Did you know: Good Driving Habits Can Lead to Better Gas Mileage And More Dollars In Your Bank Account? There are several things you can do while not only driving, but also with keeping up on car maintenance that can impact your gas budget. And with increasing gas prices lately, anywhere you can find a few extra dollars to save, may be worth changing some old habits. Roll Down Your Windows and Turn Down Your AC With summer heat starting to climb for many of us, take the opportunity on “free” air conditioning and roll down your windows while driving. By rolling down the windows, you help release the hot heat that has been inside your car all day, but while driving, will also keep your car cool with constant airflow. When you use your AC, you use more gas to cool down your vehicle, especially the higher the temperature increase. But what if you do want to use your AC? I get it, open windows means tasseled hair and lots of knots if you have long hair, and some people don’t care for the wind in their face. If you can, try rolling down your windows to allow your car to cool down first. This way your AC doesn’t work over time in trying to get rid of all that hot air right from the start, and then try to maintain a cool temperature. Same Goes for your Heater I know no one wants to think of winter and cold right since we finally got out of that season, but the same idea could go for your heater. During the colder months, when you turn your heater on, turn it to the lower settings and let your car gradually warm up, vs. having it on full blast on the warmest setting. You’ll create better fuel efficiencies by letting your car progressively get warm, as opposed to trying to warm it up in the first few minutes you get in the car. If you have access to one, try parking in a garage to not only keep the snow off, but also allow your car to be in a warmer climate so not as much energy and gas is used to warm it up to your preferred temperature. Go the Speed Limit You can save some money by letting your foot up off of the gas pedal and go the speed limit. Even going 5 -10 mph over the speed limit can decrease your fuel efficiencies. According to AAA’s fuel savings tips, it can save you a few miles per gallon. Not to mention, you can be saving on the speeding ticket you will more than likely avoid by going the speed limit. Use Cruise Control When you are able to, especially on the highway, use cruise control. It avoids the constant acceleration/deceleration and keeps your car at a continuous speed. By having to increase your speed constantly, you are spending more gas trying to get to that higher speed, than if you were to stay at the same constant speed. Keep Tires Inflated Make sure your tires are at the correct tire pressure. According to the U.S. Department of Energy, if your tires are inflated at the correct pressure, you could improve your vehicle’s gas milage on average by 0.6%. Not only will it help with gas prices, but keeping your tires inflated correctly, can help with the lifespan of the tires. Reduce Excess Weight and Cargo When you travel with additional weight, you create more of a drag, which in turn can burn more fuel. If you’re able, always make sure to unpack your car of heavy or unnecessary items when not need for the trip, or end destination. Also, I agree they are a space saver for vacation, but don’t forget to remove your car’s roof top carrier when it is not being used. These are not ideal for aerodynamics as they increase wind resistance on your vehicle, resulting in lower fuel economy. Don’t be a Racecar Driver Accelerating like your Mario Andretti when the stop light turns from red to green may sound like a good time if you have the need for speed, but it also drinks up your gas much more quickly than if you gradually increased your speed. Same goes for decelerating. Rather than go full speed up until the last minute to your planned turn or stop vs. gradually coasting, can also make you go through gas quicker speed. And my guess, it’s not the kind of speed that is all that appealing to your bank account. The Day of the Week Matters Many sources and reviews say that you should avoid filling up your tank, if at all possible, on the weekends. Typically, more people are traveling (leisurely) on the weekends so more traffic out and about calls for more consumers to be pulling up the pumps. Which means gas companies are going to take advantage of this and drive the gas prices up. Also, try to avoid Mondays or Fridays as well. They tend to be higher since they bookend the weekend and again, those gas companies are going to try and capitalize you being out on the road. Aim to fill up mid-week to see a better number at the pump. Holidays Have you ever noticed how the price increases around holidays? Again, it’s the gas companies’ way to make an extra buck or two by knowing more people will be out traveling to see loved ones, or go on vacation. Being aware of this ahead of time may encourage you to get gas a few days before an upcoming holiday to hopefully avoid that increase. Take a look at your budget, and see how much you are spending on gas each month. Then try implementing these tips and see how much you can save at the pump this year. If you need help with budgeting, schedule a meeting today with our Financial Coach, Lindsey Curry and see where else she can find you extra dollars in your budget.

Turn on CNBC, Fox Business or any other news media and you’re hearing a term that is never any fun and it’s … “bear market.” A bear market refers to when the market drops by 20% or more within a sustained period of time – typically two months or more. Another definition that is used to describe bear markets is when investors are more risk-adverse than risk-seeking. It has been a couple of years since we have seen a bear market which explains the reaction that has spurred from the current state of the market. In efforts to reel you back in to facts instead of the emotions that the media can evoke in you, here are some friendly reminders about bear markets: bear markets are normal, they will come to an end, they will be painful. Take a look at this chart. You can see as of June 15th the S&P 500 was down 20.72% year to date. Bear market for the S&P 500 – check! Other parts of the market have been in a bear market for much of the year. The Nasdaq, which tracks tech heavy stocks is down 29.82% for the year – bear market for the Nasdaq – check! The Russell 2000 which tracks many of your smaller company stocks (aggressive growth in Dave Ramsey language) down 23.94% for the year – bear market for the Russell 2000 – check! How Long Does a Bear Market Last? Take a look at this chart. The average bear market for the S&P 500 is -30.2% and takes 338 days to go from peak to trough (bottom). However there have been very short-lived bear markets, such as 2020 when it only took 33 days to reach peak to trough, 1998 when it only took 45 days to reach peak to trough and 1990 when it only took 87 days. The peak for the S&P 500 was reached on January 4th of this year thus we are currently 162 days into this bear market. In 2011, the market fell into a bear market because of European credit issues along with slowing growth in the United States. During that market we saw it take 157 days to reach the bottom and roughly 144 days to breakeven. Additionally, the longest bear market was in 2002 when it took 929 days to reach the trough and then 1,694 days to breakeven. Finally, the decade with the most bear markets was the 1970’s, which not surprisingly was during a time of high and uncontrolled inflation. Every market is different and nothing is guaranteed. Mark Twain said, “history never repeats itself, but it often rhymes.” Unfortunately, we can’t tell you when the bear market is going to end. Conversely, we do know it won’t last forever and thus the current market provides excellent opportunity for entering new money into your retirement accounts through either your 401(k) or Roth IRA. Stock Market Provides Good Risk-Adjusted, Inflation Protected Returns Historically Looking back through history you are able to see that stock investments like the S&P 500 are not positive 100% of the time. If you look at the bottom left-hand side of the Prudential Asset Allocation Chart you’ll see dating back to 1992 that the S&P 500 is positive 83% of the time and negative for only 17%. This results in an average gain of 17.91% when the market is positive and an average return of 10.65% when accounting for the negative returns one would have received, since 1992. Economic cycles are guaranteed. Dave Ramsey says, "it's going to rain, so you better have an umbrella." Although variables for the cycle can vary, it is still a cycle and it will not last forever. Should you desire to discuss your portfolio or individual situation, please reach out to one of our Financial Advisors today.

