like yeah he or she always seems to pick the wrong guy or gal and they just can’t quite, you know, there’s a behavior, there’s an attitude that they bring that’s obvious to you that might not be obvious to them. And what I find is many times people who are later on in life, they have certain habits or attitudes that are holding them back and so one of the purposes of my videos here is to talk about what is that bias? What is that attitude and behavior that might be holding us back and how does that apply in a logical format? Being emotional, having biases, all that absolutely common to being a human being and I would want it no other way, but it doesn’t mean it’s got to rule our lives and not everyone can do that.

There’s not necessarily easy answers, I mean there are different types of people. Some people have a wonderful experience at the grocery store, they get up, they pay for their food, they get in line and then they leave and they say wow that was really fun. Other people go and get their groceries and they’re obsessing of which line to get into, they’re swapping lines, they’re going from this one to that one to this one. I have to tell you I watch people sometimes at the TSA getting through the conveyor belt deal and some people are swapping from line to line to try to find the absolute best and others are just totally chill just waiting their turn and going right through. Everybody gets to the plane at the same time. I mean at the end of the day one person had a good experience, one person had a stressful experience. They might have gotten to the same spot two different experiences.

Generosity Wealth Management Principles

That’s it. That’s all I’ve got for today. I’m going to have another video coming out to you by the end of the month all ready for July 1 the end of the quarter. Between now and the end of the quarter if something huge happens of course I’ll get one out even quicker to you. Volatility has not gone away even if it’s gone to bed for a little while, let’s keep our eye on the big picture. Just because it’s giving up some in one day or maybe two days or a week I don’t know what it’s going to do at this point, it’s a good thing that I don’t need the money tomorrow or you don’t need the money tomorrow or next week because you would have no money in the market. That’s why we have to keep in mind the context of what we’re doing. Michael Brady, 303-747-6455. Have a wonderful, wonderful day. See you. Bye-bye.

Longer Economic Discussion

“Bear Markets are periods when stocks are transferred from weak to strong hands, as does wealth when recoveries occur.” 
– Buckingham Strategic Partners


I promised in my last video (March 12th) to have a longer discussion about the current economic and financial situation.  You’ve got it right here!  And with graphs!

Watch our video to hear more!



Hi clients and friends. Mike Brady here with Generosity Wealth Management, a comprehensive full service financial services firm headquartered right here in Boulder, Colorado. As you can see from the backdrop I am back in my office here in Boulder. The last two videos I did from Orlando. I’m going to make today’s video a little bit longer. When I’m traveling it doesn’t matter with today’s technology except when you want to do a newsletter with big video files and transfer, et cetera, and that gets a little irritating I assure you.

Lots going on in the world and in the markets and I want to talk about some of the implications. Let’s first put up on the screen a graph. On the left hand side that is the unmanaged stock market index, the Dow Jones Industrial average. The left access is percentage rate of return. And what you’ll see is for the first one-and-a-half months of this year it was positive, and then it took a huge sharp downward over the last three weeks or so. It is rebounded slightly because of the nice Friday that we had. However, it is definitely near the bear territory. It dipped into it which means a negative 20 percent decline. So it dipped below and then it’s kind of popped back up, but it is right there at that cusp of what we technically call the bear. Not good at all.


One thing that is important, we always talk about from a military engagement point of view that everyone’s always fighting the last war. Every general is fighting the last war or it seems since the Vietnam War everything is always compared to Vietnam. Well, we now seem to compare everything to the 1987 decline and the 2008 decline. I’m going to talk here in a few minutes about why it’s not 2008.

Before we move on though I want to talk a little bit about bonds. Bonds have done well. I’m going to put another chart up on the screen. What you will see is they have done what they’re supposed to do which is go up when stocks go down. The correlation meaning it’s very highly correlated if they do the same thing as the stock market. It is negatively correlated if it does the opposite. And what you’ll see is a portfolio of stocks and bonds. The stocks have gone down but the bonds have gone up. And whether or not a particular portfolio has gone up or down is how much of the mix you have. I’ve said in previous videos that over the long term it’s my belief that you’ll be happier over ten years the more aggressive that you are, but that doesn’t mean on a short-term basis whether that’s months. In this case it’s been weeks, even days frankly, but on a year-by-year basis you’ll be unhappy because the volatility increases.

