Investors' Insights and Market Updates

Banking and The Fed The Federal Reserve’s Open Market Committee will be meeting this week and announcing their decision on interest rates. The market expects they will raise rates by 25 base points, with that being the last. They will be moving the Federal Funds Rate from a high end of five to five and a quarter, putting it above the current inflation rate of five. This is something we’ve been anticipating since the Fed started hiking rates. They needed to get the Fed Fund Rate above the inflation rate before they could pause. Now that the market has priced that in, it won’t be what the Fed does that is important; it will be what they say they’re going to do. Do they pause for a while and see where this goes? The way they’re trying to reduce inflation is with two tools. One is what they’re doing, which is raising interest rates. The other tool is their balance sheet. They expanded their balance sheet and bought around nine trillion dollars in assets during the pandemic, which was highly inflationary. They did that to try and stop the potential collapse of the financial system during that time. They had to start reducing that balance sheet and had been doing so throughout 2022. However, once again, they had to reverse course and put money back into the system when the Silicon Valley Bank failed in March. The Federal Reserve’s balance sheet went from roughly $8.3 trillion to $8.7 trillion in the weeks following the failure of the Silicon Valley Bank. Why is that important right now? It supports the banking system, but putting liquidity back into the system is inflationary. Over the weekend, we got the news that another California bank, First Republic Bank, is going into receivership by the FDIC, and JP Morgan will take them over. This is not a recommendation of either bank. The news of another large West Coast bank failing will muddy the waters on what the Fed can do. The Fed would like to have its balance sheet drop, but it couldn’t do it last time because it had to come in and save the banking system. Are they going to have to do that again? With this happening so close to the Fed meeting, they’re most likely going to get a lot of questions about this. It will be very telling what the Fed Chairperson says they’re looking at now that they have another West Coast Bank in receivership. This is interesting timing and much to review for the Federal Reserve. Of course, the all-important press conference will be where we get all the information.   Market History With the Federal Reserve expected to raise rates another quarter of a percent this week, the question is, will they announce this is the last rate hike? We decided to look back at how the market has historically performed after the Fed paused rate hikes. We found that the S&P 500 has been up an average of 13%, six out of the eight past times, one year after the Fed paused its rate hiking. While this might give investors a lot to look forward to, it is essential to know the details. Unfortunately, the two negative years, 1974 and 2000, are similar to what the market and economy are experiencing today with higher inflation. So, while buying stocks has worked in most years after the Fed pauses, we are more cautious this year because of the higher inflationary environment that has led to lower returns in previous cycles. We will be watching the Fed closely as things unfold.   Income Migration On Thursday, we got the official income migration numbers for the Great COVID Migration that occurred during the pandemic, and it was bigger than we thought. This shows the number of people moving from high-tax states with big cities, such as New York and California, into low- or no-income tax states like Florida and Texas. Florida added $63 billion worth of income during this time. Palm Beach County alone added $11.4 billion, more than every state other than Florida and Texas. Meanwhile, on the other side, California lost $47 billion, and $44 billion left New York, with Manhattan alone losing $31 billion. Alabama was a net gainer on these reports. During this time, the ten lowest-income tax states added about $100 billion of income, and the ten highest-income tax states lost about $100 billion, making it basically a direct trade-off. That pace doubled the pre-COVID pace. This becomes a bigger deal when this migration includes high-net-worth individuals. In fact, the average tax return for moving to Florida was $80,000 more than the return for a person leaving. This could change the landscape of schools, employment, company headquarters, etc. Will California, New York, and other high-income tax states decide to lower taxes, or will they continue to try to fight the battle? This also makes the Fed’s job harder because California and New York are much slower-growing economies than Florida and Texas right now. How does the Federal Reserve treat one state differently? You would think they would want to

Inflation has caused many Americans to adjust their budget and spending habits, but how has it impacted investment returns? In this week’s educational episode, Bobby Norman goes over the risk of inflation in investing and how it might affect you.   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. 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. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.The post Inflation and Investment Returns first appeared on Fi Plan Partners.

Market History This will be one of the busiest weeks for the first quarter earnings season, and we want to address the concerns around expectations for earnings growth to be negative for the second quarter in a row. We follow corporate earnings very closely as earnings are an important long-term driver of stock prices. However, the S&P 500 has held up in the short term after two consecutive quarters of negative profit declines. Going back to 1948, the S&P 500 average price performance following a second straight quarter of year-over-year earnings decline, the market is up three, six, and twelve months after. Six months after two consecutive quarters of profit declines, history shows the market was up on average by 5.9%. It was up 7.4% in periods when you take out economic recessions. History says that as long as investors have balanced and diversified allocations, they shouldn’t get caught up in the doom and gloom around earnings season. Another interesting historical fact about the market is that when the S&P 500 gained more than 7% in the first quarter of a year like it did this year, the S&P 500 has never had a negative full-year return. In fact, it had an average gain of 23%. As always, there are no guarantees, but this historical data on the market says that investors should remain calm regarding mixed earnings results and other concerning headlines.   Spending Cuts Politics always cause some emotion in the markets, and this week will be no different as it’s a big week for earnings and the House of Republicans. The House Republicans unveiled their plan to try and pass a bill to vote on for $4 trillion worth of spending cuts while raising the debt ceiling. If this bill passes the House, it is unlikely to be fully enacted. There will likely be some changes; however, this is an essential first step in these discussions. If they cannot pass it, the leverage will shift to the Senate, where they’ll have their chance to look it over and make changes. With tax revenue numbers being a little lower this year, the debt ceiling day might move up into June, and because of that, it’s important to get this first step through. The House is pushing for it to go through this week, as they see this June day becoming a possibility. There is no concern for default now, but this would be an essential first step to make that scenario even less likely. These situations are always emotional for the markets; however, we will continue to look at the facts and update you as we navigate them.   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.The post Seven Percent Gauge first appeared on Fi Plan Partners.

Listen to this week’s educational episode to hear Ty Miller talk about what correlation means and how it relates to portfolio diversification.   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 Correlation? first appeared on Fi Plan Partners.

The Debt Ceiling This week’s market-moving event is around the debt ceiling debate. Investors will watch carefully as the House Speaker gives his speech at the New York Stock Exchange. We expect him to call for a spending cut as part of the debt ceiling conversation. When we have these types of events, we like to see how the market has historically reacted to similar events. We looked back to 2011 when the House Speaker spoke to the New York Economic Club. What’sInterestingly, the price action of the S&P 500 this year seems almost identical to the pattern we saw in 2011. At this exact point in 2011, we understood that we had a bigger problem. The same became true in conversations today around the debt ceiling. Now that the policymakers are starting to focus on the matter, the debt ceiling debate will likely cause uncertainty in the markets and is something we will be observing over the next few months. We will continue to keep the viewers updated on the markets because, as always, politics do matter, and it’s getting close to that time, with the debt ceiling will be more of a conversation.   Inflation Data In last Monday’s episode, we were looking forward to the inflation report because that has been the data point that the market has moved off for the previous twelve-plus months. That report came out with results better than expected. Year-over-year, the Consumer Price Index grew by 5% to beat expectations of 5.4%. More importantly, this reading puts CPI right in line with where the Fed Funds Rate is, which is 5%. We’ve been looking forward to that point since late last year. We were surprised that the markets didn’t rally after seeing that data point. We had to look under the hood to see what would cause the market to not take this as a positive. We found out that it’s likely because the volatile food and energy sectors, along with used car prices, drove CPI down. We are happy that motor oil is down 17% year-over-year, which is a significant drop. However, OPEC’s announcement about major cuts in oil production starting in May could have been what the market is looking through too. The market may see oil prices down now, but the reality is that prices won’t stay down. Used vehicle prices were down 11%, which is phenomenal, but new vehicles were up 6%. Those weren’t consistent indicators, so that may be why the market took a very positive inflation number, saw it flat line with the Fed Funds Rate at 5%, and took it in stride. Regardless, it’s positive to see inflation come down symmetrically, as we predicted late last year. This is something we’re watching and taking as a positive sign for what we hope to be long-term growth.   Market History “Sell in May and go away” is a popular saying, but it hasn’t held up very well over the last 20 years. In the previous 20 years, there have been only three instances where the market was negative from May to October. The average return was about 4% from different sectors, not one outperformer. So, the saying to sell in May might not have as much relevance. One interesting tidbit we saw was that this saying came about when the US was more industrialized, and factories would shut down for a month over the summer to allow people to go on vacation while kids were out of school. The difference now is that society is more digitalized, and people aren’t taking the summer months off. Earnings won’t be affected because companies aren’t shutting down. This is probably why we don’t see that dip anymore. This is historical data regarding past performance, so there is no guarantee, but we plan on watching to see what happens this year as we approach May.     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 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

Join us for this week’s educational episode, where Greg Powell sits down with our newest team member, Makenzie Phillips, to discuss her role as Operations Specialist and what she enjoys the most about working with clients as they pursue a life that is Better, Richer, Fuller.     Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell 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 The Client Experience first appeared on Fi Plan Partners.

