Oak Partners Blog

Q2 Ends with Fireworks

Mon, 06 Jul 2026 09:00:00 GMT

Markets notched a solid gain over a shortened trading week as investors cheered ongoing diplomatic efforts in the Middle East.

The Standard & Poor’s 500 Index rose 1.77 percent, while the Nasdaq Composite Index advanced 2.12 percent. The Dow Jones Industrial Average climbed 1.97 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 1.81 percent. ^1,2

Q2 Ends with Fireworks

Stocks opened higher to start the week, climbing on weekend news regarding the U.S. and Iran. ³

On the second day of trading, the rally narrowed with chip stocks leading the way. The Nasdaq rose more than 3.5 percent and the S&P 500 2 percent in the first two days of the week. ⁴

But as July began, markets pivoted as investors rotated out of some AI and tech names. The Dow hit a new intraday high before pulling back a bit. The S&P 500 and Nasdaq declined, but a handful of megacap tech stocks with company-specific news rose, limiting the downside. ⁵

On the last trading day of a shortened week, stocks initially rose after the June jobs report missed expectations, leading investors to readjust their interest rate expectations. However, as the session progressed, markets turned more mixed ahead of the holiday weekend. ⁶

The Dow Industrials ended the week at a record high. ⁷

^{Source: YCharts.com, July 4, 2026. Weekly performance is measured from Friday, June 26 to Thursday, July 2.} ^{TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.} ^{Treasury note yield is expressed in basis points.}

Job Market Slows

The economy added 57,000 jobs last month, coming up short of the 115,000 economists expected. It was also short of the 129,000 jobs added in May. ⁷

This Week: Key Economic Data

Monday : PMI Composite. ISM Services Index. Three-Month Treasury Bill Auction.

Tuesday : International Trade in Goods & Services. One-Year Treasury Bill Auction.

Wednesday : EIA Petroleum Status Update. Ten-Year Treasury Note Auction. FOMC Minutes Released (June meeting). Consumer Credit.

Thursday : Weekly Jobless Claims. Fed President speeches: John Williams (New York) and Lorie Logan (Dallas). Existing Home Sales. Fed Balance Sheet.

^{Source: Investor’s Business Daily - Econoday economic calendar: July 2, 2026.}
^{The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to provide accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts are also subject to revision.}

This Week: Companies Reporting Earnings

Tuesday: PepsiCo, Inc. (PEP)

Wednesday: Delta Air Lines, Inc. (DAL)

^{Source: Zacks, July 2, 2026. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule their earnings reports without notice.}

"For every man in the world functions to the best of his ability, and no one does less than his best, no matter what he may think about it."

–John Steinbeck

Set a 15-Minute Timer for Tasks You're Avoiding

Procrastinating on something? Set a timer for just 15 minutes and commit to starting, nothing more. More often than not, momentum takes over, and you'll keep going long after the timer ends. It's a surprisingly effective way to break through resistance and get things done.

Tip adapted from Buzzfeed ⁸

Citrus Fruits: Your Vitamin C Powerhouse

Oranges and strawberries may seem like simple staples, but these vitamin C-rich fruits are among the most nutritious foods you can add to your diet. Oranges bring fiber and antioxidants to the table, while strawberries deliver manganese and a naturally sweet flavor with minimal calories and carbs. Squeeze fresh orange juice into salad dressings for a bright, tangy kick, or macerate strawberries with a pinch of sugar to spoon over yogurt, pancakes, or even grilled chicken. Together or separately, these fruits make healthy eating feel anything but boring.

Tip adapted from Healthline ⁹

I lack lungs, yet I constantly need oxygen; I have no mouth, but sufficient water will drown me. What am I?

Last Week's Riddle: What has a foot on each side and yet another foot in its middle?

Answer: A yardstick.

Sandhill Cranes (Antigone canadensis)

Kearney, Nebraska, United States

Footnotes And Sources

^{1. WSJ.com, July 2, 2026}
^{2. Investing.com, July 2, 2026}
^{3. CNBC.com, June 29, 2026}
^{4. WSJ.com, June 30, 2026}
^{5. CNBC.com, July 1, 2026}
^{6. WSJ.com, July 2, 2026}
^{7. WSJ.com, July 2, 2026}
^{8. Buzzfeed.com, October 15, 2025}
^{9. Healthline.com, April 14, 2026}

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. The Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and considered a broad indicator of the performance of stocks of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Time for a mid-year investment review

Sun, 05 Jul 2026 09:00:00 GMT

The Indiana Society of Chicago hosts an annual black-tie event in December. During COVID, the event began being held in Indiana, but historically, it was held at a nice hotel in Chicago; I am sure the event will return to the city at some point.

My good friend John W would invite a group of us every year. I've been able to attend a few times over the years. The event would involve separate, group-themed cocktail parties, then we would all come together for dinner and VIP speeches. Governor Holcomb spoke once when I attended, Mitch Daniels another time. While putting on a tux is never in my wheelhouse, the event itself is nice, very large, and well attended.

Right after the dinner and speeches, the big event venue room would begin to empty. For the unfamiliar, this appeared to be when the occasion was wrapping up. In reality, however, this is when the party actually started — the kind of party that would leave me sitting in a disheveled tux devouring a greasy gyro at some late-night hot dog joint at 4:00 a.m. It is the kind of party that should only come once a year.

As we filed out of the main event, my group of middle-aged guys would reconvene at the hotel bar, discuss our next move, and head out, off the leash, dressed in tuxes into the city night. I call this a great rotation; the party wasn't over, it was just changing forms with the best part still ahead.

It's possible a similar maneuver may be occurring in financial markets, making a mid-year portfolio review and rebalance particularly timely right now.

In my experience, for a stock investor, ten years can seem like the entirety of existence. A trend lasting this long shifts investment philosophies, alters portfolio strategies, and has the capacity to become perceived as a "new normal."

For ten years now, the stock market has been dominated by large-company stocks, and for the past three years, this dominance was extended into what is being called mega-cap stocks, which are companies with values exceeding an astounding trillion-dollar-plus. Going even deeper, as excitement over AI technology reached a boiling point during the last 18 months, this mega-cap focus became even more concentrated into the huge, AI-focused "Mag-7" companies driving the stock market.

Even as experienced investors, like myself, have been questioning the sustainability of this mega-cap concentration, the returns provided by these companies have been busy skewing perceptions and creating biases in our own decision-making. Sometimes, decades of investing experience isn't always enough to inoculate against the seduction offered by the type of outsized performance experienced with these Mag-7 stocks over the past few years.

Despite knowing better, diversification seemed to become having a portfolio of five semiconductor stocks and two AI companies. Because these stocks seemed to go up every day, this type of concentration began to feel natural and normal. It is neither, nor is it prudent. I believe this could have become the foundation of an asset bubble, and I've been afraid that's where markets may have been heading.

Fortunately, the aforementioned rotation may be solving this challenge, and recent performance leadership changes may be a good sign. In the U.S., the universe of large-company stocks is most widely recognized as the S&P 500 index, which is designed to follow the 500 largest publicly traded American companies. At this time, the index is heavily concentrated in the aforementioned mega-cap stocks, which now comprise about 40% of the index value, with five of the seven Mag-7 making up about 25% of the index value. So, using the S&P 500 as a proxy for the mega-caps and even for the Mag-7 seems reasonable.

Over past months, indexes which are more diversified and less concentrated in the Mag-7 stocks have been subtly taking the leadership mantle from the S&P 500, and in my opinion, this is a good thing. The two indexes getting my attention are the international equity index (FTSE Global All Cap Index) and the Russell 2000, which includes small and mid-sized companies in the U.S.

Stocks inside these indexes represent a much broader spectrum of industries, market cap values, and national markets. Observing the outperformance of these indexes, in my opinion, is in some ways indicative of healthier overall financial markets, and it tells me that while the party may be changing venues, it may also have some legs yet to run.

With this in mind, hitting the 2026 mid-year mark provides an excellent opportunity to review investment strategies, identify potential concentration risk, and rebalance where appropriate. Diversification, as it turns out, isn't just a quaint idea from the past; it remains not only a viable risk management tool, but can also provide the opportunity to find new performance leaders as the rotation plays out.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com . Securities offered through LPL Financial, member FINRA/SIPC.

Remembering Alan Greenspan and a Return to Markets

Mon, 29 Jun 2026 09:00:00 GMT

Early experiences so often set the tone in life. Most of us have had formative teachers, mentors, coaches and co-workers. Sometimes these formative figures are personal relationships, other times certain public facing human beings can come to define an archetype. While I certainly did not know him personally, former, long serving Federal Reserve Chairman Alan Greenspan occupies one of these positions in my professional life. Mr. Greenspan passed away this week at the impressive age of 100.

Mr. Greenspan’s ascent as the 13th Chairman of the Federal Reserve coincided perfectly with the rise of my awareness of the Fed and how it impacts our lives. Taking office in 1987 at the exact time my understanding of macroeconomics was forming through classes at Andrean High School then Purdue, as I was becoming cognizant there even was such a thing as a Federal Reserve Chairman, Alan Greenspan was there looking exactly the part.

Intellectual, wonkish, older and slight, just as a college kid expects a government banker to look. Mr. Greenspan would be seen on TV rushing into Fed meeting with a briefcase stuffed with papers, he would come out of meetings to release statements so overly cryptic I thought I would never understand what he was talking about.

Fed Chair Greenspan would end up serving in his post for 18 and half years, not only setting the tone of discussions during the macro econ classes I came to enjoy and focus on during college, but his Fed also defined the first decade of my investing career as well. To this day, when I hear the term “Fed Chair” his image will flash in my mind. Now that’s an Icon.

By the end of his term, I did learn how to understand his “Fed speak”, but more importantly I also came to appreciate and understand the fallibility of the Fed, what it could do well, what it couldn’t do and how for better or for worse the central bank impacts markets and lives.

While Mr. Greenspan’s legacy will always be viewed positively, it was also burdened by frequent challenges, starting in 1987 with Black Monday when the Dow dropped 22% in one day, to the dot.com bubble in 1999-2001 and finally the monetary policy response to 9/11 which many market historians feel set the table for the 2008 financial crisis.

Perhaps the primary legacy of Mr. Greenspan, however, will stem from his fervent belief in markets. The “Maestro” as we came to call him, believed the Federal Reserve policy could contribute some stability to markets, but that markets functioned best when the Fed maintained a more laissez-faire stance and the government regulated less as opposed to more. His successors would not necessarily share these libertarian philosophies.

Following Mr. Greenspan, the Fed under next three Fed Chairs adopted a more activist policy approach, attempting to influence markets through policy, communication and regulation. While Mr. Greenspan’s Fed primarily focused on core policy tools such as short-term interest rates and bank liquidity lines, his successors would broaden the tool kit to quantitative easing, Fed balance sheet expansion, targeted bank reserves and a communication system of “forward guidance” designed to influence bond yields and fixed income markets.

This rotation away from a market based limited intervention, to an approach much more resembling central planning has had profound implications for investors, the government and the economy. Enter Kevin Warsh.

This last week also saw the first Fed Board of Governors meetings following the confirmation and assentation of Kevin Warsh as Fed Chair, and I for one am encouraged.

Gone is the forward guidance designed to sway markets. Gone is the use of obscure insider “Fed data” financial surveys to set policy, gone is the promise of unlimited liquidity support for financial markets. Life the Maestro, and unlike his predecessors, Kevin Warsh appears to harbor a deep belief in markets, for better or for worse, and investors are adjusting.

It’s been said in markets that history doesn’t repeat, but it does rhyme, and to me the Warsh Fed already “feels” more like the Fed I started my investing career under. There will be a lot to learn, and some things to remember from the last time the Fed was focused on staying out of the way, and markets are already adjusting. I for one am ready.

All indices are unmanaged and may not be invested into directly.

Dow Industrials Take the Lead

Mon, 29 Jun 2026 09:00:00 GMT

Stocks ended mixed as falling oil prices helped lift the Dow Industrials, while concerns about AI valuation put pressure on the broader market.

The Standard & Poor’s 500 Index fell 1.95 percent while the Nasdaq Composite Index skidded 4.60 percent. The Dow Jones Industrial Average rose 0.60 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 1.33 percent. ^1,2

Dow Industrials Take the Lead

The S&P 500 and Nasdaq indexes were under pressure to start the week as the AI trade and tech more broadly came under scrutiny. But the Dow Industrials made a modest gain for the day. ³

The rotation away from tech continued Tuesday, with large consumer stocks faring particularly well, which minimized the Dow’s decline. The S&P fell about 1.4 percent for the day, while the Nasdaq fell more than 2 percent. ⁴

Midweek, stocks were mixed. Healthcare, financial, and industrial sectors carried the Dow to small gains on Wednesday and Thursday. Conversely, continued pressure on tech shares led the S&P and Nasdaq down, albeit at a slower pace than earlier in the week. ^5,6

Then markets flattened out as the week wrapped up. The slow-but-steady Dow logged its 3rd consecutive weekly gain, while the Nasdaq and S&P 500 were under steady pressure during the week. ⁷

^{Source: YCharts.com, June 27, 2026. Weekly performance is measured from Monday, June 22, to Friday, June 26. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.}

Inflation Update

The Fed’s preferred measure of inflation, PCE, or the Personal Consumption Expenditures Index, came in as expected for May. While the core number, which excludes energy, was at its highest level since October 2023. However, investors appeared relieved that there were no surprises. ⁸

This Week: Key Economic Data

Tuesday: S&P Case-Shiller Home Price Index. Chicago Business Barometer. Consumer Confidence. Job Openings/Labor Turnover.

Wednesday: ADP Employment Report. Purchasing Managers Index (PMI)—Manufacturing. Institute for Supply Management (ISM)—Manufacturing. Construction Spending.

Thursday: Employment Report. Weekly Jobless Claims. Factory Orders.

^{Source: Investors Business Daily - Econoday economic calendar; June 26, 2026. The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to provide accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts are also subject to revision.}

This Week: Companies Reporting Earnings

Tuesday: Nike, Inc. (NKE)

Wednesday: General Mills, Inc. (GIS)

^{Source: Zacks, June 26, 2026. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule their earnings reports without notice.}

"True originality consists not in a new manner but in a new vision."

– Edith Wharton

Use AI as Your Personal Tour Guide

Planning a trip, or already on one? AI makes for a surprisingly great tour guide. Try asking something like: "I'm at [location] — what's the best route to see the highlights, and what's the history behind each one?" With voice mode enabled, it's like having a knowledgeable companion right in your ear.

Tip adapted from creatoreconomy.so ⁹

4 Benefits of Yoga

In addition to helping you finally touch your toes, yoga may confer many other benefits, from helping you relax to even potentially helping your heart health. Below are some other potential benefits of yoga:

Yoga can decrease stress and promote relaxation. Becoming more in tune with your body and where you hold stress is rewarding.
Yoga may also be able to relieve anxiety. In one study, 34 women diagnosed with an anxiety disorder participated in yoga classes twice weekly for two months. At the end of the study, those who had practiced yoga had significantly lower levels of anxiety than the control group.
Yoga may help improve heart health and reduce several risk factors for heart disease. One study found that participants over 40 who practiced yoga for five years had lower blood pressure and pulse rates than those who did not.
Lastly, yoga may help fight depression; this may be because yoga can decrease cortisol levels, a stress hormone that influences serotonin levels, the neurotransmitter frequently associated with depression.

Tip adapted from Healthline ¹⁰

What has a foot on each side and yet another foot in its middle?

Last Week's Riddle: What force and strength cannot get through, it with gentle touch can do. People in many halls would stand were it not in their hand. What is it?

Answer: A key.

Benidorm

Alicante Province, Spain

Footnotes And Sources

^{1. WSJ.com, June 26, 2026}
^{2. Investing.com, June 26, 2026}
^{3. CNBC.com, June 22, 2026}
^{4. CNBC.com, June 23, 2026}
^{5. CNBC.com, June 24, 2026}
^{6. CNBC.com, June 25, 2026}
^{7. WSJ.com, June 26, 2026}
^{8. CNBC.com, June 25, 2026}
^{9. creatoreconomy.so, June 25, 2025}
^{10. Healthline, November 18, 2025}

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

Please consult your financial professional for additional information.

AI and Token Economics

Mon, 22 Jun 2026 09:00:00 GMT

My son Sam is getting married in three weeks. In March we did Sam’s bachelor party. A ski trip to the Lake Tahoe area ski resorts. The trip was sponsored by the “bank of Dad,” and it was a party.

The key term here is “sponsored,” not “covered.” The attendees were provided a huge vacation rental apartment right on the main drag in Lake Tahoe, breakfasts, lunches and pizza, lots and lots of beer, and transportation to and from the airport as well as around town. While Dad subsidized the cost of the trip, it wasn’t free. The “all inclusive” price charged to the revelers was based upon the status of their gainful employment.

Sam is young for a groom nowadays, and some of his clan had only recently graduated college and were yet to procure adult employment. Others in the group already had their first jobs. Those who had jobs were charged one rate, the underemployed another. All of them paid me for their trip cost through the Venmo app on their phones. It’s the way these kids exchange money.

Apparently, if Artificial Intelligence (AI) robots were able to go on a three-day merrymaking excursion, they would also share expenses in a similar way, only instead of sending dollars to each other through the Venmo app, these robots, called agents, exchange value in another emerging type of payment system called tokens.

This token concept is new to most people, it’s certainly new to me, but within the tech industry it is a central focus, and is serving as the underpinning of the estimated $7 trillion AI infrastructure buildout underway. We got a glimpse of this concept within the offering documents of the SpaceX IPO last week, and the concept of tokens is said to be a central theme of the future mega-IPOs of other AI-focused businesses expected later this year. So just what is a token?

Well, first, a token is not a cryptocurrency. In its most simplified form, a token is a unit of exchange based on a fixed amount of data going in or out of an Artificial Intelligence model. These tokens are produced and used/spent by both AI agents, as well as human users, based on utilization of the computer power associated with running the AI. The computer power is generated within the data centers getting all the attention, and is shortened to the term “compute” when discussed within the context of the economics of AI business enterprises.

Eventually, at some point in the AI economic cycle, these tokens are exchanged for actual dollars based on factors associated with usage, and from what it seems like the “quality” of the compute used to generate them. From what I can tell, the token-to-dollar exchange occurs at the level of the end-user, which is to say the corporation or subscriber utilizing the AI model, or the software company providing tools and apps harnessing the AI. The dollar value of the token is ultimately based on the compute power used to process prompts and create output.

Confusing? Yes, it’s confusing, but it’s also a completely new type of currency system already operating within the AI world, and because most stock investors are heavily invested in AI, either through individual stocks or through index or mutual funds right now, it’s a concept I feel requires at least some level of understanding.

As I went into the token rabbit hole, I found myself reverting to parallels provided by my decades of investing experience. Sure, this token concept is new, but existing frames of reference seemed to apply, and some just don’t compute (pun intended).

Had I ever seen a financial model where units of output were being exchanged by economic agents (aka traders) based on underlying production metrics and activity occurring outside the direct control of the agents themselves? Well, yeah, to me it sounds a bit like commodities or futures markets based in agricultural or energy production. While futures markets are not part of my practice, I have certainly been aware of, and to some extent, a student of these markets for decades, which got me thinking.

Using basic economic logic, what if a producer of a commoditized output, say like oil, corn or even a newer product with an uncertain emerging market, poured $7 trillion of capital investment into increasing the production capacities for said product? Would this massive capital investment be likely to cause the fundamental market pricing of the eventual product, or output, to go up or down? My investing intuition doesn’t lead me to think “up.”

Now, don’t call me an AI skeptic. I believe AI will change the world, I’m just not sure how yet. The economics of AI, however, are already changing the future of investing, both in financial markets and in the real world. With most of us staking so much of our hard-earned savings on this future, it’s important to understand the true economics underlying the excitement, and the token economics concept is giving me a bit of pause.

War, Peace & Space

Mon, 15 Jun 2026 09:00:00 GMT

Stocks moved higher last week as inflation jitters gave way to investor enthusiasm over Middle East diplomatic efforts and the largest-ever initial public offering (IPO).

The Standard & Poor’s 500 Index rose 0.65 percent, while the Nasdaq Composite Index advanced 0.70 percent. The Dow Jones Industrial Average gained 0.66 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.92 percent. ^1,2

War, Peace & Space

Stocks were mixed on the first day of the week. Chip stocks led advances by the S&P 500 and Nasdaq, while the Dow Industrials sagged. ³

The script flipped in the next session, as the chip stock fizzled despite a drop in oil prices. The S&P and Nasdaq slipped, while the Dow Industrials gained. Materials and consumer discretionary and real estate sectors led, with the latter rising on better-than-expected existing home sales. ⁴

Stocks fell broadly midweek as investors reacted to the May CPI report, which showed year-over-year consumer inflation ticked up to 4.2 percent. ⁵

But then sentiment turned positive again on Thursday after the White House gave an update on its ongoing diplomatic efforts in the Middle East. ⁶

The week wrapped on a positive note, as the largest IPO appeared to boost investor enthusiasm, particularly for AI, and there were more updates on the Middle East. ⁷

^{Source: YCharts.com, June 13, 2026. Weekly performance is measured from Monday, June 8 to Friday, June 12. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.}

Inflation Update

While year-over-year inflation rose to a 3-year high due to higher energy prices, Wall Street found some silver linings in the May report.

First, investors saw this coming. The 4.2 percent “headline” inflation matched market expectations, so the news was welcomed. Second, core inflation rose 2.9 percent over the prior 12 months, in line with forecasts.

Third, month-over-month CPI cooled slightly, giving investors hope that energy prices may have peaked. ⁸

This Week: Key Economic Data

Monday: Industrial Production. Capacity Utilization.

Tuesday: Import Prices. Housing Starts. Building Permits.

Wednesday: Retail Sales. Pending Home Sales. Home Builder Confidence Index. Business Inventories. FOMC Interest Rate Decision. Fed Chair Warsh Press Conference.

Thursday: Weekly Jobless Claims.

Friday: The Stock Market will be closed for the Juneteenth Holiday.

^{Source: Investors Business Daily - Econoday economic calendar; June 12, 2026. The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to provide accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts are also subject to revision.}

This Week: Companies Reporting Earnings

Thursday: Accenture (ACN)

^{Source: Zacks, June 12, 2026. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule their earnings reports without notice.}

"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

– Aristotle

Protect Your Tax Data

The Internal Revenue Service (IRS) shared guidelines for tax pros to protect taxpayer data, but these principles are sound for everyone to follow.

Antivirus software : This software scans computer files for malicious software (malware) on the device. Antivirus vendors find new issues and update malware daily. Always install the latest software updates on your computer.

Two-factor authentication : This adds an extra layer of protection beyond just a password. Not only do you enter your username and password, but you also enter a security code that the service provider can send to another device for extra protection.

Drive encryption : Encrypts sensitive data into unreadable code that unauthorized users cannot easily decipher, so only authorized users can access it.

This information is not a substitute for individualized tax advice. Please consult with a qualified tax professional to discuss your specific tax issues.

Tip adapted from IRS.gov ⁹

Skincare Tips

The first and most important tip is always to wear sunscreen, even if you spend little time in the sun. Some skincare products, including makeup, contain sunscreen, but you should also consider using a moisturizer with at least SPF 30 for extra protection.

Another tip is to lighten up your skincare routine. If you're spending time outside exerting yourself, you might not need as much makeup or products as you do for indoor activities.

Tip adapted from Allure ¹⁰

Your mother’s brother’s only brother-in-law is taking a picture of you. How is he more closely related to you?

Last Week's Riddle: On a summer day, two fathers and two sons went fishing, and each one of them caught one fish. Why did they return home with just three fish?

Answer: Because it was a grandfather, a father, and a son who went fishing.

A tower of giraffes (Giraffa camelopardalis camelopardalis)

Maasai Mara National Reserve, Kenya

Footnotes And Sources

^{1. WSJ.com, June 12, 2026}
^{2. Investing.com, June 12, 2026}
^{3. CNBC.com, June 8, 2026}
^{4. CNBC.com, June 9, 2026}
^{5. WSJ.com, June 10, 2026}
^{6. CNBC.com, June 11, 2026}
^{7. CNBC.com, June 12, 2026}
^{8. WSJ.com, June 10, 2026}
^{9. IRS.gov, December 4, 2025}
^{10. Allure.com, February 23, 2026}

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

Please consult your financial professional for additional information.

SpaceX Offering Is First Test of New Index Fund Rule

Sun, 14 Jun 2026 09:00:00 GMT

Rules, rules, rules. I have spent my entire career in a world of rules. If I do a rudimentary assessment of the regulatory bodies asserting authority over the business of financial advice, I can count five; there are probably more, all of them have rules.

I have also spent a considerable portion of my career performing supervision and compliance functions in my firm, which is a fancy way of saying “rule enforcement.” I believe in the rules; some are really smart, some not so much, all have a purpose and solid intention.

Rules also evolve over time. Technology changes, standards evolve, and regulators react. Sometimes faster than others, but ultimately the market for services determines regulatory focus, and regulatory focus determines rules. And the rules have just changed again.

By the time you read this column, the largest initial public stock offering (IPO) in history will be in the rear-view mirror. Even those who do not pay daily attention to financial markets will likely be aware that Elon Musk’s space technology company SpaceX is now a public company. Because I write this column on Tuesday morning, and SpaceX will not begin trading until Thursday, it is impossible for me to know at this moment how the process played out, but the one thing I am sure of is that it will be huge news.

Commenting on SpaceX as an investment opportunity is beyond the scope of this column, but there is no doubt the company, by its very nature, represents a version of humanity’s future that I, and most of the people I talk to every day, find irresistible. By now, most of us have seen the video online of SpaceX’s scissor tower catching a giant rocket in midflight, pulling it down to the launch pad and gently setting it down for refitting. This concept alone makes SpaceX impossible to ignore, and the world is justifiably captivated by this company.

Whether, however, investors find the crazy level of hype around the stock offering, the science fiction component to the company, or the credibility of Elon Musk himself enticing, recent financial industry rule changes are likely to make this company more relevant to many investors than they might believe. Let’s go over why.

Investors participating in their employer’s 401(k) plans (or 457 or 403(b) plans for certain types of jobs) are likely to gain exposure to SpaceX through their plans without realizing it.

Employer-sponsored retirement plans provide investment options to their participants primarily in the form of mutual funds.

All mutual funds consist of large baskets of diversified stocks and/or bonds combined to create an easy-to-invest-in portfolio for investors. In this regard, there are two primary “flavors” used to select underlying portfolio holdings. These two different flavors are referred to as active and passive.

With an actively managed mutual fund, the underlying portfolio's holdings are selected by human fund managers or human fund management committees.

Index funds are built differently. With an index fund, the fund’s stocks and bonds are not selected by a fund manager; they are selected by an index provider. An index is a basket of stocks or bonds assembled to represent a certain segment of the financial markets. The index provider is most often a third-party entity that then licenses the index to mutual fund companies, which then select portfolio holdings with the intention of mimicking the target index. A primary advantage of index funds is they typically involve lower internal investment management and trading costs.

Due to these lower costs, most retirement plan sponsors (employers) include index funds in the funds offered to participants (employees), either through individual fund options or by embedding them in “target date” funds designed to provide turnkey investment allocations to employees.

This common adoption inside retirement plans is a primary force driving the reality that index funds now represent 55% of all mutual fund assets and include eight of the top 10 largest mutual funds in the U.S., which to me, is more and more begging the question: Just what are these indexes made of and who decides how they are built? Back to the rule change.

Until recently, index providers did not include newly offered stocks like SpaceX in indexes. All providers required a “seasoning” period, which enabled the hype and volatility that often surrounds initial offerings (IPOS) to subside. This practice, required by various financial industry rules, appears to me to be based on the intention to maintain the “credibility” of the indexes created by providers. Broad-based indexes are designed to represent markets, not to enable speculation, and IPOs were considered just too speculative.

So why the change? Well, I am speculating here, but clearly American corporations, particularly technology companies, are aware of the massive amount of capital invested in index funds, and they very much want access to some of it. As investing styles have changed, it has become much easier to simply lobby for rule changes by index providers than it is to attract capital from individual investors and fund managers.

I haven’t formed a resolute opinion on these changes yet, but the question I keep asking is this: Are the rules being changed for the benefit of investors, or the benefit of the corporations wanting easy access to capital? I think we’ll find out soon enough.

Scholarship program offers educational opportunity

Mon, 08 Jun 2026 09:00:00 GMT

In my experience from raising my own kids, as well as watching others raise theirs, the right school at the right time can make a big difference in the lives of some youngsters. In Indiana we are blessed to have a strong public education system, but kids, for a variety of reasons, sometimes need a change of pace to completely thrive in the school environment.

Fortunately, we are also blessed to have strong private and parochial education options in the Region, and several of our local public and private schools are considered some of the best in the state of Indiana.

For some families, however, the prospect of paying private school tuition is simply not feasible, which can limit educational choice for some children. The state of Indiana, however, has led the way with developing programs to enable more school choice for families, and recently the federal government has further joined in the journey toward school choice. One of the primary tools being utilized in this regard is the Scholarship Granting Organization (SGO), and the attractive tax credits associated with supporting these organizations.

An SGO is a state-certified, non-profit 501(c)(3) organization, which acts as a conduit between private donors and private schools to provide tuition scholarships to students from kindergarten to 12th grade. SGOs are funded by cash donations from individuals and businesses which are then pooled to provide qualifying families with private school education-related assistance. Scholarship funds can be used by families to pay for tuition, uniforms, supplies and technology used for educational purposes.

In order to qualify for educational assistance from an SGO in the state of Indiana, a family’s household income cannot exceed 300% of the area median income, which in Lake County is roughly $255,000 and Porter County roughly $263,000.

Scholarship awards can range from a minimum of $500 to a maximum of the full cost of attending a private school. With these generous eligibility guidelines, an SGO can open the door to educational opportunity to a wide swath of students. And as we all know, the right education for the right kid has the potential to change lives. While this reason alone is a great reason to support an SGO, the state and now the federal government are providing some very attractive additional tax incentives for those who choose to support area youth in this way.

Indiana offers a 50% state tax credit for individuals or corporations who donate cash to qualified, state-certified SGOs. This means if a taxpayer donates $1,000 to an SGO, their Indiana state income tax can be reduced by up to $500. There are also no limits to the amount any one taxpayer can donate to an SGO and receive the state tax credit, although total tax credits in the entire state for any given year are capped at $18.5 million. For cap purposes, the fiscal year runs from July 1 to June 30 the following year, which means these tax credits are about to renew in a few weeks. While the tax credit is not refundable, meaning it can only be used to reduce actual income tax liability, the credit can be “carried forward” on future tax returns for up to nine years.

In addition, starting Jan. 1, 2027, the federal government will also offer a 100% federal tax credit of up to $1,700 for taxes owed to the IRS. IRS rules prohibit “double-dipping,” which means the state tax credit and the federal tax credit cannot offset the same donated dollars, but I can envision a scenario where a $1,000 donation to an SGO could result in total state and federal tax credits of about $750. Of course, a tax professional should be consulted to provide actual planning calculations. As tax planning tools go, this is one of the most compelling and attractive in my opinion.

Legacy Foundation in Lake County is a prominent SGO serving the Region, and there are a number of statewide SGOs who can also help donors with this program. Reach out to me, or Jodi Kateiva at Legacy Foundation at jkateiva@legacyfdn.org to find out more.

Record 30-Year Bond Yield Signals Investor Worries Over U.S. Finances

Mon, 01 Jun 2026 09:00:00 GMT

I remember when the politicians actually used to address the Federal deficit and national debt in their campaign rhetoric. They would use soaring consternation to bombastingly lecture their opponents about how we are “saddling our grandchildren” with the burden of fiscal misconduct, but the further along on this journey we go the more convinced I become the burden of this comeuppance may not wait for the grandchildren.

Now days, the pretense of managing the disastrous finances of the Federal government has seemingly disappeared from any serious politicking. Sure, an occasional Republican will claim the moral high ground and desire to fix Washington fiscal mess, but rarely does behavior in office match campaign trail rhetoric.

The truth of course is the fiscal math is beyond the ability to be “managed”. Thresholds of sustainability have been crossed, interest expenses have snowballed and rhetoric aside, no spending cuts for those on the right, or tax hikes for those on the left, are coming to solve this mess.

Instead of reverting back to our various political tribes in some sort for misplaced hope for being saved by our team or blaming the other team for the problem, I think it’s more important going forward to attempt to understand what the next stage of this cycle could look like, and it may look a little like last week.

Last week the Department of the Treasury held an auction for 30-year U.S. Treasury bonds. The government holds original auctions for these long-term bonds four times a year, although it will offer follow on supply of the bonds issued in the original auction on a monthly basis, the original auctions tend to set the tone and the market for various maturities, which in effect provides a glimpse into how investors, aka markets, are assessing the fiscal health and operations of the Federal government. This assessment takes the form of the yield, or interest rate, demanded by investors from the government.

Most experts would agree, auctions of long-term Treasury bonds provide the most useful evaluation of the nation’s fiscal future, as shorter-term bonds and notes are more influenced by Federal Reserve policy, and hence provide less pure market signals than the long-term debt, and at this time there is no longer term government debt than the 30-year Treasury bond. So, what did the market have to say?

Well, it wasn’t good. The auction resulted in a yield of 5.19%, representing a 19 year high for this maturity. While 30-year yields have occasionally breached the 5% level in the past two decades, the timing and nature of the most recent auction is throwing up red flags. Not only will the interest expense associated with this bond issue exacerbate the government’s fiscal challenges, but the message being sent is pretty clear; investors are expecting more a future of more persistent inflation and demanding to be compensated accordingly.

Sure, some of this market messaging may be linked to the spike in oil prices related to the conflict in Iran. I think most investors and consumers in general are braced for higher prices in the short term. When consumer expect higher prices, investors demand higher bond yields. To dismiss this dramatic move in long term yields as linked completely to oil and Iran may be short sighted as well.

The challenge with long term U.S. Treasury yields rising swiftly is this type of market move has the capacity to shift borrowing costs and bond values across the entire economy. While mortgage rates are more closely linked to the yield on 10-year Treasury bonds, 10-year Treasury bond yields are clearly influenced by their 30-year cousins. In addition, when yields reset in this way, existing bonds providing balance sheet value and collateral at banks, insurance companies and pension funds tend to adjust lower in response (bond values move lower when bond yields move higher), which has the capacity to create a cascade of associated problems. The last time this type of trend was experienced was in spring 2023, when one of the nation’s largest banks collapsed in 48 hours due to losses in its bond portfolio.

So, am I calling for the fiscal apocalypse based on these recent trends? No, of course not, the U.S. financial system and economy remain durable, but as the fiscal mismanagement of the Federal government continues to grow in scope, I think we can expect rolling pockets of instability which won’t just impact the grandchildren, but current workers, mortgage borrowers and retirees as well. The ship has sailed, let’s try not to fall overboard.

New Generation Takes Fed Leadership

Sun, 24 May 2026 09:00:00 GMT

The end of an era approaches. As you read this, a new Federal Reserve Chairman will have been sworn in, taking the helm from Jerome Powell, and the impact of this transition could be significant.

Jerome Powell has served as Chairman at the Fed since 2018, and as a Board member since 2012. To say this has been an impactful period is an understatement. Powell’s Fed inherited the legacy of the Great Financial Crisis of 2008, dealt with the COVID crisis in the middle and finished with the affordability crisis of the past few years.

During Powell’s eight years as Chair at the Fed, the Federal debt has nearly doubled, from $21 trillion to roughly $40 trillion. In addition, despite initial efforts otherwise, the Fed’s balance sheet, which is a measure of the financial assets held at the Fed, and by osmosis the supply of money in the economy, also nearly doubled.

Reflecting these dramatic statistics, under Powell’s Chairmanship the U.S. economy experienced a greater “financialization” of economic outcomes. During each of the crisis mentioned prior, the Fed’s response has been to increase the money supply and lower interest rates in support of financial markets. On the positive side of the ledger during the past eight years, the U.S. economy experienced no deep recessions (a brief recession occurred during COVID), and the price of stocks as indicated by stock prices (S&P 500), increased in value roughly 180% during his term (source: S&P).

Chair Powell unfortunately also allowed the Fed to be drawn into the political realm with initiatives and policies attempting to address ESG (Environment, Social, Governance) issues in ways investors like me found concerning. In my opinion however, when future economists look back at this time, the negative legacy of these policy responses, in particular inflation and a growing inequality, will likely be the dominant reflection.

In addition, in recent years Fed policy under Jerome Powell has not reflected President Trump’s economic objectives, leading the President to turn is ire on Powell, which from my perception has Chair Powell finishing his term in a damaged and somewhat feckless state. Said simply, it’s time for a change, and change may be what we get.

The incoming Fed Chairman, Kevin Warsh was confirmed by the Senate on May 13th, and in current Washington fashion, the process was a bit more contentious than typical. Like many Trump administration appointees, Mr. Warsh brings an approach and philosophy to the Fed marking a material change from recent precedents. It’ll be important to understand the underlying philosophy driving Fed policy under Warsh, while at the same time appreciating the headwinds and entrenched economic realities likely to make the path to any real change difficult and bumpy.

The philosophical economic agenda under Kevin Warsh is likely to be an attempt to “de-financialize” the American economy. This de-financialization will be an attempt to address the wealth disparity between lower income, often younger Americans, and older, higher income Americans which has grown to treacherous levels. A central contributing factor in this trend is the challenge presented by asset prices.

Asset prices, and asset price growth, can be a direct consequence of Fed policy regarding the size of the overall money supply. As the Fed has induced the growth of the money supply over the past nearly two decades owners of assets have enjoyed increased wealth through higher asset prices. This prosperity, however, has not necessarily resulted in increased the productive capacity and the productivity gains typically benefiting younger Americans. In addition, higher asset prices have made it more difficult for these same young, new investors to come into the asset markets (stocks and real estate).

From the analysis I’ve read, to address these challenges a Warsh Fed may attempt to reduce the size of the Fed’s balance sheet in effort to “decentralize” the size money supply, while at the same time altering banking regulations to ultimately incent more private sector lending. While the result of this policy twist would not necessarily result in a contraction of the money supply, it may drive capital creation away from the central bank and towards the real economy, which also may mean away from financial assets. The hope being, capital allocated by the private economy instead of simply the financial sector could ignite productivity gains and innovation, creating opportunity and growth for a wider swath of Americans.

The primary headwind to any Fed monetary policy, however, will remain the massive borrowing needs of the Federal government. The President and Secretary of the Treasury have made it clear they want lower interest rates, and how the Fed will manage reduced interest rates as well as a stagnant or shrinking Fed balance sheet and funding the government as well as banking reregulation at the same time will be quite a balancing act. Investors would be wise to be wise to be skeptical.

One last brief note. Kevin Warsh is 56, which makes him Gen-X like me. We Xr’s bring a distinctly different worldview to the conversation than our Boomer friends who have held the reins of government for decades. We have less trust in institutions and more faith in markets. For me, it’ll be fascinating to see the X’r value system finally injected into economic policy. Let’s see where this goes.

Listen to Experts, Not Influencers, on When to Take Social Security

Sun, 17 May 2026 09:00:00 GMT

Don’t get your financial advice from social media. Easy for me to say as a financial professional, but if my doctor said, “don’t get your health advice from social media”, I’d look a little sheepish, since I’m constantly taking diet and fitness advice from the influencers. It’s the nature of American life nowadays.

This being said, trying a different workout or changing my protein intake targets based on YouTube videos is very unlikely to cause any lasting damage in my life, but making lifetime, irrevocable financial decisions based on Instagram or Tic Toc raises the stakes.

Which is why I was a little alarmed to see a recent column on CNBC.com stating social media influencers are online promoting the “ultimate hack” for claiming Social Security benefits. The theme among the influencers is apparently encouraging followers to claim Social Security as early as possible to “break even” earlier and maximize the potential for lifetime income. I decided to watch some of these influencers for myself, and then consult an actual expert on the topic.

First, a couple financial planning realities. In my practice we do not make decisions based on the premises of “I may be dead soon”, or “the government is going to renege on my benefits”. In the case of “I may be dead soon”, barring any highly relevant and timely information to this effect, financial planning is best conducted using reasonable assumptions on life expectancy and typical mortality.

On the second premise of “the government is going to renege on my money”, I can only answer that while the Federal government’s finances can certainly be described as a complete mess, the macroeconomics of a sovereign nation which has total control over its own domestic currency are extremely complex and beyond the scope of consideration when doing individual financial planning. Or said simply, there is an almost absolute probability we are all going to get our Social Security benefits given the information we have available today.

With these realities in mind, lets proceed in this conversation with the understanding the majority of us are going to experience a typical life expectancy, and the government, while certainly a mess, will not default on this absolutely critical public benefit program. Ok.

Back to the influencers. I looked at videos on TikTok, Instagram and YouTube. All three content creators used fairly simple math to establish a formula showing claiming benefits early, taking the funds and investing them at a reasonable return or at least not using other assets invested at a reasonable return, to fund the income provided by Social Security resulted in a “break even” in roughly 15 years.

In this context, break even means if the retiree did not live the full 15 years, then they essentially “won” by claiming benefits at age 62, if they lived beyond age 77 then waiting would have resulted in higher benefits over their lifetime. A couple of the videos mixed in mortality probabilities, to put odds on the chances of claiming early resulting in the win. From the perspective of a planner, there was nothing particularly new in the videos, although all presented their logic in a pithy and convincing way.

Now let’s go back to the real world. I happen to have the benefit of an actual Social Security expert working in the next office over. My teammate and firm partner Bridget Shoemaker has completed, from my perspective, an extreme amount of training and continuing education in Social Security and Medicare benefits. Her training has resulted in professional credentials, and she has 25 years of experience doing financial planning for real world clients. She knows these programs. I went to her office with one question in mind: Is claiming Social Security early at age 62 typically the right decision for retirees?

