Investors' Insights and Market Updates

Join the Portfolio Team as they dive into the recent housing data, interest rates, and historical data surrounding market performance in election years.   Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Deposits vs. Loans first appeared on Fi Plan Partners.

The Impact of Inflation on Thanksgiving Every year, we review this data, and it has been rough for the last few years. It’s been a long time since we’ve been able to talk about consumer prices coming down. From 2020, the average consumer prices are up over 20%. However, what we’re going to focus on is just the Thanksgiving dinner part. From 2022 to 2023, the average price of a Thanksgiving dinner has come down from $64 to just over $61, a nice drop in prices. Hopefully, as everyone’s been preparing to sit down with the family, they notice some nice savings. A large percentage of that drop came from the price of turkey. Across the country, a 16-pound turkey will now cost you about $1.61 less. That should be a welcome reprieve right before the Christmas buying season. While we are down from last year, we’re still well above the 2019 level, so more work still needs to be done. However, it has to start somewhere, and we will take the drops where we can get them. Pumpkin pie, a veggie tray, rolls, and sweet potatoes are all higher this year, with everything else being lower.   Market Performance After a year of a very bifurcated market where only a handful of stocks were constantly going up, we are finally starting to see breadth in the market, which we have seen for three weeks. The market has broken through resistance, a welcomed event after failed rally attempts throughout the year. More importantly, we have finally seen a few very strong days with breadth. On November 2nd, we had an eight-to-one day; last Tuesday, we saw a fourteen-to-one day. These are days where there have been a lot more stocks up than down. We look for these types of days to see if the market can sustain strength and rallies. We are hoping we can continue this rally through Thanksgiving week.   Government Shutdown We have already averted a government shutdown once, and from what we can tell, it seems like we’re going to avert it again, at least through the rest of this year. The House and the Senate passed a continuing budget resolution. Portions of that will extend through January 19th, 2024, with the remaining parts extending through February 2nd, 2024. Instead of having everything lumped together, they split into pieces, which might make it easier to get something more permanent passed in the upcoming year.     Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Thankful Markets first appeared on Fi Plan Partners.

Are higher interest rates helping or hurting Corporate America? Watch this week’s educational episode to hear Trey Booth go over the details related to this topic.     Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post The Impact of Interest Rates on Corporate America first appeared on Fi Plan Partners.

In this episode, the Portfolio Team goes over the data they look at on an ongoing basis to keep a pulse on the economy and the markets. Watch the full episode and hear what they have to say about interest rates, inflation, and other market-moving topics.   Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Inflation High, Water Levels Low first appeared on Fi Plan Partners.

We are coming off a great week for markets, and in this episode, the Portfolio Team goes over the details behind the positivity and tells what this could mean going forward.   Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor. Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.The post Market Momentum? first appeared on Fi Plan Partners.

We have an important week ahead as the Fed will be in the spotlight. In this week’s episode, the Portfolio Team gives an update on our recession watch checklist that clients have been asking about.     Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post On Fed and Recession Watch first appeared on Fi Plan Partners.

At Fi Plan Partners, we take great pride in working with business owners to help them build, grow, and sell their businesses. Our goal is to help business owners build valuable companies, have stronger personal financial plans, and align their personal goals. In this episode, you will hear from Bobby Norman, CFP®, AIF®, CEPA®, Managing Director of Fi Plan Partners. He goes over his Certified Exit Planning Advisor designation and how it has helped him offer specialized services to our business owner clients, as well as a comprehensive strategy around their business and personal financial planning.   Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor. Fi Plan Partners and LPL Financial do not offer business valuation services.The post Exit Strategies for Your Business first appeared on Fi Plan Partners.

In this week’s episode, the Portfolio Team delves into the impact of spiking interest rates, the historical relevance of pre-election years, and the potential effects of the upcoming GDP report on economic forecasts.   Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Watching Spikes Carefully first appeared on Fi Plan Partners.

Headwinds The market has a lot of headwinds and uncertainty right now with a conflict in Israel, questions about what the Federal Reserve will do, and a potential government shutdown next month. Still, one bright spot that is a key driver of equity markets is corporate earnings. Third quarter earnings season started strong last week, with some big banks reporting better-than-expected earnings results. Analysts expect S&P 500 companies to report back-to-back quarters of earnings growth, which is following an earnings recession seen earlier in the year. Analysts are also calling for earnings to continue to grow next year. We are looking to see if profit margins improve for the second quarter. As profit margins fell earlier in the year, we’ve seen many corporations improve efficiency ratios and pass higher costs on to a strong consumer in recent months, leading to higher profits, which has been a pleasant surprise for corporations. While stocks move on earnings reports, the profit margin surprises make company stocks move. As earnings season kicks into gear this week, strong corporate earnings and profits can help the market surpass all the current headwinds.   International Issues Our thoughts and prayers are with everyone involved in the current situation with Israel. We wanted to cover what that situation means for the US regarding markets and financials. In this episode, you can see a chart that shows how stocks usually react to geopolitical events. Often, these events happen, and people think they need to sell. One of the interesting things is that this was only the fifth time that the market was up when a major event happened. This time, the market was up 0.3%. It wasn’t up a tremendous amount, but those previous four times where the market was up the day of the event, the max drawdown was 1.5%. On a market scope, it seems to have very little impact. The average drawdown for all these market shock events is 4.7%, which is nothing crazy. Another chart in this episode shows how markets react during recessionary and non-recessionary times. This is something that is hard to translate today. Are we going into a recession? Have we already had a recession?   Oil Prices How will the Israel-Hamas war affect oil prices? The Middle East is a huge oil supplier, and it’s very interesting to see how crude oil could react. On a chart shown in this episode, you will see there have been some ups and downs. However, there have been more ups, especially if you look at the specific Middle East events like the 1979 Iranian Revolution and the 1973 Oil Embargo. All these events, for the most part, resulted in higher oil prices. We will see how this affects the consumer if oil prices start to be elevated again. We saw a huge pop on day one of the war. The next 2-3 weeks will be very important as we see if the market can focus on what’s hopefully good corporate earnings and overpower all of what’s going on geopolitically overseas.     Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Earnings vs. Geopolitical Events first appeared on Fi Plan Partners.

Join Jason Hatley for this week’s educational episode, where he reviews the latest updates from Secure Act 2.0 that will go into effect starting in 2025. He goes over the details of the new rules including the creation of a retirement savings lost and found database, new increased catch-up limits, and more. Watch this episode and get up to speed on how these changes could affect you.     Jason Hatley, CFP®, CPA, PFS Senior Vice President Financial Planning Manager Email Jason Hatley here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Secure Act 2.0: Provisions Effective in 2025 and Beyond first appeared on Fi Plan Partners.

In the latest episode, the Portfolio Team dives into the ongoing issues in Israel and the potential impacts on the US markets. With tensions rising and uncertainty looming, our team provides valuable insights and analysis to keep our listeners informed. Additionally, they provide an update on the current state of the job market. Watch this episode to learn more.   Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Ashley Page, JD, MBA Senior Vice President Wealth Consultant Email Ashley Page here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Global Tensions first appeared on Fi Plan Partners.

Volatile September Coming into the month of September, we talked about how it’s usually the most volatile month of the year, and history repeated itself as the S&P 500 was down over 5% for the month. One of the biggest drivers of the volatility in September was due to rising interest rates as the 10-year treasury yield rose from 4.1% to end the month up to 4.57%. The rise in yields occurred partly due to expectations that the Federal Reserve will keep rates higher for longer. So, while the fear around higher rates has spooked the markets in the near term, stocks and interest rates usually rise together over time. Interest rates and stock valuations tend to be inversely correlated. While that relationship tends to hold for shorter periods at elevated rates, the S&P 500 Index tends to rise throughout sustained periods of rising interest rates. Looking at rising rates from the early 1960s through this year, only three of the fourteen periods of rising rates led to lower stock returns. The return through these periods shows that the market has averaged 16.3%. So yes, rising rates lead to short-term volatility, but stocks and rates usually rise together over more extended periods. Even if rates stay high or go higher, it doesn’t mean stocks will stay down.   2007 vs. 2023 In this episode, Ty Miller shows a chart that maps out where we were in 2007 to where we are now. The year 2007 is relevant because that was the last time the 10-year Treasury yield was over 4.5%. We have come a long way since then. The S&P 500 was at a price of 1,541, and now it’s over 4,200. In the chart, you can see the similarities in oil, which was $87 a gallon and is now $91. In 2007, Bitcoin didn’t exist, of course. The largest weighting was Exxon, and now the largest stock is Apple. It’s always interesting to go back in history and see that we have made this big circle in terms of yields and what that looked like in 2007.   Government Shutdown We spent all weekend getting ready to talk about a government shutdown, and lo and behold, the unexpected averting of a shutdown has happened as the government was able to work out a deal. The headline we are seeing is saying that Congress has, for now, averted the shutdown. We think this is most likely a 45-day thing, at least. It could go longer, but it puts that hold on for 45 days at least. It was very unexpected as the odds of the Government shutdown were approaching a near certainty, but they were able to get a bipartisan package through. The legislation includes $16 billion of disaster aid, excluding border funding and Ukraine aid. We think the next step here is that Speaker McCarthy’s speakership will be a little challenged. Right now, that’s just speculation based on everything that has happened. Not everyone was for this deal, but enough people were to get it through. Typically, stocks are not correlated at all with government shutdowns. History has shown some up years and some down years during shutdowns. GDP growth has very little correlation as well. As far as that goes, we have a lot more up years than down years. Each government shutdown is a little different. Right now, we have many workers on strike, along with higher gasoline prices. Consumer aid is rolling off, and consumers are picking up on student loan payments. Typically, while looking at these things, while they are a lot of headline risk, the actual results don’t necessarily match the headline risk. So, that’s something to keep in mind.     Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor. Cryptocurrencies are not legal tender and are not government backed. Cryptocurrencies are non-traditional investments, resulting in a different tax treatment than currency. Federal, state or foreign governments may restrict the use and

We are excited to announce that LPL is rolling out new enhancements to your account statements aimed at providing you with even greater transparency and clarity. In this informative video, you will learn about the upcoming changes, including improved visuals, simplified language, and more detailed information about your investments. Watch the video now to discover what’s coming!   Adam Vansant, AIF®, BFA™ Senior Vice President of Operations & Advisory Services Wealth Consultant Email Adam Vansant here Sonja McGittigan Operations Specialist Email Sonja McGittigan here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Updates to Your LPL Statements first appeared on Fi Plan Partners.

