June 2025
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Ep. 140 Taxes, Debt & The Future: What the New Budget Bill Means for You
Ep. 139 Women & Finance | The Next Era
Hello everyone, and thank you for joining us for another episode of THE FINANCIAL COMMUTE. I'm your host, Chris Galeski joined by CEO of Morton Wealth, Jeff Sarti.
Good to see you.
We're here today to talk a little bit about your newsletter. It was recently The Perspective. Yeah. And now it's The Healthy Skeptic.
Mixing it up.
And look, I'm an optimist. So when I think of 'the healthy skeptic,' my mind sort of goes in a different direction. But what I like about this letter is you went into ten core tenets that sort of define what a healthy skeptic means. And it's not doom and gloom. No, it's not that you're not an optimist. You are an optimist.
But you touch on some really fascinating points that I thought we'd have a conversation around today.
Yeah, no, I love it. You want me to kind of just give a high-level overview of why even the name change? Yeah. I think as a starting point, we at Morton Wealth, we have a history and our clients as well. Just a history of being open-minded, of being curious, of being questioning at our core. And we distinctly don't take the status quo at face value.
Right. We are always questioning, especially as it comes to the markets, policies, government policies, the media, what's thrown at us. With regards to the media, we just, question all of those things. And I think we look to dig deeper and find the truth underlying a lot of those things that are being told to us in the media and by government policies.
Have you always been a skeptic? I think of you as an optimist.
That's why I put "healthy."
Yeah. From your perspective, like you're always curious-minded. Yeah. And you mentioned don't take things at face value. And that's one of the tenants in here.
Yeah. I guess without getting too philosophical, I mean, something we talked about in the past, I don't think anything is really black and white. I believe I live in a world of gray. That's just how I live my life. And so that filters into my philosophy, around investments, around government policies. It's again, it's the nature of instead of taking things in black and white, at face value, digging deeper and really looking at a variety of scenarios.
Pros and cons around any topic or data point that's thrown at us. Yeah.
I don't think we're going to go into all ten principles. That'll be a lot.
I'm going to start with my favorite part of this letter. And that's some of the quotes that you bring in to all of the ten components. Right. And so the first one is the media is obsessed with short term. So we tune it out. Warren Buffett's quoted was saying that the stock market is a device for transferring money from the impatient to the patient.
Yeah. And man, that rings true.
Well, I know you've always been a Warren Buffett fan.
Yeah, I'm a huge Warren Buffett fan. But, you know, oftentimes patience is such an important part of life, investing, and actually seeing success. Yeah, you can't put a timeframe on things, but often times the more patient you are, especially when it comes to investing, the better it works out in your favor. But we tend to react emotionally. Let's talk a little bit more about that.
Yeah, I mean, you hit on emotion short term versus long term, but that's the media. That point being around the media, the media by its very nature, I mean, we all know it's a short-term vehicle. It's, incentivized to get you to watch the television and not turn it off. So how does it do that?
It preys on your emotions, right? Fear and greed. Alarming headlines. What's the hot, hot stock of the day or the week? Right. What trend should you lean into or avoid? All of this is just short term noise that really, again, to your point, feeds into your emotions of fear and greed, which we all know we should avoid when it comes to sound long-term patient investing.
And that's why I'd like to think we as healthy skeptics and our clients as well, who embrace that approach, they just ignore the media, right? Especially when it comes to the markets. They really tune it out.
Yeah. And look, we've talked a lot about speculating versus investing. We we do like to take advantage of opportunities. Sure. And we do look for times where it makes sense to do that. Let's think about stepping on a gas pedal versus a brake pedal. But we are long term investors. We are not speculating. And I always think about the Jim Cramer, buy buy buy, sell sell sell, which is oftentimes you know we talked to people during heightened volatility.
They're either let's sell protect or you know what what opportunities are out there. And it's like well there's a whole host of them. But we don't know what we don't know. So that sort of goes into that next part of The Healthy Skeptic, which is market predictions are just noise for long term investors.
I forgot which number two is okay.
Yeah. So what I love about this quote is there are two kinds of forecasters, those who don't know and those who don't know. They don't know. Right. Which I always thought it was funny.
Yeah, in that section, I alluded to a study that was done. It was done a few years ago, but, where it looked at forecasts of it was, I think it was 68 stock market experts across Wall Street and their 6000 predictions of stock market returns over a long time frame. And the results were they were right, 47% of the time.
