Working with a financial advisor often means receiving a quarterly letter (or a client letter, market commentary, or some other variation of those terms). These letters are nearly always published on a quarterly basis, although they rarely focus on topics unique to the preceding quarter. They often contain metaphors, quotes from famous investors, timeless maxims, and other literary devices. Some advisors spend days writing these letters, some actually print them on thick paper and snail mail them to clients (despite using email for all other communications), while other firms simply use white-label content from third-party services. Quarterly letters did have their time and place. Before the internet allowed individual investors to access reliable information instantly or advisors to disseminate information easily, quarterly letters could be rich sources of timely information and commentary. In today's world, most quarterly content is outdated before it is ever written; in today's world, commentary on events from two months ago is not timely. Thus, we increasingly believe that the traditional quarterly letter may have outlived its usefulness.
At MFA, we have tried to eliminate the superfluous and narrow our focus to relevant content, so our letters have become shorter over the years. We only send material that we would want to receive and read ourselves. With that rule in mind, we believe it is time to improve upon the traditional quarterly letter. We will continue to send a quarterly email to clients linking to market updates and commentary (see the latest summary here), but most of this content has already been posted to the MFA blog in an effort to provide:
- More relevant information via topical posts. Those who want facts, numbers, and financial market data can dig into our quarterly market summaries (the latest one can be found here), while others may prefer to skip these posts. Some clients are interested learning about the yield curve (for instance), while others could care less as long we are managing their portfolios responsibly. Those who want to receive every post can sign-up for our blog mailing list, while others can just check the blog from time-to-time.
- More timely information via more frequent posts. As mentioned above, commentary on the events of two months ago is no longer timely. For instance, we wrote about increased tariffs at the time that they were increasing, rather than today (two months after the fact) when our quarterly letter would've been published. A letter scheduled for every 90 days will often be stale before it is even written, so we hope to mitigate that by writing about topics when they are relevant.
- Higher quality content on an as-needed basis. As Lenin once said, "There are decades where nothing happens; and there are weeks where decades happen." The same could be said about quarters; a lot of happens during some quarters and very little happens during others. We do not want to send something to our clients unless it is worthwhile. If nothing is happening in markets, we may write less. If there is a lot going on, then we will put in the extra time to to keep our clients updated.
- Meaningful thoughts. Periodically reflecting on the past can be beneficial. But every 90 days is too frequent, at least for the field of investing which is a long-term endeavor with a lot of short-term noise. The quality of most investment decisions cannot be evaluated in a three-month period; there's just too much randomness and volatility (aka noise). While we are moving beyond the quarterly letter, an annual letter may be in the offing.
We love sharing the observations, thoughts, and rationale that go into managing our clients’ assets. While the traditional quarterly letter is no more, we will continue to publish just as much (if not more) content as before. And, of course, our team of financial advisors is always available to review and discuss specific accounts and/or investments. Due to the diversity of our clients, strategies, and investment vehicles, we do not typically comment on specific investments, but our team is always available to discuss specific investment vehicles or strategies.