2 -Copy Fixed Yields and Returns

I’m going to put one more chart up there. The third chart is over the last 20-30 years.It is since 1980 and what you’ll see is the bottom numbers or the red numbers, those are the intra-year declines, the declines that happen within the year. And then you’ll see that the gray number,I’m not sure how it’s going to show up on the screen, is what it is the year and the data. And, of course we’re just starting off the year not even three months in. One thing that’s important to note is 1987 which people talk about all the time that actually was a positive year. Most people think that it was some huge negative year for the stock market when it actually had made lots of money through the first two-and-a-half quarters and then it gave it all up in a spectacular fashion over a day or two. But it actually ended the year positive.

1-1: Annual Returns and intrayear declines

1-2: Annual Returns and intrayear declines

1-3: Annual Returns and intrayear declines

So far this year we’ve had a very dramatic three weeks. That does not, of course, mean that the entire year is for naught. This is a little bit different than 2008 for the simple fact that we started the year in a very high economic and positive nature. Unemployment – I’m going to put a graph up on the screen and what you will see is that unemployment was at an all time low and we had incredible labor force participation with wages rising in the last year or so. Just absolutely wonderful.

3: employment and income by educational attainment

This is not a financial crisis. This is a healthcare crisis. Healthcare crises we’ve had before. This is a particularly bad one. We have survived the SARS. We’ve survived some of the other, the Ebola scare and other things in the last 10 to 20 years. But we haven’t seen anything like this and particularly the concern and the scare. I’m not an expert on how this crisis will play out as it relates from a healthcare point of view. There’s enough experts on Facebook that you can watch who are all your friends who used to be experts in something else. Now they’re experts in this. I admit that I don’t know and I know that there are many scientists who admit that they don’t know as well. They have models which are projections which might have some degree of probability, but this is a healthcare crisis, not a financial crisis.

Our banks were not in a strong position back in 2007 and 2008. Now they are in a very good position on strong holding. I’m going to put a chart up on the screen.What you’re going to see is interest rates. The Fed and interest rates are very high. Sorry, are very low. And the projected, that one higher number was what they projected that they would raise interest rates. Now it has been adjusted so that we will have some interest rate declines which is a good thing. That pumps money into the economy. This is a good thing. It will help governments, consumers and corporations refinance debt with lower debt burdens with those sectors of the economy.

4: The Fed and interest rates

I’m going to put up on the screen another chart which is oil prices. You’re going to see a collapsing of oil prices which is effectively a big tax cut for consumers and companies that are heavy energy users like airlines and things of that nature. This is bad for oil producers. There’s going to be winners and losers in pretty much anything that happens in the economy, but this is a “huge tax cut” if you want to say. I’m doing air quotes if you’re watching the video for the consumer. And so this is a good thing unlike what the price was back in 2008 which was significantly higher than what it is today.

6: Oil Markets

The U.S. has the highest – I’m going to throw another chart up on the screen. We are less dependent than many other countries on our imports and exports. I’m going to put up on the screen a list of all the companies, their imports and their exports as a percentage of their GPD. So that means that as a percentage of what they produce when you add up all the goods and services within a country what percentage of imports and exports as a percentage of what they produce both like I said goods and services. You’re going to see that when we flip through that first screen and a second screen you’re going to see I’ve just highlighted what the world average is. The U.S. is near the very bottom. That is because we are actually a pretty well contained goods and services producer and user. There are many countries that are in a world of hurt if the global imports and exports and trade dramatically change. We’re at the very, very bottom and in comparison to the rest of the world that is a good thing. It is not however, good for us because we are, I mean completely good for us. Everything is relative. When the global economy slows down we slow down as well.


