Navigating the Tempest

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By Sharon Allen, CFP®, CTFA and Daly Andersson, CFA, CFP®

You’re caught driving in the middle of a ferocious storm. The windshield wipers are moving at a frenetic pace allowing you just a glimpse at the road ahead. You move slowly and intentionally forward, though it’s hard to even see the lines on the road alerting you to when you begin to veer out of your lane. White-knuckled, you pray you can just get to where you’re going in one piece. 

Anyone who has been driving for any length of time has likely had this kind of moment. It’s scary and not the kind of environment one goes searching for. Today, many feel caught in this storm as the daily events in the U.S. and abroad continue challenging our status quo.

In the tempest of social, fiscal, and global uncertainty that seems to threaten our financial security, each of us has the opportunity to be a source of tranquility for ourselves and those we care about through simple daily choices. As financial stewards, keeping a level head and clear-sightedness is both our opportunity and responsibility to ensure we are making financial choices based on what we know versus reacting and creating permanent negative results to our thoughtfully constructed financial house.

It’s Your Choice. Choose Wisely.

The most “weather-resilient” investment strategies in the world are based upon observed data through decades. These observations support crafting a portfolio of investments – using both growth focused and more stable strategies – to accomplish your most important goals. Financial data and research tell us that these investment choices start with controlling what you can control. The smartest people we know do this through thoughtful diversification, targeting investments that have historically provided excess return to investors, while managing risk and costs.

Intelligent portfolio design also includes investing in companies from small to large and located in the US as well as abroad. At Sterling, we also target several other factors of strong portfolio design in client portfolios including:

  • Value companies (low price-to-book ratios, high dividend yields, and lower price-to-earnings)
  • High Profitability companies (stocks with high relative operating profits measured by operating profits divided by book equity)
  • Small-Cap companies

Below is an illustration of how some of these different design factors have performed for investors over time. We illustrate below the performance of both U.S. and International stock markets as well as short term fixed income and the Consumer Price Index from November 1998 through February 2025. In grey, you will see highlighted the three recessions we have experienced in the U.S. during this time frame. Now, if you close your eyes and remember the times described below (the “Dot Com Bubble”, the “Great Recession”, COVID), you will recall that the world felt like it was caught in a deluge with no path forward. But hindsight is always 20/20. What felt like a fork in the road with neither path leading to a viable solution proved that indeed there was a path forward out of each of these storms.  Time and time again, over the long-term span of an investor’s lifetime, the commitment to a growth allocation has historically shown positive returns.

Exhibit 1 – Global and Factor Annualized Returns from November 1998 to February 2025

Navigating Through the Storm

Investments are a necessary tool to build and fortify a solid foundation for your financial house. A financial plan tailored to your unique life provides clear guidance through both the sunniest of days and the darkest of nights.  This plan both beckons and reminds you that in any storm there is a path forward. Not unlike the instrument panel a captain would rely on when the environment feels like the craft is going in the wrong direction, your financial life plan is your guide.

Throughout history, we have experienced (and not infrequently) ups and downs in the stock market. The events that spur market movements change from day to day and decade to decade, but the learning a savvy investor must take is this: market declines are messy but necessary for a healthy, functioning market. Strive to maintain the course.

Referring again to the graph above (Exhibit 1) notice that through some enormous storms, the long-term growth for stock investors has historically resulted in higher returns and growth of invested dollars. What history has shown us is that for investors, it’s about time in the market and not timing the market.

Be Great

As the Bard in Shakespeare’s Twelfth Night decried, “Some are born great, some achieve greatness, and some have greatness thrust upon them.” When you find yourself in the middle of a tempest, you have the opportunity to be great and steward financial stability for yourself and those you care about for generations to come. Our advice is to control what you can control and stay on course. We are here with you every step of the way.

Sources & Disclosures

2025 YCharts, Inc.

The information in this material is intended for the recipient’s background information and use only. It is provided in good faith and without any warranty or representation as to accuracy or completeness. Information and opinions presented in this material have been obtained or derived from sources believed by Sterling to be reliable, and Sterling has reasonable grounds to believe that all factual information herein is true as at the date of this material. It does not constitute investment advice, a recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. Before acting on any information in this document, you should consider whether it is appropriate for your particular circumstances and, if appropriate, seek professional advice. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Unauthorized reproduction or transmission of this material is strictly prohibited. Sterling accepts no responsibility for loss arising from the use of the information contained herein.

Risks: Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful. Diversification neither assures a profit nor guarantees against loss in a declining market.

5 Key Steps to Creating a Digital Asset Plan

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We carry ourselves in the palm of our hand.

In today’s world, our digital lives have expanded from simply an email account and online banking login to a virtual reality that we control from the phone we carry with us nearly everywhere. From online financial accounts and cryptocurrency to social media profiles, streaming services, travel loyalty programs and digital photos, our ever-expanding digital footprint requires attention in our estate plan.