With increasing gas prices, seeing inflation every day at the grocery store, coming off a 2 year long and counting world pandemic, and hearing new updates daily of a war going on overseas, can often make anyone question the market and ask the question of, “Am I going to be, okay?” The talk of “a possible recession” can also make even the most laid-back person a bit nervous about their finances, and put someone in a panic attack if they are tight on cash to begin with. Unfortunately, no one can predict the future, and that crystal ball is still broke telling us when the next recession will hit. But the reality is, there will always be the chance of a recession at any given time, whether it will be in a few months, next year, or even five years from now, there is no certain timeframe to confirm when it will be. What should I do, when I don’t know what to do in this situation? The most important thing you can do for yourself right now, and at any moment in time for that matter, is to take a deep breath, collect your thoughts, and create a well-informed plan. Don’t go into freak out mode. Focus on the things that you can control. Here are a few things you can do to make sure you are setting yourself in a good financial situation if we were to go into a recession. You could call this a “things you can control” checklist… Your Emergency Fund Like Dave Ramsey, we at Whitaker-Myers Wealth Managers suggest an emergency fund that will cover your monthly expenses for 3-6 months. Obviously, that is a broad range and can drastically impact your savings, but it is more dependent on your situation and your comfort level. The suggestion of a 3-month emergency fund vs. a 6-month emergency fund has several factors that come into play, mainly coming down to are you a single or dual income household? If you are a single income household, we suggest trying to save more of that 6-month range, as it gives you more of a cushion since there is not another income to help support you or your family. If you are a dual income household, more than likely both breadwinners will not lose their jobs, or be laid off at the same time, so a 3-month emergency fund is suggested. However, if the current world and economic situations are worrying you at this time; and you are feeling pressured and have a bit of anxiety from what is going on, perhaps you have a conversation with either yourself or spouse. Discuss increasing your emergency fund to start saving more from each pay check because that will give you more of a sense of ease and comfort. Or if you are just starting out in the baby steps, it’s suggested to save $1,000 as your starter emergency-fund. Again, if you are worried and have hesitations about how things are, then increase your emergency fund to an amount where it helps your feel more comfortable if something were to happen and you would need to dip into it. Remember, Emergency-Funds are “break the glass” type of moments. Not, “I want to buy this new couch” moments. Debts and Mortgages If you have either of these, continue to try and get these paid off in a timely manner. The less debt you have, means the less you are giving your income to someone else, and the more of your income you have to put in your bank account. Don’t stop attacking these to set money aside for increasing your emergency fund. It may seem like the right idea, however, now you have created yourself a bigger mess by delaying your debt. Your debt isn’t going to go away, so better to continue to pay it off when you know for sure you have the means and are able to do so. Again, it is not for certain that a recession will happen, so before it potentially does, continue paying off your debt (or your mortgage) with the same intensity as you have been doing, before you are left trying to figure out how to pay them off with potential stress or worry of job loss, etc. One exception to this would be if you know you will be losing your job in the near future. If you see the writing on the wall that your job is being eliminated or your company is going out of business, it is a good idea to pile up as much cash as possible. Dave Ramey always says that you should be working through the baby steps and the only exception to that would be to pile up cash in order to avoid going further into debt, especially when you know a life change is coming up! Current Investments KEEP INVESTING – don’t stop because something “might happen”. If that was the case, no one would ever invest anything. Continue to put the suggested 15% of your income towards your investments, or continue with the plan you currently have. The key is, just don’t stop or decrease your investments because you are worried. And most importantly – don’t take anything out (or more than what is normally taken out of your monthly withdrawals). If you have questions, call or set up an appointment with your financial advisor, ask those questions, and discuss strategies. Even a simple phone conversation with them could help your worried mind and allow you to get a few extra winks of sleep at night. Budget There’s that “B” word again that you always hear me talking about. If you have never done a budget before, maybe now is the time you start one. This will help keep you on track from over spending, and help you set boundaries on your daily living expense to help you save more in case something were to happen. Track your planned dollars and dollars spent We suggest using the EveryDollarApp through Ramsey Solutions. If you have a Ramsey+ membership, you can use the premium version and link your bank account to it. If an app doesn’t seem like the thing for you, an excel sheet will do just fine. The important thing to remember is to start the month out with target numbers for each line item, and go back in and track those expenses routinely. Review the budget a few times a week to make sure you are not overdrawing on the dollar amount you set for yourself in a specific category. This also gives you the ability to adjust your budget as needed to cover unforeseen expenses, or if you notice you are overspending in a category, you can pull from another area to compensate and still keep the dollar amount you want to go into your savings “safe” from being spent. Trim the budget where you can Take a look at the items you are spending money on and see where you can “trim the fat” to put a few extra dollars in your emergency fund each month. Do you have several streaming services; what about canceling one of them? Have a coffee addiction; set out a specific amount of cash and that is your limit to splurge on coffee. When the dollars are gone, looks like it’s coffee from the break room for you until your month resets. Who knows, you may find multiple things you were spending your money on monthly that you realize you can go without for some time, or don’t need at all. Delay instant gratification We live in a society where things are at our fingertips and we can know answers immediately. Sometimes wanting something is as simple as a click of the “Buy Now” button, and you get it two days later (thanks Amazon Prime). Try delaying the immediate urge to purchase an item in that moment because you like it or “deserve it”. Or postpone going out to lunch by yourself and reserve that to only when you make lunch plans with a friend every so often. I know these aren’t fun things to do, but they can help you save several dollars a week. This adds up to a lot at the end of the month that you can put towards paying off your debt or putting in your emergency fund if you are worried right now with the current economic status of things. Don’t be a Dooms-Day Prepper We understand no one wants to hear the words “recession prepping” because no one wants to have to deal with it. But we also don’t want you going overboard with things like selling your home, liquidating your investments or stock piling dollars under your mattress. We are not saying being prepared is a bad thing, in fact it is something we encourage. However, we don’t want the talk of recession keeping you awake at night and going to extremes. We want you to feel confident and ready for anything to come your way if something financially were to happen. We know money can cause emotional reactions and cause more stress in already stressful situations. Hence why we encourage being prepared with a plan. Get yourself in a good state of mind Again, if you are worried about the potential of a recession happening soon, review this checklist. Are you following our suggestions? Are you able to say with confidence you are doing these things to prepare yourself in a logical, informed matter? If you are worried, again, reach out to your financial advisor and have a conversation with them. And if talking with them does not calm your nerves or help you sleep better at night, create a support system that can help ease your worries. This could include close family members and friends, or you could reach out and talk to a counselor if you feel it has gotten that far. Financial situations can be stressful, and with the fear of potential job loss could increase these worries and concerns further. Having the right support in place, or at least identifying who you would reach out to, can help set you up for success if something like a recession were to occur. Lastly… Remember, you will get through this. No, inflation is not fun, and we all do not like it, but you will be able to make it through the rough patches. And if a recession does happen, you will get through that as well. And by being prepared, logically, you will weather the storm just fine. Our Chief Investment Officer just wrote an article last month giving a market update (spoiler alert: he shares data from a few different economists and their forecasts are not as negative as what you might be seeing on TV recently). The article is packed with a lot of information and as we all know, knowledge is power so if you haven’t already, be sure to check out that article HERE.

