(An audio version of this letter can be found as Episode 60 of The Unlimited Podcast by Ginsler Wealth. Use the link provided or find us on your favourite podcast app: Apple Podcasts / Spotify)

 

A warning sign
I missed the good part, then I realised
I started lookin’ and the bubble burst
I started lookin’ for excuses
                                                                      –Warning Sign, Coldplay

To Ginsler Wealth’s Clients:

First of all, don’t read into the lyrics above that I think the markets are in a bubble and they are about to burst—I don’t. The lyrics pertain to my Coldplay story below.

Second of all, this letter won’t focus on the Coldplay “affair” controversy that was all over social media this summer.

Third of all, I did attend the Coldplay concert in Toronto with my actual wife, and I have pictures to prove it.

That Coldplay concert in early July was very good – a huge spectacle from a band that knows how to engage with the audience and put on a great, big, “stadium” show. But my favourite part (and the part this story pertains to) was at a more subdued, acoustic part of the show. The band left the stage for a break and Coldplay’s lead singer, Chris Martin, moved to the stage extension directly in the middle of the stadium floor and called an audience member up on stage. After engaging with her over her nice sign, he told her that he would play any song she wanted.

She selected Warning Sign (see…lyrics above).

With just a piano on stage, Chris fumbled a little, noting he was trying to remember how to play the song. The audience member then offered, “I can choose something else if you want.”

And this was the best part: Chris said, “No, this is my job,” asked for a guitar, and then played and sang the requested song on his own. He nailed it. No big spectacle, no big lights, no backing band. Just Chris doing his job. And it was done well.

 

DOING OUR JOB

As I reflected on Chris Martin doing his job, I got to thinking about what we are doing to do our job for you. This past quarter we focused our education efforts (via my podcast) and our investing analysis around AI, we saved our clients money (again), and we broadened our reach and strengthened our team. All for you.

Call it Magic[i] (AI Theme Again)

My last quarterly letter touched on the topic of AI – who isn’t talking about AI these days? With that in mind, it is our job to not only talk about it, but to understand it, use it, and take action in your portfolios to capitalize on it. We also took it one step further this past quarter…we educated you about it as well.

If you haven’t done so already, I highly encourage you to listen to my interview with Jordan Jacobs, Managing Partner of Radical Ventures – perhaps the world’s best AI-focused venture capital firm. There is no person (that I know) that is better positioned to tell us what is happening and what might happen in the future as a result of AI. One of his boldest predictions is that within a few years, 90-95% of white-collar workers will be performing their jobs with the help of an AI agent. If you don’t know what that means, again, please listen to the podcast episode.

We believe Jordan is likely to be right and that IDC Research is likely directionally correct that investments in AI solutions and services could yield a global cumulative impact of $22 trillion by 2030.[ii] This past quarter, we focused significant time on how best to invest in and capture the upside of AI. For certain clients, we have already invested in one or more of Radical’s venture funds.[iii]

We also looked at capitalizing on the energy infrastructure that will be needed to deliver and run AI. We sought out and reviewed a number of private and public infrastructure funds, exchange-traded funds (ETFs), and companies. However, we have determined that private infrastructure comes at high cost and significant liquidity constraints, and public options are currently trading at valuations that are too high, in our view. As such, we have not made any investments in AI infrastructure yet, but we will keep looking.

As a result, our current approach is to increase exposure to publicly traded companies we believe will benefit most from AI — not just the Magnificent 7, but also the other top twenty S&P 500 companies. These firms have the size, scale, global reach, and resources to either benefit from or empower the world with AI (or both): think NVIDIA, which is powering the AI revolution with hardware; Microsoft and Google, which essentially power every business in the world; Apple, which (together with Google’s Android) empowers individuals via cell phones and other devices; Facebook, which has significant control over social media and messaging activity; Tesla — the world’s most technologically advanced auto and soon-to-be robotics company; and Amazon, the world’s largest retailer, which along with Microsoft provides cloud services to much of the business world. Outside of the Magnificent 7 we find other world leaders like Berkshire Hathaway (nice diversification relative to tech), JPMorganChase (the largest bank in the U.S.), Walmart, Oracle (another AI cloud infrastructure leader), Visa/Mastercard, etc.

