It's that time of the year, and holiday music is in full effect. Everyone has a favorite holiday song. 

"Little Drummer Boy" is one of our favorites (despite the potential party-foul antic of banging on a drum and making a lot of noise at a baby shower…come on, the baby's mother did give him permission!).

The song - originally known as "Carol of the Drum" - was written by the American classical music composer and teacher Katherine Kennicott Davis in 1940. It was first recorded in 1951 by the Trapp Family Singers (check out the original version here). It then become popular after a 1958 recording by the Harry Simeone Chorale. Since then, many musicians have recorded more popular versions (we have over fifty in a holiday Spotify playlist including interesting takes by Johnny Cash, Bob Seger & the Silver Bullet Band, Low, Dandy Warhols & Los Straitjackets to name a few!).

For us, the song's brilliance is two-fold. First, the music's stripped-down, slow build into a low key anthematic rhapsody conjures up efficient yet celebratory emotional power through music. Couple that with its messaging about a cash-poor kid who was asked to come to an important party but could not afford a decent gift. Thinking quick on his feet, the young dude, an accomplished drummer in his own right, decides to give the gift of music. He simply played his drum. Shortly thereafter, an ox and lamb joined in the session, and they have the jam of their lives. The audience dug it. A good gift indeed. For us, this truly captures the spirit of the holiday season.

We truly appreciate someone who keeps it simple during a crisis (a gift-giving crisis or otherwise!). One of our "first principles" that grounds our investment process is a focus on simplicity over complexity. Granted, there are very complex things in the investment industry (much of it is made far more complex than it should be). We agree with Oliver Wendell Holmes Jr., when he said, “I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.”  So much of what we do for clients is to find that simplicity on the far side of complexity.

As an example: our maniacal focus on long-term asset allocation. There are so many ways to overthink about and get overly complex in individual investment selection. We keep it simple by being thoughtful on which asset classes to invest in. Knowing that you can count on one hand the important asset classes that matter to investment returns over the long-term, it is much easier to focus there instead of getting bogged down into the literally millions of individual investments out there available to investors.

This approach is backed up by academic practitioner research. In their seminal 1991 research paper "Determinants of Portfolio Performance II: An Update," Gary Brinson, Brian Singer and Gilbert Beebower figured out that the asset classes an investor invests in explains 92% of the future long-term investment performance while individual investment selection only accounts for 5% of the performance.

In our opinion, a keen wealth plan tied to a simple focus on asset allocation is a gift that will keep on giving!

"Pa rum pum pum pum…"

Happy holidays!

 

For more information on this topic please contact Russell Moenich. 

The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

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Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

On the Little Drummer Boy & Keeping It Simple | Sequoia Financial Group

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