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1st Quarter 2022

April 12, 2022

Inside Financial Connections Newsletter


Our most recent disclosure statements (ADV Part 2A, 2B and 3) are available from your portal along with your most recent investment reports. If you would like to discuss your portfolio, please don’t hesitate to contact us. The major change – a revision of our financial planning offerings.


Comic about 2Factor Authentication

Rhymes With Orange ©2022 RWO Studios, Dist by King Feathers Syndicate, Inc.

We don’t like it either but in order to keep confidential information safe, we need to use it. To give you a flavor of how it works at the office – each of our cloud-based software products are set for two-factor authentication. Each of us had to provide our cell phone number to the vendor.

Every time we login to perform an activity, we receive an authentication code. Then to add insult to injury, if we aren’t actively using the software, it logs us off automatically. And AGAIN, we login with two-factor authentication.

So, if you happen to walk down our hall and hear someone grumbling, you know why!

In all seriousness, the bad guys are everywhere and any step you can take to preserve your information, including using two-factor authentication, is time-consuming but worthwhile.

Jill saw the above cartoon in the newspaper and burst out laughing for how true it is. She was able to obtain rights to reprint it in the newsletter. We hope it provides you with a chuckle.


This was an unusual quarter for the stock and bond market. Normally, bonds operate as a cushion when stocks go down. That did not occur this quarter, largely because of inflation and the rise of interest rates*.

      • Wilshire 500 (Total Market Index) lost 6.2%

    • EAFE (broad based international index) was down 6.6%
    • European stocks down 11.3%
    • Emerging Market stocks down 7.3%
    • US Aggregate Bond Index was down 5.9%

*Source Morningstar


Financial Connections offers services to single people and unmarried couples. We have written previously and given webinars on planning for these communities.

USA Facts offered some recent insights based on the Census Bureau numbers. We thought it would be interesting to share.

  • Last year 47.3% of households were married compared to 78% in 1949
  • Last year 11% of the households were singles compared to 3.8% in 1960

Couples are delaying marriage. In 2019, men married at just over 30 and women over 28. This compares to just over 22 for men and 20 for women in 1956.

Three out of 10 women have never married as of 2021.

For the first time, same-sex marriage was tabulated as part of the 2020 census. Unfortunately, that information hasn’t been published.


There is no shortage of articles discussing the high inflation. Many of the articles, including previous ones written in our newsletter, dealt with the supply chain shortage, labor shortage and increased demand. Those are still valid.

However, are there companies just taking advantage of the opportunity to raise prices to increase their profits? Megan Leonhardt’s of Fortune magazine reviewed this hypothesis – “is inflation really this bad, or are greedy companies profiting off the pandemic?”

The answer is yes. While high demand, low supply and worker shortage is valid, so are some outsized increases.  Fortune reviewed the profit margins of food and consumer goods manufactures that are in the Fortune 500. They found:

  • Of the 28 companies in this category, half now have higher profit margins than pre-pandemic levels.
  • JBS Foods, Kellogg, Kimberly-Clark, and Tyson all raised their prices in excess of the inflation rate.
  • Molson Coors and Proctor & Gamble profits more than doubled from pre-pandemic levels.

Some price increases are set along the supply chain – at wholesalers and at the store level.

According to Bloomberg Businessweek, the corporate profits for all U.S. companies combined was announced March 31. The profits were up 35% in 2021, the most since 1950.

The Good: Wages are going up, unemployment is low and, according to the Census Bureau, consumer balance sheets are the best they have been in years.

The question for us as consumers is: Will we continue to pay the increased prices or send the message enough is enough? Even when inflation is reduced, do you really think prices will go down?


Sometimes people become frozen and just can’t decide. They may be afraid of making the wrong decision or dither over what to do. We regularly meet potential clients who hold a lot of cash. They are the first to say I have too much cash then follow up saying but I didn’t know what to do with it.

Company retirement plans

We think it is unwise not to participate in a company retirement plan such as a 401(k).

  • Contributing to a pre-tax retirement plan reduces your taxable income.
  • You may miss “free money.” If the company has a match, you miss out. The only thing you would have to do is participate in the plan. It’s a bargain.
  • Make sure to invest the money in the 401(k) plan so it has an opportunity to grow over time. Don’t leave it in cash.

Non-Retirement Savings Plan

We think it is a good idea to have different types of accounts. Retirement plans as well as non-retirement (taxable) accounts. And, assuming it is for long-term growth, have it invested, not sitting in cash.

If you need money, you may need to sell a security to free up cash. There might be a tax on the sale, but usually at a lower tax rate (capital gains).

Alternatively, money withdrawn from a retirement plan is taxed as ordinary income.

The saving hierarchy we suggest is:

  • Have an emergency fund – usually it should be in cash and cover three to nine months of expenses, depending on your financial situation.
  • Save in the company retirement plan.
  • If you still have money available, open a brokerage/taxable account. You can have a certain dollar amount transferred each paycheck – sometimes it is easier than writing a check to the brokerage account. If you get a raise, consider “sharing” it with your brokerage account.

Holding cash due to inaction usually is harmful down the road. While the market does move up and down, over time it has moved up. You want to have some growth to, at a minimum, stay ahead of inflation.


Sometimes it is just plain hard to smile. We look at the Russian aggression, the staggering number of refugees who have lost everything, inflation rising, and interest rates climbing to name just a few.

However, there is only so much we can control. It might help to set some short-term goals – perhaps a special vacation. You can continue along your path to meet long-term goals.

We can’t control the markets’ behavior day in and day out. We can’t control the Fed, the economy or global affairs. We think it is important to look for positive activities and humor until it all settles down, assuming it does.

Sometimes a walk can help our mood. In Jill’s case, while this may seem strange, she is looking forward to her hip replacement scheduled for April. Assuming all goes well, she’ll get to walk again without pain. It’s the little things.



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