It is well-known that these top companies have dominated the market for the last 10 years and have contributed a dramatic proportion of the U.S. market’s earnings and return. See chart below.[iv]

S&P 500 – Top 10 Companies Share of Earnings and Market Capitalization
(June 1990 – June 2025)

As a result, many experts like to decry the concentration of the S&P 500 in these top names. We believe their dominance will continue. In fact, looking back 35 years, a consistent trend has been the outsized contribution of the largest companies to the market’s overall earnings and market capitalization (see same chart above). As such, for many clients, where appropriate of course, we have focused more of your equity allocation in the top twenty S&P 500 companies.

It is our job to try to position portfolios to capture future gains. We won’t always be right, but that’s why we diversify.

 

If you never try, you’ll never know[v] (Generating More Risk-Free Return)

As we’ve discussed in prior letters, our job is to find “risk-free” return for clients wherever and whenever possible. Risk-free return can often come in the form of negotiating lower fees and/or expenses. This past quarter we negotiated fees and expenses with two managers.

In the first instance, we successfully convinced the manager to allow all our clients that hold their fund to switch to their “Institutional” class, which has a management fee that is 0.35% lower than the class we were in. This required significant back-and-forth and then careful work by our investment and operations teams to ensure a smooth transition. But we LOVE saving our clients money, or phrased differently, we love getting our clients 0.35% higher returns with zero additional risk taken. This is our job.

As for the second manager, as part of our due diligence process, we always dig deep to understand the full cost of investing, not just their management fees but also any expenses borne by the fund under review. In this case, we believed the expenses being charged to the fund were too high. After much discussion, the manager agreed to “cap” the expenses and fund any excess above the cap themselves. Our actions could save unitholders in excess of 1% a year.[vi] I am especially pleased by this outcome, because our efforts benefit not only our clients but also all investors in the fund, thanks to our advocacy. Frankly, I am surprised that every other advisor that has put their clients into that fund did not raise the same issue for the benefit of their clients. This is our job.

 

You are my universe, and I just want to put you first[vii] (Broadening our Firm’s Reach and Team)

For your benefit, we continue to broaden our firm’s reach, systems, tools, and team.

Over the past year (and past quarter), we became licensed to serve clients more broadly across Canada — including Quebec, British Columbia, and Alberta. In addition, we are currently taking steps to become a registered Investment Advisor with the U.S. Securities and Exchange Commission (SEC), as we know some of our clients wish to eventually move to the U.S. and/or have U.S. investing needs.

I am also pleased to announce the addition of Gila Ossip to our team as Family Office Advisor. Our practice of assisting families with their overall financial needs (what we call “Family Office Services”) continues to grow, and I am confident that Gila’s CPA, CA background and entrepreneurial experience will be of great assistance.

Finally, as mentioned last quarter, we launched our new client portal earlier this year. Some of you have not yet activated your portal access. We believe the new portal experience is fantastic and gently encourage you to activate and log in at your convenience. Should you wish to have a member of our team assist you in this endeavour, please don’t hesitate to reach out.

 

 Nobody said it was easy…oh, take me back to the start[viii] (The Benefit of Independence)

To do our jobs well, we also need to be learning from our peers and become aware of new technology and tools to serve you better. In early September, I attended a large independent advisor conference in California where I did just that (as the U.S. is often many years ahead of Canada). I also participated in a panel discussion on the benefits of independence for advisors and their clients (see article here).

Brian @FutureProof:

Brian speaking on the state of independence in Canada:

There is a clear trend of advisors wishing to “go independent”; but it is increasingly rare in Canada to do what I did in 2021: launch a new, completely independent investment or wealth management firm from scratch. The regulatory, compliance, operations, and technology burdens are not easy to manage. Frankly, I’m glad it’s hard (Nobody said it was easy![ix]). There remain few fully founder-owned (or partner-owned), independent wealth management firms in Canada. We like being one of the few. This allows us to do our job with a singular, unwavering focus on doing what is best for our clients.

