Category: Insights

Read all of the insights coming from the experts at confluence financial partners.

  • Confluence Commentary

    Advice for Young Professionals – Top 10 Financial Wellness Tips for Young Professionals & Upcoming Graduates

    By: Zac Saunders, Wealth Manager 

    1. As you consider your career and job opportunities – think about total compensation, not just salary!
    • Assess the total compensation package (healthcare, 401k match, etc.) when reviewing job offers
    1. Create and maintain a monthly budget.
    • Setting up a budget is of utmost importance.
    • Keep track of your spending and keep expenses down (Needs vs. Wants).
    1. Start to build up your emergency savings.
    • A good rule of thumb is to keep 4-6 months of living expenses in savings.
    1. If available, start contributing to your work 401k plan and take advantage of the company match benefit.
    • You should consider contributing at least the amount to obtain the maximum company contribution. This is free money!  For 2020, the maximum contribution that an employee can make to their 401k plan is $19,500.
    1. Start an individual retirement account (Roth and Traditional IRAs).
    • You can contribute to a Roth or Traditional IRA (depending on income limits) while also contributing to a work 401k.
    • The total amount that a person can contribute to all traditional and Roth IRAs combined is $6,000 for 2020.
    1. Pay down any debts and if you have student loans consider consolidating.
    • Be disciplined and start paying your loan off as soon as you can.
    1. Pay off credit cards on a monthly basis. A credit card can help you build credit provided you pay off in a timely manner.
    • Don’t spend what you don’t have.
    1. Start saving for your first home. We recommend saving 20% for a down payment.
    • Avoid private mortgage insurance (PMI)!
    1. It’s ok to buy a car, but don’t fall for the low monthly payment options that are spread out over 48 + months.
    • Don’t live beyond your means.
    1. Save and Invest Early. Time and compound interest should be your best friend!
    • Case study A: Contributing $500 per month to your portfolio from age 32 to 65, growing at 9% average annual return, adds up to approximately, $1.1 million…not bad!
    • Case study B: Contributing $500 per month to your portfolio from age 22 to 65, growing at 9% average annual return, adds up to approximately, $2.6 million…even better! Key takeaway: START EARLY!
    Any opinions are those of Zac Saunders and not necessarily those of RJFS or Raymond James.  The case study examples are for illustrative purposes only.  Actual investor results will vary.
    Zac Saunders
    About the Author

    Known for his professionalism and calming demeanor, Zac is focused on helping his clients reach their financial goals through comprehensive financial planning and unbiased guidance.  Zac and his team support and care for the overall financial well-being of their clients.

    Sewickley

    724-719-6600
    zac.saunders@confluencefp.com
    Email Zac

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    Zac Saunders

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  • CARES Act Explained: What You Need to Know

    From rebate checks to small business support, there is quite a bit packed into the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law on Friday. The $2+ trillion emergency fiscal stimulus package is intended to mitigate some of the economic effects caused by the COVID-19 outbreak.

    We have all been working to gain an understanding of the law so that we can act as a resource for our friends and family looking to take advantage of the applicable provisions. We have been reading numerous articles, participating in webcasts hosted by industry experts and large accounting firms, and talking with banks to understand the process for various provisions. New information is still coming out daily, but please do not hesitate to use us as a resource as we work through this pandemic.

    Here is a look at some of the key provisions in the CARES Act that may be of interest to you:

