Tilia's 15th Year in Business
A few weeks ago, we passed our 15th anniversary of opening Tilia. As I think back over the last 15 years, I am overwhelmed with gratitude. Gratitude for our founding partners, who had the vision to start this firm. Gratitude for our team members, both past and present, who have made Tilia what it is. And gratitude for our clients, who have placed their trust in us to be their partner in financial planning.
I'm proud that Tilia is still an independent, employee-owned firm. We've grown significantly since our founding, with our team now expanding to 12 dedicated employees. Most importantly, we've had the privilege of working with hundreds of families across the Cape Fear Region and beyond.
Lessons Learned Over 15 Years
When we set out to start Tilia, we had a vision to build a firm that would be there for clients through good times and bad. We've had plenty of both over the last 15 years. Here are some of the most important lessons I've learned:
- Markets are more resilient than they seem. Over the last 15 years, we’ve lived through two major bear markets (the Great Financial Crisis of 2008-2009 and the 2022 inflation/rate-driven downturn), a global pandemic, multiple recessions, and countless flash crashes. Despite all of this, the S&P 500 has more than quadrupled from its level in mid-2008.
- Diversification is the only free lunch in investing. We’ve never had a year where every asset class performed well. We’ve also never had a year where every asset class performed poorly. That’s why we build diversified portfolios.
- Time in the market beats timing the market. The investors who have done the best over the last 15 years are the ones who have stayed invested through thick and thin.
- Emotional decision making is the enemy of long-term returns. The investors who have done the worst over the last 15 years are the ones who sold after a major market decline and never got back in.
- Cash flow is king. The investors who have done the best are the ones who have consistently saved a meaningful portion of their income and invested it in a diversified portfolio.
- Cash is a position, not a parking lot. Holding cash can be a great strategy at times, but cash that’s sitting on the sidelines indefinitely is not working for you.
- There’s no substitute for great people. The most important ingredient in our success has been the quality of the team we’ve built. Without great people, none of the other lessons matter.
I'm looking forward to the next 15 years and beyond. While I don't know what the future holds, I do know that we will continue to be there for our clients, helping them navigate the ups and downs of the markets with the same discipline and care that has defined Tilia since day one.
Markets Right Now
As we write this newsletter, the U.S. economy continues to defy expectations. A widely anticipated recession has not materialized, despite the highest interest rates in 22 years. The S&P 500 is up over 13% year-to-date, and many of our clients are enjoying strong returns in 2023.
That said, we remain cautious. Inflation is still elevated, and the Fed is likely to keep interest rates higher for longer. The job market is showing signs of cooling, and corporate earnings growth is slowing. The next 12-18 months will be critical for the U.S. economy, and we will continue to monitor the situation closely.
Thank you for your trust, your referrals, and your partnership over the last 15 years. Here's to many more.
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