Business Exits | Retirement Equation & Leverage

Why Most Business Exits Happen in a Crisis

No one plans for disaster. But when it hits, it does something revealing—it strips away the noise and forces clarity.

I was recently in a conversation about business transitions, and something stood out: Our guest Scott Hackman of SHV Partners shared that over 60% of business exits aren’t strategic. They’re forced—triggered by a crisis, whether it’s death, disability, or divorce.

But here’s what’s interesting. In those moments, the businesses and families that weather the storm best aren’t the ones with the most airtight legal structures or the highest valuations. They’re the ones with alignment—a clear set of values that aren’t just framed on a wall but are lived in the day-to-day.

A crisis doesn’t give you the luxury of endless debate. It forces decisions—swiftly and sometimes brutally. And this is where core values do their real work.

Because when everything is upended, you don’t have time to ask, “What should we do?” You fall back on, “Who are we? What actually matters?”

The real takeaway? The best preparation for a crisis isn’t just legal documents and contingency plans. It’s ensuring that the values guiding your business and family are so embedded that when disaster strikes, the path forward is already clear.

Because when the dust settles, it won’t be your spreadsheets that determine the outcome. It will be your shared priorities.

Considering your Retirement Plan: When it comes to retirement, there are a lot of things within your control and quite a few things outside of your control. Make the most of the things you can control but be sure to evaluate factors that are outside of your control when you look at developing a retirement plan. The retirement equation takes some intentionality. We can help. Here’s the basics:

Source: JP Morgan

Leveraged ETFs and Investing: FOMO (fear of missing out) was introduced to the English lexicon in 2004. It’s a pretty active term when it comes to investing—often a motivator for some. Financial products, like exchange-traded funds or ETFs, are created, distributed, and marketed to attract investors. Investment shops have big advertising budgets and make big promises in their ads. ETFs are a tool that makes investing a bit more simple. Two of the forms in which ETFs come are leveraged and inverse.

Leveraged funds use total-return swaps or other derivatives to amplify the daily returns of an index, a basket of securities, or even a single stock. Leveraged ETFs aim to deliver twice or even triple the daily return of the underlying asset, turning a 1% market rise into a 2% or 3% gain; they also magnify losses the same way.
Inverse funds seek the opposite of an asset’s daily return. Depending on how they’re structured, they can turn a 1% daily loss into a 1%, 2%, or 3% gain; conversely, they can turn a 1% market gain into a loss of 1% or more.
According to Morningstar, as of the end of February, 316 leveraged or inverse ETFs held a total of $115.6 billion in assets, up from 183 such funds with $54.4 billion at the end of 2020.

As a firm, we remain skeptical of the risk and volatility associated with leverage. We’d encourage you, your kids, and your grandkids to ignore the ads and allure of leveraged ETFs/funds. There is no cheat code or “red easy button” when it comes to investing. As Seth Klarman said, “Almost every financial blow-up is because of leverage.”

*The views expressed represent the opinions of Compass Ion Advisors, LLC, as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website at https://adviserinfo.sec.gov/firm/summary/166418. Past performance is not a guarantee of future results.