The average person has over 90 online accounts, many containing valuable information, digital assets, or financial resources. Unlike physical assets that can be discovered during estate administration, digital assets may remain hidden without proper documentation and access instructions. Without proper planning, these assets can become inaccessible, lost forever, or vulnerable to identity theft after your death.

Important Factors to Consider in Digital Estate Planning

Provider Terms of Service

Most online platforms have Terms of Service agreements that often prohibit account transfers upon death. These agreements can create significant barriers for executors trying to access accounts, even with court orders.

Federal Laws

The Computer Fraud and Abuse Act (CFAA) and the Stored Communications Act (SCA) can criminalize unauthorized access to digital accounts, even by family members or executors. These laws were created to protect privacy but can complicate legitimate estate administration.

State Laws

The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), adopted by most states, provides a legal framework for fiduciary access to digital assets. However, implementation varies by state, and the law still generally gives priority to the service provider’s terms of service.

Steps to Take When Creating an Estate Plan for Digital Assets

  1. Create a Digital Asset Inventory

Develop a comprehensive inventory of your digital assets. For each account, document the platform name, username/email address used, and the purpose of the account. Be sure to store this inventory securely, updating it regularly.

  • Email accounts
  • Social media profiles
  • Financial accounts (banking, investment, cryptocurrency)
  • Subscription services (streaming, shopping, etc.)
  • Cloud storage accounts
  • Domain names and websites
  • Digital collections (music, books, photos)
  • Online gaming accounts
  • Loyalty program accounts
  1. Include Digital Directives in Legal Documents

When updating your estate planning documents, be sure to include specific digital directives. These should explicitly authorize your fiduciary to access, manage, modify, delete, and control your digital assets. We recommend discussing with your attorney about including this language in the following documents:

  • Will
  • Power of Attorney
  • Trust documents
  • Side Letter of instruction
  1. Store Digital Login Information Securely

While including passwords in your will isn’t recommended (as wills become public record when you pass away), consider using a password manager with an emergency access feature or creating a separate confidential document with access information. The location of this document and/or password manager login should be stored securely and shared with the individuals who will be your agents.

  1. Use Platform-Specific “Legacy Tools”

Many online platforms now offer legacy planning tools. These tools allow you to designate someone to manage or memorialize your accounts after death. Below are some of the more common platforms and the name of their specific tool. When you designate someone as your legacy contact, be sure to let them know.

  • Google’s Inactive Account Manager
  • Facebook’s Legacy Contact
  • Apple’s Digital Legacy program
  • Microsoft’s Inactive Account Manager
  • Instagram’s Memorialization settings
  1. Talk with Your Family

Have open conversations with family members about your digital asset inventory and your wishes for your digital accounts. If there are sentimental digital assets, like photos, messages or other content with sentimental value, be sure to let your loved ones know not just the “where”, but also the “why”. And don’t forget to make sure your executor knows where and how to access all of this important information!

Digital estate planning is no longer optional in our increasingly digital world. By taking proactive steps now, you can ensure your digital assets are managed according to your wishes, prevent identity theft, protect valuable or sentimental digital content, and save your loved ones from unnecessary stress and complications during an already difficult time. Review and update your digital estate plan regularly as your digital footprint evolves and as platforms and laws change.

Preparing for your digital afterlife today is truly an act of love. You provide clarity and peace of mind for those who will be managing this part of your life when you no longer can.

4 Key Truths That Lead to Investing SUCCESS

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Many of us have heard the phrase, “Luck favors the prepared.” I suggest a different idea:

“SUCCESS favors the prepared.”

Every person defines success differently… whether it means the open doors of opportunity, personal accolades, a substantial financial foundation, wealth in the form of relationships. The one common theme among these varying definitions of success is the intentional planning and action required to realize that success. Strong relationships don’t materialize because you wish them to. They are the product of time invested in people. The same is true of a strong financial house. It is the product of intentional action toward stated financial goals. And that requires a thoughtful plan.

Core Elements of a Solid Plan

As wealth advisors, we have seen a fair number of financial plans. The most successful ones – the ones that withstand whatever is thrown at them – have a few commonalities:

  • Stated Measurable Goals
  • A Diversified Financial Foundation Built on a Disciplined Investment Strategy
  • Support from Experts to Assess & Develop Solutions to Key Challenges

It is exceptionally difficult to avoid all turmoil in life. Trials, tribulations, and unsteadiness are around us at every corner. Yet, success in our financial journey requires that we have a strategy to combat this turmoil and maintain resilience in the face of it.

During this particular season, the turmoil du jour is in the form of political uncertainty. Like many things in life, this challenge is merely a variation on an age-old theme: unchecked fear and anxiety over upsetting events can activate our most human instincts of “fight or flight”. When it comes to experiencing fear around investing – even the most seasoned investor can be moved to “flight” if their emotions take the driver’s seat. This is almost always to their financial peril and lasting regret. This is why it is important to have a disciplined investment strategy in place to guide and keep you seated throughout all market cycles.

