This transcript is from our client tea, held on September 24th, 2020.

Rob: Let’s talk about what we know and what we don’t know about COVID and its economic effect. What we do know is that the economy had a huge contraction, 31.7% in the second quarter. It then recovered in the third quarter, about 30%, which does not quite take us back to where we were. Unemployment stands at about between 8% and 9%. Before COVID, it was hovering around 4%. As far as the stock market goes, the technology market has fully recovered but the Dow Jones Industrial average has not recovered.

Interest rates are now between zero and one quarter of one percent, which has some interesting long-term implications for all of us that invest, and for people who are retired. This all creates critical questions about what bond portfolios will do going forward and what can be done to earn income.

Kyle: The unemployment rate now sits at 8.4%. Prior to the pandemic, we were at 3.5%. At one point this Spring, we kicked up close to 15% unemployment. Since then, we have recovered quite a bit. We all have questions about how long it will take to get back to the full employment numbers of earlier this year. We think there is probably a large percentage of permanent job losses that have occurred in the real economy.

The fiscal year for the US government is set to end on September 30th. At the end of this month, the budget deficit for the US is expected to be at three trillion, which will be the largest US deficit ever.

Rob:  That deficit is 105% of the gross domestic product (GDP).

GDP is the total output of the entire nation during one full year. If you took all the production of goods and services during the year, we have an annual deficit that exceeds what we produce on an annual basis. It’s an increase of about 25% over where we were in 2019.

Kyle: Something else that’s really interesting is that, although we have policies that are promoting bringing jobs and manufacturing back to the United States, which would bring up domestic production, we’re seeing actually a widening of the trade gap. We are importing more and exporting less. Some of this is the result of our protectionist policies.

Rob: When we compare the real economy to the financial markets, there is a big disparity. The technology market led the stock markets higher than ever. They have more than recovered most of the downturn that COVID induced. The size of the stock and bond markets is five times the annual output of the country, the GDP. That is twice what it was before Ronald Reagan got elected, which is when we entered an era where financial assets became a mainstay of the economy. This is one indication of the wealth gap, where wealthy people have gotten richer through the expansion in financial assets. What is the impact of the stock market’s rebounding when the general economy languishes? It is that that holders of financial assets become twice as well off relative to the rest of the population as they were before. The top 2% of earners now own 50% of all assets

Question: What about bonds?

Rob: Bond investors have done well over the last five years. Where do we go from here? We have always taken a very conservative view of bond investing. We essentially own short-term portfolios where bonds turn into cash on a regular basis so that we can adjust and maintain liquidity.

No one really anticipated the Federal Reserve moving to decrease interest rates between zero and one percent, and this presents a particular challenge. People want a secure source of income for their retirement.

Question: Rob, can you address what it means for us to have a GDP less than what we are spending?

Rob: There have been very few countries that have clawed their way back to solvency once their deficit exceeds their GDP. What does solvency mean? The ability to repay one’s debts. The group of countries that are not living within their means includes Italy, Cyprus, France, and now the US. This is obviously not a good thing.

The US does remain the “safe haven” for assets around the world. The US dollar remains extremely strong. We remain the leader of the world in many other respects such military superiority. If history is any guide, it is extremely sobering and worth considering that we are, as a country, in deep financial stress. What does it mean that the U.S. government will never pay back its debts? This is not a simple question as many holders of government debt are other branches of the government.

We pulled some data recently on large nations like Japan, Russia, China, and Western Europe. All have pulled out the stops on debt, especially with the cost of COVID spending. So, we have an international situation now. This is very different than when a single country gets into trouble. Investors used to be able to take their money out of a struggling market and just go to another market that is safer. That is no longer an option.

Question: Could this be temporary? If our nation goes back to work and tax revenue starts coming in again, couldn’t our taxes contribute to lowering the debt?