Jobs The jobs report on Friday showed that 236,000 jobs were added to the workforce. The unemployment rate fell to 3.5% from the previous 3.6%, and the labor participation rate increased to 62.6%. Labor force participation is the number of people working or actively looking for work. This is an important number because an economy can only grow by increasing output and efficiencies or having a larger working base. We’re finally starting to see our labor force come back from being depressed due to the pandemic. From January to now, two million people have been added to the labor force, and the number of job openings has fallen by roughly half a million. Back in January, there were around 1.75 job openings to unemployed people. Now it’s down to approximately 1.65 job openings to unemployed people. The lower it is, the better. Another point regarding the jobs report is that average hourly earnings growth was 4.2% year-over-year. A 4% increase in your pay is excellent; however, inflation has increased to around 6%. Taking 6% inflation and adding 3.5% unemployment gives you a Misery Index of about 9.5%. We’re watching that closely because it shows the amount of pain that people may be experiencing in their jobs and their lifestyles within this economy. It’s a great gauge and allows us to see if the consumer will move forward with spending money or if they will retreat, as well as other things taking place in the economy.   Inflation Inflation has been a headline that the US consumer has felt. You can see it when you drive by gas stations and go to the grocery store, and we see it in consumer spending. The way the market looks at inflation, though, is how it relates to what the Federal Reserve will do. Will the Fed have to continue to raise interest rates, or will they pause? Historically, the Federal Reserve has stopped raising interest rates when the Fed Funds Rate is higher than the inflation rate. Today, the Fed Funds Rate is at 5%, and the last inflation reading was 6%. The next Fed meeting will be May 3rd, but we will see updated inflation data on Wednesday. Expectations are for the Consumer Price Index to drop to 5.2%, close to 5%. If that number aligns with expectations or is better, the Fed might pause raising interest rates. If it stays higher, the Fed may continue to be aggressive. Wages are up over 4%, which is an excellent raise, but if prices are going higher than that, that’s where you get the risk of stagflation. Stagflation is when prices are higher than the economy can grow. It’s not a positive sign overall, but it could be a positive for corporate America. If prices are rising at 5%, but employment is rising at 4%, there is a chance that companies are pocketing that 1.5% spread. These are the most significant data points we will see before the Fed meets on May 3rd. We must watch the data closely to see if we can bring the Misery Index down with these two data points.   Corporate America With current concerns in the market being around bank strength and some companies announcing layoffs, we are analyzing the current balance sheet of corporations to see if the concerns are legitimate. One number we like to look at is the current cash equivalent holdings of the companies that compromise the S&P 500. On a chart shown in this episode, you will see a quarterly snapshot of the total cash and cash equivalent holdings of the companies comprising the S&P 500, a barometer of financial strength. Seeing the S&P 500 Index cash holdings suggests that America’s largest companies appear to be on solid footing, in our opinion. Total cash and cash equivalents fell from $1.89 trillion in Q4 2020 to $1.58 trillion in Q4 2022. Still, the decline may be related to share repurchases and dividend distributions, in our view. Stock buybacks and dividend distributions for companies in the S&P 500 Index set record highs in 2022, coming in at $922.7 billion and $564.6 billion, respectively. Furthermore, companies will often utilize cash as they engage in M&A and invest in property, plant, and equipment, among other capital expenditures. The record-setting pace of recent stock buybacks and dividend payments could be viewed as a vote of confidence by corporations in their ability to weather current economic headwinds. Time will tell, but broadly speaking, companies in the S&P 500 seem well-capitalized and gives us hope that the market can remain stabilized through the current noise in the economy.     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 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 th

In this educational episode, Trey Booth, Chief Investment Officer at Fi Plan Partners, explains the key differences between the Federal Deposit Insurance Corporation (FDIC) and the Securities Investor Protection Corporation (SIPC). While both organizations serve to protect assets, the FDIC covers bank deposits in case of bank failure, while the SIPC covers securities and cash in case of broker-dealer failure. Watch to learn more about the SIPC and how it safeguards your assets at securities firms. 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 Understanding SIPC Asset Protection first appeared on Fi Plan Partners.

Historical April March was volatile, but seasonality patterns prevailed, as stocks performed well in the last half of the month. As you can see in a chart shown in this episode, historical April seasonality trends suggest that last week’s positive momentum could continue. Since 1950, the S&P 500 has posted an average of 1.5% growth in April and has finished positive during the month 71% of the time. The first half of April is usually strong, with the first 12 trading days historically climbing 1.4%. While there are still concerns about the Federal Reserve slowing the economy down and the continued fallout from the banking crisis, the market is showing strength in a historically strong period of the year. Of course, there are no guarantees, but this positive development gives us hope that the strength seen last week can continue.   Gas Prices In a surprise announcement, OPEC recently said they were cutting oil production to nearly 1.2 million barrels daily. That’s in addition to the two million barrels they announced they were cutting back in October, along with the 500,000 barrels a day Russia announced that they are taking offline. Altogether, around 3% of the world’s oil production is coming offline. Saudi Arabia announced that the cut would go into effect in May, just in time for driving season here in the US. The summer driving season is when we use a large percentage of our annual gasoline usage, so oil prices immediately reacted this morning, reaching as high as $81 a barrel. Barrels were as low as $66 earlier in March, so oil markets responded quickly to this news. So, why would Saudi Arabia cut oil production and make a surprise announcement? Our research partners at Strategus put out a chart that helps explain what Saudi Arabia was looking at. It shows that each country in OPEC has a specific barrel price that they need to balance their budget. When we hear of oil prices, we think of companies and their cost per barrel and relate it to how much it is to get it out of the ground. Well, most of these OPEC countries run their entire country on oil, so this is what their beak-even is. This price is not on production but to balance their entire economy. Saudi Arabia, the largest producer, needs $67 a barrel to balance their budget. That’s in line with where we were in mid-March. So, this cut is more of a point of survival for them. They have to get their budget in line, so they must reduce their production to get prices back up. This is a significant change from 2014 to 2015, when the US was the swing producer, and Saudi Arabia was trying to cut oil production to boost prices. This didn’t have the same effect back then as it does now since the US is no longer the swing producer. We’re returning to an oil shock environment like the seventies, where when the OPEC countries speak, the market reacts immediately. It’s not set in stone, but we could see a rise in gas prices around May or June. This could be an early indicator that inflation may not be on the downward trajectory like we hoped and is something that we are internalizing here to project where interest rates, inflation, and the Fed may be going from here.   Inflation and The Fed March marked the one-year anniversary of the start of the Fed’s tightening cycle. This rapid tightening cycle has been the fastest since the 1980s. Coincidentally, since the early 1980s, this is the first time stocks haven’t been up in a 12-month period since the first rate hike was announced. So looking forward, what can we expect? In a chart shown in this episode, you will see that before the OPEC news, inflation was projected to come down enough to where the Fed could raise rates without actually raising rates. How do they do that? The Fed Funds Rate is expected to be 5%, but their next meeting isn’t scheduled until May. According to this chart, we are looking for a pause in rate hikes thanks to inflation coming down. Historically, we’ve seen a pause when the Fed Funds Rate is above the inflation number, not a rate cut, but at least a pause. We could see that as early as this month as long as the OPEC news doesn’t swing too much. It will be interesting to see how we move forward and if we can get inflation down enough. If rates plateau, that’ll help the consumer with mortgage payments, car payments, and other things.     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 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 stra

Watch or listen to this episode to hear Ashley Page talk about the banking system and how it can have an impact on the overall economy.   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 Banking and the Economy first appeared on Fi Plan Partners.

Never Ending Volatility Recently, we’ve been getting questions from clients regarding what seems like never-ending volatility in the market. Because of this, we wanted to share a chart with you, which you can see in the video for this episode, that shows fourteen of the past fifteen calendar years. From 2008 to 2022, the S&P 500 index endured no less than two negative total return months and as many as eight negative months in 2008. From 2008 through February 2023, the S&P 500 index endured a loss in 61 of the 182 months. The unique year was 2017, when at least one negative month didn’t occur. This data is important because even with the volatility seen since 2008, the S&P 500 has an annualized total return of 8.95%. Historically, volatility is the norm, and given the recent news around the banking sector and stubbornly high inflation, we could easily see further volatility. That said, stock prices don’t rise in a straight line, and investors will encounter turbulent times along the way.   Long Term Impact All eyes were on the Fed Wednesday as they announced their decision to increase interest rates by 0.25 percentage points. As we discussed in our episode last week, this was widely expected. A few weeks ago, market participants expected a 0.50 percentage point hike. However, with the news about the banking sector, many expected that the Fed would pause rate hikes. Some participants believe that if the Fed had paused rate hikes, it would have been good for stocks, bonds, and the banking sector. So, why didn’t they pause, and what are they looking at that the rest of the market isn’t? The Fed appears to be more focused on inflation and avoiding stop-and-go monetary policy. They want to avoid this because that was the policy of the 1970s when inflation was rampant for almost a decade. On a chart shown in the video for this episode, you will see a blue line showing today’s Consumer Price Index and a red line showing the Consumer Price Index in the 1970s. These lines show that we are kind of tracking with the early seventies. The Fed doesn’t want to let up on inflation and allow it to go back up. If that happens, we’ll be fighting the same battle a few years down the road, and that is the risk of stop-and-go. It would be positive in the short term but harmful in the long term. The Fed is between a good rock and a hard place, being too aggressive and hurting the economy and the bank sector or too soft, allowing for a 1970-style multi-year inflation fight. On another chart in the video for this episode, you can see where the Fed Funds Rate currently sits. We are just now getting to the higher-end area where that was needed back in the late seventies and early eighties to finally beat inflation. There is a lot for the Fed to digest in the short term, and even though the markets might want the Fed to pause interest rate hikes, there’s a lot of risk in the long run. The long-term impact is likely what Chairman Powell is looking at. We will keep an eye on this moving forward.   Stocks and Bonds A chart in this episode shows the correlation between the Nasdaq 100, the 100 biggest tech stocks, and the 10-year treasury. If stocks and bonds are directly correlated, they are closer to +1 and moving in the same direction. When they are closer to -1, they are inversely correlated and move in the opposite direction, which is more typical for stocks and bonds and what we like to see. As you see in the chart shown in the video for this episode, for much of 2022, stocks and bonds were directly correlated. While being correlated is excellent when the market is moving up, it is not good when it is moving down, like last year. Since stocks are down, people are asking how their fixed income is doing, but unfortunately, that also took a hit in 2022. Things change, and the norm is that stocks and bonds will be inversely correlated and working oppositely. Since SVB Bank announced its capital raise on March 8th, stock prices and bond yields have decreased, while bond prices have increased. In short, bond prices go up when stock prices go down, which is more typical in the market and something we like to see. We believe diversification is important and is great when working properly. Last year, stocks and bonds were both down, so seeing the market return to normal and hopefully sustain it for the long term is excellent.     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 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

If you are a homeowner, it’s important to be aware of the key financial planning topics that can help you make informed decisions about your home and your future. In this educational episode, Mark Hume goes over some of the most important dos and don’ts regarding home insurance and decisions surrounding your deed and mortgage. With these tips, you can ensure you’re prepared for whatever comes your way as a homeowner.   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. Fi Plan Partners and LPL Financial do not offer tax or legal advice or services. We suggest speaking to a tax or legal professional regarding your specific situation.  The post Financial Planning Tips for Homeowners first appeared on Fi Plan Partners.

