3rd Quarter 2024 Newsletter

Third Quarter Performance by Asset Class

 US Large Growth Stocks                                2.77%

US Large Value Stocks                                   9.40%

US Small Cap Stocks                                     9.12%

International Stocks                                        7.16%

Emerging Market Stocks                                9.67%

Intermediate Corporate Bonds                        5.93%

Long-Term Treasury Bonds                            7.78 %

The third quarter was a strong one, fueled by the expectation of lower interest rates and solid corporate profits.  Large growth stocks (i.e. technology) were one of the weaker classes after leading asset classes for most of 2023 and 2024. Bonds recovered with the expectation of lower interest rates ahead.

Federal Reserve Makes First Rate Cut

In September the Federal Reserve made its first interest rate cut of .5% in an effort to prevent a recession.  Markets anticipated that cut and interest rates in many parts of the market already reflected lower expectations for the economy in the next 12 months.  Further interest rate cuts will be dependent on the data from inflation and unemployment.

Emerging Markets Rebound

Stocks in emerging markets (places like China, India, Taiwan, and Brazil) had a very strong quarter.  They continue to attract money due to their low prices compared to US Stocks.  We have a smaller allocation to these stocks due to their political uncertainty, but they do provide some diversification if the US economy weakens.

Election Results and Markets

As with the last two elections, many people are anxious about how the election will impact their portfolios.  The truth is, over the last 75 years, markets have performed fairly equally under the leadership of the Democratic Party versus the Republican Party.  Markets performed highest under Bill Clinton (15.2%), Donald Trump (14.1%), and Barack Obama (13.8%).  (The percentages after each president represent the annual total return of the S&P 500 during their presidential term.) 

For some interesting charts that show performance of markets under presidents since 1953, please click on the link below:

https://www.visualcapitalist.com/sp/democrats-vs-republicans-does-it-matter-to-the-market/

As always, we are watching for opportunities and managing your portfolios in such a way as to meet your long-term financial goals.

2nd Quarter 2024 Newsletter

Second Quarter Performance by Asset Class

US Large Growth Stocks                                8.79%

US Large Value Stocks                                  -0.88%

US Small Cap Stocks                                     -3.87%

International Stocks                                        -0.57%

Emerging Market Stocks                                5.17%

Intermediate Corporate Bonds                       0.39%

Long-Term Treasury Bonds                           -1.61 %

The second quarter was mixed, with winners in US large growth, emerging markets, and to a much lesser degree, corporate bonds.  Losers in the second quarter were value stocks, developed market stocks (like Europe and Japan), and treasury bonds.

Market Valuation

Total market valuation is at about the same relative position as it was at the end of March, about 2% overvalued according to Morningstar.  Value stocks, however, are between 9% (large companies) and 28% (small companies) undervalued. Large growth stocks are currently seen as 7% overvalued.  Those numbers are not very helpful over a short time period – no one can predict when one part of the market will begin to outperform another, but we can see that there is still good value in many parts of the market.  We like to maintain exposure to large and small companies, both on the growth side and value side since we do not know which part of equity markets will outperform.

Fewer Interest Rate Cuts Expected

The Federal Reserve has decided, so far, to hold steady on interest rates.  Many expected that slowing growth would trigger lower rates, but overall economic growth has remained solid enough to put that on hold.  Lower rates do provide opportunities for businesses to borrow money at a lower rate and potentially expand more efficiently.  However, they can also trigger inflation.

Important Tax Issues Ahead

In 2025 the current tax law changes are set to expire, including the higher standard deduction, lower tax rates, and the higher child tax credit.  Expect discussions to heat up in Congress about how to handle these changes.  Tough decisions lie ahead with large deficits set up against the continued desire to support economic growth.  These issues could add some volatility to markets over the next 18 months, depending on the course taken. 

Election Volatility Possible

The next six months will immerse us in political battle – we will see how this impacts markets.  Election years are typically strong years for the market, regardless of who wins.  Nevertheless, we remain committed to our belief that when markets will correct is not knowable in advance.  Rather, we will take advantage of any selloffs to purchase more stocks when on sale.

'Tis the Season!

