2024 Annual Client Letter

Each January, as we reflect on the year just completed, we like to revisit our shared pursuit of your most cherished lifetime financial goals. Our plan and our portfolio continue to be driven by those goals, rather than by prognostication around the economy or the markets. This will continue to be the case in the coming year, and beyond.

We begin by restating some of our core beliefs and proceed to a few comments about the current economic/ financial backdrop.

General Principles: 

• We are long-term, goal-focused, plan-driven investors. Our core investment policy is to invest in broadly diversified portfolios of high-quality businesses.

• We believe that the economy can’t be consistently forecast, nor the markets consistently timed. We conclude from this that the only practical way to capture the premium long-term return of equities is to ride out their frequent, sometimes significant but historically always temporary declines.

• We do not react to economic or market events. As long as your long-term goals remain unchanged, so will our plan for the achievement of those goals.

Current Observations 

• Powered largely by a very few of the very largest technology stocks, the past year was another exceptionally good one for the diversified equity investor. As the year came to a close, the market gave evidence of broadening out to some extent. That would certainly be welcome.

 • The presidential election result was at least clear and uncontested. The economic backdrop continued favorable. The job market remained fairly strong, though showing signs of cooling due to relatively stringent monetary policy. Corporate earnings and dividends reached record highs and are forecast to increase further in 2025.

• If anything, late in the year many investors feared that the equity market had gotten ahead of itself, as evidenced by somewhat stretched valuations. Since valuations have never proven to be a reliable timing tool—any more than anything else has—we encouraged clients to just keep on keeping on with their plan.

 • Inflation has not gone away. Nor, as Fed Chair Powell observed in mid-December, is it going away. A frothy market took this statement rather badly, as indeed it should have, in our opinion.

• And while the fiscal condition of the United States remains undeniably appalling, the consumer is (perhaps surprisingly) in very good shape. The household debt service ratio (debt payments as a percentage of disposable personal income), at 10.1% in the third quarter of 2024, is near 40-year lows.

 • It doesn’t seem reasonable to suppose that the broad equity market can go on indefinitely compounding at the nearly 16% it’s been producing since the March 2009 Global Financial Crisis lows. Nor do we need it to. Our long-term plans assume the hundred-year return of the S&P 500 at around ten percent.

We wish all our clients and friends—because to us they’re the same—a healthy, happy and prosperous 2025. We’re always here to answer your questions or address your concerns. Thank you for being our clients. It is a privilege to serve as your Family CFO.

Sincerely,

EnRich Financial Partners LLC

Investment Advisory Services offered through EnRich Financial Partners LLC, a Registered Investment Advisor.

This material may contain forward or backward-looking statements regarding intent, beliefs regarding current or past expectations. Such forward-looking statements are not a guarantee of future performance, involve risks and uncertainties, and actual results may differ materially from those statements as a result of various factors. The views expressed are also subject to change based on market and other conditions. Furthermore, the opinions expressed do not constitute specific investment advice or recommendations by EnRich Financial Partners.

Past performance is not a guarantee of future results. Performance shown is for portfolios comprised of Indexes and includes the reinvestment of dividends and other earnings but does not reflect the deduction of investment advisory fees or other expenses. One cannot invest in an index directly. This content is provided for informational purposes and is not to be construed as specific investment advice.

The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value-weighted index. The Russell 2000 Index measures the total return of small capitalization U.S. stocks and is a market value-weighted index of the 2,000 smallest stocks in the broad-market Russell Index. The MSCI EAFE is a Morgan Stanley Capital International Index designed to measure the total return of the developed stock markets in Europe, Australasia, and the Far East. The MSCI EM is a Morgan Stanley Capital International Index designed to measure equity performance in global emerging markets. The S&P 500, Russell 2000, EAFE, and EM are unmanaged indexes. One cannot invest directly in an index. Past performance does not guarantee future results.