Understanding the Vix The VIX, also known as the CBOE Volatility Index, is a widely watched indicator in the financial world. It's not a stock itself but rather a real-time index that reflects market expectations for volatility in the S&P 500 over the next 30 days. The VIX is derived from the prices of S&P 500 stock options. Options contracts give investors the right, but not the obligation, to buy or sell a stock at a specific price by a particular time. The prices of these options fluctuate based on investor sentiment about the future movement of the stock price. When there's more uncertainty or fear in the market, investors are willing to pay more for options, which pushes the VIX higher. Investors use the VIX to gauge potential risk and make informed investment decisions. A high VIX suggests that investors expect the market to be volatile in the near future. This could be due to factors like economic uncertainty, geopolitical tensions, or upcoming earnings reports. Conversely, a low VIX indicates that investors anticipate a calmer market. What does it mean? The VIX doesn't provide a direction for the market but rather the magnitude of expected price swings. A high VIX doesn't necessarily mean the market will crash, but it suggests that investors are bracing for significant price movements in either direction. There's no magic threshold for the VIX. Historically, a VIX reading above 20 is considered high, indicating a period of heightened volatility. Conversely, a VIX below 20 suggests a calmer market. However, it's important to consider the context when interpreting the VIX. A VIX of 30 during a typical market environment might raise eyebrows, but it might not be as alarming during a recession. Thus, understanding the economic landscape will provide the necessary color to the canvas. The VIX and Investor Behavior The VIX can be a self-fulfilling prophecy to some extent. If the VIX climbs due to rising market fear, it can trigger investors to sell their holdings, further exacerbating the market downturn. Conversely, a declining VIX can instill confidence, encouraging investors to buy back into the market. Investors should avoid making investment decisions solely based on the VIX. It's just one data point among many. A well-diversified portfolio and a long-term investment strategy are crucial for weathering market volatility. The VIX and Other Asset Classes While the VIX is based on S&P 500 options, it can also influence other asset classes. During periods of high volatility, investors often flock to safe-haven assets like gold and bonds, which can drive their prices up. Conversely, a low VIX might encourage investors to allocate more funds to riskier assets like stocks. Understanding the VIX can be valuable for investors of all levels. By keeping an eye on the VIX and understanding how it reflects market sentiment, investors can make more informed decisions and navigate periods of volatility with greater confidence. If you have any questions about the VIX or any other investing metrics, consider contacting one of our financial advisors at Whitaker-Myers Wealth Managers. Our team is always ready to answer the call with the heart of a teacher.

Do you have charitable intent?  Maybe you are already an active donor.  Do you generate a high annual income and want to take advantage of the greatest allowable deduction?  Do you like the idea of a private foundation but don’t want the complexity, burden, and expense of its administration?  Do you want to give anonymously?  Do you own liquid assets, such as stock, mutual funds, etc., on a low-cost basis and don’t have a plan to sell them?  In other words, do you want to organize your charitable giving more efficiently? As a Financial Advisor, I often hear this question: “What is the best way to donate money to a charity?”  The reality is there isn’t just one right answer.  There are a few different tax-efficient ways to donate your money, which certainly depends on your specific situation, but today, I want to focus on giving through a Donor Advised Fund. What is a Donor Advised Fund (DAF), and who should use them? A Donor Advised Fund is a charitable giving account established for future giving while receiving a tax deduction immediately upon the contribution.  Essentially, a DAF is like a charitable bank account.  Once you place your money or asset into the DAF, you immediately qualify for a tax deduction for that year.  Those funds then sit in the DAF until you are ready to donate to the non-profit or social venture of your choice. Here is a list of the most common examples of when DAFs are used: Liquidity event (selling business, appreciated assets) Unexpected income (bonus, inheritance, etc.) Capital gains management in a brokerage account Custom indexing Charitable bunching (example below) Retirement planning Multi-generational giving Here are some interesting stats about DAFs: There are roughly $234 billion in DAFs Approximately 10% of all gifts given to charities come from DAF’s Nationally, the average DAF size is approximately $183,000 In 2017, just over $30 billion was contributed to DAF, which has almost tripled in the last six years. Tax Benefits of a DAF One of the great features of the DAF is the fact that you qualify for a tax deduction in the year that you make the contribution to the donor-advised fund. Yet, you still have the flexibility to choose the timing of your donation to your chosen non-profit or social venture.  Simply put, you get the opportunity to optimize the timing of the tax deduction AND the donation to the charity. Important Tax Benefits: Up to 60% AGI tax deductibility (cash) Up to 30% AGI tax deductibility (public securities) All securities deducted at Fair Market Value Example 1 Donor with AGI of $100,000 Donor contributes $80,000 cash to a DAF $60,000 is the max deduction the donor can take in this year, reducing AGI to $40,000 (60% * $100,000 = $60,000) $20,000 can be carried forward up to 5 years for deduction Because the standard deduction in 2023 was $27,700 (married filing jointly), the donor in this example benefited from the contribution to the DAF by $32,300 ($60,000 - $27,700 = $32,300). Example 2: Charitable Bunching Assuming $20,000 donations per year in the 24% marginal tax bracket Limitations of Using a DAF To ensure the integrity of the social impact, there are restrictions on how funds in a DAF may be used: Must hold less than 20% ownership interest (voting stock) May not invest in businesses with ownership interests of disqualified persons: DAF managers (including trustees, directors, officers) Substantial contributors to DAF Family members Cannot participate in self-dealing Cannot make grants to individuals (i.e., a direct individual scholarship) Donors may not receive personal benefits from the transaction In conclusion, if you are charitably inclined and have the means to donate some of your hard-earned money (or an inheritance), please talk to your advisor today to see if a Donor Advised Fund may be right for you. If you don't have a financial advisor, we have a team here at Whitaker-Myers Wealth Managers who can help talk through your specific situation.