Pre-Election Today, we have a chart to help us talk about pre-election years compared to 2023. They say that history doesn’t repeat itself, but it sure does rhyme, and it’s remarkable how, on the chart, it shows that every pre-election year average has lined up to be symmetrical. There was a big difference in March due to the bank failures where the government stepped in and helped, so it didn’t expand. But now we’re in this time where the trend has flatlined. Historically, it has stayed flat through November, before a Santa Claus rally near the end of November and into December. Again, there are no guarantees, and history doesn’t have to repeat itself, but we find it interesting when you see something like this. Eurozone Stocks Last week, we talked about how a government shutdown, which is looking more likely to happen on October 1st, usually doesn’t lead to a long-term downtrend in stocks. We had a client ask about adding more exposure to eurozone stocks when the US is in the middle of a shutdown, so we wanted to discuss that. While we are big believers in diversification across asset classes, sectors, and different markets, we wanted to show two charts of why we remain overweight to US markets and underweight eurozone markets. The first chart shown in this episode reveals the Global Purchasing Managers Composite Index. The PMI is an index that shows the direction of economic trends in the manufacturing and service sectors. It summarizes whether market conditions are expanding, staying the same, or contracting as viewed by purchasing managers. The purpose of the PMI is to provide information about current and future business conditions. A reading above 50 represents an expansion, and a reading under 50 symbolizes a contraction. The current PMI of the eurozone is 46.7, which reveals contraction. The current reading of US PMI is 50.2, which means expansion. The second chart in this episode shows earnings estimates trending up for the S&P 500 and earnings estimates trending down for the European index. Corporate earnings are a key market driver, and estimates look better in the US than in the European index. So, in summary, we are allocated heavily towards US markets even with the threat of a government shutdown because the US economy and corporate earnings estimates are trending better than the eurozone. The Federal Reserve The markets reacted negatively to what the Fed gave us on Wednesday last week, but why did the markets react that way? The Fed did exactly what we expected them to do when we talked on Monday’s vlog last week. We expected them not to take any action, and the Fed left rates exactly where they are. However, the market quickly fell off 2.8% to close the week. This is likely due to what the Fed said they would do going forward. The Federal Reserve, at each of their meetings, projects where they expect the Fed funds rate, which they directly control, to be next year and in the following few years. In their July meeting, they expected the average Fed funds rate to be 4.6% in 2024. In this most recent meeting, they increased that up to 5.1%. That’s effectively saying that there will be two more rate hikes, on average, between where we are today and where everyone expected us to be over 2024. That is a massive tightening without having to do a single thing, and the market immediately reacted with higher interest rates and lower stocks. Looking globally, the ECB didn’t imply higher rates; instead, they increased rates again, even though their economy is weakening. The European Central Bank hiked interest rates by 25 base points. This week, the Bank of England is expected to hike interest rates by another 25 base points as well. Our Fed is projecting strength while the European Central Bank and the Bank of England must continue to hike rates, even though they’re slowing. This is something that is concerning. The international market seems to be weakening, and the US appears to be holding up. We may be the cleanest house on a bad street, but as Thomas Sowell once said, there are no absolutes in economics; everything’s relative. So, there’s no absolute good here, but the US looks much stronger with our Fed being able to pause and project strength with the global central banks having to still actively try and weaken their economy. We’re watching this closely, especially with the markets watching and a major dip to close the week last week.   Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial

Join Jason Hatley for this week’s educational episode, where he reviews the latest updates from Secure Act 2.0 that will go into effect starting in 2024. He goes over the details of the new rules, including changes in SIMPLE IRA employer matching, the ability to roll over unused 529 plan funds, and more. Watch this episode and get up to speed on how these changes could affect you starting next year.   Jason Hatley, CFP®, CPA, PFS Senior Vice President Financial Planning Manager Email Jason Hatley here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Secure Act 2.0: Provisions Effective in 2024 first appeared on Fi Plan Partners.

Government Shutdowns We are watching news out of Washington D.C. this week for what is expected to be a few weeks of tough negotiations to try and avoid a government shutdown on October 1st. Negotiations are set to begin this week when both chambers of Congress are set to be in session for the first time since July. There is no doubt that investors will be watching negotiations closely for potential impacts on the market. We have been looking back in history to see what impact previous government shutdowns have had on the markets, and history says the market takes government shutdowns in stride. We looked at research into the past 20 government shutdowns since 1976 and the impact on markets and found that the market was almost exactly flat after adding all the stoppages together. While government shutdowns cause initial volatility, the market action has depended more on other factors like corporate earnings. When looking at the specific performance of certain government shutdowns that lasted longer, market performance hasn’t been impacted as much as investors might think. Even in the 2018/2019 standoff, the longest in history, the S&P 500 rose almost 8%. As always, we analyze historical market performance in preparing for events like government shutdowns, which will undoubtedly be a hot topic over the next two weeks. There are no guarantees, and every event is different, but history says the market takes shutdowns in stride.   Interest Rate Decision The Federal Reserve will meet this week and make their announcement about the current rate policy. The market fully expects no action and for the Fed Funds Rate to remain at a high-end level of 5.5%. The next meeting will be on November 1st. The Fed has spoken a lot about how they will be very data-dependent in their decisions. We’re at a critical inflection point where we’ve seen inflation bottom in July but increase in the last two inflation reports. Is this just an anomaly caused by potential increases in oil, or is this a trend that the Fed needs to keep an eye on? This is happening at a time when the data may stop due to a shutdown. When the government shuts down, most people don’t notice, and the reason for that is that the market doesn’t have an impact. Most people besides us don’t notice that government reports like inflation and jobs don’t come out during the shutdown. This time may be different, with the Fed noticing very much that the government is shut down. If that important CPI report that we are supposed to get in mid-October, or the jobs data in early October does not come out, what data will there be for them to make their very important interest rate decision? This is something the Federal Reserve will have to watch closely, which is why this is such an important pivot point. Our research partners, Strategas, looked over 2,000 years of economic history, and in those 2,000 years across 24 countries, they found 62 instances of higher prices or inflation. Of those 62 instances, only eight saw prices go up and then come back down and stay down. Every other instance, they saw prices rise, come down, and then back up again for at least a second, maybe even a third wave. The Federal Reserve wants to keep on that because they do not want that second wave to come. We saw prices come down, then saw a tiny hitch up. Does that hitch continue, and are we looking at a second wave? That’s something the Fed very much wants to keep from happening. If they don’t have the data to support that, what are they going to be relying their decision on? We’re going to watch this closely, and the markets will start watching very closely as we get close, not just to the next Fed meeting, but those traditional data releases.   Consumer Stress The Consumer Stress Indicator measures food at home, mortgage rates, and gasoline prices. They lump them all together and get a number. For this cycle, we peaked at 24 on the Consumer Stress Indicator, which is high. It’s come down steadily down to 14%. We’re starting to moderate that decline, but 14% is still about 40% higher than the indicator average throughout the 2010s. Right now, we’re at 14%, which is good. Do we continue to moderate back down to that 8% number or flatten out? That will be interesting to see since we have many headwinds that the consumer is facing. Gasoline prices are now positive year-over-year for the first time in seven months. At the beginning of the year, gas prices showed some substantial improvement for the consumer, but now they’re coming back up. The amount of workers on strike in the United States has gone up. We have many factors to consider when it comes to consumer stress. One interesting statistic that lumps in with the Consumer Stress Indicator is the chart in this video that shows Consumer Pain by city. Miami has consistently been at the top; however, Detroit overtook them at 10.7%. It will be interesting

Stay informed on the latest updates from Secure Act 2.0 with this week’s educational episode. In this episode, Jason Hatley breaks down some of the new rules, such as RMD age changes, and provides insights on how they could affect your Financial Blueprint.   Jason Hatley, CFP®, CPA, PFS Senior Vice President Financial Planning Manager Email Jason Hatley here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Secure Act 2.0: What’s New for 2023 first appeared on Fi Plan Partners.

