Each year, we recommend that our clients consider converting money from an IRA to a Roth IRA. Because of our national debt, we believe that taxes will need to be raised in the future, and tax brackets will correspondingly be much worse. If you are in the 12% tax bracket, we especially recommend that you consider converting whatever you can afford. Please give us a call if you have any questions or if you’d like help putting a tax plan together.


Will We See A “Santa Claus” Rally This Year?

The term Santa Claus Rally refers to the positive stock market performance observed after the holiday season and during the turn of the new year. Over the last 100 years, in the month of December, the stock market has averaged a gain of 1.55% and has been positive 74% of the time. That being said, some analysts point out that the Santa Clause Rally should only be analyzed during the last week of December and the first two trading days of the new year, as this period has been positive 76% of the time.

There are a few potential causes of this phenomenon. One is that many investors sell stocks towards the end of the year for tax loss harvesting purposes. Then, after the first of the year, they can buy them back, potentially depending upon when they sold them (and the avoidance of the wash sale rule).

Another potential explanation is that large institutional money managers go on vacation and close out their positions before year-end, leaving retail investors to more easily control the market, and retail investors are typically more bullish and less likely to short the market.

A final potential explanation is increased holiday spending and a general sense of optimism heading into a new year with lots of vacation time. Whatever the reasons behind the phenomenon may be, we’ll be keeping a very close eye on the markets. This year has been unique because of inflation, the invasion of Ukraine by Russia, and the large drops in the stock market. Our best estimate of the price action this year is that the market will drop the first week or two of December and then rally into year-end.


Daily Managed Portfolios

As you know, we have many tools in our toolbox, including the ability to purchase investments that profit when the stock market goes down. This is called hedging. Our ultimate goal is to make money, so we’re using what we believe to be all the appropriate tools in our toolbox to potentially accomplish that goal. This is why we manage our active portfolios daily.


We Are Here to Help

We’d love to have a review meeting with you to discuss investments, retirement income planning, college planning for kids or grandkids, tax preparation, health insurance, including Medicare supplemental and prescription drug plans, and various other financial planning topics. Please contact our office at (586) 226-2100 to schedule a meeting today!

If you’ve had any changes to your income, job status, marital status, 401K options, address, or any other financial changes, please contact us right away. We hope you and your family have a wonderful, safe, and healthy holiday season!

Merry Christmas and Happy Holidays to All!

Bob, Ken, Jim, Zach, and James

Notes & Disclaimer: Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, or correctness. This information is provided “AS IS” without any warranty of any kind. All historical returns data should be considered hypothetical. Past performance is no guarantee of future results.

This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. Investment advisory services are offered through Summit Financial Consulting, LLC, an SEC registered investment advisor. Registration does not imply a certain level of skill or training. Summit Financial Consulting Investment Advisor Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Note: Please update Summit Financial Consulting, LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an additional copy. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. The Sherman Group, LLC is not associated with Summit Financial Consulting, LLC in any way, other than a research sharing partnership. Back testing is more heavily scrutinized than any other type of investment analysis because it can be updated to take advantage of past data. The algorithms and trading signals that we receive from the Sherman Group, LLC were created using back testing with the goal of creating a sustainable research process. We have reviewed data from the entire 20 year period which was mostly back tested, and have also personally reviewed the live data for the past 5 years and feel comfortable with it, but we encourage you to meet with us and ask questions so you are fully informed on what we plan to do with your investment assets at TD Ameritrade. It is important to look at fees, taxable repercussions, and trading frequency when looking at a rate of return number. There is no perfect system or research feed, and Sherman Group, LLC has had both longer term and short-term periods where they lost money. Investing involves risk, and these portfolios are no exception.