And I am just as worried about our local businesses. We’ve talked about the health of our citizens, our fellow man, our fellow woman, our fellow person and we should be concerned about that. Don’t get me wrong. But just as concerning to me are those people who are from an economic point of view more vulnerable than others. Not all of us can work at home. I mean I’m very fortunate that I get to. I’m in a white collar job. There’s an awful lot of blue collar people out there. Your servers, people who are in the service industry or in manufacturing that you can’t work from home. We should be worried about them as well. And so from a good point of view today versus where we were back in 2008, the consumer debt is much, much lower.

I’ve got the screen here and I’m going to put it up on the screen. The consumer debt is significantly lower. I’m going to put it up there on the screen and what you’re going to see is consumer debt is significantly lower than where it was. Household debt service is at 9.7 and not at 13.2 where it was back in 2007 and 2008. This is a good thing that we have much less debt from a consumer point of view than where we were back in 2008.

5: Consumer finances

I was having a conversation with someone at my particular gym, my dojo, and they were talking about hey, wait a second. I’m in my 60s, I’m in my 70s.  Will I have enough time, we talk about the longevity in the markets and the answer is I would hope so. I’m going to put up on the screen and particularly on the left side is the probability of reaching ages 80 and 90. If you are 65 years old you still have, particularly if you’re a couple, you have a 90 percent probability that one of you will reach age 80. You have a 50 percent probability that you will reach age 90. Yes, five and ten year time horizons even if you’re 75 and 80, particularly if you’re a couple. Now let’s say that you’re single. I would hope that you’re not going to die next year or the year after. Longevity is still something that you have to keep in mind. And so just throwing it into a mattress, throwing it into a money market or a savings account will almost guarantee you that you won’t reach some of your goals if you need income from it. And so we need to watch out for the longevity. We don’t know. Every person is individual in their particular portfolio and that’s why when I throw a word guarantee it’s if you have a certain rate of return that you have to achieve then there’s a balance between having the safety that you desire by not participating in something and then, of course, along that spectrum of where can I stay with my particular plan and reach those percentage rates of return that I’m hoping from the long term. And we’ve got to be in this for the long term.

7: life expectancy and retirement

There’s a quote that I read in an article and I want to make sure that I get it right. “Bear markets are periods when stocks are transferred from weak to strong hands as does wealth when recoveries occur. We’ve recovered from every past crisis which we tend to experience with great frequency about every two or three years there’s something that causes some dis-ease and right now there is some and a lot, but we too will recover from this.”

Mike Brady. Generosity Wealth Management, 303-747-6455. Give me a call at any time. Thank you. Bye bye.

March 12, 2020 Market Update: Turbulence

“Stop a minute, right where you are. Relax your shoulders, shake your head and spine like a dog shaking off cold water. Tell that imperious voice in your head to be still.” 
– Barbara Kingsolver

Turbulence in a plane is normal, and so it is in the markets. This is the biggest turbulence we’ve seen thus far, and in 11 or 12 years. Painful! But that doesn’t mean you change a long-term decision on short-term emotions. In my opinion, the ones fives years from now who are the winners are the ones who are in control today. That was true in the past, and I believe in the future. I’ll continue with videos and newsletters as every day seems to be important. Due to regulatory requirements it takes a while from recording it to out to you, but I’ll do my best! Watch our video to hear more!



Hi clients and friends.  Mike Brady with Generosity Wealth Management; a comprehensive full service financial services firm headquartered in Boulder Colorado.  As you can see from the backdrop I am still at my hotel room leaving in about 45 minutes for the airport.  I spoke at a financial conference actually a couple of days ago and with today’s technology it doesn’t really matter.  I have the office here as if I was right there in my Boulder office with today’s, like I said, technology and Internet and everything else.

So, so much is going on.  Every day is exciting.  I’m assuming that you are paying attention to the news and watching everything and anyone who tells you how it’s going to play out in any aspect of the world at any time, not just today but in any time of the world is just lying and I’m not sure why they think that forecasting the future is helpful or even possible.