    1. A check – Based on income and family makeup, most Americans can expect to receive $1,200 individually ($2,400 for joint filers) and $500 per dependent. Amounts phase out for those who reported adjusted gross incomes over $75,000 for individuals and $150,000 for joint filers in 2018 or
    2. A buffer – The CARES Act eliminates the 10% early withdrawal penalty for coronavirus-related distributions from retirement accounts. Withdrawn amounts can be repaid to the plan over the next three years. In addition, required minimum distributions (RMDs) are waived for 2020. Investors who have already taken an RMD for 2020 have options that may include returning the amount or rolling it over, as long as the distribution was not made from a beneficiary
    3. Support for small businesses – In the form of more than $350 billion, including forgivable loans (up to $10 million) to help keep the business afloat, a paycheck protection plan and
    4. Expanded unemployment benefits – Unlimited funding to provide workers laid off due to COVID-19 an additional $600 a week, in addition to state benefits for up to four months. This includes relief for self-employed individuals, furloughed employees and gig economy workers who have lost work during the
    5. Fortified healthcare – $100 billion is allocated to hospitals and other health providers to help offset costs and provide relief. In addition, the legislation provides funding for numerous other areas including state and local COVID-19 response measures, an increase to the national stockpile for medicine, protective equipment, medical supplies and additional FEMA disaster relief
    6. Enhanced education – $30 billion to bolster state education and school funding, as well as the deferral of federal student loan payments through the end of September.

    What’s next? Treasury Secretary Steven Mnuchin has targeted early April to deliver the funds. Discussions are starting in D.C. around a possible next phase of economic relief, although it’s just talk for now.

    We’ll continue to keep you updated with relevant and timely information. In the meantime, please don’t hesitate to reach out. These are difficult times in which we are living, but we are confident that we will get through them together.

    The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Confluence Financial Partners is not a registered broker/dealer, and is independent of Raymond James Financial Services. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. Investing involves risk, and investors may incur a profit or a loss. Some expressions of opinion reflect the judgment of Raymond James and are subject to change. There is no assurance that any of the forecasts mentioned will occur. Economic and market conditions are subject to change.  Some of the material was prepared by Raymond James for use by its advisors.

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    Chuck Zuzak

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  • How to Nurture Moneywise Children

    Teach your children to treasure their financial legacy.

    Most parents appreciate the importance of traditional education in their child’s development considering the obvious intellectual and social benefits. Yet all too many forget that a financial education is also crucial for ensuring their offspring’s long-term well-being.The good news is it’s never too early or too late to begin sharing your financial wisdom and experiences with your family. By taking the time to teach your children the value of money, you’ll have the comfort of knowing they’ll understand how to care for their own financial legacy when the time comes.

    An Essential Skill

    Like reading, financial literacy is an essential skill, but unfortunately, it’s not typically taught in school. Rather, it’s up to parents to pass on their financial knowledge to ensure the next generation is capable of taking care of the wealth they’ve built.

    Pre-kindergarten age is a great time to introduce the basics, including the idea that you must work to earn money in order to pay for items and services, as well as the value of different coins and bills. As they get a little older, your child can start doing chores and earning an allowance. Help them go through the motions of saving up for something they’d like to buy and deciding whether or not it’s a worthwhile purchase.

    With pre-teens and teenagers, there are several other steps you can take, such as helping them open a savings account with their earnings from chores, babysitting or other jobs. Share your own tips on managing a budget and introduce them to the concept of investing and saving for retirement. Simply being transparent with your children about the realities and costs of living can go a long way in preparing them for the future.

    Sharing Your Financial Legacy

    While products such as trusts and wills can help ensure your wishes are carried out, they can’t give your heirs the true understanding of how to save, grow and spend money wisely. In fact, if your children are going to receive a sizable inheritance, they may get overwhelmed by sudden wealth without a solid foundation to rely on. It’s also a good idea to introduce your children, when they’re ready, to your financial advisor and other professional partners, so they’ll know where to find expert guidance when dealing with money issues.

    Next Steps

    • Write out a sample budget with your children, explaining the expenses you have each month, such as utilities and groceries
    • Help them open a savings or checking account
    • Schedule a time for them to join you for a meeting with your financial advisor

    Family and Life Events

    August 14, 2019

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    Katie Montagazzi

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  • Make Lasting Memories by Savoring Life’s Simple Joys

    Make Lasting Memories by Savoring Life’s Simple Joys

    While extravagant vacations are great, you don’t need to spend a lot of money to make meaningful memories with your loved ones. A slow morning on the first day of summer. Baking cookies with the littles. A great meal surrounded by close friends or family. The best memories come in all shapes and sizes, both planned and unplanned. And while there’s nothing like going on that vacation you’ve been looking forward to for months, sometimes it’s the small, unexpected delights that stay with us the longest.