Her answer, like all pros would say was of course, “it depends”. She continued, “the decision to claim Social Security is one of the most personalized financial decisions any of us will ever make. The decision should be integrated with other decisions such as tax planning, Medicare premium considerations, health status and perhaps most importantly martial status and the age of a spouse”.

Bridget reminded me, while the Social Security Administration used to provide a “break even” calculator on their website, the agency no longer does so and this function is now provided by private software products, which she uses. Contrary to the influencers the software, or pure math, almost always shows claiming benefits at a later age results in higher total lifetime benefits using standard mortality tables.

Despite this logic however, when it comes to real world planning, she also stated it is rare for retirees to delay benefits until age 70 to just maximize total payments. Most of the time a middle ground strategy is utilized based on personalized factors and income needs.

The moral of her story is this decision is too important to be based on online videos. She encourages everyone to get advice based on personalized factors and retirement income needs. Which is likely the best advice of all on this topic.

AI Will Offer Fascinating Opportunities

Sun, 10 May 2026 09:00:00 GMT

The YouTube attention algorithm fills my video feed with investing soothsayers, political pundits, economic prognosticators, and conspiracy theorists. Perhaps these algorithms know us better than we know ourselves. So, I was intrigued last week when a YouTube short video of a pretty woman in a cowboy hat showed up in my feed.

The title of the short video was "This Song is Blowing Up." I'm not known in the family for being in touch with music and pop culture; maybe this was a chance to be "cooler" in the eyes of my young adult kids, so I clicked into the video.

A Surprising Discovery

The song was amazing. Soulful vocals, a combination of heavy metal-like guitar riffs and country beat. They even had a banjo. The lyrics actually had a Christian theme, which was nice. The musicians in the video were three age 30ish women, they were authentically pretty in a kind of no-makeup-needed sort of way. They wore jeans, cowboy boots and tank tops as they jammed on stage in front of an animated and excited outdoor concert crowd. Shots from the video showed them on their tour bus, eating pizza and burgers in small-town diners. One of them had a young daughter who was also in the video. They looked natural, fit, happy and friendly. This was good stuff. I downloaded their album on Apple Music; Ethan discovered it in my phone and started playing their music as well. Dad finally discovered some new music. I was cool.

One of my wife's little gripes about me is I don't care about live music, which she loves. Sure, I'll go when she plans it, but I don't typically get excited about concerts or shows. After seeing the ladies in the video touring and playing what looked like fun venues with "normal" looking crowds, however, I thought maybe I would take her to one of their shows. Scrolling on a Sunday morning in bed, I Googled the band's website to see if it showed their touring schedule. And that's when I got pulled into the rabbit hole.

The AI Revelation

The results of the Google search were stunning. As it turns out, the entirety of the online presence generated by this band was actually an AI-generated "cinematic and musical experience." While the song writing was real, the performers with their names, personalities and personal bios were not. There were no concerts, no tour bus, no little daughter. The band's entire feed was designed and created using AI technology. I had been completely and totally convinced. It was at this moment that I finally understood. This technology is going to change everything.

Rethinking AI's Promise

I think until this, I was viewing AI as a sort of "will be important one day" technology. I've been practicing using it with a paid Grok account for a few months, the results so far have been lackluster. Sometimes it saves me time when researching for the column, but sometimes it provides wrong answers or too much information. It still can't clean my Inbox, send out my bills, or help me with my schedule. I mostly use it make memes, not exactly life changing.

My friends who have been more enthusiastic about integrating AI tech into their businesses all seem to have hit walls as well. None of them feel the technology has delivered on its initial promise, and for most, the AI is taking more time and money than it is saving at this point. I was beginning to wonder if the hype around AI, and by correlation, the excitement present in the financial markets, was being overblown. The experience with the band changed my opinion.

I now understand, we are on the very front end of a phenomenon which has the capacity to change the entire human experience, and I'm not going to pretend to know how. What I do feel confident in prognosticating is that, as this technology evolves and develops, it is likely to become the most important economic and technological influence on the planet, perhaps ever.

Where the Investment Opportunity Lies

So, are we early to the investment themes presented by this trend? Absolutely not; lots of money has already been made, and the emerging value investments in AI infrastructure are in the past. To think we are late, however, is likely not accurate as well.

While the main investor focus thus far seems to be on the build-out of the AI infrastructure, as this technology matures new opportunities will emerge, some of which are likely impossible to foresee right now. The experience with the rock band both perturbed and excited me. As the economy moves from the infrastructure to the application stage with AI, smart investors will be pursuing the next area of opportunity. Hunting for these companies as they emerge will be fascinating.

Medical and Dental Students Need to Be Prepared for New Loan Limits

Sun, 03 May 2026 09:00:00 GMT

Anyone who's ever had a potential medical/dental school student in their life knows the journey can be a bit soul sucking. The youngsters going down this road are already our best students. They have worked hard, and likely sacrificed pursuing other opportunities. In my experience, most suffer some level of self-doubt along the way as pursuing these professions is neither easy nor affordable.

Then comes the admissions process, which is lengthy, complicated and often involves disappointment, wait lists and compromise. As an outside observer, the whole process seems unnecessarily opaque and stressful.

Even for great students, admission to a medical or dental school is far from guaranteed, and a lot of life can distract along the way. Which is a primary reason why most of the families I have worked with in my practice, and even those on a personal level in my own family, are not entirely financially prepared when the med/dental school acceptance letter arrives, and particularly when the cost of attendance letter arrives soon after.

Understanding the True Cost of Attendance

In case anyone reading doesn't know it, medical or dental school can be absurdly expensive. According to the Educational Data Initiative, annual tuition costs can range from $42,000 to $100,000, and these numbers don't include housing, transportation and eating. Even for the best-prepared families, this level of cost is difficult to endure. Student loans have traditionally filled the gap, and as the total cost of this level of education can range from $230,000 to $500,000, it is not unusual for new doctors and dentists to graduate with hundreds of thousands in student loans, taking decades to repay. It's a tough road, and it just got tougher.

What's Changing Under the OBBBA

Starting in just a few months on July 1st, as a result of provisions in the OBBBA (One Big Beautiful Bill Act), the federal government will begin greatly reducing the annual lending and aggregate sum of federal student loans made available to medical and dental students. While the headline lending amount of subsidized student loans for medical students is actually increasing from roughly $40,000 to now $50,000, the OBBBA eliminates a loan product called the Graduate Plus Loan, which many medical/dental students have traditionally used to fund tuition and living expenses. It is highly likely the elimination of the Graduate Plus Loan Program will leave annual funding gaps ranging from $20,000 to $50,000 for students.

In addition, while the new rules specifically allocate a $200,000 lending cap for medical/dental students, the OBBBA also aggregates all student loan debt (undergraduate and postgraduate) into a $257,000 lifetime lending limit. Complicated, I know, and many families have been caught off guard.

The Logic and the Unintended Consequences

I understand the logic behind these rule changes. Like healthcare costs, college education costs and the price of toilet seats on aircraft carriers, any time government money enters an equation, it tends to skew market forces and pricing, and as result, inflation rates in these cost categories far exceed the general inflation rate. So, if the government's intention is to "slow the roll" at these schools when it comes to tuition cost increases, restricting student loans as a funding source might just work over time.

My issue as a financial planner, however, is the unintended consequences of implementing these major rule changes so rapidly over the short term. The OBBBA was only signed into law in July 2025, and to have these new rules become effective only a year later is catching the students and families in my life feeling unprepared and, in many cases, a little scared.

Strategies for New Students

To be clear, the rule changes should not affect students already in med/dental school, as they should be grandfathered into a legacy provision in the law. For new admissions starting in the fall, however, many need a new strategy as market forces are unlikely to prevail in time. Here are a few tips.

Assuming the new med/dental school student has an acceptance in hand, consider using the legacy provision in the OBBBA to take out a Graduate Plus loan now before the program ends on July 1st. Having an existing Graduate Plus loan "on the books" before July grandfathers the student into the existing lifetime borrowing limits, which treats existing undergraduate loans more favorably. The student will need to be enrolled and attending classes to use this loophole, so contact the school as soon as possible to explore options. Summer classes are probably in your future.

Explore service-based scholarships. Perhaps the smartest plan I've seen came from my nephew, who pursued an officer commission in the U.S. Army through the Health Professions Scholarship Program. Not only will he finish his service commitment in his early 30s, but he will also enjoy practicing afterwards with no student debt, and he even received a stipend for living expenses while in med school. Similar programs are offered by the National Health Service Corps (NHSC) Scholarship and the Indian Health Service (IHS) Scholarship.

Explore private loan programs, but please do so carefully. The amount of funding to be potentially borrowed means any private loan program will have to be well understood. If financial topics are not in the student's wheelhouse, then please get help. Consult a trusted banker, financial planner or accountant. We are all here to help.

Buying the dips -- and the highs

Sun, 26 Apr 2026 08:00:00 GMT

Well, that was quick. Did anyone actually notice the nearly 9% decline in stock prices, as gauged by the S&P 500 index, which bottomed on March 27? I guess the answer could be "maybe," as I believe this was the day a lot of first-quarter investment account statements were generated, and it's likely most statements were down 4% to 8% from the beginning of the year.

By the time the statement was delivered in the mail, digested and any potential concerns were contemplated, however, the stock market had already recovered, and the decline was ancient history. Three weeks later, and new highs are being experienced.

It seems American investors have been well conditioned to "buy the dip," as the recent corrections and even bear markets have been brief over the past five or six years. This buy-the-dip mentality has enabled retail investors -- aka the little guys -- to give institutional investors a run for their money during the current bull market. According to a recent study by JP Morgan, during periods of intense financial market volatility, small retail investors can be more nimble and less constrained by risk management protocols than some institutions, which can lead to the little guys winning here and there. I love it.

My personal opinions and observations in this regard are that as the internet has made information more accessible, technology has made trading and portfolio management more efficient, and smaller advice firms have moved from transactional business models involving inefficient client decision-making processes to potentially more nimble fiduciary relationships with clients -- enabling investment strategies and allocations to be managed and adjusted on an advisory discretionary trading basis. The playing field has been leveled.

It's also important to remember, however, that while Wall Street and the mutual fund industry presents investing as a game to be won, constantly evaluating against benchmarks, indexes and each other, the American families I work with mostly want to simply use investing as a tool to achieve security, prosperity and life goals over time. Call it a cognitive disconnect in the profession.

The new market highs experienced this week do present another question, however. If buying the dip has enabled nimble small investors to capture gains over the past few years, what do we do when the market hits new highs?

As it turns out, there's history and data indicating investing new money during periods of new market highs can be an effective strategy as well. According to research from Fidelity, the 12-month period following brand new market highs (S&P 500 Index) has shown average returns of 12-14%, with positive outcomes about 80% of the time. Not bad.

My personal investing experience tells me buying dips can certainly be profitable, but can also be difficult, especially when dips are sharp and brief, such as the ones experienced over the past couple years. New highs, however, in my experience tend to linger a bit longer, as markets will often retrench a bit before moving consistently higher on a daily basis. This retrenchment can give investors time to formulate a strategy and allocate funds accordingly. I like investing during periods of new highs and will often annoy my teammates with one of my favorite idioms: "new highs beget new highs."

At this point, I would be a bit surprised if some of you weren't rolling your eyes thinking, "OK, Marc, buy at dips, buy at highs -- when don't you say buy?" The eye roll is indeed legitimate. The answer, though, isn't in the buying -- it's actually in the selling. Or, in investment-speak, the "rebalance."

The rebalance occurs when an investor's total investment allocation (stocks, bonds, cash) is considered and managed for aggregate risk level, not just the opportunity to make gains. Buying dips and buying new highs both have the effect of adding investment risk to a portfolio; how that risk is ultimately managed is the art form, in my opinion.

Buying dips, in my mind, tends to be more strategic in nature. This means the overall risk level in a portfolio may have self-adjusted (declined) during the dip, enabling the investor to rebuild stock market exposure back to desired target levels. The positions are more likely to be sticky as risk levels are rebuilt rather than extended.

Buying the new high, however, can be more tactical. Whereas positions bought during the dips are designed to rebalance reduced stock market exposure, positions added during the new high can actually be used to increase stock market exposure for a more limited period of time, in an attempt to harness the bull market for a while until gains are harvested and portfolio risk is systematically reduced. Buying high to sell higher.

Regardless of approach during a new market high, this type of market offers investors the opportunity to evaluate and adjust a portfolio's aggregate risk level, knowing that given all the information available at the time, it was both a good time to sell and potentially buy. Enjoy.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. All indices are unmanaged and may not be invested into directly. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Invest in Assets That Benefit from Economic Growth

Sun, 19 Apr 2026 09:00:00 GMT

Preceding the Iran conflict and the accompanying global energy supply disruption, some underlying economic challenges were percolating and gaining attention from policymakers and investors alike.

When the war began, however, investors justifiably turned their focus to developments in the Middle East, but while the shift in focus may have put other concerns on the back burner, it certainly didn’t cause the issues to go away. At the top of the list of American economic concerns was the topic of the “K” shaped economy being experienced in the U.S.

Understanding the K-Shaped Economy

This somewhat cryptic term refers to the trend where different segments of the population, acting within the same economy, experience vastly different financial outcomes during the same period of time. The “K” is used to describe the divergence between the top arm of the K, which refers to the affluent, the wealthy and typically older more established households, and the bottom arm of the K, which refers to lower income, less affluent and often younger households.

The concerns about the K-shaped economy were based on observations the upper arm was experiencing growing income, increasing asset values and rising affluence, while the lower arm of the K was experiencing stagnating wages and higher costs due to inflation, leading to rising consumer debt levels, difficulty affording basic needs and even the inability to initiate household formation, which is econ-speak for getting married, having babies and buying a house to raise them in. Often referred to the “American dream.”

While some of this inclination has always been true, the propagators of the K-shaped economy theory postulate the trend as leading to expanding levels of inequality among various segments of the population, which, in the view of some economists, was reaching a level alarming enough to present structural risks to the overall economy and even the societal fabric of the nation as well.

Is the K-Shaped Economy Real?

Is this K-shaped economy real? Some of the data does seem to support it. Tying into last week’s column on currency debasement, according to research from Barclays as of March 2026, general food prices are up 27% over the last five years. Electricity and gas are up 36-37%. Shelter costs are up 28%. During this same period, real wages for income earners in the lower quartile of the earnings scale have only increased about 14%. These kinds of numbers can definitely make it difficult to balance the household budget at the end of the month.

What about the upper-income-level folks? Well, according to the same research, as it turns out, income growth over the same time period in the top quartile of income earners is also up around 15%. So maybe the risk associated with the K-shaped economy theory was overrated after all, and like any economic debate, there are economists who dismiss this theory as well.

But this is when academic economics diverges from real world financial planning. Sure, income levels at both ends of the earnings spectrum may have experienced similar percentage increases, but top quartile earners realized their increase on earnings above $100,000 a year, and the bottom quartile earners experienced their increase on income in the range of $35,000 a year. So, if food costs are up 27% and a typical household of four spends $1,000 a month on food, the increase in food costs alone eats up most of the wage increases for lower-income households, and only a fraction of the earning increases for higher-income households. This bad math only compounds when energy and housing are thrown into the equation.

The True Great Inequalizer

Then there is the true great “inequalizer.” The top quartile households also own about 70% of the assets in the U.S., concentrated primarily in stocks and housing. With stocks up about 80% over the past five years, and home prices increasing in value about 55%, much of the cost pressures experienced by higher income households “felt” offset by growing total wealth in the form of increasing household net worth over the same period.

Do these trends present a material risk to the overall economy and potentially the financial markets? I candidly don’t think so. While these trends may be a bit more pronounced in the current inflationary environment, the facets underlying this reality have always existed in every economic system.

A Path Forward: Invest in Assets

While the political rhetoric addressing the K-shaped economy may pretend there is some sort of government policy solution to this issue, we all know there isn’t. Instead, the K-shaped economy is likely to be mitigated (I didn’t say solved) through a combination of economic growth, innovation and personal financial decision making. In my opinion, the key to this mitigation is in the investment and ownership of assets.

Asset values have historically served as the flip side of currency debasement. As dollars become less valuable, assets priced in dollars tend to become worth more dollars. So, if there is a policy solution to the K-shaped economy, it must involve getting more households in the U.S. invested in the assets benefiting from overall economic growth. Policies like Trump accounts and expanded retirement plan contribution limits can help tremendously in this regard, if people can choose and find a way to harness them.

Building wealth in America takes time, and as always, those who start taking steps to build wealth early, harnessing the power of compound growth, are ultimately able to navigate issues like the K-shaped economy and inflation over time.

Affordability, Debt and the Silent Tax of Currency Debasement

Sun, 12 Apr 2026 08:00:00 GMT

Let's get a little political, in an attempted non-political way. The end of May will be the onset of the mid-term election season. I expect the national rhetoric to go off the charts, and despite the recent failed attempt at redrawing our Congressional district in Northwest Indiana, I think we can expect an actual contest here in the Region as well, as apparently the national Republican party feels done with writing off Indiana's first district.

It's clear at this point that some political focus group somewhere coined the word "affordability" as a rhetorical way of addressing the inflationary pressures present in the U.S. economy. With this new winning word in hand, politicians around the country have been playing this fiddle until the strings fall off. The political oracles from both sides all claim to deeply understand the "affordability" crisis and promise to do something about it.

I'm not sure -- and am not sure anyone else is sure -- what this vague word really means, but with an educated guess I think the closest context is that it is being used to describe the trend of prices in goods and services going up faster and more aggressively than the income people earn, receive from pensions or receive from the government.

Recent notable examples in my own life: my obscene health insurance renewal (up 30%), my homeowners insurance renewing up 15% despite no claims, my NIPSCO bill arriving at what seemed like twice what it should be, the $125 it took to fill my truck with gas last weekend, and the $4 cup of coffee I am drinking while writing this column. Combine this with the anxiety my second daughter is experiencing because she doesn't feel she can afford a first home despite both her and her husband having good post-grad jobs, and I am able to appreciate the context of "affordability" as an actual thing.

The Debt Behind the Word

With this painful understanding in hand, let me scroll down the list of politicians or political parties who can solve this problem. You already know where this is going, which when summed up simply is: not likely. Reality of course is much more complicated.

The U.S. Federal debt has now hit $39 trillion. Interest on the debt is expected to hit $1 trillion in 2026, comprising 17% of Federal spending and more than every other cost except Social Security and Medicare. In order to sustain this level of interest expense, the Federal government is expected to borrow an additional $1.9 trillion in 2026. If the government was a family, it would be opening new credit cards to pay the interest on credit cards it had already maxed out. Yeah, it's that bad.

The Third Option: Currency Debasement

There were a couple of options for the government to address this terrible math. The government could have theoretically attempted to spend less or attempted to tax more, but at this point in the debt cycle neither was likely to move the needle much, and neither was seriously entertained. Instead, as someone who watches the markets and the economy, a third option seems much more likely. The third option is called currency debasement, and I am not alone in this expectation.

Diving deeply into the mechanics of how currency debasement policies are conducted is beyond the scope of this column, but the net effect is to make it easier for the government to pay back the dollars it owes, by making dollars themselves less valuable. We used to call this inflation. Apparently, "affordability" plays better in focus groups and campaign ads.

What This Means for Your Financial Decisions

In the financial modeling and planning software we use, inflation works in a straight line -- 2.5% a year, every year. For the first couple decades of my career my clients hardly noticed inflation; in fact, a lot of things were getting less expensive over time. Having experienced the last five years, however, I have come to appreciate inflation as much more "spurty." Trends such as globalization and advancements in technology can tend to lower the cost of goods over time, which then provides more leash for the government to mismanage itself. And mismanage itself it has. The chickens have come home to roost, and it is being called affordability.

Sustaining a period of currency debasement requires deliberate personal financial decision making. How we choose to spend and borrow, how we choose to save and invest, how and when we choose to utilize our accumulated wealth to benefit the next generation. The answers provided by politicians are, in my opinion, only likely to make the issue worse. The real answers will come from ourselves. We will continue to explore.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Tax Changes Offer Opportunities and Complexities

Sun, 05 Apr 2026 08:00:00 GMT

Tax season is not over yet, and there are a couple of new items which could save some taxpayers some money this year. It never hurts to do a last-minute review for procrastinators like myself.

With the 2025 standard deduction for a single filer now at $15,750, head of household at $23,625 and $31,500 for joint filers, tracking and itemizing expenses like mortgage interest, property taxes and charitable contributions for tax purposes simply is not necessary for many households anymore. Remember, if itemized deductions do not exceed the standard deduction amount, then itemizing is not needed. But as the government cannot let anything stay simple for long, the OBBA instituted a number of new deductions, some of which phased in for the 2025 tax year, that taxpayers should be aware of.

A Note on the Rhetoric

President Trump's way of communicating can sometimes be confusing, as actual government policy rarely fits cleanly into a social media post. What was finally negotiated and implemented based on the rhetoric of "no more tax on tips," "no more tax on overtime" and "no more tax on Social Security" were actually a set of new tax deductions, which in a way re-complicate tax filing for many. Let's go over some of the reality of these policies.

The Tip Income Deduction

The tax deduction for tip income is claimed by using a new form (Schedule 1-A) and does not require the taxpayer to itemize total deductions. Said simply, you can still claim the standard deduction and also claim a deduction of up to $12,500 single and $25,000 jointly for tip income. Of course, from there it gets complicated again, as most W-2 programs were not ready for this mid-year tax change, and tip income is not cleanly identified on 2025 W-2s.

This new deduction also phases out if Adjusted Gross Income (AGI) exceeds $150,000, and while the tip deduction can reduce taxes, it does not factor into calculating AGI. Also, please note, married taxpayers must file a joint tax return to claim this new deduction.

The Overtime Deduction

If the tip tax deduction sounds complicated, the overtime deduction is the cherry on the sundae. The tax deduction for overtime pay is also claimed on the new Schedule 1-A, and once again, many W-2 programs were not ready for this new rule last year, so overtime pay is not clearly delineated on many W-2 forms. This means taxpayers are left to calculate the "overtime premium" compensation eligible for this deduction, then apply a government formula to determine the final deduction amount.

The overtime pay deduction is up to $12,500 for single filers and $25,000 for married filing jointly. Once again, married filers must file a joint return and the deduction phases out at $150,000 AGI.

Social Security Deduction

Then we have the "no tax on Social Security," which in effect became a tax deduction of $6,000 for single filers and $12,000 for joint filers. This deduction is also determined using Schedule 1-A. It is important to note, only filers age 65 or older in 2025 are eligible for this deduction, so for those claiming early Social Security (age 62-65) or receiving Social Security Disability, the deduction does not apply. This deduction begins to phase out at $75,000 income for single filers and $150,000 for joint filers. The deduction is completely phased out at $175,000 single and $250,000 joint, but does not require joint filing for married taxpayers.

The Bottom Line

Despite my attempt to simplify some of these new rules, the OBBA resulted in the more straightforward tax filing process instituted during the first Trump administration becoming once again more difficult to navigate. In the end, however, certain taxpayers should experience some meaningful tax relief in 2025, and now with more time to digest some of these new rules, I think tax planning for 2026 offers a number of opportunities to save money.

I do strongly suggest engaging a tax prep professional, as getting a little advice and filing correctly is particularly important during years like 2025, when changes are being integrated into the process.

Inheriting Money Is Emotional. The Financial Decisions That Follow Don't Have to Be.

Mon, 30 Mar 2026 23:22:44 GMT

Most people who receive an inheritance have just lost someone they loved. The grief is real, the paperwork is relentless, and suddenly there are financial decisions to make that feel far too large for the moment you're in.

The most important thing to know is this: you don't have to decide anything right away.

Give Yourself Time

Unless there are required actions — certain inherited IRA distributions have deadlines, for instance — the wisest move in the first weeks after an inheritance is usually to do very little. Put the funds somewhere safe and liquid, like a money market account, and give yourself space to think. Decisions made in the middle of grief are often decisions you'll want to revisit later.

Understand What You Actually Received

Inheritances are not one-size-fits-all. You may have received a brokerage account, a retirement account, real estate, life insurance proceeds, or some combination. Each comes with different tax treatment, different rules, and different timelines. An inherited traditional IRA, for example, generally requires you to draw down the account within ten years under current tax law — and how you time those distributions can have a real impact on what you keep after taxes.

Don't Conflate "What I Inherited" with "What I Should Do with It"

It's natural to want to honor a loved one by holding onto what they left behind. But a portfolio that made sense for a 78-year-old retiree may not make sense for a 50-year-old still building wealth. Part of a good planning conversation is separating the emotional weight of the assets from their practical role in your financial picture going forward.

Prepare for Opinions

When word gets out that you've received an inheritance, people will have suggestions. Friends, family members, and occasionally people you barely know will have ideas about what you should do with the money. Most of those ideas will not be right for your situation. This is one of the moments when having a fiduciary advisor — someone with a legal obligation to act in your interest alone — genuinely matters.

It's Okay to Use Some of It

Not every inheritance needs to be preserved intact. If there's something meaningful you've been putting off — paying off a mortgage, funding a grandchild's education, taking a trip you've always talked about — it's reasonable to consider it. Thoughtful planning isn't about locking everything away indefinitely. It's about making intentional choices you can feel good about.

An inheritance can be a genuine turning point for your financial future. The decisions you make in the months that follow can either compound its value or quietly erode it. Taking time to plan them well is worth it.

When Should You Start Drawing Social Security? It Depends on More Than Your Age

Mon, 30 Mar 2026 17:03:43 GMT

If you ask ten people when you should start drawing Social Security, you'll probably get three answers: 62, 66, or 70. And technically, all three can be right — depending on who you are, what else you have coming in, and how your retirement is structured.

What most people know is that waiting longer means a bigger monthly check. Filing at 62 reduces your benefit by as much as 30% compared to your full retirement age. Waiting until 70 can increase it by up to 32% beyond that. On paper, the math seems to point one direction: wait as long as you can.

But retirement planning rarely works on paper alone.

Your Health and Family History Matter

Social Security's delayed credits are only valuable if you live long enough to collect them. Someone in excellent health with longevity in their family may come out well ahead by waiting. Someone managing a serious health condition may find it makes more sense to file early and capture what they can now. It's not a pessimistic calculation — it's an honest one.

What Else Is in Your Income Picture

If you have a pension, rental income, or a spouse who is still working, you may have the flexibility to delay Social Security and let it grow. If you're relying on portfolio withdrawals to bridge the gap in the meantime, the calculus shifts. Drawing down investments in your early retirement years — particularly in a down market — can do lasting damage to a portfolio. Sometimes filing for Social Security sooner protects the assets you've spent decades building.

The Spousal Benefit Conversation

Married couples have more options than most people realize. Coordinating when each spouse files can meaningfully increase lifetime household income. In many cases, having the higher earner delay while the lower earner files early is a strategy worth modeling. Survivor benefit implications are part of that conversation too.

Tax Planning Is Part of It

Up to 85% of Social Security benefits can be subject to federal income tax depending on your combined income. The years between retirement and filing are sometimes an opportunity to do Roth conversions at a lower tax rate — a strategy that can pay off for decades. When you start drawing Social Security affects that window.

There's no universal right answer here. But there is almost always a better answer than the default. If you're within five years of retirement and haven't had a detailed Social Security conversation with your advisor, that's a good place to start.

Trump Accounts Offer New Savings Opportunities for Families

Sun, 29 Mar 2026 08:00:00 GMT

Many of the questions I have been getting lately have to do with the new Trump savings accounts, which will launch in July. It has taken me a bit to figure out the mechanics and planning associated with these new accounts, but I have figured out enough to provide some insight and strategies.

If you have not heard, Trump accounts are a new type of savings account created by the government to help families invest money for the benefit of children under 18 years of age. As I have educated myself on this program, it is clear to me the intention of the policy is to help the families of children, and the children themselves, experience the long-term wealth-creating potential of the financial markets, and the stock market specifically. This goal is noble, in my opinion, as I believe the American economy, as reflected by our stock market, is a tremendous wealth creation engine, and the more Americans able to harness its long-term power, the better.

How the Accounts Work

The accounts are tax deferred and intended for retirement, with similar tax treatment as a Traditional IRA. The actual tax rules for the accounts are where things get a little complicated. Contributions to the accounts made by parents, grandparents, relatives, or the child themselves are made on an after-tax basis, meaning no upfront tax deduction is allowed. The investments in the account will then grow tax deferred, and when withdrawn for qualified purposes the growth will then be subject to income tax while the contributions (basis) will not.

If this is not confusing enough, the accounts can also accept contributions from a parent's employer, charities and the government itself, which are all made on a pre-tax basis. Then, when these amounts are eventually withdrawn, the entire withdrawal is taxed as income. No withdrawals can occur before age 18.

At age 18, the accounts must be converted to a traditional IRA, and withdrawals occurring before age 59 1/2 will be subject to a 10% tax penalty on taxable portions of the withdrawal. Like all IRA accounts, however, there may be exceptions to the pre-59 1/2 withdrawal penalty for withdrawals taken for higher education, a first-time home purchase or some catastrophic medical expenses.

Balances in the accounts can be invested in Treasury Department-approved low-cost index mutual funds or exchange-traded funds, although I have not yet seen a list of approved investments.

The Free Money Part

For any baby born (American citizen) between Jan. 1, 2025 and Dec. 31, 2028, the federal government will deposit a one-time start-up grant of $1,000. In addition, the Dell Foundation pledged $6.25 billion in the form of a one-time $250 grant for American citizen children who were 10 or under at the end of 2025. The grant applies to any zip code with a median income of $150,000 or less, which does include all the communities in Lake and Porter counties. If this sounds like free money, it kind of is, and program materials indicate the amounts will be credited automatically after the account is created -- no additional application or request will be necessary.

The accounts can receive annual contributions of up to $5,000 from parents, the children themselves or grandparents. In addition, employers or charities can also contribute up to $2,500 annually.

What Should You Do?

I of course suggest anyone eligible for the government grant or Dell Foundation grant establish an account to receive this gift. Beyond this suggestion, however, things get a bit more complicated as we compare this option to other child savings options, such as 529 plans or gift accounts.

Whether or not a family should contribute on an ongoing basis depends on the source of funds and intention for the money. If the ongoing savings are intended for education expenses, an argument can be made that the tax rules associated with 529 savings plans are more attractive. But for families with the means to save beyond college and parental retirement, I can think of some strategies involving Trump accounts which could be very powerful over time. We will explore these strategies in future columns.

For now, just know the website to establish the accounts is live. The government has released IRS form 4547 for this purpose, and the form can be completed and accounts established at www.trumpaccounts.gov .

Financial Planning Tools for Families with Disabilities

Sun, 22 Mar 2026 08:00:00 GMT

Living with a disability or supporting a loved one with a disability is a lifelong journey of learning. When it comes to individuals with disabilities, our culture has changed dramatically over the past 100 years or so, and people experiencing disabilities are increasingly benefiting from support systems, career alternatives and lifestyle choices as unique and varied as they are.

Much of the progression in how individual disabilities are experienced and managed is due to social shifts in how our society views and supports both individuals and their families, and as with most issues in modern society these values are reflected in government policy and allocation of public resources.

Government agencies on both the federal and state level provide support programs for individuals with disabilities and the families providing day to day support. As someone with a child with a disability, and as a professional who works closely with dozens of families like mine, I am grateful for these public support programs which have provided life-enhancing services to my son, my family and my clients. But of course, as with most issues involving the government, qualifying for, accessing and managing some of these programs can be difficult to navigate, so I thought I would address a common planning challenge.

Understanding Two Types of Benefit Programs

Some public benefit programs are made available upon diagnosis of a qualifying disability. Programs such as early childhood intervention, special ed services in school as well as healthcare and respite services (short term assistance intended to provide a break for primary caregivers) can all be accessed after a diagnosis of disability.

Some programs, however, particularly programs for adults, are qualified for through a combination of diagnosis as well as a determination of financial need. Programs such as Hoosier Care Connect (public health insurance), home based support services, and federal Supplemental Security Income are all considered "needs based" benefits based on a strict determination of financial need as well as diagnosed disability. This additional measuring stick of financial need has the capacity to add confusion to the process of accessing and maintaining access to these vital government programs, and can also open a window of specialized financial planning often referred to as special needs planning.

Sometimes when I write about this topic, I imagine it can sound to the general public like this type of specialized financial planning is designed to "game" the system, but the truth is the government and the law have provided the tools to manage the process of qualifying and accessing public benefits in a financial needs-based situation. With this in mind, it is tasked to individuals with disabilities, their families and the professionals assisting them to learn about and properly use the tools the law provides.

The Three Primary Planning Tools

In the interest of space and simplicity, let's make the qualification standards easy to appreciate. While reality is a bit more complicated, let's say for discussion purposes that in order to qualify for financial need-based programs, monthly income must be below $1,000 and assets below $2,000. These are obviously some aggressive limits, and while there may be more flexibility in the income qualifications depending on the program, the resources or "assets" qualification is strictly enforced.

So, how do we use the tools provided to manage these qualification standards? Let's talk about where each tool fits in.

ABLE Accounts

The ABLE account is the latest tool added to the toolbox and is the easiest and most affordable to implement. ABLE accounts are state-sponsored, tax-advantaged savings programs similar to 529 college savings accounts. These accounts enable individuals with disabilities (not families, and not trusts) to retain and invest funds in excess of the $2,000 limit for use in providing for qualified needs now or in the future. ABLEs in Indiana are set up online, have low fees and are easy to connect to a bank account for deposits and withdrawals. I think ABLEs are best used by parents saving for a child's future or by adults wanting to save and invest earned income. In my opinion, ABLEs should be a part of every family's financial planning.

First Party Special Needs Trusts

First party special needs trusts are established and funded by individuals with disabilities themselves and in my experience are typically set up to receive legal settlements or inherited assets. These special trusts require a trustee (the person or entity who controls the funds) different from the person establishing and benefiting from the trust. Administration of a first party special needs trust can be complicated, and of the three tools discussed, these are the most seldomly used in my practice.

Third Party Special Needs Trusts

Third party special needs trusts are typically established by family members to benefit their disabled loved ones (the beneficiary). These trusts will always be funded by the third party who created the trust, never by the beneficiary themselves, and also require a trustee. In my opinion, most families doing financial planning of this type should educate themselves on this tool, and we have used third party trusts extensively in my practice.

Balancing the Tools

Both ABLE accounts and first party trusts enable the government to recoup benefit costs from the individual's estate after passing. Third party trusts are not subject to recoupment. This makes understanding and balancing assets among these tools vital when doing planning. While individuals and families should maintain an understanding of these programs and their rules, this is the realm of professionals, and I strongly encourage getting help from attorneys, advisors and tax experts familiar with this type of planning.

Staying Calm When Markets and Politics Collide

Sun, 15 Mar 2026 08:00:00 GMT

Boy, you should see my inbox. In the past month I have received emails from readers accusing me of being everything from a fascist to a communist — all based on the same content. It's as entertaining as it is perplexing, and I appreciate every ounce of the discord.

Just for the record, I am not a fascist, nor a communist. I am an investor, and am charged with what I believe is the most solemn professional duty: investing other people's money using the unwavering standard of providing this service and advice driven solely by their best interest. I work in a serious business, and I deeply appreciate the obligation vested in me by the people I serve.

Politics and Investing Are Inseparable

Unfortunately, after what I perceive was about 1998, it has become impossible to be an investor anywhere in the world without also being in tune with the activity of the U.S. Federal government. Government policy in the form of interest rates, borrowing, regulation, and taxation have come to dominate the focus of investors as the size of government has grown over time. With Federal outlays in 2026 expected to be in the $7.5 trillion range, the government now represents about 23% of all economic activity in our $31 trillion economy. I have suspended the illusion that one political party or politician is going to mitigate this reality — ignoring the impact of this leviathan from an investment perspective is simply folly.

The War in Iran: An Investor's Perspective

So, let me get it out there. The war in Iran concerns me from an observational American perspective. Iran is a large nation of 93 million people. Its land mass is roughly four times the size of California. It is a big country with an established and functional bureaucracy and professional military. It is not a failed state. I pray for a fast resolution but worry this may not be possible. In this type of situation, when the myopic is dominating my focus, the best approach is to step back and attempt to muster a more historically broader lens — or risk making reactive decisions which could prove unproductive over time.

When we take a breath, it helps to look at historical trends. According to analysis from LPL Financial, major events — from Pearl Harbor to more modern conflicts — tend to cause heightened volatility with daily declines of roughly 1% in the S&P 500, and the index during previous crises has experienced aggregate 5% to 10% pullbacks. The same analysis also indicates, however, that one year later the index on average was up about 15%.

A Framework for Navigating Crisis Markets

If you've been reading the column, you know I am not a "set it and forget it" investor. I believe dynamic risk management is warranted in some market environments, and I try to be opportunistic when markets provide the chance. My own personal experience has taught me these types of events tend to cause an initial disruption or shock. I've tended to just sit tight during this stage as markets move too fast to really formulate decisions.

I have used this initial shock period to observe and assemble a strategy, typically in the form of a buy list on stocks or sectors I feel like I want more exposure to, or may have missed in the market cycle prior to the crisis. I formulate pricing tactics and then wait — if I get my price I buy, and if I don't, that's OK too. Finally, after the markets have adjusted to the new normal, portfolios can be rebalanced — not necessarily changing aggregate exposure to stocks in general, but rather how the exposure is built for the post-crisis world.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Middle East Uncertainty Demands Skill and Fortitude

Sun, 08 Mar 2026 08:00:00 GMT

Global financial markets seem to be taking the situation in Iran about as expected. While initial moves in the various major stock market indexes were muted, volatility is increasing as it appears the conflict has the capacity to persist. Iran is a huge country from both geographic and population perspectives, and it is difficult to anticipate how the war may progress over time.

Why Energy Prices Are the Key Variable

Investor concerns over the circumstances in the Middle East seem largely focused on crude oil and natural gas prices, and for good reason. While the importance of oil to the global economy has declined in recent decades, the commodity is still the most important input to the global economy. Oil is also a major input in plastic and even food production. In addition, natural gas is vital to economic activity, as it is used prolifically to power industrial production and heat homes.

Despite the vital importance of these energy commodities, roughly half to two-thirds of oil and a third of natural gas involves sourcing and supply chains which cross international borders, and 20% of the supply of both flows out of the Persian Gulf region, right through the conflict zone. A major military conflict in this region has the potential to disrupt not only production but transport of oil and natural gas.

The $100 Crude Oil Threshold

$100 crude oil is a psychological barrier often used by economists and investors to anticipate increased global recessionary risks, and for pretty good reason. Sharp increases in oil prices preceded recessions in 1974, 1980, 1990, and 2008. On the consumer level, it is generally accepted that for every $10 movement in crude oil prices, gasoline prices in the U.S. move about $0.25. When gasoline prices spike and remain high, the increased prices can end up acting as a hidden tax, resulting in lower consumer spending in other categories which ultimately has the capacity to impact business profits and stock prices.

How Investors Should Respond

How individual investors choose to respond to the increased financial market volatility related to conflict-impacted energy prices should depend on individual goals and time horizons. I believe financial market conditions in 2026 were already pre-disposed to more active rebalancing activity, which means taking profits on a more consistent basis and reweighting investments between asset classes more frequently. For those with a longer-term time horizon or a higher capacity to endure volatility, the increased market instability may offer some opportunities to pick up positions in stocks that may have been missed in the current bull market cycle. Investment decisions in general are going to require fortitude and skill while the situation in the Middle East remains fluid.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Alternative Investments Bring Expenses Back Into Conversation

Mon, 02 Mar 2026 08:00:00 GMT

One of the first purchases I made after graduating from Purdue was a new mountain bike. The year was 1993, the world was my oyster, and I wanted to ride off-road. Four hundred dollars got me into the game. The thing was a death trap — bad brakes, no suspension, rigid steel frame. Midway through the summer, I ejected forward on a downhill descent. My face landed in the mud eight inches to the left of an old steel fence post. I sold the bike and wrote the sport off as "crazy."

Twenty-Seven Years Later: A Second Look

Twenty-seven years later came COVID. Like many others, I was bored silly with the restrictions put on the world. I went to the mountain bike store with my business partner Bridget one day at lunch. The bikes looked nothing like the one I had sold in the '90s. Mountain bikes had evolved into marvels of modern technology. But when I looked at the prices, I was additionally shocked — these modern bikes cost 10 to 20 times what my after-college bike had cost.

My brother said when you ride a modern mountain bike and experience the technology involved, you realize the bikes are actually worth the money and might even be a "good deal." A month later, I pulled the trigger on a new bike. Six years later, riding is still my main warm-weather hobby. Sometimes things cost more for a reason.

The Investment Industry's Road to Zero

At Oak Partners, we began to adopt a fiduciary business model around 2010. A key part of this process was raising our awareness — on an almost obsessive level — of investment product expenses. Driven by the movement toward passive index-based investing and the emergence of the Exchange Traded Fund (ETF), the logic was clear: lower investment expenses left more for the people we serve. Wall Street was also on what became known as the "road to zero."

Concentration Risk and the Case for Alternatives

As the current bull market ages, it has become heavily concentrated. As of early 2026, just seven stocks (Apple, Nvidia, Microsoft, Amazon, Alphabet, Meta, and Tesla) now account for roughly 35% of the S&P 500 index total market capitalization (source: S&P). Investors using S&P 500 index-based funds believe they are diversified over 500 stocks, but under the rug are largely invested in seven technology stocks. Wall Street took notice, and the race to zero paused. Alternatives were developed.

As investors, it's important to understand this trend. As new alternatives are introduced into portfolios, investment expenses may be more of a factor in the conversation than they have been over the past decade.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

How to Take Advantage of the Big Beautiful Bill

Sun, 15 Feb 2026 08:00:00 GMT

My wife Tracy has worked in tax prep for decades, and tax season has arrived. As tax season arrives in my practice as well, we continue to learn more about the tax provisions of the One Big Beautiful Bill (OBBA) passed during 2025, and the planning opportunities it affords.

In this highly charged political environment, so many seem to only view government policy through political eyes and propaganda — but allow me to cut through the partisan noise. The OBBA is not a "tax cut for the rich." What it actually does is set up the most attractive tax environment for lower-income and middle-income American families and American businesses I have observed in my 33-year career.