Each morning when I get to my office the first thing, I do is tune the television to Fox Business. I’m not using Fox Business to provide any kind of research or decision-making; I simply use it as it is intended which is for entertainment and informational purposes only. Normally it is just background noise while I go about my day but I do occasionally tune in to my favorite show, Making Money with Charles Payne. Out of all the shows on Fox Business from opening bell to market close, I find Charles to be very well-articulated and probably the most realistic and educated of all the Fox Business hosts. But one thing Fox, CNN, CNBC, and the other 24-hour news networks have in common is that they would like the average person to believe that the world is coming to an end. Between talking heads arguing about the complete economic and social collapse of our society, we get the commercial that tells the us the only thing that will save us all is buying gold from Fancy Name Capital. I would like to share five reasons why I disagree with that and send a warning, especially to those nearing or already in retirement, to steer clear of these “investments” and stick to the plan you and your financial advisor have put together. If you have not had a conversation with an advisor about retirement and investment planning, please schedule a meeting with us. Basically, Zero Federal Regulation I tend to be perfectly at ease with as little federal government regulation in our lives as necessary. However, I welcome government organizations like the SEC when it comes to protecting investors from scammers, charlatans, and snake-oil salesmen. Physical gold, silver, platinum and other precious metals are not securities. The industry is not regulated by the SEC, FDIC, or backed by the full faith of the USA. They are regulated by Federal Trade Commission (FTC). The FTC is the organization that is tasked with regulating basically anyone selling anything. They are notoriously understaffed and have an incredibly difficult time trying to police physical gold and silver schemes. This lack of regulation has made the physical gold, silver and other precious metals industry a hotbed for not so ethical business practices. Boiler room schemes, targeting vulnerable age groups and making it as hard as possible to recoup your investment after you are in are just some of the unethical and sometimes illegal activities within this industry. Liquidity Physical precious metal dealers will tell you your investment is completely liquid! Whenever you want to get out, they will gladly sell your investment often within 72 hours. But, there’s a catch…If you need immediate liquidity, you will likely never get the fair value of your investment back in cash. This is a point where the dealer has leverage over you and whatever situation you might be in. Just like any old business negotiation, the one who is the most desperate has the most to lose. Because gold and other precious metals are simply commodities like rocks, lumber, or oil their value is only worth what the buyer is willing to pay. If the dealer is buying back the precious metals they sold you, they will give you the lowest possible offer to make a larger spread when they sell it to the next consumer that comes along. The best way to get the highest price for your precious metals is to sell it on the open market yourself. This involves more time, skill, knowledge and know how then most people care to invest their time into. Another important note about precious metals and liquidity is that it is not an income-generating asset like stocks and bonds. It is not a good investment for someone that needs to generate income from their investment or is taking regular distributions to meet income needs. Investment Returns The returns on gold and other precious metals are entirely based on their price appreciation. With all investment returns, time is on the side of the investor. Typically, the longer someone has to hold their investment the higher return they will see over someone with a shorter time to invest. But if I had to choose an investment from the previous 30 years, I would take Large-Cap stocks 1639% of the time over gold or silver. The chart here shows the 30-year returns of the Total Return Stock Index (BLACK) vs. Gold (YELLOW) and Silver (GRAY). The Total Return Stock Index is the return of Large-Cap stocks assuming all cash payouts, including dividends, are reinvested. A $10,000 gold investment made in 1992 would be worth approximately $54,000 today while a $10,000 investment in Large-Cap stocks in 1992 would be worth approximately $174,000. “BUT WHAT ABOUT DURING SHORT TERM VOLATILITY AND MARKET UNCERTAINTY!” -Screams the gold dealer. I will entertain that with the chart shown here. Keep in mind this is through one of the most uncertain times of our lifetime (COVID + current market situation) and I am still buying and holding the S&P 500 rather than running to precious metals. Dates: January 1, 2020 – May 24, 2022 Returns: Total Return Stock Index (PINK) = 24.25% S&P 500 (PURPLE) = 26.77% Dow Jones (GREEN) = 21.39% Gold (ORANGE) = 21.85% Silver (BLUE) = 22.24% Hidden Fees The return charts above do not even include the hidden or “not so discussed” fees and that come along with buying physical gold and other precious metals. If you hold physical gold in an IRA for example, the gold will be purchased through a dealer and sent to a custodian where you will be charged fees for storage and insurance annually. The dealer and custodian will likely charge maintenance fees and don’t forget the markups, commissions and transaction fees associated with buying and selling the commodity. An example of this: You want your gold dealer to sell $100,000 of gold bullion you own. The dealer might charge a sales fee of 15% to cover “marketing and listing costs” so you are stuck paying $15,000 dollars to sell. In contrast, if you have $100,000 worth of an S&P 500 Index fund with Whitaker-Myers Wealth Managers and want to sell $100,000, it costs you $0 in fees. Volatility Precious metals are volatile. In fact, gold has about the same volatility as the S&P 500. With regards to possible returns, according to historical data, it would be more prudent to take a similar amount of risk investing in the S&P 500 with a chance of much higher returns than gold. These are just 5 reasons why investing in physical gold and other precious metals can be a dangerous and expensive endeavor. Alternative investments from stocks, bonds and cash can be something that might benefit your portfolio but we would not recommend large portions of your total portfolio be allocated to these alternative investments. Also, before looking to gold and precious metals do some research or talk to us at Whitaker-Myers Wealth Managers about REITS or broad based commodity ETFs. These alternative investments achieve the diversifcation benefit you desire without the hidden fees, lack of liquidity and oversight and general unfamilarity that can make investing dangerous for the uninformed. If you do feel like you need to have gold, consider a gold ETF instead of physical gold which your Financial Advisor can discuss with you. It will be less expensive and easily liquid for the fair market value at the time you sell. Before making any investment decisions you should speak with a professional about the risks, fees, tax implications and other information necessary to make an informed decision.