Work Graduation! Congratulations! You’ve graduated from work! You’ve probably gone through numerous graduations by now, but none as important as this one. The most common question after graduation is, what’s next? This specific graduation is on to the next phase of life, retirement. You’ve worked so hard for the last 40+ years, so it’s time to celebrate. Over your working years, you’ve paid off all your debt, saved, and invested to set up your enjoyment years. Now, bring on the travel and exploration! Throughout your working journey, you’ve invested well and have created a nest egg to be proud of. If you haven’t, keep in mind that there is always time to make changes to impact your future. Meeting with someone who can guide you with the heart of a teacher is not only a life lesson but a blessing. No matter what phase you’re in, consider meeting with one of our advisors at Whitaker-Myers Wealth Managers to walk with you on this path. As we hang up our keyboards, stethoscopes, pens, pencils, or whatever is metaphorically correct for your career, remember that the planning should never stop. Tactically, we have daily/weekly tasks that need to align with our end goals, but strategically, we need to plan out the next set of years to accomplish those long-term goals. Financial planning is a big part of this story, but understanding what happens after we retire may determine HOW we execute our plan. You’ve probably heard some advisors or podcasts talk about the phases of retirement. In today’s discussion, we’ll explore these and dive deeper into understanding the Go-Go, Slow-Go, and No-Go phases of retirement. Go-Go Years The Go-Go years are not the years where you blast ’60s music while wearing some tie-dye combo with some flowers in your hair (though it may be for some folks). This is the time right after your last day at work and, depending on your health, may go on for a while. This is the initial retirement phase, where retirees have most of their energy and are ready for adventures. Thus, the Go-Go years. Ready to explore the world, meet up with friends at a whim, learn a new skill, and spend time with family.  The go-go years are some of the most precious years of retirement but also the most expensive. As you can imagine, this energy and desire to explore the world comes at a financial cost. However, this is precisely what you’ve saved for! Enjoy it, and make sure your finances align with your goals. Slow-Go Years The next phase of retirement is the slow-go years.  After exploring the world and enjoying all it can offer, we may only do one big trip a year instead of 2 or 3 at this next phase of retirement. Or you may choose to do a trip every other year. This is the phase where our body and mind catch up with us. Physically, we may have some limitations, but mentally, we may find more. Here, we start slowing down and focusing more on the important parts of our lives, like spending more time with family, spiritual fulfillment, giving, sharing, and mentoring.  The slow-go years may not have all the glitz and glamor of the go-go years, but you find significantly more fulfillment in these years. Though adventures have declined considerably, your finances are in good shape, and personal spending slows down.  However, we may find ourselves being more philanthropic or giving more during these years. No-Go Years After we’ve hung up our ‘60s outfits and have already explored the world to our heart's desire, during this next phase of retirement, it is common to see retirees slow down even further than in previous phases. In this final retirement phase, physical capabilities and health are the most significant limiting factors. During this phase, healthcare needs and costs grow and can be the greatest expense retirees face. As healthcare expenses rise, one of the greatest risks for retirees during this phase is running out of money. Enjoy this time, and continue to take care of your health. Most importantly, share your story and journey with your loved ones. There is so much to learn from each other, and any wisdom you pass on will be a part of your legacy. Conclusion The phases of retirement are pretty broad and are meant to be. They may not directly align with your story, but that shouldn’t matter. If you’re ready to retire, go and enjoy it! If you’re planning for retirement, make sure you align your goals with your finances. Financial planning for retirement can be tricky, but understanding your needs during the different phases of retirement cannot be overlooked. For example, you may spend more of your nest egg in the go-go years on travel, but in the no-go years, much of your expenses may be related to healthcare. There are many strategies and considerations to put on the table when planning for retirement, including (but not limited to) retirement investing, long-term care insurance, will/trust formation, power of attorney (financial and health), annuity investments, or other fixed income, Roth conversions, and many more. Based on your unique situation, our financial advisors can guide you through creating a plan that aligns with your goals.