Reaching your financial goals and the best way to reach those goals is clearly defining your goals and having a plan for how to get from point A to point B.  I think of it as riding in an airplane, from point A to point B there might be some turbulence, nobody likes it.  The better the airplanes that we get the less turbulent things become, they’re able to buffer them so that you don’t see and feel what’s happening.  But sometimes there is turbulence in the airplane, which is, of course, where I’m going with turbulence in the market.  But in the plane it happens, it’s absolutely horrible but you know that periodically it does happen.  Hopefully it doesn’t preclude you from taking that next plane ride because your life is much richer when you’re able to travel from point A to point B.

The market is no different, investments no different.  Sometimes there’s turbulence.  This happens to be a particularly difficult air pocket.  I cannot believe the oversold indicators that I’m seeing.  It’s quite remarkable.  There are certain times in our lives where we’ll look back on it and say remember that time?  And in most recent it was, of course, 2008.  Another really bad selloff that was very precipitous was when the S&P downgraded the U.S. government in 2011.  Maybe you remember that.  Both of these incidents were recovered.  They were painful both of them.  We might remember them.

If you’ve been watching my videos I’ve been talking about the unnatural nature, the unusual nature of our calmness over the last two/three/four years that we’ve become lulled into expecting that that’s always the way it is there’s no volatility, very little volatility in the markets so I highly recommend you do that.  I did a great one last summer August or September talking about the number of positive plus or minus one percent days in the year was remarkably low but most people perceived it as being particularly high but that actually wasn’t true.  And it’s one of the ways that I would argue news media can really provide a picture that’s not statistically true or maybe completely accurate without emotion.  These things do happen, like that turbulence on the plane the turbulence in the markets do happen, they are absolutely uncomfortable when they happen but that’s why it’s good to take a step back and say okay let’s be calm and remember that this is part of the plan, that I knew it was going to happen and then it did happen.  I mean it’s just completely unpleasant but a part of that journey from point A to point B.

I mentioned something earlier about being oversold, yeah I watch a lot of technical indicators.  At the end of the day my training almost 30 years ago was in technical trading. That’s when you’re doing various charts and things of that nature and the oversold nature of this is mind boggling to me.  I’m very much looking forward to when it would turn around and that can be later today, tomorrow, next month, next year, I don’t know.  But that’s the reason why oversold from my point of view leads to a very good market and that’s why we then have long-term investments along the way so that we can benefit from that when it happens at some point in the future when I don’t know when it is.  I mean that’s why you have to kind of deal with things now and the best thing you can do is have control of your emotions.

Anyway, I’m going to continue to have these videos periodically when I’m back in my office I have a little bit more charts and things of that nature so I might get a little bit more technical for those of you who might want more technical.  Anyway, 303–747–6455.  Mike Brady.  Thanks.  Bye bye.

March 2020 Market Update: Stay Calm

“If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.” – Warren Buffett

Right now, no one knows how the financial markets are going to completely react to the Coronavirus epidemic and with this recent and most particularly painful downswing it is helpful to take a step back and refocus on the long-term. It’s moments like this that remind us why we keep diversified portfolios and that we shouldn’t make short-term decisions based on long-term goals.

Watch our video to hear more!



Mike Brady here.  I am recording this on midday Tuesday, March 10.  I’m going to get this out to you as quickly as I can get it through compliance.  I’m going to continue with regular updates to you because no matter where I am in the world I’m always working and I’m always paying attention to things.  You can tell that I’m in a hotel room right now as I spoke at a conference earlier this morning.

Very spectacular news.  It’s kind of hard to miss it.  It’s sort of like driving to the airport or being on a plane. Accidents happen all the time in a car so that’s a great risk to you, but what really makes the news is the spectacular nature of an airplane crash.  In the last two-and-a-half weeks we’ve had quite the spectacular news – very huge volatility.  In the world that is volatility risk adverse it’s really quite painful.  Those that have a short-term vision or have a long-term plan but then see things through a short-term viewfinder, that’s not very comfortable.  We can’t be that way.