2022 has presented some unique challenges to investors regardless of age and the risk composition of your portfolio. Stocks have seen a near bear market (at the time of this writing May 2022) and bonds have seen the worst start to the year since 1842. Basically, if you’re alive, you’ve never seen a market like this. That’s not a reason to panic, bail on your strategy or do anything of the sort, but it has provided investors and investment advisors alike, the opportunity to review your current strategy for enhancements either through more diversification or tactically added asset classes you wouldn’t have considered in the past. One option that has become more popular has been real estate investing. Nearly every person that is an investor, has some real estate exposure in their life because of their home. If you’re fretting about your stock or bond returns for 2022, one thing that may cheer you up would be to review your Zillow home value, relative to what it was a few years ago and you’ll quickly see you have an asset still in appreciation mode, most likely (Note: it’s one reason why when we do Financial Planning we track your total net worth, home and all, because it’s helps you to see, even when stock market assets are declining other assets on your balance sheet can be still appreciating). However, an area that many investors do not get exposure into, unless you’re a business owner, is commercial real estate. This chart let’s you see that during the last thirty years, both stocks and private real estate have led the way in terms of performance, with real estate getting a slight edge, because according to the NCREIF Property Index, real estate has had much better downside protection. Take a look on your local MLS and check the price of any large commercial real estate for sale and you’ll quickly realize this is not something you can typically do on your own. However, investors do have the ability to collectively pool their investments together much like you do in a mutual fund or ETF, with the experience and expertise of a seasoned management team that will make all the buy, sell and hold decisions, through Real Estate Investment Trusts or “REITS”. What Is a REIT? REITS give you the property owner, the ability to invest in multiple real estate projects without the headache of tenants and toilets. REITs are required to distribute 90% of their income to the investors, meaning they can only leave 10% inside the fund for additional real estate acquisition purposes and at least 75% of the fund has to be invested in real estate. You can find REITS that specialize in a certain type of real estate, such as retail, office or student housing and you can find REITs that specialize in certain industries such as healthcare. Why Purchase a REIT? There could be many reasons why you would like to purchase a REIT however commons reasons are consistent income, capital appreciation and diversification. When owning real estate that is occupied by a tenant, you are going to receive rent and that rent, or at least 90% of it, must be distributed to you the investor. This would provide you a level of current and consistent income that can help meet your retirement income needs along with your stocks and bonds. Additionally, over time, real estate has shown the ability to appreciate, especially if purchased in a the right area. Therefore, real estate can provide you with the best of both worlds, current income and future appreciation potential. Of course, with any investment, there is no free lunch, so as an investor I could be purchasing a REIT, that if not properly run and/or if they don’t execute upon their strategy, doesn’t achieve the objectives of the fund or the investor. Thus, as with any investment, we believe due diligence and the help of an investment advisor is warranted. Tax Benefits of REITS IF a REIT is purchased within a brokerage or non-retirement account (Dave Ramsey calls these bridge accounts), it can provide the investor with certain tax benefits that help make the investment more attractive. Before we dig into the tax benefits let’s first understand the two main ways a return is generated on a REIT. First, the rent that is collected from the tenants of the properties owned within the REIT is considered “income”. This income is generally taxable in the year you receive it and taxed at your current income rates. Second, the REIT is investing in property and that property has the potential to appreciate over time. When your REIT sells the property that has appreciated over time, then you’ll be taxed at a long-term capital gains tax rate (assuming property is held for longer than one year). Finally, you can receive what are called Return of Capital Distributions. These are distributions paid to you that are not taxed, at least initially. A return of capital distribution would lower your cost basis meaning that if you bought a REIT for $50 / share and they distributed $2 to you through return of capital, it would lower your cost basis to $48 however, the $2 distribution would not be taxable at the time of distribution. Tax Cuts and Jobs Act of 2017 This tax cut put in place by President Donald Trump, made most REITS qualify for a 20% deduction in their dividends. This deduction, called the Section 199A Qualified Business Income deduction, allows the investor that has pass through income, which is what a REIT is doing, to deduct 20% of the that income from their tax return. Let’s look at an example below: Sample REIT distribution: Ordinary Dividend (Section 199A): $1.80 / share Long-Term Capital Gain: $1.00 / share Return of Capital Distribution: $0.20 / share Total Distribution: $3.00 / share In this example, if you owned 200 shares of the REIT you would have received a $600 distribution. However, the tax implications of that distribution would have been as follows: $1.44 of the ordinary dividend would have been taxable at the investor’s current income tax bracket (using the 20% deduction). $1.00 would be tax at the client’s long term capital gains tax rate which is 0%, 15% or 20% $0.20 would be not taxable however it would lower the cost basis of the investment meaning it would be taxed when the investment was sold either at short term or long-term capital gains tax rates, depending on how long the investor held the asset. All in, the investor was paying tax, initially on $2.44 of the $3.00 distribution, therefore providing a more tax efficient investment potentially, than other options available to the investor. Conclusion Should a REIT be a good option for you, as an investor? Perhaps, especially as you are near retirement and your goal shifts from asset growth and accumulation to asset growth, principal protection and consistent income to replace your employment income. Your Financial Advisor Team at Whitaker-Myers Wealth Managers is poised to discuss the different REIT options available to our clients, to determine if they would meet your unique goals and objectives.

Even though it’s the demand for negativity in the first place that drives the bulk of the news and information we see all the time, my goal in this quick piece is to give you what is hopefully a nice, quick breather from the typical top headlines and narratives. Inflation is a word that can, and especially now, leave a bad taste in your mouth. Let’s touch on this inflation topic a little bit for the month of April but also point to some other facts: As of end of April ’22, the overall PCE deflator (“consumer prices” – the Fed’s preferred measure for inflation) was up 0.2% from March ’22 However, average gross personal income rose 0.4% month-over-month as well as disposable (or after-tax income) at a rise of 0.3% from March to April, both outpacing the 0.2% inflation number The 0.2% increase from March to April is not necessarily optimal but much improved from the previous month-over-month result, where the increase for the same measure was +0.9% from February to March The 0.2% jump in April brings us to a 6.3% annual increase in the PCE deflator (or inflation) looking from April ’21 to ‘22 Although lagging the 6.3% number, personal income rose 2.6% for the average working American for this same time period Using data manipulation transparently, if you take governmental transfer payments out of the equation (exclude stimulus checks and unemployment benefits as a result of the pandemic from meeting the definition of personal income for this 365 days), then the hypothetical rise in personal income is actually 8.4% and specifically 12.7% for the private sector, both significantly outpacing inflation for the past year From April ’21 to April ’22, spending on goods is up 6.4% and 10.8% for services year-over-year With modern technology, the pandemic originally put a much bigger damper on demand for services in comparison to goods – with these numbers above and even just a simple eye test, it’s easy to be economically optimistic especially regarding service-heavy industries such as Healthcare, Utilities, Energy, etc. It is easy to get caught up in negativity and that’s not to say that we would pretend to look at high inflation, for example, as a positive in and of itself. But, we also and certainly do not want to ignore positive signs, either! High inflation obviously causes more money to come out of your pocket for an average purchase/expense, however, these numbers show that on average, there should be more money in the same pocket in the first place (in terms of income). More specifically, we are truly looking at a much more positive short-term trend. While personal income rose 0.5% from Feb. to March, the inflation number was higher at 0.9%, a loss for the average American. While inflation rose 0.2% from March to April, personal income rose at double the rate at 0.4%, arguably a short-term WIN for the average American more recently. Lastly, even though my point about stimulus payments and unemployment uses data manipulation, we think it’s arguable that the concept behind it was and still is the #1 driver of this inflationary environment. This inflated influx of cash into our money supply as a result of the pandemic and certain policies that came with it should not be a normal, sustainable, and recurring event moving forward that we are currently battling with and CAN fully recover from. Source Material To view, Click Here Article: April Personal Income and Consumption Entity: Data Watch – First Trust Advisors L.P. Authors: Brian S. Wesbury Robert Stein, CFA Strider Elass Andrew Opdyke, CFA