Often times we are asked why the guy that is known for getting people out of debt, Dave Ramsey, is such a focal point of our financial planning and investment management, RIA (registered investment advisory) firm. “He’s good at getting people out of debt but aren’t you guys supposed to help people with investments?” But isn’t that where it all starts? For most of us in America our most powerful wealth building tool is our income. There isn’t a white knight coming to magically bestow you with millions of dollars. Thus, the more of your income that is committed to the bank(s) in the form of payments, the more your ability to build wealth and give, is limited. Therefore, when a client can barely save for retirement because they have a car payment, credit card payment and student loan payment, they better hope the government, which is well known for its ability to handle money (sarcasm noted), will take care of them in retirement. For us, it all starts with Proverbs 22:7, the borrower is slave to the lender. Beyond that, our heart as advisors is much the same as the entire Ramsey Solutions team, which today stands at 1,000 employees strong. Most advisors, won’t fool with you, if you don’t have a minimum investment size, many for economic reasons, the more money you have to invest the more you can afford to pay your financial advisor and we have raged against that machine since our inception. We have proudly helped families, regardless of size, come to a point of debt freedom and wealth accumulation. Additionally, Dave’s advice around avoiding some of the worst products in our industry such as whole life insurance and most annuity products, provides clients with a level of comfort, knowing our advice is consistent with what they’d hear Dave Ramsey, Chris Hogan, Christy Wright, Rachel Cruze, Anthony ONeal, Ken Coleman or Dr. John Delony discuss on their radio show or live events. In 2019, one of our lead advisors, John-Mark Young, was invited to join Dave Ramsey on his SmartVestor Pro Advisory Counsel, which is a top group of advisors that Ramsey Solutions uses to provide strategic guidance and advice to their national network of financial advisors across the nation, that similar to the advisors of Whitaker-Myers Wealth Managers, believe and teach the principals that Dave and his team have taught millions of people over the last 25 years. To learn more about Whitaker-Myers Wealth Managers or The Seven Baby Steps, Dave Ramsey and his team have taught people for over 25 years, contact Whitaker-Myers Wealth Managers today.

One of the most used tools on our tool belt when helping clients is a 401(k) Rollover. This is a way to move an account without incurring penalties or taxes. (Note, this is NOT a withdrawal, which WOULD subject you to a 10% penalty and income tax for the entire amount in the year of that withdrawal). It’s not uncommon in today’s world for employees to switch jobs more regularly as they continue to look for the next potential career move. And maybe leaving your current job isn’t because of a career move, but maybe your current company just got bought out, or perhaps you’re retiring soon. Whatever the reason for leaving your job, it leaves your old hard-earned 401(k) (or other work-sponsored retirement plans) sitting like a forgotten toy in the attic. In this article, we will walk through what it means to roll an old account over, how that happens, and what that allows you to do in the future. What is a Rollover? A rollover allows someone to take the money they have saved and earned at their old job and move it to their own separately held account when they leave that job. This includes everything your employer put in on your behalf, too, as long as you are vested!  It is a perfect example of having your cake and eating it, too. Alternatively, if you get a new job right away and they have a 401(k) you are eligible to participate in, that is also an option. You would most likely only do this if the plan has tremendously diverse investments with a great history and performance. Additionally, you could be a high earner making more than the Roth IRA limits. If this is the case, you would want to roll it into your new 401(k) because if you have a Rollover IRA, you cannot make a backdoor Roth contribution. How does it Work? The process is simple if you decide to roll it over to a separately held account. We suggest meeting with your financial advisor to have them help explain the process and see if it makes the most sense for you to do this. If you don’t have a financial advisor, we have a team of advisors with the heart of a teacher willing to answer your questions regarding the process and scenario. If it makes sense to move the account, we can open it for you at our custodian at Charles Schwab. Once the account number is processed the next day, we (your advisor and you) would make a 3-way-call to the custodian of your old 401(k), provide them the new account number, and then they (the old custodian) will send a check to you, or straight to our office, depending on the custodian. You will see what typically happens with this later in the article. What a Rollover Can Do for You Besides taking no penalty and having no tax consequences, rolling your money into a separately held IRA can do many things for you. For example, if you invest that money with an advisor like us, we can invest it on Schwab’s platform. This means no trading fees, low-cost investments, and no proprietary products. We have an unlimited scope and range of investments you previously would not have had at your employer. Additionally, rolling over an old 401(k) can give you constant and unlimited access to an advisor like us to help with more than just investments. The Whitaker-Myers Group can help with taxes, estate planning, retirement projections, and planning, as well as insurance. These are generally perks you wouldn’t have if you left the 401(k) at your previous employer. If you want these perks now, you can set a meeting to discuss contributing to a Roth IRA or funding a brokerage account, or if you are 59 ½, you can roll over your employer plan even if you are still employed there. That is called an in-service rollover; you can do that while still keeping your 401(k) open and contributing to it. We would be happy to discuss if this would be a viable option for you. In conclusion, rolling over an old retirement account can feel like a daunting and time-consuming task, but it isn’t with the help of an advisor who has the heart of a teacher. Reach out to an advisor on our team to help you navigate this big step and find the best option for you.