You’ve heard me and I feel like I repeat many of the same messages over and over, but the better way to approach things is to look at things from okay, I’ve just given up and now I’m back to where I might have been ten months ago, eight months ago, a year ago, et cetera.  But my path is for the next 10, 20, 30 years.  My path is for the next five years, et cetera.  That’s why you have diversified portfolios.  Because things do happen in a three steps forward, one step back and sometimes two steps back.  If there is no belief that things will be better in the future then you shouldn’t have investments to begin with.

When the market goes down that is many times for some people a buying opportunity.  What’s interesting is that I’ve been doing this for almost 30 years and I hear so much of the same thing over and over again.  That’s one of the unique situations that I find myself in is that I get to speak with investors and clients and professionals all the time and so I’m always listening to different perspectives.  When the Dow Jones which is an unmanaged stock market index was at 10,000 points I heard that oh, no way will it go up to 12,000.  Or when it was at 18, they’re like well, when it gets to 20 that’s going to be at a top or aren’t you concerned it’s feeling pretty much at a high, it’s pretty obvious.  Or when it was at 21 or 22 or 23 it’s always at a top.  Yes, we went all the way up past 29,000 and now it has had a pretty spectacular in a relatively short amount of time a decline.

That does not mean that we then go the other way and say well, it’s obviously going to go all the way back down.  That’s why we have diversified portfolios.  That’s why we have a long-term vision, a long-term plan, et cetera.  Because on the way up we were always worried about it getting too high.  Then it goes up, it goes down.  Now we think it’s all going to go down and neither of them are true.

About three out of four years are positive.  That means one out of four are negative.  The question you might have is what’s my bias?  Is my bias to be an optimistic person or a negative person?  And optimism, in my opinion, is in your favor.  Why have investments if you don’t believe that it’s going to be higher in the future.  Why have investments if you need the money in the short term.  You shouldn’t have it in the short term.  You should make short-term decisions based on long-term goals and plans and things of that nature.

I was just talking this morning as part of the conference to this man who’s an ultrarunner.  He’s about to do the Leadville 100 which is a 100 mile race.  One of the things that was interesting about our conversation is he was saying hey listen, if I have a bad five miles I don’t give up the race.  I’ve got a 100 mile race that I’ve got to run.  If I’m 40, 50, 60 miles into it, no.  If all of a sudden I start slowing and I walk, I don’t go backwards, I continue plodding along toward my goal.  And I couldn’t help but think wow, that’s a good way to think about it because we are actually in a long marathon, a long ultra-run and not every mile goes the way we would like. Sometimes we stop and we take a little rest.  Sometimes we might walk instead of run, but we always go toward our goal and it’s no different than what is happening right now.

I believe that a lot of what’s happening is computer driven.  I think that once the big boys come back in, those people who are individuals handling billions and trillions of dollars, that’s when we will see the bottom of this particular market.  I don’t know if that’s going to be tomorrow. I  don’t know if that’s going to be next month, next year.  Anyone who will say that they know how the Corona virus fear or concerns, preparedness, virus, et cetera, is going to turn out is lying to you.  Anyone who says that they know how the financial market is going to react and the oil and this and that, all these things are going to play out the variables in the long equation are lying to you as well.  Don’t listen to them.  Don’t listen to the people on the news because most of the people who know something aren’t saying anything and those that are saying something don’t know anything.  That’s just my belief.

Relax.  That’s why we have a long-term strategy for you and these things happen.  They happen periodically.  This happens to be a particularly painful one and particularly spectacular very quick on the down, but these things do happen.  I’m not sure that I would jump out the window yet.

My number is 303-747-6455, Mike Brady.  You have a wonderful day. I will continue to update you as things go through over the days and weeks ahead.  Thank you.  Bye bye.

2019 Year-End Review

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch


The big lesson for 2020, because it is an election year, is to keep our politics out of our investments.  We give whoever is in power, our particular politicians and our president too much credit and too much blame.  In this video we’ll take a look at 2019 and how it’s been in comparison to years previous. Don’t expect any predictions about 2020, I don’t know the future any more than you do.  The best thing that I can do is counsel you on how we can increase the probability of positive outcomes.  How can we set things up to take full advantage of the favorable conditions if they’re forward, watching and keeping control of our emotions if they’re not.