I-Bonds and Treasury Inflation-Protected Securities (TIPS) are investments that offer principal protection. These investments are designated to offer low-risk investment opportunity that also protects purchasing power. In addition, they both have built in features that combat fluctuating inflation rates. Although they share similarities, these investments contain their own differences in how they are bought, taxed, the difference in their holding periods and many other factors. What are I-Bonds? I-Bonds are savings bonds that are issued by the US government. Because all Treasury securities are backed by the “full faith and credit” of the US government, they are considered amongst the safest investments you can make. I-Bonds are non-marketable meaning they must be purchased directly from the government and cannot be bought or sold through secondary security markets. These bonds are exempt from any state and local taxes, meaning they offer an additional benefit if you live in a high tax city or state. Owners of these bonds can wait to pay taxes when they cash in the bond. They may also pay taxes when the bond matures or when they give the bond to another owner. I-Bonds can earn interest for up to 30 years and cannot be cashed in for at least 12 months of owning it. Cashing in an I-Bond before the 5 year holding period results in a forfeiture penalty of three months interest. Anything after 5 years is penalty free. They have a minimum contribution of $25 and a maximum of $10,000 per year. The I-Bond can be 100% tax free if you use the bond to pay for college tuition or fees. These bonds can be purchased electronically at any time online from Treasury Direct or available on paper using your tax refund. What are Treasury Inflation-Protected Securities (TIPS)? Treasury Inflation-Protected Securities (TIPS) also provide protection against inflation. The principal of a TIPS will increase with inflation and decrease with deflation, based on the Consumer Price Index. TIPS are marketable meaning they can be bought and sold in secondary securities markets. When a TIPS reaches maturity, it pays the greater between the adjusted principal or original principal. TIPS pay interest twice a year at a fixed rate. This rate is applied to the adjusted principal. Unlike I-bonds, TIPS have no minimum holding periods, trades like a stock and pays taxes on interest yearly. The life span of TIPS ranges from 5, 10, and 30 years. TIPS can be purchased at auction through TreasuryDirect, or through banks, brokers, and dealers. During times of deflation, TIPS can go down in value, but they will always be worth at least the original principal amount at redemption. I-bonds will never dip below the bond’s value in the prior month. Any upward inflation adjustments received with I-bonds can not be eroded due to a later period of deflation. Looking into purchase limits of TIPS, auction noncompetitive bidding has a limit up to $5 million. While competitive bidding has a limit up to 35% of the offering amount. I-bonds have a $10,000 limit for electronic bonds and a paper bond limit of $5,000. These limits apply to the recipient of the bond. In terms of taxes for TIPS, semiannual interest payments and inflation adjustments that increase the principal in TIPS are subject to federal tax in the year that they occur. However, like previously mentioned are exempt from state and local income taxes. In regards to I-bonds taxation, tax reporting of interest can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first. Similarly, to TIPS, I-bonds are subject to federal income tax, but is exempt from state and local income taxes.

Jeopardy! for the Win!!! While watching Jeopardy! a few weeks back, there was a young woman, who just became that rounds new Jeopardy! champ. To her shock and disbelief after winning Final Jeopardy!, and being declared the new Jeopardy! Champion winning roughly $32,000 for that night, her reaction was, “I can pay off my student loans”. Jumping forward a few weeks later, this young lady is still the Jeopardy! champion, has qualified for the next tournament of champions, can pay off her student loans more than 10 times now, and all at the age of 23. First, I want to say congratulations to her on this accomplishment, but second, I want to point out the forethought of this 23-year-old. After winning just over $30,000, her immediate thought was to pay off her student loans. With the current discussion of possible loan forgiveness, and the recent extension for some loans to be postponed until September, the idea of using her winnings to pay off her student loans is the exact mindset everyone should be taking with their loans right now. Yes, there is talk of student loans being forgiven by the current administration. But that talk has been happening for quite a while now (this being the 6th extension granted since the Covid-19 Pandemic started two years ago), and is not a sure bet. Have ever heard the saying, “Don’t count your chickens until the eggs have hatched”? Regardless if you have or haven’t heard this saying, it is something you should keep in mind while planning on how to pay off these loans. Because you cannot plan on these loans being forgiven, or even extended again. So rather than feeling the purse strings tighten, and a sense of anxiety come over you when they finally do activate payments again, wouldn’t you rather feel more at peace knowing you have money in the bank, with a plan of attack? What is my plan of attack? Of course, we all wish we could win $32,000 on a game show and not need to worry any further, but unfortunately, that doesn’t seem like the likely scenario for many of us. Our advice at Whitaker-Myers Wealth Managers is to continue to save and put money towards those student loans during this time “off”. If you can afford it, take the minimum payments you owe each month on your student loans, and put those dollars in a sinking fund titled “Student Loans”. House your money in this savings account, knowing it has a short-term purpose. This way, you are setting aside the money you will eventually have to pay (mind you without the interest tied to it at this time), and putting it in a place with a purpose, not tempting you to spend it on something for the here and now. If you have other bills or debt that you would like to try and pay off during this grace period, that is fine and understandable, but we suggest you still try to put a little something away each month towards these loans to give you a leg up vs. trying to rearrange things once they become active again. Remember, every little bit helps for the big, long-term goal. Why should I save now if I don’t have to pay now, or they will just be forgiven in the end? Because only 1 of 2 positives will come from this. Let’s review each scenario and see how putting money aside today, will be a benefit to you in the future. Scenario 1: Loans are not forgiven but activated in September 2022 Let’s say your minimum loan payment is $450 a month. This is the beginning of May. If you put $450 away each month through May, June, July, and August to start paying in September 2022, you have saved $1,800 interest free dollars that you can throw at your loans right away. You’ll actually be ahead with paying off your loans, because you’ve been able to throw a large dollar amount at them with no interest attached to it, saving you more dollars in the end. Scenario 2: Loans are forgiven and you do not need to pay on them anymore Let’s go with the same details as above. Your minimum loan payment is $450 a month. This is the beginning of May. If you put $450 away each month through May, June, July, and August 2022, you have saved $1,800 interest free dollars. You can now put this right into your bank account – OR – You can now apply this to your debt snowball if you have any other outstanding debt. The end lesson is – it is still a win-win scenario for you. But you still have to put in the work. As I have said earlier, you cannot bank on your loans being forgiven. All you can do is plan accordingly and give yourself the best advantage of this time “off” opportunity. Yes, I am sure many of those who have this time “off” are daydreaming of other ways they can “spend that money now”, but the reality is, it should still be going towards those student loans. Because when the time comes around that they reactive those loan payments, are you going to still be okay with the purchases you made with “all the extra money” you had these last few months, or are you going to wish you had started to put it aside to pay off the loans that are now knocking at your front door again? If the answer is no, or even an “I don’t know”, the solution is to start saving and putting money aside today. So then when, and only IF, that day does happen that they forgive your student loans, it’s like you’re giving yourself an unforeseen bonus with all that money you have already set aside. If you have questions about how to handle your specific student loans situation or you need help prioritizing your debt, or finding ways to save in your monthly budget, visit our website and see how our financial coaching can help you today!