As we finish our 3-part series on metrics, if you haven’t read Part 1, Lagging Indicators, or Part 2, Coincidence Indicators, click on the hyperlinks to read to get caught up. The conclusion of the quest is near… As we continue our quest, we’ve finally reached the final and last part of the series. By now, the hero of our story has navigated their way through a plethora of challenges until finally reaching the Summit (no pun intended, well maybe). Upon reaching the highest point and completing every math equation along the journey, our hero only has one last set of metrics to understand before completing this quest for statistical knowledge.  BRING ON THE LEADING INDICATORS! Leading Indicators Leading indicators, as predicted, are selected due to their potency in predicting economic activity. These include: ·        Average work week, production workers, manufacturing ·        Average weekly initial claims for unemployment insurance ·        Manufacturer’s new orders for consumer goods and materials ·        ISM new orders index ·        Manufactures’ new orders for nondefense capital goods, excluding aircraft ·        Monthly building permits for new private housing ·        Stock prices ·        Leading credit index, M2 money supply prior to 1990 ·        Interest rate spread between 10-year treasury bond and federal funds rate ·        Average consumer expectations for economic conditions A common theme that can be extracted from the list above should be pretty evident from their names. New ‘orders’ or ‘expectations’ look at possible future purchases. These forward-looking metrics provide an outlook of those opportunities that are near-term wins in the pipeline. Some specific components of these measures and definitions may not be obvious, which we’ll hop into next. Keep in mind that the list of indicators may change in the future. Indicators have historically been replaced as the market changes to reflect appropriate reporting and needs. Leading Indicator specifics Average weekly hours worked, production workers, manufacturing A key point in this metric that may not be obvious is productivity. Assuming the number of employees, hours worked, and productivity rate remains the same, the output should remain the same. Any changes in those variables could impact output and future orders. Also, when manufacturers project demand decreasing, they tend to reduce workers' hours before downsizing. Average weekly claims for unemployment To track this metric, follow President and Chief Investment Officer John-Mark Young’s weekly market update. He discusses current activities in detail and provides great insight. ISM new orders index This survey is aggregated with responses from ~300 purchasing managers nationwide.  ‘New orders’ should be self-explanatory, thus the focus on measuring demand. For this metric, remember the number 50. If these metrics report 50% or greater, this indicates increased order growth and is usually a sign of robust economic activity. If less than 50%, this suggests a contracting pace of demand in the economy. Stock prices This metric is measured as the monthly average for the S&P 500. Some economists question its inclusion since it does not reflect economic fundamentals and should not be considered as a gauge of future economic activity. Leading credit index, M2 money supply prior to 1990 This metric measures money circulation and deposits in savings, checking, CD, money market, and other liquid assets.  M1, M2, and M3 are all types of monetary aggregates. The Federal Reserve recognizes these; however, the leading economic index only uses the M2. Average consumer expectations for economic conditions This survey conducted by the University of Michigan Survey Research Center focuses on obtaining responses from consumers about their financial situation, spending trends, overall economic/financial situation, and some current issues/concerns. Fin. Thank you for joining me on this quest to conquer economic indicators and indices. It’s been a wild ride full of calculations, definitions, and aggregations (bonus points for anyone who can tell me how many times I used ‘aggregate’ in the last three posts!) On this journey, we’ve built a foundational understanding of economic indicators, specifically looking at historical, near-real-time, and forecasting metrics. Both lagging and coincident indicators provide valuable information; however, both have improved value when the individual categories are aggregated as indices. Likewise, the leading indicator index (LEI) aggregates the list of leading indicators to provide a single data source. Remember, never depend on one metric or index to make financial decisions. Consider speaking with one of our financial advisors at Whitaker-Myers Wealth Managers to review the holistic picture of market activities and your portfolio.  Or schedule time to learn more about the data. We all enjoy a good, nerdy data session!

A common question new clients ask is, “How often should we meet with you.” The first step in a financial planning journey is reaching out to different advisors and determining who best fits you. However, once clients pick an advisor they resonate with, they want to know if there is a set schedule that they should meet with their advisor. The answer varies from person to person. Many clients enjoy a meeting every few years just to get an “account review” done on their accounts and financial situation. They want to see their earnings in their accounts and their current retirement projections. Believe it or not, meetings can be triggered by something other than a portfolio change and an investment strategy. This article will review some of the different life events that warrant a meeting with your advisor. Change in Employment Changing jobs can result in many different adjustments to a financial plan. The obvious change would be salary. An increase and decrease in salary can change your cash flow, meaning that your saving percentage for retirement may look different. You may get an increase and be over the threshold for a Roth contribution, and by letting your advisor know about this change, they can help you start making backdoor Roth contributions. Employer-sponsored retirement plans would also need to be reevaluated when changing employers. Things like your new employer's match, what to do with your old 401(k), and the new investment options are all things to discuss with your advisor. Taking Social Security Deciding when to take social security is a crucial decision that most people make on a whim. Consulting with your advisor before taking social security is a critical meeting to have. Social Security benefits increase each month you delay taking it after reaching full retirement age. Figuring out when you need to take social security, how to maximize your benefit, and being tax efficient are all reasons to meet with your advisor when approaching the time to claim social security. Marriage & Divorce Both of these highs and lows warrant the advice of your financial advisor. Marriage can result in a name change that must be reflected on your accounts and show your investments under one household. Having a dual income can significantly impact a financial plan, along with the possibility of bringing on any type of debt your spouse may have, like a car loan, personal loan, or student loan. Regarding divorce, a financial advisor can help elevate some of that financial stress that comes with an already stressful and emotional time. Rerunning retirement projections and adjusting the plan to meet someone’s retirement needs can often help settle the nerves that come with that life-changing event. Having Children Having children will bring some more costs to the table, like an increase in daily expenses. However, aside from that, it is important to talk to your financial advisor about planning for your children’s future. Your financial advisor can talk you through 529 plans, UTMAs, and custodial Roth accounts, along with other ways that you can help save and invest for the benefit of your child. Starting this at the child's birth is crucial, as time is your best friend when it comes to investing. Other times to meet with your Advisor Those are just a few examples of life events that would warrant a meeting with your advisor. A good rule of thumb is that if you are unsure about a situation or experiencing any new life event, set up a meeting with your advisor! -        Are you approaching retirement? Set up a meeting with your advisor! -        Moving across the country? Set up a meeting with your advisor! -        Want to work part-time in retirement? Set up a meeting with your advisor! All of these different life events impact your finances, and by talking to your advisor, they may be able to offer guidance in something that you did not even think about. They can also provide reassurance that you are financially able to do something or headed down the right path and that no adjustments currently need to be made. If any of these life events are something happening (or about to happen) in your life, now is the time to schedule a meeting with your advisor. If you do not have an advisor, we have a team of financial advisors at Whitaker-Myers Wealth Managers ready to meet to figure out the best plan for you and this changing season.

