The Value of Having
Been There Before

What Each Market Taught Us

The Dot-Com Bubble, Seen from the Bond Desk

I was a bond trader during this period, watching the mania from just outside it, in a market that was pricing risk very differently than the equity side was. On the bond desk, decisions were made on fundamental analysis and hard data. From that seat, it was hard to understand why so many equity investors had walked away from traditional value metrics and were justifying investments on little more than the fear of being left behind.

That contrast has stayed with me. A compelling story can substitute for a coherent valuation right up until it can’t, which is why the question we start with is always what, exactly, we’re being asked to pay, and for what.

The 2008 Financial Crisis, Learned as a Portfolio Manager

By 2008 I was a portfolio manager, directly responsible for how a portfolio was positioned as the crisis unfolded. Before the crisis, bond markets ran on an implicit assumption: if you needed to sell, the banks and broker dealers you’d purchased from would buy those bonds back from you, even if the price wasn’t perfect. That assumption stopped holding. Many banks and broker-dealers sharply curtailed their willingness or ability to buy bonds back, their own balance sheets too impaired to take on additional risk. For days and weeks at a time, transactions in some parts of the bond market became extraordinarily difficult to execute at virtually any price.

That period taught the lesson that correlations investors relied on for diversification broke down all at once, and being unable to access your own capital at the moment you need it most turned out to be its own kind of risk (at times, larger than the risk of loss itself). The system hadn’t simply repriced, but trust between counterparties had broken down entirely.

This is why we spend as much time today on a client’s liquidity structure, what’s accessible and on what timeline, as we do on asset selection. A portfolio that looks well diversified on paper can still leave a family exposed if too much of it is locked up in the wrong places or dependent on a counterparty relationship that assumes normal conditions will hold.

The 2022 Rate Shock, Seen from the CIO’s Chair

By the time rates moved sharply in 2022, I was Chief Investment Officer at State Street Bank, responsible for the framework an entire institution used to think about risk. From that seat, what stood out most was how many of the investors and professionals making critical decisions in 2022 had never lived through a rate-hiking cycle before, and it showed. Few understood that higher rates move every part of the balance sheet at once, from the cost of carrying debt to the assumptions underlying a retirement plan, not just bond prices. Having lived through a hiking cycle before made the difference between reacting to the rate move in front of you and recognizing how it would propagate through everything connected to it, which is why we build portfolios with that full picture in view.

Why the Partnership Matters

Individually, Bill and I each bring three decades of experience. Together we bring two independent, often differently formed perspectives on the same market event, his shaped inside JPMorgan and mine inside State Street. When we evaluate a client’s portfolio or a prospective investment, we bring both perspectives to the same table and triangulate where they agree and where they don’t, rather than relying on one person’s instinct.

That matters more than it might sound. Markets don’t repeat exactly, and no single career, however long, covers every scenario a client will face. Two independent viewpoints working through the same decision together catch things one alone might miss, which is the same principle behind an investment committee, and we’ve built that structure around individual and family portfolios.

That’s the foundation of the firm Bill and I built together at KinneyMunro Wealth Advisors, where judgment has been tested under pressure, with consequences, from multiple seats at the table.

The Point of All of This

Thirty years in the business only matters if it’s changed how you make decisions. What matters is that Bill and I have made decisions, with capital on the line, during periods when the outcome wasn’t obvious at the time, and we’ve had the years since to see which of those decisions held up.

That’s what we bring to the families we work with: a habit of mind built from having navigated the past. Our job is to bring that same discipline to your portfolio, asking the same hard questions about cost and complexity that we once asked at institutional scale, now on behalf of the people and families who trust us with what they’ve built.