Rob: Yes, definitely. It is not a foregone conclusion that we are doomed, because it is likely that the government will repackage the debt in a way that investors can put into it. Young people are who really get hurt by the level of current spending, but so long as no one objects, and confidence is maintained, no one really gets hurt. There is no question that future generations will not have the same options, the same level of freedoms, or the same wealth generating possibilities that baby boomers enjoyed.

Question: I have a question about the unemployment rate. Saying that at the high, it was at around 15%. We are now down to 8.5%. It has basically been halved, but the jobs that have come back, I think, are different and lower paying positions than the jobs that we had before. Obviously, they are paying less taxes on lower wages, so we are getting less revenue from it. Is this something that you see changing back as we pull out of this COVID situation and will the number of jobs increase? With a zero percent interest rate, one would think that this would spur economic activity along, but it does not seem to be doing that at all. Why is this so?

Rob: No one is opening a new business or hiring more people, because interest rates, at least nominally, are between zero and one percent. Let’s call zero percent “free” money, but it is only available to the institutional players. If a small business goes to a bank, they are going to pay 4% interest or more to a bank, but banks are not really lending to businesses right now. They are doing some real estate lending but very little commercial lending. In terms of jobs, you’re right, some jobs that have gone away will perhaps never come back. In the retail, hospitality, and service industry we may see some permanent job loss. Until people start traveling again without an overhang of fear, I am not certain that the economy will come back as strong. There are some businesses that have reopened with reduced staffs because of being reduced in volume. Will they come back to full occupancy? In what time frame? It may take a year or two.

I think the unemployment numbers are not going back down to 4% because there are retail shops, hotels and restaurants that are gone for good. There are some impacts of the economic pull back and retrenchment in some other industries as well. The airline industry is on a multibillion-dollar lifeline from the U.S. government and it is definitely a diminished industry. Will there be a permanent shrinkage? I do not think so.

Air circulation in buildings is also a big deal. I was told the other day that you are 18 times less likely to be infected by COVID if you are outside. People’s fear of infection is going to drive many companies. That will change the landscape of the workplace.

The economy and the demographics of real estate have changed dramatically. If you are in Santa Fe, the market is stronger than it has ever been. If you are in Manhattan, it’s a very difficult environment. That is a total reversal from where it was pre-COVID.

Question: Don’t we know that the solution to this thing is the vaccine? When we are, as a nation, vaccinated, we should be able to go back to work in hospitality and travel. Then a lot of these problems should go away, shouldn’t they?

Rob: The science is much more highly developed than it was 10 years ago. There are a lot of companies working on vaccines. There has been a vast array of resources deployed to create the first vaccine. It is not to say that these vaccines will be safe and effective right away or that everyone will take them, but we don’t have to have everyone take them for it to be effective. If we are 18 months out from having a COVID-19 vaccine in the economy, that is a very long time. We are now six months into the process with heavy duty results. What would it mean if we are only 25% through that period? That is a very, very serious number.

The Federal Reserve said that they expect interest rates to stay closer to zero until 2022 or 2023. They basically want people to stop worrying about the cost of money so that businesses will borrow, grow, and create jobs. Unfortunately, a lot of the money that is available is not being spent on increasing the US’s productive capabilities. As Kyle was saying, there are very few manufacturing jobs moving back to the U.S. There is a lot of money being spent on real estate and stocks. There is a huge social disparity between who gets to benefit from zero percent interest and who does not. There is a disproportionate negative impact at the low end of the socio-economic spectrum.

Question: What about gold and currency?

Kyle: One question that came up from our last meeting concerned how much cash people should keep on-hand. We have a cash on-hand recommendation range of five to ten thousand dollars. This is a recommendation for physical cash which one might keep in a safe at home or perhaps in a safety deposit box. Why hold physical cash? It does not keep up with inflation. So, what’s the point?

Rob: Right. It is not a rational decision but an emotional comfort issue. It really is an emergency measure. If your credit card does not work for some reason and you need to do something, what’s wrong with having a backup plan that includes legal tender paper?