The Senior Deduction: A Smart Filing Strategy

This first tip came to me from my friend Lee, a retired engineer with a curious mind who always cleverly thinks through issues. This tip involves one of the most attractive features of the new law: the additional $6,000 deduction for seniors aged 65 and over. For married couples, this deduction is doubled to $12,000. This deduction begins to phase out when AGI income reaches $75,000 for taxpayers filing single and $150,000 for married couples.

In Lee's case, the combination of both spouses' Social Security income and his Required Minimum Distribution put them over the $150,000 threshold, reducing their senior deduction. What Lee came up with: instead of filing married jointly, what if the couple filed married filing separately? By adopting this filing method, the family was able to save nearly $5,000 in Federal income taxes. Well done, Lee.

The Auto Loan Interest Deduction

The OBBA provides up to a $10,000 deduction for interest paid on a car loan for a new vehicle whose final assembly occurred in the U.S. This deduction begins phasing out with income above $100,000 single or $200,000 for joint filers. For households with spouses at divergent income levels, filing married filing separately and having the new car purchased in the lower-income spouse's name can allow the auto interest deduction to be fully utilized.

As we get into tax filing season, it's going to be especially important to have tax preparers and/or tax software model different filing status techniques to take full advantage of the tax code of the OBBA. The OBBA appears clearly designed to incentivize certain types of behavior by taxpayers. Understanding these incentives and how they can be utilized to save taxes is going to be both important and a little fun for financial geeks like me.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Financialization and Broken Markets

Sun, 08 Feb 2026 08:00:00 GMT

As Fridays go, it was busier than most. Back-to-back team and client meetings. Between meetings I would run back to my office, try to catch up on emails, and gauge the world through the TV in the corner of my office running CNBC on mute. Silver was getting clobbered — and I mean clobbered. After my morning meetings going into lunch, it was down about 25%. The precious metal has exploded in value over the last year, up about 300%. I found myself distracted by the trading action.

A Trade That Wouldn't Fill

When I came out of my next meeting, the blood bath had deepened. My interest now went beyond curious to tactical. I called my teammate Jonny at the St. John office. "You doing anything with silver today?" I asked. "Nope, just watching it get killed," was his response. I decided to stage an aggressive derivatives-based silver trade in my online play money account. If silver recovered, I would make good money. If it didn't, I would lose the entire investment. Please don't do this.

I entered the order. Immediate rejection. I tried again. Immediate rejection. After navigating through a chat robot, a real human came on: "These orders were rejected on the exchange level due to unusual trading action in the underlying commodity." I had five minutes until the market close. I switched tactics — the order didn't reject, it just didn't fill. The market closed, the weekend arrived. Down the rabbit hole of financialization I went.

What Is Financialization?

We all know silver is a real thing. It is utilized prolifically in modern electronics and industry. But financial markets trade silver in a variety of methods — futures contracts, options contracts, and exchange-traded funds — all conducted on the assumption no real silver will ever actually change hands. These traders rely on cash settlement, which has enabled financial markets to determine silver prices independent of any actual silver. And once something can be securitized, it can be leveraged through borrowing and derivatives.

Various estimates published by research firms online indicate between 250 and 350 ounces of financial silver is traded for every one ounce of physical silver. I've never actually heard of any other leverage ratio like this. It seems like lunacy to me — and on that Friday, lunacy broke the silver market. I've only experienced broken markets a couple of other times in my career, and none of them ended well. I simply want to encourage anyone active in these markets to work on understanding these risks. There may be a lot more going on here than is easily apparent.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The fast price swings in commodities will result in significant volatility in an investor's holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Gold Reasserts Itself

Sun, 01 Feb 2026 08:00:00 GMT

The world of precious metals is on fire, behaving like I've never experienced before in my 33 years of investing. In just the past 12 months gold prices have risen from around $2,800 an ounce to over $5,000 an ounce. Silver has risen from around $30 an ounce to over $105. These are huge moves in traditional stores of value, and the questions I am hearing from investors are more focused on "why."

Gold: From Sleepy to Significant

Gold is what I would view as a physical "macro" asset. While gold certainly has utility value for use in electronics as well as jewelry, it's difficult for me to believe industrial and retail use has the potential to move the metal the way it has moved over the past year. Instead, I think we need to look to the other large purchasers of gold: the world's central banks.

Central banks have always used gold as a strategic reserve asset. The World Gold Council, using data derived from the IMF, states central banks have consistently held about 20% of the world's above-ground gold. While the U.S. may be the largest holder of gold, it is not the largest buyer. This title, as of November 2025, belongs to the central bank of Poland, followed by Kazakhstan, Turkey, Brazil, and China.

Central Banks Are Swapping Dollars for Gold

Once again turning to IMF data, central banks are generally not increasing money supply to buy gold. Rather, the trend is swapping foreign currency reserves for physical gold, and the primary foreign currency reserves being sold are U.S. dollars and U.S. Treasury securities. To put a fine point on it, central banks — particularly in emerging markets — are diversifying their balance sheet reserves away from U.S. dollars and toward gold, a trend which started in 2022 and is not forecast to reverse.

A Transition, Not an Ending

Now, before the apocalyptically minded among us panic, let's take a breath. Yes, the time of the U.S. dollar serving as the dominant reserve asset on the planet looks to be passing. The idea of the United States as the uni-polar world power and single market-dominant economy simply no longer reflects reality. The world has diversified — why shouldn't central banks diversify as well?

I think I may be more concerned if these central banks were diversifying heavily into a different national currency, but diversifying into gold seems almost natural. For most of history gold served this purpose, and to see the yellow metal reasserting itself in this capacity is logical, and marks more of a transition than an ending. Will this trend continue? I believe it will. Does this mean gold prices will continue to rise? I am not qualified to make that call, but I think it will be increasingly important to understand the logic underlying these trends.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Capital War Risk Demands Cooler Heads

Sun, 25 Jan 2026 08:00:00 GMT

It was probably my second summer during college when someone — I think it was my Dad — gave me the book "The Art of the Deal." At the time, the book was considered one of the current must-read business books for young guys looking to get into the professional world. Trump's style of extreme self-promotion, coupled with negotiation methods I perceived as winner take all, didn't fit with my personality. I still remember viewing his deal-making approach as: blow everything up, destabilize your counterparty, and then suggest terms favorable to your position as a solution.

From The Apprentice to the World Stage

Through some large twists of fate, Mr. Trump has now become perhaps the largest focus of everyone's attention on the entire planet. Some commentators have dissected this approach and coined the phrase TACO — Trump Always Chickens Out — to describe the process of Trump suggesting grandiose policy positions which end up being watered down. Rather than seeing this as a chicken out, I simply perceive it as a scarcely evolved version of the Art of the Deal. Regardless, it's exhausting, and I'm concerned it's exhausting investors.

Greenland, Denmark, and a New Kind of Leverage

The Trump negotiation tactic of kicking the hornet's nest to sell head nets is driving the Europeans to the brink. Unfortunately for the Europeans, beyond norms and precedent, they don't seem to have a lot of negotiating leverage — but they do have something in their back pockets which could spook financial markets. The Europeans are the U.S. Federal government's largest foreign creditors, and America owes them collectively a lot of money.

This week the Danes threw a shot across the bow when it was announced a large Danish pension fund would divest itself of its entire portfolio of U.S. government bonds. The $100 million position in U.S. Treasuries, while not significant in a $38 trillion pool of Treasury debt, is more significant from a messaging standpoint — which led to a new lexicon hitting the public: capital wars.

Capital Wars: A New and Dangerous Concept

Economic pundits have been postulating about the prospects of capital wars for some time. In the highly integrated global financial system, when so much of U.S. debt is owned internationally by rivals and allies alike, the management of this debt could become a tool of geopolitical influence. This is the only incident I recall of the selling of U.S. Treasury holdings being timed with political dissent. With this seal being broken, I'm concerned it may not be the last.

There are many underlying reasons why weaponizing financial holdings is counterproductive, and in my opinion large-scale capital battles over U.S. Treasury securities is unlikely. But it would be naive to think this type of rhetoric doesn't have the capacity to roil markets — and this week as I write this column, markets are roiling. We can only hope cooler heads prevail.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Fed Drama Heralds an Eventful 2026

Sun, 18 Jan 2026 08:00:00 GMT

I have a distinct memory from my time as a high school student. It was my first Econ class — I think I was a junior. I had never taken an Econ class before, wasn't even sure what the subject was, but it was something new, so I was interested.

It may have been the first class — certainly early in the semester — when the teacher asked, "What happens to the price of things over time?" I raised my hand: "Things get cheaper over time." The teacher smiled and asked a follow-up: "Why do you think prices on goods go down?" I responded, "Because as more people buy something, the companies that make it get better at making it and prices go down." The answer seemed logical. It was, of course, not correct. Hence began the lesson on inflation.

The Persistent History of Monetary Control

While the powers that be have evolved and changed over the centuries, one trend has persisted: whoever holds power in any given economic or political system tends to seek control over the monetary system — and once that control is established, it has historically been mismanaged, sometimes to the point of systemic collapse. The history of this phenomenon, outlined well in the book "Insidious" by Orrin Woodward, is well documented. Governments, whether warlords, monarchs, ruling councils, or democratically elected politicians, seek to control the system of money. Once control is established, the agendas of governments — whether expanding empire or expanding social welfare — are rarely patient enough to be inherently sustainable, and individuals within those societies pay the price through inflation.

When our own nation was formed, the founders were aware of this history. Despite founding a government based on precepts of individual liberty, early political leaders also sought control over currency and monetary policy. The process of centralizing monetary control in the new Federal government is the story behind the music and performances in the play "Hamilton." Control over money is inherent to government itself.

The Federal Reserve at a Crossroads

"Hamilton" details the political drama behind the formation of the first central bank in the United States. Our modern Federal Reserve Bank is the nation's third iteration of this concept. In the creation of the "Fed," implemented in 1913 during a period of progressive political evolution, the government took a new approach — looking to experts to manage the currency and monetary system, acting independently of politicians based on economic academic theory, in the public's best interest.

While previous attempts at creating a central or national bank persisted only about 20 years each, the system of the Fed has proved much more durable. Now over 100 years old, the Fed has assumed a critical role in financial markets and banking. Despite the Heritage Foundation's finding that the U.S. dollar has lost 97% of its purchasing power during the Fed's tenure, the Fed is considered an effective and critical component of modern finance by most academics and investors alike.

Donald Trump, however, does not necessarily agree. When I look at the philosophy of the Trump administration, the most consistent trend I see is an inherent distrust of institutions vested with control over American life — whether academic, bureaucratic, political, or economic. The Fed is no exception.

What Lower Rates Could Mean for Markets

To be candid, the Federal government does have a serious issue not created solely during Trump's time in office. With a national debt at $38 trillion and a need to refinance or borrow an estimated $11 trillion in 2026, the government needs lower interest rates to save hundreds of billions in interest costs. The Fed controls this lever. In typical Trump fashion, the intention for lower interest rates has not been subtle. This week, the pressure ratcheted up with some high-profile aggressive legal tactics directed at the Fed's Board Chair. In May, the Fed Board charged with interest rate policy is likely to become more directly influenced by the President as Board members turn over. While the future of the Fed itself appears uncertain to me, the future of short-term interest rates does not.

Continued public drama between the President and the Fed has the capacity to spook financial markets, but lower short-term rates will have an impact as well. I don't think 2026 is going to be anything close to boring.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

New Tax Rules Offer Opportunities to Save

Sun, 11 Jan 2026 08:00:00 GMT

As we head into 2026, the provisions from the Big Beautiful Bill are being phased in. While some components from this new law did start mid-year in 2025, all are in place for 2026, and several of the tax breaks are temporary.

It seems anything associated with President Trump causes contention, and this topic is no exception. But allow me to cut through the noise. The tax provisions associated with this new law are creating an exceptional tax environment for middle-income taxpayers, specifically for middle-income retirees and middle-income families with children. For purposes of this discussion, middle income refers to households with income from $80,000 to $250,000. There are also provisions in this law creating a favorable tax environment for small businesses.

The Most Favorable Tax Environment in My Career

After digging into these new tax rules, I can say without reservation this is the most favorable Federal income tax environment I have experienced in my career stretching back to 1993. Deductions are larger, tax brackets are flatter, and tax credits are more generous. With a little bit of creativity, the current tax situation invites planning — and because much of the bill is temporary, each year the law is in effect can be used to position taxpayers for potential future tax changes, if and when they eventually come.

While no one likes paying taxes, there are times when favorable tax laws incentivize planning that may result in choosing to pay tax now in order to save future taxes later. This looks to be one of those times. Standard deductions and tax bracket thresholds have all been increased for 2026.

What the Numbers Look Like for Working Families

With this in mind, using some tax modeling software, a working family with spouses filing jointly can stay in the 12% bracket with income up to $133,000. When deductions for dependents are considered (assuming two children), the effective Federal income tax rate for the family is under 9%. Even after considering Social Security and Medicare taxes, as well as Indiana state income taxes, the total effective tax rate for a family at this income level is below 20%.

This modeling ends up even better for a retired couple over the age of 65 receiving a similar amount of income from a combination of Social Security and IRA withdrawals. If we assume our retired couple is receiving $50,000 from Social Security, they can recognize up to an additional $105,000 in IRA and/or interest income and remain in the 12% tax bracket, paying a total effective rate under 10%. This is unprecedented during my career.

Capital Gains: A Rare Planning Window

While the Big Beautiful Bill did not specifically alter capital gains tax rates, it did expand the brackets used in the context of tax treatment of capital gains. If our retired couple over the age of 65 elects to fund their retirement income needs through a combination of $50,000 in Social Security combined with realized long-term capital gains, the couple can realize up to $96,700 in long-term gains without triggering any capital gains taxes. Under this scenario, the effective tax rate, including both Federal and Indiana income taxes, models at under 3%. Truly a window of planning opportunity.

It's important to note that while my firm obviously considers taxes in the planning we provide, we do not offer tax advice or tax preparation. We prefer to work with clients' tax professionals and outside experts to formulate and implement tax planning strategies. In my opinion, the planning window is open and will remain so for three more years under these new tax rules. Now is the time to put pencil to paper and see just how this favorable tax environment can be harnessed to help save taxes now and in the future.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Fed's action could drive financial market discussion in 2026

Sun, 21 Dec 2025 08:00:00 GMT

It was early summer 2020. I would be turning 50 later in July. My brother and business partner Mario suggested I try out his mountain bike on the trails behind my house. He thought I might like it and maybe get one for my birthday.

"We tried that sport back in the '90s -- those bikes almost killed both of us. Why would I want to go back to that insanity?" was my response. "The equipment has come a super long way. These modern bikes are full of amazing technology and are nothing like those crazy bikes we used to ride. Just give it a try," was his response.

I tried the bike. Three weeks later I owned my own. Now, five years later, I've traveled the country with my mountain biking buddies, riding trail systems and lines of descent I would have never thought doable just a few years ago. Am I a great mountain biker? Absolutely not. I intend to spend the next couple decades becoming better -- advancement is in our nature as human beings, and I plan on advancing my mountain biking.

Collectively, we human beings tend to take the extreme and make it mundane over time. The first satellite launch changed the world; now we launch 300 a year. The same applies to economics and markets, and an important example of this trend may be occurring as we speak.

By now, most Americans understand the Federal Reserve Bank (the U.S. Central Bank) is able to create new money -- yes, out of thin air. This new money can be supply-and-demand driven, as a response to bank lending and consumer spending, and it can be policy driven in response to economic and market conditions as determined by Fed policy makers.

This policy-driven new money creation is called Quantitative Easing (QE) -- a complicated term used to describe a straightforward concept. When the Fed does quantitative easing, it creates new money and then injects the money into the economy by way of the bond market. It does this by using newly created money to buy certain types of bonds, and when the Fed is conducting or planning to conduct this type of activity, it announces it through policy statements and press briefings.

Last week the Fed announced the restarting of quantitative easing, only this time the central bank called it "Reserve Management Purchases" -- probably because they love using Fed-speak to appear transparent while sounding opaque, but we are on to them at this point.

Make no mistake: Reserve Management Purchases is quantitative easing, and the Fed plans to expand the money supply by $40 billion a month and use this new money to purchase U.S. Treasury bills and notes, essentially printing new money to loan it to the Federal government. For column purposes, let's assume the primary focus of this policy is to support liquidity in the short-term U.S. Treasury bill market, which has to be refinanced in 2026 to the tune of $9 trillion.

Previous bouts of quantitative easing policy in 2008 to 2014 and 2020 to 2022 were generally supportive of "risk assets" -- a fancy way to say stock prices. During those QE periods the S&P 500 Index rose significantly. Now there were plenty of extraneous factors during both prior periods and I use these observations only to make a point: expanding the money supply tends to correspond with rising asset prices.

Which brings us back to the mountain biking. Five years ago I had no interest in this crazy sport; now I perch at the edge of Black Diamond descents not thinking "if," but only "which line" to take. Is it not reasonable to think markets may react similarly to this next quantitative easing period? Like adrenaline junkies of any stripe, having been to the QE trails before, investors just may not be that impressed with this next round.

Unfortunately, rising asset prices aren't the only trends which tend to correspond with expanding the money supply. Consumer price inflation has also been a by-product, and I can envision a scenario where indifferent investors leads to stagnation on Wall Street while at the same time inflation in the U.S. reaccelerates, causing pain on Main Street -- a double whammy.

I expect this trend to drive much of the financial market discussion going into 2026. Previous QE journeys aside, I'm just not sure where this new trail will take us.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Expect Boomers to disrupt elder care

Sun, 14 Dec 2025 08:00:00 GMT

I've spent my entire career providing advice, investment management and financial services to the Baby Boomer generation. While not a Boomer myself, the entry point of my career in 1993 seems to have been perfectly timed to serve this largest-ever generation, and for me, the Boomers have provided the perfect foundation for me to develop and refine my planning and advice skills. Unlike those pesky Millennials who like to tease our Boomer friends, the Boomers have been my most trusted clients and friends for decades (OK, sometimes I tease the Boomers too).

The Boomers have approached life in a unique way from the moment they emerged on this earth. In my experience, this generation born between 1946 and 1965 is skeptical and innovative and has been disruptive in every stage of life. As the first Boomers began entering retirement roughly 15 years ago, they of course changed the nature of retirement as well -- retiring on unpredictable schedules, remaining growth-oriented investors into retirement, sometimes returning to work after "retirement" and spending their 60s with epic travel, new homes and in typical Boomer style, spending money like they have it (and they do).

I expect my observed core Boomer culture characteristics of questioning and disruption to follow them into the aging process as well. With the oldest Boomers now almost 80, I am having more and more conversations in my practice about long-term care planning, and the advice we are providing in this area has a distinctly Boomer flavor.

Previous iterations of long-term care planning centered around asset preservation strategies, with a focus on sheltering family assets from being spent on "nursing home" costs and qualifying individuals for public long-term care benefits. Families perceived the nursing home as "taking" all their assets and leaving them broke, and in an attempt to address this unpleasant perception, families would put planning in place to pre-emptively make themselves "broke" in order to qualify for government benefits.

Prior iterations of long-term care planning also had the benefit of long-term care insurance. Unfortunately, these products were poorly designed and underwritten and most insurance companies have exited this market or positioned their remaining products as extremely unattractive. Even existing long-term care insurance policies have not functioned as originally presented, and have across the board increased premiums dramatically or in many cases reduced benefits over time.

Bring on the Boomers. Just as the Boomers have disrupted every other aspect of society as they moved through it, I expect them to disrupt aging and elder care. While members of the generation before them were more likely to have ample retirement income derived from pensions but perhaps limited liquid assets, the Boomers came of age during the era of the 401(k) and tend to have less pension-based retirement income but more in the way of retirement assets in the form of liquid investments.

In addition, while the security-focused generation before them may have stored most of their liquidity in slowly appreciating savings accounts and CDs, the Boomers tend to store their liquidity inside retirement accounts invested for growth. So going into their elder years, Boomers may have less structural retirement income to be used for care needs, but they also tend to have much more liquidity -- and liquidity means flexibility.

These structural financial changes are having distinct implications for the way Boomers think about long-term care planning as well. Instead of a focus on asset preservation and accessing the security of government benefit programs, the Boomers in my practice are intensely focused on preserving choice and independence as they age.

In response, elder care models and even public benefits programs are evolving. The availability of home-based care, the emergence of lifestyle-focused senior support communities and the expanded services provided by assisted living centers have changed the way Boomers view aging. Less frequently are the Boomers I work with perceiving elder care simply as nursing homes "taking their money" -- more often they view aging as another lifestyle change to be met on their terms, through an experience they seek to control. And they are willing to use their assets to maintain this control.

Like most topics in the column, the earlier this type of planning discussion is conducted, the more options we can develop to address each family's unique concerns. With the Boomers just now entering their octogenarian years, I expect many disruptions ahead for elder care, but one trend I do not expect to change is the Boomer culture of independence and disruption following them into this unique stage of life.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Health insurance planning critical for early retirees

Tue, 02 Dec 2025 08:00:00 GMT

We are in the middle of what is termed the open enrollment period for government health insurance plans. This program, called the Affordable Care Act or ACA (often referred to as Obamacare), is now 12 years old. While my experience is that consumers have for the most part settled into using the government's insurance marketplace, I still find this time of year to be stressful for current plan users as they discover their premium adjustments -- and especially stressful for those using the marketplace for the first time.

A key component of the ACA program involves Federal premium subsidies, which are critical to this program. As we get into discussing the premium subsidy system, let me state two qualifications. First, my primary focus on this type of planning involves strategies for early retirees -- those between ages 59 and 65 -- requiring health coverage but not having access to employer-based retiree options or Medicare. Second, I don't make the rules, I just know how to use them, so don't shoot the messenger. I'm just here to solve problems.

Without government premium subsidies, 12 years into this program, my observation is that premium costs have now become nearly unaffordable for most Americans, making subsidies extra critical for early retirees. Subsidies are "baked in" to the plan premium program, which means the government subsidizes premiums by paying insurance companies directly, and insured families pay the net subsidized premium monthly.

Subsidy amounts are based on household income in relation to what is called the Federal Poverty Level (FPL). For 2026, the Federal poverty level for a household of two is $21,160. The ACA subsidizes health premiums for households with up to four times the FPL -- which means a two-person household with income up to $84,640 is eligible for a premium subsidy.

How important is the subsidy? As an example, the unsubsidized premium for an ACA silver plan for a 60-year-old household of two averages about $2,600 a month for 2026. But if this household has income less than $84,640, the subsidy caps household premium costs at 9.5% of household income -- or about $670 a month. The subsidy is that important.

So where does the planning come in? One of the primary focal points for the enrollment process on healthcare.gov is reporting expected income for 2026. But in the eyes of the ACA, not all sources of income are treated equally.

Let's use a hypothetical retired household of two, age 62. The family has $100,000 in bank CDs, $250,000 in Roth IRAs, and $750,000 in pre-tax IRAs or 401(k)s. Both spouses have elected to claim Social Security and collect $3,200 in monthly benefits. The family needs $7,500 in after-tax monthly cash flow to make retirement work.

Social Security and interest on CDs both count as income, so at least $42,400 must be reported. The question is: what accounts does the family use for the remaining retirement income need? IRA or 401(k) withdrawals also count as income, so if these accounts are used the subsidy is at risk. But Roth IRA withdrawals and spending of savings are not countable in the ACA premium subsidy calculation. So we might suggest a combination of Roth IRA withdrawals -- say $23,000 -- and savings withdrawals of $20,000 for the three years before Medicare eligibility. This will likely cause these accounts to "spend down" a bit, but not using the IRA/401(k) and allowing it to grow should offset the spend-down, and receiving the premium subsidy is a game changer.

With properly structured retirement cash flow, the household could report $42,400 in expected 2026 income, capping silver plan premiums at 7.7% of income -- or about $276 a month. Yes, in this scenario we have millionaires receiving huge premium subsidies, but like I said, I don't make the rules.

This program is a critical planning topic for pre-retirees not yet using it as well. For those in their early to mid-50s desiring to retire before age 65, understanding these rules early could impact decisions such as Roth 401(k) elections, Roth conversions and how to invest savings. This topic is crazy complicated, but with the right team and the right advice, understanding the ACA may make the goal of early retirement more feasible for many families.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Remember what's important at Thanksgiving time

Sun, 30 Nov 2025 08:00:00 GMT

My wife's cousin is a professional musician, the type of musician playing in classical symphony orchestras. She is a talented professional and lovely woman -- also a great mom. She married John, a well-educated scientist and professional academic.

The extended family would host bi-annual family reunions in the summer at a local Cincinnati park. The cousin and her family lived about five hours away; they would usually come. I enjoyed talking to John -- he is educated on advanced scientific theories such as dark matter, wormholes and other emerging topics in physics. He also knows a lot about sports.

Almost the entire family on my wife's side are conservative Republicans. Most feel very strongly about pro-life issues and border security. John is not. John is an extremely well-informed and passionate progressive -- the type of guy who pens long and provocative essays on Facebook. Over time John was christened by the family as "liberal John."

A predictable pattern began to emerge at our bi-annual family reunions. We would grill Cincinnati specialty sausages, drink beer, play corn hole, throw the football and feast on dozens of creamy side dishes, finishing the gluttony with creative desserts made of Jello and Cool Whip. The kids would run wild playing wiffle ball and sometimes setting up the "wet banana" slip and slide.

Then late in the afternoon, the ladies would start packing up the food, the corn hole champion would be declared, and the kids would wear out. The personal catch-up conversations would be complete, the sports predictions in the bag, and someone would do it. Someone would poke the bear.

Sometimes it was a conservative family member, sometimes it was John himself. Someone would poke the political bear, and the spiral out of control would unfold. Within short order yelling, sweating and cussing would ensue. My father-in-law's face once turned so red I worried he was having a health incident. For hours it would go on; the ladies would leave us at the park. No one listened, no one was persuaded -- it was nothing but fighting for fighting's sake. No issue would be solved. About eight years ago, John showed up wearing a t-shirt with a meme print comparing his brain (big) to our brains (a small dot). What could go wrong? It did.

Now, eight years later, many of the kids are grown with careers and in some cases kids of their own. We haven't had a reunion since. I miss seeing the extended family. I would like to know the adults the kids have grown into. I would like an update on black holes and dark matter and all the other non-political topics we would talk about.

This column will be printed a couple days after my favorite holiday. Thanksgiving is a time for families to gather, feast, watch football and enjoy being together. In this charged political environment I am going to guess the conversation at some Thanksgiving dinners went into the dangerous realm of politics. I am also going to guess some of these conversations went bad, and some families ended the holiday hurt and angry. And for what?

The red team, blue team divide in this country has the capacity to destroy families. Life is not a binary choice -- reality is nuanced, and we have allowed ourselves as a nation to be tricked into choosing teams which are themselves a false dichotomy.

It's OK to be deeply troubled by a complete lack of border controls and immigration enforcement AND be deeply troubled by overly aggressive immigration enforcement causing families to live in fear. It's OK to strive for no more abortions ever again AND feel strongly the State may not be the best tool to achieve this goal.

Somehow, we have been tricked into perceiving the government -- especially the federal government -- as the manifestation of our society and culture itself. It is not. The government and the red team/blue team sham choice is not our culture and society. "We" are our culture and society. Our families, our love for each other and our time together will matter more in the end than any debate in which no one listened and no one was persuaded.

If the holiday conversation went sideways, it is only a few days in the past. There's time to mend fences before the hard feelings fester for too long. Pick up the phone, make a call, send a text.

Happy Thanksgiving.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

A critical tool for family members with disabilities

Sun, 23 Nov 2025 08:00:00 GMT

Financial and estate planning for families who include an individual with a disability presents some unique challenges and an understanding of a variety of legal concerns, public support programs and financial considerations. This combination of specialized interests can often be intimidating and stressful for families and caregivers already managing a variety of unique medical, educational, health and mobility needs for their loved one.

My youngest son Ethan has Down Syndrome. When Ethan was born to our family in 2009, not only did this event lead my parenthood journey on a unique new adventure, but my wealth management career was also set down a path of learning about the specialized type of planning for families like mine -- first to do the best possible personal planning, and ultimately as my expertise in this subject matter expanded, to help client families and others in the community needing guidance.

With the experience gained over the past 16 years, I have come to not only understand the complicated technical aspects of planning for the future of a family member with a disability, but also -- perhaps more importantly -- the more emotional and personal components of this planning journey.

I think I can safely say there is not a parent of a child with a cognitive, emotional or physical disability who hasn't at some point laid awake at 3:00 a.m., staring at the ceiling, wondering in the most stressful fashion possible what would happen to their loved one if they were no longer around to provide the care and support required.

Recently Ethan brought home some interesting worksheets from high school. The worksheets, called the IEP transition plan, were provided by the State of Indiana to help us talk to Ethan about his vision and goals for the future. I was intrigued by the concept and curious to see how the discussion would go. Candidly, a little bit to my surprise, Ethan had many ideas about his future and had clearly been observing the life progression of his older siblings. This enjoyable and amusing conversation helped me focus my own thoughts and reinforced the reality that in my own planning, I needed to address not only my wife and my future security, but also perhaps the lifetime needs of Ethan as he pursues his vision for an independent adulthood.

Having worked with hundreds of families on their financial planning and wealth management, I understand how American families accumulate wealth for the long term. The typical family will hold a material amount of their balance sheet wealth and liquidity in tax-advantaged retirement plans such as 401(k)s and IRAs.

One of the technical challenges for families like mine is that naming a child with a disability as the beneficiary of a tax-advantaged retirement plan was not considered an ideal solution, as doing so could create taxable income impacting eligibility for public support programs, as well as inadvertently require investment and financial decision-making exceeding the loved one's reasonable abilities. So, even though parents may be planning for the long-term needs of a child whose lifetime could exceed their own by decades, with much of their personal wealth held in accounts which may not be well suited for this purpose, other solutions had to be developed.

Fortunately, with the help and hard work of family advocacy groups, this challenge was addressed with the Secure Act 2.0, enacted in 2023. This important legislation enabled a properly structured supplemental needs trust (SNT) for the benefit of an individual with a disability to be named as an Eligible Designated Beneficiary (EDB) of a retirement account. The classification as an EDB allows the supplemental needs trust to stretch income payments from the inherited retirement account over the lifetime of the individual with a disability, instead of the 10-year requirement for non-EDB beneficiaries.

In addition, critically, the legislation enables a properly drafted SNT to supplement an individual's care and lifestyle needs without jeopardizing eligibility for public support programs. The SNT also positions a trustee to support the ultimate beneficiary in the income management and investment strategy of the inherited retirement account -- solving the concerns over decision-making.

While positioning an SNT as the beneficiary of a tax-advantaged retirement account can solve several potential challenges, the planning process is technical and involves a number of other decisions which need to be worked through. Families needing this type of planning are encouraged to work with legal and financial planners experienced in this area. This is not the realm of web-based legal services and online trading apps. Doing this work with the right team is critical, and just might help when that 3:00 a.m. wakeup call we would all rather sleep through arrives.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

November means holidays ... and RMDs

Sun, 16 Nov 2025 08:00:00 GMT

November in our office is about more than just turkey and pie time -- November is also Required Minimum Distribution (RMD) season. With nearly 25,000 accounts in the firm, we process a lot of RMDs, and my good friend Bob suggested a column on the topic.

A Required Minimum Distribution is the annual IRS requirement to withdraw a certain amount from any tax-preferred retirement plan. These types of plans include IRAs, 401(k)s, 403(b)s, 457(b)s, SEP, SIMPLE, profit-sharing plans and TSP (Federal employees). A decent rule of thumb is: if you contributed to the plan on a pre-tax basis, it likely requires an RMD.

RMDs begin in the year the account owner attains the age of 73, unless you were born in 1960 or after -- then the RMD will begin at age 75, a rule that takes effect in 2033. These mandatory distributions used to begin at age 70½, then 72, but at this point everyone currently subject to this rule begins RMDs at age 73.

The amount required to be distributed is determined using an IRS life expectancy table and dividing the December 31 prior-year value of the account by a number representing the government's estimate of the owner's remaining life expectancy. I won't bore you with the calculation -- there are many easy-to-use calculators online -- but when I talk about the topic with clients, I generally estimate a beginning RMD at about 4% of an IRA's value, which is usually sufficient for conversation purposes.

While many of the folks we work with were originally pleased to be able to defer RMDs until age 73, with a few strong years of market performance and simply three more years to accumulate, we are finding RMDs becoming larger and therefore requiring more attention and planning.

The good news on RMDs is that with the passage of the One Big Beautiful Bill, the current tax environment is now the most favorable for retirees I've experienced in my career. As part of the effort to reduce taxes for those over 65, in tax years 2025 to 2028 married taxpayers will benefit from total tax deductions of up to $46,700, and single taxpayers up to $23,350.

In addition, tax brackets were restructured, and for a couple with total income of $100,000 -- with $50,000 coming from Social Security and $50,000 from pensions or retirement plans -- the average Federal tax rate can fall into the 4% range, with Indiana adding around 1.5%. In my opinion these favorable and temporary tax rules may provide a planning window to help manage future RMDs and avoid some of the other challenges that result from the additional income created by RMDs.

These challenges tend to be related to higher tax brackets and phased-out deductions from larger RMDs, and the potential to push a retiree -- especially a single retiree -- over the income threshold that causes Medicare Part B premiums to increase due to IRMAA (Income-Related Monthly Adjustment Amount) rules.

There are a couple tools available to help manage current and future RMDs. The primary tools are Roth IRA conversions and Qualified Charitable Distributions, but by far the most valuable tools are awareness and time.

Roth IRAs do not require RMDs, but the process of converting a Traditional IRA to a Roth IRA is taxable. Considering the favorable tax rules in place for the next few years, and given enough time to spread out the income from conversion, sometimes choosing to pay taxes before you have to means paying less in total over time. If we can have a conversation about an incremental Roth IRA conversion strategy between the ages of 65 and 71, future RMDs may be greatly reduced or even eliminated -- enabling more tax control for those who have reached RMD age.

For those currently subject to RMDs where the distribution is having negative tax and Medicare premium consequences, consider the Qualified Charitable Distribution (QCD). The QCD enables those subject to RMDs to give part or all of their RMD to a qualifying charitable organization (up to $105,000 in 2025) and not have that amount included in taxable income. For those attempting to gain control over their RMD situation, the QCD can be a powerful solution.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Thinking differently about how we store capital

Sun, 09 Nov 2025 08:00:00 GMT

There's an investment thesis gaining notoriety online and even on traditional media based on a concept we have been talking about in the column for some time. I, however, was not clever enough to give the "trade" a name, but JP Morgan coined an apt phrase for this idea earlier this year. The concept is now being called "the debasement trade."

I will take the term "debasement trade" and expand it into a broader context I have been exploring -- one I call "fiat debasement." Fiat debasement is the notion that the governments of the world, primarily the U.S., the European Union, Japan, China, Brazil and even Australia have, through poor governance, deficit spending, corruption and general incompetence, mismanaged their respective fiscal houses to a point where the various fiat currencies issued by their central banks are being debased.

When we say "debased," the term is being used to describe a general loss in the value and appeal of using fiat currency to store capital. As economic actors in the U.S. economy, we primarily perceive this debasement as the price for goods and services going up -- which we of course refer to as inflation. We all know the U.S. economy has been plagued by a more rapid inflation since 2021, and longer-term grinding inflation going back decades. Whether we like it or not, the inflation occurs under both political parties, so this isn't a red team, blue team thing, and blaming the other party is not going to help anyone address this persistent trend. So let's dig in.

What is the debasement trend? The viability of any currency is based on a couple key features which must be agreed upon by its users. First and foremost, the currency must serve as a medium of exchange -- people using it must be willing to trade labor, goods and services for it in the context of a voluntary transaction. I work for you, you pay me in dollars, I take those dollars and buy stuff. This is how our economy works, and I don't see this changing in my lifetime.

Moving on, the currency must also serve as a unit of account. When we talk about the value of assets in America, the conversation is based on the dollar value of those assets. No one values homes or cars in gold, or beanie babies, or even cryptocurrency (sorry, crypto disciples). This unit of account feature of fiat currency requires us to count our wealth in the units we call dollars. I also don't see this changing anytime soon.

The third critical feature, however, is that the currency should serve as a store of value -- and this is where the debasement theory comes into play. We already know money left in a non-interest-bearing state (like cash in the mattress) will lose purchasing power over time due to inflation. The debasement theory goes beyond the concept of simply losing purchasing power. Debasement posits that capital stored in fiat currency will also lose actual asset value, particularly in the context of other potential assets the capital could be stored in -- such as real estate, gold, some cryptocurrency and stocks. Said simply, under debasement theory these other assets may appear to go up in value over time, not because of fundamental supply and demand forces, but simply because we are valuing them in fiat currency which is actually losing its ability to store value.

I know this is complicated for a Sunday morning, but it's important. Fiat debasement requires people to think differently about how capital is stored, without thinking differently about the way the currency is earned and spent.

Debasement now acknowledges governments cannot be expected to reform. It also acknowledges the only fiat currency more poorly perceived than the U.S. dollar is just about every other fiat currency in the world, so the topic of the dollar losing reserve status becomes only marginally relevant if the dollar remains the best of the worst world fiat options.

When we dispense with the apocalyptic drama so often surrounding currency discussions, and simply realize we all need dollars to survive -- and this is not going to change -- but at the same time will only become less wealthy and secure over time if we decide to hoard excess capital in dollars instead of storing them in assets over time, a productive framework begins to emerge.

While debasement does not dispense with the need to balance short-term and long-term money needs, and account for personal needs for liquidity and tolerance for financial market volatility, it does require we think differently about how we store our capital. It also helps explain many of the asset value trends that have occurred over the past decade.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Planning challenges for surviving spouses, part 2

Mon, 03 Nov 2025 08:00:00 GMT

Last week we began a discussion about the financial challenges faced by a surviving spouse after the death of a husband or wife. The first tip was no big changes or decisions right away; the second was to plan early for the loss of income due to reduced Social Security benefits after the passing of a spouse. Unfortunately, the issues related to Federal benefits rules aren't confined to Social Security.

The next challenge can come in the form of increased costs related to Medicare premiums.

A feature of Medicare more and more Americans are discovering is that the premium amount charged to beneficiaries is impacted by household income. In an adjustment process termed IRMAA (Income Related Monthly Adjustment Amount), when certain household income thresholds are crossed the amount of Medicare Part B premiums charged against Social Security benefits are increased.

For married couples filing a joint return, the first income threshold in 2025 is $212,000 of household income derived from a calculation termed MAGI (Modified Adjusted Gross Income). In my experience this threshold is high enough that with a little planning this increased premium can often be avoided.

The bigger challenge comes when a spouse passes and the surviving spouse is no longer filing a joint tax return. When this occurs, the income threshold drops from $212,000 to $106,000 -- a level much easier to cross over.

Using some assumptions, consider a surviving spouse aged 79 with $30,000 in Social Security income, a pension of $30,000, a CD earning $4,000 in interest, $100,000 in stocks paying $3,000 in dividends and an IRA valued at $700,000 requiring a Required Minimum Distribution of $32,000. That household is knocking on the door of a Medicare premium increase. After already seeing household Social Security reduced by $1,500 a month, our widow may also experience a Medicare premium increase -- a double whammy, especially if she tries to distribute more from her IRA to make up for the lost income.

Once again, the potential solution for this challenge is awareness and planning. While the calculation of household income used for Medicare purposes (MAGI) includes 100% of Social Security payments and sources like tax-free bond interest, and is not reduced for itemized deductions such as charitable giving, one critical source of potential income which is not considered in the MAGI calculation is distributions from Roth IRA accounts.

Joining last week's column and this week's: a couple understanding the potential income and cost risks associated with a spouse passing away might want to consider converting some balances held in traditional taxable IRAs to a tax-free Roth IRA earlier in their retirement -- in effect putting the Roth IRA "aside" as a possible solution to this statistically likely future issue.

While the act of converting IRA balances to a Roth IRA is taxable in the year the conversion is completed, the current tax environment is, in my opinion, very favorable to retirees. The potential benefit of decades of tax-free growth and tax-free future income which does not impact Medicare premiums may provide a long-term solution that addresses multiple future planning challenges.

Finally, estate property rules between spouses are very straightforward in the state of Indiana. Most property transfers between a deceased and surviving spouse can be managed with properly titled accounts and property deeds. In addition, IRS rules regarding IRAs and Roth IRAs make the process of moving assets from a deceased spouse's IRA to a surviving spouse simple and tax efficient. Once assets are transferred to the surviving spouse, however, complications can apply when planning transfer to non-spouse heirs.

So while in my practice we tend to focus on income and cost planning for the surviving spouse first, when the surviving spouse is emotionally ready a discussion of estate planning often becomes relevant, and at this point we often collaborate with other professionals to help update planning documents and decision-making processes.

The loss of a spouse is perhaps the most impactful event many of us will endure. With some honest conversation, foresight and planning, families can prepare for this eventuality with confidence -- but like so many other areas in life, the sooner this type of planning is addressed, the more tools are available to help couples take care of each other when this heartbreaking but inevitable event eventually occurs.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Planning challenges for surviving spouses, part 1

Sun, 26 Oct 2025 08:00:00 GMT

This topic comes to us from my dear friend Lee -- I always appreciate ideas for the column. Lee suggested we discuss some of the planning challenges experienced by surviving spouses after the death of a husband or wife. This is an important topic and will require two weeks of columns to address.

This is a subject we deal with regularly in my practice and there are some common threads, beyond the grief and emotional facets of this type of loss, presenting financial planning issues needing to be addressed.

The first lesson I discovered some time ago is that after the loss of a spouse, the most appropriate professional approach for my team to employ when helping a newly widowed spouse is simply patience. Grief is an incredibly powerful force, impacting each of us differently, both inwardly and outwardly. For some in my observation, grief speeds up perceptions of time; for others grief can slow time to a seeming halt. As a planner, my first response to this type of tragedy is to simply slow down.

