Client Newsletter: November 2022

Josh Youngblood

November 15, 2022

Private Client Newsletter

October is now behind us and it has delivered on its track record as a historically favorable month for stocks, offering some respite for investors as major equity indices rose for the month. The downside pressure on equities had gotten a bit overdone after investor pessimism during September reached lows not witnessed in quite a few years. From a contrarian perspective, extreme pessimism can often be followed by a market bounce. Such a reaction can serve as a reminder not to react too quickly to near-term market developments. Gains in October helped deliver that message again, though they have only slightly offset this year’s losses during what has been a very tough environment for capital markets.

While it may be easy to consider the October market reaction temporary, there are some potentially sustainable developments that may continue to provide a slight tailwind. First, investors may have begun to look beyond current inflation pressures and the Federal Reserve (Fed) monetary policy tightening cycle toward potentially better conditions in 2023. The market is always forward-looking, and asset prices tend to reflect what may happen months or quarters ahead. If investors continue to look ahead to better inflation readings (inflation has been coming down after peaking in June) and an eventual end to the Fed’s rate hikes, asset prices may begin to reflect some budding optimism.

Read the entire letter here.

Client Announcements

It's Long-Term Care Awareness Month

It's expected that 56% of those age 65 and older may require Long-Term Care with an average lifetime cost of $298K according to a U.S. Department of Health and Human Services and Urban Institute, February 2021 release. Click here to read the full report.

This is an area of planning none of us can afford to overlook so we like to take this month to remind you all to review your planning through an LTC lens. Long-term care costs can greatly diminish legacy and devastate a retirement. However, there are some planning strategies that can protect you, your spouse, and your heirs from catastrophe.

Make sure your estate planning professional takes a potential LTC need into consideration
Consider LTC or hybrid LTC insurance as a strategy for mitigating SOME of the costs.
Schedule a meeting with your advisor for us to analyze your exposure and relative resistance.

WCF News

Welcoming Danny

Please join us in welcoming Danny, our new Marketing Intern who will be working from our Davenport Iowa office.

He's a Junior at Augustana College majoring in Accounting and Marketing, and enjoys ( insert) in his free time.

Thanks for coming aboard Danny!

Financial Planning Tip of the Month

Increased 401(k) & IRA Contribution Limits

The IRS has announced inflation adjustments for the 2023 tax year. Here's important information you should know for planning your retirement:

The limit on deferrals to 401(k) plans, 403(b) plans, most 457(b) plans is increased to $22,500 from $20,500.
The annual additions limit for defined contribution plans is increased from $61,000 to $66,000 and the compensation limit is increased from $305,000 to $330,000.
2023 IRA maximum contributions will increase to $6,500 for those under 50, and $7,500 for those 50 and older.

To read more about the 2023 Inflation Adjustments on the IRS's Website, click here.

Join the 20% of Wendell Charles clients who are currently on track to maximize their IRA contributions for the 2022 Tax year! Reach out to us to make a contribution or update your periodic today!