Kyle: It’s a matter of comfort. If the electricity went out and you needed to buy things, if you spent your first $600 cash and you only started with $1000 cash, would you still feel comfortable with $400 remaining? What if something extended to a week or two weeks? Cash enables one to maintain a sense of well-being for an extended period.

Rob: Let’s talk about gold, because cash, even if it makes no rational sense, is easier to handle than gold. Gold has an intrinsic investment value, and it has gone up tremendously this past year. That is not to say we are buyers of gold at current prices, but we are not sellers either. We recommend people own gold not as a trading vehicle or as a store of value, but as a form of diversification. Whether one owns physical gold, which has its own challenges, or gold stocks or gold ETFs, it is just a form of diversification. While transaction costs are fairly high for buying and selling gold coins, there is added numismatic value to coins as they trade well in person.

We believe in having at least one backup plan which involves having as many types of diversification as possible: gold coins and cash among them.

Question: What impact do ultra-low interest rates have on investing?

Rob: If you are a borrower and you get to set the interest rate at which you borrow, you are in pretty good shape. This describes the US government and explains in part why they are setting interest rates close to zero.

Kyle: The average interest rate of the U.S. government’s debt is at 1.79% now, down from 2.4% last year. Making the exact same interest payments as before, they can borrow 30% more and not change their cash outflows.

Rob: Another impact of ultra-low interest rates, is that it has penalized people who are risk adverse and obliterated their investment returns. It has forced people to move money from safe investments to higher risk investments like stocks or real estate. By and large, it has forced money to flow into financial assets and real estate assets, so it is likely that we are in an asset value “bubble”. As stock and real estate investors have benefited, most everyone else has suffered. The risk to the general population of having zero interest rates is inflation which has not been a concern for many years but could creep back in and pick up steam without much notice. The Fed says it is now willing to let inflation go up above 2% for a “period of time”.

Keep an eye on the price of food, which has gone up considerably which may accelerate this coming winter as supply chains come under stress. I saw an article that reported that tea which is the most widely drunk beverage after water on the planet, has had some price increases. We do not yet know the impact of COVID on various parts of the food distribution channels. International trade, which depends on insurance for moving commodities to function, has hit several blockages as people are no longer willing to be in the international food trade insurance business.

Question: My kids are still at home. What is the impact of that on the economy?

Rob: If the schools are not in session, then a certain number of people who lack access to day care can’t go to work and then certain things can’t get made, or don’t get made on time. We have not seen inflation result from this yet, but we easily could.

Ultra-low interest rates have made certain real estate markets go up because the cost of financing is low. Even though on paper, bond total returns have been good because prices have gone up, investors are faced with lower future cash receipts. How does one replace income streams when interest rates are expected to be very low for the next two or three years?

Question: What about buying high dividend stocks?

Kyle: What often happens when we see super low interest is a big resurgence in investors buying dividend paying stocks. We kind of saw a run up in the price of high dividend paying stocks. Traditionally, these are considered your blue-chip stocks. These companies that are well-established and pay good dividends are coming back into favor. We’ve seen the opposite occur this time as, many investors are substituting growth stocks for high paying dividends. Stocks are poised for faster appreciation. Dividend stocks like energy came down 50% this year. A company like G.E. that pays a high dividend is of questionable stability, so people aren’t investing in dividend stocks like they used to be.

Question: What industrial groups do you like?

Rob: We have a contrarian bent, so when an industry is out of favor, we like to consider it. We like the pharmaceutical industry, which for the last five years, had very little attention paid to it. They also paid a good dividend. There is an interesting divergence between US based energy companies versus European energy companies, who are focused not on oil and gas but on electricity generation. US companies are focused on hydrocarbon harvesting and processing. We like companies who have targeted clean emissions and green initiatives and would not buy Exxon for most of our clients. At the current price, it is a good value, and we are always on the lookout for situations like that.

Question: Can you talk a little bit about the opportunities and dangers to the of the political process to the market?

