Working with Integras Partners brings confidence to your financial journey. We help clients not worry so much about money, knowing that an expert is minding your investments.
Many individual investors let emotions and procrastination impact their decisions – hesitating to buy when prices fall and feeling eager to invest when markets are strong. A disciplined advisor provides steady, informed guidance to improve your financial outcomes.
Elections can stir strong emotions, but don’t let them delay your investing. Historically, markets are influenced more by economic fundamentals than politics.
Stock values fluctuate under every president, but the S&P 500 Index® trends higher over the long term, no matter who’s in the Oval Office.
Source: Dimensional Fund Advisors
Or which party controls Congress:
Source: Dimensional Fund Advisors
Market reactions to elections create short-term volatility, but defensive changes to your investments are usually detrimental. Regardless of tax policy or regulations, factors like corporate earnings growth, economic conditions, and technological advancements have more impact on market performance.
Integras Partners with clients to keep a long-term perspective, overcome emotional delays, and take action. By keeping short-term cash needs invested with less market risk, we give clients the peace of mind to keep longer-term money invested and feel more comfortable during periods of short-term market craziness.
August through October are historically the weakest and most volatile period for stocks and bonds alike. This year appears to be exceptional. Few expected the strength and resilience demonstrated by financial markets in the third quarter. The S&P 500 Index® posted a stellar 5.77% gain, posting year-to-date gains of 22%. Unlike recent years, the gain was not due to only a few large tech and communications stocks. We’re seeing overdue and much preferable broadening of stocks showing positive returns, and not just from the largest U.S. companies, but in small-caps and foreign markets as well.
The economy remains strong as the Fed begins its interest rate cutting cycle. Not too hot, and not too cold. Just like the story of a lost girl, everything is now “just right”. The Fed is done raising rates, employment strength continues, and economic growth is solid. These conditions amount to a “Goldilocks Scenario”, just about perfect to sustain corporate earnings growth and stock gains. Earnings growth should accrue to the value and small cap sectors, which until recently have lagged the large tech-dominated themes that were driving the market. At Integras Partners, we have been increasing our client allocations to these undervalued areas of the market for several months.
With lower relative prices, small-caps in particular should become even more attractive to investors, given that this Goldilocks scenario lasts for a while. We saw some confirmation of this in the third quarter as the lower P/E stocks began to outperform.
Integras Partners makes it easier to stay invested by actively managing client portfolios across our time-horizon strategies. We do this by keeping low-risk investments to provide for near term goals, allowing you more comfort with keeping longer-term investments intact through market swings. We can help you capture the long-term gains that volatile markets generate over time with less stress.
First, you may want to read our current market commentary. It details why the markets are particularly attractive right now. You can check it out here.
Employer retirement plans are often your greatest investment, for several reasons.
Funds tend to stay invested long-term, riding out down cycles to capture real growth
Salary-deferral investments made with every paycheck take advantage of market moves buying more shares when markets are down, and less when prices are higher.
Many employers match some contributions to help build your retirement funding.
Don’t limit your contributions to only capture your employer’s match.
Remember that Traditional 401(k) deferrals are pre-tax, so an extra $100 a month typically reduces your bi-weekly paycheck by only $32.
2024, contribution limit is $23,000. If you’re 50 this year, can add another $7,500.
Do you still have money in a former employer’s plan?
Employers have greatly narrowed plan investment choices to avoid liability after the tech bubble of 2001.
Some plans restrict investment choices to “target date” and generic index funds.
If you’re retirement-minded, you can “rollover” an old 401(k)’s to an IRA without tax impact, usually getting greater freedoms in how you invest and spend your savings, including your own tax withholding choices.
Everyone wants their kids to succeed and help them financially. As always, starting early pays the greatest benefits. Here are some timely ideas:
529 plans allow you to invest cash for school expenses tax free. These accounts are typically owned by a single parent, with one beneficiary. They are state-specific and accept high contributions.
Almost all states offer income tax breaks for contributions to their state 529 plans.
Nine states offer tax breaks for investing in any state 529 plan.
Not all plans are created equal, with investment choices limited to that plan’s fund lineup.
Most plans offer target-date funds which are a good idea to align with HS graduation.
Distribution restrictions have broadened, now allowing up to $10K annual distributions for K-12, college apps and even exam-prep and computers.
You don’t want to greatly overfund the accounts and may want to pair a UTMA account (see below).
Once the accounts have been open for 15 years, you can move any remainders up to $35K into a Roth IRA for your child, once they are working. Funding is still subject to annual limits.
UTMA (Custodial) Accounts are irrevocable gifts to the minor but can accept gifted securities in addition to cash. Minors also have super low tax brackets which enable some passive gains to be realized tax free, or at a very low rate.
Funds can be used for almost anything for the benefit of the child
“Parental Expenses” are excluded, including food, clothes, etc.
Eligible expenses include cars, extracurricular activities, travel and Greek life.
They are considered assets of the child and will decrease financial aid eligibility.
This can be a great tool for gifting appreciated stocks or mutual funds, selling with minimal taxes and using the proceeds to cover those athletic or extra-curricular activities. I know it’s pretty sad
Grandparents and others can directly gift stocks to these accounts!