‘Tis the Season for – year end reminders

As we close out 2023 and look forward (with optimism!) to 2024, we would like to remind you of several “housekeeping things” regarding your finances:

The clock is running out on a couple of items that need to be taken care of by 31 December:

1)     ROTH Conversions – if this makes sense for your 2023 tax situation.

2)     Required Minimum Distributions (RMD’s) from your IRA’s - for those 73 or older OR if you’re the beneficiary of an Inherited IRA.

3)     End of year contributions to IRA’s (ROTH or Tax Deferred) – while you have until 15 April 2023 to make these contributions for 2023, it’s time to start thinking about your 2023 contributions (if you’re eligible).

If you have questions about any of the above, please give us a call or shoot us an email.  We’d be happy to help you figure out what makes sense for you.

‘Tis the season for – hucksters and scams

Not a very festive topic for a holiday newsletter, but we feel the need to remind you of something you’re well aware of:  nefarious folks don’t take the holidays off! 

The ever-changing world of technology creates ever-changing opportunities to get ripped off.  For example, AI (Artificial Intelligence) now makes it possible to mimic a person’s voice after capturing a very short audio clip (3 seconds?).  So, if you get a phone call from a sobbing relative (or an earnest investment advisor) asking you to wire them money – and it sounds exactly like your sobbing relative (or your earnest investment advisor) – let them know you will call them back.  Be sure you’re talking to someone you know by initiating a call with a trusted phone number.  If you’re unsure, verify these types of requests by calling someone else related to the “original” caller – e.g. another relative, a supervisor, etc.

Here is a list of the more common scams out there – take time to familiarize yourself with these and be careful out there!

https://www.experian.com/blogs/ask-experian/the-latest-scams-you-need-to-aware-of/

As always, we’re here to help in any way we can.  Please give us a call or shoot us an email with your questions or concerns. 

Merry Christmas and Happy New Year

Joel & Troy  

Joel Nance, CFP®                      Troy Williamson, RICP®/Financial Planner 

Happy Fall Ya'll

The Albuquerque International Balloon Fiesta has come and gone which means we’re officially into the fall season.  After a prolonged, hot summer, the cooler weather and shorter days are a welcome relief.

The recent increase in interest rates isn’t all bad news.  There are now several places you can park your money, other than the ridiculously low rate savings accounts offered by most banks and credit unions, that will earn you significantly more interest.  With minimal effort you can find online savings or money market accounts offering between 4.2% and 5.25% and still have access to your money without penalties for withdrawing your money (like CD’s).

There are several places you can go to shop high-yield savings and money market accounts.  One of our favorite resources is Kiplinger Personal Finance.  Their most recent information on high-yield savings accounts can be found here:  https://www.kiplinger.com/personal-finance/savings-accounts/best-no-fee-high-yield-savings-rates

Another good resource is NerdWallet.  Find a summary of their research on money market accounts here:  https://www.nerdwallet.com/best/banking/money-market-accounts

Regardless of what decision you make about a specific savings or money market account, remember the key to building wealth is less about the rate your money is earning and more about the consistent practice of saving.  Rates matter little if you’re not putting anything away!  We suggest setting up an automatic withdrawal from your paycheck to send a specified amount to savings every month . . . and then forgetting about it for a while.  The best tool for building savings, is to consistently save!

As always, we’re here to help in any way we can.  Please give us a call or shoot us an email with your questions or concerns.

Joel & Troy 

Joel Nance, CFP®                      Troy Williamson, RICP®/Financial Planner 

Scram Scam(mers) - 5 September 2023

If you haven’t been scammed yet, chances are good you know someone that has.  These days it seems that everyone has a “scammed” story. According to Federal Trade Commission data, consumers reported losing nearly $8.8 billion (with a “b”) to fraud in 2022.  That’s an increase of over 30 percent from 2021.  Of that number, more than $3.8 billion was lost to investment scams . . . more than any other area in 2022.  That hits close to home.  FYI, second place belongs to romance scams.

Senior citizens are most frequently the target of scammers.  Seniors lose more than $3 billion each year.  Targeted seniors suffer an average loss of $34,200!  That’s a lot of money!