We attempt to counsel no big decisions, financial or otherwise, right away. Yes, when someone passes, certain "housekeeping" tasks need to be completed, but these tasks don't necessarily require immediate material changes.

With time, however, after the cloud of grief becomes less opaque, some decisions will likely be necessary. For purposes of this discussion, we will use a frame of reference of an older couple, already retired, using standard mortality ages of 79 for a male and 86 for a female in the United States. We will also assume an average age difference between spouses of 2.5 years, with the male being older -- which is also statistically consistent in the U.S.

Using these statistical guidelines indicates a surviving widow can expect to survive her husband by 8.5 years -- not an insignificant period. The primary challenge typically needing to be addressed first is a reduction in household income.

According to the Social Security Administration, Social Security provides roughly 50% of household retirement income. The amount of Social Security benefit received by retirees is based on an individual's earnings history during their working years. In addition, spouses married for at least one year are eligible for a spousal benefit based on the earnings history of the higher-earning spouse -- up to 50% of the earned benefit of the higher-earning spouse. If both spouses earned sufficiently to qualify for Social Security benefits of their own, the benefit amount will be the higher of the spousal benefit or the earned benefit of the spouse with the lower earnings record.

The ultimate benefit amount paid by Social Security is impacted by the age benefits are claimed and can become quite confusing. What is not confusing: when a spouse passes away, the surviving spouse will move to the higher of the two household benefit amounts, which means one of the income benefits will cease.

In my experience, this change in benefits typically reduces household income by 20% to 40% and can leave a large hole in household operating budgets which often exceeds the amount of household cost reduction associated with the deceased spouse.

The first step in planning for this scenario is awareness. Using experience and some reasonable planning assumptions, a value can be put on the income risk associated with mortality. The average Social Security spousal benefit is about $1,000, while the average Social Security earned benefit is about $2,000. So, for planning purposes we will assume our planning household will experience an income reduction of $1,500 a month at the death of the first spouse.

Using simplified math, we can project the total cost of this reduction for the surviving spouse over 8.5 years at $18,000 a year -- totaling $153,000. Apply a 4% present value calculation for a couple entering retirement at age 65 and the math says roughly $90,000 of "retirement age" value is needed to address this risk.

I am not saying $90,000 has to be sequestered away for this purpose, nor am I suggesting life insurance in most situations. What I am saying is that retirement planning and spending scenarios can be structured to preserve the likelihood of this amount being available to provide for the surviving spouse later in life. But in order to do so, the concept must be understood and addressed -- and the earlier the better. Next week we will continue this conversation.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

'The tokenization of everything'

Sun, 19 Oct 2025 08:00:00 GMT

An investor buys a stock and hopes it goes up, maybe even collecting a dividend payment along the way. It's a process investors have taken for granted for decades, and the process of buying and selling stocks, mutual funds or ETFs is practically seamless. But what really happens under the surface when these types of transactions occur?

What actually happens under the surface is, in my opinion, nothing short of a wonder of modern finance and technology.

Every investor accesses this process using a broker/dealer firm. The investor's broker/dealer firm enters the order on behalf of the investor, then the order routes to an exchange or market maker in the desired stock. On the other side of the exchange is another investor who desires to execute the opposite side of the transaction through their own broker/dealer firm. The trade flows through the exchange, matches up with the counter party and executes. Then the buying investor's account at the broker/dealer is debited, and the funds to pay for the stock are transmitted to the selling investor's firm, who then credits it to the investor's account as it delivers the stock purchased. As the trade is settled, a separate transfer agent records the change in ownership so dividends can be credited properly, and the trade is settled and complete. This all happens perceptibly instantaneously and the whole process takes one day. In many ways a wonder of the modern world. But what if it could be improved?

Some of the titans of modern finance believe it can be, through a technological process called tokenization. Now, if you want to melt your brain on a fine fall Sunday morning, take a deep dive into tokenization. I would prefer not to and will attempt to simplify this conversation so we can actually appreciate it.

Tokenization is a process built upon the same technology used to create and trade cryptocurrency called blockchain. Blockchain is a technology-based, detailed, secure and verifiable record of transactions and ownership called a distributed ledger. Financial firms are anticipating and working toward adopting blockchain technology into the investment trading process, which they believe will bring efficiency and security benefits to financial market mechanics and trade settlement. There is enough buzz and momentum in this conversation to tell me it is likely to happen in the not-too-distant future. I'm unsure how individual investors will perceive this change as it occurs -- kind of like installing upgraded plumbing in a house. Theoretically it'll just make something we already take for granted work better.

Once this technology is adopted into financial market trade settlement, however, it opens the door to a trend being called the "tokenization of everything." This is when the conversation gets really strange and in some ways fun.

The thought behind this trend is: once tokenization technology is fully developed and accepted in the marketplace, why can't it be applied to all asset types, not just stocks and mutual funds? Thinking about it, aren't stocks themselves a type of tokenization? Owning a stock enables an investor to benefit from owning a piece of an enterprise, without actually starting or working at the company.

All relevant parties -- the company, other investors and the law -- acknowledge the specifically owned benefits due to the investor (dividends, the right to sell), and the investor's decisions about his or her investment are recorded at the transfer agent. Let's expand this idea to something more tangible.

What if we tokenized a forest and allowed investors to buy and sell the forest tokens on the blockchain? If an investor feels like timber is a valuable asset, the investor could buy a tokenized piece of ownership in the forest. If timber gains in value, the token could be worth more in the future; if the timber in the forest is harvested for cash, the cash can flow to the tokenized owners on the blockchain.

Right now, an investor wanting to buy a forest will need to find a forest parcel for sale, conduct a timber survey to make sure the timber is viable, make an offer, maybe arrange financing, schedule a closing and arrange the deed transfer. All of this makes owning a forest a bit out of reach for most. With tokenization, an investor could own a fractional share of a forest as easily as buying a stock.

As a tokenized owner, I probably can't build a mountain bike trail in my forest -- just like I can't walk into Apple's corporate R&D lab because I own Apple stock -- but if I want to own the forest as an investment asset or store of value, the token enables much easier access and in a way "democratizes" access to assets individuals may not have been able to invest in otherwise.

Once the mind is open to the possibilities of tokenization, the possibilities become staggering. Art, farmland, classic cars, even entire ecosystems could theoretically be tokenized. I'm not sure where this conversation is going, but I am sure it's coming. The conversation can get very complicated, making it easy to ignore, but I would strongly suggest remaining aware of where this topic is being taken.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Entering a new phase of economic time

Sun, 12 Oct 2025 08:00:00 GMT

Sorry guys, this one is going to be a big pill to swallow. In a one-week period, investors in the U.S. experienced new all-time high levels in major stock market indexes such as the Dow Industrials, the S&P 500 and the NASDAQ composite, all-time high prices in gold, silver and major cryptocurrencies, as well as an all-time high value in the Case Shiller Home Price Index reflecting residential real estate values.

If we broaden out our perspective a bit to look at major overseas financial markets as well, we see recent new all-time highs in a number of European stock market indexes, as well as all-time highs in Japan, Australia and other major Asian stock markets.

I don't remember any other time in my career (going back to 1993) when such a spread of divergent asset types correlated together to all-time highs in the same period. When I see these markets moving together like this, I feel like maybe I am unattuned to the exuberance driving these divergent markets from around the world all higher at once. Is there something I'm missing?

Turns out there might be, and it could be something so huge in scope it might be impossible to perceive from inside the financial system where we all live. That's because the insight I may be missing could actually be the very financial system I am using to observe this phenomenon.

The entire world financial system is built on a concept known as fiat currency. Examples of fiat currency are the U.S. dollar, the Euro, the Canadian dollar, the Japanese Yen, the Chinese yuan and every other currency issued by central banks for use in commerce and financial markets in their respective national or regional markets. Central banks, like the U.S. Federal Reserve, issue these fiat currencies for purposes of conducting economic activity -- buying and selling between companies and individuals -- and for taxation, meaning when taxes are owed to the government, the taxes are owed in the fiat currency issued by the nation's central bank.

These central banks can simply keystroke this fiat currency into existence (yes, out of thin air), while when we as individuals and businesses want to obtain the same currency, we either must borrow it, work for it, create and provide valuable goods or services for it, sell something we own for it, or pull from a benefit program we contributed to through taxes or savings. Doesn't seem entirely fair that the central bank can just create something which we must spend a lifetime chasing, but this is the system we were born into.

While a central bank can create fiat currency by keystroke, no central bank can produce gold or silver, no central bank can create organizations capable of producing valuable goods and services (business enterprises), no central bank can produce a home to live in, and at this time no central bank can create Bitcoin. Yet while a central bank cannot create any of these assets, these same central banks do control the mechanism of assigning value to these assets -- all these assets have a stated value in the bank's fiat currency, which we call the price. And perhaps the price of all these assets is going up at the same time because in reality the value of the fiat currency used to measure them is actually going down.

We are all familiar with the concept of inflation in that we have all experienced the price of goods and services changing, usually going up, over time. Inflation as a trend is easy to observe in goods like bread, steak, eggs, cars, gasoline, and many other goods consumed on a day-to-day basis. No one likes to pay more for food, energy and entertainment, but at the same time no one typically complains about their 401(k) or home value going up -- yet both are flip sides of the same coin. Understanding this concept may help in navigating the fiat currency road ahead.

In my opinion, the global correlation of asset prices indicates the world's fiat currency financial system may have entered an interesting new stage. This new stage could require a new understanding of how consumer prices, asset values and financial instruments all interact together for purposes of experiencing and managing inflation. There will be a lot to learn, and some new rules may apply, but for those willing to expand their understanding of these issues, challenges may be met by opportunities as we move forward into an intriguing period of economic time.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

It's time to begin end-of-year financial planning

Sun, 05 Oct 2025 08:00:00 GMT

It's hard to believe we have entered the financial stretch of 2025. There were so many events and activities I was looking forward to this year -- my wife's family bi-annual trip to Virginia Beach, the guys' weekend mountain biking trip in the Absaroka range in Montana, our exchange daughter from Spain's month-long visit with her boyfriend Xavi, our family trip to Yellowstone with our granddaughter Mia, Ethan starting at Boone Grove High School, the epic trip to Africa with our close friends and the weekend mountain bike festival at Brown County State Park. All these plans that have occupied my daydreams for the past year are now in the rear-view mirror.

My team at Oak Partners has elected to dedicate the next three months to end-of-year client planning. With year-end planning on my mind, I thought as we head into the final quarter of the year, I would assemble a couple reminders of financial planning items to pay attention to while there's still a little time.

First, let's start with taxes. The wrong time to do tax planning is at filing time. The right time is just about now. The start of the fourth quarter is an ideal time to check contributions to qualified plans such as 401(k)s and 403(b)s and make adjustments if possible to maximize tax benefits. For tax year 2025, the 401(k) and 403(b) limit is $23,500, plus an additional $7,500 catch-up contribution for those 50 and older. Also keep in mind: for those making over-50 catch-up contributions, 2025 is the last year those contributions can be made on a pre-tax basis. Starting next year, catch-up contributions will be made on an after-tax or Roth basis. While this may raise tax bills out of the gate next year, I think this new rule opens up some interesting planning possibilities to consider.

While those contributing to IRAs, Roth IRAs or HSAs have until April 15th to finalize contributions, it's not a bad idea to shore up contributions by year end, especially if doing after-tax contributions as part of a "back door" Roth IRA plan. I prefer to split after-tax contributions and subsequent Roth conversions into two tax years if possible -- it just seems cleaner.

Speaking of Roth IRA conversions, with the favorable Federal tax rates currently in place I tend to think everyone should be doing some analysis as to whether an IRA to Roth IRA conversion makes sense. The Roth IRA has become an invaluable planning tool in my practice, and we have been recommending conversions more and more often. Roth IRA conversions must be complete by December 31st.

Moving on to non-retirement investing, understanding year-to-date realized capital gains and losses is critical to tax and portfolio management. Schedule D of the prior year tax return should record any carry-over capital losses which can be used to offset gains harvested in 2025. With strong stock market performance over the past two years, there are likely to be embedded (non-realized) capital gains in most portfolios -- now is a good time to review.

In addition, for those who invest in open-end mutual funds, the fourth quarter is typically when funds declare the capital gains they intend to distribute. These distributions are taxable and are best managed through the same review process. Fund family websites are the best source of this information, and the public website Capgainsvalet.com tracks capital gains announcements for widely owned funds and can even be used to estimate distributions before announcements are made.

The start of the fourth quarter in a strong market year like 2025 is also a great time to check general portfolio allocations and make rebalancing adjustments when appropriate. After the run-up in stocks this year, almost all are skewed toward higher stock exposure than originally designed. Periodic portfolio rebalancing is critical to risk management and improves the likelihood of achieving performance goals over time. Going into the fourth quarter with stock market indexes near all-time highs makes this an ideal time for a portfolio review.

2026 will be here before we know it and will usher in many financial changes related to the Big Beautiful Bill passed earlier this year. For now, however, we are in a unique period before the current tax regime sunsets and financial markets move one way or the other. Spend a little time tidying up the financial house -- it'll likely be time well spent.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Hopes for lower mortgage rates may not be realized

Sun, 28 Sep 2025 08:00:00 GMT

Even as home prices continue to go up and mortgage rates stay relatively high in the context of the last decade or so, young people still want to get married and start families. As it turns out, some forces of nature are powerful enough to usurp even economics.

Which is why I have a number of young Gen Z families in my life who would really like to buy a home and have been waiting patiently for the Fed to continue the interest rate easing cycle which started in August of 2024. The announcement last week of the Fed reducing its short-term interest rate target policy was very welcome news.

While the Fed started to reduce interest rates last year, the central bank paused in early 2025, claiming to do so in reaction to policy uncertainty with the new administration. After a couple weak monthly employment reports over the past quarter, and a bit of unorthodox "encouragement" from Donald Trump, the rate cuts have restarted, and Fed guidance is indicating the rate cutting cycle is likely to continue through the end of the year.

For youngsters in the market for a home, this all seems like good news. Unfortunately, I'm afraid I'm about to rain on their parade.

In theory, lower short-term interest rates would have the effect of lowering rates on home mortgages, but the non-theoretical world works a bit differently. While Fed fund rates can have some indirect influence on mortgage rates, the pricing of home mortgages has been determined to be much more closely correlated to the yield on the benchmark 10-year U.S. Treasury bond. After the Fed cut short-term rates, the yield on the 10-year U.S. Treasury bond actually moved higher by a small but meaningful amount, which begs the question of why, and what this could mean for borrowers and other asset classes.

The 10-year U.S. Treasury yield is the benchmark for bond investors. I have referred to this indicator as the "Dow" of the bond market, and most professional investors check this rate as routinely as they check the stock market. The "10-year" is mission critical to many types of investment decision making.

The factors influencing the 10-year yield are much broader than simply tracking the Fed's short-term interest rate policy. Prospects for future economic growth, political concerns, geopolitical risks, anticipated government borrowing, stock market volatility, and perhaps more than anything, the expectations for inflation over time all come together in a complicated amalgamation to price the yield on this high-profile security. In my experience, the 10-year doesn't always behave as expected, and can certainly be prone to short-term dislocations.

Bond yields move higher when bond prices move lower. When the yield on the 10-year moved higher, it was logically the result of investors selling these U.S. Treasury securities and moving their capital to other asset classes. After the Fed rate cut, investors appeared to move out of haven assets like U.S. Treasuries and into more aggressive asset classes such as stocks. This can be seen by the behavior of the stock market (S&P 500 index) during the same time period, which hit multiple new highs over the past week. This makes sense -- lower short-term rates typically result in some near-term strength in stock prices.

There may be more to this story though. Lower short-term rates have a direct impact on the cost of U.S. government borrowing, and the Federal government still needs to borrow nearly $600 billion by the end of the year. I postulate the Fed rate cut further opens the door to accelerated government borrowing which may have the effect of reigniting inflation in the economy. When bond investors anticipate higher inflation, they understandably demand higher bond yields to offset the loss of purchasing power.

I think it's clear at this point that the Federal government will need to seek lower interest rates and higher inflation in its pursuit to manage its colossal debt load. With the Federal Reserve re-accelerating the pace of rate cuts before inflation returned to its 2% target level, investors are expecting inflation to once again start trending higher and are positioning accordingly -- into real and financial assets with more potential for appreciation, while at the same time demanding higher yields.

So, for the time being, our beleaguered Gen Z home buyers may just have to accept higher yields on mortgages, but may make up for it over time by owning the home itself, which is typically the largest asset most American families will own.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Embracing change a world away

Mon, 22 Sep 2025 08:00:00 GMT

"I've got a proposal to make," she said. I was talking to the better half of the couple my wife Tracy and I spend the most time with, and my wife's closest friend. I sometimes call her the "Booker" for her prolific ability to keep us traveling by planning some great trips for our friend group.

"I'm ready," I replied, but the Booker said the plan wasn't finished yet and when it was she actually wanted to make a formal presentation to our group. I'd just have to wait.

A few weeks later on a Saturday morning over coffee she brought out an actual PowerPoint presentation. I was impressed. "The Great Migration," she started. She'd always dreamed of seeing it and for a couple logistical reasons she thought the window of opportunity was open. Now, I've watched enough National Geographic TV to know the Great Migration is the epic annual trek of roughly a million wildebeests across the grasslands of Africa, but beyond knowing such a spectacle occurs I knew nothing of when, where or how to see it. She continued: the best time to see this wonder of the natural world was in September (14 months from her proposal), the best place to see it was Tanzania's Serengeti National Park, and she had worked out the details including the cost, which when I heard it I thought wasn't bad.

"I'm in," I replied immediately. Tracy, however, being the actual adult in our relationship, tapped the brakes. She asked when we had to make a decision and the Booker said the first payment would be due in a few weeks. We would talk about it. It was a long trip for us -- 13 days in total, 8 in the bush with no travel adjustments and limited communications. Ethan would be starting high school around the time of the proposed trip. We have never left him this long. Plus, it was Africa -- we wouldn't be able to respond to issues at home if they came up. Tracy was justifiably nervous about the idea, but in the end we decided this might be the only opportunity for such a grand adventure with friends. I am writing this column on the airplane on the way home.

There is something about Africa, and something about Tanzania in particular. The land simply exclaims adventure. The wildness, the openness, the wildlife. The continent remains mysterious to experience and I now understand why it is sometimes called the dark continent. Much of the land has an almost primeval feel.

Then there are the people. Our safari guide Billdad told us there are over 120 different tribes in Tanzania alone, and he said they all get along. "We can go anywhere and we will be welcome," he said, and he was right. In no other travels have I encountered the cultural welcomeness and generosity that I experienced in the people of Tanzania. It's as if their very culture compels them to be good hosts -- even the sometimes intimidating uniformed government agents would call me "brother" during interactions. I found their native Swahili to be a beautiful language, and as most children learn English in school I found their African English dialect also beautiful to listen to. The people of Tanzania exude a joyfulness that is difficult to describe and rare in my experience.

I would however be remiss and naive if I did not mention the poverty. Most of the rural communities and much of the outlying urban areas function at what can be best described as a subsistence level. Water and plumbing are most often absent in homes, as is electricity in many. The average per capita income in Tanzania is under $4 a day. At the remote northern gate of Serengeti National Park we experienced a woman being arrested for gathering firewood inside the park. Her hysterical and despondent lamentation was haunting. Billdad said she was desperate to feed her family, and he later told us 50% of children born in some parts of Africa will not see the age of five. And yet the joyfulness remains.

The Great Migration and the wilds of the Serengeti were amazing beyond description. Attempting to do so is outside the scope of this column and better handled by National Geographic, but seeing the animals of Africa we are so familiar with -- free in their natural environment -- had an almost spiritual component for a wildlife enthusiast like me. Africa changed me. I land in four hours and American life takes immediate hold again. I just hope the changes stick.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Fantasy football and the macroeconomy

Sun, 14 Sep 2025 08:00:00 GMT

I used to play fantasy football. I had my little ritual: I would wake up early on Sunday morning before the family, do my "research" and review the week's games, then set my lineup, watch football and hope for victory. Other people in my league knew a lot more about football than I did -- I actually had no idea how they knew so much. I made it to the championship game one year out of about 10 that I played. Looking back, it was pure luck.

During the years I played, Thursday night games would not start on the schedule until around November. This meant fantasy football for most of the season could be managed during my Sunday morning ritual. Toward the end of my fantasy football career, Thursday night games started hitting the schedule earlier and earlier in the season. This year, the first Thursday night game is in early September. Thursday night games completely shifted the timing of fantasy team management -- the team had to be managed between the end of the Monday night game and the start of the Thursday night game each week. My ritual was disrupted, and fantasy football became very stressful. I am no longer in the game.

This feeling of fantasy team management stress during Thursday night game weeks is exactly how I am feeling about the macro-economic environment driving headlines and markets right now. There is just too much going on, seemingly all at once, with no time to absorb and contemplate information as it comes in. The pace of change is too rapid. Nearly all of this disruption involves the Federal government and the Federal Reserve. I will try to summarize, and provide some guidance on how to interpret headlines -- some of which are bound to be politically charged or propaganda based -- and sort out just what is likely to play out by the end of the year.

The Federal government is borrowing a lot of money this year. Not only is it funding record structural deficits, based mostly on Social Security, Medicare and Medicaid spending, but it is also paying a record amount of interest on the existing $37 trillion national debt, and it is refinancing $9.2 trillion of bonds maturing in 2025. All in all, the Federal government needs to borrow about $11 trillion this year.

All attempts at controlling Federal spending appear to be failing right now. Whether you loved the idea or hated the idea, the savings and austerity attempted by DOGE never materialized. The swamp monster which is Washington DC resisted reform, and prevailed. The government will spend -- this is no longer a debate. There is no longer any need to be distracted by hope.

$11 trillion however is a lot of money, even by Federal government terms, and the U.S. Treasury is in desperate need of lower interest rates. Even a 0.25% reduction in short term interest rates could save the government nearly $30 billion in interest costs in the next year. The numbers we are talking about here are insane.

In an effort to achieve lower interest rates, the Trump administration has been what can only be described as "pounding" on the Federal Reserve, particularly Chairman Jerome Powell, attempting to influence the Fed's decision making as it sets short term interest rate policy. Not only has the President been very vocal in the press about this intention, but President Trump recently fired Lisa Cook, one of the members of the Board of Governors, and intends to have Presidential control over the makeup of the Board tested in the courts. With the recent firing, and as a result of a different Board member resignation and appointment of Stephen Miran earlier this year, the President is close to having appointed the majority of this seven-member board.

The action, however, is not being limited to the Fed's Board of Governors. Congress, in conjunction with the administration's agenda, is also considering legislation aimed at altering the Fed's policy of paying banks interest to keep money on deposit at the Federal Reserve. The Fed has been paying interest on reserves since 2008, currently at 4.4%, which makes it very attractive for banks to maintain higher reserve balances with the Fed. The logic behind this legislation is if the Fed is no longer paying interest on bank reserve deposits, the banks will look for returns elsewhere, and likely some of these deposits will seek U.S. Treasury securities as an alternative. As demand increases for U.S. Treasury securities, theoretically yields will drop, enabling the government to borrow at lower interest costs.

Finally, as we discussed a few weeks ago, with passage of the GENIUS Act which codified regulations for stable cryptocurrency tokens, the expectation is the demand for U.S. Treasuries as collateral for stable crypto currency could also drive yields lower, helping achieve the Treasury's goals.

It's all a lot to unpack, and much of these material macro items will play out by the end of the year. Just how these issues will impact financial markets remains to be seen, but it's surely going to be a very interesting football season.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Housing challenge could become long-term problem

Sun, 31 Aug 2025 08:00:00 GMT

Every generation stereotypes other generations, and Zoomers get plenty of stereotyping. Having raised a couple of these characters myself, some common perceptions about this age group are accurate, some are projected at their expense. Of course, the world is comprised of unique individuals, but some common behavioral threads I've observed: people in this age group tend to be financially frugal, more in touch with the mental health needs of themselves and those around them, aren't just comfortable with technology but actually command it with ease, and value work-life balance more than previous generations.

Some of these characteristics are likely a result of the collective experience (crisis after crisis) and economic conditions (relative prosperity) in which they came of age, but others are likely the consequence of the behavior of their Gen X parents. While us Gen Xers were raised in the parenting culture of "rub some dirt on it" or "walk it off," we largely adopted a more empathetic and perhaps overly attentive parenting style with our offspring.

The net effect of these factors seems to be young adult children who are educated and accustomed to economic and emotional security, while at the same time being apprehensive about their own skills and abilities and especially anxious about their own economic prospects for the future. Perhaps in no area is this collective economic anxiety experienced more so than in the current state of the housing market.

Generation after generation, young adults seek out much of the same goals. Get a job, get married, buy a home and have babies. This cycle of life has not changed -- the Zoomers in my life think in similar fashion.

While I might say the obstacles and worries facing young adults in this journey haven't really changed, the truth is some economic factors, largely in the form of the housing market, are presenting some unique challenges at this time, and the Zoomers are getting the short end of the stick.

Now, I know our Boomer friends out there will take what I'm about to say and think "ole Marc is getting soft," but interest rates really are a problem right now. Yeah, yeah, I know, most Boomers experienced mortgage rates in the 10% range somewhere in their young adulthood, and yeah, yeah, I know the Boomers managed to buy homes and raise families. All true. But we would be intellectually dishonest if we did not do the math including home prices and earnings levels in this discussion. When all these factors are included, the 7% mortgage rates and high home prices of today do present some serious difficulties when it comes to household formation, and something is going to have to give.

Perhaps this is best explained when looking at the Federal Reserve's home affordability data. Home affordability is not an overly complex calculation. Considered in the metric are the price of a house and the interest rate on the mortgage; these data points then determine the amount of income required to afford the home, and the amount of down payment to make the acquisition work.

When these factors are considered on a national average scale, the results indicate an income shortage or gap of about 30%. This means Americans on average do not make enough income to afford a typical home purchase by today's metrics. These conditions are historically not normal, and seem to be driven by some difficult-to-solve structural supply and demand issues. Unfortunately, it appears us current homeowners may be to blame.

Case in point. My mortgage has a rate of 2.75%. My monthly payment on a home large enough to raise four kids is $1,925. My 22-year-old son just moved into an 1,100 square foot apartment in Cincinnati for $2,100. I would be crazy to sell my home, and I don't plan to -- and I am not alone.

This collective sentiment has resulted in an environment where, for the first time ever, it is more expensive to purchase an existing home than it is to buy a brand-new home (source: St. Louis Fed).

This would imply the solution is to just build a bunch of brand-new homes. Over time, new housing supply may solve some of this problem, but when considering the complications involved with new home development, this is not likely to be a quick fix.

We are living through yet another unique economic period and our Zoomer kids are feeling the effects. Family formation and new household development is critical to economic growth -- if some of these challenges aren't resolved sooner than later, the longer-term effects could reach wide and deep.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Change in 401(k) rules raises questions

Sun, 24 Aug 2025 08:00:00 GMT

Our exchange daughter from Spain is here for the entire month of August. Ane first came to us when she was 16; she is now 25. She's as connected to our family as any of our young adult kids. It's been a great visit with Ane and her boyfriend.

When arriving, Ane had four American dining goals: Chick-Fil-A as soon as she landed, deep-dish Chicago pizza, my famous homemade pork tacos and a home-smoked brisket. By last weekend all these goals had been achieved, except for the brisket. My wife and Ane wanted Sunday to be brisket day.

For my meat smoking brethren, you know smoking brisket requires planning. The right size brisket must be procured, the rub determined, the smoking supplies acquired and most of all the time. Lots of time. Unfortunately, life had been very busy and I did none of the required planning.

Returning home late Saturday night from a birthday party in Indianapolis, I rushed to Strack's to buy a brisket. There was only one left in the case: an 11 lb. 7-ounce monster. I looked at my watch -- it was 8:30, dinner would be at 6:00 the next evening. I did the math. It could be done. I grabbed the brisket.

As I rushed my grocery bags to the truck, thunder rumbled in the distance. A long, restless and obsessive night lay ahead. It was smoke master game time. I would not disappoint.

Properly smoked brisket is magical. The key to the magic is time. Brisket smokes under low heat in pursuit of the ideal internal temperature of 205 degrees. While brisket is technically edible at an internal temperature of around 180 degrees, achieving brisket master status -- with meat tender enough to fall off the fork -- requires reaching a minimum of 201 degrees. Every brisket is unique; each pound of meat could require anywhere between one and two hours to smoke. The keys are patience and meal timing.

Brisket smoking provides the perfect frame of reference for a substantial change that recently occurred involving 401(k) plans. Employer-sponsored 401(k) plans are an absolutely mission-critical tool in American personal finance. According to a CBO white paper from 2022, Americans hold about 40% of their total accumulated wealth in tax-advantaged retirement plans. The aggregate amount of these American retirement assets is nearly $9 trillion.

Which means, to put it bluntly, 401(k) assets are too important to screw up. Employers sponsoring plans, custodial firms offering investments, and advisors providing advice to these plans are all subject to very high standards. Each is required to serve plan participants as a fiduciary, meaning the best interests of the investor must drive all decisions and actions. The regulatory journey resulting in the modern iteration of the 401(k) plan has been long, but as a plan advisor, I feel most 401(k)s now offer a cost-effective, well-constructed retirement planning platform.

$9 trillion however, is a lot of capital, and while the dominant type of investment product offered to 401(k) investors is stock and bond mutual funds, other types of investment product providers seek to access capital from this pool as well. An August 7th executive order from the Trump administration opened the door to one of them: private equity.

Private equity refers to the process of investing capital in companies not traded on public exchanges. As there is no public market for these investments, private equity investments by their very nature are not liquid, which means investors have limited or no access to their capital while the investment moves through its life cycle.

Private equity is extremely important in a free enterprise economy. Through this form of investment, sophisticated high-net-worth and institutional investors have traditionally amassed capital to fund startup companies and potentially benefit from entrepreneurial innovation. On paper, extending access to private equity investment options to 401(k) participants looks like "leveling the playing field," enabling smaller investors to gain access to investments historically relegated to the wealthy. As in all things financial, however, the devil is in the details.

In the case of private equity, the details can be absurdly complex. Investment costs, financial controls, risk disclosure and a myriad of other details can be so opaque and complicated that the level of expertise required to navigate this field is possessed only by specific varieties of professional investors. Which brings us back to the brisket.

The key to both brisket and private equity is time. Funds invested in private equity aren't stored in a stock which can be traded to other investors -- the funds are deployed to pay salaries, buy technology, and run a business. Private equity investments do not, and should not, offer access to invested capital until the company is positioned for a liquidity event, which will always take years, sometimes decades. The very act of providing liquidity potentially required for retirement investors has the capacity to change the lifecycle of the investment itself, like pulling a brisket at 180 vs. 205. Maybe done, but not great. I have a ton of questions about the possibilities opened by this development, and it looks like we will have about six months to get some of them answered.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Consider a POA when sending children to college

Mon, 18 Aug 2025 08:00:00 GMT

I've always felt like late summer and early fall are critical transition times for families. Daylight and temperatures begin to change, kids go back to school and the flexibility of summer transitions to the structure of school and more intense work schedules.

While for the first time in over a decade I am not sending a student back to college, Ethan started high school and I did move my third child, and recent IU grad, Sam to his first adult apartment in Cincinnati a few weeks ago. Not cutting a college tuition check this August feels good, really good.

As my family navigates this transitionary time, I want to take the opportunity to relay some best practices for families in other types of transitions, particularly families sending kids off to college for the first time.

Sending a child to college, in my experience, is an intense bag of mixed emotions. Hope, pride, nervousness and sadness can all come together to completely cook the minds and hearts of parents and students alike. Amidst all this emotion, important details can be easy to overlook.

One of these details is if your child is over the age of 18, which most college students are, in the eyes of the legal system they are technically no longer a child. Having reached the "age of majority," the young adult is now vested with rights of financial, medical and academic privacy, which is a fancy way of saying the parents who pay for everything are no longer legally entitled to information pertaining to any of these subjects.

This is easy to confuse, especially since in my experience with Purdue and IU, the schools will absolutely blow up mom and dad's email inbox and text messages with invoice notifications when tuition is due, but just because they want your money doesn't mean they are willing or able to discuss your student's university financial account.

The same applies to information about grades and academic performance, which always seemed a bit absurd to me, and perhaps most concerning is the privacy laws regarding medical concerns. This can be terrifying if a student away at school experiences a medical emergency or begins to develop a chronic illness. Let's face it, sometimes young adults are not great at communicating medical and mental health issues, and I have experienced moms who had the intuition something was not healthy with their child living a couple hours away, but due to medical privacy policies, were unable to navigate the health care system on behalf of their young adult to find the help they felt was needed.

We all know parenting doesn't end when a child is dropped off at the dorm, so in my experience some special tools can be warranted. The solution my family elected to adopt with our departing college kids is the drafting and implementation of a comprehensive durable power of attorney document.

A power of attorney (POA) is a legal instrument in which one person -- in this case the student who serves as the "principal" -- appoints another person with the authority to act as their agent to receive information and make certain decisions on their behalf. In this context, in the POA the student authorizes the parent as their agent, with broad and durable powers, meaning the delegated authority includes financial, medical and academic issues, and durable meaning the authority continues even if the student becomes incapacitated.

In order to be valid in the state of Indiana, a POA document must be signed by both the student and the parent in the presence of a notary. Our family elected to have our POA docs customized and drafted by a local attorney, but specimen documents can also be found on online legal services websites.

Once our POAs were drafted and executed, we did not charge around giving them to the university, doctors and banks -- we simply stored them safely in a file at home, hoping to never need them. With three college kids, we only needed it once, not in an emergency, but to help one of them navigate a frustrating situation with tuition bills. The process of using it was easy: we simply emailed a copy to the school, and they were then able to discuss and resolve the issue among "adults."

In full disclosure, I am not an attorney and do not intend to provide any legal advice. My suggestion would be to engage a local attorney who can help discuss the pros and cons of this concept and help you draft an appropriate document if all parties elect to do this type of planning. While this process did cost a bit of money, having this type of planning in place did help relieve a little bit of stress as we sent our young adults off into the world. Let me know if you need a referral.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Stablecoin going mainstream with new law

Sun, 03 Aug 2025 08:00:00 GMT

On July 18th the President signed the GENIUS Act into law. This new law, whose acronym stands for "Guiding and Establishing National Innovation for U.S. Stablecoins Act," specifically addresses and provides regulation for a type of cryptocurrency commonly referred to as stablecoins.

While the impacts of this emerging stablecoin monetary technology are limited and early, the passage of this law signifies an important evolution regarding cryptocurrency, and in my opinion marks a maturation of blockchain-based financial products as it opens the door for these technologies to be more widely integrated into the traditional financial system. Let's take a look at this new development.

First, what is a stablecoin? As anyone who has invested in or simply paid attention to cryptocurrencies such as Bitcoin has experienced, one of the most prominent features of cryptocurrency is price volatility. The one-year price range for Bitcoin prices has varied by about 70%. Other high-profile cryptocurrencies have been even more volatile, which makes it particularly difficult to use cryptocurrency for real world financial transactions. This volatility has relegated cryptocurrencies to the realm of speculation and limited their utility as the "currency" inherent in their labeling.

An actual currency should ideally serve as a store of value, and as a medium of exchange. Holders of a currency like the U.S. dollar expect their dollars to maintain buying power and be readily accepted for acquisition of goods and services. When dollars lose value -- also known as inflation -- the effects can be very negative for the economy. Just think: when dollars erode in value by only 2% to 5% it shifts all kinds of consumer behavior as well as political inclinations. Imagine holding a currency with 70% swings. It just doesn't work.

Stablecoins are an attempt to solve this volatility challenge. As the name implies, a stablecoin is a digital asset (cryptocurrency) designed specifically for price stability. This objective is pursued by backing the digital currency with conventional "real world" assets such as U.S. dollars, U.S. Treasury securities or even commodities such as gold or oil. Usually, this backing comes in the form of a 1:1 "peg" to the underlying real-world asset which is to be held at a commercial bank or financial institution.

If this sounds complicated, it can be, which is a primary driver behind the new rules created in the GENIUS Act. In this new law the U.S. Federal Government has provided clear guidance and regulatory framework for assets being labeled or marketed as stablecoins.

Some of the regulatory provisions in the new law require stablecoin products to be fully backed (reserved) by official U.S. currency (dollars) or U.S. Treasury securities and to this effect require stablecoin issuers to provide monthly public disclosure about the assets they hold in reserve. In addition, the new law subjects stablecoins to banking regulations designed to address money laundering and compliance with U.S. sanctions regimes. In short, the government is requiring stablecoin-labeled cryptocurrency products to go "legit," with consumer protections and compliance with banking regulations.

So, what does all this mean to the typical investor or saver in America? Frankly, in my opinion, not much right now -- and at the same time perhaps a whole lot going forward. By embracing a fairly early adoption of this new currency technology, the United States government may be shoring up demand for U.S. dollars and U.S. Treasury securities into the future. If U.S. backed stablecoins become more integrated into banking and global trade, the demand for dollars as a modernized version of reserve currency could continue to rise. In addition, stablecoin issuers could be a new source of demand for U.S. Treasury securities, and the combination of strong stablecoin demand for U.S. dollars and U.S. Treasuries could have positive impacts on inflation and interest rates in the U.S. Due to their potential efficiency, I can imagine a scenario in which U.S. stablecoins become the preferred medium of exchange in international trade, which could secure the U.S. dollar's prominence in global trade for a generation.

Second, in my opinion, stablecoin technology effectively diversifies the control of the money supply currently vested in central banks, particularly the Federal Reserve. By providing the framework for tokenizing U.S. dollars, the GENIUS Act advances the potential issuance of new supplies of dollar-based currency products, a function which is now relegated to the Fed and the banking system. The effects of this possibility could be profound, and difficult to predict at this early stage.

As I speculate about the potential effects and outcomes of this new regulatory structure, I think one aspect is clear. Blockchain and cryptocurrency technology is growing in importance in our lives and economy. What was previously a quirky sideshow market seems to be going mainstream, and there will be lots to learn.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

A lesson in the value of real assets ... and in feeling young again

Mon, 28 Jul 2025 08:00:00 GMT

Anyone who has been reading the column knows I have an issue with things that move and move specifically on wheels. On-road, off-road, big and slow or fast and nimble, I've long been obsessed with wheels. Very few, however, know how this obsession began.

The year was 1983. I was 13 years old, growing up in Hobart. Back then, before screens, kids played outside every day, all the time. This particular day I have never forgotten. One of the neighborhood kids had received a Yamaha three-wheeler for his birthday, and we were all huddled around it on a trail in the big woods behind my house.

I'd never seen anything like it -- the sound of the motor, the big knobby tires, the ruggedness, like a yellow tank with handlebars. The new owner was not in the mood to share, so the group of boys was just standing around watching him try to figure out how to control the thing, which wasn't going all that smooth. Finally, being one of the "older" boys on site, after applying enough older boy peer pressure he decided to let me try riding it up the trail.

Without any understanding of the thing, I jumped on and hit the throttle. The three-wheeler immediately stood straight up on its back wheels, throwing me off before the front wheel came down and it proceeded to go down the trail riderless for about 30 feet. Fortunately, both me and the Yamaha were undamaged by the incident, but at that moment something unlocked in my brain. The power, the sound, the adrenaline -- in five feet of trail I was hooked. The obsession began.

I had to have one, but such expensive toys were not even a remote possibility in my family. The solution was obvious: go to work, save every penny and buy one myself. After 18 months of two paper routes, washing dishes in a bar on Friday nights, waking up at four in the morning to detassel corn and shoveling snow for every older couple on our block, I saved enough to buy a used Honda three-wheeler. Goal achieved. I treasured my 1983 Honda for years until high school sports, cars and girls took up my attention. I sold the three-wheeler for car money, but the lessons of working relentlessly and saving for a goal were seared into my identity, and so was the love for motors and wheels. The experience was one of the most formative of my life.

Now, I know as soon as any mom who experienced the '80s saw the words "three-wheeler" in print, they immediately viscerally reacted. It is true, three-wheelers caused a lot of trouble in the '80s, resulting in an eventual consent decree by manufacturers to stop making them in 1987. While not technically illegal, most people believe they are, and no new three-wheelers have been made in almost 40 years. But that doesn't mean they went away. Miraculously many survived, a few survived very well.

Which is why I was pulling my truck behind a Walmart Supercenter in Springfield, Illinois earlier this week. A white Dodge Ram sat parked, facing forward. The occupant flashed his headlights, letting me know he was the guy. In the bed of his truck was a completely gorgeous 1985 Honda three-wheeler. In my glove box was an envelope of cash. I was here for a deal.

The owner, about 10 years older than me, smiled hello. "I was kind of hoping you wouldn't show," he laughed through his downed window. "I told my wife I'm not sure I'm ready to part with her," he said as he got out of the truck. We both knew, however, the Honda was going home with me. After communicating over the phone with the seller for two months, finally seeing it in person, I was amazed. Stored in a climate-controlled garage under a cover for decades, the red, white and blue 1985 Honda ATC was almost showroom quality. It started easily with a kick, and I test rode it around the loading docks. I was 15 years old again.

I handed him a Centier bank envelope containing three times the amount of cash required to buy the machine brand new from the dealer back in 1985. Not being produced for 40 years and becoming exceedingly rare in good condition is apparently a quite profitable formula for storing and even gaining value.

There are definitely economic lessons here about scarcity, inflation and storing value in real assets as opposed to simply financial ones, but candidly I just wanted to share this story with you. I turn 55 this week and while I wouldn't want to be 15 again, the opportunity to feel 15 again is spectacular. I hope everyone gets a chance to experience this sensation at least once in life. My chance was this week.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Trump's push for lower interest rates intensifies

Mon, 21 Jul 2025 08:00:00 GMT

It was early February. I was sitting with a group at Gamba's in Merrillville having an always delightful lunch, attending a meeting hosted by a well-known investment and mutual fund company. The material was called "The Year Ahead" and was being presented by a young, fixed income (bond) analyst from the hosting firm.

