Objective Financial Advice

Greetings!

We hope you've been enjoying the falling temperatures of the new season!

This year has continued to be a good time to be an investor. The S&P 500's 12-month return is now hovering around 35%*. This is not the only asset class with above-average returns this year, and it's a fresh reminder that we can't time or predict the markets. We've got several segments in the newsletter that discuss investing in more detail.

The 2025 Social Security cost-of-living adjustment is 2.5%, the lowest we've seen in several years. We're expecting other key inflation-adjusted numbers like retirement contributions, Medicare part B premiums, and more in the coming weeks.

If you have a business entity (LLC, etc), the deadline to file your beneficial ownership information report is December 31 this year. It only takes a few minutes, but the penalties for failing to file are steep. We strongly encourage you to research it for your situation to see if it applies to you.

We are now in the season of Medicare open enrollment. This period ends December 7th. We encourage everyone with a Medicare part D plan to shop it each year, and it may be a good time to review your options with other coverage as well.

We are pleased to announce that Stephen Ropes has joined us as our newest financial planning associate! Stephen graduated from UNT with a Bachelor's in Financial Planning and was our 2024 intern. Get to know Stephen more on the Meet Our Team page.

Please read on for other actionable planning ideas. We will be closed for Thanksgiving (Thursday, November 28th and Friday, November 29th), our annual team-building day (Tuesday, December 3rd), Christmas (Tuesday, December 24th and Wednesday, December 25th) and New Year's Day (Wednesday, January 1st). We plan to send the next newsletter out in mid-January. We'd love to hear from you on questions or suggestions for topics you’d like to see covered in the future.

2024 Presidential Election and Your Financial Plan

We've received many inquiries about how the election may affect your investment portfolio or financial plan. If you're feeling anxious about the election, you're not alone. Concern around the election is not isolated to one party or another. We probably are all feeling it to some degree.

As financial planners, we are heartened that our actions continue to have the greatest control over our financial plans. There may be some adjustments to make based on tax or economic policies in the coming years, but for the time being, you gain the most by focusing on what you can control with your plan. How much you save and how much you spend has a much greater impact than any other factor.

As for your investment portfolio, history suggests that we may see some increased volatility in the months around the election. Avantis provides in-depth analysis on this topic. We also have a really helpful presentation from Vanguard illustrating that stock market performance hasn't been materially different regardless of which party is in power or whether power has been divided or unified. If you're interested in that presentation, we're happy to send it to you.

The only actionable items we can see here? Focus on what you can control, be kind, and go vote.

You're Invited -- Optimistic Aging Event

We are thrilled to be hosting a virtual client event. At this summer’s Garrett Planning Network retreat, several of our planners enjoyed hearing psychologist Margit Henderson speak on Optimistic Aging. We found her so informative and inspirational that we partnered with 2 other firms to bring her presentation to you.

Wednesday Nov. 20

Noon Central time

View the full flier on our website. Please reserve your spot and we will send you the zoom link prior to the event. Let us know of any questions!

Die With Zero Book Club Recap

We held our first book club in September on Die With Zero by Bill Perkins. If you weren't able to make it, several of our planners created a brief video summary. We're happy to discuss your thoughts on this topic at your next meeting.

Charitable Giving Tax Tips for Year End

Yes! You can still get tax benefits from charitable giving in 2024. With the higher standard deduction, you may have seen your charitable efforts have a reduced or no benefit on your taxes in recent years. However, it’s still possible for your generosity to save money on taxes. It just may require a little more planning.

The optimal charitable giving strategy depends on your age and type of investment accounts. Jean Keener shares the best approaches for different situations.

Jean Keener and Samuel Pond talk charitable giving and taxes

Does Anybody Really Win?

Quick! Name the world’s greatest market timer in all history.

This is an exercise that financial advisor Harold Evensky would introduce to investors who want to act on their impulse to get out of the market at the first sign of a hiccup, or put all their money into AI stocks for fear of missing out.

The typical reaction is a blank look. We can debate the greatest tennis players of all time, or the pantheon of great chess players throughout history. Some folks can cite statistics about the greatest hitters in the history of major league baseball, and you can have your opinions about the top pop stars and performers.

But market timers? Has anybody, anywhere, at any time in history, created an amazing track record of knowing the most propitious times to get into and out of the market? Have you ever heard anybody debating the merits of this market timer vs. that other amazing one?

Any activity that provides us with zero successful examples ought to be examined carefully and skeptically, and market timing might be the best example of this. Rating the top market timers is not unlike rating the top individuals who have flapped their arms and flew away.

The point that Evensky is making is that if the world’s top economists, hedge fund managers, Wall Street traders and TV market pundits haven’t achieved notable success in this endeavor, it’s fair to ask whether any of the rest of us are likely to outwit the psychologically-driven twists and turns of share prices. We saw a great example of this in early August: pundits and economists were predicting smooth sailing for the markets and then there was that unexpected 3% one-day drop in the S&P 500. Then the headlines were about how the market was headed for a bearish stretch. These headlines continued while the market not only recovered its lost ground but reached new highs. Who could have predicted that?

The answer, based on history, is nobody.

Article adapted with permission of financial columnist, Bob Veres.

Investment Market Update

We have had five back-to-back months of positive returns now as investors. We had a week in early August that might have been a test of your risk tolerance, but the market came right back the following week and continued its upward ascent.

The S&P 500 returned 5.89% in the third quarter. Small cap and large cap value stocks sprung back last quarter at 9.27% and 9.43% respectively.

Developed market stock rebounded as well with 7.26% for the quarter. Emerging market stock increased its gains over the last 3 months at 8.72% with last month's return alone at 6.68%.

Bond funds had some nice returns for the quarter and we are observing some bond funds sporting double-digit returns for the last 12 months. We saw the fed cut interest rates by 0.5% at the end of September. We watched the market drive rates lower (and prices higher) in anticipation of this cut so that the actual event produced very little change in the bond funds. It was a good reminder that we need to stay invested because we can't predict when the market will price in new expectations or information. The US aggregate bond index was just behind the S&P 500 at 5.2% for the quarter. Shorter-term bond funds provided more modest gains at 2.89% for the quarter.

While we do not recommend gold as part of your investment portfolio, it is worth noting that it has had a great year, as well. Gold is up just under 30% for the 2024 year. We do not include gold in our portfolios due to the speculative nature of pricing and lack of interest, much like cryptocurrencies.

While all of this far exceeds our average return expectations for the year, this doesn't mean that it's been smooth sailing or will continue to be as we finish out 2024. Between the election, global conflicts, and what will happen next with interest rates, we may be in for some heightened volatility as investors. Harken back to early August and how quickly the market bounced back if the volatility is making you itchy enough to want to act. Markets can move quickly, and trying to time or predict just right can hurt you, which is why we recommend maintaining your targeted asset allocation through consistent, methodical rebalancing.

*Source for investment returns is Morningstar. Quarterly returns are as of September 30, 2024. S&P 500 TR USD for S&P 500. Russell 2000 TR USD for small cap stock. Russell 1000 Value TR USD for large value stocks. MSCI EAFE NR USD for developed international markets. MSCI EM NR USD for emerging markets stock. Bloomberg US Agg Bond TR USD for the US aggregate bond index. Bloomberg US Government 1-3 Yr TR USD for short-term bonds. Source for gold price is goldprice.org.

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