The year was 2007. I was a fresh, motivated young man. I was about a year and half away from finishing college and received a job offer with a super-regional bank, in their private banking group, that was going to push me towards my ultimate goal of becoming a Financial Planner. What could stop me, right? How about the entire financial world getting taken to its knees because of the mortgage crisis? The stock market making a nearly 50% drop, large national banks like Wachovia, Washington Mutual and Penny Mac becoming insolvent. Long standing Wall Street Firms Bear Stearns and Lehman Brothers collapsing. And here I was, 22 and trying to make sense of it all. There were so many positives and negatives to starting my career during such a tumultuous time, however the one thing that still sticks with me today is how one particular Advisor I worked with, seemed to always stay positive and his clients LOVED him for that. As a matter of fact, irrespective of the crisis they were living through, clients were referring their friends and family, to this gentleman at a breakneck pace. “Come invest and do your financial planning with my guy” they’d say, “the stock market isn’t good but he'll get you on the path to success when it rebounds.” And the great thing was – they believed and trusted him. And guess what – it did get better. Of course, I had to know his secret sauce and he was gracious to give me sage advice. It was simple: Faith and The Power of Positive Thinking by Norman Vincent Peale. This Advisor told me, “This book will help you to improve your personal and professional relationships, break the habit of worry and develop the power to reach your goals. These are all things your clients will appreciate in you.” He was right! As I searched the Scriptures, I came to learn the mentality of positive thinking is Biblical. I’m not talking about prosperity gospel positive thinking, however the type of positive thinking that helps me to understand everything is going to be ok and not worry about the uncontrollable. Let’s dive into some positive, critical thinking below, regarding today’s markets. First, I’ll set the table for where we’re at today. As I write this, May 9th 2022, the market has certainly taken a breather with Growth Stocks (Nasdaq) down 25.71%, Aggressive Growth Stocks (Russell 2500) down 18.64% and the S&P 500 (blend of Growth / Growth & Income) down 16.26%. Even the safer side of a retiree’s investment portfolio (Bonds / Fixed Income) has seen a 10.11% loss YTD. Much of this year’s pain has been brought, as a result of rapidly rising interest rates, which serve as competition to stocks. January 3rd, the 10-year treasury was trading at 1.52% and today it closed at 3.12%. This is a level we haven’t seen since November 5th, 2018, which interesting enough was the middle of another 20% drop (which subsequently recovered early in 2019). That’s a big move for interest rates in less than 5 months. Despite the headwinds, I continue to believe that stocks provide our clients the best opportunity for long term returns for their retirement and non-retirement investment portfolios. Simultaneously, we believe for retired clients, stocks, along with a diversified fixed income portfolio and potentially real estate exposure (either through your primary residence, rental properties or commercial real estate REITS) provide you with a diversified basket of assets for long term planning. Much like the book, The Power of Positive Thinking, taught me your circumstance today does not define you indefinity, the stock market losses today do not negate its long-term wealth building power! Remember, it’s giving you the ability to invest in some of the greatest companies the world has ever seen! Let’s dive into a few pieces I found instructive regarding the forward-looking outlook. First Trust: Reducing Our Stock Market Forecasts Granted, I understand the title might scare you a bit. However, to start 2022 almost every investment firm had a positive price target on the S&P 500 for 2022. Early on, the market looked promising however that quickly faded. Now nearly 5 months into the year, firms are starting to reassess their 2022 Investment Outlooks. First Trust, to start the year, had a price target for the S&P 500 at 5,250, which seems extremely unlikely at this point, including in their own updated models. They use a Capitalized Profits Model which takes into account future expected corporate profits and current invest rates to put a fair value target on the market. They like many did not see The Federal Reserve, being so aggressive with interest rates in 2022 to combat ongoing inflation, and therefore have now updated their model to include a 10-year treasury at or around 3.13% which has given them a fair value on the S&P 500 at 4,100 (today it closed at 3,991). When their model says the stock market is fairly valued – as it is today, that means there is an equal chance it could go up or down from here. However, they point to a few reasons they feel it may outperform to end the year: Recession: The market is pricing in a recession soon however employment is strong, wage growth is happening. There seems to be little consensus among experts there will be a recession in 2022. Most of the research I’m reading expects a recession in the neighborhood of summer 2024. War: Investors are still concerned about World War III. It seems Russia has understood that invading Ukraine has cost them and their economy so much already, they won’t escalate their aggression into other countries, consequently triggering NATO’s call for mutual defense. As it becomes more clear Russian aggression will be contained within Ukraine the market should price that in. Republican Sweep: First Trust expects the House to take 247 seats which would be near the post-World War II high water mark. Additionally, they expect the Republicans to take 53 Senate seats. They don’t mean to say here that just because Republicans win, the stock market will rise however, they realize this will create divided Government with a Democrat in the White House and the corporate tax agenda would become dead on arrival in the legislature, protecting the Job and Tax Act of 2017, including corporate tax cuts. Add those three market positive events along with their Capitalized Profit Model and they currently expect an equity rally to end the year, perhaps reaching 4,900. That’d be a 25% increase from today’s closing price You can read the full report from First Trust here. JP Morgan Guide to the Markets Charts Each month JP Morgan updates their Guide to the Market. It’s an extremely valuable tool, if you like to look at charts to understand where things are at economically or from a stock market point of view. For this month I’ll highlight three charts I found instructive: Corporate Profits and Sources of Total Return The chart can be seen here. We know the primary reason a stock will rise long term is the growth of the companies’ earnings. Just as your income, is what allows you to build wealth, a company’s earnings are what will move their stock price up or down, long term. You can see going into 2023 and 2024, currently the consensus of analysts is a fair amount of earnings growth, nearly reaching $275 / share by 2024. Additionally, you can see on the chart to the right, so far in 2022 we’ve seen 5.2% earnings growth, however a negative S&P 500 of 13.33% at that point, which is tied to the higher interest rates we spoke about above. Sources of Earnings Per Share Growth The chart can be seen here. To date in 2022, Earnings Per Share Growth has reached 8.8% primary driven by revenue growth and a slight bump because of share buybacks (share count). Improvement in profit margin, which was extremely high last year thanks to inflation allowing companies to pass along much more price increase than they actually had within their business, has taken a breather this year, but overall, earnings per share growth is within a historical norm. Annual Returns and Intra-Year Declines The chart can be seen here. As Dave Ramsey says, “if the material I’m presenting can make it from your head to your heart, your life will be changed.” That’s how I feel about this chart. The average intra-year decline, meaning how deep a negative got within any given year, over the last 42 years, was -14% (we are currently at -16%). The stock market was still positive in 32 of those 42 years. In 2010 the market dropped 16% only to end the year up 13%. In 2011 the market dropped 19% only to end the year flat. Point is, you don’t know where the market will end the year, but you do know over time, companies have proven their ability to drive growth and improve their earnings, which will make its way to their stock performance. The only guarantee, is the guarantee of a loss, if you were to sell today. Don’t jump off the roller coaster in the middle of the ride. Don’t make a decision you’ll regret in 10 years. The market is dynamic and there are many things that are unknown in the future. However, what you can control is your mindset, just as I learned so early from a great mentor and wonderful book I try and read every year. Remember above when I mentioned positive thinking is Biblical? Let me explain why. Matthew 6:34, “Therefore do not be anxious about tomorrow, for tomorrow will be anxious for itself.” Matthew 6:26, “Look at the birds of the air, they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they? And which of you by being anxious can add a single hour to his span of life?