All Eyes on The Fed Market participants have wished for the Federal Reserve to pause on rate hikes for many months, and we may see that happen after their meeting this week. This is the least clear the market has been on where the Fed will go with only two days away from their meeting. Typically, the market is fully priced on what rate expectations will be. There is much debate on where rates will be because of the concern around the banking system over the last few weeks. Even though the Fed pausing rate hikes is what people have wished for, it may have come at the expense of the banking system. This give-and-take surrounding the market is something we are going to continue watching. Over the weekend, there was a shotgun marriage between two Swiss banking giants, Credit Suites and UBS. UBS will buy its smaller competitor, Credit Suites, with the support of the Swiss banking system. This is news that the market is taking as a positive and shows that we’re doing all the right things and firming up our banking system and capital worldwide. What will be important is what the Fed says after their meeting. Will there be a 25-bais point rate hike, or will there be no hike at all? What the Fed says as the reason behind their decision could reassure markets. The Fed sees data that we don’t see, so if the Fed is confident in our banking system and the strength of our economy, then that’ll likely boost market expectations. In addition, inflation came out last week at 6%, which was in line with expectations. So, the Federal Reserve is getting what it wanted, which is a slow decrease in inflation.   The Bond Market In a chart shown in this episode, you will see that we’ve had a lot of volatility in the bond markets. It has almost traded like the stock market, in a sense. The chart shows that the curve has flattened, and rates have decreased. The 2-year dropped from around 5% to 3.86% in the span of a week. The 10-year dropped from 4% to around 3.43%. We went from a 100-basis point difference between the 2-year and the 10-year to roughly a 40-point basis differential. Traditionally, once the 2-year goes below the Fed fund rate, that is typically when the Fed looks to pause or to start cutting rates. The 2-year is down about fifty 50-basis points below the current Fed fund rate, so it will be interesting to see what the Fed does with this news and the current situation with the banking system. On another chart in this episode, over the span of one day, you will see what the Fed funds rate looked like before and after the situation with Silicon Valley Bank. It has dramatically changed from having steady rate hikes throughout the year to maybe one rate cut or a pause to pricing and cuts coming along as soon as the middle of the year. All eyes will be watching to see what direction the Fed goes.   Direct Impact What the Fed does has historically affected the stock market. In the past, the Fed has pushed rates higher than necessary to stop market falls. This time, we need to see a more accommodated Fed to see the market start to rally. Over the last year, we have seen mortgage rates rise. We watched the 30-year mortgage rate go from mid-twos to above seven. That directly impacts individuals looking for homes. As interest rates fall, you should expect to see stocks stabilize and potentially rise. You should see mortgage rates fall, which could help the housing economy and people looking for houses. A great deal of news is coming out this week that will significantly impact where the markets, inflation, and interest rates go from here, and we are watching it closely.   Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President 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 Be Careful What You Wish For first appeared on Fi Plan Partners.

Watch this week’s educational episode to hear Adam Vansant walk you through how to access tax documents on Account View.   Adam Vansant, AIF®, BFA™ Senior Vice President of Operations & Advisory Services Wealth Consultant Email Adam Vansant 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 Finding Tax Documents on Account View first appeared on Fi Plan Partners.

The Banking Industry We want to address what happened last week in the banking industry and explain why the market had such a tough week. Last week the S&P 500 was down 4.5%. Mid-caps were down 7.4%, and small-cap stocks were down 8.1%. The sharp pullback in the market was due to earlier in the week when the Federal Reserve said they still had work to do and expected further rate hikes. After that, later in the week, the news came out about the failure of Silicon Valley bank. Why did the market react negatively to the Silicon Valley Bank news? The best explanation is that Silicon Valley Bank was uniquely at risk because of its unusually low percentage of individual depositors and its unusually high portfolio of loans and securities backing up their deposits. Another problem is that the bank’s clientele was mostly startup companies in the technology and healthcare sectors. On Thursday, the bank had $42 billion worth of withdrawals which left the bank with a negative cash balance. This was immediately followed by regulators stepping in to take over the bank. Silicon Valley Bank was the 16th largest bank in the nation by total assets, so it wasn’t surprising that the market was concerned by its failure. This was the second largest bank failure in U.S. history, so the fears of a 2008 run on the banks scenario were running through investors’ minds. Silicon Valley Bank’s situation is unique, and the news of its failure was initially such a worry because 97% of the deposits at the bank exceed the FDIC’s insurance cap. Silicon Valley Bank was in a class of its own because it had a bad combination of the lowest percent of retail depositors and the highest percent of loans and securities backing up their deposits among all similarly-sized banks in the country. The second worst bank by these measurements, Signature Bank, was suddenly forced into receivership by regulators on Sunday, March 12, 2023. The two banks that regulators took over are the two banks that had the highest risk. It’s important to note that a large majority of U.S. banks are in much better financial shape than the two mentioned; however, this is something that we will continue to watch.   Inflation and The Fed One of our research partners, Strategas, once said, “Traditionally, the Fed raises rates until something breaks.” A break can be something minor, like in 1998 when the break was long-term capital management. At that time, it was the largest hedge fund in the world, and the Fed came in and had to save it. It could be something significant like the housing market crash in 2008. We’ve already seen parts of the economy break; for example, we saw crypto nearly collapse, we saw the collapse in the tech industry, and the IPO market dried up to near 0, and now we’ve had a bank failure. It will be interesting to see if this failure of Silicon Valley bank is an extension of what we already knew was the broken tech market or if this is a new break in the economy where it may be a weakening the banking system. Only time will answer that, but we do have a short-term indicator of that, which is market expectations for Fed rate hikes. What does the market think the Fed is going to do? Jerome Powell spoke to Congress last week for two days. Over those two days, interest rates spiked as he made it clear that the Fed’s number one goal is to fight inflation, and how they’re fighting inflation is by raising interest rates. On Friday, the news about the banking concerns pulled rates back down. However, tomorrow we will get a new inflation report, and it will be huge to see how market expectations react to that inflation report. We expect a 6% CPI, so depending on whether that CPI number comes in above or below 6% will be telling on a year-over-year basis. It will be more telling to see how the market reacts. Will the market say that the Fed is back focused on inflation, so the expectation is for interest rates to increase, or will the market say that the Fed is focused on the banking sector, at which point interest rate expectations come down? There’s a lot of conflicting data and some tug of war between who will win. Has the Fed done enough to break what they feel is reasonable to bring down inflation, or is there more to go? This is a significant week for data. The inflation data coming out tomorrow is good because we no longer have to wait. We’ve been waiting for this inflation report since the last Fed meeting beginning of February. The next Fed meeting will be on March 22, so we will also keep an eye on that.   Jobs According to the recent jobs reports, 311,000 jobs were added. The report also showed that unemployment rose from 3.4% to 3.6%. The unemployment rate rose because there are more people in the workforce. This is proven because the labor force participation rate rose the same amount as the unemployment rate. This is a significant data point because an increase in people looking for jobs i

Interest Rates and Market Performance With the treasury yields spiking higher the past few weeks, we’ve had some questions about higher interest rates and market performance. We looked back from a historical perspective on how the S&P 500 index had performed in calendar years when the yield on the benchmark 10-year treasury note finished the year higher than it began. From 2000-2022 there were ten such years where the S&P 500 posted a positive total return in eight of those ten years. One of the outlier years was last year in 2022, which saw a record jump in the 10-year yield, with the S&P 500 having a tough year. So, even though rates are rising this year, history says that’s not necessarily bad for the markets and is something we’re observing. Economic Data When we talk about holding the line, we’re usually referencing a technical line and trying to see if the market can stay above it. A chart in this episode displays the S&P 500, the 500 largest stocks publicly traded in the US. The S&P 500 is the most important equity index in the world. The chart shows how all of last year, the market would rally and then fall repeatedly. That started the term where we had a higher, low beginning this year. The market rallied, and then the market fell and then held at that rising line. Can the market hold this line going forward? Will it be able to continue a new pattern of higher highs and higher lows? Technical data like this tell us what’s happening now, and fundamentals are good for looking at the past. Another chart in this episode shows market performance during earnings season. The last three rallies in the S&P 500 were during earnings season. The micro data core company earnings alone have been very positive. The market had rallied on that positive news only to fizzle when the macro data took center stage. The Macro data we’re talking about is inflation. Everyone knows that inflation has been an issue and that the Fed has been pushing prices down. We’ve passed through another earnings season, and recently the market rallied again just in time for us to receive the macro data. Can this current market line hold as we move from the micro data positivity to the macro, which has been negative over the last 12 months? We will get the jobs data on Friday, inflation data next week, and the week after that, we will have the important Fed decision regarding interest rates. As you can see, we have a lot of macro market data coming at us. It will be very important to see if the market can hold the line and get a good rally to start off the year. Sector Realignment The global industry classification standard oversees realigning the S&P 500 and is scheduled to do a realignment on March 17th. Over a trillion dollars’ worth of money will be realigned within the 11 sectors of the S&P 500. The money is not coming or going; it’s just being realigned within the same 500 companies, but how does that work? Some credit card companies currently in the tech sector are moving to the financial sector. These kinds of moves make more sense because credit card companies deal mainly with financials. Some companies are moving from the tech sector to the industrial sector, and some big box and discount retailers are going from the consumer discretionary sector to the consumer staple sector. These moves will align the US more with the rest of the world. The tech sector is going to lose about 3%, making up 22% of the overall sector for the S&P. Financials are going to get a 3% bump, moving up to around 15% overall. Compared to the rest of the world, in the most tech-heavy places like Japan, their tech sector only makes up about 18% of their total. In places like Europe and China, their tech sectors comprise around seven and eight percent. It is interesting that we were so tech-heavy before this realignment. Forced Trading The sector realignments won’t change anything but will create hundreds of billions of dollars worth of forced trades. We have a lot of rules-based investing in this world. It’s not as much as one person picking one stock and buying them. They may want to own Visa, but if Visa is no longer in the tech sector, they must sell it. If you own a financial sector, you have to buy it. There’s no human decision behind that. That’s just hundreds of billions of dollars worth of forced trading that will happen in the next couple of weeks, likely around March 16th. It will make the market look a lot more volatile and look like there’s a lot more activity. There will more than probably be a lot of press around the record volume that will take place. It’s an important event for those companies going from one sector to another. It is equally as important for the sector managers who own these companies today but won’t own them a week from now. There are a lot of moving parts that will most likely create friction fo

Have you ever wondered what distinguishes ETFs from mutual funds? Our latest educational episode has got you covered! Join Ty Miller in this week’s educational episode as he breaks down the key differences between the two investment vehicles and how they can impact your portfolio. Watch the full episode to learn more.     Ty Miller Associate Vice President 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. ETFs trade like stocks, are subject to investment risk, fluctuate in market value, and may trade at prices above or below the ETF’s net asset value (NAV). Upon redemption, the value of fund shares may be worth more or less than their original cost. ETFs carry additional risks such as not being diversified, possible trading halts, and index tracking errors. Investing in mutual funds involves risk, including possible loss of principal. Fund value will fluctuate with market conditions and it may not achieve its investment objective.The post ETFs Vs. Mutual Funds first appeared on Fi Plan Partners.