As practitioners in a field that has a rather tainted reputation, we’re very sensitive to financial scams.  It is our desire to not only be above board, but to help you recognize a potential scam before it’s too late.

In general –

• If it doesn’t “feel” right, it’s probably not.

• NEVER give your personal/financial information to someone who is pressuring you.  Better to lose out on a good deal than risk being scammed.

• If someone calls you that you do not know, do not assume they are who they say they are.  Avoid giving any information in these cases.

• The IRS does not call people for balances due.  The Social Security Administration does not call you if there is a problem with your account. They (like the IRS) will mail a letter.

• If you’re not sure, put off the purchase or donation until you can do more research.  Run it by a family member, friend, or trusted financial planner.  Especially if you’re struggling emotionally (e.g., depressed or lonely).

• Check your bank balance and credit card accounts frequently.  If you see charges you don’t recognize, call your bank or credit card company immediately.

• Familiarize yourself with the latest, most frequently used scams.

Below are links to two excellent articles that we recommend you read to get current with the latest scams. 

https://www.experian.com/blogs/ask-experian/the-latest-scams-you-need-to-aware-of/

https://www.aarp.org/money/scams-fraud/info-2023/top-scammer-tactics-2023.html

As always, we’re here to help in any way we can.  Please give us a call or shoot us an email with your questions or concerns.

Joel & Troy 

Joel Nance, CFP®                      Troy Williamson, RICP®/Financial Planner 

FTC Data:

https://www.ftc.gov/news-events/news/press-releases/2023/02/new-ftc-data-show-consumers-reported-losing-nearly-88-billion-scams-2022#:~:text=Newly%20released%20Federal%20Trade%20Commission%20data%20shows%20that,than%20%243.8%20billion%E2%80%94than%20any%20other%20category%20in%202022.

End of Year Ponderings - 12 December 2022

End of Year Ponderings

As we move into a new year, it’s common to develop a list of things that we’re going to “do better”.  The calendar change often gives us that extra push to genuinely change things.  Why not make the most of your financial resources in 2023?

 Things to consider as the year comes to a close:

1.     Revisit your savings rate – can you increase your deferrals into a 401k or make larger monthly contributions to your Roth IRA?  Are you ready to begin buying I Series Savings Bonds?

2.     Are you paying for subscriptions that you don’t need?  It’s easy to build up automatic payments that no longer make sense.  Look through your monthly credit card statement or bank statement to find them.

3.     Check your costs for internet, cell phone, and streaming services.  Internet providers may lower your costs with just a phone call.   Are you using all the streaming services you pay for?

4.     Want to track your spending this year?  We have software that makes it very easy to see your spending by category.  Let us know if we can help with this.

5.     Remember to find a good place to start compiling the tax documents you will begin receiving soon.

If you need help thinking through any of the above, we’re here to help.  Just give us a call or shoot us an email and we’ll set up a time to meet.

TruePath – Growing into the New Year

TruePath is growing the number of people we serve and the services we offer.  In addition to financial planning and asset management, we continue to build expertise in tax planning and preparation.  Troy has also completed the Dave Ramsey Financial Coach Certification.  Please keep us in mind if you talk to friends or family who need any of those services.

If we can help you end this year or start the next more effectively, we’d love to help.  May your holiday season be full of faith, family, friends, and joy!  God’s Peace!

Joel & Troy 

PS - If you do not want to receive this monthly newsletter, please reply with "Unsubscribe" in the subject line. 

'Tis the Season! - 4 November 2022

How happy were you this morning when you looked outside and saw a dusting of snow?  I was STOKED!  I LOVE the fall and winter months – cooler temperatures, changing leaves, a return to real time, pheasant season, ski season, and yes, the holidays.  

I do, however, have one large asterisk on the season revealing my inner Scrooge.  **Tis the most, wonderful time of the year . . . . to go into serious debt!  

Not to throw cold water into your hot chocolate, but many folks absolutely lose control of their spending during November and December, creating a hole that they spend the next 10 months trying to dig out of before they do it all again.  Nothing ruins the holiday season more than spending money you don’t have in the name of the Christmas spirit.  (Bah Humbug!)   

