CAPITAL MARKET UPDATE
Market Performance as of 03/31/24
U.S. SECURITIES
- S&P 500 TR: 1Q24 10.56% and last 1 year 29.88%
- Dow Jones Industrial Average TR: 1Q24 6.14% and last 1 year 22.18%
- Bloomberg Barclays US Aggregate Bond: 1Q24 -0.78% and last 1 year 1.70%
- Top US Sector Performers 1Q24: Energy, Communication Services, and Financials
- Worst 3 US Sector Performers 1Q24: Real Estate, Consumer Discretionary, and Utilities
FOREIGN SECURITIES
- MSCI EAFE (unhedged International Stocks): 1Q24 5.78% and last 1 year 15.32%
- MSCI Emerging Market (unhedged): 1Q24 2.37% and last 1 year 8.15%
- Bloomberg Bclys Glbl Agg Bond Hedged: 1Q24 0.01% and last 1 year 4.14%
INVESTMENT INSIGHTS
Market Thoughts
We’ve already had an eventful start to the year with the first quarter results. In the first quarter, markets in the United States, Japan, Germany, France, and Latin America all reached record highs. These all-time highs in the U.S. were felt across multiple market sectors, with more companies sharing in the gains than in 2023. Globally, a broad rise in favorable economic trends across developing markets, Japan, and Europe indicates that business confidence is still improving and that is encouraging for the near future.
At the beginning of the year, we saw a rise in expectations for interest rates to be cut 175 basis points, which markedly deviated from the Federal Reserve's December "dot plot" (or their projection for short-term interest rates, updated quarterly). The Fed mentioned seeing a 75 basis point cut in 2024 if inflation and economic growth began to slow. Additional rate cuts were also projected in 2025 and 2026. Since then, there has been a course correction driven by economic resilience, keeping us waiting a little longer for a cut. Longer-duration bonds have suffered as a result of their sensitivity to higher interest rates. However, high-yield bonds performed well, indicating a reduced sensitivity to interest rates and confidence in business stability. Thankfully, the Fed did not modify the 2024 "dot plot" during its March meeting..
An impending U.S. presidential election, elevated inflation, geopolitical unrest, and some volatility in asset performance all highlight the significance of diversification in a changing market environment. As always, please give us a call if you would like to discuss your portfolio or come in for a review.
Sources: Total returns of the indices mentioned are provided by Morningstar, MSCI, S&P Dow Jones and SectorSPDR.com. None of these firms nor their Information providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the information on their websites, including, but not limited to information originated by them, licensed by them from information providers, or gathered by them from publicly available sources. There may be delays, omissions, or inaccuracies in the information. Past returns are no indication of future results.
Are you on track for retirement?
You can mindlessly save your whole life without knowing where you are headed or you can set goals and know what your going to have saved by the time you retire. Our financial planning tool can help you get a good picture of what retirement will look like for you based on what you have saved so far. If it turns out the result isn't what you were hoping for, we can help you know exactly what you need to do to reach your retirement goal!
It is good to break up your retirement goal into smaller steps. Set simple age-based savings goals. Below are some common guidelines you can follow:
- By age 30 — Save 1X your annual salary.
- By age 40 — Save 3X your annual salary.
- By age 50 — Save 6X your annual salary.
- By age 60 — Save 8X your annual salary.
- By age 67 — Save 10X your annual salary.
Here are some common mistakes that may keep you from hitting the mark:
- No Strategy: Creating a strategy may increase your potential for success. Know how much, how often, and where to save.
- Frequent Trading: Chasing “hot” investments often leads to despair. Create an asset allocation strategy that is properly diversified to reflect your objectives, risk tolerance, and time horizon; then make adjustments based on changes in your personal situation, not due to market ups and downs.
- Not Maximizing Tax-Deferred Savings: Workers have tax-advantaged ways to save for retirement. Not participating in your employer’s 401(k) may be a mistake, especially when you’re passing up free money in the form of employer-matching contributions.
- Prioritizing College Funding over Retirement: Your kids’ college education is important, but you may not want to sacrifice your retirement for it.
- Overlooking Healthcare Costs: Extended care may be an expense that can undermine your retirement if you don’t prepare for it.
- Retiring with Too Much Debt: Reduce your debt level before you retire.
If you find you're struggling to meet the guidelines let us help you get back on track. The guidelines mentioned for each age are based on your current standard of living and assume you are getting small annual increases to your income. If your job is not giving you small annual adjustments that keep up with inflation you will need to have a plan of action in place now so you can be comfortable in retirement.
Call us today to run your free retirement scenario analysis, 281-395-8300 or email us to schedule an appointment info@coxglobalassociates.com.
Source: https://www.empower.com/the-currency/life/how-much-should-i-save-for-retirement and https://www.coxglobalassociates.com/resource-center/retirement/eight-mistakes-that-can-upend-your-retirement
DO YOU PAY TAXES ON SOCIAL SECURITY
Social Security is subject to Federal and State income taxes depending on the total income you bring in when you receive benefits. Up to 85% of your Social Security can be taxable and about 40% of Social Security recipients have to pay federal taxes on their benefits, according to the Social Security Administration.
To know how much of your Social Security will be taxed you'll need to calculate your provisional income:
Adjusted gross income (part-time job income or pretax savings withdrawals) + nontaxable interest income (like income from muni bonds)+ half of your Social Security = provisional income.
The amount of provisional income will determine how much of your social security benefit is taxable at the federal income tax and your state tax rates. If your provisional income is less than $32,000 as a married filer (or $25,000 if single) then you won't own taxes. But if you're between $32,000 and $44,000 (or $25,000 and $34,000 for single) you'll be paying tax on half of your social security benefit. Greater than $44,000 (or $34,000 if single) you'll need to pay tax on 85% of your benefit . If you need help determining the best withdrawal strategy from your savings make an appointment with us today.
Source: https://finance.yahoo.com/personal-finance/do-you-pay-taxes-on-social-security-225710647.html
Critical Estate Documents
Start by keeping a list of all your assets and liabilities. Note the type of ownership structure for each, where they are held, any account numbers, and the estimated value. Consider meeting with an attorney to get a Durable Power of Attorney and a Living Trust if needed, in addition to some healthcare documents like a Living Will, Power of Attorney, and a Power of Attorney for Health Care. Learn more about what these are in the images below:
It is important to share your estate strategy or financial directives with your financial advisor so that they can better serve you.
source: https://www.coxglobalassociates.com/resource-center/estate/critical-estate-documents
Schedule a review of your accounts by visiting this link: https://calendly.com/meetwithcoxglobal.
STAY INFORMED
Follow us on Facebook, LinkedIn, and Instagram @CoxGlobalAssociates!
Check out our audio series Two Sides of the Same Dollar! Find it here: https://www.coxglobalassociates.com/cga-audio-series
Cox Global Associates, Inc. || 1260 Pin Oak Road, Suite 204 || Katy, TX 77494 || 281.395.8300 https://www.coxglobalassociates.com/ || info@coxglobalassociates.com
Securities and Advisory Services are offered through Geneos Wealth Management, Inc. FINRA, SIPC. Investment advisory services also offered through Cox Global Associates, Inc., A Registered Investment Advisor.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. Articles may be developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.