—————–

Our firm’s main colours are black and yellow, chosen because I am partially colourblind, and those two colours are very clear to me. So, it seems appropriate to end a letter focused on launching my independent firm and “doing our job” for you as follows:

I came along
I wrote a song for you
And all the things you do
And it was called “Yellow”
                                                                      –Yellow, Coldplay

Thank you for your continued trust, support, and confidence. We are available 24/7 should you need us.

Sincerely,

Brian Ginsler
President & CEO

 

 

[i] Coldplay lyric. Magic.

[ii] IDC Research. IDC Predicts AI Solutions & Services will Generate Global Impact of $22.3 Trillion by 2030. https://my.idc.com/getdoc.jsp?containerId=prUS53290725

[iii] Reminder that venture capital investing is very risky and only appropriate for investors with a high risk tolerance for this type of investment. Also note that Radical’s funds have high minimum investment requirements and therefore unfortunately limits our ability to prudently allocate many of our clients to its funds.

[iv] Apollo Global Management, Inc., Apollo Chief Economist Torsten Slok. July 10, 2025.

[v] Coldplay lyric. Fix You.

[vi] Note that we have not yet completed our due diligence on this strategy and as such, no clients are currently invested in it. The expense savings would initially start in excess of 1% but would be forecast to decrease as the fund size increases and expenses become a much smaller percentage of the overall fund assets.

[vii] Coldplay lyric. My Universe.

[viii] Coldplay lyric. The Scientist.

[ix] ibid.

 

(An audio version of this letter can now be found as Episode 53 of The Unlimited Podcast by Ginsler Wealth. Use the link provided or find us on your favourite podcast app: Apple Podcasts / Spotify)

 

To Ginsler Wealth’s Clients:

While I am still not sure how I got into Harvard Business School back in 2001, once on campus I was constantly amazed by the caliber of speakers the school could attract. But at HBS, no visiting speaker generated more excitement than the Greatest Investor in the World – Warren Buffett. HBS’s auditorium – Burden Hall – would be packed to the rafters to hear Buffett’s sage advice. I had the great fortune of hearing and seeing Buffett twice during my two years at HBS. And Warren was even nice enough to take a picture with me. I note that almost 25 years later, Buffett looks about the same while I certainly don’t have the same head of hair I did back then!

I have been following Buffett’s musings since leaving HBS. Each year, Buffett pens his annual letter to Berkshire Hathaway shareholders. And for the past many years, I have written a standalone Ginsler Wealth commentary on each of Warren’s letters (see 2023, 2022, and 2021).

Buffett’s latest letter was released on February 22, amid one of the most volatile and uncertain calendar quarters, perhaps in history; and I am writing this letter after the first week of April with Trump’s Tariffs roiling global markets. As usual, Buffett’s letter contains some very important themes and lessons. As such, I thought I’d connect The Oracle of Omaha’s latest insights to today’s investing environment—and how we’re applying them in managing your portfolios at Ginsler Wealth. Buffett’s quotes will be in bold italics throughout.

For context – which I suspect you are all aware of – Trump’s actions (primarily) drove the U.S. stock market[i] to a negative 4.6% return through to the end of March 31, 2025 (and dramatically lower than that in the first week of April). World equity markets, generally, have all turned negative for the year-to-date as well.

 

REMAIN INVESTED & DON’T TIME THE MARKETS

The most common question I’ve been asked in recent months is how to navigate the uncertainty surrounding Trump’s tariffs and other unpredictable developments. This is often followed by the acknowledgment that no one can reliably forecast what’s coming next—particularly since it’s unclear whether even Trump knows what he’ll declare from one day to the next.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won’t change. Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses,…”

“Businesses, as well as individuals with desired talents…will usually find a way to cope with … instability…”

Buffett reminds us that staying invested will, in hindsight, likely be seen as the wisest course of action. We have written often about “doing nothing” and “doing something”, including combining the two ideas in my February 2^nd Note to Clients re Trump Tariffs. As my former boss, Gerald Sheff, Co-Founder of pre-eminent wealth management firm Gluskin Sheff + Associates Inc., reminded our listeners on the latest episode of The Unlimited Podcast, “Doing nothing is often the best thing to do. Because if you do something, you have to do it right twice.”

And in line with Buffett’s comments, our general approach to investing does not involve “going to cash” when uncertainty or volatility rises. Instead, we aim to construct portfolios that are built to better withstand market swings than traditional equity and bond portfolios (more on this below).

