The Cox Connection helping you build your wealth

Vol 7 Issue 1 || JANUARY 2024

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Market Performance as of 12/31/23


  • S&P 500 TR: 4Q23 11.69% and YTD 26.29%
  • Dow Jones Industrial Average TR: 4Q23 13.09% and YTD 16.18%
  • Bloomberg Barclays US Aggregate Bond: 4Q23 6.82% and YTD 5.53%
  • Top US Sector Performers 4Q23: Real Estate, Technology, and Financials
  • Worst 3 US Sector Performers 4Q23: Energy, Consumer Staples, and Healthcare


  • MSCI EAFE (unhedged International Stocks): 4Q23 10.42% and YTD 18.24%
  • MSCI Emerging Market (unhedged): 4Q23 7.86% and YTD 9.83%
  • Bloomberg Bclys Glbl Agg Bond Hedged: 4Q23 5.99% and YTD 7.15%


Market Thoughts - Don Cox

I often talk optimistically about the markets, so it shouldn't surprise you that I see the new year as an opportunity for investors. I do expect the year to offer its share of challenges but I believe we will finish it better than we began. We are hearing some experts with this type of talk lately:

Stocks are overvalued after 2023.
Corporate earnings projections are too optimistic.
The markets are too dependent on rate cuts for positive returns.

While I agree these are risks we will face I also believe the election, downward trending global inflation, and the possibility for resolution and change in the global political environment exists. These factors would lead to continued positive consumer sentiment in 2024. Matter of fact we have heard some of these positive statements too:

The consumer has a more positive view of overall business health and fewer view conditions as 'bad'.
Consumers seem to feel much more positive about jobs noting improvement in the number of job openings.

Our portfolios always seek to balance risk. Your portfolio is designed to invest within defensive sectors such as healthcare, utilities, and consumer staples but it is also going to be exposed to growth sectors like technology and consumer discretionary services. You will not only have stocks but you will have income generating lower-risk bonds as well. Having the right balance and diversification allows you to reach your goals and that is what we are trying to do!

Cody Cox

As we start a new year and we assess our client allocations we wanted to take a moment to discuss the bond markets. Clients approaching and in retirement will have exposure to bonds in their accounts. First, let's remember the basic rule of bonds: when yields fall prices rise for existing bonds and when yields rise prices fall for existing bonds.

Put another way, when inflation peaks the Fed will typically begin to lower interest rates. Lower interest rates mean that new bond issues will have a lower yield or interest payment then existing bonds that were issued during a higher rate environment. The bonds issued in the higher rate environment become more attractive in the secondary market and therefore their prices rise. This gives bond holders the opportunity for price appreciation should they decide to sell their bond in the secondary market and therefore the ability to capture growth of the asset plus the income produced by the bond...or a positive total return.

We utilize bonds to dampen risk in your portfolio but we also rely on them to provide total return as well. As companies have time to prepare for the possibility of slower growth, managers may find opportunities to add some higher yield bond options to your portfolios. High yield bonds have below investment grade ratings, but they can also offer significantly more yield. If companies are prepared for 2024, a high yield bond may be attractive compared to the decreasing yields of investment grade options.

We will continue to keep you aware of how we view the markets and what that means for your portfolio. Please don't hesitate to ask us any questions. We are interested in seeing you in 2024. Please think about making an appointment to meet with us for an review of your accounts. You can schedule that via this link when you are ready or give us a call at 281-395-8300.

Sources: Total returns of the indices mentioned are provided by Morningstar, MSCI, S&P Dow Jones and 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.


Building a retirement distribution strategy can be a challenge. How much can you withdraw each year and still have enough money to last throughout retirement?

In the 1990s, a leading financial professional developed a guideline for retirement distribution called the 4% rule, analyzing the historical returns of portfolios that featured an approximate balance of 60% stocks and 40% bonds. The study determined that retirees could draw about 4% each year over 30 years without running out of money. That became known as the 4% rule.

Does the 4% rule work? It depends on a variety of factors. For example, if stock prices fall sharply in the early years, your odds of running out of money increase. So is it time to retire the 4% rule?

The answer relies in your retirement goals, time horizon, and risk tolerance. A portfolio created with your long-term objectives in mind is crucial as you pursue your dream retirement.


What If Your Kids Decide Against COLLEGE?

As a parent or grandparent, you may have diligently saved money in a 529 account to help fund your child's or grandchild's college education. But what happens if they decide college isn't the right path for them? It's a valid question that many families are facing as more and more people choose alternatives to traditional four-year colleges.