Oil Rig Counts Last week marked the tenth consecutive week where the oil rig count in the US didn’t go up. In fact, it has pulled back. The total number of rigs in the US is now 106 off of its all-time high, but why is that important? We’ve seen an increase in the price of gas at the pump over the summer, and with that rig count continuing to fall, it makes it unlikely that US oil producers will be ramping up production to cause that price to fall. What we want to see happen often is when prices rise, which incentivizes production, which then eventually brings prices down. However, you need rigs to produce more oil. Seeing the pullback in the oil rig count is concerning that we may see gas prices continue to rise or at least stay at elevated levels. We see that flow through directly to the market when you compare consumer discretionary stocks to oil stocks. In the July CPI print, when inflation was at 3%, consumer stocks greatly outperformed energy stocks. Since then, oil prices have skyrocketed above $80 a barrel, and we’ve seen all that gain reverse. Is the market expecting consumers to pick between filling their gas tanks or purchasing discretionary goods? The market expects that consumers will have to choose to fill their gas tanks; therefore, we’re seeing consumer stocks go down. We are watching closely to see how this pullback in oil rigs bleeds through to consumer stocks and how that impacts the markets.     Volatile Markets We had some great feedback and conversations with viewers of the vlog last week, specifically tied to markets being historically volatile in September. September is traditionally the worst month for the markets, but every time period is different. We want to cover that intra-year pullbacks in the market are entirely normal and don’t necessarily mean the market will be down after September. So, while technical evidence supports the case for the potential for a longer-term bull market trend, investors should expect some pullbacks along the way. To show this, we share a chart in this episode that compares intra-year price performance and maximum pullbacks for the S&P 500. At a high level, the top row of the chart shows that even years with double-digit gains into August often experience sizable pullbacks over the remainder of the year. On the right of the first row, you can see that going back to 1950, the average pullback of the S&P 500 has been down 8.6%, but the average final return has been up 5.2%. To break down the data further, the quintile ranked the performance of the S&P 500 from December 31 to July 31 for each year going back to 1950. We then analyzed the corresponding average returns in the middle column and maximum pullbacks for the remainder of the year for each quintile group on the far-right column. As always, there are no guarantees; even good years have historically seen pullbacks at times throughout the year, and it is normal for the markets to experience. We use this data to take advantage of market pullbacks when opportunities present themselves.     Employment Report We got the August employment report a couple of weeks ago, and non-farm payrolls increased by 187,000, beating expectations. The education and health services were up due to schools starting back, as well as leisure and hospitality. We did have a decline in the truck transportation industry because one of the major players there dissolved, but overall, it was a solid report. One of the headlines that you’ll see that may be confusing is that the unemployment rate rose to 3.8% from 3.5%. All that gain in the unemployment rate was due to an increase in the labor force. The labor force is people actively looking for jobs or working. There were 736,000 more people who entered the labor force this past month. That’s a big deal because, since Covid, we’ve lacked in the labor force participation. We’ve had many people, for whatever reason, leave the workforce. It’s nice that this is our highest labor force participation since Covid. If you look back at what we’ve seen so far, year to date, one interesting point of the job market is that small businesses, which are businesses with under 500 employees, have made up 100% of the job growth year to date. Big businesses are pulling back from their employment, while small businesses are adding to it. That’s very interesting, but we’re seeing small business hiring slow down. We want to keep an eye on that because the IRS is starting to pull back on the business tax refunds they’re giving out, specifically for small businesses. They, of course, have the employee retention tax credit this year, but now the IRS is starting to take these claims more seriously. They are taking further steps to detect falsified claims to try and ensure everything’s legit to cut back on what they’re given out as they see this healthy job market that’s led

History of September Going back to 1950, September has historically been the worst month for the stock market and the only month of the year where both the average and median returns are negative. September also has the lowest positivity rate, meaning only 43.8% of the time is the market up in September. There’s much disagreement around why that is. There’s some thought that when people return from summer vacations, they want to right-size their portfolios; therefore, some trading goes on. There’s also the consideration that people use this time to get their taxes in order ahead of the New Year. There’s a lot of talk about consumer spending picking up as people take money out of the market to pay off any debts from vacation, school, and other things that might come up in the fourth quarter. So, whatever the reason is, it does seem to be consistent and produces lower-than-average returns. Now, this obviously isn’t a guarantee of what will happen, but it seems consistent and something we are watching.   Technology We continue to see the impact of higher interest rates on the market. One sector we want to talk about is the technology sector, which has been volatile over the past year. Historically, technology has been a sector that has underperformed in rising-rate environments. During the second half of last year and early this year, the technology sector exhibited a relatively strong inverse correlation to interest rates. Technology stocks traded down as interest rates increased, which was typical behavior in previous market patterns. However, the move in rates from the low threes to the low fours during May-July of this year (based on the 10-year U.S. Treasury yield) was uniquely accompanied by technology strength. So, we saw that technology showed strength despite rising rates due to the enthusiasm around Artificial Intelligence. But, as the enthusiasm around AI started to dissipate in August, we saw the tech sector underperform a bit as rate sensitivity returned. This scenario is one example of how unique the past 12 months have been in the market and how interest rates and artificial intelligence have changed certain aspects of the stock and bond markets. We think this will continue to cause overall market choppiness, especially in the tech sector, and will continue to keep an eye on it.   The Consumer The consumer makes up around two-thirds of the economy, so it is important to always pay attention to it. Back-to-school season is a great time to see how the consumers are doing. Around 53% of back-to-school shoppers plan on using debit cards this year compared to 45% last year. Credit card interest rates are up, so it’s interesting to see that many people are choosing to take money straight out of their bank account with a debit card instead of going with the higher interest rate of credit cards and then paying it off. Since January 2020, overall spending is up around 19.5%, especially in the entertainment, retail, and recreation space. Grocery and transportation are only 15% and 13% higher, below the overall average. We’ve talked a lot about inflation with gas and food prices, but overall, grocery and transportation aren’t up quite as much as some other sectors. It is interesting to see how the consumers are doing and adjusting to increased rates and life post-COVID.   Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post September Blues? first appeared on Fi Plan Partners.

Bonds Last week, we discussed how higher interest rates have been the leading cause of market volatility in recent weeks. However, this week, we want to talk about the benefits of higher rates. For the first time in four years, real yields from bonds are once again providing investors with a rate of return that outpaces inflation. We like to focus on real rates of return because it shows a bond’s actual return by subtracting inflation from a bond’s current yield. On August 18, the 10-year yield was 4.26%, which is above the 3.2% year-over-year inflation rate, according to the CPI report from July. That’s a real yield of 1.1% and a welcome change for bond investors. After four years of negative real yields, bonds are once again providing investors with a rate of return that outpaces the CPI. Bonds are essential to a diversified investment strategy, so we will continue to follow rates closely.   Debt For every receiver of higher interest rates, there is a payer of higher interest rates, and the federal government is the largest payer of interest in the world. A chart shown in this episode reveals the net interest over time versus the 10-year treasury. You will see that the red line, which is interest paid as a percent of government revenue, has spiked up to 14% of revenue in interest payments. That spike has happened in excess, higher in 10-year treasury yields. Why and how is that? It’s because, unlike the American consumer, the US government debt is heavily weighted towards short-term debt. Over 50% of US sovereign debt outstanding is for three years or shorter, and over 30% is less than a year. So, as interest rates have been going up, that directly impacts the US debt much quicker than US consumers. Over 90% of US mortgages have 30-year fixed rates. The US consumer is locked in long-term while the US government is not. As interest rates are spiking, we’re seeing that spike also occur. This really hits the road when debt servicing costs eclipse 14% of US government revenues. That causes the government to tighten its belt, cut spending, and find ways to reduce costs because that leaves less money after interest is paid. Interest paid is the first dollar out, leaving less money for everything else. You’ll probably start seeing a lot of talk of austerity and some tightening of budgets in areas.   Drugs A large healthcare component was part of the Inflation Reduction Act that passed over a year ago. The Biden Administration didn’t announce which drugs were built in for price caps when the law passed, and tomorrow, that announcement will be made. The ten drugs will have price caps going forward on what the drug companies can charge. The goal of that is to bring the cost of healthcare down. However, there’s the other side of the coin. Every dollar paid out for prescription drugs goes from somebody to a company. The cost then is incurred by these companies, and that’s not been priced in, so we’re about to see a political silly season. Even though these price controls haven’t even been announced yet, eight cases are already going through the works to challenge them. This will go into political facilities and the courts for the next few years. We’re going to watch this closely because it could have a negative impact of up to 8% a year in annual earnings on these companies, depending on which drugs are announced and what the prices are. This is something big we’re watching. Some of that belt-tightening we’ll likely see.   Driveways A popular saying in our industry is, “Housing punches above its weight for the economy.” Housing has done an excellent job of holding up our economy while some other factors have fallen back. We got July’s new home sales report, which was strong again. New single-family home sales increased 4.4%. Year-over-year, sales are up 31.5%, which is a big deal. Sales in July were specifically strong in the Midwest and the West. The median price of a new home sold was about $437,000. With the increase in sales, prices are starting to come down. Prices are down 8.7% from a year ago and down over 12% from last year’s peak. Supply is starting to catch up on the new home side, but we are still facing problems with the increase in interest rates. Assuming a 20% down payment on a new home, with the rise in mortgage rates from this year and last year, that’s a 29% increase in the monthly payment. You’re saving 12% on the home purchase but paying 29% more monthly. We need prices to decrease further. Supply is up 150% for new homes since 2022, which is huge. As you can imagine, the supply of existing homes is relatively light because 90% of people are locked into a 30-year fixed rate mortgage at a 3-4% rate, so not many people are looking to move and start paying 7.5% on mortgage rates.     Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell he

In this educational episode, Ty Miller takes a deep dive into inflation, stagflation, hyperinflation, and deflation. He explains what each of them means and how they impact the economy differently.   Don’t miss this enlightening discussion!   Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Understanding the Four Types of Inflation first appeared on Fi Plan Partners.

Choppy Conditions Major market indexes ended lower for the third straight week as the 10-year Treasury yield remained near a 16-year high. Investors believe the Fed will maintain a hawkish stance even with declining inflation. The S&P 500 was down 2.11% last week and is down 4.06% in the past month as the market has had trouble with mixed corporate earnings and higher yields. Energy and Healthcare, however, are in the green and are two sectors we have liked and continue to allocate funds into. We did get good news on retail earnings and a strong consumer, but the good reports were followed immediately by a cloudy outlook due to rising rates. The bottom line is that we will continue to see a choppy market until yields stabilize and we get better clarity from the Federal Reserve. Another headwind that the market is facing is seasonality. Going back to 1950, August and September have historically been two of the most challenging for the markets. Research shows that the average return for August has been flat, and the average return for September has been down 0.7%. So, higher yields and seasonality can be blamed for the market choppiness.   Consumer Data We often hear people asking about the Fed being stubborn when it comes to leaving rates elevated. In September, the Fed is expected to make another rate decision, and right now, the expectation is that they will pause. We don’t anticipate a cut in the foreseeable future. This has many people wondering when the Fed will start cutting rates. With the consumer data that we just got, along with wage growth, the job market, the housing market, etc., there are still many elements out there that the Fed is looking at that is causing them to be hesitant to cut rates. The retail sales report is one consumer data point they are keeping an eye on, showing a solid 0.7% increase for the month. The Amazon Prime Day we had back in July boosted a portion of that. On top of that, the job market and the housing market are also reports that the Fed watches. The Fed is continuing to keep an eye on inflation because historical data shows that it comes in waves. Usually, inflation doesn’t come down and stays down. We’ve come from 9% to 3%, but that doesn’t usually mean we see the end of inflation. Historically, there’s only been a 13% occurrence there that has happened. So, the Fed is looking at all these numbers, factoring in the reality that we may have another wave of inflation to hit us before it’s over. On average, the second wave started around 30 months after the first peak. This explains why the Fed is being stubborn when it comes to cutting rates and watching inflation.     Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Stubborn Markets first appeared on Fi Plan Partners.

