At the end of 2024, “global household wealth surged again to a record $310 trillion.”[1] “North America still commands about half of all global household financial assets and more than half of asset growth in 2024.”[2] The value of US stock markets was approximately $64 trillion at the end of 2025.[3] Of course, “households” own only a part of that. Woodstock deals almost exclusively with households, so that is our focus.
In general, the best advice for managing financial assets is to buy low and sell high.[4] Not easy to do, as competing investment theories, current trends and current events combine to complicate the process. “No one can buy low and sell high perfectly. But systematic rebalancing is the closest analogue we have.”[5] Yes, but even here is a choice. “Systematic” may be stretched if you believe your winners have more room to run.
Because we have had two major market adjustments in our financial lifetimes (1999-2000 and 2007-2008), where there was at least a 30% drop in the S&P 500 that recovered slowly (Covid was a fairly rapid recovery), it is a good idea to keep your eye on the horizon to, perhaps, spot the next drop approaching. This also is not easy to do. As we have found before, “the best approach is to build a sturdy foundation for your investments and to treat crashes the way insurance companies do natural disasters: know (or try to know) the odds and accept that they happen every so often.”[6]
As to be expected given his retirement at the start of 2026, there was a flurry of articles on Warren Buffett, Jimmy’s “cousin.” One author compares Mr. Buffett’s investing style to “his own list of six that drive returns.” Of course, definitions for these six factors do vary widely. The three that Mr. Buffett concentrated on were: value, quality and intangible value. The three he focused less on were: momentum, size (smaller better than large) and investing skill.[7] The author concludes by focusing on a “two-factor model of intangible value and quality.”
Investment professionals can’t help but be blindsided by events over a career. Our favorite professional response is that “I’m never wrong but often early.” Another is for investors in general, from renowned “permabear” and GMO cofounder Jeremy Grantham: “The realization that you can have an idea, a new idea or a different idea and you can be right, and the market in general, can be wrong, is the single most powerful lesson that anyone can learn in this business.”[8]
Tactical Tips
The above defines a general framework. Below are some specific examples to, perhaps, influence tactics going forward. What are the odds of a 30% drop in the S&P 500 in 2026? “8% to 10% or once every 10 to 12.5 years,” say some economists.[9] However, a warning comes from a quote attributed to Peter Lynch. “Far more money has been lost by investors trying to anticipate corrections, or trying to time the market, than has been lost in the corrections themselves.”[10]
According to Grantham, “Capital moves towards profits: excess returns attract competition and bad returns drive capital away. Pretty soon you have mean reversion.” Even the reviewer of Grantham’s memoir comments: “Who can disagree?” However, he points out, “The market can and does more often than you might suppose.”[11]
Finally a detour into behavioral economics. According to Richard H. Thaler and Alex O. Imas, the authors of The Winner’s Curse, the notion of the “winner’s curse” originated with a study by Atlantic Richfield on why its winning bidding in government auctions for the right to drill usually found less oil than their experts had predicted. The answer is that “a winning bid always anticipates more oil than the average of all the other bidders and the average tends to be more accurate.”[12]
Woodstock’s general framework or investment style is to concentrate on high quality and industry leadership with sound financials and strong managements when picking stocks. We anticipate that there will be occasional dramatic downturns and believe that a sturdy portfolio of high-quality companies has the best chance of rebounding from a major event or surviving the market as it follows whatever violation of the rules of investing it wants to. We believe we have a very good and flexible system for generating long-term success in the financial markets, balancing risk and reward. Please ask your portfolio manager for our 2025 GIPS report.
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— William H. Darling, Chairman & CEO
— Adrian G. Davies, CFA – President