The Unique Ability to Say No
Contributed by Doug Walters, David Lemire, Max Berkovich, Matthew Johnson
What does it mean to act in your best interest? It’s a simple question, but in today’s investing world—full of hype, complexity, and competing agendas—the answer isn’t always obvious. Sometimes, doing what’s best for a client means saying “no” to things that feel exciting, timely, or even profitable—at least on the surface.
There’s no shortage of shiny objects these days—cryptocurrency, private equity, buffered ETFs, meme stocks, IPOs. These products make headlines. Naturally, clients want to know: “Should I be in this?” It would be easy—and perhaps good for short-term AUM growth—to say yes to everything. But as fiduciaries, we’re legally and ethically obligated to act in your best interest. That means saying yes only when it truly makes sense.
We recently explored this idea on our podcast: what it really means to act in a client’s best interest. The definition is simple—but living it out is anything but. Take cryptocurrencies like Bitcoin, for example. For years, we’ve written that it isn’t an investable asset. It’s built more on speculation and criminal use cases than fundamentals. Yet prices keep rising. It doesn’t feel great to tell clients to avoid something that seems to be working. But we feel confident that helping clients avoid speculative mania is the right call — even if the market scoreboard says otherwise for now.
Our confidence stems from the knowledge that one of the most important responsibilities we have is helping clients avoid permanent loss of capital. I’m talking about investments that can truly go to zero and never come back. A company going bankrupt is a clear example. We believe many cryptocurrencies fall squarely into this category. With no underlying fundamentals—no cash flow, no productive use case, no claim on assets—there’s nothing to stop it from going to zero if sentiment shifts. That may not happen today, but the risk is real.
Too little risk can also be an issue. A few months ago, I spoke to an advisor who asked if we were using “buffered ETFs.” He boasted that his “clients love them.” I’m certain I visually cringed. They’re pitched as equity with downside protection—which sounds great in these uncertain times. But they also cap your upside. And because markets rise more often than they fall, those limits tend to work against you. If risk reduction and downside protection are the goals, there are simpler, cheaper, more transparent and more effective ways to achieve them. As fiduciaries, we’ll stick with those.
We love innovation when it makes sense. As evidence-based investors, we’re always on the lookout for thoughtful, well-structured investments that provide a strategic advantage—like low-cost funds, tax-efficient strategies, and factor-based investments.
Being a fiduciary means sometimes playing the long game when the short game looks tempting. We may not be on the right side of every trade, but we will always be on the right side of your long-term interests. That’s what acting in your best interest really looks like.
+73,000
The non-farm payrolls missed consensus of +115K, and May and June were revised down a combined -258K.
Headline of the Week
I Dissent
This week’s Federal Reserve decision to hold interest rates steady at 4.25%–4.5% was anything but routine. In the first double dissent in over 30 years, Governors Michelle Bowman and Christopher Waller voted in favor of a rate cut, citing mounting evidence of economic softening. Their concerns were swiftly validated Friday morning when the July non-farm payrolls report came in well below expectations, with just 73,000 jobs added. The disappointing data triggered a sharp drop in short-term Treasury yields, with the 2-year note falling nearly 20 basis points—an unmistakable signal that bond markets now expect a rate cut at the Fed’s September meeting.
To top off a volatile week, President Trump signed a sweeping executive order late Thursday imposing new tariffs on over 90 countries, set to take effect August 7. The order includes duties ranging from 10% to 41%, targeting both major trading partners and smaller economies. While some nations secured temporary reprieves through last-minute negotiations, the aggressive move has reignited fears of a global trade slowdown. More critically for the Fed, tariffs are inherently inflationary—raising costs for businesses and consumers alike—complicating the central bank’s calculus as it weighs a potential rate cut. The combination of weakening labor market data and rising trade-related inflation pressures has intensified the stakes for the Fed’s September meeting, which now looms as a pivotal moment for U.S. monetary policy.
The Week Ahead
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