The Economy and The Fed   The Fed’s “preferred” inflation gauge, the Personal Consumption Expenditures or PCE, not only came in worse than expected, but the prior three months were all revised higher. The whole thing throws cold water on the ‘disinflation’ buzz and the rally we’ve seen so far this year. On a year-over-year basis, the PCE Price Index for services spiked by 5.6%, the worst since 1984. This matters because services is where inflation is running hot and makes up almost two-thirds of consumer spending. This higher reading is not what the Fed wanted to see, so we expect further rate hikes, which will lead to a more volatile market than what investors were hoping for coming into this year. This makes the Fed’s job extremely difficult in bringing down inflation without significantly hurting the economy. We will continue to watch this closely.   Inflation Data   The chart shown in this episode shows the most recent year-over-year changes in the cost of selected items in the Consumer Price Index. The chart shows that services have been the most inflationary. Airfare costs are up, along with hotels, food, and others. However, gasoline is down 1.53%, and used car prices are down nearly 9%. During the pandemic, there was an increase in electronic purchases, such as TVs. However, last year the data shows that television prices dropped 14.40%. Another chart in this episode shows how price changes in consumer goods and wages have developed since 2000. It shows that anything technology related has been deflationary. In 2000, technology items, such as TVs, toys, and computer software, were more expensive and have continued to decrease in price over the years. On the opposite side of that, hospital services, college tuition, medical services, housing, food, childcare, and hourly wages have continued to get more expensive.   Technical Analysis   As long as inflation remains elevated, we will continue to see increased market volatility. After the third week of a declining market, we’re analyzing our technical research closely. We would like to see the S&P 500 stay above the 200-day moving average of 3942. Numerous Federal Reserve officials are speaking this week, and several important economic reports are coming out. For those viewers who like to track the markets throughout the week, keep an eye on the 3942 level on the S&P 500. The market must hold this level as we continue to deal with higher inflation.     Bobby Norman, CFP®, AIF®, CEPA® Managing Director Wealth Consultant Email Bobby Norman here Ty Miller Associate Vice President 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 and Market Volatility first appeared on Fi Plan Partners.

You don’t want to miss this week’s special episode of Investors’ Insights, where Greg Powell and Trey Booth answer a popular question that we often hear, “What is the purpose of the many screens in Trey’s office?”   Click the link to watch this informative video where Greg and Trey discuss how the Portfolio Team at Fi Plan Partners uses the screens to follow market performance and track data.   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 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 Behind the Screens first appeared on Fi Plan Partners.

As we celebrate the 18th anniversary of Fi Plan Partners, we wanted to share a special message from our fearless leader, Greg Powell, to thank you for an incredible 18-year journey with phenomenal relationships like you.     Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell 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 An 18th Anniversary Celebration first appeared on Fi Plan Partners.

  Core CPI   This week’s market-moving event could be when the consumer price index report comes out on Tuesday. Expectations are that the annual price growth decelerated to 6.2% in January. The core CPI, which takes out the more volatile food and energy numbers, is often seen as a better measure and is projected to rise 0.4% month-over-month, which is different from what the market or Federal Reserve wants to see. The core CPI number had started to come down at the end of last year, especially the inflation of core goods. The market started the year strong on the thought that inflation was coming down, so a hotter inflation number could reverse the trend in the market. We’re concerned about Tuesday’s report because we’re seeing a rise in gas and used car prices. Used car prices have surprisingly risen in recent weeks, which was unexpected. They remain above historical prices going back to 2008. So, Tuesday’s inflation report is significant because trading sessions and market trends were negatively impacted throughout last year on days when CPI was reported. With the much stronger-than-expected jobs report seen two weeks ago, a higher inflation number could damage the market for a few weeks.   Market Moving Data   When the Congressional Budget Office updates its official budget baseline, it’s typically a non-event. This report comes out on February 15th and is expected to be a market mover. Why does this budget baseline matter? It is the number that congress uses when considering bills or changes to the deficit and spending. They use the Congressional budget baseline to guide where things are going. This number hasn’t been updated since May, and a lot has happened since then. The current Congressional budget baseline uses a 1% Fed funds rate. Currently, the Fed funds rate is 4.75%. That’s an additional $300 billion in interest payments that must be built into the future budget. That’s also $300 billion that congress, when dealing with the debt ceiling debate, must take off the table for spending and use for interest. In addition, spending overall is up $570 billion above the baseline estimate. Again, another dollar figure means that congress must pull that spending off because it’s already been accounted for. Tax revenues are relatively flat, so a big tax windfall is not expected. What does all this add up to? It means that the deal over the debt ceiling, originally expected to last until July, will be pulled forward by as many as 2-3 months. Congress initially thought they had as many as five months to do this; however, they may only have as little as 6-8 weeks. That’s a much shorter timeline to get a bill passed, which could pull the market volatility forward. In 2011, the S&P 500 was down 15% during a similar situation. The market has ignored it more this time than it did then because markets typically don’t react until reality hits. With the possibility of market volatility coming sooner than later, we will dig into the baseline data that comes out on the 15th and plan to react accordingly.   Short-Term Volatility   We wanted to share a Super Bowl fun fact with you this week. According to Carson Investment Research, there have been eight instances since 1910 of a Philadelphia team winning the Super Bowl or World Series. Each win was followed by adverse events such as the Great Depression, the Great Recession, etc. Obviously, that’s coincidental and not something we trade off of. However, it helps us to feel better when talking about the Chiefs winning Super Bowl LVII instead of the Eagles. On a more serious note, sticking with technicals but focusing on seasonality, February is typically the second worst month of the year aside from September. In February, weakness traditionally occurs in the second half of the month, starting around the 15th. However, it has been historically followed by a strong March. We are also amid the strongest quarter of the 4-year presidential cycle. So don’t let this short-term volatility get you down.     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 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 re

In this week’s educational episode, Ashley Page talks about preferred stocks and explains how they are different from bonds and common stocks.   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. Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk.The post The Pros and Cons of Preferred Stocks first appeared on Fi Plan Partners.

Technical Analysis   After a strong January for the markets, the question is, can the rally continue? Fortunately, technical analysis helps us answer this question. One bullish market development that happened last Thursday for the first time in two years, a golden cross occurred in the S&P 500. A golden cross is a bullish signal when the 50-day moving average crosses above the 200-day moving average. Historically, a golden cross means a positive market. The S&P 500 has historically generated positive returns over the 12 months following each golden cross. Of the previous 36 golden cross signals, the index produced forward for an average return over the following 12 months of 10.5%. What’s more interesting is when the 200-day moving average is declining, such as the recent occurrence, the average return for the S&P 500 jumped to 16.8% over the following 12 months. We’re able to analyze technical analysis for confirmation that there is a trend change for the market and further raises the probabilities that the bear market low that we saw back in October and the current direction of the market appears durable, just probably not at the pace seen in January, but still a positive sign for the market going forward.   The Fed   The Federal Reserve met last week and announced its interest rate policy. As expected, they raised rates from 4.5% to 4.75%. That was in line with expectations and not nearly as aggressive as when they closed the year by raising rates by 50 and 75 basis points at a time. The Fed appears to be slowing down, and the market has taken that positively. However, in the Fed’s official statement, one sentence was missed initially that the market may be taking more aggressively now. Jerome Powell said, “The committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.” That 2% number is important because many market participants have been looking for the federal funds rate to get above the current inflation rate. The current rate of inflation is 6.5% and the federal funds rate at 4.75%. That’s not nearly as far to go, especially with two inflation numbers coming out between now and their next meeting in March. You could easily see how inflation could fall down to where the federal funds rate is currently. However, with inflation at 6.5%, that’s a long way from 2%. Is the Fed moving its target of getting the federal funds rate above the current inflation rate, or are they trying to get inflation all the way down the 2%? That’s a much more aggressive stance if the Fed remains aggressive until inflation is at 2%. They sent some mixed signals with their statement and if you don’t want to fight the Fed, it’s hard to see where they’re going. There’s a lot of data left to come out but the next most important data point we’re watching for is the inflation report, which comes out on the 14th of this month.   Earnings   So far this quarter, half of the companies in the S&P 500 have reported their earnings. Sales growth is up 4.6%, beating expectations, but earnings growth is short at -2.7%, with energy still being the outperformer. What’s interesting is that these numbers show us what is going on right now and looking back. Looking at the projections for 2023, those numbers have started to come down. Every time each company reports its earnings it puts out a projected earnings estimate. So far, these have been coming down. We started last year with earnings per share of around $245 for the entire S&P 500. This year EPS took a steep decline down to $224. Job cuts are not factored in these earnings reports but we’ve seen a lot of them. While they are never good for the employees, job cuts help companies expand their margins. They have fewer costs, which factors into earnings costs, cost of goods sold, and things of that nature, so it’ll be something to keep an eye on going forward.     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 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 unmanage