“Greg [Abel][ii] and I have no view on future foreign exchange rates…”

It is also important to remind you that Buffett consistently emphasizes that he and his team have little ability to predict what will happen in the economy and markets. Instead, they focus on making sound decisions without relying on a crystal ball. We do the same at Ginsler Wealth.

 

THE IMPORTANCE OF DIVERSIFICATION AND BUILDING THE ALLWEATHER PORTFOLIO

“In 2024, Berkshire did better than I expected though 53% of  our 189 operating businesses reported a decline in earnings.”

We have described our portfolio construction approach many times, and in my 2022 Year End Letter, I called this portfolio the “All-Weather” portfolio – a portfolio that can provide a reasonable level of downside protection, some income along the way, and the opportunity for growth and gains.

A typical “diversified” investment portfolio (outside Ginsler Wealth) is sometimes called the “60/40 Portfolio” (i.e., 60% stocks and 40% bonds). As you know, at Ginsler Wealth we have augmented that so-called diversified portfolio to include other asset classses (alternatives and real estate, most commonly), and include a variety of sub-strategies within each asset class.

As Buffett explains in his quote above, even with more than half of Berkshire’s businesses experiencing a decline in earnings, Berkshire’s diversified “portfolio” of businesses did well overall.

Breaking down the “Ginsler Wealth” pie chart above, the high-level results of the strategies in each asset class over the first quarter of 2025 were as follows:

Given the unique circumstances, goals, and objectives of each client family, it’s challenging to provide a personalized performance summary in a general letter like this. However, one key takeaway applies broadly: the importance of diversification only grows as market volatility and uncertainty increase.

“A small but important exception to our U.S.-based focus is our growing investment in Japan.”

Buffett details in his recent letter about Berkshire’s investments outside the U.S. In my last quarterly letter, I described one of our key moves going into 2025: decreasing U.S. equity exposure and increasing International/Emerging Markets exposure. As per the table above, (so far) that has been a good decision, and we believe maintaining this international exposure enhances the overlal diversification of portfolios.

 

THE COST OF DIVERSIFICATION IS WORTH IT

“Berkshire Hathaway – paid far more in corporate income tax than the U.S. government had ever received from any company – even the American tech titans that commanded market values in the trillions.”

A theme of Buffett’s last few letters has been the amount of taxes Berkshire proudly pays each year. Why? Because paying taxes means they’re making a lot of money.

At Ginsler Wealth, part of our role is to help you minimize taxes through thoughtful financial and tax planning, as well as by designing tax-efficient portfolios (I discussed this in my 2024 Q1 letter – Free Money Edition). But that doesn’t mean avoiding taxes at all costs.

At a high level, equities tend to be among the most tax-efficient investments because you typically only pay taxes when (if) you sell them at a gain—often many years down the road—and only half of that gain is taxable. But unfortunately, this tax advantage doesn’t come cheap. The “cost” is market uncertainty, volatility, sharp swings, sleepless nights, and maybe even a touch of nausea, which I suspect many investors felt last week.

As one tries to reduce those unpleasant side effects by holding more stable and consistent investments (some of which I highlighted in the pie charts and table above), the trade-off is often reduced tax efficiency—meaning you may pay a higher tax rate per unit of return. However, like Buffett, we believe this “cost” in the form of taxes is well worth it over the long run—especially during periods of market distress like we’re experiencing today.

 

 REMINDER: INVESTING REQUIRES A LONG TIME HORIZON

“Our measure [of operating earnings] excludes capital gains or losses on the stocks and bonds we own, whether realized or unrealized. Over time, we think it highly likely that gains will prevail, though the year-by-year numbers will swing wildly and unpredictably.”

“Our horizon for such commitments is almost always far longer than a single year. In many, our thinking involves decades.”

Everyone knows that investing requires a long time horizon. But in our experience, many investors have a long time horizon…until they get spooked. And there is always something to worry about. As Buffett says, year-by-year swings will be wild and unpredictable. But the chart below – which I call “Climbing the ‘Wall of Worry’” – shows a reasonably predictable long-term pattern.