The presenter was talking about inflation and the economic cycle, and as the new administration had just taken the reins in Washington, he was doing his best to stay apolitical. The attendees of course all wanted to hear about what the Trump administration may mean to markets, but the speaker was carefully dodging with the message that Trump was not going to be nearly as disruptive as his rhetoric, and how actions at the Federal Reserve were going to be far more important in 2025 than anything the Trump administration may be able to get done with its thin congressional majority.

With this postulate driving the firm's fixed income decision making, they expected inflation to cool off, the Fed to cut short term interest rates by mid-year and interest rates along the entire yield curve to drop through the rest of the economic cycle.

The conventional investment logic is, if an investor expects interest rates to fall then longer-term bonds become more attractive because they enable the investor to "lock in" higher yields, and bonds with higher interest rates (coupons) should logically become more valuable and rise in price during this type of scenario. In investment lexicon, the length of time it takes to recoup capital from a bond is called "duration," and when an investment strategy is seeking longer term bonds we refer to this as "adding duration." The presenting firm was therefore discussing adding duration to bond portfolios, in anticipation of falling interest rates in 2025.

I listened intently as I reveled over a perfectly constructed chicken marsala. The whole lunch was too delicious, and I needed to pause putting more of that amazing Gamba's Italian sourdough bread on my plate -- so I thought I would disengage from eating, sit back and whip up the room a bit.

"So, you think the Trump administration is going to be simply more of the same?" I started when he called on my raised hand. "We do -- we don't think policy will align with the rhetoric and don't expect much on the fiscal side this year," was the confident answer.

"Well," I continued, "can you imagine a scenario where inflation does cool off, Trump demands lower interest rates, and Powell (the Fed Chair) doesn't react or doesn't comply fast enough, and then Trump starts going after Powell and the Fed, maybe even firing Powell?"

"This sounds like a conspiracy theory," he answered. "We can't manage to conspiracy theories, and besides the separation between the Fed and the government is irreproachable. Trump won't cross that line."

"Ok," I continued, "but in this apparently highly unlikely scenario, wouldn't it be feasible that this type of disruption could drive shorter term rates lower as Powell gets bullied or fired by Trump, and longer-term rates higher as the bond market anticipates inflation reigniting?"

He rolled his eyes a bit as he considered my logic. "Yeah, that could be the result if this were to ever happen, which it won't. We think it's pretty safe to add duration at this point." Side note: longer duration bonds get hurt during periods of rising interest rates, so in dismissing my scenario he was defending the firm's decision to add duration risk to their strategies. I decided I had caused enough trouble and went back to the marsala, using the bread to soak up the sauce. Wonderful.

Well, seven months in, this highly unlikely scenario is starting to heat up. After using a variety of colorful names in the press to describe Fed Chair Powell for not lowering interest rates in alignment with the administration's economic objectives, the White House has now ramped up its criticism of the Fed and the Chairman specifically, regarding the central bank's $2.5 billion renovation of its Washington headquarters. Apparently the project is experiencing extreme cost overruns and completion delays. Trump despises nothing more than cost overruns on a real estate project, and criticism of this project is starting to involve calls for Powell to be ousted.

Trump does not appear to share the view of the separation of the Fed and the government as sacrosanct, and my understanding of the MAGA base is it clearly doesn't hold the Fed as above reproach. Treasury Secretary Bessent made clear in February, the Trump administration wants lower interest rates, and I would not want to be the guy standing in the way of this goal. This situation is emerging and still very fluid but could disrupt markets as it plays out. It's not the number one thing I am watching, but it is definitely high on the list.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

'Big Beautiful Bill' offers tax savings

Mon, 14 Jul 2025 08:00:00 GMT

After what seemed like a larger than usual level of political drama, the Trump administration's "Big Beautiful Bill" was signed into law on July 4th by the President. Now, I know, just saying the word "Trump" triggers a large percentage of the population one way or the other, but at this point opinions on the man are not relevant. The bill has become law and it has a number of very important provisions and resolves some lingering questions from a personal finance perspective. So, let's dig in a bit.

First, my bias disclosure. I see Donald Trump as neither a superhero nor the anti-Christ. In my view, he is a populist politician, neither conservative nor libertarian, and clearly not progressive. His policy approach tends to be a direct descendent of his political rhetoric, which is based mostly on pragmatism and instinct rather than ideology.

I also don't want to talk about this new law in the context of projected deficits, because in my view the modeling used for such proclamations is too easily influenced by agendas, one way or the other. Unless there is some sort of explosive growth-based paradigm shift in the next decade, the U.S. government has crossed the threshold of fiscal sustainability. After decades of extreme mismanagement and now rising interest rates, government finances are beyond repair and I just don't want my clients, or myself, to pay for it in taxes -- and in this regard the new law does a pretty good job.

The tax rules contained in the new law are very "tax deduction" based, meaning the rules are designed to exclude certain types and levels of income from Federal taxation. Tax rules based on deductions heavily favor middle income households, which for this discussion we will consider are households earning from $75,000 to $300,000 in various types of income. In my analysis there aren't a lot of "tax cuts" for the rich in the law, but neither is there a great expansion of tax credits, which tend to favor lower income households. The tax provisions of this law seem to be focused on workers and retirees.

First, let's talk about three features of the new rules that are based directly on Trump political rhetoric: no tax on tips, no tax on overtime and no tax on Social Security. None of these features made it into the law by direct definition, but all three made it into the law in some form of deduction.

It's important to note when talking about tax deductions, there are two kinds -- "above" and "below" the line. Above the line tax deductions are added to the standard deduction on a tax return (better), and below the line deductions are only applicable to taxpayers who itemize deductions. With the expansion of the standard deduction in the new law to $15,750 for single taxpayers and $31,500 for joint filers, many American households are no longer itemizing deductions.

The good news is the new tax deductions for tips ($25,000 in tip income), overtime ($12,000 in overtime income) and "Social Security" ($6,000 in any type of income) are above the line, meaning they are added to the standard deduction amounts.

It's important to note, the new deduction for "Social Security" is not actually based on Social Security income -- it's based on age, with individual taxpayers over the age of 65 now eligible for an additional $6,000 deduction, which is doubled for a joint return to $12,000.

All of these new deductions are once again focused on benefiting middle income households and begin phasing out at around $75,000 to $150,000 in income based on the deduction and filing status. This being said, I can see a lot of opportunity for planning in order to reduce tax burdens, especially for retirees using IRA accounts for income, as these households tend to have more control over how their lifestyle needs are funded.

Two other attractive new or expanded tax deductions involve up to a $10,000 above the line deduction for interest paid on auto loans (providing the vehicle was made in the U.S.), and an expansion of the deduction for state and local taxes (SALT) to $40,000. Phase outs for the auto deduction begin at $100,000 income for single filers and $200,000 joint, and the SALT deduction begins to phase out at $500,000 income.

While I haven't seen tax modeling software inclusive of the new rules yet, my gut feeling is the new law could reduce Federal taxes for a "typical" American household with income in the $100,000 to $200,000 range by roughly $2,000 to $10,000 a year, depending on income sources and deductions. There are many more financial provisions in the new law we will continue to explore, and it's also important to note most new rules are retroactive to the beginning of 2025, so tax savings will be fairly immediate now that the Big Beautiful Bill has been signed.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Roth IRA conversions becoming more common

Sun, 06 Jul 2025 08:00:00 GMT

My good friend Bob from Munster had a question I thought merited visiting in the column. Bob's question involved a topic we are dealing with more and more often in the practice and a tool we are using more commonly to gain control over taxes -- the Roth IRA conversion.

The question specifically was, "Why, when if ever, should someone cash in their IRA and pay taxes to roll their IRA to a Roth?" So, let's explore some ideas.

Created in 1999, by now most people are aware of the tax features of a Roth IRA. The Roth IRA can receive contributions of earned income while someone is working, or receive conversions from existing IRAs or qualified retirement plans (401(k), 403(b)) during the rollover process.

Contributions to a Roth IRA during one's working years are made on an "after tax" basis, which means the contributions are still included in income and taxed on the front end. The beauty of the Roth IRA, however, is that after funding, the growth in the Roth IRA occurs tax deferred, and when used properly for retirement the funds distributed from the Roth IRA are received tax free.

A Roth IRA can also receive conversion deposits from a Traditional IRA. When a saver converts Traditional IRA funds to a Roth IRA, the conversion amount itself is taxable in the year of the conversion, but then grows tax deferred and distributes tax free for retirement purposes. Also, unlike a Traditional IRA, a Roth IRA does not require Required Minimum Distributions (RMD) at age 73, and it is in this last feature of no RMD that we are finding the planning opportunities.

The age of RMD was phased higher from 70½ in 2020 to 73 in 2025, and is also scheduled to increase again to 75 in 2033. This age change is positive in a number of ways, as it gives taxpayers more control over their income and taxes for a longer time, but there is a downside. As the RMD age has extended, compounded by strong market gains of the past decade, we are finding IRA balances exceeding our planning models and growth targets which is resulting in RMD distributions that are quite large, creating challenges with items like tax brackets and Medicare premium surcharges.

While these are positive challenges to have, as ultimately more money provides more security and opportunity, they are still challenges. The Roth IRA conversion is the tool we are adopting more and more to mitigate these circumstances.

Back to Bob's question. Besides the typically considered tax benefits of the Roth IRA, the "why" of this question now also includes the objective of gaining some level of control over the amount of an eventual future Required Minimum Distribution. Roth IRAs do not involve RMDs, and distributions taken from Roth accounts are not taxable. So, if we can use Roth IRA conversions prior to RMD age to "siphon" off the accumulation inside an IRA, we can essentially slow down the growth of the future RMD and sometimes keep future IRA income from being taxed in a higher bracket. In addition, Roth IRA distributions are one of the only income sources not countable in the government's aggressive MAGI calculation which is used to determine Medicare premium surcharges (IRMAA). Making the answer to the "why" simply: to gain control over future taxation.

The "when" of Bob's question is also important to explore. While we use Roth IRA conversions as a planning tool throughout an investor's entire financial lifecycle, the Roth IRA conversions engineered deliberately to control future RMDs are most likely occurring between the ages of 62 and 71. It is during this period that we are finding investors have more planning control over income, as income during this decade is transitioning from employment over to Social Security and retirement sources such as pensions, IRAs, 401(k)s and investment income. Given that income sources are changing and tax-relevant decisions are being made, the window opens for this planning tool to be considered.

Instead of "cashing in" Traditional IRAs to convert to a Roth, however, we are using a more incremental approach, targeting partial conversions based on tax brackets and other income sources. This incremental approach, as opposed to attempting wholesale conversions, is a very important aspect of the planning conversation, and conversion amounts are highly customized for each investor.

Roth IRA conversions can be a valuable planning tool, and when used deliberately and correctly can provide many long-term solutions. I strongly suggest getting qualified professional tax and financial advice before engaging in Roth conversions, as conversions can also create tax and planning challenges. Thanks Bob, for your question. I hope everyone had a great 4th of July weekend.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

The complexities of inheriting an IRA

Sun, 22 Jun 2025 08:00:00 GMT

My Oak Partners practice is a useful source of inspiration for the column, serving such a wide variety of investors and families with unique planning needs. I figure if I am seeing an issue in the practice, chances are it is more and more common in the community as well.

One somewhat complex issue I have encountered a number of times lately is beneficiaries inheriting second generation beneficiary IRAs from individuals who themselves were the beneficiary of an original IRA. I know this sounds complicated, and it can be, so let's unpack it.

First, a primer. When an owner of an IRA or Roth IRA passes, the account value passes to the named beneficiaries on the IRA account. The process of receiving the IRA is independent of any will or living trust the decedent may have established -- when a beneficiary is named on an IRA (which is almost always), the account will pass completely separate from a will. What the IRA owner's will says simply doesn't matter.

When the beneficiary receives the account, the beneficiary has the option to transfer the account value to a special type of IRA known as a beneficiary IRA. This beneficiary IRA account is established in the name and social security number of the new IRA owner but will reference the name and date of birth of the original IRA owner as well. This new beneficiary IRA will require the new IRA owner to also name beneficiaries on the account, completely independent of the original IRA owner's named beneficiaries.

This new beneficiary IRA is subject to some specific IRS withdrawal rules. Please note, these rules only apply to a non-spouse, non-minor child or non-disabled beneficiary (called qualified beneficiaries). We will cover rules and strategies for a surviving spouse and other qualified beneficiaries in another column. These rules also only apply to IRA accounts inherited after January 1st, 2020 -- different rules apply for accounts inherited before this date.

The general rule for non-spouse, non-qualified beneficiaries is the IRA account must be completely distributed (and subject to tax if not a Roth IRA) by the end of the 10th year following the year of death of the IRA owner. The IRS does not specify how the IRA must be distributed by the end of the 10th year, simply that it must be fully distributed, except if the original IRA owner was age 73 or over and subject to Required Minimum Distributions (RMDs).

If the IRA owner had reached the age of Required Minimum Distributions, then the beneficiary inheriting the IRA account must continue the original IRA owner's RMDs during the 10-year period before full distribution. In my experience, in most situations, just continuing the RMD will not be sufficient to completely distribute the IRA in 10 years, so at some point IRA withdrawals must be accelerated. Which leads us to the inspiration for this column. What happens when the person who inherited the IRA passes away before the beneficiary IRA is fully distributed?

In this situation, the new named beneficiary of the beneficiary IRA, called the successor beneficiary, will open yet another beneficiary IRA, this time referencing the name of the successor beneficiary as well as the date of birth of both the original IRA owner and first beneficiary (hey, I don't make these rules up).

After the successor beneficiary IRA is established, the new IRA owner also inherits the distribution timeline of the original beneficiary. For example, if the original IRA owner was 75 and passed in 2021, the successor beneficiary IRA owner must continue the original IRA owner's RMD, but now only has until 2031 to distribute the entire account, consistent with the requirements of the first beneficiary to receive the IRA.

I know these rules can be confusing, but the tax penalty for not following them can be substantial. Anyone finding themselves in the situation of being a successor IRA beneficiary is highly encouraged to engage a qualified financial advisor and a qualified tax advisor to help navigate these rules -- and I am not going to consider the customer service rep answering the phones at an online investing firm as a qualified advisor. Sorry, but it's complex stuff. Please just get some local help.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Investors should pay attention to Treasury auctions

Sun, 15 Jun 2025 08:00:00 GMT

Last week we discussed the noise in the financial ether about the fiscal challenges of the U.S. Federal government. High profile CEOs are expressing concern, high profile investors are expressing concern, the financial press is fueling the fire and it's all over the internet.

By any reasonable standard, the United States national debt has reached levels which for many other nations would lead to a potential negative debt or even currency predicament. When investors evaluate government debt levels the line in the sand is a national debt not exceeding 100% of a nation's total economic output, or GDP. The U.S. debt now stands at roughly 125% debt to GDP.

When investors evaluate a nation's fiscal deficit -- meaning the amount of money it borrows to fund the government over and above what the government collects in taxes -- the line in the sand is 3% of GDP. The U.S. is now borrowing 6% of GDP. And when total interest costs are considered, the interest costs on the national debt now exceed the money spent on the U.S. military, as well as social programs like Medicare and Medicaid. The numbers at this point appear unsustainable.

In order to right this runaway debt ship, the government has four primary options. The first is austerity, or simply spending less and becoming more efficient to reduce deficits and ultimately debt. Like 'em or hate 'em, DOGE was the American version of this attempted austerity. It is clear from the smugness of those who opposed this austerity process, DOGE is losing momentum, and six months into the Trump administration I do not believe there will be any meaningful austerity -- the problem is just too large.

The second option is default. Default occurs when a government effects policies resulting in a failure to pay interest or principal on its debt. A default from the U.S. Federal government would be an earth-shattering disaster and remains an extremely unlikely outcome and small risk.

Thirdly, a government borrowing in its own currency (like the U.S.) can inflate its currency to reduce the burden of the debt. This is accomplished by the creation of new money supply to pay its debts, or printing money, thereby reducing the value of the dollars it owes and the burden of paying interest and principal back to creditors. With the United States emerging from the very inflationary COVID period, this option is less practical right now as continued high inflation could have serious political, financial and even social consequences.

And fourth, the government can attempt to grow its way out of the debt challenge, by increasing the size of its economy and by osmosis its tax base in order to make the debt ratios discussed above more palatable. Listening to Trump administration rhetoric, this appears to be the preferred policy response, but it is also the most uncertain and difficult to engineer. Donald Trump seems to love big risk, big return stakes and this unique financial culture appears to be driving fiscal policy in the administration. We would all be smart to be skeptical as to whether the U.S. can grow itself out of its debt problems this time, but there is still hope.

So, if the national debt moves from the festering but theoretical problem level to the acute and urgent crisis stage, what would the sequence of events look like? Well, as discussed last week I think the first warning sign would come in the form of a failed Treasury auction. The government is selling new bonds in Treasury auctions all the time, and most of the time these auctions attract about as much attention from individual investors as power lines and water pipes.

A failed auction would occur when there are not enough buyers (bids) to purchase all the bonds being sold at the interest rate offered by the government. This could occur in a couple different ways, all of which would rattle markets if they occurred. The technical aspect behind these potential failures is beyond the scope of this column, and the government has a number of tools it can use to prevent this from happening.

Which leads me to believe at this stage in the debt cycle investors may perceive the utilization of some of these failure prevention tools as an auction failure, making it difficult for individual investors to understand why a Treasury auction that didn't actually fail is driving interest rates higher and likely stock prices lower.

Over the next few quarters, I expect Treasury auctions to be observed very closely by investors, attempting to gauge demand from foreign investors and non-primary bank investors in the U.S. I really don't like putting Treasury auctions on the list of financial news investors need to be cognizant of, but until the government's fiscal house is improved and some of the high-profile angst comes out of the financial ether, I'm afraid this "tail risk" topic must be added to the list of investor stress.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Risks brought on by national debt are real

Sun, 08 Jun 2025 08:00:00 GMT

Every other year my wife's family hosts a week-long trip which has now become known as "Buerger vacation." Buerger vacation is this week, all 33 of us in one gigantic Virginia Beach beach house. Four generations of human beings ranging from one to 79 years old playing, cooking, eating and conversing 16 to 18 hours a day. I stepped out to a local coffee shop for a few hours to write the column, answer some emails and sneak in a mountain bike ride.

The conversations over bourbon and cocktails in the evenings are lively. Adventure stories, sports (especially the Pacers), politics, parenting, markets and economics are all on the menu. It's a great time, even if it's a little intense, and I credit my in-laws for pulling it off.

Last night we were talking markets. I was pontificating about my concerns over the Federal debt, discussed many times in this column. It was a perfect opportunity for me to slip into one of my proudest impersonations. I raised my voice, added a Texas drawl and sped up my words as I "explained" the problem.

My Zoomer nephew looked at me with a blank stare. "Why are you talking like that?" he asked. My brother-in-law, however, was impressed. "That's good," he laughed as he high fived me.

"Ross Perot," I answered, "you know, little guy, big ears, flip charts. He ran against Bush and Clinton in '92." My nephew shook his head, clearly he had no idea. Child.

Ole Ross Perot, Lord bless his soul, an early voice in the wilderness ranting about Federal spending and the national debt, pointing out the obvious to a country incapable of hearing him. While Ross may have been the loudest at the time, he hasn't been the last -- with famed investor Ray Dalio's new book "How Countries Go Broke" coming out just this week.

The national debt exists on a level seeming almost metaphysical. The concept of trillions of dollars of debt, now accruing a trillion dollars in interest, is so infinite in scope it means almost nothing. Like a faraway supernova locally consuming and destroying its entire solar system, but to us merely a slightly brighter star among billions of stars in the sky. Catastrophic, yes, but meaningful on our faraway blue rock? Not so much.

Unfortunately, however, the U.S. Federal debt is not a theoretical curiosity -- the math is real and so is the risk. Mr. Perot was spot on, but at least 40 years early. Ray Dalio is spot on now. Whether or not Mr. Dalio is also early is impossible to know, but I worry the peril associated with this topic may be moving beyond the "if" stage into the "how" part of the equation, and I've spent some time looking into just how the "how" might look.

After advising others on investing for over 30 years, I find individual investors in general to be well in tune with the gyrations of the stock market. And why not? The daily behavior of the stock market is fascinating, and I dare say fun, and the financial media does a great job of helping us maintain our collective fixation.

By the time, however, a U.S. federal debt crisis makes its way into the stock market, I'm afraid it'll be too late to get out of the way. In order to read the tea leaves on the threshold of when the U.S. Federal debt transitions from theoretical problem to actual calamity, interest rates and the more opaque bond market will need to be the focus.

The U.S. Treasury holds auctions for various types of securities used to finance the Federal debt on a regular basis. These auctions garner about as much attention from individual investors as power line maintenance gets from homeowners. We kind of know something must be going on, but only notice when the power goes out. It's highly likely the first phase of moving from a hypothetical problem to an acute crisis will be present as a failed Treasury auction.

Does a "failed Treasury auction" sound dramatic? If your answer is "no," it's probably correct. A failed Treasury auction will produce a headline, maybe even some consternation on the evening shows of the financial news channels, but it won't be a Pearl Harbor. Long term interest rates will spike, going maybe from 4.5% to 5% -- once again, not good but also not earth shattering.

The Federal government and the Federal Reserve have a number of tools to avoid this occurrence, and the tools are powerful, which means if this event does occur something has gone very wrong. Next week we will discuss the tools, and how some of them have already started to show up in the system.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Planning, collaboration are key to handling life's challenges

Sun, 01 Jun 2025 08:00:00 GMT

I was surprised to see a dear client couple on my schedule. The family had just been in for a planning and strategy meeting a little over a month earlier, so it was unusual to see them back in the office so soon.

I looked at their pre-meeting notes; there were no hints as to their visit in the system. "Maybe they want to do a bucket list trip or buy a car," I thought as I reviewed for the appointment. The couple was in their mid-70s, were extremely active and very family focused. They had two daughters, both in their 40s, and half a dozen grandkids between them.

As I walked into the room, I could immediately sense the stress. "What's going on guys?" I asked as I sat down. They side-eyed each other, as if each was expecting the other to do the reveal. "Our daughter is getting a divorce, and it's a terrible situation," the wife uttered, almost choking up as she said it.

"Oh no," I answered, seeing on their faces they didn't care to share details, so I didn't ask. "We are worried about our estate," the husband added. "We want to make sure the divorce doesn't impact the legacy we want to leave to our grandkids."

I had worked in collaboration with the attorney who had drafted their estate planning documents, and I had his cell phone number. I could tell they felt the issue was urgent, so I suggested we get the attorney on the phone for this conversation. Fortunately, he answered the call.

The attorney listened intently to their concerns while I could tell he was pulling their documents up on his computer screen. Their family trust was funded with their bank accounts, non-retirement investment accounts, their home, and some undeveloped lake house lots they owned up north. Their daughter was not listed as the successor trustee, which is the individual or institution charged with administering the trust after they, the grantors, passed or became incapacitated.

After looking over some details he relayed their family trust contained language that would prevent assets held in the trust from being considered marital property in the event both clients passed before the divorce was settled. He said the successor trustee was empowered with trust provisions to disallow distributions that could be subject to any divorce proceedings and could even distribute funds to their grandchildren without impacting the divorce process. The couple was clearly relieved, and the attorney reassured them no additional planning was required on his side to mitigate the situation.

"So, what about the IRAs?" was the next question from the husband's mouth. Like many families in Northwest Indiana, about 65% of the family's wealth was held in IRAs and Roth IRAs. "Well, that one is a bit more complicated," I replied. The attorney on the phone mumbled in agreement. I let him take the ball from there.

"We don't typically recommend naming a family trust as the beneficiary of an IRA," he stated. I confirmed the primary beneficiary of all the family IRAs was the surviving spouse, but the contingent beneficiaries if both spouses passed were the daughters. I chimed in that naming a trust as an IRA beneficiary came with some unideal limitations and some administrative challenges.

The attorney continued, "Under Indiana's 'one pot' legal theory, if the daughter were to inherit the IRA before the divorce was settled, it is possible the asset could be considered a marital asset and subject to the settlement." The family clearly didn't like the answer. "So, what can we do?" the wife asked.

I thought a minute. "We could use a trusteed IRA for your daughter's share of any IRAs or Roths. It's not a tool we use all that often, but in this case I think it could be a solution." "Go on," the husband replied.

A trusteed IRA is an IRA in which the custodian (the firm that holds the money) also serves as a trustee to the accounts. Having a trustee in place enables the control of distributions and could keep the assets out of the marital estate of the beneficiary. The distribution and access provisions of the trusteed IRA are established by the original IRA owner, and the custodian/trustee then implements the terms of the trust as instructed. The trusteed IRA also locks in the original beneficiaries and contingent beneficiaries, which could ensure the grandchildren also ultimately benefit from the IRA.

The husband clearly liked the idea. "What's the catch?" he asked. "Well, the trustee relationship does involve additional cost, but this additional cost only comes into play after both spouses pass. We can establish the trusteed IRA provisions now, and when the divorce is settled, assuming no one has passed, we can change it back to directly benefit your daughter without the trustee. The process is pretty easy, and quick."

"Let's do it," they both replied, and we got to work. While the painful road was still ahead, I was glad to send my friends home with at least some solutions and peace of mind. Life has a tendency to throw curve balls, but with planning and collaboration sometimes even the toughest situations can be manageable.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

The elephant in the room remains unaddressed

Sun, 25 May 2025 08:00:00 GMT

The elephant in the room. We all see it, we all smell it, and yet no one looks at it and for goodness sakes, no one talks about it. We do it to ourselves, we do it to our families, we do it to our communities and we even do it to our country.

Sometimes, we do it so long, the elephant becomes so obvious, it becomes a fixture of life. We just work around it, managing to exist and even thrive despite its obtrusive presence. Occasionally we live with the elephant so long that when someone finally has the courage to point to the beast sitting there, the pronouncement is practically ignored as irrelevant.

So, when credit rating agency Moody's pretends to have the courage to shout out what everyone already knows, are we expected to give credence to their complicity as well? This week the financial markets determined otherwise. Can somebody give that elephant some oatmeal? He looks hungry.

The U.S. has three major credit rating agencies -- S&P, Moody's and Fitch. These firms are considered the gold standard in credit analysis used for investment pricing, fixed income portfolio construction and risk analysis. As someone who advises clients on portfolio management, I use these work products nearly every day. Most advice firms simply do not have the depth of resources to perform fundamental credit analysis on fixed income securities; we have to rely on these firms for this type of research. It's important stuff.

This week, Moody's announced it was cutting the quality rating on debt issued by the United States government from its highest rating of Aaa to its second highest Aa1. Moody's was the third of the "big three" agencies to perform this ritual, with S&P downgrading U.S. government debt in 2011 and Fitch in 2023.

I find the timing of the pronouncement a little questionable, as we are about to enter the intense negotiation period regarding the domestic fiscal agenda of the Trump administration as the "Big Beautiful Bill" works its way through Congress. The timing of the downgrade in my opinion has the hint of politics behind it, and without doubt the work these rating agencies do has to remain above the political fray. Maybe it's just a coincidence Moody's decided to weigh in now, but if so, it's a pretty big coincidence. I would prefer they not attempt to put a thumb on this policy scale.

As the process of setting Federal tax and fiscal policy for perhaps the next decade takes form, let's look at the math. In 2018 when the current tax laws went into effect, the government collected $3.3 trillion in revenue. In fiscal year 2025 (which began in October 2024) federal revenue receipts from all sources is expected to reach a record $4.9 trillion, a 48% increase in seven years (source: CBO).

Of course, forming any conclusions about these huge numbers is not possible without a wider look at the overall economy. During this same period U.S. GDP in 2018 was recorded at $20.6 trillion; in 2025 GDP is expected to be $27.6 trillion, a 33% increase from when the current tax rules went into effect. So, the economy grew by 33% and tax revenue grew by 48% in the same seven-year period. Only in Washington DC could this increase in revenues be considered a "tax cut" and be viewed as anything but remarkably positive.

The math also requires us to look at just where these revenues were generated. According to research posted by the Institute for Tax and Economic Policy, the top 20% of income earners earn 62% of all income but provide 65% of all tax revenue to the Federal government. So, as the rhetoric in the press over the next few weeks heats up and the "tax cuts for billionaires" line reaches a fevered pitch, let's do our best to stay intellectually honest. Any tax policy change is bound to positively impact high income earners, simply because these households pay most of the taxes. Wouldn't it be nice to leave the class warfare at home for once and have an honest discussion about funding the government?

So back to our friend the elephant. The paradigm of globalization, enabling corporations to seek the lowest cost labor pool anywhere on the planet, while the United States military sets the tone on global security and provides the world's reserve currency, has created incredible prosperity in the United States. Not, however, without a price. The price has added up over time to a marginally manageable $37 trillion mountain of debt. U.S. abundance aside, the continued sustainability of this expensive and poorly managed paradigm has to be questioned. For some reason Moody's chose now to point out the obvious. Investors yawned.

As the latest little girl along the parade route to shout "the emperor has no clothes," I didn't really expect a response from investors. The elephant in the room won't be solved by tax policy, and everyone already knows it.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Transitionary times call for vigilance

Sun, 18 May 2025 08:00:00 GMT

If I had it my way, I would love to spend my days watching markets and analyzing economic news. Poring through investment trends and economic data is my professional happy place. Reality though is clients need planning and service, teammates need collaboration and decision making, and I typically have three to five schedule items a day. Not to mention the always overflowing email box providing a constant stream of noise and busyness in the background.

So, when the headline flashed over the screen "GDP shrinks in the first quarter," all I had time to do is think "here we go" -- the recession flashing since 2022 has finally arrived. For a quick refresher, Gross Domestic Product or GDP is the measure of domestic production and consumption in an economy. This is obviously a difficult metric to measure, so the government typically releases GDP in an advance estimate and then the numbers are later revised, sometimes considerably, over time. These headlines involved the advance GDP estimate, indicating economic output in the U.S. had contracted 0.3% in the first quarter of 2025.

My email box filled up. Investors already anxious from recent stock market volatility and the non-conventional Trump administration felt validated and were further agitated by the headline. I spent the better part of my unscheduled afternoon time responding to nervous clients. That's the job.

It was days later when I got to go to my happy place and dig into the headline to see what this 0.3% contraction looked like under the rug. I like to go to the Bureau of Economic Analysis directly for the deeper dives to GDP, as the myriad of pundit coverage of news involving economics has turned excessively inflammatory during the early months of the Trump administration. Unbiased analysis is difficult to find.

The first thing noticed when looking below the headline is the 0.3% negative change in GDP was an annualized number -- the actual contraction during the first quarter was less than negative 0.1%. Understanding the nature of GDP revisions, a "print" this small was not likely to persist through the entire revision process, so I was already doubting the usefulness of the headline.

Moving deeper into the BEA release, the contraction in economic activity was clearly identified as a result of higher imports and lower government spending. It's a bit confusing, but imports sold into the U.S. are actually a negative contributor to GDP calculations. Because GDP measures economic output of goods and services produced in the United States, anything produced outside the U.S. and consumed here is subtracted from domestic production numbers. Strange, I know, but also consistent across time.

The BEA's website noted a surge in imports in the first quarter as importers attempted to front run the tariff conversation and build inventories before the effect of these new policies went into force, which of course makes perfect sense, and is also a little less scary than the headline indicates.

The second contributor to the negative GDP headline was a decrease in government consumption. Interestingly, the decrease in government spending was not sourced in local or state governments, which showed increased spending in the quarter, but was instead totally concentrated in Federal expenditures.

This also makes sense, considered in the context of DOGE and some of the very important changes occurring at the Treasury department. While Federal downsizing of employment rolls and some of the more provocative cuts with departments like Education and USAID get all the attention, fundamental reform is also occurring with government payment and information management systems which is likely to continue to lead to spending contractions.

I recently watched an interview with Treasury Secretary Scott Bessent in which he stated nearly a third of payments processed by the U.S. Treasury in 2024 were issued without an appropriation tracking process, which said simply means no one is documenting where the funding was authorized or why the payment was issued.

While the conspiracy theorist in me envisions hidden underground government bases and secret UFO testing programs, reality is more likely fraud and waste. As payment systems within the government are modernized, continued reductions in spending are the likely result. As every dollar spent by the Federal government is taken from someone in the private economy, I can't see how this is a bad thing.

Scrolling through the BEA release further indicated that outside the expansion of imports and contraction in Federal spending, private consumption and business investment both increased during the quarter, so if there is a recession percolating it's not presenting in the private sector just yet.

At the end of the closer look at the GDP headline, I decided there wasn't enough clarity in the advance estimate to impact investment strategies. Our nation and economy continue to be in a transitionary period, and transitions are marked by volatility. As I've said before, investing during 2025 is likely to be more challenging, but sometimes challenging environments can also be more productive. Stay active and stay vigilant.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Celebrating the Oracle of Omaha

Sun, 11 May 2025 08:00:00 GMT

The financial world was caught off guard this week with the announcement that the Oracle of Omaha, Mr. Warren Buffett himself, would retire as CEO of Berkshire Hathaway at the spry age of 96. Mr. Buffett is perhaps the most famous investor in history and has served as an inspiration for countless individual investors and business leaders over his roughly 75-year career as America's favorite investor.

I love to quote Mr. Buffett in columns and conversations. I find his folksy wisdom provides volumes of material not only to ponder, but also to guide me as an investor myself. While there are so many of Buffett's one-liners to pull from, perhaps my three favorites are these.

"Only when the tide goes out, do you find out who's been swimming naked." This one is as hilarious as it is also wise when it comes to risk management. The quote in essence refers to investor behavior during strong bull market trends and economic booms, when investors tend to overpay for the stocks and bonds of companies which can only function during times of abundant prosperity. Once the economy turns -- aka the tide goes out -- financial markets tend to reveal the weaknesses in balance sheets and business habits and capital is destroyed. It can of course also apply to other areas of life as well when public image does not coincide with real world results.

On the power of patience and time, Buffett also opined, "Someone's sitting in the shade today because someone planted a tree a long time ago." I find this one useful not only from an investing perspective, but maybe even more so from a small business perspective. Buffett certainly believes in investing in well-researched companies and owning them while they create shareholder value over time, and the same logic can be applied to investments and initiatives in the small business setting. I have found people in general tend to view the world through current circumstances, giving far too much credence to the present without a full understanding and appreciation for the sacrifices and lessons learned by those who were present before them. As I get older myself, I realize frames of reference can change dramatically over time, and sometimes the solutions for the complexity of today are found in a more simple period of the past.

Buffett's wisdom has not only helped me as an investor and business person, but also as a parent and mentor. This quote in some form has helped me many times: "You only have to do a very few things right in your life so long as you don't do too many things wrong." We all make mistakes, no one is perfect, but mistakes can also require substantial amounts of time and money to fix. In my experience, the less effort spent fixing mistakes the more emotional and mental energy can be applied to creating value, growth and prosperity. Sure, we can learn from mistakes, but it's far more productive to learn from not making mistakes in the first place. So come prepared, do the reading before the meeting, and avoid impetuous and poorly informed decisions when possible.

Warren Buffett is not only a man of great wisdom and investing skill, but he is also a product of a unique period of time. During his early career in the 1950s, financial markets were modernizing and democratizing, enabling this young prodigy from Omaha to use his distinctive skill set to build incredible value for his investors. Mr. Buffett's insatiable appetite for information, driven by an obsessive yet productive curiosity, enabled him to find and create value by doing the deep dive on the business models and habits of American entrepreneurs. This curiosity, which led to a unique understanding of how to identify investment opportunity and business success, coupled with his love of the American free market system, combined to create results which will likely not be repeated.

As access to information has proliferated and technology has accelerated the process of investing, the next potential Warren Buffett is likely to be overly influenced by the intense, never-quiet noise surrounding the financial markets of today.

As Mr. Buffett takes a step toward the next stage of his long life, he deserves to be celebrated not just for being our favorite folksy billionaire, but perhaps more so for being a true American treasure.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Time to make a plan for student loans

Thu, 01 May 2025 08:00:00 GMT

I was recently coaching my 25-year-old cousin in the job seeking and interviewing process. We had been working together for weeks, rewriting the resume, working on cover letters and practicing the interviewing process. He's a sharp and coachable young man, and through one of his personal relationships he was able to get a foot in the door at a national construction company.

It was an incredible opportunity, the interviews went fantastic, and an offer was received. Celebrations all around -- seeing a young person get their first "real job" is so rewarding. He forwarded me the offer email, it was an attractive offer, and of course, in the last paragraph stated the offer was contingent on a background check.

"No big deal, right?" I asked about the background check. "You don't have any legal history, like shoplifting or DUIs right?" "Nope, never been in trouble," was his response. "Great," I responded, "we better pull your credit too just to make sure there are no surprises there -- companies always pull credit with background checks."

I told him to sign up for the free Credit Karma app and call me to discuss the results. When he called his voice sounded like he was going to throw up. "My credit report is bad," he said immediately, "what am I going to do?" "Email me a copy of the report," I replied, "let's take a look."

The credit was bad. Ten tranches of student loans in default. My stomach sank. The issue was going to have to be addressed.

Student loans are a recurring irritant in my practice. Like most financial advice practices, our clients tend to be in their 50s or older. For the first 20 years of my career, I don't recall ever seeing a student loan on the balance sheet of someone over 45. Over the past five to ten years, however, we are regularly encountering lingering student loan balances for families entering pre-retirement and even for parents who have kids in college now. And just to clear up any confusion, I am talking about student loans accumulated from the parent's education decades in the past, not for the kids in college. For this, I blame the government.

With the COVID era payment deferrals, Biden era misleading loan forgiveness political rhetoric and predatory lending related to skyrocketing college costs, the government has enabled a whole generation of Americans to mismanage their student debt, and the impacts can go way beyond the balance sheet as my young cousin discovered.

For all the Americans in a similar situation, and there are many, news this week is bringing clarity. On April 21st the Department of Education issued a clear policy directive: student loan borrowers need to bring their loans into compliance or face collections and consequences. For those with student loans in deferral it's time to be aware, and for those with non-performing loans it's time to get the house in order.

According to information on the Department of Education website, over 25% of outstanding student loans will soon be classified as in default. Over 5 million borrowers have not made a student loan payment in over a year, and 4 million are in a late state of delinquency requiring collection action.

In defense of these borrowers, the Department also states 1.9 million borrowers have been unable to begin repayment due to processing pauses put into effect by the Biden administration. This means even those desiring to pay their loans have been unable to do so because of government ineptitude. What a mess. Time to clean it up.

First the hard news: the government is directing the Office of Federal Student Aid to begin collections activity on May 5th. The collections activity will begin with emails directing borrowers to information on their options, including websites and contact phone numbers. The FSA also plans a comprehensive outreach campaign to raise general awareness and encourage borrowers in default to begin engaging FSA and private loan servicers to bring loans into compliance.

Now the hopeful part: the FSA understands much of the nonperforming borrowers in default are in those circumstances as a result of the government's own mismanagement. The agency is offering online tools to help borrowers develop a plan and is reactivating the process for establishing income-driven repayment plans, giving borrowers options to solve this problem.

For those who have loans in default, the time for ignoring the issue is over. The Department of Education website also clearly states its intention for aggressive collections action including potential wage garnishments. This issue just can't be swept under the rug any longer.

Young adults, and those with young adults in their lives, please take command of these financial products. Blown up credit reports due to student loans can involve implications far in excess of simply not getting approved for car loans and credit cards. Job offers may be impacted and aggressive collections and wage garnishments can be stressful and even financially catastrophic for young families. With some attention and communication student loans can be managed, and eventually even paid off -- which is of course, the best solution.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

'A fascinating time to be an investor'

Sun, 27 Apr 2025 08:00:00 GMT

Apparently all that glitters is gold. Over the past year the precious metal has been on a steady march higher, but the gold price chart went dramatically parabolic upward following President Trump's "day of liberation" in early April, and now sits comfortably at an all-time record high -- and that's a super long "all time."

I am not going to pretend to be an expert in the gold market. My team has a gold ETF in only one of our many managed investment strategies and I have some opinions about best practices when owning physical gold, but I find the overall topic a bit obscure and have been often frustrated by the yellow metal during my investing career.

With this in mind, I am not going to discuss whether investing in, or selling gold already owned, is a good idea right now. It's doubtful I would be right anyway. Instead, I am much more interested in the "why" behind the recent stratospheric move in gold, and what this investing logic may mean to the financial markets and the global monetary system more broadly. Let's jump in.

To develop our logical framework when considering the trend in gold, I think it's important currently to look at what other trends are occurring in contrast or support of what is happening with gold prices.

The financial markets have clearly entered a period of disruption, marked by changing capital flows and increased volatility in core asset classes and currencies. In its first 100 days, the Trump administration has pretty much disrupted every norm and principle of global trade (along with a whole host of other norms), and while tariffs get all the attention, the policy resets being negotiated behind the tariff headlines go much deeper.

The immediate result of this disruption is a U.S. "risk off" trade, marked by U.S. stock markets sinking nearly 20% before the recent bounce. In past cycles, when risk off trends were asserted in stocks, the capital flight would flow to less volatile assets such as U.S. Treasuries and the U.S. dollar. But not this time.

The current trend lower in U.S. stocks has been coupled by a simultaneous decline in the value of the dollar versus its global peers (U.S. Dollar Index), and a rise in U.S. interest rates which is directly related to a capital flight out of U.S. Treasury bonds. Or said simply, this isn't just a risk off trade -- this is an America off trade. It would appear something is driving capital out of the United States, but what and to where? Let's look around.

Well, based on stock indexes, we can deduce European stocks which are performing well right now are receiving some of the capital flows, as well as European government bonds as indicated by European yields which have moved lower (yields move lower when bond prices rise). The same trend to a lesser extent may be unfolding in Asian financial markets, but nothing so dramatic on either continent like the move seen in gold.