As we start Part 2 of our 3-part series on metrics, focusing on lagging, coincident, and leading indicators, if you haven’t read Part 1, Lagging Indicators, click here to read to get caught up. Near Real Time Last week, we jumped into the deep end with historical data and indicators that ‘lag’ the market or show their full impact after the market changes. This week, we’re diving in and looking at coincident indicators. These indicators are measures that provide macroeconomic insight into the state of the economy in near real-time. The closest to real-time data, these indicators depict the business cycle’s activities in the recent past.  Coincident indicators closely track various turning points in the business cycle. For this reason, they are commonly used as benchmarks while assessing the relativity of economic metrics to the business cycle.  The reporting may have a long or short lag, depending on the metric. The coincident indicators, which combine to form the coincidence index, are the number of employees on non-agricultural payrolls, personal income less transfer payments, industrial production index, manufacturing and trade sales. Keep in mind that the list of indicators may change in the future. Indicators have historically been replaced as the market changes to reflect appropriate reporting and needs. Coincidence index: The coincident indicators Number of employees on non-agricultural payrolls The number of employees on non-agricultural payrolls is aggregated by a survey conducted by the Bureau of Labor Statistics (BLS) of ~140,000 businesses within the United States. This metric has consistently paralleled the gross domestic product (GDP). Considering that nearly 67% of the U.S. GDP is consumption-based, intuitively, as more citizens have jobs, they are more likely to spend on the economy. Personal Income less transfer payments This metric has two components: personal income and transfer payments. Personal income consists of all household wages and salaries. Transfer payments are governmental disbursements such as social security, food stamps, and veteran’s benefits. They generally cover rent, food, and basic necessities. Since they essentially net zero, transfer payments tend to have very little or negligible impact on macroeconomic activity. Excluding transfer payments from personal income appropriates this metric to align as an impactful economic indicator. Industrial production index This metric consists of over 300 components that represent mining, manufacturing, and utility industries. This is a weighted metric where weights are assigned based on the value each component adds during the production process. Due to the complexity of this calculation and aggregation lag, this metric is a more timely proxy for quarterly GDP (Gross Domestic Product). Manufacturing and trade sales The coincident index's last major component measures all domestic manufacturing and trade sales. In the 2/3 end In every one of my metrics posts, I always highlight that economic metrics should never be taken in isolation. The indicators we’ve discussed so far are no exception. Though these metrics provide good information on their own, the impact of the aggregate should not be overlooked. For example, combining these coincidence indicators as the coincidence index correlates with a GDP of 0.88 (88%). Look at the graph below from “The Investment Advisor Body of Knowledge,” P230. Though this data doesn’t extend to the present day, it is apparent that the aggregation of these metrics correlates with the GDP. We see this trend play out in more recent metrics, which is why economists have used these metrics to understand the state of the economy. Next week, we’ll explore leading metrics as we wrap up this three-part series. Of course, in the meantime, if you have any questions for our team at Whitaker-Myers Wealth Managers or one of our Financial Advisors, schedule a time with them to discuss these topics and more.

With the quarter ending Thursday, March 28th, 2024, and the S&P 500 returning over 10%, the Russell 2000 coming in around 5%, and the MSCI EAFE (International Stocks) closing the quarter at around 6%, it may be a good time to review your total portfolio allocation. Nothing runs consistently forever, and thus, a diversified portfolio is often the means to weigh out the times when certain stocks or asset classes are not in favor. Recently, stocks have not been the only asset class to provide solid returns, though. Other asset classes have also contributed to portfolio gains in this environment, including gold and Bitcoin, for instance, which have reached new highs in recent weeks, rising above $2,185 and $68,399, respectively. Gold has reached new highs as investors anticipate rate cuts In times like these, it's important for long-term investors to stay diversified and not lose sight of the bigger picture. True financial success is not about timing the market perfectly or going "all-in" on a single investment. Instead, it’s about building and maintaining a portfolio tailored to financial objectives that can perform well across all phases of the market cycle. At the moment, the market believes it's a matter of when, not if, the Fed will begin its first rate cut cycle since 2019. The underlying economic trends are in favor of lower rates but recent economic data have sent mixed signals as to the exact timing. For example, the latest report from the Bureau of Labor Statistics showed that 275,000 new jobs were added in February, well above what economists expected. A strong job market means that the Fed can hold off on cutting rates, since it suggests the economy is doing fine even with tight financial conditions. However, the same report also showed that the prior two months' job numbers were 167,000 lower than originally believed, while unemployment also ticked up to 3.9%. This muddies the picture, leading many investors to adjust their expectations in favor of a first rate cut in June or July. In theory, gold can benefit from rate cuts just as the stock market does. Lower interest rates make bonds and cash relatively less attractive, leading investors to seek alternative ways to preserve wealth. This is especially true when investors are worried about the country's fiscal discipline and geopolitical risks in the Middle East and Ukraine. The accompanying chart shows that gold has gained about 35% since its lowest point in 2022 when the Fed was hiking rates rapidly. Interestingly, the S&P 500 has outperformed gold over this period with a gain of 44% with reinvested dividends. This is partly because gold does not always behave as one might expect or hope. In times of high inflation and economic distress, hard assets such as gold and other commodities are expected to outperform. While gold did rally in early 2022 when inflation was accelerating, gold prices then pulled back and did not recover