The Advisor, January 2024

What’s New at GPW

Happy New Year! We are excited to ring in the 2024 year and are looking forward to what’s ahead. We are starting the New Year off with 3 Financial New Year’s Resolutions as well as important tax facts and retirement limits for 2024. This January, we will also host our annual Market and Economic Outlook and would love to have you join us for breakfast while we share our insights.

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


Your Market Update

Reports issued mid-December for the month ending in November confirmed inflation was in line with expectations at 3.1%. This was driven largely by a slowdown in energy. Additionally, PNC’s Christmas Price Index, which measures the cost of each gift in the song “The Twelve Days of Christmas,” increased by 2.7% (down from an increase of 10.5% in 2022).

Both the S&P 500 and the AGG rallied in December, mostly due to lower treasury yields and interest rate cut expectations. Gradually lower inflation rates have proven positive for equity markets in 2023. Weekly jobless claims remain low and US retail sales data was better than expected. These factors help boost an already positive investor sentiment as 2023 draws to a close. Additionally, lead economic indicators have improved and point towards an orderly, gradual slowdown in the US economy. In other words, a “soft landing” seems more likely.

News in emerging markets was less positive in December, however. Moody’s revised their outlook on Chinese bonds down amid concerns about the level of leverage in their economy. This, along with the fact that the US continues to outperform international (especially emerging) markets, leads us to retain our overweight allocation to US equities into 2024.

In December, we priced new growth note opportunities with double-digit return targets and long-term capital gain tax rates, where we believe risk-to-return prospects are compelling. Going into 2024, the rally in asset prices has been broadly positive for our portfolios. Our portfolios remain balanced and diversified with a focus on good quality assets. We believe we are well positioned and are ready to pivot our positioning as needed in anticipation of changing market conditions.

Be on the lookout for our Q1 2024 economic and market outlook report in January, which
will share more details about our 2024 investment strategy.

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

Sources: JP Morgan Asset Management, Goldman Sachs, Bloomberg, BlackRock, Ares, Apollo, Carlyle


3 Financial New Year’s Resolutions

1. Re-evaluate Your Goals

The new year is a time to set new goals and reflect on the past year. Instead of just focusing on health and hobbies, consider incorporating a new financial goal or strategy. It can be helpful to remind ourselves why we are investing when the market seems so volatile. During such times, it is critical to remember the long-term goal for your finances. These goals help drive your cashflow and savings, impact your investments and risk levels, and provide you with financial confidence. For example, maybe now is an opportune time to reevaluate your retirement age or consider if you can be less aggressive with your investments.

2. Start Saving and/or Increasing Your Savings

After the holidays, you may feel pressure to cut back on spending. The start of a new year is a great time to review your budget and identify where you can put extra monies for the upcoming year. One strategy is to slightly increase your retirement savings. This could be as simple as increasing your 401(k) contributions by 1% if you are not already maxing out your 401(k) contributions. If you’ve already hit that limit, consider investing a bit each month in a taxable account to save for future goals such as travel, college, retirement, gifting, etc..

3. Prepare for the Unknown

With the start of a new year also comes new (likely unknown) challenges. However, you can take steps to help prepare for and reduce the burden of these future challenges. Preparing for the unknown may be a multi-year project, such as estate planning. Current laws that allow approximately $13.61 million/person to be exempt from estate taxes are set to end in 2025. Unless these rules are extended or replaced, the estate tax threshold will then be reduced to $5-$7 million (depending on inflation). This could cause a large estate tax liability that would severely impact your heirs if not planned for properly. Now is the time to review your estate plan and take steps to help manage these tax liabilities. Additionally, many tax planning strategies work in tandem with other financial goals including gifting to charities or family members. As with any goal, taking time now to properly plan will significantly improve your end results.