At Ferguson Wellman, we are nearing the end of our Mid-Year Update events season, where we present updates to our yearly Investment Outlook and deepen our connections with clients and the community.
Hop, Skip and a Jump?
The Swiss Army Knife of Tax-Advantaged Accounts
One of the most powerful savings vehicles for health care costs is the Health Savings Account (HSA), a type of savings account that lets you set aside money on a pretax basis to pay for healthcare expenses. Funds in an HSA grow tax-deferred and come out tax free when used for qualified medical expenses such as Medicare Part B and D premiums, vision and dental care expenses and qualified long-term care insurance premiums up to certain limits.
Pahlow on KOIN Wallet Wednesday
Changing of the Guard
In an otherwise quiet week on Wall Street, the benchmark S&P 500 turned the page on one of its longest-running bear markets. Rebounding by over 20% from its October lows, the blue-chip index has officially surpassed the threshold marking a new bull market. What is notable about the advance from last fall’s lows is how few stocks have participated in the upturn.
2022 Annual Report
Puget Sound Business Journal Names Ferguson Wellman to Wealth and Asset Management List
Ferguson Wellman Capital Management and West Bearing Investments were recently named by Puget Sound Business Journal to their Seattle-area Wealth and Asset Management Firms list.
Better Late Than Never
On Wednesday, days before the U.S. is projected to run out of money to pay its bills, the House passed the Fiscal Responsibility Act of 2023 in a bipartisan effort. The final vote of 314- 177 received support from 149 Republicans and 165 Democrats. With both sides making concessions, it’s not surprising to see members of each party voicing their displeasure with the deal.
Debt Drama Update
Many people believe the world’s largest and most important economy is on the brink of default. Indeed, politicians generally do a disservice by pushing their agenda until the last minute and then lose the trust of their constituents and investors. However, negotiations on the debt ceiling have improved over the last few days and the risk of default has decreased.
A Nifty Fifty Redux?
According to headlines and news pundits, it is a near certainty that the U.S. is very close to entering a recession (reminder: economists have successfully predicted nine of the last five recessions). Despite this, to date, the S&P 500 has posted a positive return of about 9% this year.
Solutions for Excess Funds in a 529 Education Savings Plan
We recently wrote about strategies for funding education needs in our wealth management Insights Newsletter. Occasionally, we learn that a client has successfully saved and built wealth for education inside a tax-advantaged 529 education savings plan, only to find themselves with funds left over. Luckily, there is good news – your savings aren’t trapped. There are several options for transferring or withdrawing funds from a 529 plan when they are no longer needed for the current beneficiary’s education.
Slowing Progress
Inflation has been the most watched economic data point for the past two years. On Wednesday, we received inflation data for the month of April. The headline Consumer Price Index (CPI) increased by 0.4% compared to the prior month and 4.9% compared to the year-ago period. 4.9% compares to economist expectations for an increase of 5.0%, equal to the 5.0% increase seen in March.
A Lot to Digest
A bank failure, a rate hike and a surprisingly strong jobs number all led to volatile equity markets this week, with negative returns led by energy stocks and regional banks. We’ll first discuss the takeover of First Republic bank, then the effect of the Fed’s actions mid-week. Finally, we’ll hit on the employment numbers for April.
Gradual, Then Suddenly
“How do you go bankrupt? Two ways. Gradually, then suddenly.” -Ernest Hemingway
As of this writing, there are expectations that First Republic Bank may not survive the weekend. However, we believe that First Republic’s issues are not systemic across the industry. Unlike 2008, these issues with First Republic, as they were with Silicon Valley Bank, are not credit related. Rather, it was the issues that were part of their business model, which played out as Hemingway stated in “The Sun Also Rises.”
Wealth Management Insights: Caring for Ourselves and Our Loved Ones
Collaborative planning for care needs can reduce family stress and ensure our housing, financial management, legal arrangements and healthcare is consistent with our personal preferences. In this quarter’s Wealth Management Insights video, Mary Lago, CFP®, CTFA, shares common decision points and items we can address in advance.
A Debt Ceiling Primer
Now that individual taxpayers have submitted their 2022 tax returns and Tax Day 2023 is in the rearview mirror, a largely self-made crisis surrounding raising the debt ceiling will begin to resonate through the halls of Congress, possibly lasting through the summer months.
Selecting a Trustee and Executor
Your wishes. Your legacy. Your plan. Your estate planning documents, whether a will or a trust, reflect your values and wishes relating to the distribution of your assets. While you, and your attorney, have carefully drafted language that reflects distribution wishes congruent with your goals, it is still left up to someone else to execute your plan.
Spring Has Sprung
This week marks the start of earnings season and investors are anxiously awaiting corporate guidance to shed light on the state of the economy. The first quarter of 2023 brought positive returns for both stocks and bonds, but we also saw the second and third largest bank failures in U.S. history. Mixed signals like this are difficult for investors to reconcile, however, this week was rich with economic data to set the stage for the second quarter of 2023.
Wealth Management Insights Q2 2023: Keeping Your Estate Planning and Education Funding on Track
Read our second quarter 2023 Wealth Management Insights titled, “Keeping Your Estate Planning and Education Funding on Track.”
Market Letter: Stalemate
Investment Strategy Video: Stalemate
George Hosfield, CFA, discusses the firm's quarterly strategy titled "Stalemate," which highlights the Fed's ongoing battle to tame inflation along with our views on the health of the banking industry and capital market expectations for the balance of the year.