Summer has gone by quicker than ever and the leaves are already starting to turn. Although the seasons are changing the financial issues of this year remain the same. Stubborn inflation with a tightening Fed, a perpetually rising dollar, high heating costs and the continuing war in Ukraine are setting up for an unusually cold winter (with all due respect to the Farmers Almanac). However, spring always comes and with our strong banking system, exciting new technologies, low unemployment and American entrepreneurship, the future has a distinctly brighter outlook.
Our new analyst, Jaysen Bohrod, assisted in writing this newsletter and will be taking over starting next year. Please give us your feedback. We always enjoy hearing from you.
By Rodd D. Berro
The S&P 500 has given back the gains made in July and August to reach new lows, officially down 4.82% for the quarter and 24.36% for the year. The technology heavy Nasdaq has faired even worse, with quarterly and yearly performance of -12.19% and -33.19% respectively. Small cap stocks, measured mainly by the Russell 2000 index, were down 8.6% for the quarter and 25.34% since January 1. Expectations for additional rate hikes by the Federal Reserve, due to continuously high inflation numbers and a very strong labor environment, are weighing on investor sentiment creating more uncertainty for the short term.
Volatility in the oil markets is expected to continue as well, with the price per barrel closingat $83.63, down 23.76% for the quarter. Gold, which is seen by investors as a way to hedge against inflation, closed at $1,702 per ounce, down 5.86% for the quarter.
The 2-Year US Treasury interest rate rose to 4.31% and the 10-Year Treasury interest rate rose to 3.88%. The spread, still inverted, widened from .248% to .432%.
Qualified charitable distributions allow for donations to be made directly from your individual retirement account to a qualified charity of your choice. These distributions are excluded from your income and count towards your RMD for the year. There are some requirements to make a QCD, which include:
It is recommended that you speak with your accountant first if you plan to make a deductible IRA contribution at age 70 1/2 or older and want to make a QCD. The QCD tax benefit may be reduced - a portion of the QCD may become taxable. Also, 1099-R tax documents do not code the QCD so you must let your accountant know the details of the QCD and provide the acknowledgement letter from the qualified charity.
Annually review and update your account beneficiaries to confirm accuracy. Especially after major life events such as marriage, divorce, death, or having a baby. The new SECURE Act rules can affect Trusts as beneficiaries. Be sure to review your Trust with your Estate attorney.
To update your beneficiaries online, go to:
Click the ‘Service’ tab
Click the ‘My Profile’ tab
Click the ‘Beneficiaries’ tab
The stock market, bond market and/or our office will be closed on the following days:
November 24-25, 2022 - Thanksgiving Day
December 26, 2022 - Christmas Day Observed
January 2, 2023 - New Year’s Day Observed
January 16, 2023 - Martin Luther King Jr. Day
Schwab Mobile App
Secure, online access to your accounts is easy, visit the Schwab Alliance website or Schwab Mobile App to view account balances & transactions, access tax documents, open new accounts, and more.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Pegasus Asset Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Pegasus Asset Management, Inc.. Please remember to contact Pegasus Asset Management, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Pegasus Asset Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of Pegasus Asset Management, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.