Corporate Earnings In a world where the market has a lot of negative news and uncertainty to digest, it’s important to stay focused on one of the biggest drivers of stock price movement: corporate earnings. A chart in this episode reveals the percentage of corporations beating earnings estimates in the second quarter of 2019. Also, on the far-right side of the chart, you will see that 77% of corporations exceed expectations. That’s above the average of 76.7%. As a portfolio committee, we review this chart on an ongoing basis to provide us and our clients with insight into the earnings beat rate for the companies that comprise the S&P 500 Index. As many investors may know, equity analysts often adjust their corporate earnings estimates higher or lower on an ongoing basis. While these estimates may provide insight into the expected financial performance of a given company, they are not guaranteed. From the second quarter of 2019 through the second quarter of this year, the average earnings beat rate for the companies that comprise the index was 76.7%. The percentage of companies in the index that reported higher-than-expected earnings increased over the past two quarters. We’ve seen the market follow suit with better performance. Corporate Earnings are coming in better-than-expected matters. However, the current quarter results in the chart shown reflect earnings results for 384 of the 503 companies that comprise the S&P 500 index and could change over the coming weeks, so we’ll continue to observe this.   Inflation The most recent inflation report came in where it was expected. The headline inflation was 3.2%, slightly higher than last month’s 3%, and core inflation came in at 4.7% year-over-year, which is a 0.2% month-over-month gain. The trend is still down, which is where we want, so why does a slight tick-up pique our interest? And why did bond and interest rates go up after that slight tick-up even though most of the market feels like the Fed has beaten inflation? Our partners at Strategas dug through 2,100 years of economic data across 24 separate countries and found 62 instances where inflation was an issue for that country. Of those 62 inflation episodes, only eight didn’t see a peak, trough, and then another hike. So, for those keeping track, that’s only 13% of instances across 2,100 years of economic data where inflation had come down and then stayed down and where inflation was beaten once and for all the first time. That’s why you hear Jerome Powell and the individuals in the Fed be more aggressive and keep interest rates high. They want to project strength. They are still focused on inflation even though we’ve come down from above 9% to now 3.2%. That is a great downward trend and better than what we expected, but this is where economic data impacts consumers most directly, is from inflation. That’s why the Fed, the fiscal side of the market, is watching closely because this directly affects you as a consumer. If prices come down but start going back up, it will be hard to get that back under control. We’re watching this closely because the odds are not on our side. We don’t expect to see rates go down anytime soon, either. That’s really where we see consumers and borrowers being impacted. If the Fed is fighting this potential of higher rates again, they won’t bring it down to have to turn around and raise them again. They’d rather keep them steady. That’s why inflation is down 3.2%, the core at 4.7%, and the Fed Funds Rate is at 5.5%. They want to stay well above the rate of inflation. The market doesn’t seem to price that in or expect it. In general, the market seemed shocked that the Feds said they want to keep inflation down and will keep those rates high.     Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member

Bond Valuations We’ve been getting many questions about bonds and interest rates recently, so we wanted to give an update on bond prices relative to changes in interest rates. Bonds are an essential piece in a diversified investment strategy, and the best way to provide an update on bonds is by sharing data specific to this topic. In this episode, you will see a chart that shows the current price of eight of the bond indices we like to track, including corporate and government bonds. All eight are trading below par, which is the value if held to maturity. Over the past 18 months, the Federal Reserve, through its inflation fight, has raised the federal funds target rate, sending it soaring to 5.50% as of July 26, 2023. As many investors know, bond prices and yields typically move in opposite directions. Therefore, an increase or decrease in bond prices could indicate that yields have fallen or risen, respectively, over the period. Interestingly, while not captured by the time frame in the chart shown, seven of the eight bond indices referenced stood above their par values as of December 15, 2021. Current valuations have fallen below par due to the Federal Reserve raising rates. We use this chart and analysis as we manage client portfolios, and while volatility has provided an opportunity in the bond market with bonds trading below par, we know to be cautious. The Fed might not be done with raising rates; therefore, certain bonds remain under pressure. We are taking advantage of certain sectors of the bond market by purchasing bond positions below par, knowing that if held to maturity, these bonds will mature at a higher price than where we bought them. This is a dynamic we haven’t had to deal with in some time. We are seeing this impact on bond yields, the money market, CD rates, as well as other areas. We are taking advantage of bonds at a lower valuation. Not that this current interest rate environment will continue, but looking back through the history of rates, the only time that we had double-digit interest rates was in 1978-1981, which was a volatile time for bonds. We have a great opportunity here to take advantage of this while, at the same time, watching closely.   Money Supply Last month, the Federal Reserve raised interest rates again, and according to current data by the CME Fed Watch Tool, there’s only about a 30% chance of another hike for the rest of the year. These figures can change, but the dialogue will shift to when we can expect a cut. Currently, the Fed is content with maintaining rates while they perform QT before possible cuts in the first half of next year. Some may wonder why the Fed is determined to keep these elevated rates with inflation seemingly coming down. When you couple the recent commodity inflation we have seen, such as oil, gas, steel, copper, etc., with the recent turn in the money supply, you will see that the Fed simply wants to make sure they kill inflation and not re-live a 1970 reflation case. CPI, the primary inflation metric used, typically lags the money supply by 16 months. We had a historic rise in money supply during COVID due to the unprecedented stimulus provided, which led to inflation of around 9%. Since then, the money supply has been steadily decreasing and negative this year until recently. Average money supply growth in the 5% range is nothing to be concerned about. That would correlate with the 2% inflation target the Fed has set for us for years. However, if we see this supply rise rapidly again, we would be concerned about another 1970s-type reflation case. It appears the Fed is paying close attention to this, and that’s why the rate cut expectations have been pushed back until next year.       Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor. Bonds are subject to market and interest rate

Watch this educational episode to hear Ashley Page talk about the global economic impact that AI could have over the next ten years as well as what pros and cons there might be surrounding the development of artificial intelligence.     Ashley Page, JD, MBA Senior Vice President Wealth Consultant Email Ashley Page here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Artificial Intelligence and the Global Economy first appeared on Fi Plan Partners.

Market Strength We continue to get questions and comments from clients who are surprised at how well the market has performed this year and are asking if it can continue considering that at the beginning of the year, some economists expected the economy to be in a recession by this point. One of the measures we utilize to quantify and compare market breadth and the market’s underlying strength is the percentage of stocks trading above their longer-term 200-day moving average. As a general rule, if a stock is trading above its 200-day moving average, it is considered to be in an uptrend, and vice versa, when prices are below the 200-day moving average. Furthermore, the higher percentage of stocks above their 200-day moving averages implies buying pressure, and market strength is more widespread, suggesting the market’s advance is likely sustainable. Currently, 73% of stocks in the S&P 500 are trading above their 200-day moving average. This is compared to 48% at the end of 2022. The composition of breadth, underlying strength, and leadership has turned increasingly bullish as the highest sector readings include technology, industrials, energy, and consumer discretionary. We use this data in our day-to-day management of client portfolios. This strength across the market is due to resilient economic data in the U.S., receding inflation pressures, and expectations for the end of the Fed’s rate-hiking campaign have all contributed to this notable expansion in market breadth, which is positive.   Savers and Spenders As anticipated, the Federal Reserve raised interest rates last week, making the top end of the Fed’s fund rate 5.5%. That’s a double-edged sword situation of higher interest rates. The good news is that this environment is rewarding savers right now. You can get north of 5% by just sitting in the money market, which we’re enjoying providing to clients right now. You can get excess of that if you’re willing to take on more risk in corporate bonds. The other side of that coin, however, is the cost to spenders. The 30-year mortgage rate, credit card interest rates, and car loan interest rates from 1995 up to the last year have consistently come down. We’ve seen a sharp spike where borrowing costs have harmed spenders. In other words, there’s no free lunch. Savers are getting more on their money, but that money has to come from somewhere. This is an altruistic scenario where money is coming from spenders who now are paying higher interest rates. It’s a delicate balance that the Feds are navigating. At what point do we benefit the savers too much at the expense of the spenders to where we see the economy dip into a recession where spenders can no longer sustain these rates? Market participants anticipate at least one more Fed rate hike going forward, but that should be about it. We expect rates to rise slightly from here on out, but we’ll see where this delicate balancing act plays out.   Dow Jones Industrial Average The Dow Jones industrial average, the oldest stock market we follow in the US, was up for 13 consecutive days. This streak tied the 2nd longest streak from January 2nd to January 20th of 1987. The longest streak belongs to 1897, where the Dow started at 39 and ended at 43. This time, we started at a little over 33,000 and ended up over 35,000. That streak has since ended, but the interesting point is that despite the great run in January of 1987, the market later got hit hard in October of 1987. This time, the Dow was only up 5.3% when the streak was going, which is a muted return compared to some other similar streaks. An important point to make is that the Dow Industrial Average is only 30 select stocks that are publicly traded and not a reflection of the total economy. Between the New York Stock Exchange and the Nasdaq, there are over 5,000 stocks. So, when you think about 30 select ones, you realize that it is a minimal reflection of the economy overall. That said, don’t consider this much more than interesting historical event.   Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

In this educational episode, Trey Booth discusses interest paid to investors from money market accounts and explains how those funds could be used to stimulate the economy.   Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.The post Money Market Stimulus first appeared on Fi Plan Partners.