Check out my full video review:



Hi there. Mike Brady with Generosity Wealth Management, a comprehensive, full-service financial services firm headquartered right here in Boulder, Colorado. Recording this on the evening of Friday, December 27. It’s my year end video and there’s still one and a half business days left – Monday and Tuesday, but I figured we were close enough. Assuming nothing major happens on the last day and a half we’re good to go for a good conclusion for 2019 which is one of those years that we all live for.

As we look back at the unmanaged stock market indexes over the last three or four years we had 2015 positive, 2016 positive, 2017 positive, 2018 negative and 2019 positive. Historically for a four-year presidential, the year that’s the election year it has historically been positive, more than 50 percent, but more subdued than the other three years. Who knows? I mean that’s the thing is you’ve got to have a long-term strategy. You don’t do things month by month or year by year.

As a matter of fact I would say that the big lesson for this next year because it is an election year is let’s keep our politics out of our investments. If you are pleased with the current president, you’re happy and you’re saying it’s a big mandate on his policies of 2017 but then in 2018 it flipped–it was sharply negative. And then 2019 it’s sharply positive. I mean I think that we give whoever is in power, our particular politicians and our president too much credit and too much blame. I can have that argument with you not today over this video. All I can really say is when you’re watching news all day long you’re going to come away thinking that everything is politics and it’s just not true. There’s a bigger world than that. And you’re going to come away thinking that everything has an answer. You look up at the clouds in the sky and our mind looks for patterns, makes that bear or that nice sheep up in the sky when it really isn’t there. Well, journalists have a tendency to say the reason why this happened – it went up, it went down, whatever, it was volatile, nonvolatile was because of this. Take it with a grain of salt. It’s just not quite as simple as they would led you to believe in the few minutes that they have on TV.

I’ve got lots of charts today that I want to share with you because it is the end of the year. This is a chart I’m putting up on the screen for the last number of years since 1996. You’re going to see I did a couple of circles on the far right-hand corner. You’re going to see a huge runup going all the way up from 2009 to the present. You can see that I did it in blue there. There were a couple of years where it was kind of stagnant and then we had a big upswing again. And then you can see there in 2018 it was kind of sideways again.

S&P Index at Inflection Points 2019

If you only focus on those as your whole focus, your investment strategy is to avoid the downturns then you’re never going to have the upturns in my opinion. So, you can’t look at it that way. I mean who goes into a friendship saying well, I don’t really want to have this person as a friend with all the good times because I’m worried that we might have an argument. I mean that’s ridiculous. Don’t treat investments the same way. You don’t go in so fearful of some of the negative things when on balance I would argue the positives outweigh the negatives.

This next screen you’re going to see is corporate profits are positive so I just want to talk about how 2019 was an incredible year and the corporate profits continue going forward and with the earnings estimates as well. You’re going to see that the S&P valuation level – this next chart on the far right-hand side – it’s nowhere near where it was in the late 1990s. I’ve heard a few pundits on TV talking about is this right before a big bubble and the huge valuations after a big runup in the stock market. The answer is they’re nowhere nearing that. From my point of view it’s trying to compare apples and oranges, make a story where there is no story.

Corporate Profits

The next graph I’m going to throw up on there is on the right-hand side you’re going to see that bottom line there. That shows our current economic expansion after a recession compared to many, many different recessions going back 60, 70, 80 years. What it shows is that we’ve had in comparison to other recessions since 2008 a relatively mediocre recovery from an economy point of view even though we’ve had a great stock market. The economy is not the stock market. I’ve made that argument in previous videos but from an economy point of view it has been relatively mediocre, not quite as hot as previous recoveries but it has been longer than the other ones as well.