    So how can you lead a life with more moments worth savoring? Here are a few tips to help you get started.

    Focus on the Little Things

    There’s nothing wrong with a bucket list full of exotic travel destinations or goals to buy that yacht or plan a big family reunion. After all, helping you work toward those goals is what a well-planned life is all about. Still, that’s usually not our day-to-day life. There are so many moments in between those grander experiences that are opportunities to explore smaller joys that, when added together, can be just as memorable or fulfilling as a big trip.

    Start by picturing your perfect day. What do you do or eat? Who and what do you see? Perhaps it’s reading a book, listening to music or getting outside. Maybe you want to spend more time with close friends. After thinking it over, consider how to bring a few of those elements into your regular routine.

    For example, maybe you want to get outside and see one of your friends more often. Consider putting a weekly date on the calendar with them to go for a walk, helping you fulfill both goals. Or perhaps you want to spend more time with your grandkids and also do more at-home cooking. Can the kids help? It could turn into an opportunity to not only spend time together, but for you to share some of your skills and insights with the next generation – doing something as simple as making a pizza.

    When trying to find ways to bring the whole family together, consider what everyone is most interested in. Do your kids or grandkids have favorite activities you can do together? Maybe it’s going to an escape room or planning a watch party for their favorite show. Better yet, take turns choosing the plans for a monthly get-together. Experiences are a great way to connect and they make excellent gifts, too.

    Commit to Unplugging

    Social media has given us unprecedented access to loved ones near and far, and it’s made it easier than ever to share our lives (for better or for worse). But while it makes capturing a moment so easy, social media can also put extra pressure on ourselves and our experiences to be and look perfect – making it that much harder to cultivate and cherish authentic memories.

    Moreover, according to Psychology Today, the average American has five social media accounts and spends an hour and 20 minutes each day browsing their feeds. That’s more than 37 hours every month! Imagine the memories we could create over a year with that time.

    If you’ve found yourself getting sucked into social media, consider taking a break or limiting the time you spend scrolling. Time management apps and new settings on phones allow you to set timers so you receive an alert when you’ve gone over your allotted time on specific apps.

    Learn to Be Present

    It’s hard to fully take in a great moment when we’re distracted, whether by our never-ending to-do list or our phone. Learning how to quiet our mind for even short periods of time can leave us open for moments of serendipity and spontaneity. Perhaps you run into a friend at the grocery store and decide to catch up over lunch, or spot a bed of flowers in full bloom while on a walk – both things you may have missed while checking your phone or worrying over all the errands on your list.

    Meditation has been proven to help reduce stress and anxiety while improving our concentration. And with several popular apps out there with guided meditations, it’s never been easier to give it a try. While some require subscriptions, most offer a free trial so you can see how you like it before making a commitment.

    Enjoy the Moments Worth Living For

    Living for the moment is all about applying that stop-and-smell-the-roses mindset to your daily life. That way, even when you aren’t cruising the Mediterranean or celebrating your birthday with a bash, you might just stumble upon a few more exciting moments and soak up some extra memories along the way.

    Sources: Psychology Today; Huffington Post

    Raymond James is not affiliated with any organizations mentioned.

    Family and Life Events

    June 26, 2019

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    Katie Montagazzi

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  • End of Year Tax Savings Strategies

    Check This List – Twice – Before Year-End

    Proactive investors know that the months before year-end are an ideal time to make any final tax-saving moves.

    While keeping in mind your long-term investment goals, meet with your advisor and coordinate with your tax professional to examine nuances and changes that could impact your typical year-end planning.