Looking for a Break The Fed will be looking at a lot of data this week, which will be used to drive their interest rate decision. Many market participants expect the Fed to raise rates by 0.25 taking the Fed funds rate from 5.25% to 5.5%. This is widely anticipated and likely already priced in the markets. What is important is what the Federal Reserve Chairman says after that decision. Many people feel inflation is coming down, so why does the Fed have to continue raising interest rates? The Fed traditionally hikes rates until something breaks. The Fed wants the price of everything to come down, such as stocks, bonds, cars, houses, etc., and they’re not necessarily seeing that. This is why the Fed typically raises rates until something cracks or breaks. The economy is continuing to muddle along, and nothing has really broken. The Fed’s largest direct impact is typically on leverage-driven parts of the economy, such as housing. The estimated monthly mortgage payment hit a recent high after taking a dip as interest rates started to fall and some of the housing prices started to roll over. Since then, housing prices have spiked back up along with interest rates, causing the monthly mortgage payment to increase to extremely high levels compared to recent history. This is primarily due to higher interest rates but also supply and demand. Existing homes available for sale are at a new all-time seasonal low, with almost no inventory available. This limited availability keeps housing prices high, which is a considerable input into core inflation. Core inflation is what’s challenging the Fed. The spread between core inflation and headline inflation is vast. We explained this in last week’s vlog. We’ve seen headline inflation come down, but core inflation remains sticky, which causes the Fed to want to continue to hike rates to try and break the back of this housing market or some part of the economy where they have direct influence. We aren’t seeing this; therefore, the Fed will likely continue to hike rates until we see something break. This is somewhat concerning for market participants due to not knowing when this will happen until, in hindsight, it’s already happened.   Leading Economic Indicators We wanted to take a detailed look at the current economy to see what the leading indicators are saying about the economy. We continue to get many questions from clients wondering if economists are on track with their call for a recession. We wanted to share a heatmap that we continuously look at weekly that shows ten leading economic indicators. In this episode, you will see a historical recession data chart. The blue boxes on this chart show where each indicator historically has been near recession, and the grey box shows where the indicator currently is. Payrolls and the unemployment rate are strong indicators that say we’re not close to a recession based on history. However, industrial production is one indicator that is showing weakness. Other indicators showing weakness are capacity utilization, a measure of output, and two indicators connected to manufacturing. The two indicators we are focused on are retail auto sales and housing starts; both are well above where they have been in previous recessions. It’s important to note that recessions are a contagion. With five primary indicators still well above recessionary levels, we are inclined to say the economy is still growing strong. We would need to see most of these indicators showing weakness to say that a recession is probable, and we are not seeing that right now. This week’s question will be what the Fed says about future rate hikes, which could cause some of these indicators to turn lower. We will continue to keep an eye on this data in the upcoming weeks to see what impact it could have on future markets and the economy.   Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIP

Inflation The top-line inflation number came in better than expected and going in the right direction. This is the one-year anniversary of when inflation peaked last year at 9%. This is a year-over-year number, which means inflation is 3% off of 9%. With inflation moving from 9% to 3%, that’s still a fast move in 12 months. This shows that whatever the Fed is doing seems to be having a positive impact on inflation. The challenge is that when you dig into the numbers, core inflation is stubbornly still near 5%. The main difference between core and top-line inflation in this report is energy. Energy year-over-year transportation costs are down 4.67%. That’s the big driver in the top line number is lower. If you look forward, the risk there is that, more recently, energy prices have started to increase. The month-over-month energy is actually a boost to recent inflation. This may be a discount not being considered going forward, which could explain another phenomenon we noticed. If you look at yields, the CPI has come down. A chart shown in this episode shows that CPI has come down from nine to three percent over the last two years. The 10-year treasury rose with CPI and has stayed stubbornly flat around the four percent range. It doesn’t look like the bond market is pricing in this continued drop in inflation, and in fact, it may be pricing in future higher inflation, which is concerning. Looking back to the 1970s, CPI went up and came down but then went back up again. At the same time, the 10-year yield never came back down and continually increased through that, predicting future hikes and inflation. The market right now is positive on this low print, but it’s concerning to see that the bond market is not expecting that low print to stay. We may see higher inflation from here, which is a bit concerning. Even though these numbers are coming in well below expectations, the market still expects the Fed to raise interest rates at the next meeting in late July. This could be concerning to equity markets if that does come to fruition. Another interesting topic we’ve noticed is that import prices have decreased, which has also helped lower costs. We may be importing deflation from China, which is a surprise and something we haven’t seen in many years. There are a lot of global connections to these numbers and data that we are watching closely.   International Stimulus As investment managers, we look at a lot of data and potential market-moving events. It’s no secret that it’s a global economy and global markets, so we look at domestic and international events that could affect the global markets. One we’ve never discussed on our vlog is the credit impulse indicator from China. The credit impulse indicator measures the change in new credit issued or, better put, a stimulus as a percentage of GDP in China. We’re watching this indicator closely because while the U.S. Federal Reserve is tightening liquidity, which is lowering inflation, we’re starting to see China increase liquidity. Why does this matter, and why are we watching this indicator? Historically, U.S. equity markets have benefited when China has increased liquidity through stimulus. Our analysis shows that if China does stimulate and Chinese credit begins to expand, U.S. equities would likely benefit. During periods where the credit impulse measure indicator expanded in the past, the S&P 500’s median advance was 12.5%, with five of the six periods showing positive returns. More importantly, we look at this to see what sectors would benefit the most, and in this case, Energy and Materials have historically benefited the most. We use this analysis in building our portfolio strategies, so we’ll continue to follow this.   The U.S. Dollar We’ve had many inquiries from clients this year about the U.S. dollar. Some are fearful that the U.S. dollar won’t become the reserve currency. We don’t share those fears, but we plan to continue monitoring them. There are not a lot of alternatives out there that would be good right now to replace the dollar, even if the dollar does come down. On a chart shown in this episode, we will see data that indicates that there is a possibility for the dollar to continue to come down. According to research, the dollar has consolidated and appears to be in a continuation pattern to the downside. We want you to remember the 2022 and 2021 U.S. dollar reports while thinking about this. We aren’t near the 2021 levels yet, and there weren’t nearly as many concerns about the dollar then as they’re on now. There is plenty of room for the dollar to fall. But you might be wondering how this could impact portfolios. This is explained in a chart shown in this episode where the S&P 500 and the dollar are almost perfectly negatively correlated to the opposite of each other. When the dollar goes up, the S&P 500 typically falls. When the dollar goes down, the

Watch this week’s educational episode to hear Ty Miller go over the different types of annuities and explain the importance of each one.   Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Annuity Basics first appeared on Fi Plan Partners.

Rolling Recession The phrase rolling recession is relatively new in economics, but it’s gaining popularity. The U.S. has been experiencing a rolling recession over the last few years that could continue but not an economy-wide one. If you think back to last year, some parts of the economy were in a very deep recession, but it didn’t spread economically. Areas like San Francisco and New York have had a deep real estate recession, and sectors like the technology sector experienced a recession last year. These areas may be coming out of it, but we’re seeing a rolling recession, and new parts of the economy seem to be weakening. Last year, housing was weak, but new housing construction, so far this year, has been very strong. However, commercial real estate is weakening, so it’s not an economic-wide slowdown. It appears to be rolling across the country, where there’s much strength. In areas like Florida and Texas, real estate prices and commercial real estate are strong, but if you look at places like New York, where 40% of the central business district office buildings are, it’s very weak. This is an interestingly new concept where we may not see an economic-wide slowdown, which is more challenging for economists to factor in and project, but we may see it in specific sectors. A good way to look at that and what calls for the discussion is that earning season is coming up. Earnings look backward to where things were last quarter. What fascinated us that you can see in a chart shown in this episode is that revenues are expected to decline by 0.8%. Earnings are expected to climb by 6.4%. The fact that revenue is declining is more interesting to us because, in an inflationary environment, you would expect prices to go up with inflation and earnings to be harmed as prices don’t outpace cost expansion. However, in this scenario, revenues are declining, but it’s not economic-wide. Specific sectors, like financials and consumer discretionary, are growing in revenue. Certain sectors like energy and materials, which were booming last year, are seeing revenue decline. These may be areas of weakness, which we saw in prices for the first half of the year, and could be up like last year’s for the second half. This shows a picture of possible rolling weakness. Many people might be surprised to see financials on the list, but again, this is the S&P 500, the largest 500 stocks. The financials may be misleading because many regional banks aren’t included. A point that we brought up on a previous vlog is that JP Morgan, at that point, was larger than all the regional banks combined, so this is the biggest of the bigs and something to keep in mind. Another point to make when looking at S&P 500 earnings is the size impact. What’s fascinating is that the top ten companies make up 30% of the index and 20% of the earnings. It’s been a narrowly focused stock market rally this year. In some particular companies, those rallies may have outrun their earnings. We’ve seen prices move much quicker than earnings, so there may be some pullback, and it is something we’re watching. We will be using this data to look backward to help us make decisions going forward.   Historical Market Data The second half of the year is starting relatively slowly as the market battles overbought conditions. A rise in interest rates and economic resiliency, especially the tight labor market, has kept the Federal Reserve rate hikes on the table. This has led to more uncertainty in the market for the second half of the year. We want to look at what history says about the second half of a year that started well. It was great to see the market up in the first half, but the breadth of the overall market could have been stronger. Only a few stocks contributed to much of the market’s upside. We did some correlation analysis, comparing the first half of prior years to 2023, and found that history is on the market’s side. The ten highest correlated first half to 2023, going back to 1950, the S&P 500 generated average and median gains of around 12% in the second half. Nine out of ten periods produced positive returns. 1995 stands out with a high correlation to 2023 and a relatively similar macroeconomic backdrop to now. We saw market volatility in 1994, especially in the bond market, as we did in 2022. The following year, 1995, was also a pre-election year when the Fed paused an aggressive rate hiking cycle. The soft landing helped drive the S&P 500 up 13.1% in the year’s second half. Of course, no guarantees, but this observational data comes from a lot of historical data and has a major asterisk by it. The correlation does not always apply causation, and the same returns. Still, we continue to look at historical trends to see if similar market setups can contribute to our investment strategy for our clients.   The Bond Market The bond market m

In this educational episode, Mark Hume goes over several vital things you need to know about your estate plan, no matter what stage of life you’re in.   Watch or listen to this episode to learn where to get started with choosing the executor of your estate and more.   Mark Hume, CFP® Senior Vice President Wealth Consultant Email Mark Hume here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Major Decisions for Your Estate Plan first appeared on Fi Plan Partners.

