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Fall Market Update

Fall Market Update

October 04, 2022

Happy Fall RetirePath clients!  It is hard to believe that we are already into fall and approaching the final quarter of the year.  As always, we wanted to provide you with an update on the markets as we know that 2022 has been a crazy ride so far.  Let’s start with our primary mission – as you may already know our mission to provide you all with Hope, Clarity, and Peace of Mind.  And we know when the markets are volatile we could all use a little bit more peace of mind.  So we wanted to share with you our thoughts on the markets and let you know what we have been doing for you behind the scenes as we try to weather this storm in your investment portfolios.  Each of you work with someone on our team.  You either work with Chris, Josh , Beth, Luke or myself – Our goal is ensure that your investment portfolio directly aligns to your long term goals.

We take managing your money, very seriously and we are helping to build plans with you to make your retirement and legacies successful, for you and your families.  What you may not know, is that we meet each and every week as a team with our Director of Investment operations, Gary Wanamaker, to review and discuss the markets and our portfolios.  Each week, we spend time looking ahead at what might be coming next and preparing as best we can – always with a long term perspective in mind.  Now, what I want you to hear is that we are not passive investors – we are actually actively investing your money – making tactical adjustments along the way.  We are not, however, timing the market.  Our philosophy remains as long term investors making tactical moves that we see fit.  So far this year, we have made quite a few tactical moves. First, we decided to get out of the international space, then we moved a greater portion of our equity positions to value rather than growth, we believe that this will better position us moving forward in a rising interest rate environment.  We also severely reduced our exposure to the bond sector, even utilizing some inverse bond positions for a little while.  We have chosen to keep this portion of our portfolio in cash for the time being.  Remember, we are not trying to time the markets – but we are trying to actively manage where we see potential opportunity.  Right now, when we look at all of the assets we are currently managing, we have roughly 1/3 of our overall investments sitting in cash.  Now this will be different for each of you, based on your overall risk tolerance – but have decided that for right now, this is the right place to be.  Please know, that we will continue our weekly investment meetings and will continue to make changes as we feel appropriate. 

There are a few strategies that we like to consider before the year ends:

  1. Roth Conversion – we like to consider Roth Conversion when the market declines as this essentially provides a tax break on top of the many other reasons to own Roth IRA funds. Of course, we would need to review your overall plan and consult your tax advisor to see if this strategy would work for you. 
  2. Make your IRA or Roth contributions now, rather than later. Why wait until the end of the year or first part of next year to make these annual contributions – this allows you to place funds into the market at new lows.
  3. Revisit your giving strategy for the year. Those of you who are 70 ½ or older, have available the opportunity to give money to any charity that is a 501c3 organization from you IRA without having to pay tax on the distribution.  This is knowns as a Qualified Charitable Distribution.  This is especially helpful for those of you who are 72 or older and required to take your Required Minimum Distribution.  The same rules apply for that.  You can give some or all of your Required Minimum Distribution to a 501c3 charity and not have to pay tax on that amount given.

We are here for you, if you have questions please feel free to reach out to our office. #hope #clarity #peaceofmind #financialplanning