This past weekend, our home state of Illinois announced “stay at home” protocols. You may wonder how this will affect our business operations, the planning we do for you, and your portfolios. Prudent planning is a hallmark of our firm, and effective business continuity is an integral part of any robust plan. It would be ludicrous for us to implement a sturdy, long-term strategy for you, and then ignore this practice for ourselves.

In brief, we want to reiterate a few points:

• We have “work from home” infrastructure and a “remote working” plan that can operate for a sustained period of time. That’s now in effect. It includes constant intra-firm communication as well as protocols to uphold important safeguards, such as cyber security and client confidentiality. We are executing trades, depositing checks, and making distributions. You should expect this to continue.
• Effective operation relies on the health of our employees. Daily, we update each other on health status, and encourage responsible action, such as social distancing and prudent testing. Any employee with health issues immediately ceases work and focuses on their recovery. We disperse their responsibilities among the other team members. Our collaborative approach strongly mitigates “key man” risk. An employee absence of several weeks is not of concern.
• We rely in part on third parties, such as Charles Schwab, Morningstar, and Dimensional Fund Advisors. To the best of our ability, we monitor the business continuity and stability of our service providers – these days, essentially via daily communication – with realistic contingencies in place. Of course, we already have affected the best practice; work with other firms that themselves have effective continuity plans.

In light of recent weeks’ historically unusual volatility in financial markets, we want to remind you why we believe our investment approach has been and will be effective.

Our first step in crafting your portfolio was to determine its goals. How much  as needed to meet near-term liabilities (e.g., next year’s college tuition) versus long-term liabilities (e.g., living expenses in retirement)? How much needed to be in a moat to counter crises (e.g., your income is unexpectedly halved because of COVID ramifications), and how much could be placed in aggressive growth investments to be tapped by heirs in forty years? Our next step was to build a diversified, goals-oriented portfolio that minimized the risk of a permanent impairment of capital (e.g., selling a stock mutual fund after a 30% decline) while maximizing the probability of meeting your goals. Our final step was (and is) to have the discipline and fortitude to adhere to this long-term plan in the midst of intense short-term vicissitudes. We remain constant in this approach, and fully expect its merits to be revealed as others panic.

Some things have changed rapidly in recent weeks. Less than two months ago, stories about the Super Bowl and impeachment dominated domestic news. It feels like that was two decades ago. Other things haven’t changed. Before COVID, the optimal way forward was calm and focused adherence to an intelligently crafted long-term plan. In the midst of COVID, the optimal way forward is calm and focused adherence to an intelligently crafted long-term plan. Why? Because any such plan incorporates the probability of crises.

You have many things to be concerned with at this time. Our ability to serve you is not one of them. You have entrusted us with an enormous responsibility; the management of your financial security. We strive each day to earn your trust, and you can expect us to keep you informed throughout the crisis. Please be safe, healthy, and calm.

Sincerely,
Gryphon Advisors