We’re happy to welcome two new clients into the Elevation Wealth Partners family again this quarter. It’s an honor to serve you and we look forward to many years of working together. Today we work with clients in 19 states and three foreign countries.
Thank you to everyone who continues to share with friends and family how we’ve helped you achieve financial independence and live your best lives. Often, we are asked what to look for in a financial advisor. In this post titled, How do I choose the right advisor? we list 16 essential questions to ask when interviewing an investment advisor or financial planner.
Your 4th quarter report is now available in your Elevation Wealth Partners portal. If you haven’t already done so, please bookmark that page for future use.
Once you access the portal, please click on your DOCUMENTS tab to find your 4th Quarter 2022 Portfolio Report. The latest report appears at the top of the page. For a demonstration on how to log into your Elevation Wealth Partners Portal and download your quarterly report (and save documents to your secure portal), watch this video by Kelly Gillette – Client Service Manager.
In addition to our usual quarterly review of the economy and markets, we spotlight two hot topics in this issue. First, we’ll share our perspective on the prospect of recession, the potential impact on investments and how to prepare. Second, we unpack the SECURE 2.0 Act that was signed into law at the end of 2022.
Recessions happen.
First, let’s define our terms … what exactly is a recession? Harry S Truman once stated:
“It’s a recession when your neighbor loses his job; it’s a depression when you lose yours”
Textbooks say a recession is a period of temporary economic decline when trade and industrial activity are reduced, and the GDP falls in two successive quarters. Another indicator is that unemployment increases by 0.5% over a short period of time. However, despite a rash of recent layoffs in the technology sector, the unemployment rate actually declined by 0.1% in December (from 3.6% to 3.5%), an indicator that the economy is still quite healthy. As a practical matter, it’s not a recession until the National Bureau of Economic Research (NBER) says so. According to the NBER, there have been ten recessions in the US since 1945. Our interactive exhibit examines how stocks have behaved during US economic downturns.
While the economists we follow think there is a decent chance the global economy will enter recession in 2023, we know that predicting recessions is more art than science. In a 1966 Newsweek article, the eminent economist Paul Samuelson famously quipped that the stock market had predicted nine of the past five recessions.
Peter Lynch, the former manager of the Magellan Fund and arguably one of the most successful and well-known investors of all time, is quoted as saying:
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready. You won’t do well in the markets. If you go to Minnesota in January, you should know it’s gonna be cold. You don’t panic when the thermometer falls below zero.”
So, while we may not be able to predict or control the timing of a recession, there are actions you can take to help you get through the next recession when it comes.
- Focus on your budget and build an emergency fund
- Pay off high interest debt
- Update your résumé
- Get creative about saving
- Stay invested
At Elevation Wealth Partners, we believe it’s “Time in the market not timing the market” that’s important to achieving your long-term goals.
All investing is subject to risk, including the possible loss of the money you invest. Past performance is no guarantee of future returns. Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.