until the middle of 2023. Gold also provides no income benefits, which makes it less attractive if interest rates remain higher for longer. This may be one primary reasons why I hesitate to include gold in clients' portfolios. With interest rates around 5% and some fixed-income investments yielding over 6%, the risk reward isn't as attractive as an investment that is going to pay the return to me in interest, therefore lowering my sequence of return risk and the chaos theory risk (This is a whole article in and of itself). Thus, while gold has experienced a strong rally and is hovering near all-time highs, it's important to keep its relative performance in perspective. The choppiness of gold prices over the past few years shows that while it can act as both a hedge during inflationary periods and serve as a store of value, this can reverse quickly as conditions change. Like all asset classes, gold is perhaps most valuable as part of a diversified portfolio rather than as a standalone investment or just as a trading investment, considering the recent volatility, but be careful because, as mentioned above, Gold has not quite reacted as expected recently. Bitcoin has jumped sharply for fundamental and technical reasons Like gold, Bitcoin has also rallied sharply in recent weeks. This is not just due to the possibility of Fed rate cuts, which should theoretically benefit cryptocurrencies and other stores of value, but is also related to the approval of spot Bitcoin ETFs in January. According to news reports, tens of billions in new funds have flowed into these ETFs which provide a simpler and more attractive way to invest in digital assets compared to Bitcoin futures or holding a digital wallet. On a technical basis, Bitcoin will also experience a "halving" around April during which the reward for mining will be cut in half. Some investors believe this might help to boost the price of Bitcoin as new supply becomes increasingly scarce. Whether the rallies in Bitcoin and other cryptocurrencies continue is unclear given the uncertain nature of the asset class, especially after the various corporate collapses, scams, and criminal convictions in the ecosystem over the past few years. Still, the rapid recovery from the 2022 crash has no doubt attracted much investor attention. Similar to gold, long-term investors should view digital assets from the perspective of properly diversified portfolios. Unfortunately, cryptocurrencies have not yet proven to be reliable portfolio diversifiers since they are strongly correlated with the stock market and other risk assets, serving to amplify risk. It's no secret that Bitcoin is extremely volatile and price swings have been 5 to 10 times larger than the overall stock market. So, Bitcoin can be thought of as another asset with specific characteristics. The question of whether and how much to invest in this asset should be no different than deciding on any stock, bond, currency, commodity, real estate property, etc. Careful analysis and risk management are needed to understand the potential risks and expected returns relative to other investments. Many sectors have contributed to S&P 500 returns this year When it comes to the stock market itself, large cap tech stocks, including the so-called Magnificent 7, are still the main focus for many investors. However, many other sectors have contributed to broad market returns this year too. The accompanying chart shows that while the Information Technology and Communication Services sectors continue to lead the market, others, such as Financials, Health Care, and Industrials, have increasingly performed well. If you would like to pursue a portfolio that overweight's the sectors of the market that Whitaker-Myers Wealth Managers, through our internal and external research partners, ask your Financial Advisor about our In-House Tactical Model. News headlines tend to focus on the absolute best and worst performers in the market. For investors, how an overall portfolio performs is far more important - not just in terms of returns but its risk profile too. So, while large-cap tech stocks have done well for good reasons, investors should not lose sight of the many other parts of the market that could also benefit from rate cuts, ongoing economic growth, easing inflation, a strong labor market, and more. We currently believe many investors (outside of Whitaker-Myers Wealth Managers) are extremely underweighted to small and mid-cap stocks because of their recent underperformance. However, due to solid valuation reasons and a lowering of interest rates, we believe this sets up small and mid-caps for a nice run throughout the remainder of the year. As a reminder, the small and mid-cap space in our Dave Ramsey vernacular is aggressive growth. The bottom line? The choice to invest in gold, bitcoin, tech stocks, small or mid-caps or any other asset should be viewed in the context of a diversified portfolio rather than as a standalone investment. Doing so can help balance other asset classes, creating a smoother ride toward long-term financial goals when appropriate. Copyright (c) 2024 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. 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‘Wouldn’t it be nice’ Wouldn’t it be nice to have one metric that we could all turn to in order to see how the economy is doing and whether we should invest more or hold off? (Before we dive deep into that thought, I will apologize in advance to anyone who now has the Beach Boys playing in your head for the rest of the day. Unfortunately, I am humming it as I type. I digress.) One metric, one indicator, one ring to rule them all! Well, maybe not the last one, but I would bet that most economists and consumers would appreciate one indicator that tells us what to do next. As with all complex subjects, the probability of one measurement telling the whole story is quite rare. In medicine, we use a combination of results over a defined period to determine which medication to put the patient on. In finance or economics, we take a similar approach to many metrics that provide hindsight, insight, and foresight (to some extent) into the economy. These are referred to as lagging, coincident, and leading indicators (respectively). Each indicator provides puzzle pieces that start telling the story of the economy. These indicators are all linked to the business cycle, considering the cyclical nature of business with seasonal adjustments. Over the next three weeks, we’ll broadly describe each of these indicators and the metrics within each of the buckets. Let’s start with lagging indicators. Keep in mind that the list of indicators may change in the future. Indicators have historically been replaced as the market changes to reflect appropriate reporting and needs. Lagging Indicators Lagging indicators, as inferred, consist of indicators that provide