Below are some suggestions and an article that you might find helpful in creating a more healthful financial approach to this holiday season.  

Suggestions  

1. Have a spending plan – it’s not too late to sit down and plan what you can spend and how you want to spend it.  

2. Focus on what matters – Remember that the holidays are about spending time with family and friends, and it doesn’t cost much to get together for a meal and some flag football or a hike.  

3. Be thoughtful – and I don’t mean give everyone you know a gift in the name of “being thoughtful”.  Think about the gifts you give and why you’re giving them.  Don’t give gifts or spend out of guilt or obligation.  If you don’t have it, you don’t have it.  There are lots of inexpensive and meaningful ways to let folks you know that you’re thinking of them. 

Reading Suggestion 

Here is a great article from the folks at the Financial Planning Association (FPA) about holiday spending: 

https://www.plannersearch.org/financial-planning/9-ways-to-keep-holiday-spending-under-control

In summary, be careful out there!  Don’t throw a year’s worth of work away in four or five weeks trying to meet the expectations of others.  It is possible to enjoy the holidays without a sense of impending doom for the next 10 months.  

Please let us know if you need our help or if you have any questions - 

Joel & Troy 

Glass half full? - 10 October 2022

If you’re a glass-half-full kind of person, it’s been difficult, of late, to maintain optimism when it comes to our financial markets.  The current sell off has gone on . . .and on . . . and on.  Or so it seems. 

Well, we think there is reason to hang on to your optimism.  As you will read in the following article, history shows that serious market declines are often followed by serious market bounce backs.  But don’t take our word for it, take a minute or two and see for yourself: 

History Shows That Stock Gains Can Add Up after Big Declines | Dimensional Fund Advisors 

The basis for these bounce backs is the fact that while investors are constantly re-evaluating companies, most businesses are still delivering solid earnings.  While the markets may be down 20%, earnings reports remain up across many sectors.  And it’s all about earnings. 

Remember, it’s a long game – let’s stick with our plan.  When it comes to the markets, the long game is undefeated!

Please let us know if you need our help or if you have any questions -

Joel & Troy

The Side Hustle - 6 September 2022

Last month we sent some suggestions about how you might free up some money in your budget by cutting costs.  As promised, this month we want to look at option #2 for creating some breathing room - the side hustle.

There are numerous web sites available to you - just Google "Earn extra cash" or some such and you'll have more suggestions about ways to make extra money than time to read them all.  And be careful . . . especially if "they" want you to send them "money up front" . . .

Here are our top 20 favorite side hustles - 

• Sell stuff you don't use any more (old dvds, records, clothes, furniture, tools, recreation equipment, etc.) on Facebook Marketplace or NextDoor or Craig's List - again, be careful about giving out your personal information.

• Tutor online

• Drive for Uber or Lyft

• Deliver stuff after work - food, groceries, Amazon, etc.

• Become a dog walker - (Wag or Rover or Bark or ????)

• Babysit

• Rent your car - TURO

• Apply to be a movie extra (Albuquerque is a good place for this!)

• Sell old phones/electronics (Swappa and Gazelle)

• Rent out your home or a room (Airbnb)

• Work as a handy person and put things together for people

• Take online surveys

• Bake or prepare meals

• Edit or copywrite work for others

• Housesit

• Write online reviews

• Become a virtual assistant

• Officiate youth athletics - basketball, soccer, football, baseball, volleyball, etc.  Officials are in short supply!

• Earn more interest on your savings account - check out NerdWallet.com for the highest rates available.

• Save all your $1 or $5 bills or coins that you receive as change.

If you cut costs where you can (last month's newsletter) and you earn a little extra cash on the side, you'll be surprised at how quickly things add up.

One (or two) more things -

1. We've just completely revamped our web site - www.truepathfp.com  Check it out!  

   If you know someone who might benefit from our services, please send them a link to our web site with a short note about how much you like us!

1. Speaking about how much you like us 🙂. . . it would be helpful to us if you would write a short blurb (one or two sentences) about your positive experience with TruePath Financial Planning and send it our way.  The governing bodies for Financial Planners (SEC and FINRA) now allow us to post client testimonials.  We promise NOT to identify you if you want to remain anonymous.

