2021 was another unusual and sometimes challenging year. We alternated between feelings of relief and anxiety and moved through a series of monumental events, including the ongoing effects of the pandemic, extreme weather conditions, faults in many commercial supply chains, and global political changes. COVID continues to cast a shadow over us, especially as the Omicron variant rages through communities.
But 2021 was also a year of heightened collaboration, innovation, and growth. As a result, we are in a much stronger position on many fronts than we were a year ago. We understand more about the virus, our response to it continues to evolve, and employment has rebounded to pre-pandemic levels.
From our perspective, 2021 was a very good year for Sage clients regarding their portfolios and the planning work they accomplished. It was also a very good year for the organization. 2021 was Sage’s 32nd year in existence, and it is gratifying to see how time and growth continue to deepen our commitment to our founding values.
Some of the highlights of 2021 for our clients and the firm include:
- For the most part, the markets climbed steadily higher, and Sage’s strategically positioned portfolios delivered positive performance,
- More clients benefited from the continuing expansion of our wealth management services, including financial planning, tax planning, and estate planning,
- We identified and introduced new technologies to help create efficiencies for clients and our team,
- Introductions from our clients to their family and friends turned into new relationships,
- Sage welcomed five new strong team members, and
- We maintained our 98% client and team member retention rates.
2021 was not without its ups and downs, and we intentionally changed course several times. Even now, we remain alert and agile. But we are starting 2022 in a strong position and remain cautiously optimistic that the overall growth trend for portfolios and the organization will continue.
2022 Market Outlook
We are cautiously optimistic about 2022.
- We have identified three major themes, which we believe may have the most impact on economic growth in 2022 and thus are driving our outlook on major asset classes around the world:
- Strong consumer demand for goods and services
- Less accommodative monetary policy
- Evolution of the COVID virus
- While risks remain, our base-case scenario is that the U.S. economy will grow by 3.5-4.5% in 2022 year-over-year, and conditions for corporations remain positive (i.e., revenue growth, margins, etc.), which should support equity returns.
- Overall, we expect global growth to exceed 4% in 2022. In addition, we expect emerging market growth to rebound following a year of poor performance.
Longer-Term Market Outlook
- Sage’s approach to portfolio management is not to try to time the markets. Instead, we stick to a disciplined strategy that involves rebalancing through market fluctuations and diversifying investments within portfolios. In our view, this disciplined and diversified approach leads our clients closer to achieving their financial goals knowing it is nearly impossible to predict the short-term returns of any individual asset class.
- While it is important to evaluate each year’s performance and consider how it impacts your unique financial picture, we prefer to focus on long-term returns. This is because economic growth, inflation, and productivity growth (i.e., innovation) drive financial market returns over the long term.
READ the full 2022 Sage Investment Outlook, including our annual “Base Case View of 2022 Asset Class and Portfolio Performance.”
READ a condensed, bulleted version for those who prefer a shorter piece.
The Sage Organization in 2021
Managing investments and our clients’ wealth management are our core competencies, but a broader purpose drives us. We want to help others make intelligent, well-informed, and personally beneficial decisions as they seek to achieve their financial goals and enjoy greater peace of mind. COVID’s shadow and the continued need to live and work remotely helped emphasize the importance of communication, collaboration, long-term planning, and Sage’s integrated, coordinated approach.
In 2021, we continued to spend time with clients on investment management, financial planning, and the areas covered by our family office services, including tax planning and estate planning. We added value in other ways, too, including offering our 2nd Summer Symposium for the next generation of Sage clients and introducing, as appropriate, conversations with some clients about impact investing.
Everything we do begins with our team, and we work hard to recruit, develop, and retain good people. The care we put into our people has created a stable and robust team with a 98%+ retention rate. They exemplify a deep sense of humility and care, which is as clear in their daily interactions with each other as in their relationships with our clients. In our view, the team’s determination and passion are vital to our mission.
Sage welcomed five new team members in 2021: Ben Kogan, CFP®, J.D., MBA (University of Michigan, Emory University), Senior Wealth Manager, John Yoo (University of Massachusetts, Lowell), Reporting Associate, Jake Vielbig (Pace University), Client Service Associate, Ross Cohn (University of Wisconsin, Columbia University), Client Service Associate, and April Solla (New York University), Trusts and Estates Paralegal. The team’s growth will help us provide even more comprehensive advice and services while seeking to maintain the high quality of your experience. We also added two Strategic Investment Consultants to our Investment Division. Their expertise and knowledge add diversity and complement the work of our in-house team: Ben Alimansky, MBA (Columbia University), and Orim Graves, MBA, CFA (Hampton University, University of Wisconsin).
We expect to add more people in 2022 as we continue to manage growth and our interest in offering expanded client services. Some of our best team members were referred by people we know, and we welcome introductions to individuals interested in a career in investment and/or wealth management.
Opportunities for Innovation
In 2021, Sage continued to turn challenges into opportunities with the goal of improving our clients’ and team’s experience.
- In 2020, we began holding meetings via video and telephone conference calls out of respect for the health and safety of our clients, our team, and their families. It wasn’t always seamless, and we explored different technologies. In 2021, it became old hat for most of us, and we have learned that many clients prefer these virtual meetings as they can be effective and more efficient. In 2022, we hope to offer more in-person meetings when desired, as it can be valuable to meet face-to-face. But we are committed to providing alternatives so that our clients can meet with us in the way they prefer.
- While everyone was working from home, we were able to renovate the office suite. We are thrilled with the increased functionality and refreshed look.
- We steadily introduced DocuSign into our new client onboarding and Schwab paperwork processes. The technology allows us to request and collect signatures electronically, which reduces paper, postage, and, most significantly, time and effort for our clients.
Finally, as you know, it is important for us to find ways to help others, especially when so many around us are struggling. While we supported many charities in 2021, one of our most meaningful relationships is Alex’s Lemonade Stand Foundation. We continue to be gratified by how many of you join us each September in support of The Million Mile, the annual virtual run/walk/bike event that helps raise awareness, support, and funds for research into cures for childhood cancer.
- In 2021, the Sage Million Mile team helped raise more than $63,000. This was the largest donation made by a business team (out of 209) and the sixth-largest overall.
- Our cumulative impact continues to grow. Since the event began in 2013, Sage and all the clients, friends, and family who support us have donated more than $350,000, translating to more than 7,000 hours of critical research.
As we move into 2022, we want to emphasize the deep gratitude we have for our relationships with you and the tremendous sense of fulfillment we get from helping individuals plan and build toward their goals.
As always, we welcome your feedback.
Stephen L. Cohn, CFP®
Alan J. Cohn, CFP®
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The information and statistics contained in this report have been obtained from sources we believe to be reliable but cannot be guaranteed. Any projections, market outlooks or estimates in this letter are forward-looking statements and are based upon certain assumptions. Other events that were not taken into account may occur and may significantly affect the returns or performance of these investments. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. These projections, market outlooks or estimates are subject to change without notice. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. All indexes are unmanaged and you cannot invest directly in an index. Index returns do not include fees or expenses. Actual client portfolio returns may vary due to the timing of portfolio inception and/or client-imposed restrictions or guidelines. Actual client portfolio returns would be reduced by any applicable investment advisory fees and other expenses incurred in the management of an advisory account. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Sage Financial Group. To the extent that a reader has any questions regarding the applicability above to his/her individual situation of any specific issue discussed, he/she is encouraged to consult with the professional advisor of his/her choosing. Sage Financial Group is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the Sage Financial Group’s current written disclosure statement discussing our advisory services and fees is available for review upon request.
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