visibility of what has happened in the past, aggregated to give visibility on historical events that may indicate current or future events. Yes, I know. Say it with me… “Past performance is not indicative of future results.” I agree. However, lagging indicators are very important when we trend the data and combine it with the other indicators to identify patterns. Let’s take a look at some lagging indicators and define them together. Average duration of unemployment Unemployment is calculated as the average number of weeks that someone is out of work. The longer people are out of work, the greater the downstream impact on the economy. Decreases in unemployment rates generally occur after a recovery is already underway. When businesses have recovered or show signs of recovery, they are more willing to hire. On the other hand, unemployment rises after the economic downturn has already started. Ratio of manufacturing and trade inventories to sales This metric calculates how many months, given the current pace of sales, it will take to liquidate inventories entirely.  Associate this metric with supply and demand dynamics and its impact on the economy. Demand for certain goods and services decreases if the economy isn’t doing well. This will directly affect the supply of these goods in the warehouses. An increase in this metric can reflect the decrease in demand for goods across the market. This metric can show what future production may be (based on inventory). However, the inventory rise occurs long after sales growth has halted. Thus, the appropriate categorization as a lagging indicator. Manufacturing labor cost per unit of output This measure tracks productivity. If manufacturing costs increase and output decreases, this is a double whammy for businesses. Since monthly output and manufacturing costs can be volatile, this metric is reported as a percent change over six months. This indicator trend peaks during recessions. Average prime rate As the economy expands or contracts, the Feds utilize monetary policy to ‘normalize’ these changes. The Fed fund rate has historically been the baseline for most financial institutions. Generally speaking, banks add 3% to the Feds fund rates to determine the prime rate. The average prime rate is the rate at which borrowers can lend money from banks or credit unions. Keep in mind that this rate is not for all borrowers. Depending on the borrower's creditworthiness, the rate may be adjusted with additional percentage points. Commercial and industrial loans outstanding This metric looks into the total amount of industry loans outstanding. When diving into this metric, the belief is that as companies take out more loans, they invest back into the economy and focus on capital investments in their business. This indicator tends to peak when the economy is doing very well but hits lows a year after the end of a recession. Ratio of consumer installment credit to personal income Consumers tend to reduce their personal borrowing during a recession or difficult financial times. Also, during this time, banks reduce lending due to non-payment risks. Thus, this metric highlights the pace at which credit utilization occurs in the market. This indicator bottoms out a year or more after a recession. Change in the consumer price index for services You’re likely familiar with the Consumer Price Index (CPI). If not, quickly read Purchasing Power: the highs and lows. In contrast to CPI, this metric focuses only on services and service sector inflation. Service sector inflation tends to increase when an economy is already in a recession and decreases only after the recession has ended. In the 1/3 end Historically, we can’t say one indicator has been the driving force of the economy, but we can look at the trends and deduce some patterns of recognition that may provide guidance. Past performance never indicates future returns, but hopefully, you can see how the lagging indicators provide insight into the economy and trends. Lagging indicators show what has happened in the economy. These indicators show their full impact after recovery and, thus, are lagging. Next week, we’ll explore coincident indicators, which focus on insight data and more near-real-time analytics. As in any great trilogy, the first installment sets the stage and grabs your attention to want to read more. By this time, hopefully, the Beach Boys have exited stage left. Or now that I’ve mentioned it again, they’re returning for an encore. Whichever never-ending tune is stuck in your head, I hope you’ll join me in part 2 of this series next week. Of course, in the meantime, if you have any questions for our team at Whitaker-Myers Wealth Managers or one of our Financial Advisors, schedule some time with them to explore these topics and more.

One of the most common topics I discuss during meetings with financial coaching clients is how to save at the grocery store. Buying groceries is a common denominator for everyone at any stage of their financial journey. And if you have gone to the grocery store (or bought groceries) at all lately, you know the price of groceries is continually increasing. Below are some tips to help you save monthly dollars when buying groceries. Meal Plan If you have heard it once, you have heard it a million times. Meal planning will help you plan meals throughout the week, allowing you to create a grocery list with just those items. Understanding how your week will play out is key to setting yourself up for success. I know personally things come up all the time during the week to derail our plans (parents asking us to come to dinner, unplanned leftovers, etc.), so honestly, I only try to plan for three main meals to make during the week and purchase groceries tailored to those meal needs. I always have on hand spaghetti and sauce, bread to make sandwiches, a head of lettuce, canned or frozen soups, boxed rice, frozen veggies, and chicken that I can make for meals on those “off days” when something doesn’t pop up, and now I need a meal for dinner. Make the Grocery List Making this list will limit the “peer pressure” of impulse buying all the marketing people at the grocery store are hoping you will do without a plan. Aimlessly walking up and down the aisle and grabbing things as you see them leads to overbuying in a hurry. And sometimes duplicate buying. I fell victim to this over the weekend. I ran in quickly to grab a few quick items I knew we needed as my husband drove circles in the parking lot with napping kids, and as I ran past an end cap, I saw parmesan cheese. I knew we were having pasta that weekend, so I grabbed it. Once I was home, I realized we had a full, unopened bottle waiting for me in the pantry. – Make the grocery list! Shop Sale Adds Shopping on certain days of the week can help you save. And no, not because potatoes are cheaper on Tuesday, but because you could