    Mind Your RMDs

    Be thoughtful about required minimum distributions (RMDs) to ensure that you comply with the rules. If applicable and you have yet to do so, take your 2017 RMD to avoid a 50% penalty on required amounts not taken. Other considerations:

    • By automating your RMDs with your advisor, ensure that you never miss this important deadline.
    • You can take your first RMD during the year you reach age 70½, or you can delay it until April 1 of the following year. Know, however, that if you delay and take two distributions in the first year after turning 70½, your income could be inflated, which may affect your tax-bracket standing.
    • Subsequent RMDs must be taken no later than December 31 of each calendar year.
    • Qualified charitable distributions allow traditional IRA owners who transfer RMDs to qualified charities to exclude the amount donated from their adjusted gross incomes, up to $100,000.
    • Be mindful of how taking a distribution will impact your taxable income or tax bracket. If you have space left in your bracket or a down income year, you may want to consider taking additional distributions.

    To Harvest or Not to Harvest

    Evaluate whether you could benefit from tax-loss harvesting – selling a losing investment to offset gains or establish a deduction of up to $3,000. Excess losses also can be carried forward to future years. With your advisor, examine the following subtleties when aiming to decrease your tax bill:

    • Short-term gains are taxed at a higher marginal rate; aim to reduce those first.
    • Don’t disrupt your long-term investment strategy when harvesting losses.
    • Be aware of “wash sale” rules that affect new purchases before and after the sale of a security. If you sell a security at a loss but purchase another “substantially identical” security – within 30 days before or after the sale date – the IRS likely will consider that a “wash sale” and disallow the loss deduction. The IRS will look at all your accounts – 401(k), IRA, etc. – when determining if a wash sale occurred.

    Manage Your Income and Deductions

    Those at or near the next tax bracket should pay close attention to anything that might bump them up and plan to reduce taxable income before the end of the year.

    • Consider making a donation. Giving to a charity can benefit a cause you care about and reduce your taxable income. Make sure your gifts are well-documented. You also can gift up to $14,000 tax free to as many individuals as you wish.
    • Determine if it makes sense to accelerate deductions or defer income, potentially allowing you to minimize your current tax liability. Some companies may give you an opportunity to defer bonuses and so forth into a future year as well.
    • Certain retirement plans also can help you defer taxes. Contributing to a traditional 401(k) allows you to pay income tax only when you withdraw money from the plan in the future, at which point your income and tax rate may be lower or you may have more deductions available to offset the income.*
    • Evaluate your income sources – earned income, corporate bonds, municipal bonds, qualified dividends, etc. – to reduce the overall tax impact.

    Evaluate Life Changes

    From welcoming a new family member to moving to a new state, any number of life changes may have impacted your circumstances over the past year. Bring your financial advisor up to speed on major life changes and ask how they could affect your year-end planning.

    • Moving, for example, can have a significant impact on taxes and estate planning, especially if you have relocated from a high income tax state to a low income tax state, from a state with an estate income tax to one without or vice versa, or if you have moved to a state with increased asset protection. Note that moving expenses themselves, however, are no longer deductible as an itemized deduction for non-military members.
    • Give thought to your family members’ life changes as well as your own – job changes, births, deaths, weddings and divorces for example can all necessitate changes – and consider updating your estate documents accordingly.

    Next Steps

    Consider these to-dos as you prepare to make the most of year-end financial moves, and discuss with your financial advisor and tax professional:

    • Manage your income and deductions, paying close attention to your tax bracket, especially if you are on the edge.
    • Remember to take your RMD, if applicable.
    • Evaluate your investments, keeping in mind whether you could benefit from tax-loss harvesting.
    • Make a list of the life changes you and your family have experienced during the year.

    *Withdrawals prior to age 59 1/2 may also be subject to a 10% federal penalty tax. RMDs are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation. Raymond James advisors do not provide tax advice. 

    TAX PLANNING

    November 21, 2018

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    Greg Weimer

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  • Redefining Your Retirement

    Redefining Your Retirement

    Today’s retirees are choosing from a variety of retirement styles. What’s yours?