So a little like it's a coin flip.
I have better odds at a roulette table.
Right. Exactly. I mean, and listen, we all even intuitively know this, right? No one has a crystal ball. So why do we spend so much time with these market forecasts? And that's really in many ways, I know a frustration that we both share that our industry at large really promotes the theme of forecasting that we are the experts in the room, right? Wall Street with their PhDs on stuff that they can outsmart an unknowable future.
Again, we think that's tremendous, tremendously misplaced in terms of energy. And we'd rather focus our energy on other areas.
It's that point like it is just built on this idea of prediction. Yeah. And look, we have thoughts and we have perspectives over things. But we're not trying to predict. Yeah. And no one has a crystal ball, if you were the best stock manager in the world you'd be managing everybody's money buying stocks. Yeah. That's just the true nature of it.
So I always found that interesting because, you know, people do lean to us on our ability to predict. And later on, we'll talk a little bit about how they should be us versus what the media tells you to think.
Real quick on that. You probably get, the same question when people find out what I do for a living and that I'm in finance. The most common question I get is, Jeff, great. You know, the stock market, how are stocks going to do this year? Yeah, I know I have no idea how stocks are going to do it.
They know that. Well, I'm the guy with the crystal ball. And all of a sudden they met me at a cocktail party. It's just again, it's a false sense of control that people are looking for.
I laugh because I don't want to go into too much detail, but I have a neighbor, young guy. He's starting a family, and I always see him and his dogs walking around our neighborhood, and he's had a very good year financially. And he's getting a nice bonus. And he texted me, he's like, hey, I'm getting a bonus.
I was wondering, where do I invest it? Like, what should I be looking at? Like, where would you put new money today? Yeah. And it's like, yeah, a lot of different places.
But yeah. What is the new trend that he has to chase right here? Right now?
Yeah I wanted to just say gold, but the third one is uncertainty exists and we purposely make resilient decisions that lessen the impact. So this is our philosophy. Yeah. If uncertainty is unacceptable to you, it turns into fear. If it is perfectly acceptable, it turns into increased aliveness, alertness and creativity. That was Eckhart Tolle.
Yeah, that was a neat quote I came across. And yeah, it's really it is a very we've talked about this before I think on a previous podcast, but we do take a very different approach when it comes to uncertainty. The way that most traditional investors handle uncertainty is, again, it goes back to that prediction. The previous point we talked about, they try to outsmart an uncertain future, right?
They try to figure out which way the trends are potentially going, even though we strongly believe in so many ways, so much is uncertain. So instead, what is our approach? We lean into the uncertainty. We embrace it. Right? We just acknowledge that the world can go in a variety of different directions. And so instead of, again, misplaced energy of trying to outsmart an unknowable future, what do we do?
We try to build. We spend our time building resilient portfolios so that no matter which way the wind blows are portfolios are going to do okay. So it's just much a much different approach, not only in terms of strategy, but really in terms of where we spend our time. Again, it's not in predicting in an unknowable future. It's finding needles in a haystack, uncorrelated opportunities that will help to build more resilient portfolios.
Yeah. And your analogy in this letter has to do with somebody surfing. Yeah. You know, so they're surfing riding the waves, going with the flow. All of a sudden the waves get too big. Or if it gets stormy they just get off their surfboard and they go onto the beach and they wait it out.
Yeah. That's timing. That's trying to perfectly time. They hone their surfing skills. Right. Trying to perfectly time when they get on a wave, when they get off a wave, that's like buying or selling the right stock at the right time or when the waves are way too large. What do you do? You go to shore and you go to cash or bonds.
Again, everything is... that's a short term trying to outsmart an unknowable future. The waves are inherently unpredictable, so we take a very different approach. We ditch that surfboard and...
Build a bigger boat. That way we can stay in the water and manage the uncertainty. Yeah. This one sounds sort of like everybody goes, oh, yeah, I get that. But we challenge it from a different perspective. So investing starts with investing in yourself. Yeah, it's a Warren Buffett quote. You know, the best investment you can make is in yourself.
Yeah, I think intuitively we all say, oh yeah, that makes sense. But what I found interesting in this, you know, I've been doing this now for 16 years. And hopefully going to do it for a lot longer is that our world does not teach people at a young age how to invest the right decisions. And so you find yourself with some success in life, built a nice nest egg, and all of a sudden you don't want to take on the burden of responsibility yourself.