Student Loan Forgiveness vs. Inflation There has been a lot of news coverage of the Supreme Court’s decision to strike down the Biden Administration’s plan to forgive student loan debt. However, there hasn’t been much coverage on how that will impact inflation. Inflation occurs when demand is up, and the amount of supply is down. That mismatch of demand being higher than supply pushes prices higher. The secondary cause of inflation is the creation of more dollars through debt financing or pulling forward demand from the future by borrowing and spending today. The rejection of the student loan forgiveness plan hits inflation in both spots. Since 2020, the average student loan borrower hasn’t had to pay a dollar back in student loans. These payments will start in October, making student loan borrowers owe $383 monthly. That will reduce demand by $383 a month. Secondarily, writing off this policy immediately eliminates a projected $400 billion additional debt. Bringing demand down and reducing debt should hit inflation in the short term, starting in October. The positive impact could be deflationary pressure, bringing prices down as spending is diverted from goods and services into these loan repayments. It will be stressful for the borrower but should also put pressure on prices, which should be a net benefit economy-wide. This is something we will continue to watch closely.   Banking Liquidity We received good headline numbers last week as Consumer Sentiment and Consumer Confidence were at their highest since early 2022. Consumers are starting to get more confident even with student loan repayments coming. The Fed announced last week that all 23 banks they tested this year passed their stress test. The stress test included a 10% unemployment rate, a 38% decline in home prices, and a 40% drop in the value of commercial real estate. Even though all those banks passed the stress test, it’s important to point out that before the Silicon Valley Bank collapsed, it also passed a stress test. One thing that’s missing in the stress test is the liquidity crunch. That is what happened to the Silicon Valley Bank, which we see possibly becoming an issue with other banks. This test was only run on 23 banks, so that’s not the entire United States worth of banks. There are a lot of regional banks that were left out of this test. With the Fed still having quantitative tightening and half of the Treasury’s new debt issuance being funded by bank reserves. We’re seeing this liquidity crunch on the weekly change of bank reserves. They have fallen $130 billion in two weeks, and we expect a larger drain this week with the Fed balance sheet runoff continuing. We need to keep an eye on that in this liquidity crunch. While it’s great that they passed the stress under these specific scenarios, we want to see how they do with liquidity. Bank reserves and liquidity correlate strongly and are something we will keep an eye on going forward.     Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Stress Test first appeared on Fi Plan Partners.

In this educational episode, Trey Booth and Ty Miller provide a comprehensive guide to understanding the different stock market indexes. They delve into the nuances of the indexes, discussing the differences between them and how they are calculated. By the end of the episode, listeners will have a clear understanding of the major indexes, including the Dow Jones Industrial Average and the S&P 500.   Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Exploring Stock Market Indexes first appeared on Fi Plan Partners.

Unrest in Russia There was an effective attempted coup in Russia over the weekend with the Wagner group. At one point, they were marching on Moscow. However, when the markets opened today, this topic seemed quelled entirely. What it did, however, was create more questions. This war between Russia and Ukraine has been in a stalemate for over a year now, and much of the uncertainty around it seems to have been removed. The markets don’t react to any news one way or the other, but one question this raises is if there was unrest in Russia, how would that impact our markets here in the U.S.? In February 2022, when the war in Ukraine started, our U.S. oil market spiked to nearly $120 a barrel. That’s the market’s perceived risk if Russian oil were ever taken off the market. We thought, at that time, that Russian oil would be removed, so we limited oil export to Europe and the U.S. through sanctions, but we didn’t stop it. It’s just moved to where it’s going, so Russian oil is still pumping. If you ever wanted to produce unrest within Russia, that’s precisely where you’d want to go. The power base is in the money being driven from all production oil sales globally. If we were to see any continued unrest, it would likely happen in the oil market exclusively first. That’s where the protection is and where the prices will be hit. Russia as an economy is extremely small and has almost no impact on us. It’s a large energy country, so there will be no hit market-wide; only in the energy sector could it make an impact.   Historical Rate Hikes With the Fed pausing its rate hiking in June, we wanted to review what that historically means for the stock market and interest rates. Looking back in history, over the last 35 years, there have been five monetary policy periods when the Fed paused after a major rate hiking cycle like we’re currently in. During these periods, it took four to fifteen months before the Fed started to cut rates, with the average pause lasting just shy of seven months. As expected, the Fed paused its rate hiking cycle after fifteen consecutive months of tightening. What happens to the market and interest rates? While the number of occurrences is limited, stocks have done relatively well after a Fed pause following a major rate hiking cycle. The S&P 500 traded higher over the following twelve months after four of the last five pauses. The average twelve-month index return for all five periods was 16.4%. The outlier year was the pause in May of 2000. Interest rates have historically declined after a Fed pause, which is good news. The ten-year treasury yield also declined after all five Fed pauses, falling by an average of 13.7% over the following twelve months. So, history says a Fed pause is good for the markets and can be good for interest rates falling. We’ll see what happens here, but history says it’s a good thing.   Student Loans We expect to see a Supreme Court decision that will impact student loans in the upcoming weeks. No matter this court decision, student loans are set to start picking up interest again in September, with the first payments beginning in October. This would be the first time people have been forced to pay their student loans since March 2020. Some college kids are two years out of college and have never paid student loans. This is going to have a significant impact on consumer discretionary spending. On average, student loan payments are $383 a month. For people between the ages of 18 and 29, student loans account for nearly a third of their total debt. Out of all of the debt someone might have, including auto loans, mortgages, credit cards, and more, student loans were a third of it all. The U.S. Supreme Court must decide if they want to uphold the plan to forgive $10,000-$20,000 of the student loan forgiveness, depending on your income. If they choose to enforce that, it will result in a $400 billion expense because about 40 million people will be eligible for this program. Sixteen million people had already applied when it became big news and was approved. We expect that to go into effect quickly if the Supreme Court rules to go that way. However, suppose they say that’s not how they want to go. In that case, we expect President Biden to roll out a new income-driven plan immediately after that decision. On this plan, based on your income, you will pay 5-10% back on your student loans each year. After 20 years, the balance that is left will be forgiven. This could result in higher costs because if you pay off $10,000-$20,000 and still have $100,000, you still have that big bill. If you’re paying interest back every year and you still have a large balance at the end of 20 years, all that’s left will be forgiven. That could be a more significant expense. When the Supreme Court announces its ruling, we can go more in-depth on which route that’ll take. The importa

Watch this week’s educational episode to hear Greg Powell and Mark Hume discuss artificial intelligence and how it could play a future role in the finance industry.       Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Mark Hume, CFP® Senior Vice President Wealth Consultant Email Mark Hume here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Will AI Replace Human Advisors? first appeared on Fi Plan Partners.

Inflation and The Fed Coming into the Fed’s interest rate decision, most market participants expected the Fed not to raise rates, and those expectations were met. What made this meeting so important, and why did the market react the way it did? It’s because there’s still the unknown of whether or not this is a skip in terms of they didn’t do it now, but they just skipped one meeting they plan to raise in the future. Or is this a pause in rate policy where we will stay here for a while? The market before the meeting was pricing for a pause. The Fed was done, and 5-5.25% was the high point of the Fed Fund rate. What the Fed showed, though, is that they anticipate as many as three more hikes this year, which completely goes against the market. Many market participants were pricing in a cut by the end of the year, so the fact that the Fed is now putting out there that not only are they not done, but they could raise rates up to three more times within the year, is entirely off-side from what the market was saying. Chairperson Jerome Powell said they wanted to pause right now because they wanted to see data come in before deciding on hiking rates. Why did they say they would push rates out now but hike rates in the future? The reason is that the Fed wants to avoid getting into a situation where they have a stop-and-go Fed policy like the one that got us into trouble in the 1970s. They would raise rates, inflation would come down, and then inflation would pick back up. On a chart shown in this episode, you will see the inflation rates of the seventies, and the blue line on this chart is the current inflation rate pattern. You can see that while inflation is coming down, many more participants are asking since we’re now below 5%, potentially getting below 4% in the next few months, why consider hiking rates again? It appears as though we have beat inflation but in the seventies, inflation came down just as fast as now. However, it went back up because the Fed took its eye off the ball. That’s why Mr. Powell is using his words carefully and trying to guide the market into a future where we’re not cutting rates. Plus, we are still fighting inflation. The average US consumer goes to the store and doesn’t feel like the inflation flight has been won, but the market was pricing as if it were.     Pain in Corporate America The Fed’s actions have had a negative impact on two areas of concern: our mortgage availability and an increase in corporate bankruptcy. Mortgage availability has fallen significantly, and mortgage credit availability has decreased for the third consecutive month. The industry continues to see more consolidation and reduced capacity due to lenders pulling back on loan offerings due to high rates. The Mortgage Credit Availability Index is now at its lowest since January 2013. We’re also seeing a spike in corporate bankruptcy. Higher rates matter. It’s clear that when the Fed started raising rates, bankruptcy followed. It’s not just the banks struggling with high rates; we also see the pain in corporate America.     Consumer Stress Indicator Our Consumer Stress Indicator is down as we’ve seen inflation come down. It’s moved lower to 16.3%. Gas prices and food are stabilized and down from a year ago. By no means is the consumer out of the woods yet, but this inflation is a welcome sign of relief, with the likelihood of student debt payments restarting in the months ahead. It’s not all bad, but we are watching for economic and market cracks.       Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Skip or Pause first appeared on Fi Plan Partners.

Watch this week’s educational episode to hear the Operations Team discuss Required Minimum Distributions and how the team at Fi Plan Partners will educate you about RMD changes and ensure the process to satisfy your RMD is streamlined and effortless for you.     Adam Vansant, AIF®, BFA™ Senior Vice President of Operations & Advisory Services Wealth Consultant Email Adam Vansant here Sonja McGittigan Operations Specialist Email Sonja McGittigan here Makenzie Phillips Operations Specialist Email Makenzie Phillips here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post How to Satisfy Your RMD first appeared on Fi Plan Partners.