    Although an estimated 10,000 baby boomers reach retirement age every day, how each chooses to spend their free time can be quite different. Today’s retirees wish to forge new identities and seek new experiences, while redefining how they spend their time and money.

    See if one or more of these new retiree profiles resonates with you. Deciding how you’ll stay busy can go a long way toward helping you plan and save for your dream retirement.

    The Giver

    Givers contribute time, talent and, yes, even money to support causes close to their hearts. While the typical American spends 20 minutes a day engaged in volunteer, civic or religious activities, the Giver over age 65 dedicates a half hour or more, according to the Bureau of Labor Statistics.

    One retiree may use her musical talents to play the violin for hospital patients, while another works behind the scenes updating a nonprofit’s website. Either way, it’s all about making a meaningful difference.

    Note: Givers may become too altruistic, spending more time and money than planned, undermining health or financial stability.

    Givers represent 33% of working retirees.

    The Thinker

    Thinkers have a deep desire for lifelong learning. They may retire in a college town, take classes, read for pleasure and engage in contemplative activities.

    Many colleges and universities are designing courses aimed at this new senior class. Campuses can be found in areas with affordable housing, quality education, teaching opportunities, walking and biking trails, and excellent transportation, healthcare and entertainment options.

    Note: If you’ve established a 529 plan for a child or grandchild, you may be able to use unneeded funds for your own continuing education. Ask your financial advisor about potentially withdrawing funds without penalties.

    Cognitively active people are 2.6 times less likely to develop dementia or Alzheimer’s.

    The Entrepreneur

    Entrepreneurs typically start a business that’s different from a past career, bringing decades of experience, success, passion and emotional intelligence to their new ventures.

    Goals include a fulfilling career, increased flexibility and enjoyment in their work. Some hope their new endeavors will becomes self-sustaining, while allowing for work/life balance.

    Note: A small business entails a business plan, startup costs, insurance and a financial plan. Work with a professional tax planner and financial advisor to build a successful venture.

    Nearly 3 out of 5 working retirees consider a different line of work.

    The Explorer

    The Explorer dedicates up to a quarter of their financial resources on travel. These globetrotters invest in experiences and indulge their wanderlust while they have the health, energy and resources.

    Good saving habits help Explorers immerse themselves among other cultures, foods and languages.

    Note: Plan for ongoing travel expenses, desired location, frequency and duration, as well as inflation and foreign exchange rates. Health-related issues may become a limitation in later years.

    There are just as many Explorers over age 75 as there are among younger groups.

    The Part-Timer

    The Part-Timer, like the Entrepreneur, seeks a career change, but may not wish to commit to a full-time position. Some favor mini-retirements – periods of work followed by intermissions for relaxation. Think consulting and contracting, for example.

    Note: Returning to work, even part time, can incur expenses such as new work attire, transportation and dining out. Evaluate the impact of additional income on your current tax bracket, Social Security benefits, healthcare coverage, and potential contributions to retirement plans.

    There are more than 7.1 million Part-Timers age 55 or older.

    The Foodie

    Foodies prefer quality dining and enjoying the experience of the meal. They typically spend about an hour and 20 minutes when dining, relishing how food and drink increases their quality of life. They enjoy experimenting with new creations, introducing new flavors or bringing friends and family together.

    Since the Foodie spends time shopping for and preparing meals, other expenses are typically lower.

    Note: Food connoisseurs need to factor in healthcare costs and inflation, as well as utilities and transportation.

    Foodies spend, on average, 28% of their income on food and beverage.

    The Athlete

    The Athlete may compete in triathlons or play tennis into their 80s and beyond. They stay in top form and enjoy training and competition.

    As the Athlete eventually slows down, or faces sudden illness or injury, healthcare costs can account for a significant share of retirement income, including Medicare expenses, prescriptions or long-term care needs.