Kyle: Early voting is available in many states. Many states have established mail-in ballot systems, contrary to what we hear through the media. The counting of these ballots starts well ahead of election day, so there are large numbers of ballots that are cast early and counted by Election Day. People who vote in person, have their votes tallied immediately. We believe it is likely that there will be a clear picture of the results very soon after Election Day. It may not be the next day, but it should occur fairly quickly. There may be disputes that occur within various states and recounts may be necessary. Even if there are disputes, we think it will be possible to understand who the winner is going to be soon after Election Day.

Question: What is likely to happen with financial assets in the event of a Trump victory or in the event of a Biden victory?

Rob: We believe if Biden wins, taxes will go up on income and capital gains related to financial assets. However, we think the economy will recover no matter who is elected. Over the last the last 10 years, we have seen a huge flow of tax benefits to the wealthy and particularly real estate and stock investors. The tax code is so complex. Now, I often see tax returns that show people with high net worth that don’t pay taxes on their qualified dividends and real estate income.

Kyle: A qualified dividend stock is one that you have owned for at least six months and so you get a reduced tax rate on them.

Rob: If Biden wins, corporate taxes, estate taxes and income taxes will likely go up substantially and the stock market is not going to like that. The stock market loves reductions in taxes, so a reversal represents a potential headwind for the stock market.

Kyle: I think also if we look at the potential rise in capital gains tax rate, that would be another major headwind as well, because it would be a further disincentive to invest in stocks.

Gayle: I think any market reaction to the election will be a short-term reaction and that is all.

Jeff: How long do you think the general economy is likely going to stay in recession?

Rob: For as long as there are severe restrictions on travel and gatherings. This does not mean that some companies won’t make out well. The employment numbers and the and the country’s economic activity levels depend on social activity resuming. Right now, it’s hamstrung.

It’s interesting to look at other countries: Russia and China in particular. They have a very different attitude about public health. It is difficult to know if China has really recovered. They have pronounced that COVID is under control, but is it? It appears that their economy has closed the gap with the US during this tumultuous time.

Here is the United States, we seem to have a very difficult time complying with strict social orders. Maybe it goes against the American grain to do what the government says to do. Our unique strain of individualism seems to have turned into a negative trait when it comes to implementing a cohesive plan to deal with COVID.

Russia says it has a vaccine. I read US epidemiologists expect that perhaps only half of Americans will actually take the vaccine. As a result, the negative economic impact from the pandemic is likely going to be longer and more profound in the US than in other countries who have a less diverse population and where the wealth gap isn’t as wide as it is in the US. We believe in holding the course on most investments, such as stocks and private investments.

We are private lenders to real estate entrepreneurs, and most of our private real estate lending is in geographic areas that are doing well. They are performing better than we expected, but we do have some investments in the restaurant and hospitality industry which are not currently paying. It is hard for the managers of these projects to do anything about the restrictions on economic activity. They are coping with adverse circumstances.

Question: I would like to know how you pick your stocks… do you pick them for value or growth?

Kyle: We meet every Tuesday afternoon to go through various stock ideas. We review different sectors and see who has any new ideas. We have a bias toward value stocks and don’t buy over-priced stocks. There is a range of metrics that we kind of use to make that determination.

Rob: When we identify a company that we like, we try and identify the proper entry point and exit point. We use both growth and value companies, but as Kyle was saying, we look at stocks that have suffered from bad news that are likely to recover.

Gayle: The stock picking here at the Rikoon Group, is far more comprehensive than I have ever seen before. It’s exciting to be a part of this process. When we put a stock in our own portfolio, it’s one that we are using for our clients. I personally have concerns that there are currently seven growth-oriented stocks that are driving the U.S. market to new highs, but it will not always be that way. We don’t know when it will switch, but we’re preparing our clients for the day that happens. We have a plethora of research tools to use when we pick our stocks.

Question: There’s a race to develop a vaccine. Who do you think will be the company gets to the marketplace first with an effective vaccine? Do you think Pfizer’s in the running?

