Happy Fall!

Hello and Happy Fall! 

I hope this note finds you and yours in good health and great spirits.....perhaps a tall order given the current political climate we are living through. 

The media would have us believing that we are hopelessly divided.  While we may disagree with each other on some very important topics,  I'll bet that we agree with each other on more things than we realize.  I'd be willing to wager that we all want lower taxes and lower prices at the gas pump, the grocery store and the pharmacy.  We cherish the relationships with our families, our kids and our friends.  For those of us who have pets, we love them dearly.  We are in universal agreement that we want a better future for our children, grand children, god children, nieces and nephews.  Finally, I think we can agree that laughter is GREAT medicine for all that ails us.  

Negativity and fear mongering generates views and clicks, often eclipsing good news. Good news, however, is abundant!  Here are a few good things that are happening:

-The Dow is up more than 13% this year.

-The S&P 500 Index is up more than 22% this year (The S&P Index is the best representation of the US Stock Market as it tracks 500 American companies that are publicly traded).

-The Nasdaq is up 23% this year.

-Inflation is cooling and the Fed has started to lower interest rates. With lower inflation, investment returns are less likely to be eroded, and purchasing power remains strong, creating a more favorable environment for personal wealth growth.

-As of September, the unemployment rate was low at 4.1% indicating that the US labor market is resilient and healthy.

-Corporate earnings have been strong all year and the trend continues. 

-Social Security payments will recieve a 2.5% Cost of Living Adjustment next year.

-A new law (from the SECURE 2.0 ACT of 2022) allows you to transfer unused funds from your child's 529 plan to a Roth IRA.  The law allows you to transfer up to a total of $35,000 per beneficiary but the annual Roth IRA contribution limit still applies.  For 2024 that limit is $7k which means that up to $35k can be transferred over a period of 5 years.  There are a few caveats of course. To qualify, the 529 has to have been in place for at least 15 years and can't come from contributions made to the 529 in the past 5 years.  

Not too shabby on the good news front!

In spite of all that, I've noticed that some investors are fearful that if their candidate doesn't win the election, the stock market will experience a catastrophic decline.  While the stock market will likely react for a few days no matter who wins the election, one person, even the President of the United States, does not affect the stock market long term.  The drivers of the stock market are those mentioned above; inflation, interest rates, corporate earnings, the labor market (unemployment) and economic growth.  All of these indicators are currently positive.  We are in the midst of a very healthy economy.