So you just hire a financial advisor. And because you don't really understand all the components that go into it. Yep, there's a component of trust, but it's built by hope.
Yeah, it's blind trust.
Absolutely. And you just hope that you're making the right decisions because you're not knowledgeable or informed. Yeah. And I used to think that the best client was the delegator, the one that says, oh, do whatever you want. But what I've come to realize is that is not the best client.
I've shifted. I've shifted my mindset over the last 5 or 6 years.
Right. So talk a little bit more about like what the best client is and what investing in yourself really means.
It comes down to those who do have knowledge and understanding. Going back to your common around blind trust, we all know any strategy. If it's built on blind trust, ultimately that's not a recipe for success. So we take a very different approach when we partner with our clients, and it really is spending time on education. It's things like this podcast, right?
Things like the newsletter I write, things like our Couchside Conversations. We have that other that other video chapter that we release on a regular basis. It is with the goal of really empowering our clients to build their knowledge and with that knowledge, true confidence. Right? Not a false sense of confidence that they really understand the why and the purpose behind their investment portfolio.
Because again, it's really a partnership. We don't want that blind trust right now. Because to your point, hope is really not a sufficient strategy over the long term.
I want a partnership. I want I want to be in the game with our clients and along the journey with them, as opposed to them just delegating and trusting like I want trust. Trust is better when it's not backed by hope.
Government statistics policies are misleading.
So I just did an episode with Beau talking about the recent Tax Cuts and Jobs Act. Okay. A lot this year, in terms of volatility has been around, you know, tariffs and inflation and jobs reports. Yep. I've always been distrusting of the inflation reports that the government comes out with because why would they want higher inflation. That means that they would have to pay more money to people for Social Security or cost of living raises.
So of course they're going to find ways to manipulate the numbers. We've joked about that for some time.
And just really quick, yeah, this is not a conspiracy. Over the years they've changed how they calculate the inflation statistics. They've altered the methodology. If you just for instance, take the current inflation numbers statistics. And if instead of calculating it based on today's methodology, you calculate it based on the methodology during the 1990s.
Today's 2 to 3% inflation would be in the high single digits, same underlying numbers, but just a different methodology that over the last three years they keep changing the rules to artificially result in a lower reported inflation number.
It's so fascinating. Yeah. I do love this quote though. Yeah. Because even though you say that you do believe that we live in the greatest country in our honor.
The codes are so funny. No matter how deeply you distrust the government's judgment, you are still too trusting. Yeah, it's is really good.
So another another component of this is each investor's path is unique to them. This is the one that if anything should resonate with our clients, I believe it should be this one. It's the fact that you are on your own path, in your own journey. Yeah. And it doesn't matter what everybody else is doing.
You know, there's a Mark Twain quote. Comparison is the death of joy. And but it's it's human nature to compare ourselves to others. Yeah, we all strive to be better, all of that stuff. But at the end of the day, it's like following the herd. All these other mentalities, like it's so dangerous. And if your goal, as you mentioned, is to generate consistent cash flow for you to live your life, you shouldn't care that your neighbor bought XYZ thing that went up 20,000%.
Another great example in frustration of how I think the industry promotes, false truths. So what I mean by that is that the art industry really promotes comparison shopping. Everything is around benchmarking a portfolio and benchmarking over short-term time frames. But to your point, many of these benchmarks, let's even just take the S&P 500 as an example.
If you are benchmarking your performance against the S&P 500, I mean, that's just the wrong term approach. Two examples. Let's talk about an up market and down market. Let's say big up market. Let's say the S&P 500 is up 20 plus percent in a year. You're of course not going to be all in stocks. And you'll lag that.
What emotions will arise out as a result of that comparison shopping? You'll feel FOMO. You'll feel greed as opposed to fear. Right. And you'll want to reach for higher returns that might not make sense for you, right? You'll go into riskier things, vice versa. What about in down market years in a bear market, let's say 2022, the S&P 500 was down 18%, right?
Let's say you were down 13 or 14%. Should you be cheering that you outperformed the S&P 500? Absolutely not. That's a horrible result, right? Of course, your portfolio should do much better than that. So that's just one example again of that comparison shopping in the artificial nature of benchmarking that I think is really, really damaging to long term investment principles.