Gayle: A couple of weeks ago The New York Times, had a full-page ad from the different vaccine manufacturers. They are all in this together. They are not just trying to compete against each other. They are doing what is best for the whole country’s benefit. Pfizer’s on the list as is Johnson and Johnson. Both of which we hold at the Rikoon Group. Will one company benefit more than another? That is anybody’s guess.

Rob: The US government has contracts out for producing a vaccine once it is shown to be effective. Our sources believe that we have an 18-month timeline before the economy is back to full activity. There is a lot of private money going into vaccine research. As such, it’s more likely to happen quickly, but not necessarily as quickly as anybody wants or that we hear in the news. Even if there is a safe and effective vaccine, it’s likely going to be about 18 months before people get over the fear factor. Consumer spending is 75% of the economy and that is what has been hit the hardest.

Kyle: We don’t want to speculate as to who will be first to the market with the vaccine. Our goal is to invest in good companies that will be beneficiaries of a vaccine. Whether it be Johnson and Johnson or Pfizer or another health care company, we are looking for opportunistic buy candidates. If they happen to benefit from the vaccine, all the better.

Rick: Isn’t it true that if these companies doing the vaccine research are also capable of production, they will do well? There is certainly not one company that is going to have enough production capacity to be able to provide vaccines not just the United States, but to the whole world.

Rob: I think we have already seen some of that price movement in the general rise of pharmaceutical stocks.

Kirk: You may know there are 80 to 120 different vaccine development efforts going on around the globe. It is difficult to know what to project is going to be in the top eight or ten companies. Some of these vaccine efforts are taking place in universities in conjunction with private companies. There are at least three different major categories of vaccination approaches: traditional, genetic engineering, and monoclonal antibodies. Many experts feel that there will probably be more than one vaccine option available as time goes on because companies will not give up on what they are doing now even if another product gets out there first. A huge international cooperative effort is taking place.

Question: Depending on which party wins the election, will we see declines or increases?

Rob: The conventional view is that any change in tax code will likely take at least a year to be implemented. If it is a smooth election and there is a decisive winner according to normal rules, there should be a positive boost for the market. If there is a fair chance that reform or changes in the tax code are coming, it could go either way. A reduction of the wealth gap is a primary goal of the Democrats. If Trump wins, it will be seen as vindication of his past policies and so we may see more tax cuts.

The impact on the real economy is what we are trying to keep in focus. When people feel like they are safe and they can go back to work in person, a strong economic surge is likely.

Thank you all very much for joining and participating, and please give us some feedback. I hope everyone stays well.

The Markets – Kyle Burns

As of September 30, 2020, the United States’ national debt was reported at $26.9 trillion. This is an increase of $4 trillion over the past twelve months and up $2.5 trillion since the end of February when the pandemic began. The rapid increase in federal debt comes largely from the US government’s stimulus packages meant to lessen the negative economic impact of Covid-19. While the debt rises, the government stimulus combined with the Federal Reserve’s moves to lower interest rates has been a major windfall for the US stock market. Those participating in the public markets with their investment accounts have been major beneficiaries of the stock market’s rapid recovery.  The stock market continues to push higher with the prospect of additional government stimulus even as the uncertainty around politics and the economy remains elevated.

It would be hard for an investor to recognize that there was a global pandemic if they only looked at the stock market numbers through the first nine months of the year. Through the end of the third quarter, the S&P 500 is up 5.6% and the technology heavy Nasdaq 100 is up an astonishing 30.7%. The impressive performance of the Nasdaq 100 is due in large part to their heavy weighting to technology companies that have flourished, this year with companies like Apple and Amazon, which have returned 59% and 70% respectively in 2020. While the performance of certain companies carried the returns of the overall indices, the broad performance of companies was not as strong.

