202 Providence Mine Rd Suite 202
January 2021 Newsletter
April 2021 Newsletter
July 2021 Newsletter
October 2021 Newsletter
January 2022 Newsletter
April 2022 Newsletter
July 2022 Newsletter
Happy New Year! As of now, 2023 is certainly starting off better than 2022.
Market Summary The Federal Reserve appears to be nearing the end of aggressive tightening as inflation may have peaked in October and begins to recede in 2023. Weaker companies that have been propped up by easy Monetary policy and government subsidies are likely to face strong headwinds in this higher rate environment. The current Fed Funds rate is in the 4.25 to 4.5% range. Fed Chairman Powell and other Fed presidents have called for a peak rate of closer to 5%, implying another half percent increase this year. Markets have priced that expectation in already. A deviation from this expectation will likely cause bond (and stock) market volatility. If the Fed Funds rate decreases by year end, we may see a bond and stock market rally.
In general, we plan to rebuild equity exposure for accounts with heavy cash positions as we anticipate eventual market recovery. Though we expect volatility to continue, we are keeping our eyes on a longer-term investment horizon. Bear markets on average last between 12-18 months. If we consider the bear market to have started last January, we are 2/3rds the way through. We believe that patience will be the name of the game in 2023.
-529 Plans can be rolled into a Roth IRA if the 529 is at least 15 years old. The rollover limit is $35,000. -New exceptions to eliminate the 10% early withdrawal (pre 59 ½) penalty from qualified plans -Up to $10,000 in cases of domestic abuse -For cases of terminal illness. -Up to $22,000 in areas declared a federal disaster zone. -Up to $2,500 per year for long term care expenses
Thank you for your business.