May 2022 AAM Newsletter
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If you are a client of mine, thank you for your continued business and please update me on any changes in your situation do that I can make the appropriate changes to your financial plan and investments.
If you are not a client please consider giving me a call or emailing me if you would like to begin a plan to get you to your financial goals. I consider myself different from many of the advisors out there for the following reasons:
1) You will not be pressured to purchase any products because I am a fee-only advisor and a NAPFA® Member (no commission sales)
2) You will have a comprehensive financial plan completed by a Certified Financial Planner ™ Practitioner or CFP® – I have committed to financial planning and continuing education.
3) You will have a reasonable fee for the services performed. I charge less than the typical large financial planning firm by being a small shop and keeping my business expenses low.
Ronald J. VanSurksum, CFP®
Please see below for financial articles and tips
Stocks dropped in April as higher interest rates, inflation and the war in Ukraine continue to add uncertainty to market valuations.
Index performance April 2022____ YTD 2022_
- The S&P index -8.80% -13.31%
- Dow Jones industrial 30 -4.91% -9.25%
- The NASDAQ Index -13.26% -21.16%
- The Russell 2000 Small cap -9.95% -16.98%
- EAFE International Index -6.74% -12.76%
- The US Dollar +4.88% +7.92%
- Oil +4.40% +39.20%
- Gold -1.62% +4.40%
- 10-Year Treasury Yield 2.89% 1.50% on 12/31/2021
- 30-Year Treasury Yield 2.95% 1.91% on 12/31/2021
Volatility remained high in April for the S&P 500 index. The index began at 4,530, rose to a high of 4,583 on 4/4 then fell to finish at a low of 4,132 on 4/29 for a difference of 451 points or about 9.8% from high to low.
It was a full reversal of the previous month with value beating growth and technology stocks leading the way lower.
The US dollar and oil both surged while gold was lower.
Markets fell back into correction territory and tech stocks hit bear market levels establishing new lows for 2022. Volatility will likely continue well into the second half of 2022 and possibly through year end. I believe inflation will begin to settle down in the coming months and hopefully finish the year in the 4-6% range rather than the recent 8.5%. Only time will tell and I think the best defense is to stay diversified and rebalance when the market gives us an opportunity to do so.
Yields continued higher and savings are going to start getting paid on low-risk investments. I bought a 2-year CD today for a client at 2.95%. We have not seen that for some time.
I think both bonds and stocks are pretty good buys rights now for the long term (5 year + time horizon). If you have some cash on the sidelines now may be a good opportunity to put it to work.
Please contact me if you have questions or simply just wish to talk about your plan. I can meet you in my office or virtually over the computer and I am here to help!
Recent US Economic Data
US Manufacturing – ISM manufacturing fell and missed expectations.
Jobs – The April payroll report came in above expectations adding 428,000 jobs, unemployment was steady at 3.6% and average hourly earnings rose less than expected at 0.3%.
Housing Prices – Both Shiller and FHFA home prices rose with Shiller rising more than expected.
Housing starts – Both housing starts and building permits rose and beat expectations.
Existing home sales – Fell a little more than expected.
GDP – 1Q GDP first estimate was lower than expected contracting 1.4%.
Retail Sales – Rose a little less than expected.
Leading indicators – Rose a little less than expected.
Durable goods orders – Rose a little less than expected.
Inflation data continued higher – consumer prices rose and matched (highest since 1981), producer prices rose more than expected, import and export prices both rose while PCE prices also rose.
For weekly market updates please visit my blog at www.aamllc.com
Mortgage rates continued higher again last month. The national average on mortgage as per Bloomberg.com shows the 15-year rate is now at 4.38% and the 30-year rate is at 5.48%. These rates are as of 5/11/2022 and may include points.
CD rates were higher as well over the last month. Charles Schwab has access to CD’s from banks all over the country. Here are some of the current CD rates offered.
6 mo CD @ 1.15% 1-Yr CD @ 2.05%
2-Yr CD @ 2.95% 5-Yr CD @ 3.25%
Tips and Suggestions
The next quarterly estimated tax payments are due 6/15/2022 for the 2nd quarter of 2022. Go to www.IRS.gov to make your payment today (if needed).
With yields heading up and stocks down 10% to 20% this year it could be a good time to put some excess cash reserves to work. I can manage these dollars for you or give you advice on what type of investments to use based on your goals. Schedule a meeting soon to discuss.
It is time to start planning for 2022! What would you like to accomplish next year? How much to you want to save and home much do you need to save to reach your financial goals?
Develop a 2022 cash flow plan to maximize your health savings account, 401k, 457, 403b or IRA contributions for 2022.
Is your estate plan up-to-date? This is a good time to review your estate plan and update your beneficiary designations.
If you have a child attending college next fall get your FAFSA done ASAP. The sooner you fill out your FAFSA the better chance you have for financial aid.
Do you have children age 18 years or older? You may want to plan for an emergency by obtaining HIPPA authorizations or power-of-attorney so that you can get health information, if needed.
ABLE accounts are now available in the State of Michigan. ABLE accounts are for certain individuals with disabilities to accumulate funds for their long-term needs without disqualifying themselves for Medicaid. Check it out at www.miable.org or give me a call.
When is the last time you reviewed your insurance plan? Is your disability income keeping up with your income? Do you have any term life insurance policies expiring soon? Do you need additional coverage or less coverage? Let’s discuss.
Are you on track to meet your financial goals? Do you have a plan to get you where you want to be? If you do not you may not reach your goals. Let’s make a plan to Maximize your financial potential.
Do you need a debt payoff plan? Let’s work on one together.
Need help with your 401k? We can do a virtual meeting to allow me to help review your 401k online and help you rebalance. We can access the plan together online, I can give you control to log in and then we can discuss and make changes together. Let me know if you want to discuss!
If you have any questions or if you would like to have help with your financial plan please give me – your Fee-only Certified Financial Planning ™ Practitioner – a call.
Work on Your Financial Plan:
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All articles are now found on my website blog: www.aamllc.com
The website has a new look! Check it out!
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Contact MeDo you want more information on how I can help you? Give me a call or drop me an email to review or set up a free initial consultation.