Global Central Banks A lot is happening this week, but the market-moving event will be the Federal Reserve meeting on Wednesday. For the first time in 15 months, the Fed is expected to skip, not pause, but skip raising interest rates. Even though inflation remains higher than what the Fed wants, and after a big beat on the recent jobs number, a surprise hike on Wednesday is unexpected and would possibly spook markets. We’ve already seen surprise hikes from Australia and Canada last week. Our central bank is one of many central bank meetings this week. The European Central Bank is expected to raise rates on Thursday, as are Norway and Sweden. We’re also watching several African nations where central banks have been tightening. The US and Bank of Japan are the only central banks expected not to raise rates this week. We’re observing global central markets as we’ve already seen signs of economic slowdowns across the globe. Last week we got confirmation that Germany has slipped into a recession, as Europe’s largest economy has dropped its output since last year. Central bank actions have consequences, and that’s why we’re talking about it in this episode, and it is something we’re focused on today.   What Will the Fed Do? Inflation in the United States remains elevated but is falling. We expect the inflation report that comes out on Tuesday to show a year-over-year increase in prices of 4.2%. That’s down from last month’s number of 4.9%. That’s important because, even though 4% is still high, it’s well below recent history and below the current Federal funds rate of 5.25%. If we get an inflation print of 4.2%, that puts over a percentage gap between inflation and the Fed funds rate. The Fed funds rate is the money that the Fed is lending overnight to banks and what you see in the money market. That means that investors can outpace inflation with cash. That’s a very important distinction between our current Fed funds trade and the global interest rates. However, we also see a weakness with Germany in a recession, and China recently reported that its global exports are downs by over 6%. China is the exporter to the world, so when their exports are down, that’s likely an indication of slower economic growth. Something the Fed will be looking at very closely is the US vs. the globe and that rate pause. A rate hike skip is what many market participants expect. The next Fed meeting isn’t months out; it’s next month on July 26. They get to pause and don’t have to sit there for long. Instead, they get to adjust and see where things are. Another important indicator is what the Fed will say about their quantitative tightening. During Covid, the Fed expanded its balance sheets to nearly 9 trillion dollars, providing needed liquidity for the market, in the economy. Since the beginning of 2022, they have been reducing that liquidity. We expect they will continue that to 80 billion dollars a month. However, year to date, that liquidity drain has been offset by the Treasury Department pumping liquidity into the market. Now that we’ve seen the debt ceiling raised and the Fed potentially pausing, that liquidity drain may restart. It is essential to hear what they say because the last time we had a major debt ceiling debate, in 2012, the Fed came in and provided easing. So, there’s a lot to talk about, even though the market has priced in a hundred percent of a pause. There’s still a lot for the Fed to digest. This is a big week with big news on what the Fed will do.       Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Fed Surprise? first appeared on Fi Plan Partners.

Mortgage rates have spiked since last year, but how does that impact buyers and their monthly payments? Watch this week’s educational episode to hear Bobby Norman review current mortgage rates and compare them to the highs and lows from 1971 to now.   Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.  The post Mortgage Rates first appeared on Fi Plan Partners.

Economic Tug of War As investment managers, we look at the good and the bad. Last week in our Memorial Day vlog, we discussed the positives we’re seeing, such as positive leading economic indicators and an improving consumer stress indicator. We also saw a great jobs report as the economy continues to show incredible resiliency. We look at everything as we manage market volatility, and right now, there is a tug-of-war going on. We’re seeing new year-to-date highs when we look at the current technical setup of the S&P 500. That’s great news, but what concerns us about the current rally is that it’s been very concentrated. Only 44% of S&P 500 stocks exceed their 200-day moving average. This says the market breadth could be stronger. Chipmaker stocks, technology, and the S&P 500 were positive in May, but there are several different asset classes and sectors that were in the red, which shows the underlying weakness of the overall market. Another concern that we have is that debt charge-offs on credit cards are increasing. What’s concerning is that we have begun to see a rise in charge-offs before the unemployment rate increases. Charge-offs are headed towards the Covid highs in short order. The next area of concern is with banks. We’ve seen a slight increase in the number of problem banks, which increased to 43. We’re observing banking pressure as past-due real estate loans secured by nonfarm nonresidential properties jumped by 20% to 16.9 billion dollars during the first quarter, which is the highest since the height of the pandemic. So, there is a tug-of-war between the positives of a resilient economy and certain areas’ underlying weaknesses.   The Debt Ceiling The debt ceiling was passed and has been something we’ve talked about all year. We were right when we said it would come down on the wire. All the necessary steps have been taken and look to be going into effect, which is overall good news. This would be a debt ceiling suspension until 2025 and let the parties of the following year’s presidential election handle it from there. That’s an important step the government was looking at as opposed to just a temporary suspension. This is a full-time raise, but it will give us at least through the next two years and roughly a trillion dollars of spending cuts over the next ten years. About $200 billion of that will come in the next two years. Student loan repayments will start again in September. This will be a hit to GDP because there is less discretionary spending. The defense did not get cut; that was a big thing fought over, and life science tools did not get cut. The net result of this is, we’re thinking, a bit slower of an economy with less liquidity. Things will be less liquid as the government issues about a trillion dollars of bonds from the economy. How the Treasury General Account and the S&P 500 line up performance-wise will be a little different of an environment moving forward with how the spending cuts are enacted. Overall, this is good news that we got something passed. We will continue to watch how the market adjusts to this news. Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Headline Market Strength vs. Underlying Weakness first appeared on Fi Plan Partners.

Watch this week’s educational episode to hear Greg Powell and Jason Hatley review the recent law changes to college saving plans and how they might affect you moving forward.       Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Jason Hatley, CFP®, CPA, PFS Senior Vice President Financial Planning Manager Email Jason Hatley here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor. Prior to investing in a 529 Plan, investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax-free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing. A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for five years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.The post Secure Act 2.0: New Laws for 529 Plans first appeared on Fi Plan Partners.

Economic Growth There’s been a lot of recent talk about a pending recession or an economic slowdown, so we wanted to go over a recent report showing economic activity in the US. The report indicates that the economy is growing at the fastest pace in 13 months. The Purchasing Managers Index deposit outlook is a weighted average of the Manufacturing Output Index and the Services Business Activity Index. We follow this report because it is an important leading economic indicator that provides valuable insight into the state of the US economy, specifically the manufacturing sector. This indicator hit 54.5% in May, which came in better than expected and was the highest in 13 months. Any reading above 50% on this indicator represents expansion, and it currently being over that is great news and shows economic growth. However, for investors hoping for the Federal Reserve to pause rate hikes, this report might pose a problem because of how a growing economy could lead to higher inflation. We will continue to watch this and how positive economic reports might impact the market.   Consumer Stress Indicator We’ve been tracking the Consumer Stress Indicator that was created by our research friends at Strategas. It takes food, inflation, mortgage rates, and gasoline inflation and compiles a common indicator to show how much stress the consumers are under. The bad news is that we’ve been over 10% for 20 consecutive months. That’s the longest stretch going back to 1970. The good news is while we’re still elevated, we are way off the low of 23.6% from earlier this year. We’re currently sitting right around 17%. That’s partially due to lower mortgage rates and largely due to falling gasoline prices as well as a little reduction in food inflation. This is a great sign for the consumer as we head into the summer driving season. We don’t want to be overconfident in this because, as we’ve mentioned before, there is a risk of potentially higher gas prices due to cuts in OPEC production. There will be an increase in demand and a cut in supply which typically leads to higher prices. This current environment may not be a permanent relief of consumer stress. On the other hand, mortgage rates have started to pick back up with a risk of higher interest rates. There’s a chance that they may not be cutting rates because the economy is doing so well. That pushes interest rates back up. You want a good economy, but that good economy comes with higher interest rates which then can cause consumer stress. It’s a delicate balance we’re dealing with right now, but something to be thankful for while we get it. We’ll take low prices now. It just may not be permanent.   The Debt Ceiling Debate The debt ceiling decision is expected to be made in early June. They’re shooting for June first, but our research partners are telling us that it may be June seventh or eighth. June first is an encouraging sign that they’re coming to the negotiating table early. Hopefully, we can get something passed soon. Once it is raised, it’ll be a big change. Right now, we have the Fed doing quantitative tightening. They paused that for the time being, and we expect them to pick back up. The Treasury general account, where Janet Yellen operates, is pumping liquidity into the system. However, the balance in their account is down to roughly $68 billion. That’s a level where the June date comes into play and the point where the government will look into issuing one trillion dollars’ worth of treasuries. What that is going to do to rates is unsure, but what it is going to do is take the liquidity out of the system. When they issue bonds, people must pay for those bonds with money which they’re collecting at that point. That’s going to change the market attitude and something we’re going to look at going forward to try to navigate. As the debt ceiling comes across, they’re going to have to up the treasury general account from $68 billion to at least $500 billion, if not more.   Treasury General Account We run a deficit in the US. It’s like the saying that you borrow money from Peter to pay Paul. That’s how the government works. When we hit the debt ceiling, we can no longer borrow from Peter to pay Paul, but we’re still paying Paul. The Treasury is just putting money into Paul’s bank account without taking money out of Peter’s bank account. When they raise the debt ceiling, the Treasury goes back and tells Paul they need all the money they’ve given him. They then take the money they would have taken from Paul out of his bank account to refund the money they gave to Peter. For the last six months, we’ve had nothing but treasury money going into the banking system and the economy without a counterbalance. Once we raise the debt ceiling, it comes back into balance. What happens in the market is un

The term Gross Domestic Product (GDP) frequently appears in our vlogs and in news reports. In this educational episode, Ty Miller provides an in-depth explanation of what GDP represents and explores its crucial role in the economy.       Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post What is GDP? first appeared on Fi Plan Partners.