In the most recent reporting of data, US GDP is expected to be down 5% for the year and corporate profits are down 10%. Although the technology sector performed well, up 27%, there were 34 companies in the S&P 500 that were down at least 50% through the third quarter and several other industries lagged the broader markets. Energy was the worst performing sector through the first three quarters of the year, down over 50%, as low oil consumption continues to weigh on those companies. Financials, down 21%, also lagged the broader market as worries over credit defaults and low interest rates weigh on their profitability. Small and mid-sized companies also struggled to perform with broad shutdowns across the US and shifting consumer habits. US small companies were down 16.2% and Midcap stocks down 9.8%.

Most International stock markets faced the same kind of impacts of the pandemic as the persistence of the virus lingers and hampers returns. European stocks were down 13.2%, Australia down 13%, and Brazil down 18.2%. China and South Korea with their aggressive approaches to controlling COVID-19 have managed to perform better. The Chinese and South Korean stock markets are up 5.5% and 5.9% respectively.

Commodities have been the surprise winner so far in 2020. Precious metals, which are seen as a store of value during uncertain times, have led the way. Silver is up 31.4%, reaching levels that have not been seen since 2013. Gold has performed similarly well reaching a new all-time high after returning 24.2% this year. Lumber prices have jumped nearly 50% this year as demand for new housing and home construction projects have boomed. Although some residential markets have fared well, commercial real estate, with its large reliance on urban office and retail space has struggled to recover from March lows and remains down 8.9%.

The bond markets continue to reward existing owners of longer duration bonds while punishing savers. The 10-year US Treasury bond had a yield of 0.68% at the end of the third quarter. Money market funds that used to serve as a safe place to hold cash while earning some additional interest are now paying close to 0%. Companies have issued large amounts of new debt with low interest rates and investors are stuck with options that fail to keep pace with inflation.

Having a long-term strategy during volatile times – Contessa Archuleta and Keren James

As John Allen Paulos, mathematician and scholar said, “Uncertainty is the only certainty there is.” That is truer now than ever. Markets do not like uncertainty.  The global pandemic, highly contested U.S. presidential election, and persistent civil unrest throughout the globe have created market volatility that will likely continue throughout the remainder of the year. In the face of such volatility, it is important that investors maintain their long-term investment strategy and not react emotionally.

Investors generally feel positive and want to add to their investments when the market is going up, even if prices and valuations are high. In a downturn or correction, an innate urge to sell in an attempt to avoid losses, often kicks in. A diversified portfolio, which includes multiple types of investments such as stocks, bonds, real estate, gold, and cash, better positions an investor to withstand these ups and downs. An investor’s time horizon, near-term and long-term financial needs are equally important. Historically, over a long-term time horizon (5 years or more) investments have had ample time to recover from a downturn.  According to a recent Fidelity report, there have been 16 bear markets since 1926.  This confirms the fact that all investors will also experience bear markets during their lifetime.

As history has shown, markets have usually been volatile leading up to a presidential election, and this year is certainly no different. However, it is impossible to know how the market will respond to a win by either candidate, and as all good long-term investors realize, there is no need to try to predict the future.  Since 1928, the stock market has gone up after every presidential election, regardless of which party was victorious.

It is impossible to time the market, and those who don’t panic and sell, do not sustain the losses of those who give in to the “fight or flight” mentality. March of this year, the S&P dropped almost 30%. The investments of those who maintained their long-term investment strategy are now in positive territory again.  As an example, an investor with a $1 million portfolio on January 1st of this year (70% stock/30% bonds) would have seen the value of their portfolio drop to $780,000 by March 23rd. If their emotions got the better of them, and they sold on that day, they would have realized a loss of $220,000. If they held to their investment strategy, on the very next day (March 24th), they would have taken part in the largest one-day gain since 1933 of over 9.3%, and the market value of their portfolio would have increased to $830,000. As one of our clients said during the depth of the downturn in March, “I hate to lose value, but it isn’t money yet.” A loss in market value is not a realized loss unless you sell.