 

OPPORTUNITY KNOCKS (AGAIN?)

“…really outstanding businesses are very seldom offered in their entirety, but small fractions of these gems can be purchased Monday through Friday on Wall Street and, very occasionally, they sell at bargain prices.”

A few years ago, in the third quarter of 2022, after a brutal nine-month stretch, the U.S. equity market was down 25% for the year, and the Canadian market was down 13%. Fixed income markets—the “bonds” in the traditional “60/40 Portfolio” mentioned earlier—were also down significantly. At that point, the 60/40 Portfolio didn’t feel all that diversified. I released my “Opportunity Knocks”-themed quarterly letter on October 9, 2022. I encourage you to revisit it for a look at past market declines and the strong recoveries that often followed. As the chart below shows, just three days later, the U.S. equity market[vi] bottomed out—and went on to gain 78% to its recent high in mid-February, almost 63% through the end of March, and 47% as of April 4, 2025 (even after recent steep declines).

In other words, periods of significant market declines have historically been some of the best—and most opportunistic—times to invest. But please don’t assume the market will bottom three days from now. Remember…I don’t have a crystal ball.

WARREN BUFFETT COLES NOTES (OR TL;DR, FOR THE YOUNG FOLKS…)

1. Stay invested. Don’t try to time the markets or predict the future. Do nothing, sometimes.
2. Diversification works. True diversification proves its value when you need it most (like now).
3. Paying taxes is okay. It means you’re making money. Don’t let tax concerns override sound investment decisions.
4. Think long term. Successful investing requires patience. Markets tend to climb the “Wall of Worry.”
5. Find opportunity in fear. As Buffett famously said: “Be fearful when others are greedy, and greedy when others are fearful.”

—————–

ME AND BUFFETT ARE ALIKE

“During the 2019-23 period, I have used the words ‘mistake’ or ‘error’ 16 times in my letters to you. Many other huge companies have never used either word…”.

Probably the only thing Warren Buffett and I have in common, aside from our love of Coca-Cola and McDonalds, is that we both make mistakes. In fact, I am probably better than Buffett at making mistakes.

“Greg, our directors and I all have a very large investment in Berkshire in relation to any compensation we receive. If you lose money, so do we. This approach encourages caution but does not ensure foresight.”

But also like Buffett, me and my family are invested in the same holdings and strategies we recommend for our clients. So, when it comes to managing your portfolios, both I and the Ginsler Wealth team think and act with great care. Yes, we will make mistakes from time to time. But we do well when you do well, and vice versa. You can trust that we are fully focused on navigating today’s uncertainty—guided, in part, by the timeless wisdom of the Oracle of Omaha.

 

Thank you for your continued trust, support and confidence. We are available 24/7 should you need us.

Sincerely,

Brian Ginsler
President & CEO

 

 

 

—————–

[i] S&P 500 Index as a proxy for the U.S. stock market.

[ii] Greg Abel, from Edmonton, Alberta, Canada, was confirmed by Warren Buffett to be his successor as CEO of Berkshire Hathaway.

[iii] The Ginsler Wealth portfolio shown here is simply an illustration and is not meant to be representative of each client’s portfolio with Ginsler Wealth. Every client has different risk tolerances, goals, objectives, time horizons, etc. and each portfolio at Ginsler Wealth is tailored for each individual client’s circumstances.

[iv] The strategies mentioned are the “core” strategies held in most/many client portfolios and exclude specialized or very lightly-allocated strategies that are used sparingly for particular client situations, especially those with higher risk tolerances. It also excludes “cash management” types of strategies and holdings, which were all positive, as one would expect. However, it is important to note that the experience detailed herein may not be in line with individual client-specific results. See endnote iii above for client-specific disclaimers.

[v] Source: Haverford, Ibbotson Associates and taken from the following website: https://www.pwafinancial.com/blog-01/wall-worry. The S&P 500 is a broad representative index of large capitalization U.S. stocks. It is not possible to invest directly in an index. Past performance is no guarantee of future results. The Panics of 1837, 1857, 1873, 1896 & 1907 were periods of financial crisis and extreme market volatility that resulted in deep economic downturns.

[vi] The S&P 500 Total Return Index.