Inflation Impact on Yields We continue conversing with investors interested in current bonds and savings account yields. Because of that, we wanted to give an update on where yields stand and also talk about real rates of return, including looking at inflation. Bonds have always been an essential part of a diversified strategy. Still, we want to point out that when looking at bond returns and, more specifically, yields, investors need to look at real rates of return that include taking current yields and subtracting the current inflation rate. The main point is that while having a better return on yield-oriented investments like bonds and other fixed income is excellent, we, as investment managers, look at the total return. Inflation is causing some current real rates on government bonds to be negative. This is why keeping exposure to stocks is important to longer-term investors. Over the past 30 years, the average real rate of return on ten-year treasury bonds is 1.4%, while the average return of the S&P 500 stock index is 9.8% in the same 30-year period. Therefore, it’s important to look at total real rates of return. Unfortunately, for treasury bond investors, higher interest rates have been unable to overcome the impact of inflation on real yields over the past several years. While yields are not the only return aspect of bonds, they are important. The real yield on the 10-year treasury bond has been negative at the end of the last four consecutive years and remains negative today. However, there were eight observations since 2008 where inflation was two percent, or lower and real yields were positive in seven of those eight year-end snapshots.   Money Market We’ve all seen the news about the regional banking crisis, and we’ve talked about how yields and the rapid rise in rates have affected the regional banks. In addition, there has been a rise in money market funds, which has taken deposits away from banks. Since the rate hike cycle started last March, bank deposits have seen about one trillion dollars of outflows. An estimated $750 billion has gone to money market funds because they yield just under 5%. The savings rates at banks are about one percent or lower. There are CD options, but money market accounts give you more liquidity and allow you to be flexible to take advantage of opportunities in the market. Of course, their rates do go up and down where a CD is locked in. However, if you see those rates going low, the flexibility to jump into the market is beneficial.   Wrapping Up Earnings Season Around 94% of companies have reported earnings, and 77% have beaten expectations. This is an excellent sign of strength and is something we like to see. In Q3 of last year, we saw earnings top out, and we are just under what Q3 of last year was. However, while these expectations have been lowered, a 77% beat rate on earnings is encouraging and isn’t in the news right now due to the talk about the debt ceiling and rates. This topic ultimately matters to stocks and where the market goes from here.     Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Money Market Fund – An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Bond yields are subject to change. Certain call or special redemption features may exist, which could impact yield. Certificates of Deposit are FDIC insured and offer a fixed rate of return if held to maturity. Brokered CDs sold prior to maturity in the secondary market may result in a loss of principal due to fluctuations in the interest rate or lack of liquidity. Brokered CDs are registered with the Depository Tru

There has been a lot of talk about moving manufacturing jobs back to the US. Watch or listen to this week’s educational episode to hear Trey Booth give an update on that situation and how it impacts the economy.   Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here   Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post Reshoring of US Manufacturing Jobs first appeared on Fi Plan Partners.

Will History Repeat Itself? There has been a lot of negative headline news about the slowing economy, high but falling inflation, as well as the fight about the debt ceiling fight. Today, we are pointing out something we discussed last year: market performance 12 months after a midterm election. In this episode, you will see the chart we showed on our vlogs numerous times last year. Here is an update on where the market stands relative to history and this chart. Keep in mind, the average one-year gain for the S&P 500 following a midterm election is 14.5%, with the index up 18 out of 18 such periods going back to 1950. The positive news is that stocks are right on track. As we passed the halfway point, The S&P 500 is up just over 7% since November 8, 2022. Another gain of just under 7% over the next six months would put the index at its average post-midterm election gain of 14.5% and secure its 19th consecutive gain in the 12 months after midterm. As always, no guarantees, but we like historical relevance. As we get closer to the 2024 election, it is possible for the policy to be less unfriendly than it is today, which explains why this market pattern has historically worked so well after the midterm elections. The current administration doesn’t want to campaign on a weak economy or a bear market. Keep that in mind as we watch to see if history repeats itself.   Consumer Impacts We got some good news from the Consumer Price Index report last week: inflation was up only 4.96% year-over-year. To the consumers buying the goods that make up this number, a 5% growth rate in cost year-over-year doesn’t feel good. The good thing is that it’s on a downward trajectory. Transport, the cost of moving things, has the best year-over-year number in the report, at only 0.30%. However, what is concerning as we look under the hood, is that the month-over-month, Transport is the highest at 1.15%. This is the time of year when transport costs are most noticed by the US consumer due to it being travel season. It hits the consumer’s pocketbooks because they are spending more money on fuel. The money you must spend on fuel takes away from what you could have spent money on during your vacation, such as dining, hotels, and other things that make the trip worth taking. It’s usually not the traveling that’s the fun part. It’s the time you spend once you get there. In May, June, July, and August of 2022, the US consumer consumed 48 billion gallons of gas. That is a staggering number when you think about it. When you hear about just a one-penny move up or down, the average price of a gallon of gas hits the US consumer to the tune of $480 million. That’s $480 million just for a one-penny move. If you look at a dollar move, that’s $48 billion that the US consumer can’t spend once they get to where they’re going as opposed to spending once they get there. That’s a real negative stimulus to the economy if gas prices go up. However, if they go down, that’s a huge stimulus for the travel, leisure, and restaurant industries, spreading out across the economy. We will be watching throughout these upcoming travel months to see if we can keep fuel prices at least flat, year-over-year. Right now, it’s looking challenging with the recent OPEC cut.   The S&P 500 The market is up year-to-date, with the top ten largest companies in the S&P 500 responsible for 81% of that gain. A lot of times, if this number is over 100%, it is because the market is down. It’s a flight to quality. It’s not over 100% right now, but we still see that flight to quality. This week’s headline was about how Apple is now bigger than UK’s GDP. The UK has one of the largest stock markets in the world, and Apple has surpassed it, meaning that just Apple alone is bigger than the United Kingdom. Apple and Microsoft together make up about 14.5% of our stock market index. That’s more than energy and materials combined. With the current situation with regional banks, JP Morgan is now bigger than every regional bank in the country combined. These are not recommendations, only facts that interest us as companies get bigger. This is something for us to keep an eye on as we see this flight to quality.   The Legacy of Mr. JP Morgan In 1908, we had a significant financial crisis where JP Morgan and his bank manhandled the economy. During that time, we did not have a Federal Reserve. In 1912, JP Morgan died, and because of his death, newspapers asked what the country would do without him. Only after he died in 1913 did the United States implement the Federal income tax to help support a downturn as they had seen in 1908 and 1909. They also started the Federal Reserve because JP Morgan wasn’t around. Over 100 years later, the ghost of JP Morgan still lives as the bank is now bigger than all the other regional banks combined.     Gre

Watch this week’s educational episode to hear Ashley Page talk about the four main factors the Federal Reserve always considers when establishing interest rates.   Click the link above to learn more about this highly requested topic.   Ashley Page, JD, MBA Senior Vice President Wealth Consultant Email Ashley Page here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post The Federal Reserve and Interest Rates first appeared on Fi Plan Partners.

Interest Rates and The Fed As expected, the Fed has announced its tenth rate hike in thirteen months. The numbers weren’t surprising, but the words they used were. Before, they were saying that they anticipated further tightening would be necessary, but now they’re saying that they are determining whether or not further rate hikes will be necessary. The market took that as the Fed is done raising rates, but what does that mean for returns? The data shows that there’s no longer an expectation for higher rates but a possibility of future rate cuts. Many historical reports show that when the Fed pauses or pivots, it’s positive. On average, returns after the last Fed rate hike and to the first rate cut, the market is higher by five percent. However, average is a loaded word in this case. The chart shown in this episode shows the market’s returns after the last Fed rate hike and before the first rate cut. One thing that stands out is that there is not a single data point that is anywhere close to where the average is. The average is in the middle at five percent. In 2006-2007, there was a 20% increase, but in 1974, 1980, 1981, and 1984, the market fell. This is a situation where average is like having one hand in the oven and the other hand in the freezer; on average, you feel great, but average isn’t what anyone’s experiencing. You’re either doing great with markets up, or markets are down; there is no in-between on these data points. What’s concerning is that our research indicates that the current environment is a lot more like 1974, 1980, and 1984. The difference is that back then when the Fed paused, they were still dealing with inflation due to external factors. Even though we are working towards correcting inflation, enemies have the ability to shock our economy and cause inflation to rise just like they have historically. We analyze historical and current data, not only looking at the numbers but also watching the words. How things are worded is significant, and all of these factors are why we’ve stayed defensive until some of this pans out.   The Debt Ceiling One upcoming event that we are keeping an eye on is the conversation around the debt ceiling. We started watching this a couple of weeks ago when the House Republicans tried to pass something to get the negotiating started. With only a 50/50 shot of getting anything through, they were able to pass something by a mineral majority to start negotiations, which was an essential first step. Tomorrow, President Biden is meeting with House and Senate members to discuss the debt ceiling further. There will likely not be a deal for a few weeks; however, due to the recent tax revenue numbers, this debt ceiling date, originally expected to be August or September, is being pushed up into June. This gives them only a couple of weeks to discuss this. If the debt ceiling isn’t raised by the time the due date hits, there is no reason to panic. We have enough cash flow to pay interest payments on important things. You could see the volatility pick up as talks go on and as the due date approaches. One question that keeps coming up is how this be funded. The Treasury General Account program supports some markets with liquidity from their reserves. That liquidity must be replenished when the debt ceiling rises, but how will they do that? Typically, they take from bank reserves, but that is not an option because banks need to be in better standing to do that. Therefore, they will have to find other funding methods. It will be important to watch and see what words they use when they announce how and when they will do this. It will be imperative because it will lead us to what happens next for the market.     Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President Wealth Consultant Email Ty Miller here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post It’s All In

In this week’s educational episode, you will learn about the newly enacted age delay rules for Required Minimum Distributions set forth by the Secure 2.0 Act. Watch as Mark Hume explains how these changes might affect you and your retirement accounts.   Mark Hume, CFP® Senior Vice President Wealth Consultant Email Mark Hume here Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.The post New RMD Rules for 2023 first appeared on Fi Plan Partners.