    Note: It’s important to budget for proper equipment and training. Select an appropriate Medicare or healthcare policy and account for expenses that aren’t covered. Be sure to factor in inflation and long-term care or assisted living.

    Approximately a third of Americans over 65 are considered physically active.

    Next Steps

    • Decide what type or types of retirement styles you’d like to pursue
    • Further explore the necessary steps to achieving your goals
    • Talk to your financial advisor about the best strategy for turning your retirement dream into reality

    Sources: Journal of Financial Planning: “How retirees spend their time”; Bureau of Labor Statistics; Robert S. Wilson, Ph.D., Rush Alzheimer’s Disease Center; Work in Retirement: Myths and Motivation; J.P. Morgan “Cost of Waiting” study; President’s Council on Fitness, Sports & Nutrition

    Earnings in 529 plans are not subject to federal tax, and in most cases, state tax, so long as you use withdrawals for eligible education expenses, such as tuition and room and board. However, if you withdraw money from a 529 plan and do not use it on an eligible education expense, you generally will be subject to income tax and an additional 10% federal tax penalty on earnings. Investors should consider before investing, whether the investor’s or the designated beneficiary’s home state offers state tax or other benefits only available for investments in such state’s 529 savings plan. Such benefits include financial aid, scholarship funds, and protection from creditors. 529 plans offered outside their resident state may not provide the same tax benefits as those offered within their state.

    RETIREMENT AND LONGEVITY

    August 15, 2018

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    Chuck Zuzak

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  • 2 Things Every Investor Should Know About SECURE Act 2.0

    In late December, a $1.7T omnibus spending package was passed in Congress and subsequently signed into law by President Biden. This bill included some significant updates to the landmark 2019 SECURE Act, such that this portion of the legislation is being referred to as SECURE Act 2.0.

    While there are many important updates in the law, I’d like to focus on two items that we believe are especially significant

    1. Required Minimum Distribution (RMD) Age Increase

    Beginning 1/1/2023, the new beginning age for RMDs will be 73. By 2033, the age for RMDs will be pushed back further to 75.

    This means that investors who will turn 72 in 2023 received a pass on what would have been their first RMD! It also means that the window of opportunity for income planning in retirement is extended.

    Some of the most opportune years in terms of income planning are the years between retirement and when RMDs begin. In these years, individuals tend to be in a relatively low tax bracket, because they no longer have high employment income and they also don’t yet have required income coming from their retirement accounts.

    If these retirees are able to live on Social Security and income from taxable brokerage accounts, they could end up in an unusually low tax bracket. These years can then be used to “harvest” capital gains at a 0% tax rate, or convert portions of a traditional IRA to a Roth IRA. The lower adjusted gross income can also help retirees save on things like Medicare and Social Security taxes.  

    Pushing the RMD age out to 73 and then 75 will give retirees additional time to take advantage of these opportunities.

    2. 529 accounts to Roth IRAs

    For the first time, 529s will be allowed to rollover tax-free to Roth IRAs, albeit with significant restrictions.

    The total amount allowed to be rolled over in aggregate is $35,000, and the rollovers must be done in accordance with the annual Roth contribution limits (currently $6,500 for those under age 50). In addition, the 529 must have been established for at least 15 years.

    This change will help to alleviate investor fears of what may happen to 529 funds if the beneficiary chooses not to pursue higher education.

    The change also allows for a strategy whereby investors begin planned rollovers to a Roth IRA once the beneficiary turns 16. At today’s limits (which will be adjusted up for inflation), a 529 beneficiary could have $35,000 plus earnings saved in a Roth IRA before graduating from college. That is a solid head start!

    If you have questions about how these opportunities could affect your financial planning, please call one of our offices to speak with a wealth manager today.

    See below for additional key provisions in SECURE Act 2.0:

    Chuck Zuzak
    About the Author

    Chuck joins Confluence Financial Partners with 13 years of experience in the financial services industry, most recently as Director of Financial Planning at JFS Wealth Advisors. At a fundamental level, Chuck’s passion for financial planning stems from the desire to help clients connect their personal values and purpose with their financial resources.