hit your store's weekly sales add and save big. In our local store this past week, eggs were on sale for $0.99 a dozen. That is a great savings if you’ve bought eggs lately! We also like to see when they put bell peppers on sale because our 3-year-old would eat a whole one every day, I think (I know, I am fortunate to have a child who loves veggies – mom win!), so shopping the sale adds on produce is sometimes how we tailor our meal plan and shopping list. Store Apps If you haven’t downloaded your store app yet, let this be your gentle reminder to do that now. Some stores have gone to this as their loyalty program, and again, you can save some much-needed dollars here. Depending on the store or item, it could be a discount/certain dollar amount of the item or, at times, a BOGO offer. And being a loyalty program is not the only benefit. If you are really trying to hone in and know exactly what you are spending each grocery haul and trying to stay under a specific number, consider placing a pick-up order. This way, it eliminates the possible impulse buys of avoiding even walking into the store, and you can see in real-time as you hit “add to cart” what your total checkout number will be (give or take a few dollars based on weighted items like produce.) If you aren’t sure you like the idea of a pick-up order because you want to be selective, that is a-okay – use this same method of “adding to cart” in the app as your grocery list! Again, you can see in real-time how much you will be spending on that specific grocery trip and can omit or make edits to your items before getting to the checkout. This is extremely beneficial if you are trying to set a target dollar amount to spend and don’t want to do math as you walk the aisles. Chat GPT And while on the topic of using our phones to help at the grocery store, here is another unique way to save on groceries! As Chief Operating Officer and Financial Advisor Amanda Sharratt shares in a Question of the Week video, she uses Chat GPT to help create menu ideas for budget-friendly meal options, as well as ideas on how to use random items in your fridge for a meal you may never have thought of. She also puts technology to use by asking it to make two meals using the same ingredients to help stretch those groceries for you, saving on your bottom-line budget number. If you are trying to work on a monthly budget and need guidance or help creating one from scratch, we have a financial coach on the team to help you in these areas. She can help create your budget with you, discuss strategies like those noted above in various areas to help you save money, and help keep you accountable during your budgeting journey!

What is Wealth There are countless online articles about being rich and how to define wealth. Even on our own Whitaker-Myers Wealth Managers website, our experts have written many articles on the topic of wealth. Some that come to the top of my mind include: NUMBER ONE INDICATOR OF WEALTH HOW LIFE INSURANCE CREATES GENERATIONAL WEALTH INVESTING AND OUR HABITS The Wealthy Concept: but make it We(a)llthy! Most online articles center around defining wealth or being rich by numbers. Showing that you have $1,000,000 as a net worth, thus equating this value to being wealthy or having a gross income of $200,000 (CNBC Survey) to feel ‘rich’ only tells one part of the story. Indeed, being a net-worth millionaire with no debt is a great place to be (our team recommends following Dave Ramsey’s seven baby steps to get there). Still, we all need to understand wealth is a combination of two variables: financial capital and human capital. Financial Capital vs. Human Capital Financial capital, as suggested, is the aggregation of all assets, including, but not limited to, invested stocks, bonds, cash, insurance, annuities, livestock, land, and more. All assets and liabilities would be used to calculate financial capital. Human capital, on the other hand, is the net present value of future earnings. Essentially, it takes all education, capabilities, capacities, grit, focused intensity (to be discussed later), and all the intangible factors that can impact one's ability to grow assets. Understanding how each variable impacts one's financial future is important at various stages of life. Typical Lifecycle of Human Capital and Financial Capital Image credit: Retirement & SMSF Investment News & Analysis - Morningstar The graph above depicts the typical lifecycle of human and financial capital. The Y-axis of this graph depicts total wealth by the summation of human capital (HC) and financial capital (FC). The highest potential for human capital (green line) is early in the wage-earning years. As students graduate, they have the greatest earning capacity and can potentially take on multiple jobs. However, during this time, their financial capital is usually low compared to later years. Their ability to work is high, but their wages are lower. Financial capital has a nearly opposite story. The traditional investor may start low (blue line), but with consistent smart investing and compound interest, this investor can see their portfolio grow steadily. As the portfolio grows and financial capital continues to rise, human capital starts declining. Our ability to work more may be present, but our bodies may not agree. The intersection of these two lines is the optimal point for our human capital and financial capital. This is where we can maximize the return for the time commitment.  This traditionally happens around the age of 55, approximately ten years before retirement. Lifestyle Investing Understanding where you are on the curve plays out in your investing strategies. Take a moment to point on your screen where you feel you are on this graph. This is very important. Where you feel you are on the graph can determine your risk tolerance and investment selections. *Be sure to discuss this with your financial advisor and ensure they agree. Strategic alignment and your time horizon should align with your goals. For example, a 25-year-old who recently graduated debt-free from college (yes, it is 100% possible; ask our Financial coach) decides to invest. His investment strategy may be more aggressive, with an equity-to-bond ratio of 90:10. On the other hand, the soon-to-retire individual may choose a less risky portfolio with an equity-to-bond ratio of 10:90.  There are many flavors of this ice cream, so make sure to discuss with your financial advisor which blend and mix of asset classes is right for you. I’m a fudge sundae guy; you may like a banana split. Neither of us is wrong; we just have different tastes and wants. If you’re looking for friendly advice and a financial advisor team (or someone to eat ice cream with) with the heart of a teacher, our team of advisors at Whitaker-Myers Wealth Managers is always willing and ready to help. Schedule time with them today!