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4th Quarter 2023

January 10, 2024

Inside Financial Connections 

Newsletter

      • ADDING A SECURITY WORD TO PROTECT YOUR IDENTITY
      • DEPOSIT ENVELOPES FOR RETIREMENT PLAN CONTRIBUTIONS
      • HOLIDAY DONATIONS
        • BRIAN GOES TO ROME
        • CONGRATULATIONS TO FLAVIA
        • SOME OF THE ACTIVITIES INFLUENCING MARKETS IN 2023
        • FORMS 1099 AND 1099-R FOR 2023
        • DECIDING TO LIVE TOGETHER

ADDING A SECURITY WORD TO PROTECT YOUR IDENTITY

In an effort to better protect your identity, we wanted to offer you the option of providing Financial Connections with a password. Everyone wants to stay ahead of the criminals but with Artificial Intelligence added to the mix, it gets harder and harder.

Therefore, if you would like to have a security word, (your choice) that identifies you as a client with us, please give us a call so we can enter it in your file. Fortunately, at least one or two of our staff knows your voice but we can’t always count on that.

Please don’t hesitate to call if you’d like to talk about it.

DEPOSIT ENVELOPES FOR RETIREMENT PLAN CONTRIBUTIONS

We’re sorry to keep comparing how business was conducted with TD Ameritrade and now Schwab but it can’t be helped. With TD Ameritrade, we had deposit envelopes at the office. When clients requested an envelope, we would forward it along with more personalized instructions.

Schwab does not want to send deposit envelopes to Financial Connections but directly to the client’s address of record with a minimum of five envelopes.

We’ve found a workaround. Financial Connections has a Schwab account. We ordered 50 deposit envelopes to be delivered to the address of record – our office.  We anticipate delivery in the next 7-10 business days.

If you need to deposit a check in your retirement account, please let us know so we can send a deposit envelope with instructions and forms, if needed.

HOLIDAY DONATIONS


We are pleased that the participation rate increased to 72% from 65% in 2022.

BRIAN GOES TO ROME

Brian’s son, Robert, is in the Archbishop Riordan High School Marching Band. They were invited to perform in Rome, Italy. While there, visits to Frescati (where they also performed), Florence, and the Vatican took place. Brian and his wife, Jen, were chaperones. Lucky Brian and Jen having to check them at curfew and wake-up times.

CONGRATULATIONS TO FLAVIA

Flavia completed the program and passed the eight-hour exam to become a Certified Financial Planner™ professional.

SOME OF THE ACTIVITIES INFLUENCING THE MARKETS IN 2023

According to Tyler Cowen of Bloomberg News, 85% of economists anticipated a recession in 2023. Even Federal Reserve Chair Jerome Powell was worried in March last year that in order to reduce inflation the offset might incur major job losses.

None of it came to pass. On December 5 in Mexico City, Treasury Secretary Janet Yellen said, “Economists who predicted that high U.S. unemployment would be needed to tame inflation ‘are eating their words’ as the economy experiences little weakness in the labor market and consumer demand with prices moderating.”

Issues that supported a good economy in 2023 were:

  • Inflation last year was 3.2%, down from 8% in 2022 (www.statista.com)
  •  Artificial Intelligence (AI) became the latest “innovation” driving stock returns
  • The S&P 500 was dominated by the Magnificent 7 (Apple, Microsoft, Amazon, Nvidia, Alphabet, Meta Platforms and Tesla). According to Forbes, these 7 companies accounted for 60% of the index returns. The other 493 companies underperformed
  • Estimated economic growth (Gross Domestic Product or GDP) was 2.7% last year compared to 0.7% the year before*
  • Unemployment is under 4% for the 25th straight month – the longest streak since the 1960s*
  • Labor force participation for those age 18 – 64 is at its highest level since 2009*

It is unfortunate most Americans don’t feel confident in the economy. According to the Survey of Consumers conducted by the University of Michigan, the December 2023 confidence number was 69.7, up 16.6% over the December 2022 but well below the 2019 level of 91.6.

*Stats from JP Morgan Chief Global Strategist, David Kelly’s article “Balance Sheets and Resolutions”

ALERT: Forms 1099 and 1099-R for 2023

 

You will be getting one from TD Ameritrade and one from Schwab. We also noticed that the December Schwab statements do not include the Required Minimum Distribution information that was applicable during the first nine months of the year at TD Ameritrade. If you have questions, please contact us.

DECIDING TO LIVE TOGETHER

One of the major topics that needs to be discussed is how will we handle our finances? There is no right or wrong way. Just as one partner may like jazz and the other disco, how each person feels about money can be very different and should be explored.
As with any relationship, communication is one of the keys to success. Initial conversations might include:

  • Each person makes a list of their spending and reviewing how it changes living together
  • How similar are your spending habits
  • Are there expenses that apply to one but not the other? How will that be handled?
  • What can each person afford if disparate assets/income?
  • How much debt is there?
  • A monthly budget might be handy

We all come with our own perspective about money, usually formed when we are young within the family unit. A good understanding of each person’s views on money can go a long way to keeping stress low. There are a number of dos and don’ts that can be found on the internet to guide a couple over the financial and legal terrain.

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