    Pittsburgh

    412-391-0377
    chuck.zuzak@confluencefp.com
    Email Chuck Zuzak

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    Chuck Zuzak

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  • Stock Market Recap: October 2023

    Month in Review

    • Stocks fell during the month of October, marking the third straight monthly decline for the S&P 500 Index.
    • Bond markets also fell again during the month, the fifth straight monthly decline for the asset class.
    • Concerns over US government funding helped keep interest rates higher in October, pressuring stock and bond markets again.
    • US corporate earnings season is also in full swing, with over 50% of the S&P 500 having reported by the end of the month. Companies have thus far reported positive earnings growth with mixed outlooks.

    Last Rate Hike? Now What?

    The Federal Reserve held its November committee meeting, where they kept interest rates unchanged. Following the press conference, investors are now expecting interest rates to be unchanged again in December (only a 15% probability of a December rate hike as of 11/2/2023).  If the Federal Reserve is finished increasing interest rates this cycle, what does that mean for the stock market? Going back to 1929, there are no clear trends, the range of outcomes following the last hike is very wide historically. While various talking heads remain hyper-focused on short-term events such as this, it is more important than ever that investors maintain their focus on long-term fundamentals.  

    What’s on Deck for November?

    • The autoworkers strike appears to be nearing resolution, while a potential government shutdown remains a possibility ahead of the November 17th deadline.
    • Corporate earnings season is nearly two-thirds complete, with companies reporting earnings ahead of estimates on average, and clocking positive growth this quarter. Investors will focus on forward guidance from companies as the season wraps-up.
    • The next Federal Reserve meeting is not until December 13th, so in the interim investors will continue to look for communications and sign-posts for confirmation the Federal Reserve is done increasing interest rates. The Federal Reserve did confirm their on-going effort to reverse their quantitative easing (QE) program, which is expected to keep interest rates elevated.

    Download the October 2023 Market Recap below:

    Market-Recap-Oct-2023Download
    William Winkeler
    About the Author

    Bill has more than 15 years of experience in the investment industry, most recently as Managing Director of Investments at a private wealth management firm. In his role at Confluence, Bill chairs the Investment Advisory Committee and develops and implements investment strategy for clients of the firm, as well as communicates investment content with clients.

    Pittsburgh

    724-719-6600
    bill.winkeler@confluencefp.com
    Email Bill

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    William Winkeler

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  • Building a Secure Retirement: The Confluence 401(k) Service Structure  

    Whether you are a business owner offering a retirement plan to your employees or are an employee participating in a company sponsored retirement plan, managing the benefit & saving for retirement both can feel like an isolating process. Too often we see a lack of guidance or knowledge from financial advisors to be able to serve as a resource to the company or its employees.  

    Confluence understands these challenges with a dedicated team of financial advisors collaborating with employee retirement plans. We have built a comprehensive 401(k) service structure – Confluence Standard of Care, designed to offer peace of mind to the employer, while supporting employees to make informed decisions to reach their financial & retirement goals. 

    Our 401(k) Standard of Care service structure centers on four key pillars: 

    1. Personalized Employer Review Meetings:  “One size fits all” does not work when it comes to 401(k) plans. Through regularly scheduled meetings, we collaborate with employers to monitor the employer plan to make sure it continues to fit the company’s needs and goals.  

    During these meetings we will discuss the following topics: 

    • Plan investment analysis: considering the quantitative and qualitative results to ensure we have skillful managers in place. 
    • Courageous plan design: striving to increase an employer’s benefits return on investment while striving to enhance participant retirement outcomes.  
    • Fee benchmarking: every 3 years we lead an RFP driven process to ensure apple-to-apple comparisons and to help maximize a plan’s negotiating leverage. 
    • Fiduciary guidance: to support the employer and mitigate potential liabilities. 