Interest Rate Hikes   For the last few years, the market has been 100% focused on what the Federal Reserve was going to do. During Covid, it was very stimulative, but in 2022 that flipped to being very restrictive, where the Federal Reserve was trying to get the market and prices to drop. Going into 2023, the story is the same. What we’re watching for this year is when will the Fed feel comfortable with pivoting from restrictive hiking to maybe pausing or turning around. This week’s meeting is very important and will be the first meeting of 2023. They’ll announce on Wednesday what their rate policy is and expectations are that they will go from 4.5% where the Fed Funds Rate is up just 25 basis points to 4.75%. That’s a big move considering we had 75 basis point hikes many times through last year. The Fed will not stop hiking its Fed funds rate until it is above CPI. History is a good guide to this and that’s where the Fed thinks they have finally beaten inflation. The Fed funds rate is currently at 4.5% and is likely going to 4.75%. Inflation most recently was at 6.5% so there’s still a lot of work to do. The Fed’s guidance on how they view potential inflation between now and when they meet next in March is going to be huge. Hopefully, by then, inflation has come down to a point where the Fed can at least pause. In a chart shown in this episode, you can see why the market thinks that a pause is good. The chart shows that historically the Fed doesn’t sit idle for very long. As soon as they get to that peak level, they usually make some sort of policy mistake where they chase inflation up. Similarly, they didn’t chase the market and the economy down on the other side because they typically hike rates, so they must immediately start cutting rates. Cutting rates is very stimulating for the stock market and we may start seeing what could be a sustainable rally which we haven’t had in many months. That’s why this decision is so important. It’s not really what they do, we all pretty much know what they’re going to do, it’s what they say. There’s so much teetering on when they can pause and then likely reverse course, which will help the market.   Positivity   Last week, the Core PCE report came out and was up 0.3% month-over-month and 4.4% year-over-year. The Core Personal Consumer Expenditures report focuses on businesses and is a key part of the Consumer Price Index report. With that being said, over the past three months, Core PCE is only up 2.9%, with the Fed funds rate possibly going up to 4.75%. We’re looking at the first time in a long time when we might have some real positive rates. It was just a short time ago when we were talking about negative nominal rates, not even including inflation. Now we’re looking at positive real rates, which would be the Fed funds rate minus inflation. It’s very interesting and gives consumers a lot of different options as opposed to the negative interest rate environment that we have been in for quite some time.   Misleading Headlines   As we head into another big week of corporate earnings reports, one of the big stories so far this earning season is the layoffs being announced by some of the big technology firms. Some might think that the Federal Reserve will be happy with the layoff announcements but looking deeper into the situation, the headlines might be misleading. Looking at a chart shown in this episode of recent layoffs announced by technology firms gives a better picture of what’s really going on. On the chart, the blue lines represent the percent growth in the workforce during the pandemic and the orange lines on the left of the chart represent recent layoffs. Amazon increased employees by 93% and Spotify increased by 122%. Some of these companies had record hiring sprees, so the recent layoff announcements seen in the orange lines are not too surprising. META increased its workforce by 94% and just announced layoffs of over 12% of the workforce. It’s not that big of a deal considering the size of hirings in recent years. Also, we’re hearing that those in technology losing their jobs are being rehired quickly, even with some being hired within a few days. If we hear of more layoffs this week from technology companies, it might not be as negative for the stocks and future guidance as some think. As always, it’s important to look at the full picture.     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 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

Watch or listen to this week’s educational episode to hear Trey Booth and Ty Miller talk about the possible benefits of a down market when it comes to taxes.   Trey Booth, CFA®, AIF® Chief Investment Officer Wealth Consultant Email Trey Booth here Ty Miller Associate Vice President 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 Tax Loss Harvesting first appeared on Fi Plan Partners.

Market Update   We want to give a quick update on where the market stands as we head into a very important week of corporate earnings. The S&P 500 has kicked off 2023 with a solid start, rising 4% before giving up some gains last week. In this episode, we show a few charts that highlight the technical macro backdrop of the S&P 500, which should help the index finally break its downtrend in 2023. One chart goes back to last January when the S&P 500’s previous rally attempts failed to break through the 200-day moving average. Today, the 200-day moving average is at 3971. These failed rallies last year in March, April, July, and December were due to sharply rising interest rates and a big US dollar rally. The good news is that the headwinds we saw last year have largely subsided. On another chart, you can see that the 10-year treasury yield has fallen to 3.5% and is in a pronounced downturn. On the third chart, you will see that the US Dollar index is also in a pronounced downturn. The backdrop for inflation has also improved over the last year. Another chart shows that the recent peak in year-over-year inflation estimates for 2023 is coming down. With yields, the US Dollar, and inflation all trending down, we’re watching carefully to see if the market can finally break through and hold at the very important 200-day moving average number. We are watching and hoping for what should be a less volatile year as we move forward.   Technical Strength   We seem to be having some technical strength in the market where we’ve created a bottoming process. Last year it was all about inflation, the Fed’s response to inflation, and rising interest rates. Since the last Fed meeting, the market has seemed to be looking at earnings. Something we thought was important to look at was where our earning season could be going and where the market expects it to be. A chart shown in this episode shows the change in earnings expectations to start the year off. Only 10% of the S&P 500 earnings have been reported and we will get a third of the S&P report this week, which should show some market-moving data. While the market seems to be bottoming, earnings are coming out a little bit weaker than expected. Since the beginning of this year, expectations have dropped by over 2%, showing negative earnings growth for the fourth quarter at -2.9%. That kind of conflicts with the revenue expectations of +4.1%. That means inflation is hitting a company’s earnings and the market directly. Prices are higher and there are more sales, but you also have higher costs so that’s bringing earnings down. If you strip it down and look at the specific sectors, you can see that the bulk of the earnings positivity comes from two sectors. Energy had 61% earnings growth, and industrial had over 40% earnings growth. Those two sectors are pulling up the market and that is where you saw a lot of strength last year. We need to see a broadening of that strength for this market to find a sustainable bottom and then move past this inflation and Fed-led market into an earnings-led market. At the end of the day, companies make money and they give that money to shareholders. That’s what calls the price to go up sustainably. We’re going to need to see those earnings improve. We will get a lot of data this week and we hope we’re going to see some positivity, which could cause the market to rally.   Record Dividends   Last year we saw a record $563 billion in dividends being paid to shareholders. That is a great sign because, during the pandemic, a lot of companies had to cut dividends or pause them. We were glad to see companies get back on track with rising dividends. It’s only January, but we’re on pace to see another record year for dividends. If the dividend yield stays the same, there’s a chance that numbers will surpass those from 2022, which is a great sign. Historically, dividends have accounted for about 60% of the S&P 500’s total return. As you can see in a chart shown in this episode, one factor is from 2010 to about 2021, known as the QE era, we saw dividends only make up 26% of the S&P 500’s total return. As we transition from QE to QT, it’s going to be interesting to see if dividends start making near that 60% range or at least find a nice middle between 26% and 60%. Right now, companies are paying out 33.4% of their payouts, which is historically low. Typically, they pay out around 48%. Last year was a record year, but it seems like 2023 is well on track to surpass that. We are hoping to see dividends become more of a factor going forward.     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 Adam Vansant, AIF®, BFA™ Senior Vice President o

Listen to this week’s educational episode, where Ty Miller talks about taxable events in relation to gains and losses and how to know when it is considered realized versus unrealized.   Ty Miller Associate Vice President 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 Unrealized vs Realized Gains and Losses first appeared on Fi Plan Partners.

Historical Markets   One of the best ways you could describe the 2022 year is with the word volatility. This occurred in the stock and bond market. We saw the S&P 500 down 19.4%, Nasdaq down 33.1% and the Aggregate Bond Index was down 13%. Also, international markets didn’t fare much better with an example of Emerging Markets being down 20.6%. Where does last year compare in history. Going back to 1928, there have only been 6 years in which the S&P 500 performed worse than it did in 2022. Moving forward, we expect some similar headwinds to play out in 2023. One of the biggest one that we have an eye on is the uncertainty of the Federal Reserve raising interest rates to fight inflation. Historically, the market has seen an average 26% return following the previous year close to 20% or more. Of course, there are no guarantees. We are hopeful that we will have a more favorable market in 2023, even with some of the headwinds that carried over from 2022.   Mortgage Rates and Inflation   It’s no secret, if you have been watching our vlogs that the interest rates have been challenging and rates have moved up drastically over the last year. We thought it would be helpful to discuss some topics, specifically what was the most telling of last year. The first is regarding Mortgage rates. The national average of the 30-year was an important thing to look at. It opened the year around 3.22% and ended the year at around 6.3%. To put this in dollar terms, that’s around $200 per month for every $100,000 of borrowing. So, for example, if you have a $500,000 home, that’s $1,000 a month for 30 years in additional cost. This is a topic that is really starting to affect people. From a market standpoint, we wanted to discuss the amount of negative yielding debt. This shows how extremely abnormal the last decade has been. Coming into 2022 there was $14.1 trillion negative yielding debt instruments around the world. What this means is that an individual is buying an investment that if held until maturity that they will lose money. This almost seems counter-intuitive for investing in general. That number is now down to zero. The transition was painful to get where we are now but looking forward, this feels like a more normal environment for investors.   Unemployment and The Fed   After a sluggish start to the year, we saw a big rally on Friday. For some that may have had the perception of receiving a good unemployment rate, but it really depends on how you look at it. Payrolls increased 223,000 which was a little more than expected. Unemployment is down to 3.5%, which is low. The labor force participation rate froze, which is a good sign. One of the main takeaways for us is how the market reacted to the wage numbers. Wages rose 0.3% month-over-month and under 5% year-over-year now. While this does hurt the working consumer with inflation still being high, the stock market seemed to take this in stride but why? The federal reserve cannot handle supply and demand but one of their jobs is to help with inflation. So, if wages start coming down or moderate, the Fed could stop raising rates as much as they have. We got some good information from ISM Manufacturing with service inflation decline and production falling. The thing we are keeping an eye on is how the Fed reacts.   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 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 2023 and You first appeared on Fi Plan Partners.

Watch or listen to this week’s educational episode, where Trey Booth talks about the impact that interest rates have on the cost of mortgage payments and home prices, as well as what this type of housing environment has looked like historically.   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 Housing Costs first appeared on Fi Plan Partners.

Inflation Data   The Consumer Price Index (CPI) report that measures inflation ended up being a nice Christmas surprise. The report came in at 7.1%, beating the expectation of 7.3%. The market took that in stride and rallied on the good news. The report also showed some of the transport costs coming down, which is also a good sign. However, one negative thing in the report that stuck out is that food and beverage costs are still elevated. We need that to come down but overall, it was a solid inflation report that the market enjoyed.   Interest Rates   In last week’s vlog, we talked about the two big data points we were watching for. One of those being inflation and the other being the Fed. We said that inflation needed to be below 7.3% and the Fed’s decision on interest rates needed to be at or below the expected 50-basis point rate hike. Well, inflation did its part and the market rallied from Tuesday morning when the report came out through Wednesday into midday when the Federal Reserve announced its decision. Jerome Powell came out, despite the better-than-expected inflation data, and gave comments about the dot plots of what the Fed projects the interest rates to be going forward. The plan is much more aggressive than expected. They did raise rates by 50-basis points in line with expectations, but it’s what they said about future rate hikes that were much more aggressive than what the market thought considering inflation coming down. However, what was interesting is after those comments, the market did sell off for the rest of the day and through the week, but long-term interest rates came down. That tells us what the bond market and the stock markets are expecting. Even though the Fed says they’re going to raise rates, they’re likely not going to be able to because the Fed has already misjudged the economy and we might be heading into recession, which will cause the Fed to raise rates and then quickly turn around and cut rates because they’ve moved the fed funds rate too high. Interest rate expectations for their federal funds rate fell despite the Fed saying that they would raise rates further. It’s a little confusing but what the market is telling us is that the Fed is on the wrong side of fighting inflation.   The S&P 500   If you have watched our vlogs this past year, you know that we have stayed focused on inflation and the actions of the Federal Reserve. There are many reasons why we have been focused on these things, but one reason can be seen in the chart shown in this episode that highlights the average daily return of the S&P 500 and its different sectors. It shows that for all Consumer Price Index release dates since the Fed began raising rates in March of this year, the returns were bifurcated between days when year-over-year core CPI came in above or below estimates. In terms of the broader market, the S&P 500 has posted average returns of 2.4% when core CPI is surprised on the downside. We show this because we hope that inflation numbers will continue to trend down in the new year and the market will react more positively to these lower inflation numbers. It’s something we will continue to watch every day and continue to talk about in our vlogs in the new 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 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 The Fed Grinch first appeared on Fi Plan Partners.