Yeah. And it plays into that whole emotion, the fear versus greed and FOMO, which, you know, happens to all of us. Yeah. Even sometimes we make a financial mistake looking back. And then our next move is to try to make up for it.
I played golf professionally. Long time ago. I was so good, I'm now a financial advisor. But rule number one, when playing money for playing golf for money. Yeah. Don't make two mistakes in a row, okay? Never. Yeah, you can, you can. You can still win a tournament. You can still do well as long as you don't compound mistakes.
And that was a life lesson I learned very, very young playing competitive sports.
That's interesting. Moving on, forgetting about that error, and moving on to the next thing?
Yeah. And not trying to be a hero on that next shot because you know, making two mistakes in a row, hitting in the trees and trying to be a hero and hitting it out and maybe hitting in the water or out of bounds or hitting that tree, you're just compounding your mistakes and end up with a really big number that takes you completely out of competition.
You try to avoid that at all costs. The next one that that I really like is it has to do with illiquidity can help create positive outcomes. So we talk a lot about, illiquidity. You know, the big money is not in the buying and selling but in the waiting. Yeah. This sort of ties back to the first premise earlier, where patience is a virtue.
Most investor investors crave liquidity, wanting to have access, but it goes against even Warren Buffett's principle of patience and letting things ride out. You want to talk a little bit.
And why do they crave liquidity? It comes back to again our emotions and our need for a sense of control. But all liquidity is it's a false sense of control. All you're able to do is at a click of a button, buy or sell that stock, or even your net worth, when your emotions are running hot. So that's actually one of the negative aspects of liquidity.
It gives you a false sense of control. Now illiquidity on the other hand, what does that do? It reinforces a long term mindset. If you can't literally buy or sell at a click of a button, that investment, you have a real different mindset shift. Instead of thinking, oh, what is the price target and when am I going to sell it tomorrow?
No, forget about that price target. The goal of that investment is to hold it for the long term and compound wealth or cash flow over years or decades. And that's what illiquidity really reinforces.
Yeah, I love that. And obviously we embrace that here. Just even from a mindset perspective. The last one and we'll kind of close out on this is, you know, overconfidence is akin to close-mindedness as someone that in many times in my life, I've been overconfident. I love this quote. The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people are so full of doubts.
Like, I love talking with Meghan because she's not 'the sky is falling,' but she likes the question. And yeah, you know, she likes to doubt certain things. And people are like, oh, this investment's so great, you got to take a look at it. And she can't wait to kind of dig under the hood and, and look for other reasons why it's maybe not so great.
It goes back to the onset of this conversation. At our core, we question, we're curious, but we question. We don't believe in certainty. I believe the best investors that we know at their core, they have a lot of humility as opposed to overconfidence. Most are fooled by the overconfidence. And if someone really has a real conviction in something, i.e. overconfidence, that's what many investors lean into.
We take very much of an opposite approach, where humility is the starting point when we're evaluating investment opportunities. So what does that mean from a strategic point of view? We're looking at opportunity. We're really trying to break it. We're stress-testing it. We're looking at a variety of different scenarios. And what is the end result of a more humble approach to portfolio management?
It's diversification. It's why we're so passionate out over diversifying a portfolio, because when you have lots of different things that'll just move in different ways, you're going to be more resilient.
Yeah. You even mentioned here that when somebody is able to, you know, have that different mindset, they no longer stress about outsmarting the world or predicting an unknowing future. Instead, they humbly lean and acknowledge that the world is bigger than they are. Yeah. I mean, we are the greatest country on this planet. But we are a very small component of the entire population and the shifting dynamics of the world.
Yeah. And so it is, it is looking back and saying, hey, I can make an impact. But I'm also partly along for the ride, and I need to acknowledge that a little bit.
I love that. Impact vs. along for the ride. We as investors, I know it's humbling. Sometimes it can feel overwhelming to some, but the reality is we just kind of are along for the ride. Yeah. And so if you have that mindset, it really changes your approach towards investing in portfolio construction.
And Jeff, this has been a fun conversation. I know that we talked about a lot of the components that are inside this letter, but we didn't even get to some of the other good stuff. So please stay tuned and watch out for this newsletter. I hope that you really enjoy it. If you have any questions, please reach out to your Morton Wealth financial advisor and we're happy to have further discussions.
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