The Advisor, October 2023

What’s New at GPW

Andrew Carnegie is quoted as saying “I resolved to stop accumulating and begin the infinitely more serious and difficult task of wise distribution.” This month’s newsletter features important information about Required Minimum Distributions (RMDs) and charitable giving for end of year planning.

We also dive into Private Equity opportunities in our second podcast episode. Take a look below for the link to the video.

As always, if you have any questions or would like to discuss anything further, please reach out to our office at (316) 613-7570.

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


GoalVest October Outlook

The economy has been very resilient this year. Although marginal, GDP growth has been
better than expected, labor statistics are coming in higher than anticipated, and inflation is
trending down. Oil prices have rallied, reaching year-to-date highs (as of 9/22/2023) amid
concerns about global supply. Additionally, the Fed paused interest rate hikes in
September and instead held the federal funds rate at 5.25% – 5.50%. It’s possible that the
Fed won’t raise rates again this year due to risks in the economy such as the UAW strike,
government shutdowns, higher gas prices, student loan repayments and potential
pressure on commercial real estate. In his press conference, though, Fed chairman
Jerome Powell suggested that they are still prepared to raise rates further if inflation ticks
up. We’re inclined to believe that we’ll see one more rate hike this year and then for rates
to stay elevated into next year.

While no single risk mentioned above would be enough to push us into a recession, there
is a scenario where a number of these could decrease consumption and lead to a more
severe slowdown. If this happens, the Fed may decide to switch tactics and begin
reducing rates. One reason for elevated interest rates is the Fed’s ability to reduce
them in the face of a recession. For a long time this “tool” wasn’t available to the Fed
because rates were near zero. That’s not the case now.

Regarding consumer spending, more than 50% of respondents to Bloomberg’s Markets
Live Pulse survey said that personal consumption is likely to decrease in early 2024. The
consensus among bank executives is that extra consumer savings built up over the
pandemic have either run out or are close to running out. Rising wages, low
unemployment, and the wealth effect are powering the still strong economy. However,
over time there appears to be some pressure building on the US consumer via reduced
purchasing power, rising credit balances, and falling personal savings rates. This can be
seen in the inflation numbers that were reported last week. Inflation came in slightly hotter
than expected with headline CPI at 3.7% (driven mostly by rising energy costs) and core
CPI excluding food and energy at 4.3%. Month over month, headline CPI and core CPI
rose by 0.6% and 0.3% respectively.

So how do we prepare for this? We have been refining our models in preparation for 4th
quarter portfolio rebalancing. We seek to drive risk-adjusted returns by continuing to
diversify, ensuring cash needs are covered, taking advantage of higher rates in our core
fixed income allocation, and holding neutral equity exposure with a slight tilt towards
quality and dividend/defensive stocks. We are also looking at alternatives such as
structured notes that have targeted, more predictable outcomes and additional alternatives
such as private equity offerings that have high growth potential while reducing volatility
from public markets.

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

Sources: JP Morgan Asset Management, Carlyle, Sevens Report, Bloomberg, Invesco


Important End of Year Reminders

Where has this year gone? It seems like just last month we were wishing you a relaxing
summer and safe travels. Now the leaves are changing, and we are preparing for the
holidays. October is also an opportune time to prepare for year-end financial and estate
planning decisions, though. Below you will find several important reminders related to your
investments. Please take a few moments to read through this full article, as some of these
deadlines may apply to you.

Required Minimum Distributions (RMDs) – For Ages 73+
In 2019 and then again in 2022, the IRS updated the requirements for taking an annual
distribution from your retirement account. Below is a chart outlining when you must start
taking your distributions. We can gladly assist with this calculation of your Required
Minimum Distribution (RMD) amount upon your request.

Qualified Charitable Distributions (QCDs) – For Ages 70½+
While you may use your RMD for income, holiday gifts, special projects, etc., it is possible
that you don’t need these funds. If this is the case, you may consider reinvesting the aftertax
proceeds of your RMD or giving this money to charity. Gifting these funds directly to
charity is considered a Qualified Charitable Distribution and allows you to take advantage
of special tax savings. Don’t hesitate to contact us and your accountant if this is something
you are interested in doing.

Retirement Contributions and Roth Conversions
Don’t forget to evaluate your retirement accounts and consider if you would like to
contribute to your accounts this tax year, or possibly even utilize a Roth Conversion. Our
team is happy to help you evaluate these options further and coordinate with your
accountant at your request.

Annual Gifting
Lastly, annual gifting for estate and tax planning purposes is another item that typically
arises this time of year. If you are interested in taking advantage of your annual gift
exclusion or donating appreciated securities to your favorite charity, give us a call. We can
coordinate with you, your attorney, and your accountant to help accomplish your
charitable, tax, and estate planning goals for this year.


GPW Podcast
Episode 2: Private Equity
Our second podcast episode is here! Episode 2 features Jeff Wetta, Dustin Jackson, and GoalVest Advisory’s Blair Cohen, head of Private Equity, as they discuss what Private Equity is, what opportunities we are looking at for clients, and how these opportunities can be incorporated into clients’ portfolios.