In the modern world, when capital flows out of financial markets we also need to look at cryptocurrency as a potential recipient. But crypto assets are also down considerably this year. Looking at all these various indexes and factors together, in my opinion, the move in gold may not just reflect the outflow of capital from U.S. financial markets -- it also could reflect an outflow from financial instruments in general, including crypto. Now the conversation is getting interesting.

Global financial institutions and governments, including central banks, can't just store capital under the proverbial mattress. I think the word "store" here is a better choice than the word "invest." These entities are charged with supporting governments and currencies. Sure, they would like some return on capital, but what is more importantly needed is assets that preserve value.

For decades, U.S. Treasury bonds and the U.S. dollar have served this function. This may be changing, at least on some preliminary level, and gold may be playing an important part.

If we look at the U.S. national debt and deficit spending in the context of the standards directed by the International Monetary Fund for foreign governments and economies, the metrics don't look good. But we aren't a small foreign economy in need of dollars, we are the behemoth who actually creates the dollars, so we get a lot more leash.

But that leash doesn't stretch forever, and our national credit card is about maxed out. So, while the recent move in gold may be reactive to the Trump tariff drama, it might also indicate a trend away from financial assets in general, with gold serving as the default alternative.

If this speculative observation is true, then eventually the stocks of fiscally strong global corporations, real estate, commodities and even crypto will likely attract capital flows as well, and would do so at the expense of traditional currencies and sovereign bonds. We will have to wait to see if more trends supporting this gold hypothesis emerge. There is no doubt -- this is a fascinating time to be an investor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Bond market is trying to tell us something

Sun, 20 Apr 2025 08:00:00 GMT

It was open house day. Four years ago, my son Sam graduated from Andrean. In typical Sam style, he wanted the big graduation party. After weeks of yard work, probably doing more than any guest would ever notice, game day had arrived.

I was out in the barn at 7 a.m., chairs and tables were being delivered to be set up, banners hung, coolers filled, and Scooters BBQ was arriving at 10. Inside my wife finished up the side dishes and desserts. We were ready for a crowd and hoping they would show.

It was a beautiful day, temps in the high 60s and partly sunny. The crowd did not disappoint. Around 9 p.m. guests started to leave, at 10 p.m. a couple friends helped me fold up tables and chairs and clean up the food before they left. Around 11 p.m. I went inside and sat on the couch. It was immediate lights out.

Sometime later, as I was asleep on the couch, my wife Tracy shook me awake. "Hey, you need to get up and do something," she was saying. "With what?" I responded crabbily. "I'll come to bed in a minute." (She gets annoyed when I sleep on the couch.)

"With the party!!" she exclaimed. "Seriously? The party's mostly cleaned up, I'll do the rest tomorrow," I mumbled, annoyed. "Not the clean-up," she chimed back, "the party's not over, and you need to do something."

It was at that moment, now mostly awake, I realized the screen porch where I was sleeping was subtly vibrating to thunderous bass "music" coming from the barn. I sat up and looked at my phone, and then out the window. It was 2 a.m. and a huge bonfire was burning in my yard. Teenagers, dozens and dozens of teenagers, were everywhere. My blood pressure spiked, I grabbed my shoes next to the couch and headed toward the door thinking about my poor neighbors. Now this party was over.

In the world of capital markets, the stock market is without a doubt, the teenagers. Volatile, moody and difficult to understand. Stocks can be a pain in the neck. Like parenting teenagers, managing stock portfolios requires lots of attention, patience, understanding and after 31 years of work in this arena, I dare say, hard earned wisdom is the most important tool. Stocks, like teenagers, take focus and energy. The last month and a half more than proves my point.

In the world of capital markets, however, if the stock market is the teenagers, then the bond market is Dad sleeping on the couch. The bond market is where the adults are, and when the bond market decides to get up and make a point, professional investors pay attention. Last week the bond market didn't just get off the couch -- it came out to the barn party with a vengeance.

The primary benchmark driving the bond market is the 10-year U.S. Treasury bond. This benchmark security sets the tone for a whole array of financial instruments and strategies. Professional investors watch the "10 year" as closely as they watch the Dow or S&P 500. Last week, seemingly overnight, the yield on this benchmark security moved from roughly 4% to 4.5%. While this may not seem like a huge move, I would analogize a move of this scale being roughly equal to the Dow Industrial Average losing eight to ten thousand points overnight. A big deal.

Because the bond market is not prone to short term volatility of this magnitude, stock markets were also roiled by the move in yields. Tariff talk was certainly posed as a source of this stress in the market, but the question had to be asked -- was there something more stirring the markets?

We've all heard about the risk presented by so much of U.S. federal debt being held by foreign nations such as China and Japan. While these risks can seem obscure, like tornados and hailstorms, it doesn't mean they aren't real and don't sometimes manifest into disastrous reality.

Was this move in U.S. Treasury yields a result of one of these large trading partners sending a signal, by selling U.S. bonds, during tariff negotiations? Was it a sign of deteriorating liquidity in the markets or banking system? Was the bond market questioning the stability and credit worthiness of the United States?

The bond market usually demands higher yields during periods when faster economic growth and inflation are anticipated, and U.S. Treasury yields typically move lower during periods when recession is forecast or occurring. Bond yields go down when bond prices go up, and Treasury bond prices rise when investors buy them for their safeguard status. None of this conventional logic fits the yield move being experienced. The move remains an enigma.

Bond market stress tends to be lower profile until it isn't, and by the time bond stress boils over into the stock market a lot of damage has typically already occurred. The 10-year yield is telling us something -- it's time to go outside and take a look.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Managing political bias when making investment decisions

Sun, 13 Apr 2025 08:00:00 GMT

I listen to a lot of podcasts. Podcasts in the car, podcasts in the shower, podcasts while I am brushing my teeth. If I get any "me time," which is kind of rare, I am likely listening to a podcast.

I find the podcast format appealing because I like the length and depth of conversations, without the constant need for soundbites and without the ever-approaching commercial break. I also like the podcast format because everybody is doing one. Conservatives, liberals, libertarians, socialists, scientists, investors, economists, conspiracy theorists, historians, relationship coaches, survivalists -- you name it, and someone online is talking about it. I love the perspectives and yes, I love the debate.

One feature of the modern podcast universe is the full transparency of bias. No one hides their bias in a podcast. No one pretends they are a dispassionate journalist, while really spewing propaganda and talking points. The bias in the podcast world is on open display, and it helps the listener know where they stand, which is certainly not the case with other forms of media (including this one). To me, the open display of bias makes all the difference.

As a columnist, I try not to hide my bias as well. I am a philosophical libertarian. I believe government is often an inadequate and expensive delivery mechanism for many of the important functions it attempts to provide, and I believe the bigger the government, the less effective the local result tends to be.

I believe in communities taking care of their own, especially our most vulnerable, and I believe a system where the Federal government takes 20% of the income created in our communities to be wrangled over in a dysfunctional city 1,000 miles away and then partially sent back with strings attached is kind of, well, insane. I don't often vote Democrat, but I have at times, and I have little illusion about the instinctual governing style of Donald Trump. There's my bias, laid out for all -- many of you may not align with me but we can still be friends.

When it comes to investing however, or more importantly, advising others on their investing, to the greatest extent possible the bias must be managed. Politics is politics and markets are markets, and while both get a lot of attention and can sometimes seem as one, in my opinion, the two are distinctly different from an investing decision-making perspective.

So, where am I going with this? In hindsight, the philosophy behind "Bidenomics" is becoming clear. My perception is federal economic policy under the last administration consisted of a combination of a high comfort level with extreme deficit spending, using these deficits to fund massive public sector hiring to support employment, and driving public funds toward preferred industries such as green energy, semiconductors and NGOs supporting progressive causes. From a political and economic worldview perspective I agree with none of these policies, and yet my business and my own financial planning required me to navigate through this activity in an attempt to manage financial risk and hopefully find investment gains.

The new administration has taken a distinctly different approach. In an effort to control deficit spending it has embarked on a road to government austerity (DOGE), is attempting to raise government revenue through tariffs as opposed to increased income taxes, and is focused on across the board deregulation across all industries, particularly energy production.

Maybe the way these policies are being presented in the press make them seem more radical or dramatic, and daily Trump rhetoric coming out of the White House doesn't help, but when we break these policies down into a basic form, there's nothing here dragging us off the economic cliff.

Now, here's the rub. For those who are pre-disposed against Donald Trump, and there are many, you can despise everything I just said, its your right as an American. You can blame the stock market volatility on Trump, and you can say "I told you so."

The truth, however, is rarely so black and white. Reality is, by nearly every metric I follow the stock market going into 2025 was overvalued and likely due for a correction. Yes, the tariff conversation may have induced the correction process, but to make the volatility all about tariffs is an oversimplification.

So, my advice is this. Be very careful about tapping into political bias when making long term financial decisions. Yes, now is the time to be an active investor, manage risk, try to find opportunity, but please don't let the blood sport of politics and the inflammatory rhetoric of Donald Trump and cable news completely disrupt long-term investing and financial plans.

Despite all the prior claims otherwise, the world didn't end under Joe Biden and the smart money says it won't under Donald Trump. Be part of the smart money crowd.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Possibility of fairer trade could lead to stock market bargains

Sun, 06 Apr 2025 08:00:00 GMT

If you've been reading my column for a while, then you know I have an addiction to things that move, especially things that move off-road. Four wheelers, motorcycles and mountain bikes are all important parts of my life. I love to ride, always have.

All riders have riding buddies. Kenny is one of my good riding buddies, we've had some fun adventures together. Kenny likes to call me two days before he leaves on a road trip to go riding, asking me to go. My life is not that spontaneous, and I usually must pass. This time Kenny called me to go riding two full months ahead of time -- a miracle. He invited me to go on a snowmobile trip up north.

I don't ride snowmobiles, but always wanted to. I was excited for the invitation. Kenny said I could borrow one of his sleds for the trip, but once the subject was breached, I started musing about buying a snowmobile of my own. I went down the snowmobile rabbit hole, which is very deep.

I have a personal rule, kind of like a law of physics: money that goes into riding toys must always stay in riding toys. When my kids went to college, I had sold their four wheelers as they didn't seem to have any ongoing interest in riding them. I put the money into a secret cash hoard I keep for the riding toy fund. I wouldn't say it was burning a hole in my pocket, but I knew it was there. My snowmobile money.

So, I went to Facebook marketplace to look for used snowmobiles. With weak snowfall for the last two winters, there were a lot of used snowmobiles for sale. But once the web stalking bots discovered me looking for snowmobiles, my various online feeds filled up with ads for new snowmobiles. I didn't plan on buying new, but it couldn't hurt to look.

In a world of warming winters, making snowmobiles is not a great business. There are four major snowmobile makers, two American, one Japanese and one Canadian. One of the American makers was going out of business, the Japanese maker had decided to stop making sleds, leaving one strong American maker and the Canadians. Both surviving companies made great snowmobiles filled with modern technology. But something seemed odd with the pricing.

The price of the Canadian snowmobile was almost a whopping 40% lower than the comparable American snowmobile. 40%! So cheap that a new Canadian sled was only a little bit more than a comparable used sled three to five years old on Facebook. I bought a new Canadian snowmobile. It was a no brainer.

Kenny has strong opinions on snowmobiles, and politics. He doesn't like the Canadian snowmobile company. When I announced my purchase, he called me to rant. He went on a tirade saying the Canadian government was subsidizing the snowmobile company to give it an advantage and drive the remaining American company out of the sled business and dominate the market. He said I was embracing "Canadian socialism." I let him rant. I got a great deal on an amazing sled and was willing to take the heat from his conspiracy theories. I dismissed his bluster as rider bias -- we all have it. That is, until this week.

On Wednesday afternoon the Trump administration revealed its tariff plan, called "Reciprocal Tariffs." The press conference included a long list of countries which were using claimed tariffs or "currency manipulation" to levy competitive advantage over imported American products. The list was shocking, so shocking I was skeptical. How could some of these countries be penalizing American goods at these levels -- some as high as 95%, many from our international "friends" over 50%? I suspected political spin at work.

I don't like tariffs. Free trade among friends seems like the best path to international peace. Wall Street apparently doesn't like tariffs either. As I write this, right after the new tariff plan was revealed, Dow futures had dropped 1,000 points. After-hours trading in shares of some major global corporations are down almost 10%.

International commerce is endlessly complicated. Tariffs, duties and currency exchange all play a part. Was the Trump administration cherry picking in order to form its interpretation of "reciprocal"? The press conference charts seemed too simple, nothing about this press conference felt right, and I don't like losing money in disrupted financial markets.

Then I remembered the snowmobile. How could the Canadian sled be so much cheaper than the American version of the same product? Was this price differential a result of the currency manipulation and unfair subsidies being talked about? Was Kenny right? Candidly, I don't know, but maybe President Trump's chart wasn't pure spin after all.

When the stock market opens tomorrow, maybe it'll be a train wreck. But maybe, just maybe, if our international trading partners are subjected to these reciprocal tariff policies, some will decide to change their own practices. The result could be even fairer trade down the road, and fairer trade could mean stronger growth for American companies. Maybe I'll do a little bargain shopping for stocks in the morning.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

2025 may be a year to play defense

Sun, 30 Mar 2025 08:00:00 GMT

Last week we talked about the federal government's math problem. The U.S. Treasury must borrow a lot of money, by issuing bonds, during 2025. Data and estimates from the Federal Reserve indicate about $10 trillion. These bonds will be issued into a higher interest rate environment, likely increasing government interest expenses by hundreds of billions of dollars. This increased interest expense could have profound implications for government finances and operations, and if not carefully managed, profound implications for the overall economy and financial markets as well.

In prior economic cycles, some of this debt would be monetized, which means the Federal Reserve would initiate policies to expand the money supply to accommodate the process of issuing bonds, which is done through a complicated auction process. With inflation still running above desired levels, however, aggressively expanding the money supply could reignite higher inflation, causing financial stress among the population and political stress in the government. Said simply, the size and timing of this math problem has left the government and the Federal Reserve boxed into a corner, and the new administration is very aware.

Like much about the new Trump administration, the policy response to this fiscal challenge is shaping up to look quite unorthodox by recent comparisons. After analyzing recent comments and policy initiatives from the administration, I believe the strategy will be multifaceted and is likely to heavily influence financial markets for the next couple of quarters. Let's go through a couple of the concepts.

First, the administration has made it clear it would like to see lower interest rates. This week President Trump weighed in on the Federal Reserve's most recent policy decision to keep interest rates steady, by encouraging the Fed to cut interest rates to support his tariff policies. Also, over the past few weeks, Treasury Secretary Bessent has repeatedly expressed the intention of the administration to target lower yields on the benchmark 10-year U.S. Treasury.

While the effectiveness of the President's encouragement remains to be seen, and Treasury policies to target lower 10-year yields would be unconventional and, in many ways, experimental, I would find it difficult to bet against these coordinated efforts.

Second, President Trump is clearly serious in his intention to use tariffs to increase government revenue and rectify what he considers trade injustices against the United States. Based on recent stock market reactions, tariffs are obviously not popular on Wall Street, and as tariff policy continues to be revealed, evolved and implemented, I expect continued uneasiness and volatility from investors. With the President now touting April 2 as some sort of tariff "liberation day," this coming week could prove very interesting from a tariff policy perspective.

Third, the new administration will attempt to pivot the economy from being dominated by government intervention and federal spending, to an economy handed off and supported by the private sector. According to data from the Mises Institute, during the Biden administration the federal government became a primary driver of job growth in the U.S. with the percentage of new government jobs going from around 3% in early 2021 to as high as 58% of all new jobs in late 2023.

This hiring spree contributed to record high federal spending and deficits, with total post-COVID crisis federal spending at around $6.75 trillion in 2024, equaling about 23.5% of the total U.S. economy (the long-term average is about 20%) and driving record deficits of almost $2 trillion.

The Trump administration response, led by DOGE, involves slashing federal jobs, programs and even entire federal agencies. While the rhetoric on this process from both ends of the political spectrum has reached a feverous pitch, I say the process in some form was ultimately inevitable. The fiscal math problem and the fast-approaching federal debt challenge makes shrinking government and reducing federal spending highly necessary. Like it or not, the math says the money is running out in Washington, and the process was never going to be easy or pretty.

So, what do the rest of us who just want to invest to send our kids to college and hopefully one day retire do in this type of highly charged fiscal and political morass? My answer for 2025 is, be careful. Unlike recent years when we enjoyed relatively easy stock market gains and stable interest rates, 2025 looks to be a year of economic and financial market transition. Transition leads to uncertainty and financial markets typically don't cope well with uncertainty.

We've already experienced one technical market correction this year, I won't be surprised to see more, and calls for recession are already in the ether. Sometimes offense rules the day, and sometimes defense. To me, 2025 looks like a year for defense, which means more active rebalancing, a slant toward value stocks and high-quality bonds and a high level of resolve for investors deciding to stay in the game. Transitions are never simple, but they are sometimes necessary.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

'Pivot' on fiscal policy will occupy investors for foreseeable future

Sun, 23 Mar 2025 08:00:00 GMT

The U.S. Federal government has a serious, serious math problem. A math problem so big it is quickly becoming the collective problem of all of us who live here and use U.S. dollars to conduct our business.

The math involves the bonds the Federal government uses to finance its operations when it spends more than it takes from American businesses and residents in taxes and fees. This amount is called the deficit, and the bonds issued to finance these deficits added together over time are referred to as the national debt. It's important to understand the distinction between the two terms.

We are used to hearing the political theatre over the deficit. One political side cries about it and keeps spending, the other ignores it and keeps spending. Underneath this theatre, however, is an actual portfolio of bonds which need to be serviced, "paid off" and managed. These bonds, US Treasury securities, underpin the world financial system and are considered the most secure financial instruments on the planet. Managing these bonds properly has arguably become the most important function of the government. This management task belongs to the United States Treasury Department, aided by the Federal Reserve Bank, which controls the money supply required to sustain the process.

According to data on the St. Louis Branch of the Federal Reserve Bank website, about $9 trillion of US Treasury securities will mature during 2025. When these securities mature the bond holders are entitled to a return of their principal, as well as accrued interest.

Of course, the government never actually "pays off" any debt -- instead as these bonds mature, they are "rolled" forward in a refinancing operation involving issuing new bonds to pay off the maturing securities. These refinancing operations happen every month, most often behind the headlines, as this routine part of public finance mostly involves large institutional investors and doesn't typically get a lot of attention from media or the American public.

I've seen people struggling with too much credit card debt play a similar game using the "zero percent" roll, as they continually open new credit cards offering special introductory rates and then roll their existing balances from card to card attempting to avoid paying crazy high credit card interest. While this may look clever, it's not a great game and in my experience often eventually goes bad. While government finances work differently, similar problems can also manifest with public finances, some of which is occurring in 2025.

The serious math problem charging toward the government also involves interest rates. Interest rates in the United States were extremely low, around 2% or less, from late 2008 to late 2022. During much of this period, the lowest interest rates were payable on shorter term notes and bonds, and much of the Federal debt was funded with short term Treasury securities as well.

During the decade while rates were very low, many analysts publicly encouraged the government to use longer term bonds to finance the national debt, locking in these low rates for as long as feasible. But the government doesn't always behave in ways that are easy to understand, and much of the Federal bond portfolio remains financed using short term bonds, which is where the challenge comes.

After inflation flared resulting from COVID era policies, followed by obscene deficit levels in 2021 to 2024, the Federal Reserve raised short term interest rates in an effort to cool the economy and slow price increases. Now, after the most aggressive rate increase cycle in decades, short term interest rates are around 4.5%.

So, let's say for discussion purposes much of the bonds maturing in 2025 carry interest rates below 2%, and will be refinanced at rates around 4.5%. If the government needs to refinance $9 trillion in bonds and issue another $2 trillion just to fund its deficit in 2025, simple math says this could amount to increased interest expenses of around $350 billion in fiscal year 2025/2026 alone. Yikes.

The Treasury Department under Secretary Bessent is clearly aware of this issue and recently stated publicly that reducing longer term interest rates is a key objective of the Trump administration. But unlike short term interest rates which are set by the Federal Reserve, long term rates are set in the bond market and are subject to complex market forces involving investor expectations for growth, inflation and future borrowing. Just how the Treasury can influence longer term rates remains uncertain.

The answer now seems to be some combination of DOGE, tariffs, deregulation, tax relief and what is being called the "pivot" from an economy heavily impacted by government spending and government hiring, to an economy supported by a growing private sector. The policies and implementation of this pivot are likely to dominate the attention of investors for the foreseeable future and we will continue to explore.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Confirmation bias and market volatility

Sun, 16 Mar 2025 08:00:00 GMT

My wife came down the stairs and caught me terribly embarrassed as I watched the TV in shame. The "other" cable news channel was on the screen. "Why are you watching this?" she asked, "all they do is lie."

"Sometimes their lies are informative," I answered. "There's just so much going on right now, I wanted to get a different viewpoint." Uninterested, she went on with her chores.

Confirmation bias is the tendency to seek out information and patterns of information that validate our pre-existing world view and biases.

We all engage in confirmation bias, and I would posit that confirmation bias is so important to us as individuals it is often impossible to even perceive. We simply view our opinions and biases as a source of fundamental knowledge and truth, without being aware of divergent frames of reference much of the time. I would go so far as to say confirmation bias is fundamental to being human.

In today's world dominated in the United States by cable news and social media, confirmation bias has gone beyond being simply "a" factor in the way humans perceive their world, to being "the" factor dominating not only perceptions but delivery of information. Cable news channels spew selective coverage and propaganda supporting the preferred world view of their target audiences 24 hours a day, and social media apps use sophisticated algorithms to validate the biases of their users, providing a toxic mix of both affirmative and antagonistic content in a brilliant effort to keep our eyes captured on the screen for as long as possible. Resistance to these complex manipulations is almost futile at this point.

Assuming our species survives the intense tribal polarization resulting from the technological echo chambers we have put ourselves in, I can't imagine future social scientists and policy makers won't look back at the current mess we have enabled and embraced and decide fundamental intervention was warranted, but by that time it'll likely be too late.

So, go ahead, wrap yourself in the warm blanket of propaganda and enjoy your confirmation bias, it's what we Americans do, so why not enjoy it.

There is one area of American life however, where confirmation bias can end up being a proverbial terminal illness. The realm of investing, and now may be a time to check it at the door.

When I think about confirmation bias, it's so easy to believe the prism through which we view the world is as fundamental to reality as the information we absorb through it. Confirmation bias feels like logic, it feels like reason, in reality it is neither. Instead, confirmation bias is a dynamic construct of life experience, concluded logic, our own opinions, the opinions of others, settled facts and raw information all wrapped in a thick layer of emotion. And few things in life elicit as much emotion as money.

Which in my opinion is why confirmation bias presents such a material risk to investors. Recent market movements, especially when involving a higher level of volatility, tend to elicit strong emotional responses as both greed and fear are extremely intoxicating elixirs. When portfolio values rise, decisions are validated even when the decisions themselves may not have contributed to the gains. When portfolio values fall, decision making is questioned, as the pain of losses validates latent fears present in many confirmation biases.

The last few weeks have reminded us that extreme volatility can be an inherent characteristic of investing in stocks. After multiple years of strong gains, confirmation bias may have convinced investors that conventional measures of value and risk no longer applied to the "modern economy" and current market cycle.

In my 33-year career, this has never proven to be true. Financial markets are dominated by expectations of corporate profits and interest rates, and in most of the ways I use to evaluate these metrics, the price of many stocks had become disconnected from what I would consider reasonable measures of value.

Does this mean the stock market is on a one-way trip off a cliff? Well, my confirmation bias tells me this is not the case (although it does feel this way). Instead, I think the correction in stocks being currently endured offers a window of opportunity for investors to examine the confirmation biases induced by recent market performance, which was specifically dominated by a small group of technology stocks, and perhaps re-broaden their investment perspective to a more conventional search for value and opportunity. Not all stocks are overvalued, but the ones I fell in love with over the past few years certainly are. Time for me to take a deep dive on my own confirmation bias.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Evidence points to potentially challenging times

Sun, 09 Mar 2025 08:00:00 GMT

To slow or not to slow, that is the question. Investors in the U.S. seem to be once again struggling with the prospect of a recession in the American economy, with several warning signals flashing red.

The highest profile of these warning signals is also the one I am most tired of talking about. The indicator is known as an inverted yield curve, and it refers to the interest rates on cash and bonds. In a normal economic environment, the yield on shorter term bonds and cash is lower than the yield on bonds maturing many years into the future.

This of course makes logical sense, as borrowing someone else's capital for a longer period should be more expensive (higher yield) than borrowing for a shorter time frame. The yield curve inverts when investors believe longer term interest rates will move lower due to coming economic weakness and lower demand for capital in the future.

Although this indicator is not perfect, it has been fairly accurate at forecasting recessions. In the current economic cycle, the yield curve had been inverted since October 2022, only correcting itself after the Presidential election in December of 2024. Over the last month however, the yield on the benchmark 10-year U.S. Treasury bond has fallen off a cliff, going from 4.63% on February 11th to now around 4.1%. A move of this magnitude is quite dramatic and not to be ignored, but because the yield curve has been inverted for so long this indicator taken by itself seems like it could be less pertinent in this cycle. But other indicators are jumping on board as well, rattling investors and markets.

Another indicator of recession in past cycles has been crude oil prices. Over the past month the price of crude oil peaked at $73 also on February 11th, and is now priced around $67. While an 8% price move in this volatile commodity is not unusual, when considered with the move in bond yields, a pattern does seem to emerge.

Then of course, we have the stock market. While stock prices aren't necessarily the most reliable indicator of economic conditions, the signals sent by the stock market are considered a leading indicator on the economy and should not be ignored. The widely followed S&P 500 Index peaked at 6,144 on February 18th, and now sits about 6% lower around 5,800. Clearly, with three high profile financial market indicators moving in concert, investors are grappling with something, but what about the real economy -- does it offer any clues?

Well, last Friday cracks began to emerge in the economic data as well with weak numbers being released in retail sales and awful numbers in housing starts and existing home sales rattling investors. At the very least, it appears markets and the economy have hit a weak spot, begging the primary question, has the recession forecasted since 2022 finally arrived?

There is no doubt the American economy is entering a time of transition. The Trump administration is resolved to fulfill its perceived mandate to disrupt the status quo and is wasting no time getting to work. According to an analysis posted by Reuters, the Federal government is in the process of reducing employee head count by an expected 300,000 Federal employees, which according to the Brookings Institute is also expected to impact government contractors by as many as 700,000 people. While many of these workers will likely find new work quickly, some will not, and all of them are likely to file for unemployment. When in full effect, job losses at this level will move the needle on the unemployment rate, which could further support the idea of an economic slowdown.

Combine the layoffs with the general reduction in government spending being initiated by DOGE efforts, the soft patch in economic data from last month and the financial market warning signs, and an image begins to form -- one which may look a lot like a recession.

The technical definition of recession is two consecutive quarters of negative growth in economic output (GDP). First quarter advanced estimate GDP will not be reported until April 30th, but at this point I won't be surprised to see a negative first quarter report. Whether or not a full recession is experienced in the United States is still too early to say, but there is enough writing on the wall that it would be prudent to develop some strategies to help endure potentially more challenging times ahead.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Wills help structure the planning process

Sun, 02 Mar 2025 08:00:00 GMT

In my day-to-day practice my team spends a lot of time collaborating with estate planning attorneys and often accountants, assisting with the estate planning activity for mutual clients. In our capacity as wealth managers, we tend to maintain consistent contact with families over long periods of time, and so in the estate planning process we can offer unique understanding to both the family doing the planning and the other professionals assisting them. While I am not an attorney, and estate planning when done properly usually involves an attorney, my experience with this area of financial planning enables me to provide some helpful insights.

Estate planning can be complex if necessary, or super simple in some situations. The state of Indiana is what I would consider an estate planning friendly state, in that Indiana's rules regarding transferring property on death and small estate administration are some of the most straightforward of the many states across the country that I have worked with clients in.

Without a doubt the most common estate planning question we hear when starting a new client relationship is, "do I need a will?" The answer to this question is always, "yes, probably," but then the conversation must evolve to help the individual or family understand what a will is and how it works.

A will is a specific estate planning document used in a probate to direct the transfer of property at the death of the person who writes the will, called the testator. This document will specify the party who must conduct the business of wrapping up the financial and other affairs of the deceased individual. This person, called the personal representative or executor, will be responsible for paying expenses and settling debts, selling or re-titling property, managing the disposition of investments and ultimately distributing profits to the heirs or beneficiaries listed in the will.

A will becomes activated during a process called probate, at the death of the testator. Interestingly however, despite the advice that almost everyone should have a will, Indiana rules have made the estate process so easy to navigate that with a little foresight and planning rarely do we see an actual probate opened in our practice. The primary tools that can be used to avoid probate are an asset titling tool called Transfer on Death (TOD), beneficiary listings on retirement plans and in some situations a Living Trust.

In the State of Indiana, a transfer on death title or registration can be used on financial property such as bank accounts or investment accounts, real property such as real estate and motor vehicles and even personal property such as clothing or jewelry when executed properly. For estate planning situations when there is perhaps one or two ultimate heirs and property is free of liens, this tool can provide an efficient way of transferring property. Let's look at a hypothetical example.

Betty is a surviving spouse, her husband of many years passed five years ago. Betty's assets consist of a checking account, a savings account, a couple of CDs, her home (paid off), a paid off car, an investment account, and an IRA. She has two grown children as heirs.

Using a TOD title on her bank accounts and CDs, as well as her investment account, can efficiently transfer these assets to her children. When the bank and financial institutions are presented with proof of Betty's passing, they will require each beneficiary open an account and Betty's deposits or investments will be split into the beneficiary account according to the instructions held by the institution. The IRA will also be transferred similarly to a specific type of beneficiary IRA for each beneficiary. The process is straightforward.

Transferring real property such as real estate or vehicles is a bit more involved, and usually involves the help of an attorney. The property, however, can be transferred without establishing a probate as well, which saves time and cost.

So, if so many are avoiding probate in Indiana, then why do we typically answer affirmatively to the need for a will? We answer this way because despite the desire to simplify the estate process, not every situation ends up being simple, and a will can provide more detailed instructions in the event complications or challenges arise.

The process of engaging an attorney and drafting a will also opens up the planning dialogue, which tends to create more holistic and well-conceived planning outcomes. A will can also be vital for younger families with children, as it is the document used to designate guardianship intentions for surviving minor children.

In short, drafting a will makes us think about our estate and legacy, which is perhaps the most important component of the estate planning process.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Government inefficiency should irritate all Americans

Sun, 23 Feb 2025 08:00:00 GMT

Love 'em or hate 'em, the DOGE team is definitely opening eyes on the operational conundrum of the federal government. As some of the operational data comes out, some of the questions I've mused about over the years are getting at least partially answered.

Putting all the political hot potatoes aside, just looking at the government for what it truly is, a monopolistic service provider, and then applying some reasonable frames of reference to the service model, it's abundantly clear. Government is expensive, in more ways than one.

In our practice we obviously work with retirees, lots and lots of retirees. We work with retirees from the steel industry, we work with retirees from the oil industry, we work with retirees from local utility companies, retirees from every trade union around, retirees from both Indiana and Illinois schools and local governments, and yes, we work with many retirees from the federal government as well.

Each of these different types of employers have divergent benefits packages, and either active pensions or pensions that have been converted to cash balance benefits. The benefit packages from these various types of employers are all slightly different with unique processes and benefit timelines. Our team understands all of them.

For example, for a steel industry retiree with a pension benefit available as either a lump sum or a lifetime income and a 401(k) plan, we can help get benefits started and balances consolidated within four to six weeks. The same applies to union pensions and state pensions, it's a little faster for the oil industry and utility companies. Bottom line is, implementing on a retiree income plan usually takes a little over a month.

Except for our federal employee retirees. Most currently working federal employees participate in the FERS retirement system (of course it's an acronym), which pays a lifetime income to the retiree and a reduced spousal benefit for surviving spouses. So, how long do we typically plan for the delayed onset of the FERS retirement income payments? The answer is six to nine months. Six to nine months of no pension income payments for the new retiree. So long that part of the planning for a federal retirement is addressing how the retiree is going to make ends meet while waiting for their pension to start. Not acceptable.

I always wondered why it took the federal government so long to process a retirement benefits application compared to other employers. Now, thanks to the DOGE, we have an answer. According to the DOGE findings, the beleaguered people working to process federal benefits applications for their other agency co-workers are working at the bottom of a mine shaft in Pennsylvania, processing the paperwork by hand, with a pace limited by the speed of the mine shaft's ancient elevator. Apparently, the pace is six to nine months. As someone who sees the impact of this inept system firsthand on my clients, this irritates me. It should irritate all Americans.

On to my next point of government agitation. Two weeks ago, I wrote about the Social Security Fairness Act, and how those who believe they are due a benefits adjustment under the new law could engage the Social Security Administration (SSA) to get the process started. I didn't make up the instructions, I found the tip in information released by the SSA.

Almost immediately after the column was printed, I began receiving emails about the process not working. These emails coincided with DOGE postings about the administrative costs of the SSA program itself, which provided a simple frame of reference.

According to information from the SSA, in 2025 Social Security is expected to pay $1.6 trillion in benefits to 69 million Americans. These are huge numbers, and the operations cost to administer these benefits is $15.4 billion, which is about a 0.96% program expense ratio. For someone who runs a wealth management business, this seems a little high, but reasonable, until we find a comparison.

The largest provider of retirement plan services in the U.S. is Fidelity. Fidelity also offers financial products and financial advice along with its core retirement plan business. As of September last year, Fidelity administered $15 trillion, and managed $5.8 trillion. Certainly, a reasonable comparison.

So, how much is the operating budget of Fidelity? According to the 2024 annual report, $10.2 billion, 32% less. But here's the rub -- while this private sector peer had lower operating costs, it also had more employees to serve customers, at 77,000 to 58,000 for SSA. And the real rub: when my team calls Fidelity to process a retirement, they actually answer the phone and typically provide immediate results. Not the case with the government program.

Let's put politics aside. These aren't political issues. Even those who don't like the President and the DOGE process should agree that Americans deserve more from our government. Even a crazy libertarian like me understands we need government, we just need it to be more effective, more efficient and more responsive to the people who need it most, and our retirees are at the top of that list.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

New law makes Social Security benefits available to some former public employees

Sat, 08 Feb 2025 08:00:00 GMT

In the final days of the Biden administration Congress passed and President Biden signed the Social Security Fairness Act into law. The law is now in effect and has been made retroactive to January 1st of 2024.

This law impacts employees of the Federal government or some state governments and municipalities who accrued pension benefits under a government pension. Some Federal government employees who accrued pension benefits under the Civil Services Retirement System (CSRS), or the transitionary Civil Service Retirement System offset program, as well as state and large numbers of municipal employees in states such as Illinois and Ohio and some in Michigan and Indiana.

Public employees participating in certain government pension programs were subject to a rule called the Windfall Elimination Provision, or WEP. While accruing public pension benefits, these workers did not contribute to Social Security, and from a logical perspective were exempted from payroll taxes in exchange for having part of their compensation directed toward funding the public pension programs of their public sector employers. This would result in a testing process, called the Government Pension Offset (GPO) under WEP, used to determine whether they would receive reduced benefits or have their benefits eliminated under Social Security. Or said simply, if receiving a sizeable municipal pension as retirees they would not receive Social Security benefits.

The WEP and GPO rules (sorry about the government speak) did create an issue for workers who did not spend their entire career in a public sector pension system. It's not hard to imagine that perhaps someone may start their career in the private sector, contribute to Social Security for 10-15 years, then go work for the government and stay until retirement. Under this scenario, despite having paid payroll taxes long enough to qualify for Social Security benefits (40 quarters), these retirees would not receive benefits.

The Social Security Fairness Act adjusted these rules and made certain employees and retirees eligible for the Social Security benefits they would have earned while subject to payroll taxes.

According to government data released during the signing of this new law, about 2 million public sector retirees and 750,000 spouses of deceased retirees will be impacted.

So, if you think you may be impacted by this new law, and in my experience most impacted retirees and some pre-retirees are well aware when they are, you have the opportunity to reclaim the benefits earned by the payroll taxes you paid outside of the government pension system, but it won't be exactly easy or automatic.

If you believe you are impacted, and once again this is for public employees and retirees subject to the WEP and GPO rules who also worked under the payroll tax system, or their surviving spouses, you can apply for reconsidered Social Security benefits under the new law. The Social Security Administration has set up an application process, and while the benefits increase is retroactive to the beginning of 2024, benefits begin accruing upon application date with a lump sum payment for the reconsideration period.

The volume of applications related to this new law is expected to be considerable. I strongly suggest calling Social Security at 1-800-772-1213 as soon as possible and when prompted by the voice response system as to why you are calling, state clearly "Fairness Act" to get connected to specially trained representatives to get the ball rolling.

Special thanks to Stacey Fargo at Oak Partners for elevating this topic in the office and suggesting this column topic. Stacey is a real pro, works so hard for her clients and is a joy to work with.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax or legal advice. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

AI's unprecedented opportunity

Sat, 01 Feb 2025 08:00:00 GMT

Markets were shaken on Monday last week with the revelation that a Chinese startup, called DeepSeek, had developed a functional Artificial Intelligence (AI) product to rival currently available, leading American AI models, and done so at a claimed small fraction of the cost.

The combination of the high performance of the Chinese DeepSeek product, along with claims by the company the model had been trained at much lower total investment, caused investors to question the lofty valuation of the AI market sector in the United States. This sector, which includes top performing stocks such as NVidia, Microsoft, Broadcom, Google and other "magnificent seven" technology companies, is priced for perfection and any narrative throwing doubt on the AI narrative has the capacity to disrupt markets.

While industry analysts and technology experts have been impressed with DeepSeek's learning and performance, there was some skepticism the claimed training cost of the AI model was accurate, and inclusive of all the development costs associated with building and running the critical semi-conductor chips and hardware to scale the product.

I am not going to pretend to be an expert on AI technology. Like everyone else, I eagerly await the promise of an intuitive AI, which delivers true human-like interaction and reasoning ability. Thus far I have not been overly impressed with the large language AI models I have interacted with, but I know many others feel differently.

My standard test question when interacting with an AI chatbot is: "Where should I go on vacation?" -- as I believe this question requires a certain level of intuition and inherent curiosity to answer effectively.

When I ask this question to Chat GPT, the leading free American AI chatbot, and now DeepSeek R3, the leading Chinese version, both answers are similar. The chatbots list so many potential vacation options it practically provides no answer at all, for the most part just naming the top travel destinations on the planet, and neither model asks me what I want to spend first before answering, which is clearly how a human would conduct the same conversation.

Which is why I find large language AI products to be just sort of "meh" at this point. It's still clear when I'm interacting with a chatbot that I am interacting with an AI, as the output is still not very "human." This is probably the reason so many students have been sanctioned for trying to use AI to write term papers. It's still very obvious at this point.

This being said, while I may not be overly moved by AI right now, I also believe this technology is going to change everything about being human on planet earth, and it won't take long.

My best analogy on where I feel this technology is right now: compared to the internet, I think it's right about the stage where we no longer had to dial in, listening to the garbled computer talk, to get online. Most everyone over the age of 40 knows what I am talking about; anyone younger is likely just blank stares at this comment.

We knew while listening to the dial-up garble sounds this internet thing was going to change everything, but I think few of us could really understand just how profound this change was going to be. After only 30 years the internet has impacted almost every facet of being human, so shall it be with AI.

Which is why I have a hard time believing a Chinese startup with bold claims of unusual cost structures is about to upend the whole subject. I certainly like the competition and innovation, but does this Chinese success change the global narrative? That's probably a bit of a stretch.

When a sector or market is priced for perfection, volatility is the inevitable result as no tree grows straight to the sky. The winners and losers in AI may or may not be known at this stage, but the one thing I can be certain of is the opportunity presented by Artificial Intelligence may be unrivaled in all of human history. It's a fun time to be on the earth.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

New economic agenda could bring market volatility

Sun, 26 Jan 2025 08:00:00 GMT

With the return of the Trump administration, I find myself having a lot of conversations about tariffs. I've written columns about tariffs in the past and familiarized myself with the philosophy and history of this specific type of taxation, but with Trump 2.0 now in motion, investors are becoming more focused on this topic and I expect discussions of this topic to increase in my day-to-day activity.

To prepare for this likelihood, I decided to do a bit more targeted research on the topic, using the only guinea pig I have easy access to: my own family. In order to do this research, I had to leverage a traditional January process I was already engaged in, which is the annual purging of Ruiz family junk subscriptions and restructuring or reconsideration of household services such as cell phone, streaming services and cable accounts.

The further tariff research required me to delve into the abyss of the family's Amazon order history and Southwest Visa card, which tells most of the story on where our goods-based discretionary money goes month to month. This is always a traumatic process for me, as it tends to raise my blood pressure, but this year I endeavored to suffer in silence as prior findings were not, shall we say, "effectively communicated" to my brood, leading to family in-fighting. So, armed with curiosity and fortitude I set out to discover how much this tariff idea is likely to cost the family.

I think January is a decent month to survey our spending habits, as the Christmas gift spending binge is over, and goods consumption tends to be much more "typical." Month-to-date as I write this column, 29 items had been ordered on Amazon, and my wife had been to Costco once. I also went to Harbor Freight once for hardware needs. Most of the items ordered on Amazon were consumable, mainly vitamins, tea and other personal care related goods. The Costco trip was almost entirely groceries but did include some gloves and a pair of pants for me. Total routine household consumption-based spending was about $1,600 for the month. There were eight non-consumable goods purchased on Amazon, five by me.

Here, however, is where it gets complicated. Most of the consumables (vitamins, tea, groceries), which were about 50% of the total spending, seem to be produced in the U.S., but it is impossible to know if all the inputs were produced domestically (some produce surely came from Mexico), but for discussion purposes, let's say they were, so no tariffs there.

The Costco pants and gloves were made in Asia, not China; the eight products purchased on Amazon were all made in China, as were all the items purchased at Harbor Freight. The items purchased from non-China Asian producers totaled about $50, the other items made in China (ladder, floor jack, duffel bags, various hardware, cooler) around $650. Nothing on the goods on this limited survey list was produced in Canada or Mexico.