S&P 500 Valuation measures

So, maybe that’s better. I mean frankly when we add it all up when we have a recession in the future we’ll look at it and historians will say wow, it was warm but much longer, twice as long. Maybe that’s better than having it super-hot for a shorter amount of time. Only time will tell but that’s what we have right now and have had for the last 11 or 12 years or so.

The length & strength of expansions

Right now look at this next chart. You’re going to see unemployment and wages on the far right-hand side. We are at a historically very low unemployment which is a great thing. Just a decade ago we were at ten percent unemployment and now we’re at two or three percent. This is a great thing. And over the last seven or eight years or so we have had wage growth increase, particularly in the last two or three years. That’s just kind of the way it works out. I definitely don’t give any party in power all that credit. It just doesn’t work out that way.

Unemployment and wages

The next chart up there I want to talk about is the interest rates and inflation. You’re going to basically see that we have inflation at incredible lows right now which is a good thing. And the last thing that I want to show before I get into a little bit of analysis is the yield curve. The reason why I want to show this yield curve to you is all summer for two months all we heard about is a yield curve and how the sky is falling and how it’s the most important thing in the world. And when is the last time you’ve heard someone talk about the yield curve? It’s quite frustrating from my point of view at times when I hear these pundits or when I hear people talk about the pundits is that they’re always coming up with predictions and many of them are wrong, and yet people still listen to these particular pundits.

Interest rate and inflation

Yield Curve

One of my colleagues said something I thought was pretty funny the other day. He said yes, sometimes they’re right, sometimes they’re wrong but they’re always certain. And that’s so true. They’re always so confident in their prediction where I believe the long term from an investing point of view and reaching your financial goals you need to have some humility. Hey, I believe this is what’s going to happen. There’s lots of different variables in the equation but you know what? Maybe I’m wrong. That’s the point.

Getting back to long-term success, it’s not just one year. I mean while this is my 2019 year end review listen, we’re not investing for a year. We’re investing for multiple years. I don’t care if you’re in your 70s or 80s. Hopefully you’re not going to die in the next year. I mean you still have to ensure that you don’t outlive your money. So we have long-term strategies and you’ve got to look at it that particular way as well. Here we are talking about one year but goodness, it needs to fit into a whole strategy.

One of the things that I do for all my clients is a financial plan. Where are we going? How are we going to get there? What are the variables we can control and what are the variables that we think we can control but we really can’t. A great example would be we can control how much we save. We can control when we retire. We can control on what income we retire at that point. How much we want to draw out in the future, what kind of a lifestyle.

Things that we don’t control are when we’re going to die. We think we’re going to maybe live 15 and we live 25. We think we’re going to live 25 and we live 15. We don’t know that. While we try to control the rate of return and there’s so much focus on it, that is something that we don’t have control over. We can try to control the band, the upper limit, the lower limit. We’re going to try to control that with various risk levels and investments and a balanced portfolio, et cetera. But that’s something that we just don’t have control over.

I like to focus clients – and I’m going to continue this next year on focusing on what are the variables that we have control over to increase the probability that we’re going to meet our particular financial goals whatever they might be. That’s it.

One thing you’ll notice is that I’m not giving any prediction about 2020. The one thing I’m going to give a prediction on is sometimes the market will go up and sometimes it will go down. We’re going to talk about politics all year long and half of America is going to be happy at the end of the year and half are not. That’s about as close to predictions as I can give this year. I don’t believe that it’s in your best interest to become – I could sit here and give a falsely positive of course it’s going to go up and this is the reason why. And that might be what you want to hear, but I would be disingenuous if I did that. I could be very negative this year but why would I want to do that. Three out of four years historically have been positive. I could be negative. I could get you fearful. I could get you in defensive strategies and things of that nature. But you know what. I don’t know the future any more than you do. The best thing that I can do is counsel you on how can we increase that probability. How can we set things up to take advantage of things. The favorable conditions if they’re forward, watching and keeping control of our emotions if they’re not.

Mike Brady, Generosity Wealth Management, 303-747-6455. You have a wonderful day and a wonderful 2020 year. Bye bye now.