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Quick Reminder on RMDs: We wanted to include another quick reminder to contact your service team to process your Required Minimum Distribution if you still need to complete it. Remember, we are aiming to have these completed by December 1.

Stock Market Explanation: You are likely aware of our long-term view on the stock market: riding it out as much as you are able will likely bring reward. A recent chart from the Bank of America shows it this way:

In the long run, stock prices go up. And while we believe this, we also realize that it’s a bit misleading. It can get crushed in the short term. That can be lost in a chart covering 200 years of history. The Great Depression, the 1987 crash, and the Great Financial Crisis look like minor blips. Looking at the drawdowns is also essential in our personal education of the stock market:

Sometimes, the stock market crashes, and it takes years to get your money back. However, if you can’t sustain the short-term drawdowns, you don’t benefit from the long-term gains. Another chart that helps explain the stock market is the annual returns matched with intra-year drawdowns:

The average intra-year peak-to-trough drawdown since 1928 was -16.4%. Losses in the stock market should be expected. Drawdowns happen even when the stock market finishes the year in positive territory. You should expect to experience downside volatility even when the stocks are in an uptrend.

A surprising stat here is the sheer amount of 20%+ returns you see in the stock market in a given year. In 34 of the past 95 years, the U.S. stock market has finished the year with gains of 20% or more. That is a greater percentage of years (36%) than the number of years that finish with a loss (27%). Historical numbers have shown the longer your time horizon, the better your odds for success, and the less variable your range of returns are:

There are no guarantees when it comes to the stock market. With an extended timeline, though, you’ll be better off. If your portfolio needs review or you have questions about your investments in the stock market, please reach out to us today. We are available to help!

Considering Thankfulness: While we’re big fans of expressing gratitude all year, we realize that it is on the front burner this week for obvious reasons. As many of you gather with family, conversations about the future can often come up. We recently came across an article about the regrets of those facing death. An in-home caregiver who looked after patients in their last weeks of life would say, “I wish I had the courage to live a life true to myself, not the life others expected of me.” This caregiver noted, “Health brings a freedom very few realize until they no longer have it.” Living with an awareness of our own mortality fundamentally changes what we value and how we choose to use our time.

Entering the holidays and turning the calendar on a new year is often a time of reflection. As you consider what you want your legacy to look like, what changes you want to make to align your time with your values, or what financial freedom looks like for you to pursue your goals, please consider involving us in the conversation.

Business Briefing

  • Inflation Cools: Inflation cooled more than expected in October, according to Tuesday’s Bureau of Labor Statistics Consumer Price Index. Prices rose last month by 3.2% compared to a year earlier, down from a 3.7% rate a month earlier and far below the 9% high seen in summer 2022. Prices in October were flat compared to September, the first time that has occurred in more than a year. So-called core inflation, which excludes volatile food and energy prices, was 4% on an annualized basis, the lowest since September 2021. (Reuters)
  • Walmart and Food Prices: Walmart CEO Doug McMillon said Thursday that food prices could start falling soon after three years of steady price hikes. Food prices have jumped 25% since the start of the coronavirus pandemic. But the pace of food inflation has slowed in recent months, with prices rising just 3.3% on an annual basis in October, according to the Labor Department. Prices on some staples, including bacon, seafood, and eggs, have dropped, as have prices on other goods like appliances and phones. Walmart reported strong quarterly sales on Thursday but gave a cautious outlook as shoppers cut spending, sending its stock falling 6%. (The Associated Press)

The Knit Wits: We are always cheerleaders of new initiatives that help others. While the group of seniors who call themselves The Knit Wits isn’t new, they have found themselves filling a special need in the Russia-Ukraine war. A group of ladies in a Texas senior living community have created thousands of hand-knit items for infants facing heart problems at Children’s Health in Dallas. At one time, the group knit helmet liners for soldiers in Afghanistan. Most recently, however, they have knitted cuddly dolls for orphans from Ukraine. See the story of the ladies from age 80-102 here. May we all consider what simple acts of kindness can make a difference to those around us!