Armed with this data, and Trump's rhetoric, let's do some math. Right now, President Trump has revealed his intention to levy tariffs on goods imported from China of an additional 10%, and goods produced in Canada and Mexico of 25%. I have not seen any mention of other Asian nations such as Vietnam or the Philippines. He has also threatened to levy tariffs as high as 50% on goods made in China, but most analysis I have seen concludes this is unlikely.

With the information we have, my math indicates the announced tariff intentions would have cost the family about $65 in additional "taxes" so far in January. Not an insignificant amount, but not a real game changer either. I am also reminded of the process of checking out at Harbor Freight when the very nice attendant scanned a coupon she had under the counter and took $25 off my total before I even knew what she was doing, so obviously our retailers have the ability to absorb some of the potential cost changes due to tariffs.

So, what do we do with this experiment? Well, collectively tariffs clearly could raise costs for American households, and if we extrapolate the cost increase due to the hypothetical tariffs across my family's January consumption it is about a 4% cost increase, which will feel inflationary, and perhaps investors should be concerned.

Admittedly, with my investor hat on, tariff talk considered in isolation does cause me some consternation, and until we get a more thorough look at the rest of the new administration's economic and tax agenda, markets may continue to experience stress in reaction to President Trump's very loud tariff rhetoric.

The Trump administration is clearly determined to reveal and pass its economic agenda as quickly as possible, but with thin margins in both houses of Congress quick may be relative. Tariff talk will matter to Wall Street, but so will capital gains tax rates, income tax reform and energy policy. 2025 looks to be a year of great change; investors aren't always great at dealing with change. While euphoria seems to be in control of markets, I believe the most likely outcome over the next few months is increased volatility. Hold on.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Quantum computing emerging as a technology -- and investment topic

Sun, 19 Jan 2025 08:00:00 GMT

I'm a fan of the Marvel movies. Not just for the action and the effects, but perhaps even more so for the clever dialogue between characters. I find the writers and actors witty and brilliant.

In one of the Antman movies, the hero Scott Lang is being lectured on how he became the Antman. After the confusing diatribe from the physicists who created his Antman suit, he frustratingly asks "Do you guys just put the word 'quantum' in front of everything?" Well, for the past couple months, stock investors have been doing just that.

As seemingly quickly as the investment excitement surrounding Artificial Intelligence (AI) technology came into the financial market landscape, the hype around quantum computing has come on even faster. While AI may be the secret technology sauce of the current stock market rally, those focused on quantum computing believe this technology may soon take up the leadership mantle. While I am certainly not convinced, I don't think this topic is going away, so I thought we might cover some basics.

Like the Antman movie dialogue indicates, the subject of quantum computing is confusing. The terms used to discuss it are technical and most of the talk quickly breaks down into the jargon of a master-level physics textbook. I will do my best to avoid this technical jargon here, so I may also be off on some of my accuracy for our true physics-reader audience. Feel free to educate me; the rest of you stay with me.

The word quantum in its simplest form is used to describe processes or interactions occurring on a very small scale. Not small like microscopic, but rather small like subatomic. So small the processes are considered almost fundamental, in that they are the most basic interactions between energy and matter. Processes at this fundamental level occur in different contexts of time and reality. Despite attempts to build technology to harness these processes, they are not yet completely understood by physics.

Because quantum processes occur in different contexts of time, the opportunity to harness them with technology has become the focus of researchers. Developers of quantum computers promote the technology as a way to solve extremely complex mathematical equations and challenges in fractions of the time it would take for classical computing models (including AI). This speed would enable quantum computers to increase the computational potential of the planet by an incomprehensible magnitude.

This type of computing power has the capacity to be used to solve many complex problems. One positive example coming to mind is the ability to accurately model long-term global climate trends, a feat not yet possible with current technology. There are negative examples as well, as it is believed a true quantum computer could break any current computer security encryption within milliseconds. The financial and national security ramifications are terrifying.

Quantum technology is still primarily in the theoretical stage. I am only aware of two companies claiming to have built a machine based on quantum technology: Google and IBM. The basic form of quantum information interaction, called the qubit, is unstable and requires incredible amounts of energy to isolate and contain. Any interference present in this process tends to break down the qubit into a state of incoherence. It's mind-boggling stuff.

Some of the immense technological challenges, however, have not deterred a host of companies from pursuing development and commercialization of quantum technology. In November and December of 2024 this niche of the stock market ignited, and many quantum stocks rallied, drawing attention to this subsector.

Unlike the development of AI, which has been heavily dominated by giant mega-cap technology companies, quantum computing opportunities look to be more broadly spread among mid-sized companies and even start-ups. While the debate is raging about how soon quantum technology may provide commercially viable applications, with claims ranging from later this year to 15 to 20 years, the topic of investment possibilities in quantum computing is likely here to stay. While investors may not be early at this point, this topic and the companies developing this technology are certainly worth further exploration and research.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

First months of new year could be a wild ride

Mon, 06 Jan 2025 08:00:00 GMT

Ah, a New Year. While from a financial market perspective 2024 was hard not to like, I for one am looking forward to 2025 with both positive anticipation as well as a healthy level of nervousness.

I believe the re-election of Donald Trump heralds a once in a multiple generation societal shift. Trump, whether you love him or hate him, to me represents the true intention for change and disruption on a national scale, and unlike last time when I believe Trump thought his election in 2016 was mostly about his own charm, this time I think he actually understands and embraces the intent of those who support him.

The nation wants change, and having learned the hard way just how the system he seeks to govern can resist, his incoming administration has developed strategies to deliver more effective results in the upcoming second round. Ready or not, disruption is coming and at the very least it will be entertaining.

In my experience however, financial markets struggle with disruption. So, my expectations for 2025 are a bit back-end loaded as I believe the Trump administration seeks to come in with a bang. Here are some of the investment themes I will be working off this year, which are primarily dominated by inflation.

The Biden administration is clearly blamed for the rampant inflation experienced over the three years, but reality is rarely this simple. The government has mismanaged its finances and the monetary base for decades, and while Biden's economic philosophy of driving federal dollars towards preferred industries and zero accountability when it comes to federal operational spending is no doubt a cherry on the mismanagement sundae, I believe when it comes to inflation, President Biden is more a victim of bad timing than anything else.

A number of long-term trends involving demographics, public and private debt and globalism, coupled with a radical financial response to the COVID crisis, are manifesting in higher inflation, which won't be easily offset by anything the Trump administration is able or willing to do, especially in the short term. In the short term the snickering lefties online, blaming the re-election of Donald Trump on grocery prices, are likely to be validated; groceries prices aren't going down, inflation will not be easy to control and I believe investors are just coming to realize this reality. It is this realization that I believe will drive markets in the early part of 2025.

In the short term, I do not believe investors really care about inflation, but what they do care about is interest rates, which they are expecting, maybe even demanding, to go lower. I believe this expectation will be the first investing challenge of the new year, as inflation continues to stay above the Fed's target level and the central bank continues to forecast a slower pace of rate cuts, or maybe even an early pause to the rate cutting cycle, only this time with a new wild card: Donald Trump.

The Washington establishment believes in the independence of the Federal Reserve. The politicians have talked themselves into the supremacy of the Fed policy process, letting the experts at the Fed run the economy. I believe Donald Trump believes none of this. Listening to his rhetoric, Donald Trump believes in growing the economic pie, believes people who are working hard and making money have less time and energy to fight with each other politically, and believes the way to make America rich is lower taxes, lower regulations and yes, lower interest rates -- and he isn't interested in the independence of the Fed.

From this perspective, it's not hard to see the predicament we could end up in. With inflation rates not dropping, or even rising, the Fed attempting its standard policy response of holding interest rates steady or even raising them, and President Trump pounding away on Truth Social about what he wants to see -- forget the playoffs, this could be the most exciting game ever, all playing out by springtime.

What would the financial markets look like in this scenario? Well, I would expect longer term interest rates to move higher as bond investors begin to price in higher permanent inflation rates, and I would expect complete confusion with the short end of the rate curve, driving an already overheated stock market toward much increased volatility.

With these possibilities in mind, I am going into the New Year prepared for a wild ride. The silver lining is, I do believe the lower tax, smaller government philosophy of the incoming administration promotes stronger growth over time, even if this growth comes with a dose of higher inflation.

Eventually I believe the new normal of a more rambunctious monetary policy process settles in, and the prospects of higher growth and higher inflation drive long interest rates and stock prices higher, both of which are ultimately good for investors by year end. We may just have to survive long enough to enjoy them. Happy New Year.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

New tax savings program starts July 1

Sun, 16 Jun 2024 08:00:00 GMT

A very exciting tax savings program is about to roll out on July 1st and I think now is good time to refresh on the state of Indiana's great tax credit programs.

First, lets go over the difference between a tax credit and a tax deduction. A tax deduction is income that is excluded from being taxed. Common tax deductions are state and local taxes, mortgage interest and charitable contributions. Most of the time, in order to benefit from a tax deduction, the tax payer must "itemize" their deductions, instead of using the standard deduction.

In 2024 for a married couple filing jointly, the standard deduction for federal and state income tax is $29,200, so in my experience many tax payers do not have enough in itemized deductions to exceed the amount of the standard deduction. So, long story short, many people are not getting an additional tax benefit for expenses like charitable contributions and mortgage interest.

If, however, a tax payer does have sufficient deductions to exceed the standard deduction, the amount of the deduction is excluded from income taxes. For example, a $10,000 mortgage interest deduction for a family with $150,000 in income, choosing to itemize, would reduce federal and state taxes income tax due by about $1,800.

A tax credit works differently and in my opinion is much more attractive. A tax credit directly reduces the amount of tax owed by the tax payer. Common tax credits are child and dependent care tax credits, the earned income tax credit, the American Opportunity tax credit for education, and in the state of Indiana the 529 contribution tax credit for amounts contributed to the Indiana College Choice 529 plan.

In the scenario, let's assume an Indiana family with two children contributes $4,000 to an Indiana 529 plan and pays $6,000 a year in child care costs. In this scenario, the same $10,000 in expenses, only this time eligible for tax credits, reduces federal and state income taxes by $7,000. A much better outcome.

Bottom line, tax credits are very attractive planning tools. So how do we get more? Well, fortunately the state of Indiana offers some great options, and one new one rolling out on July 1st. Let's go over some of these great programs.

In my opinion, Indiana has very attractive tax rules regarding contributions to its Indiana College Choice 529 plan. For Indiana residents, the state offers a tax credit of 20% for contributions to this plan, for a maximum credit of $1,500 for a $7,500 contribution. This tax credit is available to Indiana tax payers, but the beneficiary of the 529 does not need to be an Indiana student or attend and Indiana school. The tax payer also does not need to be the owner of the 529 plan, so grandparents can contribute to an account owned by parents and still claim the credit. I am not aware of a more generous state tax credit option for any other state's 529 plan. And in 2024, a credit is also available for families contributing to the InvestAble plan which benefits individual with disabilities. Kudos to Indiana.

Another attractive Indiana state tax credit program is the NAP credit. The NAP credit is designed to benefit local non-profit organizations working to improve our communities. This program provides a 50% state tax credit for donations made to organizations participating in the program. In addition, the contribution to the non-profit may also be eligible for deduction on the tax payer's Federal tax taxes. So, with the NAP program a donation of $1,000, will reduce Indiana state taxes due by $500 plus potential Federal savings. What a great program. Some of the local organization participating in this program in 2024 are Boys and Girls Club, Caring Place, Dunebrook Hospice, Healthlinc, Opportunity Enterprises, Habitat for Humanity, and Planting Possibilities. Contact these organizations to learn more.

A tax credit program I intend to explore personally this year is the Indiana Scholarship Granting Organization (SGO) tax credit. This credit functions the same as the NAP credit with a 50% tax credit for contributions to and SGO that provides educational scholarships to eligible Indiana students. The Legacy Foundation is a local SGO and a number of private schools in Lake and Porter county have SGO partners as well. More information can be found on the Indiana Department of Education website.

The newest Indiana state tax credit program is the Affordable Homeownership Tax Credit. This tax credit will also function similarly to the NAP and SGO credit, providing a 50% credit for contributions to be used to reduce Indiana income taxes due. The purpose of this credit is help fund local affordable housing projects that are so vital to our local communities. This tax credit is available locally through Habitat for Humanity, so once again contact this organization to learn more.

We all appreciate saving money on taxes. With a little bit of planning and education, the state on Indiana provides some great option. Consult your tax advisor to learn more.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

'My AI' will be a game changer

Sun, 09 Jun 2024 08:00:00 GMT

Readers of the column know, I am a sci-fi geek. I voraciously consume any movies or TV shows about the technological future of humanity. At the same time, I am also a dabbling student of the "apocalypse". Working for 30 plus years in a field which utilizes global financial markets to deliver solutions to clients, I maintain a grasp of the complexity, durability and corresponding fragility of the systems which serve as the foundations of modern life. I admittedly find it healthy and sometimes mentally fun to explore the possibility of collapse in the things we have all come to take for granted in society. Combine sci-fi and the apocalypse and now things are getting interesting for me.

I am certainly not alone; it seems American consumers cannot get enough of these two topics melded together as well. Each decade has its own version of dominant pop culture vision of our dystopian future. In the 80's it was the Terminator, the 90's the Matrix, more recently the Hunger Games series, and hundreds of other titles fill the years.

A common trend in apocalyptic future fiction is the all-powerful, and of course corrupt and evil "AI". In these stories the AI has taken over the world, and enslaved or attempted to exterminate humanity. In these narratives reference is often made to the "singularity", which is the moment computers become self-aware or conscious, and seconds later decided to wage a first strike on their human creators. There are some who follow such things that believe the real life "singularity" is close and may have already happened in some Silicon Valley laboratory.

Candidly, the concept of an all-encompassing non-human intelligence connected and operating everything from our doorbell cameras to our cars to our pockets and wrists through our smart gadgets is disconcerting. What could be done with such power? How can this new form of "being" be trusted with such access and control?

What if however, we simply change the term "the AI", to the term "My AI"? "The AI" watches and commands everything from a perspective of centralized planning, and as we know from all forms of central political and economic planning in the human world, "the AI" would therefore also be highly likely to become self-serving and focused more on preservation of itself than service to others.

"My AI" on the other hand is not focused on watching and commanding all things from a central point of view, but rather on monitoring and assisting each of us from a decentralized, personal perspective. "My AI" wants to help us make sure our kids get their homework done, it wants to make sure we don't forget a birthday or anniversary, it wants to watch our bodies health signals to identify sickness or disease as early as possible, it wants to make sure the home never runs out of toilet paper.

"My AI" exists to make us a better version of ourselves, it exists to serve, not unlike a super smart, highly aware, hypoallergenic techno border collie living in each family's own individualized cloud. Instead of being an omnipotent villain, "My AI" is a loyal customized hero.

So, which model is likely to come to fruition? Well, in my opinion there is no doubt some will attempt to harness the power inherent in artificial intelligence to increase the ability to monitor and analyze mass amounts of data generated by human beings around the world every day. Those who seek control, even under the best intentions, will always seek more control, and this version of the "the AI" is likely to be infected by the underlying flaws of its human masters.

There is however the possibility that in a peaceful, decentralized world, using AI for this type of purpose is just simply not that interesting, or even productive. Sure, watch what I buy, see where I travel to, monitor what I look at online. Yawn. Bad actors will likely develop counter measures to AI, just like they have to human beings, new flash to the rest of us, someone is already tracking all these metrics on us already.

"My AI" on the other hand is a game changer. It exists to make us more productive, more organized, more healthy. My AI is something I am interested in investing in, My AI will require a technological infrastructure build out unrivaled since perhaps the beginning of industrialization. My AI may eliminate the need for some human jobs, but it also creates the opportunity for all new human jobs not yet conceived.

I believe the concept of My AI is inspiring investors and in large part powering the current stock market rally. When I think about the possibilities, I can't remember a more exciting time to be an investor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Vanguard at a crossroads

Sun, 02 Jun 2024 08:00:00 GMT

When it comes to outdoor sports, I'm a gear junkie. I thoroughly enjoy discussing the nuances of sports equipment and outdoor clothing with my mountain biking, skiing and ATVing buddies over a beer or around a campfire after a long day outside.

All junkies have our favorite brands in bikes, skis, ATVs, shoes and clothing. Sometimes we hassle each other over the wrongness of the other guy's choices, most often however, the conversations are informational and helpful in finding new products to improve the outdoor experience. In my experience, the technology and quality in gear is directly correlated to my performance on the trail or mountain. Bottom line, gear matters, and the gear world is always changing.

Unfortunately, all my fellow gear junkies also have their stories of the "sell out". The sell out is a gear company that had an exclusive or dominant position in their space in the market, building unique, high-quality clothing or equipment, that was then sucked up by a private equity firm or large competitor.

The buyer then kept, and sometimes expanded, the brand but changed the products, sometimes subtlety, sometimes substantially, typically either to reduce costs or expand production. The result was same brand, dramatically different product experience. I can think of two high profile clothing companies, a bike company and a shoe company right off the bat that fit the sell out bill. Sell outs make gear junkies sad and sometimes angry.

Of course, corporations change products and strategies all the time, and this certainly isn't limited to outdoor gear. One such transformation may be going on right now with one of the highest profile companies in the financial services industry. The company is Vanguard.

I have appreciated Vanguard's values and philosophy for decades. I was a fan of their founder, John Bogle, who presented his viewpoint on low-cost index funds in a folksy, easy to grasp way, educating a whole generation of investors on the fund industry and investment concepts in general.

I have also appreciated Vanguard's ownership structure. Vanguard is owned by its mutual funds, which are in turn owned by fund investors. With no outside shareholders, Vanguard almost functions as a sort of investment co-op, where profits are ultimately returned to fund investors in the form of lower fund expenses. While not a non-profit, Vanguard does ultimately exist to benefit the people who choose to invest in its funds.

As an advisor I also appreciate Vanguard products, which I have always considered to be "clean". Clean in that the internal pricing was fair and easy to understand, and as a manager of money I knew what I was getting when investing client money in a Vanguard product. Vanguard in my opinion does what it does (low-cost index funds) well, and serves an important role in financial services.

Which is why I am concerned about some of the changes I've perceived recently at this company. As index fund investing has become more dominant, especially inside 401(k) plans, there has been a race to the bottom on fund expenses. This competitive pressure appears to have effected Vanguard's already tiny margins and sent management searching for other revenue streams. This search has led to behavior which has in turn impacted Vanguard's brand.

In the podcast world where get some of my news, its not unusual to hear reference to "Blackrock and Vanguard", as if these two financial industry giants were bent on taking over the world from behind the scenes. I hear people say these goliaths are buying up residential housing so they can rent it back to former homeowners, and taking over corporations through ESG board bullying, by voting the shares owned in their index funds. I personally am not aware of these behaviors when it comes to Vanguard, and it makes me sad to hear the brand referred to in these ways.

What I aware of is my mutual clients coming in saying Vanguard is tormenting them through the implementation of new account service fees, the consolidation of product lines and other subtle ways. These things to me make it sound like in trying to keep up in the race to the bottom with fund expenses, Vanguard may have put its brand at risk, and to me this is a shame.

I've heard it said when it comes to social media, "if there is no cost to the product, then you are the product", well I believe this can ring true in financial services as well. Yes, some index fund providers have removed fees from their funds, but are we naive enough at this point to believe this means the product is free? Would it really matter to the typical index fund investor if fees in the fund are .03% vs .05%? I would prefer the fund family charge a fee that enables it to continue providing the product. I would prefer honesty and transparency.

Soon a new CEO will take the helm at Vanguard. It will be the first external CEO the company has ever hired. The new CEO is from Blackrock. I feel like this institution stands at a crossroads, and I hope that it will choose to continue fulfilling the important role in financial services it has played for many decades. Only time will tell.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Inflation expectations can become self-fulfilling

Sun, 26 May 2024 08:00:00 GMT

Last Saturday I was heading to the Three Floyds Dark Lord Day beer fest in Munster with a couple buddies and my brother. My brother and I had already made a pact with each other to behave, get in, get lunch, get our beer and leave. Dark Lord Days of the past had not been executed so effectively and expectations from my wife Tracy on these objectives were low. To help me meet my "performance goals" Tracy cleverly delegated me an errand before I left.

That night my brother and sister-in-law, adult nephew and new niece were coming in from out of town. She needed me to plan and pick up dinner. My brother-in-law spoils me with good bourbon, so I wanted to plan a nice grilled feast on my new Blackstone for the evening, so after the beer fest, off to Meijer I went.

We would grill some nice New York strips, summer veggies, baked potatoes, a blanched asparagus appetizer and berry pound cake with whipped cream for dessert. I also picked up some eggs, bacon and hashbrowns for Sunday breakfast and a few other items. I was clearly going to deliver for my wife and our guests, credibility preserved.

Now, there is something important to know about me. I can trade tens of millions of dollars of stock and bonds for clients without breaking a sweat, craft extraordinary financial models to confidently help people plan far into their future. I can ski Colorado black diamond ski slopes with poise and mountain bike like someone 20 years younger, but put me at a self-checkout lane in a grocery store, especially when there is a line behind me, particularly when some of the stuff in my cart has to be weighed, and I'm heading directly and quickly toward heart palpitations and hyperventilating. I simply don't do grocery stores well and try to avoid them, and there is always a line at Meijer on Saturday.

This time however, I was on a role. I executed at the fest, had a great dinner planned and went into the self-checkout with confidence, scanning and weighing like a practiced Mom. Until the total came up on the screen. $372, this was impossible. I must have screwed something up. It was only two meals and some drinks, there wasn't even any alcohol. I panicked, what was I supposed to do, overpay by what was in my estimation at least a $100 or ask for help? I looked around, the line was long but moving, the young self-checkout attendant looked available, I made the call, pressed the button and the help light lit up.

The young guy came over with a bored but friendly demeanor, "can I help you?", he asked. "Um yeah, I think some of this stuff must have scanned twice because my bill doesn't seem right", I replied. He looked at me, less annoyed than I anticipated and said, "let's review the items in your cart" as he started the process with impressive competency, looking at items and finding them on the screen.

I couldn't even turn around and look at the line. I imagined the busy Saturday people behind me glowering at me in disgust, but the attendant was very good, and the process was going fast. "Ooops" he said, I knew it, I had scanned the steaks twice just as I thought, "you missed this garlic clove", he continued. He punched a couple buttons, and my new total came up, $374. "Looks like you're all good now", he said as he walked away.

So, when I'm being continually asked, "Marc, when do you think inflation is going to get better?", this is what they mean. Candidly, in my daily life, I'm a bit insulated from this pain. Most of the "stuff" I buy comes from Amazon, where I buy one or two things at a time and don't notice the price changes, or is big discretionary items like trucks or bikes, where to some extent prices can be negotiated and shopped.

Tracy handles most of the daily bulk buying for the home, and while I see the credit card Costco charges alerting on my phone, I am always assuming she is buying more than just groceries. Maybe she isn't.

The problem with inflation proving as persistent as the current cycle, which began in 2021, is after a while inflation itself can become self-fulfilling as people come to expect price increases and start adjusting their behavior as a result. I'm afraid we may be close to this trend taking hold, which is the precursor to hyperinflation.

Hyperinflation taking hold in an economy changes everything. Consumption habits, interest rates and borrowing, even the citizenry's relationship with the government. Hyperinflation requires direct individual countermeasures. Hyperinflation topples regimes. I don't think we are there yet, but it can't hurt to revisit some lessons from other periods where this trend emerged. Next time, maybe some burgers will suffice.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Time to demand politicians address the money issue

Sun, 19 May 2024 08:00:00 GMT

Here we are, six months out from the November Presidential elections. Based on the non-stop propaganda flooding the flat screens, annoying texts begging for money that for some reason come from every candidate to my phone, the legal dramas and these gigantic rallies hosted by Trump, that are in my opinion both impressive and a bit unnerving, campaign season is clearly in full swing.

Now that it is "game on," I thought I would start following up on the economic policy analysis I promised earlier in the cycle and do some new research as to who is saying what on the campaign trail. I really wanted to understand what each candidate was saying in the way of economic vision, we certainly have serious economic issues in this country and a need for clear leadership on how we can address some of these challenges. So, what did I discover?

Well, Trump is talking. A lot. Despite being shackled in a New York courtroom most days, he is still talking. He loves to talk about the border, loves to talk about himself, is talking about Israel and Ukraine and especially China. He talks a lot about the economy during his Presidency, which he of course deems as the "best ever." But still not a lot of economic policy talk, so I went to the issues tab on his campaign website.

There's a tab called "Rebuild the Greatest Economy in History." I opened the tab, it boasts about the economy during his first administration. There is no policy specific items. It ends with, "President Trump's vision for America's economic revival is lower taxes, bigger paychecks, and more jobs for American workers." Um, OK.

To be fair, there are other tabs in the campaign website as well. One addresses his vision for "energy dominance," which involves permitting oil and gas drilling as well as pipelines. There is also a tab about "Fair Trade." This tab, when opened, talks about re-doing trade deals and reducing dependence with China. At least there's something economic related to chew on, but nothing new.

Biden, on the other hand, is not talking. It's very difficult to find Joe Biden talking about anything online. There are no long format podcasts, no meaningful campaign rally videos, and all the media interviews I can find seem short, vague and scripted. So, I went to his campaign website.

The website asks for money (they all do), and asks for volunteers (they all do), but there is literally not one word about policy or issues of any kind on the site. No vision, no ideas, no propaganda. Nothing. On President's Biden's official government website, whitehouse.gov, however, there is some policy talk, including economic policy.

The Biden government website has puffery about reducing cost burdens (inflation) on American families and some nominal talk about changes to the tax code. The approach toward reducing cost burdens appears to be focused on small tax credits for clean energy and health insurance. The tax approach is to implement higher taxes on corporations and a tax on corporate stock buybacks. There is also a vague policy talk of not increasing taxes on personal incomes under $400,000. The rest of the items on the website seem to be about cultural issues and touting the record of the Biden administration.

Then we have RFK Jr. Now this guy is talking to everyone. There's long format podcasts with hosts in the center, the right, and the left. Last year he was on Joe Rogan for three hours, Chris Cuomo for an hour, Tucker Carlson for 81 minutes. I love deep diving on a topic, but sometimes RFK dives so deep he loses even me.

I also went to RFK's campaign website. The website reads like a policy white paper. He is clearly focused on regulating corporations, is suggesting a national $15 minimum wage, is pro-union, and is proposing a national mortgage program which limits mortgage rates to 3%, funded by tax free bonds. The website has idea after idea, just like his podcasts. I may not agree with his approach on some economic issues, but at least he's talking about ideas, lot's of them.

Unfortunately, what I am yet to discover is anyone talking about the real elephant in the room. This year the federal government will spend nearly as much money on interest payments as it will on national defense. In 2035, the government projects the Social Security program to run out of reserves. Spending by the federal government is now projected to be over 23% of our national GDP, when has this type of government overhang ever led to prosperity or been sustainable?

Look, I understand rhetoric about abortion and gender issues may rile up the base, and no one is happy with the mismanagement at the border, but for American prosperity to continue it really has come to a point where it's all about the money. We need to start demanding these politicians address the money issue, it dwarfs every other issue by comparison. I will keep doing my part.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Financial aid mess begs discussion of government's role in higher education

Sun, 12 May 2024 08:00:00 GMT

Families who have sent youngsters off to college have experienced what I am about to explain. As part of this process, most families will complete a process known as the FASFA, which is a government acronym for the Free Application for Student Financial Aid.

The FASFA is completed online, and I have written about this ordeal many times before. I am not going to go over this undertaking today, except to say that it is a major pain in the rear and usually takes two to five hours to complete. The net result of the FASFA is a difficult to understand number called the EFC, which is another acronym for Expected Family Contribution, that colleges and universities use to draft their mandatory "cost of attendance" letter for each student.

This letter, written in nice plain language, details the expected costs the family will incur for tuition, materials, meals and housing and also details any financial aid the university, or the government, is providing in the way of scholarships or grants. In my experience the letter is also accompanied by information on available resources to help the family finance the cost of attendance, which will involve Federal student loan programs.

In my own home, the receipt of cost of attendance letter for my son Sam, from the out-of state University of Tennessee, resulted in a conversation, which depending on who is telling the story is described as either a "ridiculous rant", or from my more "rational" perspective, a reasonable discussion of the purpose and "investment in the future" that is college. I will admit, at some point during the conversation, going to the Marine Corps recruiting office was mentioned. In the end, however, it all played out well as Sam now attends IU with it's nice in-state tuition.

Needless to say, the cost of attendance letter is pretty darn important for most families, and for universities, because it very often drives the ultimate decision of where the soon to be college student is heading and gets both students and schools on the same page.

Which is why this year, a mess of unapparelled scope is unfolding. The source of the mess lies with who else, but once again, the government. The Department of Education, probably responding to previous griping about the FASFA process, endeavored to simplify the process by making the FASFA shorter. Sounds reasonable of course, but as President Reagan once wisely opined, the most terrifying words in the English language are "I'm from the government and I'm here to help".

As it turns out, the new FASFA process is actually easier, and many families are navigating the system in less time. The real problem, however, was with the back end of the FASFA system itself. Apparently, the system was not ready for the shorter form, which ultimately resulted in some critical calculation errors in the information being provided to universities and families. This caused many incorrect letters to be rescinded, and many unissued letters to be delayed. While I don't have a college freshman in the house right now, the stress I'm hearing about from clients, and family members is pretty excruciating, with some high school seniors in my life still not sure where they are going in the fall.

I think there is a lesson to be learned here. The lesson being, I think the Federal government just way to involved in discussion and implementation of higher education for our youngsters.

From the confusion the Biden administration is continuing to cause with their loan forgiveness programs, to the completing of the FASFA being pretty much required to sign your kid up for college, it seems to me there is too much government, and government money, surrounding this subject.

I certainly understand and appreciate the need for public investment in higher education, especially through the support of those in our communities who truly need a financial leg up to improve the lots of the next generation, but in my opinion any time government money flows into an industry, and make no mistake secondary education is an industry, the results tend to be inefficiency, cost inflation and even corruption. It's impossible to deny all three of these factors are impacting the college and university system in our country today.

Perhaps this mess with the new FASFA will marshal a conversation about Federal government involvement with college itself. I think the conversation is long overdue.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Uncertainty in estate tax future warrants planning

Sun, 05 May 2024 08:00:00 GMT

Tim graduated from Purdue Calumet with a Business degree in 1976. The U.S. economy was recovering from recession at the time, but there still wasn't a ton of jobs in Northwest Indiana. He found a job selling fabricated steel products to customers in the agriculture machine industry. He didn't make a lot of money, but he worked hard forming relationships and building a customer base.

Unfortunately, the early 80's took a turn for the worse, the economy slipped back into a deep recession which hit the Region hard. His employer closed the shop and Tim found himself unemployed with a new wife and baby at home. The early 80's were a time of darkness and deep stress for the young family.

Luckily, with a wide network of customers, when the economy recovered Tim was able to find new suppliers for the steel products he had been selling in his previous job and he began acting as a broker. During this time the strong relationships and solid service he provided paid off, and his customer base began to look to him for more solutions. In the late 80's Tim opened his own small fab shop and began supplying customers directly. He took a second mortgage on the family home to open the business, and while times were less dark, the stress never abated.

In order to take care of his employees, prepare for his own future and save taxes, Tim established a company retirement plan for his small group of employees in the early 90s. He always put as much as he could into the plan. The small shop grew, Tim was able to pay off the second mortgage on the house and eventually had enough business history to borrow money from the bank for a more advanced fab shop and equipment. This expansion enabled the company to serve different industries with increasingly sophisticated products. Tim was always a good steward of company assets and managed his finances closely. He spent non-work time serving on various charitable boards and volunteering in his town. The company became larger and more profitable, creating good jobs for nearly 100 people within two decades.

When Tim was 62, he was approached by a larger competitor proposing an acquisition. The deal would enable his company to live on beyond him, preserving jobs and taking care of customers. Between the fab shop building and the business model itself, Tim accepted a $10 million buyout offer.

Going into retirement, after taxes were paid on the business sale, Tim owned his home, now worth $800,000, had $3,000,000 in his retirement plan and $9,000,000 in business sales proceeds and savings. He and his wife would enjoy a great retirement surrounded by their grandchildren at their lovely lake cottage up north purchased with some of their savings. By any measure Tim was wealthy, and he had earned every cent through hard work, taking calculated risks and making good decisions. He had achieved the American dream, and helped the families of his employees find financial security along the way.

Here's the rub. If Tim were to pass away suddenly in 2025, he would pass his wealth down to his wife, adult children and grandchildren, as well as be able to support some local organizations he felt strongly about. With the exception of income taxes due on his retirement plan, his estate would pass unencumbered by taxes to the people and causes Tim worked so hard to support for many years. Tim's wealth would stay in the Region, where it was created, strengthening our community through consumption, charity and investment. Tim's legacy, built in the Region would remain in the Region.

If, however, Tim was to pass away in 2026 an entirely different scenario presents itself. This is because in 2026, the Federal estate tax exemption will revert back to the rule structure prior to 2017 and expose a large portion of Tim's estate to Federal Estate Taxes. While the estate tax calculations are complicated, a reasonable estimate of the tax due on Tim's estate, both estate and income tax, is roughly $3.5 million. $3.5 million that won't benefit his family, $3.5 million that won't benefit local causes, $3.5 million that will be sucked into the Federal morass plagued by deficits and out of control spending.

Can this nightmare scenario be avoided? Perhaps. Congress could act quickly after the next election to establish new estate tax rules. There's a possibility the rules would be better, there's also a possibility they could be worse. With the current state of two-party political dysfunction in Washington, I'm not holding my breath either way.

This potential scenario, however, can also be addressed through good planning. By being proactive, families like Tim's can use existing rules to reposition assets and financial accounts to maximize savings and keep their wealth in the communities where it was created. We may find, that after the rules change might be too late for some of this planning, and 2026 is right around the corner.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Help is available when pursuing the American Dream

Sun, 21 Apr 2024 08:00:00 GMT

We recently spent the weekend with my son Sam. Sam is a junior at IU, this summer he has been asked back for a second internship at a mutual fund company in Cincinnati. As a dad, I am proud of his progress. He is in the school class I feel was most impacted by the COVID pandemic, as the COVID polices occurred during the important transition years of his senior year in high school and freshman year at IU. I think a lot of these young people are just catching up and the whole group deserves a little patience.

During the weekend, Sam was opining about how "the system" was lined up in a way that was making it impossible for young people to "get started" today. While I detected a little "IU cultural bias" seeping into his rant, the points he made were valid. He said taxes were too high, houses were too expensive and interest rates are double the rates I had to pay on our mortgage (actually, close to triple, but he was on a roll). Sam asserted even if he and his girlfriend of two years both got good jobs when they graduated, together they could barely afford a decent house where they want to live.

As I said, he had a lot of valid points, but at the same time points based on a sentiment felt by young people since time immemorial. And since time immemorial young people still view "getting started" in life as finding a job, buying a home and starting a family. Despite the polarizing rhetoric we are exposed to, the American dream hasn't changed.

I agree however, this is a tougher than typical time to get started. American life has gotten expensive. Asset prices for things like homes are inflated, and interest rates have moved higher accordingly. Bills such as car insurance and health insurance have all gone through the roof and gas and food prices are egregious. Something has to give. Our Federal government's system of spend, tax and print is eroding the opportunity for young people to build prosperity. Inflation is a poison that kills optimism.

As a financial advisor, I've been observing other families "launch" young adults into independence for decades. As a parent I've been learning along the way as well. I have come to the conclusion some of these youngsters may need a little more help at this point in time.

Fortunately, there are programs and tax rules that accommodate this need for a little more help. This help can come in a couple different forms all designed to benefit first time home buyers. The primary categories of programs are affordable mortgages designed for lower down payments, cash grant programs that help families working to muster a down payment and tax rules that accommodate parents who may want to help children in buying their first home.

Mortgage programs offered by Fannie Mae and Freddie Mac called Home Ready and Home Possible both offer mortgages with lower than market or competitive interest rates to buyers with only a 3% downpayment. While reasonably good credit is required for both programs, neither require completely stellar credit scores to qualify, making them more applicable to young families.

On the grant side, the National Homebuyers Fund is a non-profit public benefit corporation that assists first time home buyers with up to 5 percent of a home's purchase price. To be eligible for the grant, home buyers agree to live in their home as a primary residence for at least five years. This grant is applied for through a mortgage company.

Other forms of down payment assistance can include community and local government-based cash grants depending on where the family is establishing a home. A list of grant programs can be researched at www.ncsha.org.

IRS rules also allows a tax penalty exception for parents to access an IRA to assist children in a first time home purchase, prior to the parents reaching age 59 1/2. The exception is limited to a $10,000 lifetime maximum per taxpayer, but under this rule a parent can withdraw funds to from an IRA or Roth IRA without incurring the 10% tax penalty on early withdrawals if the funds are used to assist the child with first time home purchase. Depending on the type of IRA, however, the withdrawal may still be taxed as income. This rule does not apply to 401(k) or 403(b) accounts.

So, while the American dream may have gotten more expensive and intimidating in this modern era of inflation, it is still alive. With some help from the government, the community and the family youngsters may find they are still able to chase their dreams and "get started" building their own lives in our still great country.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Assuming interest rates will be reduced this year doesn't mean they will

Sun, 14 Apr 2024 08:00:00 GMT

It's been 44 years since my alma mater, Purdue University, made it to the Final Four of the NCAA Men's Basketball Tournament. So long, that I of course, have no recollection. I do have recollection of many years of heart ache during March Madness, as strong Purdue teams underperformed over and over again. It's been a tough road for us Boilermakers.

So, because I had already scheduled a day off for the eclipse, there was not much standing in the way (except some serious money costs) of me going to Arizona for the final game. I was committed over the weekend to the Special Olympics state games in Indy, but I was able to catch a late flight out of Indy on Sunday to Phoenix. I figured solar eclipses have been less rare and more predictable than Purdue playing in the finals.

My Dad, my brother Mario and nephew Will (also Purdue grads/students) were already in Arizona waiting for me when I flew in, we enjoyed some mountain biking Monday morning, then our co-worker Steve arrived from the airport to join us, and it was game time. When my brother walked out of his room to go to the game, there was not one Purdue logo or black and gold item of clothing on his body. I, on the other hand, was decked out in Purdue gear.

I immediately recognized his lack of spirit and said, "hey, where's your gear. You look like you're going to dinner, not the national championship game?" He was ready for the question and responded, "Nope, I never wear Purdue colors when I go to games, if I do, they lose". "Understood", I replied, with no further questions required.

In the terrible Phoenix traffic on the way to the game, talk turned to online betting apps and the spreads and odds for the game. Everyone in the rented minivan agreed there seemed to be some opportunity in the numbers, Mario said I should put in a bet. But this time, I replied, "Nope, I never bet on Purdue, they never win if I do." Everyone concurred, there would be no betting.

By now we all know how the game ended. Despite Purdue losing to an exceptional UConn team, the game itself was a great experience. To be surrounded by such amazing Boilermaker energy and excitement was so fun, and I remain extremely proud of the Purdue team for their fortitude and composure. I hope I get to do this again someday.

As I smile contemplating the hopes, rituals and superstitions before the game I can't help but think there may be an investing lesson to be learned.

Common knowledge says the stock market is what is considered a leading indicator. A leading indicator is a data point that may be useful to predict changes in the economy before trends become evident. Other examples of leading indicators are manufacturing orders, building permits, inventory and retail sales numbers.

The logic is because investors are forward looking when valuing the stock of corporations based on expected sales and profits, stock prices have the ability to anticipate future economic conditions and provide insight into the health of the overall economy. But what about a situation where stock prices and the stock market in general seem to be rising not in anticipation of rising corporate profits, but instead in anticipation of falling near future interest rates? Or said, more simply, what about a situation like the first quarter rally of 2024?

When considering this question, we first need to start with the understanding that the principal reason interest rates would go down, is because weakening in the overall economy, which of course, is typically not positive for corporate sales or profits. This general economic weakness would likely first begin to manifest with rising unemployment, stagnant wages and falling inflation and then later be echoed by falling sales and profits. Why would stock investors want these trends to emerge? Would a stock market rally built on these expectations really be sustainable?

I think these questions need to be asked as we head into the second quarter. I expect investors to begin dissecting and obsessing over unemployment and inflation numbers, I also expect unemployment numbers that sound bad could lead to short term rallies, and inflation numbers showing anything but falling prices to do the same. Investors may soon have to come to grip with the possibility interest rates may not go down this year at all, and what happens after this realization sets in is not clear.

In the end it didn't matter if Mario wore no black and gold, or I didn't do my usual $2.00 bet on Purdue. Despite how bad we wanted to win, the results of the game were neither predictable nor controllable with our rituals. Despite how bad traders on Wall Street would like interest rates to go down this year, the same logic may apply.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

As fraud attempts become more sophisticated, it's time for extreme vigilance

Mon, 08 Apr 2024 08:00:00 GMT

Last week was spring break in our family and we took a long-planned trip to the Caribbean (out of the country) with a couple other families. My son Sam joined us from IU for the last half of the trip. My wife and I flew out of Midway, Sam flew out of Indianapolis.

As we were dealing with the chaos that is Midway on the Sunday evening after spring break, Sam forwarded me a voicemail over the phone text. The accompanying message from him was "is this legit?". While I was walking with purpose to retrieve the car, I half listened to the message. It was from a major bank fraud department, sounded professional, requesting a call back about recent suspicious activity on his debit card. I texted him back, "seems legit, you should check the account activity on your phone app".

He texted back, "I don't have that bank, and listen again, the voicemail is for YOU". Just as I was reading the text and getting to the car, a new voicemail notification appeared on my phone. It was the exact same message, requesting a call back about my debit card. Now, I definitely don't have a debit card with that bank, but I do have a credit card I had used on the trip. I also have the credit card set up to send alerts to my phone every time it is used, and I knew no suspicious transactions had occurred and no transactions had been held or denied. I decided not to react and stay focused on the job of surviving Midway. Red flags were flying in my head.