Let us know if you need our help -

Joel & Troy

Ways to Save $$ - 4 August 2022

There seems to be some debate among U.S. economists and policy makers about what to call our current economic situation.  While the experts mince words, inflation continues to spike and our hard-earned dollars buy less today than they did a year ago.  That reality is putting the squeeze on most of our budgets.  

 The answer?  There are really only two options:  make more or spend less (okay, three options - you can do both).

 We will address the "make more" side of the equation next month.  For now, let's talk about how you might get some breathing room in your family's budget by spending less.

 If you Google "Ways to Save Money" you will find more videos and blog posts than you can possibly take in.  The posts we're familiar with all have some common, cost saving methods that are summarized below.  One of our favorite "money" sites is NerdWallet; here is what they have to say about saving money:

How to Save Money: 22 Proven Ways - NerdWallet

Save money by using an automated tool or app, getting discounts on entertainment, lowering your cell phone bill and more.

And here is our "top ten" list of money saving tips, gleaned from several websites:

1. Shop for a cheaper cell phone plan. They're out there and the cheaper plans are utilizing the same networks as the expensive ones.

2. Re-evaluate and shop your monthly subscriptions - TV, Internet, Netflix, Disney +, Amazon Prime, Gym/Health Clubs, etc. List your monthly costs and total them - you may be shocked! Cancel the ones you don't utilize and find cheaper versions of what you do utilize.

3. Plan your meals a week at a time - eat at home more and eat out less. Planning meals reduces your number of "Ah, let's just go out . . ." impulses.

4. Plan trips to the grocery store and stick to your list. Again, limit your impulse purchases. And don't forget the coupons!

5. Limit out of home entertainment options - movies and that wonderful popcorn add up.

6. Delay major purchases for 30 days.

7. Drive less and walk more.

8. Automate deposits into your savings accounts so you never "see" that money.

9. Restrict and track your online purchases. It's WAY too easy to spend money online - one click and "POOF" - money gone!

10. Last but not least, get rid of your high interest credit card debt as soon as possible.

Nothing on this list is easy.  Cutting costs takes effort, but you'll find it worth your time and energy.

One more thing -

 You may have noticed that you're not receiving a monthly summary of your investment performance from BlueLeaf any longer.  EMoney, a financial planning software we're making available to our clients, provides investment summaries and much more.   

If you're interested in a weekly summary of your finances, please reach out to us and we'll help you access this valuable tool at no extra cost. 

As always, let us know if you have any questions or if there's anything we can do to help.

Joel & Troy

Credit Cards - 6 July 2022

One of the more controversial topics among financial planners is the use of credit cards, especially if you're just getting started with a budget.  Some very well-known financial advisors encourage people who are struggling to get control of their finances to steer clear of credit cards.  Others feel that it's possible to use credit cards wisely in different situations.  

Our stance on credit cards?  IF you are in a position to pay off your credit card balance every month (and you're disciplined about doing so), then credit cards are a tool that can bring definite benefits.  But even one month of interest on an outstanding credit card bill can be crippling.  So do your homework before signing up . . . . 

Here is some good information for deciding whether or not you should use credit cards:

Pros, cons of using credit cards for everyday purchases

And IF you decide that credit cards can be a financial tool for you, look here to help you decide which credit card might be best for you:

Best Credit Cards of July 2022

Whatever you decide, take your time and carefully consider all the ramifications of having that little slice of plastic in your pocket! 

And please let us know if you have any questions.  

Joel and Troy

Series I Savings Bonds - 1 June 2022

Finding a guaranteed return worth getting excited about is tough to find these days.  One place you might want to look is the Series I Savings Bonds.

 The short story:

• Rate of return is tied to the rate of inflation.

• You are limited to $10,000/person/year.

• These can't be held in an IRA.

• We can't purchase these for you, you have to go to the website below and purchase them yourself.

General information about Series I Savings Bonds can be found here -

To set up an account and purchase Series I Savings Bonds, go here -

Please let us know if you have any questions.  

Joel and Troy