The Advisor – April 2023

What’s New at GPW

April is Financial Awareness and Literacy Month and one of our goals at Gentry Private Wealth is to ensure that you understand how current events impact your financial plan. With the recent events in the banking industry and economy, it’s more important than ever to fully understand your plan and finances. As we monitor your plan and portfolio, we are also considering you and your unique goals and money habits. Financial Literacy Month is the time to learn more about both your money habits and investments. Continue reading for an in-depth update on current events, our positioning and money behaviors and habits. If you missed our special edition of the newsletter earlier this month outlining our response to the Silicon Valley Bank failure, please see below.

Market Update – Silicon Valley Bank


Jeff Wetta, RPS and Dustin Jackson, CFP® RICP®
Managing Partners


GoalVest Portfolio Update

The stock market has proven resilient to recent developments in the banking industry and is up slightly year to date as of Monday, March 27th. However, the financial sector is down 8%considering the events surrounding Silicon Valley Bank, Signature Bank, and  . Volatility in the financial sector has also made the Fed’s job more difficult, as they are confronted with this challenge alongside their ongoing fight against inflation. We have seen downward revisions to interest rate expectations over the month and slightly positive returns on low-risk fixed income year to date.
Silicon Valley Bank was unique and vulnerable due to their asset base, their deposit base, and their customer base. Signature Bank and Silvergate Capital were two of the biggest lenders to the cryptocurrency industry. Despite the failure of these banks, the Fed, Treasury, and FDIC are working to ensure that depositors still have access to their money. Silicon Valley Bank was even just recently purchased from the FDIC by First Citizens Bank.
While anything is possible, we do not expect widespread bank failures or contagion to come out of these events. They will likely contribute to stricter lending standards, though, that may result in a drag on economic growth. A slowdown in economic growth isn’t necessarily good for company earnings, but it may help combat inflation and that, in turn, could be positive for stocks. In the twelve months following the end of the past six rate hiking cycles, equities have, on average, generated double digit returns (except for 2000, where they were down 12%).
Consumer spending remains strong and service spending continues to expand. While this is good news for the economy and company earnings, these are also factors for rising inflation. As expected, February’s CPI reading (released in March) was 6% year-on-year and down from6.4% in January. So even though inflation hasn’t reached the Fed’s 2% target, it continues to trend in the right direction.
Taking a look at our portfolio, the fixed income allocation is less sensitive to interest rate changes because we are overweight structured yield notes and short-duration treasuries. We’ve taken this position because we don’t think the Fed can start to cut interest rates until inflation moves closer to their target. In our equity allocation, we have selective exposure to quality growth companies, though we believe there is potential for lower valuations in the technology sector. This is especially true for lower quality companies (technology stocks are generally trading above five- and ten-year medians with a weaker than average earnings growth outlook). Our overall equity positioning is balanced with a slight overweight towards value stocks and companies that can demonstrate pricing power to grow earnings through the economic cycle. Looking forward, we continue to take a prudent approach towards capital management and will be ready to capture opportunities as we gain conviction that inflation is heading closer to the Fed’s 2% target range.

Sevasti Balafas, CFA, CPWA®
CEO & Founder
GoalVest Advisory


Financial Literacy via Money Scripts

Given recent events in the banking industry, Financial Awareness & Literacy Month comes as a perfect reminder that we all need to be diligent in our understanding of how our finances are affected by daily events. Education is key to anyone’s financial literacy, and as Retirement Plan Specialists (RPS) and CERTIFIED FINANCIAL PLANNERS™ (or CFP® Professionals), we strive to understand our clients’ financial tendencies in addition to educating them about their investments and the economy. But did you know that money behaviors (sometimes called scripts) and habits aren’t just small, passing reactions, but are developed actions that can be studied and researched?

In studies led by Bradley Klontz, Psy. D., CFP® and Sonya Lutter-Britt, Ph.D., CFP® LMFT, they identified how money behaviors, or what they call “money scripts,” can lead to different financial behaviors. These four money scripts include: money avoidance, money worship, money status, and money vigilance. Understanding the basics of these scripts allows us to see how our behavior regarding our finances can have long-term effects on our overall financial plan.

The first script, money avoidance, is characteristic of an individual who views money as corrupt. This can lead to blame shifting financial behaviors, simply avoiding spending, or negatively viewing finances and financial responsibility. Money worship is simply what it sounds like – you derive happiness from money. Consequently, this money script can lead to dissatisfaction with your finances, compulsive buying or working, or even financial dependence. Money status can often be construed as money worship, as these two scripts have similar outcomes and behaviors. Money = status is the primary belief of the third script and individuals that hold this script see their self-worth through money. Interestingly, earlier research conducted by Klontz and Britt showed younger, lower earning individuals tended to hold the money status script more. A later study conducted by Klontz, however, suggested that individuals earning more than $154,000/year were almost 10 times more likely to hold this script. The last money script is money vigilance. This script is found in individuals who are diligent about their financial well-being and are strong savers. Unlike other money scripts, money vigilance tends to demonstrate more positive behaviors such as saving, planning, low debt, etc. But just like any other behavior, an individual that holds an excessive belief in money vigilance may end up looking like Ebenezer Scrooge.

But what do all these money scripts really mean? Do they even matter? Yes, they do matter! If you are aware of your fundamental habits and beliefs towards money, you can not only better understand your daily habits, but can also mitigate risk factors such as taking on too much debt, overspending, or gifting above your means. Knowing your financial strengths and weaknesses allows you to implement stronger habits to help you achieve your goals. Identifying your money behaviors is one of the first steps to financial success and well-being. If you are looking to improve your financial success, don’t hesitate to reach out to our office today!