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Eric recently attended the Ohio Financial Planning Association’s (FPA) annual symposium. The FPA symposium was a mix of financial planning and investment related sessions.   We wanted to provide a few takeaways from the event:

Financial Planning
•    If you are using a trust as the beneficiary for an IRA or qualified retirement account, be sure a trust is needed and also be sure the trust is written or has been updated to correctly address the changes in inheritance rules from the Secure Act which was signed into law January 1, 2020.  If the trust was written before January 1, 2020, you may need to update it or determine whether a trust is still the appropriate beneficiary to use moving forward.  Incorrect trust language could lead to undesired consequences such as higher taxation for beneficiaries.    
•    Even if you are below current estate tax limits and your spouse passes, you may want to file an estate tax return. Contact your accountant to determine if this is beneficial.   
•    Be sure all of your estate planning documents are up to date and that someone knows where they are and your intended wishes.  
•    If you have digital assets (online accounts, pictures, documents), be sure they are addressed in your estate planning documents if you want to be sure they can be accessed after your death.     
•    The number one regret of people near death is the things they didn’t do - not the things they didn’t buy.   Shared experiences with friends and loved ones are often times better uses of money than buying material things.  
•    The financial plan will never work out exactly as intended. Don’t stress out when the plan goes off track.  Work to set a new course whenever that happens.

•    The last 10 years has not been normal as far as returns of U.S. stocks versus international. The valuation dispersion between the two hasn’t been this wide since right before the technology bust in 2000.  
•    Be cautious to jump into a new investment that is performing well right now, as it may not do the same moving forward.   Investment fads come and go, but diversification has worked over the long run.  
•    The media’s job is to convince people they are angry and scared to sell ads. Their motivation is to make money not provide accurate and unbiased information.   
•    The strong labor market has kept the U.S. from going into a recession.
•    Don’t let politics influence financial decisions.  Markets can do well with either party in power.  
•    We often hear “I’m waiting for things to settle down before I invest.”  Dr. David Kelly of JPMorgan had a great line in his presentation.   “Market’s don’t settle down, they settle up.”  His point was that by the time things settle down in the economy, markets have usually already gone up.   

The S&P 500 fell 10.5% from July 27th to October 28th, while the yield on the ten-year treasury rose from 4.01% to 4.85%. Five days later, equity markets experienced their best week of the year and treasury rates dropped into the 4.55% range.  This shows how quickly markets can move and reward those who were patient and harm those who were not.   

In October 2022, when equity markets were at their low point for the year, Bloomberg predicted a 100% chance of recession in the next 12 months.  12 months later, no recession and markets are trading higher than they were at that time.   While most of the gains have been concentrated in only a few stocks as we have pointed out previously, this still illustrates how hard it can be to predict the economy and even harder to predict how the stock market will react to the changes in the economy.   

We understand the fear and anxiety that can come from looking at an account statement lower than the prior month. We also understand how dire things may look when turning on the TV or browsing the internet.  Most economists predicted a recession in 2022 with high conviction.  Many of these same economists are now backing off these predictions which may put the probability of recession even higher.  A recession will happen sometime.  It may be in 2024.  It may be in 2025. We may be in one now.   Who knows.   What we do know is that markets don’t always react how you think they will and missing out on those good days and weeks can be detrimental to your long-term results.   

Please reach out if there are any changes to your financial situation or your 2024 income needs. As always, we want to be sure your next 3 - 5 years of income needs are out of equites.     

This material is meant for general illustration and/or informational purposes only.  Views expressed in this newsletter may not reflect the views of Osaci Wealth, Inc.  It is our goal to help investors by identifying changing market conditions.  However, investors should be aware that no financial advisor can accurately predict all of the changes that may occur in the market.   This material should not be relied upon as investment advice.  Investors should note that there are risks inherent in all investments, such as fluctuations in investment principal.   There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. This article contains forward looking statements and projections.  Past performance is no guarantee of future results.  Neither Osaci Wealth, Inc nor its representatives provide tax or legal advice.  If you don’t wish to receive marketing emails from this sender, please reply to this email with the word REMOVE in the subject line.