What Has Changed?

Markets continued their positive performance in the second quarter and the S&P 500 is now up 17% through the first half of the year. Many investors have been caught off guard as the outlook at the beginning of the year was doom and gloom. Cooling inflation, better than expected corporate earnings, and the new AI (Artificial Intelligence) craze have been the obvious drivers of the great start to the year, but as we get longer into this market run up, the question becomes “Is this sustainable”? In order for the answer to be yes, inflation must continue on its downward descent, the Fed has to start talking rate cuts and corporate earnings expectations need to continue to surprise to the upside. In our view, at present, there’s a low probability of all three happening in unison.

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TD and Schwab Conversion

On November 25, 2019, Charles Schwab announced that it would be acquiring TD Ameritrade and the deal officially closed on October 6, 2020. After nearly 3 years of combining operations and best practices, we are excited to announce that your accounts will be moving to the Schwab platform over Labor Day weekend. Click HERE to learn more about what to expect over the next several weeks.

Where’s the Recession?

In the face of significant uncertainty, markets proved to be more resilient to start the year than many investors thought possible. The quarter started off largely upbeat as inflation seemed to be subsiding and many believed that would lead the Fed to stop raising rates or even contemplate cutting rates. In February, economic numbers came in hotter than expected and the Fed’s rhetoric quickly reinforced further rate increases. Many professionals have been predicting that the significant rise in rates would eventually cause something to break. In March, the cracks started to emerge as Silicon Valley Bank & Signature Bank quickly were shut down by regulators within a few days of each other. Please click here to continue reading our market update.

529 Plans – New Tax Law Provides More Options

With the rising costs of higher education, many of our clients are actively seeking ways to set aside funds to support their children and grandchildren’s future education expenses. An efficient and flexible way to save for college and its associated costs is a 529 plan. A 529 plan is a tax-advantaged savings plan specifically designed to provide for the qualified education expenses of a designated beneficiary. 529 funds grow tax-deferred, and withdrawals are tax-free provided they’re used for qualifying educational expenses. Click here to read more.

One For the Record Books

2022 will go down in history as a landmark year for economics and financial markets, just not the type of year we want to remember. The highest inflation in 40 years, the most aggressive interest rate increases in modern history, and the Russia/Ukraine war were each unique in their own respects and caused extreme volatility in all investment asset classes. This is only the 5th time since 1926 that stocks and bonds have been down in the same year and the first time that both have declined by 10% in a single year. Please click here to continue reading our market update.