On this episode of Innovation Mavericks, Greg Powell, CEO of Fi Plan Partners, sits down with Rush Garner, Owner of Rush Wine Cellars, to talk about his journey from selling wine out of his minivan to having his own brand and how he has continued to grow over the years. What is a Maverick? Mavericks are free-thinking people who refuse to conform to society’s standards and are driven to change the world. Mavericks are intelligent, inventive, imaginative, genius, independent—individualistic idealist idea machines, original uninhibited visionaries, icons, intentional and inspirational. What special power is possessed by Maverick? The power of innovation. Innovation is doing what hasn’t been done before. New ideas, methods, solutions, systems, products, and tools at the heart of every Maverick is the power of innovation. So, let’s tap into the mind of an innovator!   Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell 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 Innovation Mavericks: Rush Garner, Owner of Rush Wine Cellars first appeared on Fi Plan Partners.

Interest Rate Hikes   This year is coming to a close, and very few market participants would disagree with the idea that inflation and the Federal Reserve have been the two stories that have driven the market higher and lower this year. We’re about to get both reports on top of each other as the inflation CPI report comes out on the 13th, and the next day the Fed is going to announce its final rate decision for 2022. These are two very enormous data points to see if inflation is going to be on the naughty or nice list. Will we get a Santa Claus rally? If it’s going to start, it’s got to start here this week. There are no other major data points between now and the end of the year that can push the market out of its current state to begin that Santa Claus rally. The markets reacted a few weeks ago when Jerome Powell made his last public statement. They go through a blackout period where they can’t talk to the media before Fed decisions. During his last statement, he said, “The time for moderating the pace of rate increases may come as soon as the December meeting”. That one sentence sent the market higher. Since then, the market has come back down to earth because of worse-than-expected economic data. This week, the market is expecting the Federal Reserve to raise rates by 50 basis points. That expectation is built off of the fact that the market expects inflation to come in at 7.3%, which is down from 7.7% last month. We must see this number continue to come down so that it locks in that peak inflation number that we saw over the summer and continue to come down. The Fed can then take that data in before their announcement on the 14th. They don’t have a lot of time for their models to take in that new data so if it’s aggressive one way or the other, the Fed doesn’t have a lot of leeway to move. The next day, on the 15th, the Fed is expected to announce its decision. Will Jerome Powell stick to his words, that if the inflation data is positive, the December meeting will be the beginning of the end of a tight fed? The market would love to hear that. These are the two data points to write down. The 50 basis points hike from the Fed and a 7.3% number for CPI. If we’re above either of those numbers, the market is likely to fall. If we are below either of those numbers, the market will likely rally to close the year. That’s what we are looking at as we head into the holiday.   Consumer Spending   The Fed is expected to raise interest rates again this week as we continue to look at the overall impact higher rates are having on the economy and the markets. With the Fed’s goal of slowing down the economy, or having what we call demand destruction, we like to look first at consumer spending. Consumer credit reports show that consumers are still willing to spend money despite concerns about the economy. Perhaps they’re taking comfort in the fact that the labor market remains really strong which is a good thing for the economy and the markets. One area where we are seeing evidence of the Fed’s policies working is wholesale prices of used cars. Prices have reached their lowest levels as interest rate hikes have raised borrowing costs. Used car wholesale prices have declined 15.6% from the record levels that we saw back in January. Lower used car prices should help spending across other industries, that’s good for the economy and the markets.   Technical Analysis   After the market traded back last week, we wanted to give an update on technicals, as the market will be greatly impacted by the Fed’s actions this week. The S&P 500 has been sandwiched into a very tight trading range. The S&P 500 closed last week at 3,934. If the S&P 500 goes above the price of 4,100 to the upside, it will be a positive breakout. Anything under a price of 3,900 would probably imply weakness. So, there’s a lot on the line this week with the Fed raising rates again.   Gas Prices   It doesn’t feel like it, but it’s been a remarkable year. Gas prices year-over-year are virtually flat. Over the summer, gas prices hit an average of $5 a gallon nationwide. Consumers were concerned and inflation numbers were hot. Since then, it has come down to $3.50 a gallon nationwide. It has kind of been a tug-of-war between OPEC production cuts and global recession fears. With oil, there’s more than meets the eye when it comes to pricing. We started using the strategic reserve we had, the OPEC production costs changed, and the EU last week started capping oil prices from Russian oil at $60 a barrel. Russia said they were not going to go down to $60 a barrel and said they would quit producing or find other buyers before they let that happen. With that being said, it’s going to be an interesting dynamic going forward and we don’t think this is the end of the talk regarding gas prices. It has been a remarkable year just going from

The Price of Gas   The G7 plus Australia have agreed to implement a $60 price cap on barrels of oil from Russia. The reason that this is impactful is that oil is currently trading at around $80 per barrel. This means if these countries are going to buy oil from Russia, they’re going to get it at a deep discount, which would force Russia to sell below market prices. This story ties directly to a story we discussed last week where China may increase its chances of lockdowns to fight some uprisings and protests in that country. Why does that impact this story? That agreed-upon $60 price cap only has teeth if other countries agree to do the same thing as the G7 plus Australia. If Russia can get around it and still sell oil at $80 barrel to the likes of China or India, then there’s no impact on this G7 agreement because Russia will still get the $80 barrel. If China is locking down its economy, then they’re not going to be buying as much oil. This will then have a bigger impact on Russia, which will hopefully weaken its military strength in what is the ongoing battle with Ukraine. Russia’s ability to circumvent any kind of sanctions through China has been a large perceived driving force of Russia’s continued economic success, despite all of the developed world trying to cramp down on their growth. We’re seeing oil rise and not fall as you would expect after hearing this news. This is something we will continue to watch closely.   Jobs and The Fed   The best way to describe the recent jobs report is that it would be good if we were in the right environment, and right now we’re just not in that environment. It’s not a terrible report, it’s more of a mixed bag. Unemployment is low at 3.7%. Wage gains are up 0.6% month over month, and up 5% for the year. Payroll is up $263,000. That’s all good news but with this environment, where the Fed is hiking rates and we’re seeing wage gains of 5% at the same time, they’re saying that’s too hot. They think that’s tying into inflation where they might need to do another 50 basis point hike in December. The participation rate, which is the number of people actively looking for a job, fell again. We need more people looking for jobs to relieve some of the stress from supply chain issues. We’re still trying to catch up in the leisure and hospitality space. You will see in a chart shown in this episode where we were pre-covid and where we are now. We have gained a little bit, especially in some areas, but we’re still trying to play catch-up in leisure and hospitality. The next jobs report we get will be next month. Hopefully, we can see some things that will lead the Fed to believe that they don’t have to hike as much or as viciously as they have previously.     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 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 Low on Energy, High on Jobs first appeared on Fi Plan Partners.

In this week’s educational episode, Mark Hume talks about the different types of life insurance and how important it is to make sure what you have is right for you.   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. This material contains only general descriptions and is not a solicitation to sell any insurance product. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. Guarantees are based on the claims paying ability of the issuing company. 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 Is Your Life Insurance the Best for You? first appeared on Fi Plan Partners.

China Lockdowns   Over the weekend, following the data on Black Friday and holiday shopping, we received news regarding major China protests, across the country, against Covid lockdowns and poor working conditions. That news has riled Asian markets and has hit certain sectors of our market. Indirectly, our entire ecosystem is connected to China, with them being a large part of our supply chain. We are seeing companies within certain sectors of the market hurting today due to their large presence in China. The energy market is down because of the thought of these protests. One would think that since they are protesting the lockdowns and negative working conditions, there may be a change for the better to follow. However, the markets are telling us the exact opposite. The government will likely crack down on these issues, causing the lockdowns to be more severe, less usage of commodities and energy, less working, worse working conditions, and less productivity. The news is reporting on how these protesters are gaining steam and getting more attention than normal, but the market is saying the opposite. The market is saying that these protesters are likely going to have more severe consequences on the other side, which affects demand for a lot of products globally. This is not something that will necessarily impact us today and is not something that we were expecting to be a big news event, but it is something that we feel needs to be watched very closely moving forward.   Historical Markets   The midterm elections are mainly over and what we are looking at is a Democratic Senate and a Republican House with a Democratic President. On a recent episode, we discussed two scenarios that we thought were most likely to play out heading into the midterm elections. One of the charts shown in this episode is from early November when we said one possible outcome of the elections was a Republican sweep with a Democrat President. The other possible outcome we estimated was a Democratic Senate with a Republican House. As it turns out, the latter has become a reality. You can see the average annual performance, going back to 1933 when we had this kind of layout in the political landscape, was actually better than with a Republican Congress and a Democratic President. The market’s annual performance was the second best, coming in at 13.6% for that time frame. We thought this was something to keep an eye on and it’s great that it played out how we thought it would. Every year since 1942 the market has been up an average of 15% for the twelve months following a midterm election. Of course, there’s no guarantee and historical returns don’t mean future returns, but it’s still good data to look at it while we are dealing with inflation, recession talk, and other negative things out there. An average of a 15% gain and nothing negative to report from the past midterm election years gives us a little more positivity when it comes to the political landscape and how it’s associated with the markets. This is data that we provided in other episodes throughout the year as we navigated through the volatility of the markets, and we will continue to stick with that as we watch things. You can always have a surprise, but this is the kind of data we want our clients to know about and how we are looking at it in relation to their portfolios and the markets.   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 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 Markets, Elections and China first appeared on Fi Plan Partners.