Americans are not saving enough! Based on the latest statistics from a large national investment company, Americans savings are far below what your means will be at the ideal retirement of your early to mid 60s. This article will focus on what the data shows, what you will need to retire, how you can increase your savings, and what tools and services Whitaker Myers Wealth Management provides to help! Below you'll find the average savings rates and current amount saved, on average, for Americans in their 30's, 40's, 50's & 60's. The numbers present an upside down situation. Meaning, savings rates increase with age, but in reality the more you can save at younger age, the less you have to save when you're older. Remember Dave Ramsey's example of Ben & Arthur? Let's see what Americans are currently saving.... Age 30 The average savings in retirement is $38,400 with a contribution rate of 8%. At this point in your life, you should be in a field or job that you will stay in till retirement. Not saying that you should not leave and follow your dreams. But if you are to change careers, it should be a step up from your current position. Aka, more money, better benefits, higher positions. But at this stage, you should have your career field established and working to be the best (fill in the blank) to ever do it! Age 40 The average savings in retirement is $93,400 with a contribution rate of 8%. This figure is very low for this age bracket. If you are following the Dave Ramsey Baby steps, your debts should be paid off and have a minimum 15% put away in the retirement (Baby Step 4-6). At this stage in your career, you are established and have progressed in your field to a respectable position. With said progress, promotions and pay increases have increased your wealth. While not suggesting all of the additional wealth goes into savings, your annual contribution should be higher than that ten years ago. Age 50 The average savings in retirement is $160,000 with a contribution rate of 10%. You are getting close to the finish line in your work career. Do you have enough in savings? According to this data, no way! Did you notice how contribution rates increased between the age groups of 40 to 50? It went from (on average) 8% to 10% contribution rates? People are getting nervous about their savings and noticing that they do not have enough to retire. Therefore their reaction is increasing their contributions. Age 60 The average savings in retirement is $182,100 with a contribution rate of 11%. Can you retire on $182,100? It depends on your lifestyle but this amount of assets would only produce $600 / month of income (based on the 4% rule) therefore with a Social Security Benefit of $2,000, you’d better be debt free. A savings amount at this level, could force you to continue to work into your later years, which is ok for some individuals. But you should not need to work in your 70s and 80s. Get Back on Track - 15% of Income Towards Retirement What if I review the data above and realize that I am currently average? There is a plan! It’s called the Baby Steps and we recommend you begin to follow those steps with gazelle intensity. The sooner you work through Baby Steps 1, 2 & 3, the sooner you’ll be able to start contributing 15% of your household income towards retirement and getting those retirement numbers up to where they need to be. However, the older you are, there is less time to leave to chance, which is why we recommend hiring a Financial Coach. Whitaker-Myers Wealth Managers has a Ramsey Solutions Master Series trained coach on staff to help you work through Baby Steps 1, 2, & 3 and be that in house accountability partner you and your spouse are looking for! “Financial Coaching is all about helping you become better with your finances. In the world where most financial advisors have a minimum investment size finding someone who can help you deal with the burdens of debt, help you achieve money goals outside of investing or just help you improve your marriage, because as we know money fights and issues are one of the major causes of divorce in America, financial coaching is here to help! Whitaker-Myers Wealth Managers Mission states that we, "strive to have the heart of a teacher, so that we can empower and equip people with the knowledge and tools they need to be able to achieve their goals and feel confident about their financial future. We do this by providing integrity-based financial planning and investment advisory services that are tailored to the specific needs, goals and values of each client." Hence, to further this mission, we launched Whitaker-Myers Financial Coaching to help those individuals and families that had no investable assets but wanted to improve their lives financially and holistically.” -Whitaker Myers Website Our Certified Ramsey Solutions Master Coach, Lindsey Curry, will work with any unique situation and develop a plan to get you debt free and build wealth. Yes, there is a subscription cost. Think of a health coach. You’re paying for someone to help you get healthier and for them to develop a personal plan to reach your goals that you cannot get on your own. Not to mention the experience and knowledge they can provide. Lindsey provides just that, just in the realm of your personal finances. For more information, please visit our financial coaching website to view in more detail. You may email Lindsey at lcurry@whitakermyerswealth.com or call her at 330.345.5000 ext. 317.

What is Taking Place in the Economy and Markets? The year 2022 has reminded us that markets can be volatile. So why now are we seeing such high volatility in the markets for the year 2022? This one word that we, the consumers, are feeling on a day-to-day basis, Inflation. Since the Covid-19 pandemic begun here in the United States, the Federal Reserve began stimulating the economy, as we all remember those months in 2020 where only “essential workers” reported for work, stimulating the economy was deemed appropriate. We saw this in the form of stimulus checks, the increasing amount and pre-payment of the child tax credit, forgivable paycheck protection loans (PPP loans), dropping interest rates, and the consistent buying of bonds from the Federal Reserve. These accommodative actions have put more cash into Americans’ pockets, and with a record high savings rate in the months of 2020, Americans were ready to spend. As a result of the stimulus and supply chain issues, we are seeing the highest inflation since 1981 (8.5% year-over-year based upon the latest CPI data released on April 12th, 2022). Most noticeably, in the housing market, the used car market and energy market. The Federal Reserve has now committed to stopping the stimulus and combat inflation as one of its core missions. So, it will begin to tighten the economy, which we have seen by raising interest rates and the tapering/final purchase of bonds the Federal Reserve was making. This is now having its effect on asset classes. Stocks and Fixed Income Stocks The reaction to the Federal Reserve’s talks of tightening the economy has led to stocks catching their breath in 2022, seeing modest declines from the index's all-time highs. As of 4/15/2022, the Dow Jones Industrial Average, down –6.8%. The S&P 500 Index, which tracks the 500 largest companies in the United States, down -8.8%. The NASDAQ, which tracks large growth companies and predominantly tech, down –17.2%. And the Russell 2000, which tracks small companies, down –18.6%. Fixed Income With rising interest rates, comes rising yields, and fixed income has taken a hit this year. In its fundamental form, the reason that fixed income prices fall in the environments of rising rates, is because when yields rise, purchasers sell off their current fixed income at low rates, and then purchase the new issued fixed income offerings at higher rates. So, in the short-term, this does adversely affect bond prices, but in the long run, the purchaser will begin seeing the benefits of rising yields. The Vanguard Americas Chief Economist, Roger Aliaga-Diaz, states “Investors should stay forward-looking: At current higher yields, the outlook for bonds is actually better than before yields went up. Bear in mind that the upside of higher yields—greater interest income—is coming. Also, the odds of future capital losses decline as yields increase. So now is not the time to abandon bond allocations.” What Should You Focus On? Volatility happens in markets, and it’s not easy to watch your portfolio go through the market’s choppiness. So, focusing on the following sure helps: Staying Focused on the Long-Term Dave Ramsey says “make decisions now, that you would be proud of in 10-years.” Can equities be choppy in the short-term? Of course. History has shown staying patient in the markets and having a diversified strategy that aligns to your goals pays off. Making emotionally driven decisions has hurt investors, which is why discipline is such an important factor here at Whitaker Myers Wealth Managers. Say No to Market Timing It seems like everybody has their own special way of timing the market and getting in and out, and this will somehow save you. Market timing is entertaining, do you know what is not? Disciplined investing. Buying and holding