Health Insurance Open Enrollment:
Summit Health Services is now offering appointments to review any health insurance questions you may have. They can quote a large number of available options to make sure you have the best plan for your specific needs. Call us today at (248) 779-1000 to schedule a no-cost health insurance review.
Charles Schwab Updates:
It has been almost two months since our TD Ameritrade accounts were merged with Charles Schwab. Here is a list of important updates: If you request a one-time distribution, it may take up to a week, depending upon what your account is invested in. Please try to plan in advance if you have an expense occurring in the future. It can be expedited to 24 hours for a fee. Schwab is very particular about tax withholding, and if we must adjust your tax withholding in any way, a form is required to be signed via DocuSign or on paper.
Schwab does not notify us if a client submits money within the Schwab app. They are planning to add this notification within a few months, but for now, please let us know if you add money to your account on your own. If you do not see your spouses account when you log in, please let us know, and we can send you a form to add that capability.
October Was Scary. Will the Santa Claus Rally Deliver?
After a tumultuous October, investors wonder if the Santa Claus rally will deliver this year.
From the recent S&P 500 peak on July 24th, the S&P 500 dropped for three months in a row and lost over 10%. While past performance cannot predict future performance, we are now entering the seasonally most vital period of the year. October was a rougher ride than we anticipated, but luckily, our research did not advise us to increase our stock exposure until later in the month. The goal of investing for most people is to buy low and sell high. Our research already instructed us to sell high in early August. Now, we are potentially (hopefully) seeing an opportunity to buy back low before a year-end rally.
The stock markets were down big in 2022, but dating back to 1928, the market has had back-to-back negative years only four times in almost 95 years, so the odds say we’re due for a rebound in 2023. Anything is possible, of course, despite the odds, which is why we monitor the portfolios daily.
Our updated research platform told us to sell stock funds and buy an inverse (which profits when the market drops) in August to reduce risk, and that was a good thing. We encourage you to look at your own statements for performance and call us if you’d like to discuss it. For the month of October, once again, like last month, most clients will see we were down, but not nearly as much as the market. As of month end for October, the S&P 500 was negative 2.2%, the Nasdaq was down 2.7%, and even bonds (Ticker AGG) lost 1.84%.
Three Reasons for Optimism in Next 12 Months
Unless the war in the Middle East escalates very quickly, there is a high probability that the market will bounce from here overall until year-end, barring something unforeseen. In the long term, three pieces of evidence are currently making us optimistic that the next 12 months until the election have the potential to be good for stocks overall despite some potential short-term bumps in the road.
- First, every President wants to get re-elected, so they make moves that potentially “window dress” the economy and stock market before the election.
- Second, in late April, one of our most important longer-term indicators shifted from negative to positive. It had been negative since the first quarter of 2022, so it was negative for quite a while (Source: https://www.shermanportfolios.com/indicators). While past performance cannot predict future performance, in the past, this type of indicator switch has said brighter days may lie ahead for the stock market in the longer term.
- Finally, the 200-day moving average of the S&P 500 has turned and is now heading up rather than down. This is a longer-term trendline, and in the past, it has had some success identifying a change in trend.
Research Platform Handled Downtrend Well
We had a different indicator a few months back state there is a chance we’ll have a recession this year (inverted Yield Curve, Source: https://www.forbes.com/sites/simonmoore/2024/02/06/the-inverted-yield-curve-continues-to-flash-a-recession-warning/?sh=1325948b15ac). We hope that recent improvements in the overall economy, inflation data, and the housing market will provide some stability moving forward. Our new research handled the downtrend relatively well this month, in our opinion, but we’re doing our best not to focus on the short-term results because the research has the potential to work well in the long run. We encourage you to come by the office to go over the new strategy with us in person or over a Zoom call.
Financial Planning and Review Meeting
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, marriage status, 401K options, address, risk tolerance, or any other financial changes, please contact us right away. We hope you and your family are doing well!
Sincerely,
with contributions from Robert Wink, James Wink, Zachary Bachner, and James Baldwin
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 Charles Schwab. 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.