Consumer Credit   As we head into the Thanksgiving holiday, we’re also getting closer to the big spending day with Black Friday, and there are a lot of different thoughts about how strong this black Friday will be, as consumers are still dealing with high inflation. One interesting note is that consumer credit defaults are still low and falling. As you can see in the chart shown in this episode from the New York Fed, consumer credit default is that a record low of 5.7%. It was 14.6% in the 2008 recession. One of the hallmarks of a recession is a rise in consumer credit defaults, resulting in a rise of third-party collection activity which is not happening yet. So, despite record-high credit card balances being carried by the consumer, the rate of default is comfortably low. This is a good sign for holiday spending and the economy in the near term.   The Cost of Thanksgiving   According to a report produced annually by the Farm Bureau, the average cost of Thanksgiving dinner has increased by 20%. We think this is a neat indicator to see where prices are this time of year and there’s no surprise that inflation has found its way to the Thanksgiving table. The 20% increase was a little higher than we expected, however, a lot of that came from turkey which was up over 21% by itself. The average price of the Thanksgiving dinner went from $53.31 up to $64.05. Of that $10 increase, $5 came from the turkey. While getting ready for Thanksgiving, you might want to prepare to spend a few extra dollars to prepare for that family meal this year. Adjusting to ham might save you a few extra dollars for Black Friday spending.   Inflation   We got the CPI report a few weeks ago. We went over that report and talked about how it appears as though inflation has peaked. We received further evidence of this assumption last week with the Producer Price Index report. This report shows the prices that producers are paying, while the CPI report shows the price that consumers are paying. The report showed that PPI was up 0.2% in October. That was less of an increase than was expected. As you can see in the chart shown in this episode, prices for the producers have really fallen off a cliff. The chart also shows that inflation of goods was up 10.5%, as well as services up 6.3%. That sounds bad but to put it in perspective, previously the number reported for goods was 11.3%. Energy has pulled back some but one area that we would like to see come down is food. We all feel the pain of this being up. For further evidence of peak inflation, the rate hikes that the Fed is doing typically work with a lag. As a result, we expect these numbers to continue to come down. We will know for sure as we continue to analyze the data.     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 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 Carving Up Inflation first appeared on Fi Plan Partners.

Consumer Spending and Corporate Profits   While the market will have to wait a few more weeks to get clarity on what the makeup of Congress will look like, we can give you an update on two important components of what drives stock prices and the economy. First, let’s take a look at an update on consumer spending. You will see on a chart in the video for this episode that the consumer continues to be a bright spot even with higher inflation and the Fed’s intent on slowing down demand with higher interest rates. Second, we are almost at the conclusion of third quarter earnings season, which has been mostly positive. On another chart shown in this episode, you will see that corporate profits continue to climb higher, which is a great sign for the market. The combination of strong consumer spending and corporate profits continues to be a positive for markets going into year-end. A third positive point we want to make is that after the strength seen in the market in recent weeks, 56% of stocks are above their 200-day moving average. This is higher than the previous high from back in August. We look at this from a momentum standpoint which should be a positive development for stocks. The consumer is strong, corporate America is strong, and the average stock has positive momentum. All of these things are helping the market fight off what has been an aggressive Fed raising rates.   Inflation Update   After the release of the inflation report on Thursday of last week, there was an unbelievable jump in the market, which ended up being the highest market bounce in two years. We can’t yet be sure if this was a bear market bounce or the start of a new bull market but what is clear is that the market took the inflation report very positively. We’re not at the point of deflation yet however, the worst of it should be behind us. As you can see in the chart shown in this episode, inflation is still increasing but at a much slower pace. Core CPI, which is inflation minus energy and food prices, only rose 0.3% month-over-month and is up 6.3% year-over-year. That’s something that the Federal Reserve looks at when they make a determination about rates. Right after the Fed spoke at the beginning of the month, there was a 50/50 chance that they would do a 50 or 75-basis point hike in December. After this report was released, those odds flipped to an 80% chance of only a 50-basis point hike, which is good news. The bond market took that in stride as prices rallied and yields came down. A lot of things that impact the consumer, such as inflation and the Federal Reserve slowing down the increase of interest rates, could be another catalyst for this market.     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 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. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. 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 the Elections? first appeared on Fi Plan Partners.

Recently the IRS released the changes they are making to tax brackets, standard deductions, IRA contribution limits, and more. Watch or listen to this week’s educational episode to hear Mark Hume go over these changes and what they mean for you.   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. Fi Plan Partners and LPL Financial do not offer tax advice or services. We suggest that you discuss your specific tax issues with a qualified tax advisor. 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 2023 Tax Planning first appeared on Fi Plan Partners.

Fundamentals vs. Technicals   On a chart from our research partners at Strategas shown in this episode, you will see the S&P 500 and what it looked like in the middle of last week when we got the Fed’s decision, which caused the market to sell off pretty quickly. It appears as though that created what is called a ceiling where there’s resistance from the market going any higher and that was at a price of around 3,900. The selloff stopped pretty quickly at a price of 3,700, and that appears to be the support level. The good news is now that we have those numbers and what appear to be defined ranges, how do we get above that resistance of 3,900? We need catalysts. This is where fundamentals outweigh technicals. If we can have some fundamental catalysts, that’ll push us beyond the 3,900. Potentially, the market was looking for more of a dovish Fed last week, but this week we’ve got two very large catalysts. We have the election tomorrow and the CPI report that will come out on Thursday. That report will give us inflation data and if that data comes out better than expected. Current expectations are for 7.9%, which is lower than last month’s 8.2%. We might get to see those numbers continue to come down. If the fundamental data points hit in a positive manner, that should be enough momentum to push us through that resistance of 3,900. The good news is that once you’re through it, if you hold it, that then becomes a new floor and you can bounce off a much higher base, which is what we really want to see. Positive Developments   As we head into an important week for the market, with all eyes on the midterm election, we wanted to take a quick look back at what’s been a historical year for the market. You will see in a chart shown in this vlog that 2022 has been one of the worst years. The right-hand side of the chart shows how both stocks and bonds have struggled big time. You can see out of all the years on this chart, even years like 2008 and 2009, as tough as those years were, they don’t compare to this year. We show this chart to say that it’s been a year where active management by our team has been crucial, not only in stocks but with fixed income and bonds as well. We also want to point out two positive developments heading into the midterms. First, as you can see in the chart shown in this episode, the average stock is breaking out compared to the largest few individual stocks, which is kind of a reversal for previous years. This is showing that there is good momentum starting to build in the overall market. Also, another positive development that we’re watching is we’re seeing money coming off the sidelines and we’re seeing inflows into exchange trading funds. Having a seven-month high, you can see on the bottom of the chart that the average 12 monthly ETF inflow is 40 billion. The inflow of 63 billion in October is a positive development. It’s been a uniquely tough year, but active management has been essential and we like the positive developments we’re seeing heading into the midterm elections. The Fed   The Federal Reserve met last week and announced another 75 basis point rate hike to no one’s surprise. Chairman Powell kind of alluded to maybe looking at slowing the right hikes down from 75 basis points to more of a 50 basis point level. A chart shown in this episode shows what the rates are looking like all the way until 2024. We now have updated rankings after Mr. Powell spoke about higher for longer rates. How does this affect the everyday consumer? It may be time to start planning on mortgage rates since they are looking like they’re gonna be elevated for a little bit longer than we initially thought. Car loans and basically any other kind of loan may have higher rates for longer. On the positive side, bond rates are going up, and once those start leveling up and prices start leveling out, you should have higher savings rates. Overall, in addition to the rate hikes, the Fed is also tightening and that’s something that’s also taking money out of the system.     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 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 histori

For the sixth time this year, the Federal Reserve has announced that they are raising interest rates in an attempt to fight inflation. In this episode, Bobby Norman talks about where consumers could see a direct impact due to these increases.   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 Higher Rates and Your Money first appeared on Fi Plan Partners.

Inflation The recent inflation data has been negative, and individuals are feeling the pinch at the pump and the grocery store. Inflation has risen at a fairly fast pace, historically. Strategas Research Partners provided us with a chart, shown in this episode, that we think helps to show that even though the ride up has been painful, there’s some belief that the steeper the ride up, traditionally that means the steeper the fall down will be. You can see that inflation is very symmetrical. The chart shows inflation periods in 1951, 1974, 1990, 1970, 1980, and 2008. Where inflation rose you can see that the pitch at which it rises looks a whole lot like the pitch at which it falls. While this ride has been painful, considering how severe it’s been, history indicates that we could see a similar downslope on the other side. There are a lot of indicators that inflation peaked back in June at 9% so we could already be over the worst of it and could see some good news coming down the pipe.   Midterm Elections Please keep in mind that we only care about politics and how it relates to the market. According to the most recent poll by PredictIt, Republicans have increased their chances of taking control of not only the House but also the Senate. What does that mean for the market? We only like to bring up politics and how it relates to the market and looking at the current polling and historical performance of the market going back to 1933, if the Republicans take control of Congress, that would be the third-best scenario for market performance. Polling can be wrong but we’re watching carefully to see how it would impact the markets.   Money Supply Money supply impacts inflation and it was a big deal during covid. In 2020 and 2021, we saw a 40% increase in the money supply which led to all this inflation. On a great chart shown in this episode, you will see that CPI has a thirteen-month lag to money supply. As money supply goes up, thirteen months later inflation came up. We just had a pretty astonishing number in September where money supply decreased by 0.6%. That’s the largest decrease in money supply since 1959 and simply means that we’re not printing money right now. It’s a good sign for inflation to come down, and hopefully, it does so quickly. Money supply coming down rapidly will hopefully translate to inflation coming down in the next six months to a 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 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 Trends first appeared on Fi Plan Partners.

In this week’s educational episode, Trey Booth goes over the recent cost of living adjustment announced by the Social Security Administration and explains how it impacts individuals planning for retirement. 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 Social Security Cost of Living Adjustments first appeared on Fi Plan Partners.