diversified funds that line up with your risk tolerance and goals, isn’t talked about too much on social media, or mainstream platforms, ever noticed that? It’s almost like foundationally strong, disciplined investing is boring. So why has disciplined, long-term investing worked even though, time and time again, there has been a reason to get out investing your wealth? See below for an article on focusing on the long term by Josh Brown, the CEO of Ritholtz Wealth Management. Victims - The Reformed Broker Achieving your Financial Goals Market volatility may grab your attention. But do not let it shake you from achieving the financial goals you have laid out for yourself in the short-term. If your goal is to build your retirement, cut through the noise and save that % of your income that you had made a goal. If you are planning your estate for generational wealth, continue to update and complete your estate plan. If you are aiming to be debt free, keep that gazelle intensity when pushing yourself. If you’re saving for education, continue to fund that education savings vehicle. Whatever your unique goals are, strive to accomplish them, be in control of your plan. What is Your Wealth Management Team Focusing on? Rebalancing as Scheduled Rebalancing is just as important now as it ever was. The reason we diversify portfolios is because we aren’t willing to take our guess as to which sector of the market will outperform the others. So, when the economical landscape changes, rebalancing allows you to align your portfolio equally to each of the sectors within your investment strategy. Positioning the client more appropriately for market cycles. Distribution Planning A significant role advisors play, pulling back the curtains and monitoring fund management within the portfolio. For those taking distributions, avoiding sequence of return risk is vital, that is, avoiding selling funds at a loss and hurting the long-term compounding effect on your portfolio. So, strategically analyzing the funds within the portfolio and preparing distributions becomes vital. Roth Conversions You may be thinking how do Roth conversions and market volatility play hand-in-hand? When there are periods of negative stock market returns, it lowers your overall account value, something none of us want, but it's inevitable when investing in the markets. At these lower dollar amounts, Roth conversions become much more attractive as you convert them to a vehicle that will allow for tax-free growth and recovery with the market, so long as it is a qualified distribution. As this is a case-by-case basis, it is important to understand your applicable tax bracket when converting any portion of your account as these conversions are taxable. Consult with a tax professional before converting pre-tax funds into Roth funds. Tax-Loss Harvesting Tax-loss harvesting is applicable for a taxable investment, such as a brokerage account. When volatility in the market presents itself, it allows for more flexibility of the selling and buying of funds in this brokerage account. In example, if Fund A was bought at $1,000 and over the last year it has grown to $1,200, when sold, the gain of $200 would be taxed as a long-term capital gain and added to your taxes as applicable and according to the long-term capital gains tax rate. If within this same portfolio, you had Fund B, and you purchased at $1,000, a year later fell to $800, you can simultaneously sell fund B resulting in a long-term capital loss. When these two sales are combined, it results in no taxable capital gains for the year ($200 gain and $200 loss offset each other). This could allow for proper rebalancing of a taxable account without incurring large capital gains across the board. The IRS allows for $3,000 a year for an above-the-line tax deduction when reporting capital losses, while the rest is carried forward, allowing for tax planning opportunities. Sales of funds within a brokerage account should not be acted upon without consulting a financial professional and understanding tax consequences. All that to say, investing in the markets can feel like a roller coaster (thank you for that saying Dave Ramsey), keeping a cool head, knowing your goals, understanding the level of risk you’re taking, as well as your time horizon will allow you to prevail choppy times. As the old saying goes, “time in the market, beats timing the market”. Staying consistent with your plan will pay off. Links used to comprise this article: Current US Inflation Rates: 2000-2022 | US Inflation Calculator Victims - The Reformed Broker Rising rates don’t negate benefits of bonds (vanguard.com)

Working for a publicly traded company and having the opportunity to purchase company stock in your retirement plan has many benefits. Not only do you get to reap the benefits of your hard work but knowing you have a stake in the company directly leads to working harder and taking more pride in your work and pride in your company. Your company knows this; that is why they offer company stock in your retirement plan. Being proud of your work and company you work for is great but it often leads to biases that can be detrimental and sometimes catastrophic to retirement assets. “My company won’t go out of business.” is probably the most common sentiment of people who are grossly overweight in their own company stock. The fact of the matter is that companies, no matter how profitable they are can and likely will fail. Even Jeff Bezos, Executive Chair and founder of Amazon.com was quoted during an interview saying “I predict one day Amazon will fail”. When a company becomes financially upside down and their assets outweigh their liabilities to a point of no return, they will file for bankruptcy and their stock price goes to zero dollars. That means, any stock you have in that company all of the sudden has no value. If this is stock in the company you work for, not only are you out whatever your investment was but you likely will be laid off at the same time. Some factors that cause companies to fail include: economic issues, management decisions, fraud, competition, technology, legislation, consumer interest changes, etc. Here are a few examples of corporations that filed for bankruptcy much to the surprise of many investors AND employees: Lehman Brothers Total assets at bankruptcy: $691.1 Billion Date of bankruptcy: September 15, 2008 Lehman Brothers at the time was the fourth largest investment bank in the United States, employed 25,000 people and had been in business for 158 years before filing for bankruptcy in 2008. Their downfall came from 3 factors. They were involved in the sub-prime mortgage lending crisis, assets were downgraded by credit agencies and consumer confidence was lost causing the stock price to drastically fall forcing Lehman Brothers to file for bankruptcy. Worldcom Total assets at bankruptcy: $103.9 Billion Date of bankruptcy: July 21, 2002 Worldcom was the second largest telecommunications company in the United States and employed 80,000 people. The corporation was caught up in an accounting scandal where they were using illegal accounting methods to hide a loss of earnings. The consequence of these illegal practices led to the company filing for bankruptcy. General Motors Total assets at bankruptcy: $82.3 Billion Date of bankruptcy: June 1, 2009 Poor management decisions basically led to General Motors failing. According to Harvard Business Review, they were too slow to innovate because of their size, they were too bureaucratic and unable to adjust to changing markets and their dealer network was too large. They were almost forced into bankruptcy in 1991 when they posted a $4.45 billion loss. In 2009 they did not have enough cash flow to stay afloat during the 2008 recession. They received a $40 billion bailout from the United States Government which caused them to have to re-structure the entire company. Even if a company does not go out of business or seems “too big to fail” (which the previous examples should close the book on that) they can still falter during your lifetime. If you are overweight in any stock including your own company stock, one of these falters at the wrong time can be detrimental to your overall portfolio if not still catastrophic. So, how much of your retirement portfolio should be allocated to company stock? A general rule of thumb is no more than 10%. The correct allocation for you will depend on your goals, risk tolerance and time horizon. If you are younger, have a longer time horizon to retirement and willing to take on more risk; 10% of assets allocated to company stock would be fine. If your risk tolerance is low, you are older or already retired and need to focus on asset preservation rather than growth then your allocation of company stock should be lower. If you are a client of Whitaker-Myers Wealth Managers, you likely know your current goals, risk tolerance and time horizon. If you are a prospective client, let’s schedule a meeting and discuss these topics and how it pertains to your particular situation. Goals, risk tolerance and time horizon also change throughout your life. Having an advisor in your corner to keep your portfolio in check with these factors is crucial to a successful retirement plan.