Service Update

The Rikoon Group is pleased to report that our clients did not experience any interruption in service from the outset of the pandemic that occurred in March. We were able to seamlessly transition to remote work and communicate with each other consistently by holding daily staff meetings via videoconference. We continue to work closely with our custodians and other partners to maintain a high level of service to our clients. We remain available to meet with our clients by Zoom or phone on a regular basis and continue to host our Quarterly Tea virtually.  Employees are on a rotating in-office and remote schedule and any calls that are received for someone who is working remotely are put through to them at their home office. In the office, we are distanced and masked, with sanitizing protocols in place to protect ourselves and any clients who come into the office. As our clients can attest, we have been working harder than ever on their behalf and the office remains open and functional during these challenging times.

In August, we added a new team member, Nizhoni Redmond, to help with our service efforts. Nizhoni’s bio can be seen below:

Nizhoni Redmond was born and raised in Santa Fe, New Mexico. She recently graduated from Dartmouth College in the Spring of 2020 with a Bachelor of Arts, majoring in Anthropology, and minoring in Film and Media Studies. After four years of living in Hanover, New Hampshire, and spending a term in Auckland, New Zealand, she ultimately felt that Santa Fe was home and returned to begin her career in financial services at the Rikoon Group. While attending Dartmouth, she was the acting president of the Tae Kwon Do Club and competed at events across New England. She also worked as a Stage Manager and Production Assistant for Dartmouth’s performance center, the Hopkins Center for the Arts. During her spare time, Nizhoni enjoys watching movies and short films with family and spending time training her two dogs.

Staff Updates

Rob: Summer is my favorite time of year because of the expanded daylight hours and plethora of things to do outside. With less travel, there was more time to focus on metal sculpture projects and planning a shop for working in sculpture and lithography during the upcoming winter season. My younger daughter, Hannah, passed her national naturopathic medical boards and got a teaching/clinical position with her university in Portland Oregon, so she and her partner Geoffrey have moved back to the West Coast. Robyn continues to produce material for the Santa Fe Playhouse which includes an online “Santa Fe melodrama” series that is available via their website. It’s been incredibly dry and warm here in NM, which the tomato plants love but the trees and critters up in the forest are yearning for rain along with the rest of us! I continue to travel back-and-forth to Asheville, North Carolina where many of our real estate projects are located. Stay tuned for more updates as they develop.

Kyle: I have been trying to work on and improve my cooking abilities over the past several months. Each week, I go through a process to plan our meals and do something slightly different from the past. My preferred method of cooking usually involves some type of grill where the duties are shared between one of my four options which include a gas grill, water smoker, Komodo style grill, and traditional charcoal kettle. The meals have ranged from traditional grilled foods to Peruvian or Spanish style meals. During the week, I continue to come into the office each day and have found a good routine with video calls and managing the noise ever present in the markets. My boys are in virtual school and are finding it less than ideal, but manage to get through their lessons. My wife, Tabitha, and I are very thankful they have such curious minds and are constantly learning well beyond what is presented over the computer screen classroom. We are keeping our fingers crossed for an open ski area this season, accompanied by lots of snow!

Gayle: The foliage this year is glorious. Some trees seem to be especially electrifying from within.

Six-year-old Claire is studying “realistic fiction.” (If she were older, she would have a lot to read on that subject!). Folks seem to be kinder. A young man on I-25 waived me over, removed a flap hanging from my truck, and made sure I got back on the highway safely. Food establishments, grocers, and farmers continue to feed us, despite heroic efforts to “get it done.” Almost 3, Violet informed me that pterodactyls have special powers. Take that COVID! TRG (AKA us, The Rikoon Group) continue to care for you, our clients. It’s hasn’t been the easiest of years. Growth and empathy don’t happen in a vacuum, and we have learned a lot. Talk to you after the election, Gayle.

Jeff: This is a very unusual and interesting time during the coronavirus. My wife and I recently commented that for the past six months or so, we have mostly been going exclusively to our workplaces, the grocery store and Home Depot. We have kept busy with lots of projects at our property, reading books, viewing some films and walking the dogs (Rosita is now 1 year old). It’s actually been very productive and pretty enjoyable. I have a Zoom meeting with a small group of musician friends on Sunday evenings. Each week we have to prepare and perform a song. For the song selections, we put song styles, eras and ideas into a hat and then draw one out of the hat for the following week’s subject. It provides a challenge and a fun diversion.

