Mid-Year Subscriber Letter

For the last decade (or so), I have written both an annual and a mid-year letter to our readers. In the beginning, it was intended for our clients, but today we have over 2500 readers (fewer than 10% of which are clients). I’m happy to share my goal-focused, planning-driven, long-term equity philosophy as broadly as possible and I sincerely appreciate our readers’ continued attention.

If you know someone who could benefit from a better investment process or a steadier hand on the investing wheel, please forward this newsletter to them and suggest that they subscribe. Thank you.

Every one of these letters has taken the same basic form – a re-statement of a few essential investment beliefs – our core principles – of which I think people may need reminding at the moment. Then, a very light, totally non-predictive review of the 6-month period just ended.

Longtime subscribers know I intend this to be very much more a perspective-restoring, mood-setting exercise than it is any sort of economic/market commentary. “Future conditions” in the economy and the markets are not merely unknowable, they are irrelevant to the plan-driven investor. Yet, she is exposed to a firehose of such drivel 24/7. There are much finer things on which we’d like to help her focus. My goal in these letters relates much less to hard content (which isn’t helpful anyway) than to emotional tone (which will absolutely make the difference between being a successful or unsuccessful investor).

You will, no doubt, notice a few recurring themes:

  • Our plan is progressing;
  • Calm down;
  • Tune out the noise;
  • Know what we own: The great businesses of the US and the World;
  • Know why we own them: They provide the highest probability to overcome the greatest risk to our future – inflation;
  • Know that the long-term equity plan we’re following has always, repeat always worked;
  • Know that even (and especially) during temporary market declines, that plan continues to work through dividend reinvestment and the unstoppable engine of compounding;
  • Know that temporary decline can only become permanent loss if and when the panicking investor sells. Permanent loss is always something investors do to themselves.

As I usually do in these reports, I ask that we first remember a handful of what I regard as timeless truths about enduringly successful wealth management. Then we can proceed to some more current observations.


We are goal-focused, plan-driven, long-term equity investors. Our portfolios are derived from and driven by your most cherished lifetime financial goals, not from any view of the economy or the markets.

We do not believe the economy can be consistently forecast, nor the markets consistently timed. There are no facts about the future; there are only guesses. We do not believe it is possible to gain any advantage by going in and out of the markets, regardless of current or expected conditions.

We therefore believe that the most efficient method of capturing the full-premium compound return of equities is by remaining fully invested all the time.

We are thus prepared to ride out the equity market’s frequent, often significant but historically temporary declines. We believe that even during such trying episodes, our reinvested dividends will be buying more lower-priced shares—and that the power of equity compounding will be continuing, to our long-term benefit.


The first six months of 2024 can be simply but accurately summed up in two observations: (1) The U.S. economy continued to grow, however modestly. (2) The equity market—responding to accelerating earnings growth and dividend increases—did very well indeed.

Economic growth remained marginally positive, continuing to avoid recession, while job growth continued relatively strong. Inflation slowed very grudgingly, providing the Federal Reserve with no urgency to reduce interest rates.

Monetary policy remains gently but quite firmly restrictive— that is, the fed funds rate is well above the inflation rate—where long-term investors should want it to be. Getting inflation down to the Fed’s target two percent remains Job One.

Even without stimulating rate cuts, the equity market advanced solidly across a broad front: all three major stock indexes are significantly into new high ground. The driver for this has been just what it should be: strengthening earnings and rising dividends. Bloomberg’s current estimates are for the S&P 500’s earnings to be up something like 8.8% this year, to be followed by a further 13.6% increase in 2025.

Even though cash dividend payments to shareholders are at record high levels, S&P 500 companies are still paying out a below-average percentage of earnings (about 37% versus the average for the last 30 years of nearly 46%). Between that and sharply increasing earnings, there would appear to be quite a bit of room for further dividend growth this year and next.

Earnings and dividends are the variables that ultimately drive the long-term value of our core investment asset: ownership equity in a broadly diversified portfolio of enduringly successful companies. Not the national debt; not the looming election; not the presence or absence of Fed rate cuts; not war(s); not the onset of the next regularly scheduled government shutdown “crisis;” not the outcome of our quadrennial national political duel (read: election). 

I continue to believe that the more we focus on the fundamental strengths of our core asset, the more we’re able to tune out the noise, and the less danger we will be in of emotional overreaction to gyrations in “the stock market.”

I believe in our plan, and I like what we own. Heck, I love what we own. Thank you, as always, for being clients, members, and general readers. I appreciate your trust and it is a privilege to serve you.

If you’d like to delve more into my beliefs regarding the importance of making ownership of the shares of the great companies of the US and the World a cornerstone of your family financial plan, please listen to episodes #91-#100 of the Mindful Money Podcast.  Start with episode 091.

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