Enter: The Disciplined Investment Strategy

“The first rule of compounding is to never interrupt it unnecessarily.” – Charlie Munger

TRUTH #1: Negative events cannot have lasting impact if your plan remains intact.

  • Your stated, measurable goals are the guiding light of your plan.
  • The plan is designed to aim toward your most important goals.
  • Once an investment plan is designed and implemented, it will work most effectively if you have the patience and discipline to stick with it.

TRUTH #2: Significant market declines are a normal and expected part of investing. Your disciplined investment strategy incorporates the expectation that market declines may be precipitous at times.

  • 1 in every 5 years since WWII, broad stock markets (as measured by the S&P 500) have declined an average of nearly 30%, so we expect stock markets to go down roughly 30% every 5 years.
  • Three times in the last 50 years, markets have declined by about 50%.
  • The stock market has compounded at 10.7% per year since January 1973.

Our conclusion? Broad market declines are temporary (and necessary) for long-term advances.

TRUTH #3: Historically, it has been far more fruitful for long-term growth to be an owner versus a lender.

  • To be an investor in the stock of a company is to be an owner. To be an investor in the bonds of a company is to be a lender.
  • Historically, long-term investors have been rewarded for taking on the risk that comes with stock ownership. Owners of companies have compounded their wealth at rates that far outpace those that lenders have grown their wealth. For example, over the last two decades $10,000 invested in the US Stock Market (via the Russell 3000) would have grown to $51,870 versus an investment in US Bonds (via the US Bloomberg Aggregate Bond Index) that would have grown to only $18,860. That’s nearly three times the growth!

TRUTH #4: Prepare to be an opportunist, not a victim.

  • If we know that market declines are a part of investing, come regularly, and are planned for, the smart investment strategy provides for an approach that capitalizes on the opportunity a down market provides.
  • Historically, the stock market’s very best days come very quickly on the heels of the worst and most highly panicked days.
  • As institutional investors, we understand that there are greater factors at play when the market moves. We are able to help our clients maintain their disciplined strategy because we see the playing field without emotion. Our approach has planned for these times and see them as opportunities to buy shares of the good companies when they are ‘on sale’.

How does one experience a successful financial life journey? Preparation.

And your Sterling Team is here with you all along the way providing expert guidance, solutions and collaboration. Thank you for being part of our family.

Launching the Younger Generation to Financial Success

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There are many personal finance activities that we engage in as adults that are almost second nature, from working to saving to borrowing and building credit. We’ve compiled some simple actions you can take (and when) to increase your child’s financial success as they mature.

Grade School Age +
1. Encourage them to get experience with a job (in or outside the house)
> Let children get experience managing their own cash flow – learning about how much money comes in (and when), how to spend wisely, and how to save for future expenses both large and small.

Junior High/High School Age
1. Help them open their own checking & savings account (& obtain a debit card)
> In addition to learning about how to manage money with a bank, this is a critical step before engaging in any future lending.
> Provide experience for managing money the way most of us do today (digitally).

2. Open a secured credit card (or make them an authorized user on your card) – build credit!
> Building credit is an often-overlooked aspect of setting young people up for financial success.
> A secured credit card allows you to build your credit with significant guardrails in place
– Allows for building credit with very low (and secured) credit limits
– Available to people with poor or no credit
> To start, authorizing a child as a user on your card may be a good way to allow them to learn to make purchases, build & manage credit, while still allowing you to monitor their spending and ensure their success.

3. Go through a tax return with your teen
> At school, kids learn a lot – however, as you may have experienced in your own life, the intricacies of a tax return is not one of them. Help your younger generation understand what taxes they are paying & why.

College Age
1. Understand the difference between “good” debt & “bad” debt
> With credit, comes the need to discern how to use credit wisely. Teaching young people the difference between high interest rate credit cards, auto loans, and federal/private education loans is critical to making informed decisions about debt.
> Review the costs and benefits of particular schools & majors when determining when (and how much) to borrow for school – it’s critically important as college costs & student loan debt continues to balloon.

2. Take them to a meeting with your financial advisor
> Be open about your financial journey & allow them to learn from your successes & failures.
> Make the most of the resources available to you – we would be more than happy to help be a part of your young person’s financial success.

The “SMART” Way to Navigate Life’s Transitions

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Change in life is inevitable – and so too are the periods of transition which big changes can bring. Whether you’re buying a home, having a child (or grandchild!), getting married, getting divorced, changing careers, or saying goodbye to a loved one – it is truly an understatement to say life is full of moving parts. As planners, we strive each and every day to ensure our clients are set up for success, no matter what changes they face.  So it is our most important responsibility to come alongside them as they navigate all of life’s biggest transitions.

While helping our clients through countless transitions, we have learned a few things about what it takes to successfully navigate a big transition. First and foremost, we know it’s “SMART” to do at a little planning in advance of life’s big events.

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