Contessa: We have almost made it through the first quarter of remote schooling for our 4th and 2nd grader.  The days of hard cover textbooks, writing in notebooks, and utilizing transparencies with a projector are long gone. All of that has been replaced by touch screen lap top computers, iPads, and Zoom meetings.  It blows my mind that a seven-year-old is expected to type when they are just learning to read. On another note, this time of year also means hunting season for our family.  David was fortunate enough to bring home an elk that should feed us until next fall.  We are looking forward to a delicious steak dinner!  Over the last couple of months, I have also been making time to attend webinars regarding finance, investing and other topics that interest me (without that extra time away from the family when having to travel for in-person conferences).  I am preparing myself for a different kind of fall/winter season, since our usual parties with friends and family will be limited and look much different.  As we ride out these unusual times, we will enjoy the cooler temperatures, change of colors, and good food this season brings.

Keren: Fall is my favorite season, perhaps even more so this year. The colors of the foliage warm my soul, and just when I think my son might be lost to the boredom of the pandemic, he lifts his head and revels aloud in the beauty of a softly sunlit Sunday. I am incredibly grateful that his small school, which already had an outdoor focus, has been able to provide in-person schooling in an outdoor classroom. Their protocols are commendable, and my son has been tested twice as part of their rotation testing schedule. It is not necessarily a skill a parent would wish a child to build, but I am extremely proud of his fortitude and commitment to protecting the health of all the members of his pod and his community. I have been taking more masked, distance walks with a few, close friends, taking advantage of the mild weather, and allowing nature to smooth some of the rough edges. I took part in a book club over the summer, and have been enjoying watching concerts by the Berlin Philharmoniker, the subscription of which was gifted me by my cousin during the lockdown. Summer without the Opera was a major loss to me personally, and to the Opera community and the economy of Santa Fe. I continue to volunteer with the Santa Fe Opera Guild and have assisted in creating webinars and online events for our guild members, the proceeds of which benefit the Opera. Finally, when the Shelter-in-Place was ordered, I began logging a daily list on social media of things for which I am grateful. It requires me to look past the challenges of the day and this time and focus on all that is good in my life. I am grateful for my job. I am grateful for my health and that of my son and family. I am grateful that my son is able to safely attend school. I am grateful for each of our clients, and for the faith they place in us.

Anthony: Fall has arrived, and I must say it is bittersweet this year. What is normally a jam-packed October with Balloon Fiesta, pumpkin patches, school fundraisers, Oktoberfest, and Halloween, all seems to be too quiet this year with COVID. My family and I were recently able to make it up to Hyde Park to experience the change in foliage, and my wife and I were also able to participate in a Wine and Chile Brunch event at the Four Seasons so the month did have some high points. The weather has been great to be outside, but as the mornings and evenings cool down, our opportunity for outdoor activities is starting to be limited. I am happy to report that we survived our first quarter of online schooling. This next quarter, Santo Niño has given our daughter the option to return back to the classroom in person, which we have decided to try out. We are fortunate that the classroom numbers are low enough at the school to have this option and so we feel comfortable sending our daughter back at this time. I hope everyone is well.  Please stay safe out there.

Elizabeth: We continue to plug away at home projects and have recently tilled the backyard and planted grass. We will see how long we can keep the dogs and children off of it. Keep your fingers crossed for us. Our daughter turned two at the end of September, so we officially have two toddlers in the house now. We are looking forward to the fall season as it is our favorite time of year. I hope everyone has been well and safe and has had a chance to get outside and enjoy the cooler weather.

Upcoming Teas

Please join us for our quarterly audio gathering to discuss economic and market related events on Wednesday, December 9, from 2:30 – 4:00 p.m. (MT).