Getting back into the swing of things at the office the next day, an urgent email sat in the top of my Inbox. The email was from our Oak Partners office in eastern Indiana. The email was from an experienced advisor who had also been on spring break the week before.

The advisor had returned to an alert on our account management surveillance system. While he was gone, a good client and family friend had requested a huge withdrawal, north of $200,000, from an annuity account serviced by the office. Thinking a withdrawal of this nature was unusual and would typically involve a planning conversation about taxes and timing he called the client first thing Monday morning. The client had no idea about the withdrawal, neither did the Operations Assistant in the office. They called the insurance company for the withdrawal documents, which were attached to the email he had sent me.

The somewhat complicated withdrawal documents were in good order. The signature on the documents matched other signatures on file for the client. The docs requested the funds be sent to a checking account in the client's name, a blurry VOID check was attached, and they even requested tax withholding as to look more typical. Fortunately, the insurance company could not read the VOID check, and instead sent a check to the client's address. Unfortunately, the insurance company processed the paperwork without any red flags. Our office was able to obtain the withdrawal check and reverse the process.

Obviously, these situations are disturbing, but the aspects disturbing me the most are the sophistication of both fraud attempts. Maybe the debit card fraudsters just had lucky timing and managed to call both Sam and I while we were traveling internationally and at a higher state of alert. But maybe it wasn't luck. How did these fraudsters get access to our phone numbers? Why would they call Sam looking for me? We have no joint financial accounts. There's only three sources that knew we were traveling out of the country and had our phone numbers, the phone company, the airlines and the government. The prospects are terrifying.

When it comes to the annuity withdrawal, the fraudsters had to discover the annuity (probably mail theft or an email hack), get a hold of the account information, understand at least something about the product itself, have enough information to either open a checking account in the client's name or be able to create a fake check and obtain a copy of the client's signature. This was not a simple phishing attempt, this was highly developed financial knowledge.

I can say without hesitation, our offices used to encounter two or three financial fraud attempts against clients in a year. In the past year, it's now two or three a month. I have other stories that are even more terrifying. Unfortunately, it's time for extreme vigilance.

So, what's my primary advice? Slow down. Develop a relationship with a trusted advisor such as a financial advisor, banker or accountant. Use your intuition, and ask for advice when something seems even slightly awry. I know I beat this drum a lot, but in my experience education and relationships are the best countermeasures.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Be aware of the risks when considering precious metals

Sun, 24 Mar 2024 08:00:00 GMT

I am going to tell some stories, with some key details changed to protect privacy. If my tone sounds like a bit of a lecture, it is, so take it as you will.

If you've been reading the column for a while, or had a cocktail with me on a Friday night, or were privy to my YouTube feed then you know that I am a curious student of apocalyptic theories. I am fascinated by economic collapse, currency crashes, depressions, world war and other improbable and terrifying topics. I've read the books, watched the podcasts and allowed my mind to wander in the dark hours of the night. So, for those of you who also allow their minds to drift deep into the rabbit hole, I get it.

In my opinion, there is an entire industry set up to indulge people like us. Freeze dried food, survival gear, solar generators and even firearms companies craft effective messages to get us worked up. In this regard, without a doubt from me, the foundation of this tradecraft is the precious metals business.

With serious personalities like William Defoe and Bill O'Reilly as their spoke persons the precious metals companies create the most compelling commercials both on TV and online. They talk about the insanity of the national debt, the mess that is Washington DC and the scourge of inflation, and present the clear solution as gold and silver coins. It's effective stuff, I'm sure the message is effective because I have seen the results first hand, commence the lecture.

I am not going to weigh in on the merit of these urgings, the investment value of these products or the value and price of precious metals. My opinions probably wouldn't matter anyway. What I want to talk about is the actual physical risk and logistics of owning material amounts of physical gold and silver and some real life experiences my team at Oak Partners has encountered with people we work with.

The first tragic story involves an older couple from outside the Region. The husband had worried about economic collapse for decades and had been regularly purchasing gold coins from a metals broker over the phone. This accumulation over time had resulted in over $100,000 in family wealth being held in gold coins. The coins were stored in a safe in the master bedroom closet.

No one is still quite sure how this information got out, could have been a repair person who had visited the house, could have just been random, but somehow the presence of this value became known. One weekday afternoon thieves clearly waited down the street for the older couple to leave in the car, they then broke into the house, removed the entire safe and got away with a huge amount of gold. Because the metals had been purchased over such a long period of time, purchase records were not great and the homeowner's policy did not cover the entire loss. More importantly however, I shudder to think what would have happened if the couple would have returned from their errands before the thieves' job, which must have taken close to an hour, was complete. The loss was devastating for the family and for the elderly husband's self-esteem.

The second story is not as tragic, but it should make us think. In this story, a father had been accumulating precious metals for decades. Always buying, never selling, his hoard eventually equated to $300,000 in value and weighted in my estimation 50-60 lbs. The metals were also stored in a safe in his home, and then he passed away, leaving the metals to his daughter, who herself was in her 60's when he passed.

When the daughter realized the extent of the value held in the safe, she understandably became very, very nervous. She had no interest in owning the metals and reached out to my team to for a solution. We first suggested she call the local metals dealer her father had dealt with for many years. She tried, the store had closed when the owner had retired. Without this personal relationship to rely on (who knows if the store could have processed this much value anyway), she came back to us again.

Fortunately, our securities firm has a partnership with a precious metals dealer, and we were able to help her navigate the sale. The process took weeks of inventorying, photographing and evaluating complicated bids for the metals. All this while this concentrated value continued to sit in her home, causing stress to both her and us. Eventually after completing a fairly complex process, she ended up taking the metals for shipping to the dealer. Imagine the stress of driving down the road with $300,000 of value in the trunk that she couldn't even move on her own. Yeah, it was that stressful.

So, for those of us who ponder the potential risks of terrible things happening, let think about the odds. Collapse of the dollar, never happened. Default on the national debt and hyper inflation, never happened. World War III, never happened. Eventually dying and leaving our hoard to loved ones who are subject to physical risk and stress of products they may not even understand, 100% probability. Maybe we should plan accordingly.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

End of bank 'band-aid' could open old wounds

Sun, 17 Mar 2024 08:00:00 GMT

At the start of 2024 I had concerns about a couple of upcoming issues expected to unfold throughout the year. To name a few, items such as movement in interest rates, the unfolding of the pre-election cycle and the election itself were all occupying parts of my investor psyche. In addition to these popular concerns another lower profile topic with a set expiration threshold, was also on the list. And the threshold on this item was crossed this week.

What I am referring to is a technical sounding financial program being implemented by the Federal Reserve called the Bank Term Fund Program, or BTFP. The BTFP is a policy rolled out fairly quickly around this time last year for the purpose of stabilizing the banking system.

As a refresher, remember the blissfully low interest rates borrowers enjoyed from 2009 to 2021? For some great examples, the mortgage on my home has a 2.75% interest rate, the interest rate on my wife's Ford Explorer purchased in November 2021 is zero. I used to have a home equity loan with a rate of 3%. Money was cheap for over a decade, like the words to the 80's hair band song, "you don't know what you got til its gone". And boy is it gone.

While we were all enjoying cheap money, the banks on the other hand struggled. Not only were American banks getting low interest on their consumer and business loans, but the investments the banks were encouraged to buy with their own capital (kind of like a bank emergency fund) by regulation, aka U.S. Treasury bonds and U.S. Agency mortgage-backed securities, were also paying low interest rates. As banks searched for some sort of investment yield during this long period of low interest rates, many desperately purchased piles of long-term bonds, because long term bonds were expected to pay the higher yields which they badly needed at the time.

The very big problem was, and may continue to be, when interest rates go up, long-term bonds lose value, and when the Fed aggressively raised interest rates throughout late 2021 and 2022, some bonds lost as much as 40% of their value. They lost so much value that some of the calculations used to measure a bank's health and safety were impacted, and impacted very severely, to the point where a few high-profile banks started to fail, potentially sparking a panic and impacting the entire banking system.

With a deeply divided Federal government still roiled by the last bank bailouts in 2008, it was up to the Federal Reserve to help stabilize the banking system. In response the Fed rolled out a plan, the BTFP, which enabled banks to access capital from the Fed using their bonds as collateral. Only in this program, the Fed did not take the collateral at the current market price of the bonds (some as low as sixty cents on the dollar), but rather at the face value of the bonds which is typically the full dollar. The system stabilized and investors went on to focus on other things. This program was good for a year, and the year was up this week.

My analysis is the Fed's intention was to stabilize the banks and give them a year to work out their bond issues. Until last week banks were still accessing the BTFP for capital.

These recent BTFP loans from the Fed also provide a term of one year, so I didn't expect the ending of the BTFP to manifest like a light switch, but if the BTFP was functioning like a band aid to protect the system from the bond wounds hiding in the portfolios of American banks, the band aid has now been ripped off and we are going to begin to see just how much healing is going on underneath.

Nothing torments the financial markets like a banking crisis, and while there is no indication I can see of a banking crisis right now, if there is one lurking somewhere, now that the BTFP is wrapped up we might just find out sooner than later.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

An international perspective can be informative

Sun, 10 Mar 2024 08:00:00 GMT

I've found it amusing that each one of my kids got to travel to Europe, without me, before I got the chance to go "across the pond" myself at age 52. Of course, I paid for all these galivanting young adults through various school programs, and I suppose this could have made me bitter in a whimsical sort of way, but the truth is it was some of the best money our family could have spent. Each of them came back from their studies abroad, more cultured, more mature and with a better perspective on the world.

Not having this overseas travel experience until later in my life made it even more interesting and fulfilling when my wife and I hosted two different exchange students, one from Thailand, one from Spain. Each of these young women brought so much to our home, and while we have kept in touch with both, Ane from Northern Spain has stayed closely connected to us, becoming nothing short of an adopted daughter. I sometimes joke that Ane texts us more than our actual kids. She spent the fall and the holidays with us last year.

When the time finally came to travel to Europe myself, visiting Ane's small city and meeting her family was to be the highlight of the trip. I wanted to experience Spain in the most authentic way, and visiting her town, which is about the size of Valparaiso, and meeting a new family we already had so much in common with seemed like a great way to do so.

As I prepared for my trip, I admit my expectations were not aligned with my eventual observations. I truly expected to find a place pretty much like the U.S. only where everyone spoke Spanish. The trip started in Barcelona, where some of my expectations were validated, I imagine all big western cities share certain commonalities, but the longer we spent in Barcelona, the more "macro" differences started to emerge.

I'm a news junky, following economics, politics and especially markets even on vacation. The first thing I noticed when I turned on the news in the hotel room in Barcelona is how non-Spain focused it was. Spain's issues and politics were part of the programming, but a fairly small part. Much more of the focus was on European issues, and even beyond that, American issues, and Asian issues. The news there was simply much more internationalist than it is here.

On the road trip once outside of Barcelona, heading to Pamplona, Bilboa and eventually Ane's town Durango, it became further apparent this wasn't "America only everyone spoke Spanish", the people we met thought differently, worked differently and experienced life differently than we do in the U.S. Again however, the people we encountered seemed more globally aware. Everyone certainly had an opinion on American politics, especially Donald Trump, and I was embarrassed to admit I didn't even know the name of Spain's President. After the trip I committed to work on being more globally aware, and less American centric.

So it is in this spirit that I will call attention to something I think all Americans might want to be aware of. Recession. In the last few weeks recession has been recognized in the U.K., Ireland, Finland, Germany and Japan. Beyond these major economies, we've discussed the problems with the biggest domino in the line, China, and it's hard to image how, if this centrally planned economy provided open and accurate economic data, this nation would not also be added to the recession list. If we make an assumption, based on the market performance and credit conditions, China is either in or will be in recession, then this puts the Chinese trading partner economies of Australia and the Pacific rim at risk as well.

To this point, none of the recessions being experienced in these major world economies has emerged as particularly deep, but as Warren Buffet famously says, "it's only when the tide goes out that we find out who has been swimming naked", and recessions have a tendency to reveal structural problems which had been previously unheeded.

Does this mean I think we are destined for recession in the U.S.? Not particularly. Each of these nations have different demographics, had different responses to COVID and face different economic challenges than we do here. It would be foolish however to remain unaware and unprepared for a trend this widespread.

It's been said when America sneezes the world catches a cold, it'll be important to see what happens in the states when the world sneezes first.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

When will the inflation rate come down?

Sun, 03 Mar 2024 08:00:00 GMT

As I meet with clients and talk to people out and about, one core question tends to dominates the conversation. This crux of this question is of course on everyone's mind and will likely dominate the rhetoric surrounding the U.S. elections later this year. The question is "when are things going to stop getting so expensive?", or said in financial speak, when is the inflation rate going to come down?

I, of course share this question, as prices on anything we actually want to buy feel out of control to me. New pickup trucks, airfare, ski condo rentals, mountain bikes, steaks, pizza, bourbon, blueberries, coffee shop coffee and bacon, basically all the things I essentially want to spend money to make life more enjoyable are all crazy expensive these days. I want some relief.

In our quest to explore the question of when things are going to stop being so expensive, we have to go back into the macro-economic logic underpinning the unpleasant inflationary trend we've all be experiencing.

As we all know, the inflationary cycle that started in 2022 was a result of Federal Reserve and Federal government fiscal policy, combined with supply chain disruptions related to the COVID pandemic. The pandemic policy response from government at all levels was an inflationary perfect storm. Before we cast stones however, I also believe that some of the inflationary policy responses kept our economy from slipping into recession or worse in 2020/2021. To stabilize our economy through the lockdowns and COVID fear, the Federal government and Federal Reserve flooded the economy and financial markets with liquidity, aka new money, as a kind of medicine, let's call the inflation one of the side effects that seem to dominate every drug commercial on TV.

The therapy for the inflationary side effect was the most rapid interest rate hiking cycle in the past 40 years. Higher interest rates have important impacts on the economy and markets, and are intended to reduce economic activity and cool the demand driving prices higher. In addition, the Federal Reserve was busy implementing other banking and open market polices to reduce the supply of money in the economy and between 2022 and December of last year it was gently working with the money supply (M2) falling about 3.5% during this time. Less money in the economy should also reduce inflation, and as supply chains started to reconstitute these Fed polices had started to take the edge of increasing prices, until 2024. What happened?

Well remember, there were three main culprits behind the inflationary cycle. The Federal Reserve, global supply chain disruption and of course, the Federal government. Two out of the three have been correcting, the Federal government however, seems to have other agendas.

In early fall of last year, we discussed that over the fourth quarter of 2023, the Federal government was going to have issue almost $800 billion in new bonds to finance operations and satisfy on-going bond maturities. I wondered at the time where this money was going to come from, in fact I was a little concerned that to raise this much capital, interest rates on the newly issued bonds would spiral upward. They didn't, rates actually went down, which both surprised and confused me. Now I have a theory as to why, and it fits with observations on inflation.

One of the intended consequences of higher short-term interest rates controlled by the Fed is higher yields on savings accounts and money market funds, which are built with very short-term debt instruments. These higher rates attract deposits and the money sitting in these savings vehicles is not being spent, and thus not driving prices higher. It's a win-win for the Fed as it tries to address inflation and for savers who like the yields.

My theory is that as the insatiable Federal government sold bonds in the fourth quarter, some of these new bonds attracted money from savings accounts and money market deposits, and some money market funds pulled money from other debt instruments and bought short term US Treasuries. Once the government had its hands on the money from the bond sales, much of it was immediately pumped into the economy in various social programs, entitlements and spending agendas. The result was the money supply stopped falling and has even gone up a little so far this year (source: Federal Reserve), which in my opinion is why the inflation rate resumed some momentum over the past two months. A very real example of why the talk of deficits and the national debt matter. As a nation, we need to get serious about this issue. Our on-going prosperity is beginning to depend on it.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Will the recent upswing in the stock market continue?

Sun, 25 Feb 2024 08:00:00 GMT

Three days before Halloween 2023 the Dow Jones Industrial Average closed at 32,417. Earlier this week the widely watched stock market index closed at 38,563. Quick math shows the price return during this three- and half-month period is roughly 19%. Leaves me wondering "why".

Could be the promise of AI, could be anticipation of better than expected corporate profits in 2024, could be anticipation of Presidential election year stock market returns which have historically tended to be above average and haven't been negative since 1952. Could be a combination of all these items.

I think however, the biggest factor driving market returns over the past couple months has been expectations for interest rates. From reading the press, listening to the TV pundits and looking at the blogs somehow it seems like investors had talked themselves into believing the Fed was going to start aggressively cutting interest rates as early as next month, and there are few, if any, things the stock market likes more than declining interest rates.

This expectation appears to have predicated on the belief that the economy would start to slow in 2024, and inflation rates would start to drop. It was further bolstered by a couple erroneous comments about interest rates made by Federal Reserve Board members, which were then backtracked (no one seemed to pay attention to the back tracks). With price appreciation of nearly 20% in just a couple months however, I think the reality is investors were rubbing their hands together in anticipation of the perfect "soft landing" where the economy gently slows but doesn't go into recession, inflation rates drop, and the Fed engages a nice comfortable cycle of lowering interest rates to begin stimulating growth. With this expectation in hand, stocks became priced for perfection. What could go wrong?

Two scenarios exist to answer this question. The first is the "good news is bad news" scenario currently dominating markets. In this situation, good real-world news like continued strong employment reports, solid retail sales and rising GDP interfere with the narrative of a soft landing, and as a result interfere with the narrative of interest rate reductions. Originally some of the more bullish prognosticators were predicting six interest rates cuts, starting in March, in 2024. With the recent employment reports and hotter than expected inflation numbers from last week however, these predictions have now moved into the realm of fantasy, and the bulls find themselves searching for new reason to be excited.

The other scenario that could interfere with a stock market priced for perfection is an actual recession. Changes in interest rates take a while to work themselves into the real economy, it's still possible the effects of short-term interest rates above 5% have yet to be fully realized, and eventually these higher rates sap the growth out of the economy. In this scenario, the Fed drops interest rates but it's too little too late as a recession, as it always does, reveals the underlying cracks in our economy. While falling interest rates may be good for stocks, recessions tend to trump rates when it comes to stock prices. It's important to remember, as cryptic as they can seem, stock prices are ultimately driven by corporate profits, and profits tend to dry up during recessions.

Federal Reserve interest rate policy is never entirely predictable, but I believe at this point the idea of six interest rates cuts, starting in March is off the table. As inflation continues to fester, and the economy continues to chug along, I think any interest rate cuts are months away, and may possibly not even come in 2024.

Which leaves us with a stock market priced for perfection. Without the elixir of falling interest rates, the market is reliant on strong corporate profits to continue driving stock prices higher. We are now three quarters through the 4th quarter 2023 earnings reports, and results thus far have been a bit "meh".

If stocks need stellar earnings or falling interest rates to keep going higher, it might be time to remind ourselves that no tree grows to the sky.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Retirement planning and inflation

Sun, 18 Feb 2024 08:00:00 GMT

I've been working with retirees my entire 30-year career. I can safely say that I understand retirement, have a strong frame of reference for the financial behavior patterns of retirees and have gained a lot of experience with what works and what doesn't work when it comes to building and executing a successful retirement plan.

Over the three decades I have been working with and observing retirees I have formed the opinion that retirees tend to experience inflation differently than those still in the workforce and especially younger families raising kids. Its not that retirees don't experience inflation, they certainly do, it is rather in regard to how retiree households consume and make decisions in regard to inflation. Here's a couple examples.

First, let's talk about how the financial world gauges inflation. The government produces two key measures used to track consumer experienced changes in pricing, aka inflation. One is called the Consumer Price Index, or CPI, and one is called the Personal Consumption Expenditures Price Index, commonly referred to as PCE. Without getting too deep in the weeds in the difference between the two metrics, the PCE attempts to account for changes in consumer behavior in reaction to pricing changes. The PCE is considered a more holistic view of inflation and is the metric preferred by the Federal Reserve.

Now back to our retirees, in both inflation indexes shelter pricing (aka housing) makes up a material component of the index with the weighting of shelter in the CPI at 42% and in the PCE is about 23%. This makes sense with younger households who are likely to be dealing with rent increases, may be required to move for work purposes or may find themselves needing to trade up to a larger home as a family grows.

I find that retirees, however, are much less likely be subject to renting, are sometimes downsizing their housing needs, and while we are seeing more retirees moving homes recently, often times the moves are funded entirely with equity from their existing home as well as cash savings. In addition, many retirees have recently paid off their homes, or will pay off the home within the first couple years of retirement. Between these behavioral factors, it's not uncommon for my team to observe housing costs being greatly reduced for retirees, which makes using an inflation index based materially on housing costs, quite a bit less useful when it comes to planning for retirees.

Following housing, another large component of both the CPI and the PCE is food prices. Once again, while food is getting more expensive, retirees tend to just eat less of it, or more accurately, retirees tend to feed less people. In this regard I like to say, sure a loaf of bread costs a dollar more, or a dozen eggs two dollars more, but retirees are only consuming one or two of each per month. So, is the extra two to four dollars these food items cost annoying? Absolutely. But are the extra couple bucks per month a financial planning issue? That's a bit harder to sell.

Another big component of the CPI and the PCE is healthcare costs. Now you might say, "ah, Marc we have you now", and certainly retirees devote a larger portion of spending toward healthcare than younger folks. For the most part however, retirees also have Medicare and some sort of supplemental insurance products that provide for more healthcare expenses than they did even ten years ago. The big exception in this logic is prescription drug costs, some of which are outrageous, so while the retirees I work with are spending more on medical care, their benefits have also improved over time, offsetting a good portion of the inflation being experienced in this sector.

I could continue to go down the component lists for the inflation indexes and posit that retirees experience price changes differently, but there's one area where retirees don't have an advantage, in the price of services.

Services in the inflation indexes consist of items such as insurance, recreation and entertainment, travel, tax preparation and other financial services. In these areas I have observed that retirees have no advantage, and may actually be impacted by price increases more significantly that younger households. And right now, this is a problem.

It's a problem because service cost inflation is proving particularly stubborn in the current inflation cycle, with services inflation outpacing goods inflation for almost the entire inflation cycle that started in 2021. This has me concerned for the many retirees in my life, some of whom I have noticed changing behavior to "save money", by skipping desired travel or entertainment. I don't like it, and neither do they, and while I still don't feel inflation has become a material long term planning issue for the time being, my thinking just might be beginning to change.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

China's financial situation a cause for concern

Sun, 11 Feb 2024 08:00:00 GMT

China. There is clearly no other nation on earth eliciting so much attention from the American political establishment. The rhetoric from the American Right is that China is a dangerous emerging world military power focused on ending western dominance in the Pacific and American prosperity if it can. The less noisy, but still prolific intellectual musings from the American Left are that China represents a distorted caricature of socialism and central planning which has dangerously devolved into global corporatism run amuck. The common thread between the spectrums is of course, danger. China is a danger.

As investors, however, in an ideal world, we are tasked with looking through the rhetoric of the political pundits in an attempt to develop assumptions based not on agenda or demagoguery, but rather accurate observation and analysis. As investors, we don't seek the propagation of a global political adversary to rouse our constituents, we simply seek to earn or protect capital, and this, in my opinion, makes our objectives much more straight forward. For us, it's about the money.

Well, on the money front, China has gotten a lot of attention over the past few weeks, and quite frankly, none of it has been good. I don't have the space to go over all the details here, but to catch everyone up quickly, every time we belly ache about the absurd $34 trillion American national debt, if we want to immediately make ourselves feel better, we need merely cast our gaze to the Far East. The scale of China's debt is impossible to compare to the U.S., simply because the Chinese situation is so alarmingly worse.

A recent Bloomberg analysis put China's public debt-to-GDP ratio at 286% (the U.S. is around 120%), and according to recent reports from the IMF this doesn't include "off balance sheet," or hidden, debt embedded with regional or local governments. In addition, Chinese households have borrowed heavily to invest in real estate, and after creating a property bubble, real estate prices in the nation are in the process of collapsing, with some market experts predicting values declining as high as 50%. Not good, not good at all.

On the forefront of this real estate market disaster is a development company called Evergrande. Evergrande is China's third largest real estate firm and has raised capital from Chinese investors and banks in a variety of debt instruments. Last week, a Hong Kong court ordered the liquidation of Evergrande. The company had stopped paying its debts in 2021, and now some estimates I've seen put likely losses on Evergrande debt at 98 cents on the dollar.

The potential contagion risk throughout the Chinese financial system from such an event is hard to overstate. In response, this week several Chinese credit rating agencies announced a credit downgrade of the Chinese government itself. The Chinese government reacted to the downgrade quickly, by fining the rating agencies as well as some of their senior executives personally. So essentially, at a time when accurate financial analysis of the Chinese economy is most vital, the government there has made producing said analysis much more difficult and perhaps even illegal. What a mess.

When I look at the Chinese financial and investment landscape, I feel like I'm watching an airliner bellowing thick smoke coming in for a landing. Not all is lost yet, but at the very least there seems to be a rough landing ahead, if not something worse.

I write about China about once a year. Going back almost 20 years now, from an investment perspective, I have never been a fan. For anyone with Chinese investment exposure either through Chinese companies listed in the U.S., through emerging markets mutual funds or perhaps even through funds focused on China, I know it's been a brutal ride as of late. I am more concerned however, about the implications of a potential Chinese financial crisis or even collapse on the world economy. So, unfortunately, we American investors will need to pay close attention to China in 2024 and 2025. Right now China may in fact be dangerous. Just not for the reasons peddled by the politicians.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Enjoy -- and hold onto -- what the market provides

Sun, 04 Feb 2024 08:00:00 GMT

There's a well know adage in the investment world of "don't fight the Fed". This pithy saying implies interest rates and central bank interest rate policy are the dominant influences on shorter term stock and bond market trends, and when attempting to build an investment strategy its not wise to surmise to know more than the Fed does about the factors driving its own decision making.

I strive to build upon this adage, by further applying a version of it to the stock market. While it's easier said than done, I endeavor to invest for the stock market we have been given, not for the stock market I think we should have, or even wish we had. Like many investors, I spent too much time in my earlier days thinking the market was wrong, and I was smarter and knew what it "should" be doing instead of how it actually was acting. This "I'm smarter than the market" perspective can be very expensive over time, and this lesson is mostly only learned the hard way.

With experience I have come to value a certain wisdom inherent in markets. Over the short term can markets be insane? Absolutely. Are markets mostly unpredictable? No doubt. Does the stock market accurately reflect economic reality? Only occasionally, so basically "no". Markets however, the stock market in particular, are comprised of millions upon millions of simultaneous individual decisions, all being made by investors with competing, sometimes misaligned interests, clouded by the noise from computer algorithms, all using incomplete information to form biases and strategies to implement disparate agendas.

Somehow through all this racket a certain "wisdom of the collective" emerges, providing us normal humans with access to the greatest wealth creation mechanism ever conceived. Yes, there is a certain wisdom and beauty to this madness, and I for one greatly appreciate it. But it is, however, difficult and dangerous. Some market periods are more dangerous than others. It's quite possible this is one of them.

Now if you're rolling your eyes thinking "Dangerous? Marc, you should have seen my December investment statement, I'm making money hand over fist", the answer is "I know". Over the past 12 weeks or so, since late October, the gains across the board in all major stock market indexes have been nothing short of spectacular. Go a little further and look under the rug at some of the most widely held and traded stocks in these indexes and it gets even better. There are widely held stocks, provoked by the opaque opportunity of artificial intelligence, up 30%, 40% and more in just months. It's been nothing short of easy to throw money in the stock market over the past few months and make money. The returns being generated are actually starting to change the way I think and feel about investing, and maybe even my own personal planning. And this is what scares me.

What is motivating investors to drive such gains? The loudest voices seem to be eagerly anticipating interest rates to go down soon, the idea of cheaper money tantalizing investors into stocks. But why would interest rates go down soon? Well, the conventional wisdom is the Fed would drop rates to counter weaker economic conditions brought on by the currently high interest rates, which could maybe result in rising unemployment, slower economic growth, maybe even a recession. Wait a minute though, would a recession really be a positive for stock prices? Aren't we told stock prices are supposed to reflect corporate profits, how could corporate profits get stronger in a weaker economy? It's all so confusing.

So, what are we supposed to do with this confusing stock market that is making us so happy? I would say the one thing I want to do, is actually also the one thing I can't allow myself to do. Unfortunately, this one thing is to sit back and enjoy it. In my opinion, certain market conditions actually prompt both the buying and selling of stocks. This is one of them. Am I advocating day trading? Absolutely not, it's a difficult and losing proposition for most. This is, however, a time when markets are providing gains and as another axiom says "new highs, beget new highs". It is possible to deploy money into markets during a period of market highs and make money, but the key in my experience is gains need to be harvested by regular and consistent selling or rebalancing. In short, both buying and selling.

As this stock market continues to make me happy, I will work really hard to remember to not confuse a raging bull market for my own personal brilliance. Eventually the music always stops and markets fall, and the smartest investors are the ones who are able to hold onto to what the market provided on the way up.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

Health Savings Accounts offer variety of advantages

Sun, 28 Jan 2024 08:00:00 GMT

In the world of tax preferred savings plans the Health Savings Account is the crème de le crème. These accounts, commonly referred to by the acronym HSA, are the only accounts under IRS rules that allow tax deductible contributions, tax deferred growth or accumulation, and tax-free withdrawals when used for qualified health care expenses.

HSAs can only be established by individuals or families who participate in an HSA-compatible health insurance plan. HSA-eligible health insurance plans are typically insurance plans with higher deductibles and co-pays. In order to be compatible with an HSA, the plan must have an individual deductible of at least $1,600 and a family deductible of $3,200. In order to be compatible, the health insurance plan must also have an out-of-pocket maximum, which includes deductibles and co-pays, limited to $8,050 for individuals, and $16,100 for families.

The IRS also limits the amount of money which can be contributed to an HSA plan each year. In 2024, the limits are $4,150 for individuals and $8,300 for families. HSA users age 55 or over can also contribute a $1,000 catch up contribution, so if both spouses in a family plan are 55 or older the maximum tax deductible contribution is $10,300, which could result in quite a tax savings.

To get the full tax benefit of an HSA, including, of course, the tax-free withdrawal feature, HSA withdrawals must be made for payment of qualified health care expenses. Qualified medical expenses can include amounts paid to satisfy health insurance deductibles and co-insurance amounts but can also include unreimbursed expenses for dental visits, orthodontia, eyeglasses, prescribed drugs (even over the counter drugs recommended by a doctor), mental health expenses as well as transportation to medical appointments. There is a list of 82 qualified expense types listed on goodrx.com, and reviewing the list impressed on me the overall flexibility inherent with an HSA.

One common question we hear about HSAs, however, is whether they can be used to pay actual health insurance premiums. The answer is "sometimes" in very specific situations, which include only premiums paid for health care continuation coverage, commonly referred to as COBRA, after leaving a job, or for health care coverage paid for while receiving unemployment benefits. HSA withdrawals can also be used to pay for Medicare premiums by those 65 or older, but it's important to note this includes only Medicare Part A, Part B and Part D premiums, not Medicare supplement or Medicare advantage premiums. HSA withdrawals can also be used to pay long-term care insurance premiums, but are limited by age.

It's very important to be aware of how to properly use HSA withdrawals because non-qualified withdrawals are subject to a whopping 20% tax penalty as well as regular income tax. So, while these accounts can provide substantial tax benefits, it's also vital to learn how to properly use them to maximize benefits and avoid pitfalls.

Another common question involves the difference between an HSA and a Flexible Savings Account, or FSA. FSAs are common with larger employers and offer similar tax benefits to an HSA. Contributions to an FSA are typically done through payroll deduction and employers can also contribute to an FSA as a benefit to employees. A primary difference between the two types of plans, however, is that FSA are a "use it or lose it" benefit which can be forfeit by calendar year or separation from an employer, while HSAs follow an individual and not are based on calendar year or employment. This key difference enables HSAs to accumulate funds over time and serve as potential retirement planning solutions over the long term.

Speaking of retirement planning in the context of an HSA, IRS rules also allow a once-in-a-lifetime "rollover" of funds held in a Traditional IRA to an HSA. There are material stipulations and limits put on this process, but if planned for correctly, the HSA rollover may be the only way I am aware of that IRA funds may be utilized tax free, when of course, they are used for qualified medical expenses pursuant to HSA rules. I encourage anyone considering this type of transaction to seek qualified tax and financial advice on the process.

My family has used an HSA for many years. I find the account options and service on these plans to have greatly improved over time and our HSA has become an important part of our annual tax planning, and long-term financial planning at the same time. To me, funding the HSA in our family is a "no brainer."

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

When kids' 'launch time' arrives

Sun, 21 Jan 2024 08:00:00 GMT

Between the new parents (my oldest daughter), the newlyweds (my second daughter), the college kid (my son Sam), his girlfriend and roommates, the Spanish exchange daughter thrown in just for the enjoyment of it, and the young adult kids of the couples we spend time with, my life is full of young adults, and its great fun. I've been raising kids for a long time, and I will state without reservation that the 18-30 age bracket is the most fulfilling for me (and most expensive), and with the beautiful new grand daughter it just keeps getting better.

The very young newlyweds (both 23, married in late October) came up for an impromptu visit last weekend. My new son in law graduated with his master's from Krannert at Purdue in December and got a great job in the automotive industry, and my daughter now works full time for Purdue Food Science.

We hadn't seen them since he started his new job, after all the congratulations and excited questions about his first two weeks at work, it was clear they were both feeling very confident about life with their now double salaries. So, in a twisted Dad way, I think I found it even more gratifying when they were still caught a little off guard when, about 45 minutes after walking in, I cleverly steered the conversation toward purging my daughter from the family car insurance and cell phone plan.

"Oh, I was just doing our budget so we could save for a house, and I forgot about those bills" my daughter lamented. "That's because you've never paid them", I replied with a grin. "How much do you think its going to be?" she asked.

"Well, with your impressive record of fender benders, the car insurance may not be as cheap as it could be, and the cell phone seems to just keep getting more expensive, but between the two I would say $200 to $300 a month". I answered, feeling strangely satisfied as I said it.

"$300 a month!!!", she bellowed, "when will we have to start paying that?", the princess implored. "I mean you guys are married and both have great jobs, so how about next month", was the answer. She looked at her mom for some sort of respite, there was none. The son in law, sensing the awkward conversation and no-win situation he was observing, held up an iPhone so cracked up it looked like it had lost an epic fight with a grizzly bear.

"If we need to get our own cell phone account, I can get a new phone", he offered. "You definitely need a new phone", she replied looking at her husband with some settled resolve, and just like that she was off the dole. Launch complete, two down. Very fulfilling indeed.

I have come to appreciate the artform that is launching young adults into independence. I certainly talk about it all the time with our clients. The conversations are mostly entertaining and always very one-sided (us parents, against them kids). Depending on the family, sometimes the launch starts at 18 and some families are still fighting the battle in the mid-30s. In an era, however, when the government says they can stay on our health insurance until they are 26, I have noticed the launch period getting later and later.

As peers and friends, it's easy to judge the timeline and process other families use to launch kids. I find almost every family has some sort of pre-existing narrative about how they (the parents) pulled themselves up by their bootstraps when they were young and never got anything from anybody. These stories are usually coupled with some sort of value-based pontification about how other people are soft on their kids, while in our family we stress independence and fortitude. Most of us have our own version of these tales, most of us are on some level, "full of it".

After having these conversations with families for 30 years, give me 10 minutes and chances are I can uncover some hidden pocket of truth that conflicts on at least some level with each of our delusions of rugged independence (always check the cell phone, health insurance and Uber accounts). And you know what? That's ok.

Modern life is complicated and expensive. As parents of young adults, we are required to balance this modern reality, with the needs of each individual kid. I can say however, after launching two of my own, and observing hundreds of client families launch thousands of kids, the one common denominator none of us escapes is the "awkward conversation" like the one from last weekend. So, for those with one of these conversations on the horizon, you are not alone, and if you find yourself anxiously rehearsing your strategy and timing, you're not the first one to do so. Might as well try to enjoy it.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

New tax rules provide flexibility in dealing with life's 'curveballs'

Sun, 14 Jan 2024 08:00:00 GMT

Sometimes life doesn't go as planned. Cars break down, basements flood, people get sick, couples get divorced. Starting in 2024, new IRS rules make it a little easier to use retirement accounts to deal with the challenges life sometimes throws at us. So let's talk about when the government allows retirement savers to use money held in IRAs or company-sponsored retirement plans (aka 401(k) or 403(b)) before retirement age.

First, I know that some TV and radio "financial advisors" act like taking an early withdrawal from a retirement plan is akin to chopping one's foot off. And in general, retirement plans are not designed or intended to be slush funds for discretionary spending. I, however, provide financial advice in the real world, to real people and families, and I know sometimes life throws us curveballs.

I have also come to realize that we Americans don't always save money in what I would consider from a planning point of view an "ideal" sequence or order. Over the past 40 years, the retirement planning industry has done a good job of educating the public and stressing the importance of saving for retirement. This public messaging, combined with incentives like employer 401(k) matching contributions and automatic enrollment, has resulted in many young families being what I would call "retirement plan poor."

It is not uncommon for my team to meet younger families (those under 40) who have zero money in savings, are struggling with credit card or student loan debt, have no money saved for college expenses, but have hundreds of thousands of dollars in a 401(k). These families often feel like they are "doing what they should be doing," and yet are over stressed by personal finances and money concerns.

From personal and professional experience, I have come to feel strongly that a family balance sheet is best built from the base up. The base being a designated emergency fund, then six months of expenses saved in the bank, and then begin accumulating retirement savings. Despite the ideal, when working with investors we work with the cards we've been dealt -- and some new IRS rules will make it easier to use IRAs and employer-sponsored plans to swing at some of life's curveballs.

Starting in 2024, retirement account owners can now take a hardship withdrawal of up to $1,000 per year without incurring the 10% pre-59½ early withdrawal tax penalty. My understanding is the hardship will be self-certified and is defined as an "unforeseeable or immediate financial needs relating to a personal or family emergency." The new rules also allow -- but do not require -- the hardship withdrawal to be repaid to the retirement plan over the subsequent three years. While no repayment is required, no additional hardship withdrawals can be taken until the funds are paid back or three years have passed.

In addition to the basic hardship withdrawal outlined above, the new rules also permit tax-penalty-free withdrawals of up to $10,000 or 50% of an IRA or employer-sponsored plan's account value by individuals who are the victim of domestic abuse. This provision enables this type of hardship withdrawal for up to one year after the abuse incident, and also permits repayment of the withdrawal over the next three years.

While utilizing funds held in a retirement plan for pre-retirement hardship is certainly not ideal, I think these new rules do a nice job of recognizing that many American families are heavily invested in retirement and yet not well positioned to deal with shorter-term emergency needs. Knowing that in some situations retirement funds could be used to help deal with life's challenges is a positive, in my opinion -- though I strongly encourage anyone considering these types of transactions to get professional tax and financial advice first.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.

New year brings improved financial rules

Sun, 07 Jan 2024 08:00:00 GMT

With the start of the new year, a number of notable changes are occurring in the realm of financial planning rules. Most of the rule changes are the result of the Secure Act 2.0 phasing in, but some are the result of the higher inflation experienced over the past few years. With some awareness and preparation, a window of opportunity has opened for some planning improvement using the new regulations. Let's go over a few.

One significant change involves 529 education savings accounts. As we've discussed in the column before, the potential tax benefits of a 529 savings account are threefold in Indiana. These special education savings accounts enable tax-deferred accumulation of investment returns, and when used for education expenses they also enable tax-free withdrawal of investment gains. Also, in the state of Indiana when using the Indiana plan, amounts contributed to the account are eligible for a 20% tax credit up to a maximum credit of $1,500 on a $7,500 annual contribution. With these attractive tax benefits, many families we work with have used these plans to effectively plan for education expenses.

This being said, a very common question I hear when discussing college planning is: "What if my child or grandchild doesn't go to college?" The question is valid, as often times these conversations occur when the child is under the age of five and it's impossible to know what choices he or she will make in the future. Until now, the answer wasn't great.

If the funds in the account were not used for education of some sort, the gains in the account -- not the principal -- were subject to income taxes as well as a 10% tax penalty when withdrawn. While another option could be to change the beneficiary on the account to another family member, this feature did not always bring more clarity to the question.

Starting in 2024, however, the answer becomes more attractive. Value held in 529 savings accounts not used for education costs can now be transferred to the child's (who will then be an adult) Roth IRA, helping them jump-start their retirement savings. While this new rule is much improved, it does come with a couple strings attached. The 529 plan must have been open for at least 15 years before rolling over into a Roth IRA, and funds contributed during the last five years are not eligible for conversion. Also, money rolled over is subject to yearly Roth IRA contribution limits ($7,000 per year in 2024), and there is a lifetime transfer cap of $35,000. Even with these stipulations, I feel the new rules provide a nice option to consider when families are ready to start saving for a child's future.

Other notable changes are occurring with income tax brackets in 2024, which are indexed to inflation. Tax brackets across the spectrum are rising, which means more income at all levels will be subject to lower tax rates. The IRS is also changing withholding tables for employers, which means larger net paychecks almost immediately this year. In addition, the standard deduction is also indexed to inflation and will increase to $29,200 for married taxpayers and $14,600 for single taxpayers. Using some quick and simple math, I estimate a couple with $100,000 of gross income will see roughly $2,000 in increased after-tax income in 2024 due to these changes.

A number of other rule changes involve retirement savings accounts such as IRAs, 401(k)s and 403(b)s, all of which are seeing increased contribution limits as well as some adjustments to rules on early withdrawals, which we will explore in future columns. One quick planning suggestion: before the increase in the net paycheck gets integrated into the family's spending, why not contact payroll and drive at least some of the projected increase into the old 401(k) or 403(b)? The window is open now, and when it comes to retirement savings, every little bit helps.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.