Summertime Rules

​Even during the summer vacation, rules are in place and must be followed. I’m sure many of you understand the truth about children and the old saying concerning idle hands and the devil’s workshop. I don’t believe Carter is working for the devil, and maybe the milder, “an empty mind is a mischievous mind” suits better, but lately that son of mine has been on a carousel of “escapades” and “life lessons”. Depending on who you are, summer “vacation” is a matter of perspective. 

This month’s letter is about rules, and I know you’ll be happy to hear that I am going to keep it short. First, if you receive paper delivery of our monthly reports, the first thing you saw was our new Client Relation Summary (Form CRS). We have just very recently changed from being a South Carolina state Registered Investment Advisor to a U.S. Securities and Exchange Commission (SEC) Registered Investment Advisor. This change does not affect our ongoing relationship with any of you. Some of the rules are slightly different between state and SEC registered advisors, however the State of South Carolina states clearly that in most circumstances their rules follow the rules of the SEC. One difference, however, is Form CRS, which the SEC requires broker dealers and investment advisers to deliver and make available to retail clients. It summarizes key details about a firm to aid investors in making decisions about their financial relationships.
 
We are required to give Form CRS, along with the larger Part 2A of Form ADV that you all have received before working with us, to any new and perspective clients, but upon first registering with the SEC we must deliver a copy to all current clients. If you read through it and any questions are sparked, please reach out to discuss them with us, but most of the information should sound familiar to you.
 
As to other rules affecting our lives, there is an increase in news about the independence of the Federal Reserve System. There are discussions and comments about President Trump “thinking about” the possibility of removing Jerome Powell as Chair of the FED and replacing him with someone else. Although the Chair of the FED is a presidential appointee confirmed by Senate vote, removing and replacing an acting chair because they are not doing what a president wants would directly compromise central bank independence in the United States.
 
It is generally agreed that central bank independence results in better price stability and employment. The markets are still “priced for perfection,” and I don’t know how market participants would react to this change if enacted. In the short-term markets could go up because the new Chair would obviously lower interest rates, but the lack of U.S. central bank independence could be viewed negatively by several parties, including credit rating agencies, international investors, and other central banks and international financial institutions.
 
The world is never a boring place, and we stand witness to changing times, weather, technology, and governments. I think we often like to say that people change as well, meaning the ideas and ideals of society change. However, I think it is more that people adapt to the change around them, while doing their best to retain the big ideals that we generally agree upon as people. That is how I base my hope on the future for humanity, and why I believe despite the uncertainty that we’ll continue to find success as we adapt.
 
So, while enjoying the summertime sun with friends and family, and dwelling on the goodness of people, I hope you adapt accordingly with the latest sunscreen, shading, and hydrating technology offered by society today.
  
Justin Anderson