Last month we discussed how thinking for the next generation of investors early can help them (read our last letter on the right accounts for young investors here). This month we want to talk about how thinking for the next generation through your own investment decisions can help you. 

Thinking long-term allows you to avoid the short-term hiccups and fear that can limit your overall return. 

That is why our advice is to view your portfolio as not just your life, but beyond. Like an endowment, your portfolio doesn’t need a finish line — it’s built to serve generations. Whether you have kids, grandkids, nieces, nephews, or friends, investing with them in mind will actually be a benefit to your own returns. At 70, don’t consider yourself as having just a 20-30 year horizon. Your time horizon is the entire generation below you, and the one after that. If your capital will serve both you and them, why would you invest differently at 60 than they should at 30?  

This is one of our core philosophies — investing with generational wealth in mind. It has to start somewhere. When you think this way, and especially if you can pass that thinking down to the next generation, assets become unstoppable. 

Naturally, this mindset benefits future generations but what if that is not your priority? That’s still fine, because thinking this way can actually increase your own returns and assets, allowing you more freedom to enjoy yourself.  

The industry standard is that as you age you should reduce your exposure to equities and increase your bond exposure. There is even the common rule of thumb that your bond allocation should equal your age. 

Consider a 50-year-old who followed that rule. In 1995 they chose to put 50% in bonds and 50% in stocks. The next year, 51% in bonds and so on. A $10,000 investment would be $75,700 today. 

Compare that to a 50-year-old who neglected the rule of thumb and went 100% in stocks. Their $10,000 would be $193,000 today. That’s 2.5x the wealth over 30 years — a difference created entirely by mindset. 

These assume a 10% equity return and a 5% bond return, which roughly match long-term S&P and bond returns. Our historical returns have exceeded these long-term averages. We acknowledge we are preaching to the choir here as many of you followed this advice and experienced the benefits. 

Why do people follow these rules of thumb? The logic is that as you stop earning income, you need to preserve what you’ve built. People are rightfully afraid of losing their money and not having enough. However, too much focus on preservation can make you miss the chance to grow your money passively.  

The best defense against a down market isn’t timing… it is already having enough invested to outlast it. This may sound obvious or even obnoxious, but people don’t practice it. Having “enough money” isn’t just dependent on a high-paying job. Continuously making the small decisions to stay invested, invest more, and allow compounding interest to work is how individuals can eventually have the luxury of not stressing about the market.  

Out of the two examples above, who is more afraid at age 80 of not having enough money? Start making decisions out of fear and you likely never stop. 

It’s easier said than done. The fear of losing money you may one day need is real, and we don’t take it lightly. Over time, we’ve seen that staying invested stops feeling risky and starts feeling responsible. When your focus shifts to the long term — to yourself and the generations that follow — volatility starts to feel like background noise, not alarms. 

In our experience, the biggest financial challenges we see aren’t bear markets — they’re opportunities: a child’s wedding, a new home, a business venture, a college education. Investors who have focused on growth may have more freedom to say yes to those moments. It is a great honor for us to help with them. 

Patience and consistency aren’t just virtues in investing, they’re multipliers. That’s the mindset we bring to your portfolio.