History of The McRib We have plenty of charts to show today, but perhaps the most interesting chart of the day is about the McRib making a comeback. It has historically been added back to the menu around the fall season, so we wanted to have a little fun and show you a chart analyzing the performance of when the McRib is selling and when it’s not. According to the chart shown in this episode, the S&P 500 has performed much better when the McRib is in stock. No guarantees, but that sounds like a good technical indicator to keep up with.   Earnings Positivity Last week we saw the S&P 500 have its best week since June. A big reason for that is corporate earnings and how they are surprising to the upside so far. As you can see in an earnings scorecard chart shown in this episode, 99 out of the 500 companies of the S&P have reported so far. We are seeing an unexpected report in sales growth and earnings growth, which was a driving force behind last week’s positive market performance. We are watching carefully to see if this trend continues, as this week is the busiest of the third quarter earnings season with over 165 of the S&P 500 companies reporting.   Technical Analysis In last week’s vlog, we mentioned that we are observing to see if the S&P can get to a price of 3,800 and break through to the upside. We always like to give our viewers something to watch during the week, and the goal to get the S&P 500 to a price of 3,800 is an important number to look at because that was the early October high. That’s kind of what we consider resistance and would be a positive near-term development especially as big-term seasonality gets more favorable for the market. So, we will be watching carefully this week to see if we can break through it.   Returns Treasury yields and bonds have gone up a lot this year and have started to show some returns. It’s interesting to look back in history and see what the market looked like the last time yields were this high, which is about 4.5% on a two-year term. As you can see in the chart shown in this episode, it was a completely different market. It was about 15 years ago with three energy companies in the top ten of the world. IBM was bigger than Apple at that time and GE was still up there. It is a much different market now. Over time things change and it’s interesting to look back. During Covid, rates were being cut and we had a lot of negative-yielding debt in the world. There was $18.5 trillion worth of negative-yielding debt. As of today, we’re at $1.5 trillion of negative-yielding debt. Even though it went down $17 trillion, $1.5 trillion still seems like a lot. There are only 51 securities left that are still yielding negative debt, and they all belong in Japan. The Bank of Japan has been one of the few to hold out on raising rates this year. Comparing this to when we had over 4,200 securities yielding negative debt during the pandemic to now where we are down to 51 new ones, is pretty remarkable.       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 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. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. 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 McRib and Markets first appeared on Fi Plan Partners.

Listen to this week’s educational episode to hear Jason Hatley go over the recent RMD rule changes that the IRS has announced for inherited IRAs.   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 Inherited IRA Rule Changes first appeared on Fi Plan Partners.

Historical Volatility As volatility remains high, we continue to look back at the history of the market to see what could lie ahead as we get closer to the midterm election. The market has historically shown strength in the months after the midterm elections. What we found out about the S&P 500 is when it has been down 25% or more, which is rare and only happens about 1.5% of the time, the historical returns of the market going back to 1950 have performed well three months to a year after. Past performance is no guarantee of future results, but as volatile as the markets have been, it’s important to point out that we’ve been here before. We’re watching carefully to see if history is any indicator for the next few months. Technical Analysis After another choppy week in the markets, you will see in a chart shown in this episode that the S&P 500 finished last week at a price of 3,583. From a technical analysis standpoint, we would like to see the S&P 500 push through 3,800, which is a near-term resistance level that would help us get closer to the important 50-day moving average of 3,933. We will be watching these numbers closely as the week progresses. Inflation Last week, we pointed out how the inflation number was the most important data point coming out. We said how the market reacted to that data would also be very important and it definitely didn’t disappoint. On Thursday, when the inflation number came out, if you were watching the stock market you would know that there was not a dull moment. Inflation was expected to be 8% but came in a little bit higher at 8.2%. We saw the market sell-off drastically that morning, but we may be hitting an inflection because the market hit a low and then rallied to close the day much higher. We may be at an oversold point and all of this bad inflation data may be priced in. On a chart shown in this episode, you can see while the year-over-year average is 8.22%, the only two data points that go into inflation that are higher than average are the food and transport numbers. These are energy and the things you see when you’re driving to the tailgate on the weekends. These are things that people buy daily. These are things that consumers can see and feel are at their highest point. Most goods and services are below average. Housing, which you don’t buy every day, is below the average as well as medical care, apparel, and recreation. All of these are also things that people spend money on but not on a regular basis. Those are items that you don’t see inflation while driving down the interstate as you do for gas prices. There’s some hope and while it may not feel like it right now as you go through your daily activities, with time and as life happens when you do things like buying a new suit or going on vacation, you will notice that those prices aren’t moving nearly at the same rate and are lower than the average inflation rate. There could be some upside which could be what the market is seeing. Interest Rates Interest rates moved drastically higher last week. This data point is painful in the short term because higher interest rates bring the prices of bonds down, but in the long term, you’re able to get a high return for a very low cost in terms of risk. Right now, the two-year treasury yield is yielding almost 4.5%. This time last week it was lower. That was a big move up for what is typically an extremely stable asset class. This is something we are watching closely to see how the market is reacting to each data point. Inflation is hitting our clients on a day-to-day basis and we’re seeing that firsthand. The market’s reaction is really what we’re watching for to see if there are any moves we need to make because of its reaction. Earnings Earnings usually is a driving force for markets. While we’ve seen earnings estimates come down for the year, according to analysts, that report is not necessarily a bad thing. We expect the earnings per share (EPS) growth to be below eight for next year. Earnings season just kicked off last week and we’ve already seen about 10% company’s report and are beating estimates at a 69% clip. That’s not something that you see typically in a bad market, which is what we’ve had. Earnings are doing great so far, and we haven’t even had any energy companies report yet. They’re supposed to be leading the way above and beyond every other sector. Three’s a little positive light as we start earnings season. Hopefully, this will lead the market higher. We have lower expectations, so we are hoping for a surprise to the upside.     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 Email

In this week’s educational episode, Ashley Page talks about the European energy crisis and how it could impact the world and US economy in terms of supply, imports, exports, and more.   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 How the European Energy Crisis Affects the Global Economy first appeared on Fi Plan Partners.

Interest Rates & Inflation On Friday, we received the jobs data, which ended up being a quintessential example of how good news turned out to be bad news. The report showed 263,000 jobs added last month, which is good news. The unemployment rate dropped to 3.5%, which is also good news. The bad news was the participation rate which fell to 62.3%. How did the market take all the good news? Well, it quickly fell 2.8% on Friday. That tells us that the market is no longer pricing in a high chance of a soft landing. A soft landing is where the Fed raises rates to slow the economy, but the economy does not slow to a point where it hits a recession. You end up having a calm and reasonable slowdown in the economy and with inflation but no recession. We are seeing the market telling us that a soft landing is unlikely. Good news means that the Fed is going to have to get more aggressive with tightening, which will likely push the economy into a recession. We continue to see good news out of the labor market which caused the equity market to sell off. We’re kind of in a good news is bad news and bad news is good news reverse thing where everyone is watching the Fed again. This week, on Thursday, we will see the inflation data which is what everyone is waiting to see. The CPI report comes out, and expectations are for an 8% flip. Last month we got 8.3%, but it was higher than expected. We saw the market sell-off, and inflation came down, but not at the pace we expected. We really need to see the inflation number come down. Hopefully, we see a number below eight because that is really what the Fed is watching for. The Fed is fighting inflation and needs to get interest rates to a point where it is coming down. Hopefully, we don’t kill the job market in the meantime. Earnings & Gas Prices Hopefully, good news actually does mean good news as we kick off earning season later this week. We are expecting sales growth for the S&P 500 to be around 9-10% and earnings to be around 4%. A caveat is the energy sector, which is supposed to be the outstanding performer of this report. The good news is that means there will be lower expectations for the rest of the market. If we get some upside surprises and the banks kick off this week with interest rates up like they are, they might have a good quarter. That could be positive momentum for the market and could take some pressure off all the other headlines out there. OPEC was expected to cut 1 million barrels of production a day, however, they cut 2 million barrels of production a day. That’s good news for the energy sector but could be bad news for the consumer. We’ll have to see how the US responds and where gas prices end up after nearly two months of lower gas prices.     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 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 Good News, Bad News first appeared on Fi Plan Partners.

Every year we sit down with the Operations team at Fi Plan Partners to point out important things that need to be done before the end of the year, which is quickly approaching. Watch or listen to this week’s episode to hear what you should be adding to your year-end checklist. Greg Powell, CIMA® President and CEO Wealth Consultant Email Greg Powell here 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 Operations and Year-End Checklist first appeared on Fi Plan Partners.

Oil Price Increase This week, for the first time since 2019, OPEC will be meeting in person in Vienna. The talk of the town, which was moving markets this morning, is that they’re talking about cutting production by a million barrels per day. Last month when they met virtually, they discussed and followed through on cutting their production by one hundred thousand barrels a day. That didn’t appear to have the impact on the energy market that they had hoped, and they appear to be pushing for prices to go higher this time. A one million barrels a day cut will be sizable in terms of the impact of the markets. We’re seeing that oil prices are up four to five percent just on the rumor of this news. It’ll be good to see how markets react to the actual news once it occurs later this week. What is also throwing a hitch in this, is that one of the OPEC Plus members, Russian’s oil minister, is under sanctions and legally cannot leave Russia. How he will be able to be part of these talks will also be something to watch close. This is a big part of where we’ve seen the supply of oil stay high, and the price of oil come down. That alone has been a huge help in the last couple of months in terms of our CPI. It appears that OPEC is wanting to turn that around and push our oil prices back up. This is something we’re watching very closely. However, there’s numerous things that could occur after OPEC makes their decision, which could help in maybe keeping oil prices stable. It’s an ever-moving world but this will be a big data point this week for close out the year. Money Supply Cutting supply isn’t always a bad thing. We’ve seen a good sign here of cutting the money supply down. During the pandemic the government was printing a lot of money but people weren’t working. That typically has a thirteen-month leading indicator of CPI which, of course, is inflation. With us bringing supply down, we’re at about 1.5% growth, which is way below normal. Normal is around 4-5%. During COVID, it was up to around 9%. That’s a good leading indicator of inflation for thirteen months from now. Even though that’s thirteen months from now, it has steadily decreased and if we are down to 1.5% now, we should start seeing an impact here in around six months or so. One analogy that we’ve used before with CPI is if you have ten dollars and ten apples, and that’s your whole economy, each apple is a dollar. If we print more money and we have fifteen dollars available, but still just ten apples, now every apple is a dollar fifty. That’s kind of what we saw during the pandemic. Now, we’re getting back to the more of the normal ten for ten.   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 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 Cutting Supply first appeared on Fi Plan Partners.

Watch or listen to this week’s educational episode where Ty Miller talks about how shareholders can have cash returned to them in different ways, such as dividends. Ty Miller Associate Vice President 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. Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. 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 Returning Cash to Shareholders first appeared on Fi Plan Partners.