What’s in a name?
"So David triumphed over the Philistine with a sling and a stone."
1 Samuel 17:50a
Since entering the financial services industry, I have always been fascinated with it. The interplay between securities, the endless correlation studies, the constant change, and the persistent efforts to resist that change. Why markets behave the way they do will surely be studied for generations to come.
Yet the best part of the capital markets is how it helps everyday Americans build wealth and create a secure financial future. The key is owning equity in something that appreciates in price. That equity could be real estate in the Texas Hill Country, it could in the form of owning your own business, or it could be derived from owning stocks of publicly traded companies. It doesn’t matter how its achieved, it’s just paramount that you own equity in things that appreciate. The US is the world’s preeminent economic superpower in no small part because it allows every day citizens to own equity in its most successful enterprises.
Beyond equities, the bond markets offer one the ability to earn interest commensurate with what a bank would earn on their loan portfolio. A properly constructed bond portfolio can provide a predictable and secure income. And lastly, we can all hedge the inevitability of inflation though the investment of hard asset derivatives known as leveraged futures.
There is just one problem with the capital markets. And that is the gate keeper of the capital markets known as Wall Street. Maybe it has occurred to you that your 401k or IRA account has never measured up to the talking heads on CNBC. After all, 94% of all mutual funds underperform average (source: SPIVA). How can 94% of managers be below average? And worst yet, 85% of the 6% that have outperformed will end up underperforming average in the subsequent 10 years. So, it turns out it was most likely luck or just happenstance that even 6% were able to outperform.
Why do mutual funds, ETFs and brokerage accounts routinely underperform “Wall Street”? Why has your account not mimicked the ones you read about online? I contend the reason is simply that Wall Street engages in various schemes to confiscate your wealth. ’40 Act Funds (i.e. mutual funds and ETPs) are the most overt way but there are plenty of others. Insider trading, front-running, and free-riding are key ways Wall Street consistently extracts wealth from your investment accounts.
While capital markets are wonderful at creating wealth, Wall Street has often been just as proficient at destroying it. For investors, Wall Street is often seen as a necessary evil, but it doesn’t have to be that way. It’s our job to protect you and your wealth from the Goliath of Wall Street. The SEC won’t do it, FINRA won’t do, and surely the DOJ won’t do it.
Not a single member of a Wall Street firm was jailed following the 2008 Financial Crisis. When was the last time you read about a Wall Street banker being indicted for insider trading? They got Martha Stewart, they tried really hard to nab Mark Cuban but the SEC has not pursued a single Wall Street banker for insider trading for as long as I can recall.
Our little firm located in a little town in the Texas Hill Country makes a singular promise to you. To never cease in our efforts to protect your wealth from Wall Street, simply because, if we don’t, no one else will. I can’t promise you that we will always succeed, but I can promise you that we will never stop trying…
armed simply with A Sling & A Stone.
All the best,
Matt McCracken, Founder
MAY LOSE MONEY | NOT FDIC INSURED | NOT BANK GUARANTEED