It's a more common situation than you might think. Fewer students are going to college, and the expenses continue to climb. American undergraduate enrollment rates peaked in 2010 and have steadily declined since. During the same period, college costs have risen over 12 percent.

A 529 plan is a college savings plan that allows individuals to save for college on a tax-advantaged basis. The state tax treatment of 529 accounts is only one factor to consider before committing to this savings plan. You should also consider any fees and expenses associated with a particular plan. Whether or not a state tax deduction is available will depend on your state of residence. State tax laws and treatment may vary, and state tax laws may differ from federal tax laws. Earnings on nonqualified distributions will be subject to income tax and a 10 percent federal penalty tax.

First and foremost, it's important to remember that having a 529 account doesn't mean that the funds are reserved only for a four-year college education. Several choices are available for using the money saved in the account.

One option is to use the funds for a two-year program, such as those for an associate's degree or at a trade school. Many vocational schools offer programs that can lead to careers that don't require a four-year degree. When you use the funds in a 529 account for these programs, you are still investing in your child's or grandchild's future and providing them with skills that may help them succeed.

Another option is to use the funds for education expenses outside the United States. Many countries have educational institutions that offer programs that may interest the student in your life. By using the funds in a 529 account, you can help support their academic goals, no matter where they choose to pursue them. Certain restrictions apply, so you will need to explore this option more thoroughly if you decide to pursue it.

The rules for 529 accounts allow paying up to $10,000 per year in tuition expenses at elementary, middle, or secondary schools with 529 assets. Furthermore, a lifetime maximum of up to $10,000 of 529 assets can repay existing student loans. So if the student doesn't use the 529 plan, it could be used by a different beneficiary. This means that you can transfer the funds to another family member who may be preparing to attend college, or you might even use the funds for your education if you decide to return to school.

As part of 2022's SECURE Act 2.0, which goes into effect in 2024, a 529 account holder can move money to a Roth IRA account under certain conditions, including:

  • The 529 plan must have been open for a minimum of 15 years.
  • Changing beneficiaries to another student may restart the 15-year clock.
  • The owner of the Roth IRA must be the beneficiary of the 529 plan (meaning the student).
  • Any money moved from a 529 plan into a Roth IRA account will be subject to the Roth IRA annual contribution limits. The Roth IRA contribution limit in 2024 is $6,500, with an extra $1,000 allowed for individuals over 50.
  • The lifetime limit is $35,000.

To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under other circumstances, such as the owner's death. The original Roth IRA owner is not required to take minimum annual withdrawals.

It's important to note that taking the money out of a 529 account for nonqualified expenses comes at a cost. Doing so may result in federal income taxes and a 10 percent penalty on the earnings portion of the withdrawal. However, there is one exception to this rule: 529 plans allow money to be taken out for the exact amount of the scholarship or grant that has been awarded.

The truth is that for some young adults, college does not offer what they need. A person who aspires to enter a creative field might find more value in a vocational school or pursue their chosen field through smaller classes or institutes of learning. While most universities and colleges offer these courses, the cost involved could be a problem, as might the requirement to take courses beyond the student's chosen field to earn a full degree. In short, college is not for everyone.

As you are guiding and advising the student in your life through these complicated decisions, it's important to remember that a 529 account offers you a great deal of versatility and is designed with these variables in mind. Remember that the funds in a 529 account can support the student's educational goals no matter their path. By understanding how it functions and working with a financial professional, you will find that a 529 plan offers many potential opportunities.


Is Term Life Insurance for You?

Term insurance is the simplest form of life insurance. It provides temporary life insurance protection on a limited budget. Here’s how it works:

When a policyholder buys term insurance, they buy coverage for a specific period of time and pay a specific price for that coverage. If the policyholder dies during that time, their beneficiaries receive the benefit from the policy. If they outlive the term of the policy, it is no longer in effect. The person would have to reapply to receive any further benefit.

Unlike permanent insurance, term insurance only pays. It does not accumulate a cash value. That’s one of the reasons term insurance tends to be less expensive than permanent insurance. Many find term life insurance useful for covering specific financial responsibilities if they were to die unexpectedly. Term life insurance is often used to provide funds to cover:

  • Dependent care
  • College education for dependents
  • Mortgages

Would term life insurance be the best coverage for you and your family? That depends on your unique goals, needs, and circumstances. You may want to carefully examine the pros and cons of each type of life insurance before deciding what type of policy may be the best fit for you.

Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.



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Cox Global Associates, Inc. || 1260 Pin Oak Road, Suite 204 || Katy, TX 77494 || 281.395.8300 ||

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.