War and Terror in the Middle East
Impacts on spending, inflation, interest rates
It seems so routine. Israel in another conflict. Another far away terrorist strike. Another flare up in the Middle East. Unfortunately, we seem to be almost immune to the headlines of terror and war, especially if it they don’t directly affect us. So far, the U.S. stock market has largely ignored this as just another flare-up. We disagree.
This adds another uncertainty to an already vulnerable, overvalued market. In the past these “conflicts” remained fairly contained. Today, we are concerned about the potential for this to spread in unforeseen ways. The risk of a close U.S. ally involved in a full-scale war could lead to more U. S. support, leading an already stretched government budget to even more spending. One of the more obvious impacts of the war spreading would be a likely increase in energy prices with negative inflationary effects worldwide. Higher inflation could keep interest rates higher for longer, making the long-awaited recession more likely and the stock market more vulnerable.
While we are by nature long-term investors, we believe there is enough near-term risk of the conflict spreading that we are adding to our already defensive investment strategy. We generally say we will make our mistakes being too cautious: this time we hope we are wrong.
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Legacy Financial Inaugural Seminar |
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Market Perspectives on Artificial Intelligence
If you're curious about what AI is, how it works, how it's implemented, why it matters, and what the risks are, this seminar will provide a timely and interesting perspective.
Please join us and Mike Armstrong, Vice President with
Goldman Sachs Asset Management, to learn about the broad impacts of
Artificial Intelligence and the relevance to markets and to your portfolio.
Thursday, October 26, 2023
6:00 p.m.
Audubon Country Club
3265 Robin Road, Louisville, KY 40213 (map it)
Appetizers and cocktails
RSVP by Monday, October 16: (502) 873-0525 Melody
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Scary financial mistakes can cost you |
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Avoid a Costly IRA Mistake
Take your RMD by Dec 31 or pay 50% penalty
We hope our retired clients are busy enjoying life...but not too busy to check on their required minimum distribution, or RMD. Not taking the RMD - or miscalculating the amount - can result in a 50% penalty on the amount not taken.
To learn how to avoid, or correct, this mistake, click here.
For a handy tool to calculate your RMD, click here.
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October is National Cybersecurity Awareness Month
Cybercrime tactics are more sophisticated than ever. designed to trick victims as opposed to hacking systems directly. Click here to learn steps you and your family - including aging parents - can take to increase your safety and protect our money, identity, data and more.
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Get ahead of the Medicare Game
You may be surprised how your premium is calculated
For high-earners, Medicare can come with pricey premiums and a surprising surcharge. The amount you pay in monthly premiums is determined by your modified adjusted gross income (MAGI), but the effect is delayed by two years. This means that your current Medicare premium is based on your IRS tax return from two years ago. Click here to learn more.
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Investment & Portfolio Updates |
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Aggressive Equity
Sold Ulta, Stock Yards, LKQ Corp, and ERII. Bought ProShares Short S&P500 and Principal Investment Grade Corporate Active ETF. This Principal ETF invests primarily (at least 80% of their assets) in bonds of higher quality companies (such as JPMorgan or Amazon).
Kentucky Select
Sold Dollar General, Marathon, UPS, and Ford. Bought Principal Investment Grade Corporate Active ETF. Of the 5 consumer discretion companies in the portfolio, we sold the two (Ford and Dollar General) that are not headquartered in Kentucky (leaving Yum, Texas Roadhouse, and Churchill Downs).
Large Cap Sector
Sold Advanced Micro Devices, Texas Instruments, RTX Corp, Tractor Supply, Live Nation, Nasdaq, Dollar General, and Agilent Technologies. Reduced Chevron and Schlumberger. Bought Principal Investment Grade Corporate Active ETF, DraftKings, Expedia, IBM, American Express, Walmart and Charter. Increased T-Mobile.
Large Cap Concentrated
Sold RTX Corp, PNC, Advanced Micro Devices, Texas Instruments, Tractor Supply, and Agilent Technologies. Reduced Chevron. Bought Walmart, Waste Management, Visa, Hewlett Packard, IBM, Expedia, and Principal Investment Grade Corporate Active ETF. Increased T-Mobile. We are moving both the Sector and Concentrated portfolios to more defensive, with less equity exposure.
Equity Income
No Changes. Roughly 29% of the portfolio is invested in different types of bond funds. Among the 6 holdings, the two largest are the Invesco Bond Fund (7.2%) and the iShares TIPS Bond ETF (6.9%).
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Throughout our mutual fund portfolios (and our stock portfolios), we have rebalanced our exposure to further reduce the amount focused on the stock market. We now have roughly 20% of our portfolios allocated between preferred stock funds and corporate bond funds. Given the current market environment, we are using a defensive strategy to take advantage of any upcoming downturn. |
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You're Invited to our Open House
We're excited to welcome clients and guests to our new offices!
Legacy Financial Open House
Save the date
Wednesday, November 15, 2023
4:30 p.m. to 7:30 p.m.
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Looking forward
Stay tuned for these topics in our upcoming newsletters
- Year-end tax planning
- Generational wealth transfer - holding important conversations over the holidays
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www.legacyfia.com
502-873-0521
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Providing peace of mind for your financial future
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This material is confidential and has been prepared solely for the information of the intended recipient and may not be reproduced, distributed, or used for any other purpose or shared with anyone in any form or format. This has been prepared for you by Legacy Financial Independent Advisors, LLC (“Legacy”), an SEC registered investment advisor. Information within this report may have been provided by third-parties and, while Legacy believes this information to be accurate, Legacy has not independently verified such information. Reference to registration with the Securities and Exchange Commission (“SEC”) does not imply that the SEC has endorsed or approved the qualifications of the firm or its respective representatives to provide any advisory services described on the report or that the Firm has attained a level of skill or training. The targets herein reflect analysis regarding potential outcomes, are presented solely for informational purposes and are not guarantees of future performance. Investments in securities are not FDIC insured, are not bank guaranteed and may lose value. Before investing, consider your investment objectives and Legacy charges and expenses. Legacy advisory services are designed to assist clients in achieving discrete financial goals. They are not intended to provide financial planning with respect to every aspect of a client’s financial situation, they do not incorporate investments that clients hold elsewhere, and they do not provide tax advice. Past performance does not guarantee future results, and the likelihood of investment outcomes are hypothetical in nature. Nothing in this presentation constitutes an offer, solicitation of an offer, or advice to buy or sell securities in jurisdictions where Legacy is not registered |
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