    2. Employee engagement:  Our education team uses highly customized plan participant content structured to help optimize outcomes and increase financial wellness. We deliver multiple types of meetings throughout the year. These meetings run the spectrum from group education to 1on1 individual consultations, and life stage education designed to meet the employee at their individual career stage.  

    3. Regular investment monitoring & investment analysis:  As a member of the Retirement Plan Advisor Group (RPAG), we have access to their proprietary fund ranking system that aims to enhance outcomes, manage risks, and reduce fiduciary exposure. Employers receive quarterly plan “report cards” detailing investments scores.  In addition to the fund scores, Confluence has an internal Investment Advisor Committee that provides guidance on selected investment managers and incorporates a qualitative layer of oversight to the fund analysis programs used.  

    4. Ongoing communication & support: In addition to the processes outlined above, we deliver a variety of additional touchpoints designed to keep employers and participants informed and engaged. This includes informative webinars, quarterly newsletters, and campaigns to address specific plan demographics or concerns.

    By utilizing these services, employers can have the confidence in knowing their 401(k) is managed effectively while employees have the opportunity to understand their benefits options.  

    Our team is here to guide you every step of the way. Should you have any questions or require further information on how our service delivery model can benefit your organization, please do not hesitate to contact us or listen to our podcasts today! 

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    Chuck Zuzak

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  • Stock Market Recap: November 2023

    Month in Review

    • Stocks rose sharply in November, breaking a three-month losing streak. Gains were broad based across major markets.
    • Bond markets also broke a five-month losing streak, posting strong results as short- and long-term interest rates fell significantly during November.
    • Multiple data points illustrated that inflation is in continued decline, raising investor confidence that the Federal Reserve is done hiking and turning its focus to potential rate cuts in 2024. 

    A November to Remember!

    November was a month to remember for investors: The S&P 500 posted its strongest November since 1980 (rising roughly 9%) and the Barclays Aggregate Bond Index had its best month since May 1985 (rising roughly 4.5%).

    What were the catalysts for such a sharp reversal?

    Investor sentiment had become overly negative – a three-month losing streak for stocks and a 5-month losing streak for bonds. This set-up was followed by unexpected positive developments on the fight against inflation. Multiple readings during November showed inflation rising by less than expectations. Federal Reserve officials also affirmed progress towards normalizing inflation, the decline can be seen in the exhibit below. The positive developments on inflation drove interest rates lower, sending stock and bond prices higher, as investors now shift their attention away from rate hikes to rate cuts.  

    Source: BLS, FactSet, J.P. Morgan Asset Management. CPI used is CPI-U and values shown are % change vs. one year ago. Core CPI is defined as CPI excluding food and energy prices. The Personal Consumption Expenditure (PCE) deflator employs an evolving chain-weighted basket of consumer expenditures instead of the fixed-weight basket used in CPI calculations. Guide to the Markets – U.S. Data are as of November 30, 2023.

    What’s on Deck for December?

    • Earnings season is wrapped up and government shutdown issues have been pushed out until January 19th and February 2nd of 2024.
    • The Federal Reserve meeting on December 13th will be watched closely for comments on the timing and magnitude of the first rate cut and the on-going shrinking of the Fed’s balance sheet. At time of writing, futures markets are implying a 50% chance of a 25bps rate cut during the March 20th, 2024 meeting.
    • As we enter 2024, the US Presidential election will once again be a focus. Despite a significant amount of noise, it is important to remember that the S&P 500 has only had negative returns in election years two of the last 20 election years (2000, 2008).

    Download the November 2023 Market Recap below:

    Nov-2023-Market-RecapDownload
    William Winkeler
    About the Author

    Bill has more than 15 years of experience in the investment industry, most recently as Managing Director of Investments at a private wealth management firm. In his role at Confluence, Bill chairs the Investment Advisory Committee and develops and implements investment strategy for clients of the firm, as well as communicates investment content with clients.

    Pittsburgh

    724-719-6600
    bill.winkeler@confluencefp.com
    Email Bill

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    William Winkeler

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