Efficient Charitable Donations- Wealth Insights #3

What is the best way to donate to a non-profit? We use strategies to increase tax efficiency and get more funds to those who need them. This enables our clients to be more purposeful in their donations so they can make an impact to the causes that are important to them.

How To Prepare for Change- Wealth Insights #2

How do I financially prepare for the death of a parent?

How do I retire from my job?

What are the risks I face as I build wealth?

Life is full of change. We help client navigator difficult times, so they can focus on the things that matter most to them.

Our Most Important Work

You’ve kept us extra busy these days, working with people you’ve sent who are going through transitions right now. It’s been a reminder that we don’t always pick the time when retirement savings are needed to fund the next chapter, when a death turns someone who is married into a survivor, or when a job change cascades through our other plans and planning.

An uncertain economy and volatile markets compound these tasks. We so appreciate your confidence in suggesting to people you care about that they talk to us, when they need to. These transitions are key, important times – we respect the time and attention people need in sorting through the issues. This may be our most important work, and you help us be there for people who need it. Thank you again.

We are equally grateful for the chance to talk to so many of you! As market uncertainty continues, it becomes invaluable for us to understand your priorities, goals, and concerns. While we never try and time the market, many of you have inquired whether this is a buying opportunity or if market downturns are jeopardizing the things that matter most to you. Keep those calls coming! We will review our strategy together and make sure we are taking appropriate steps for your future.

Our investment philosophy is built on 2 pillars. 1) Only take appropriate risks and 2) Buy high quality companies and investments. This approach has a history of building wealth over time and in a variety of market cycles.

We continue to believe in this philosophy even amid the global economic and geopolitical uncertainty. We are encouraged that the core domestic economy is still quite stable. Additionally, the economy is expected to grow in the latter part of this year after a surprise contraction in the first quarter, though the growth path may be bumpy as monetary policy is recalibrated from exceedingly loose to moderately tight and consumers and businesses adjust to higher borrowing costs.

We believe patient investors stand a better chance of meeting their long-term goals. No one has a crystal ball, but at lower valuations, history suggests the chances of above-average returns going forward may be rising. It’s tough to do during times like this, but we encourage long term investors to stick to their game plan.

Stocks’ Road Ahead

The calendar had barely flipped to 2022 and investors were reminded that even attractive long-term stock returns come with a cost: volatility. The S&P 500 Index fell nearly 10% from January 3 through January 27 amid fears that the Federal Reserve (Fed) will have to get a lot more aggressive to fight inflation, before staging a 4% rally over the last two days of the month to end January down 5%. After such a steady march higher in 2021, the dip may have caught some investors off guard.

For those whose anxiety levels may have risen a bit last week, here are some numbers that may provide reassurance:

Even in positive years for the S&P 500, on average the index experiences a maximum peak-to-trough decline of 11%. This year’s max drawdown is now 9.8%.
After a correction of 10-15%, the index has experienced an average one-year gain off the lows of 22% and has risen in 12 of the 13 one-year periods.
The average stock market gain one year after the first Fed rate hike of an economic cycle has been 11%, with gains the past eight cycles dating back to 1983.
When investor sentiment is most negative, as it was during the past two weeks based on the American Association of Individual Investors (AAII) investor sentiment survey, stocks have risen an average of 11% in the next year.

This data argues that stock investors should stay the course. But remember that gains in 2022 will likely be tougher to come by than in 2021. They may be more modest and happen later in the year, as is typical during midterm election years.

The good news is that an inflation peak may be near as the COVID-19 Omicron variant loses its punch. Slower, but still solid, economic growth this year will help cool inflation as Fed rate hikes take hold. We’re already seeing backlogs and bottlenecks start to clear. We expect more people to jump back into the labor force later this year, easing wage pressures. We may also get some help from lower oil prices, though that may have to wait for Russia-Ukraine tensions to die down.

These uncertainties make the road ahead for stocks tougher. But with U.S. consumers and businesses in excellent shape, the U.S. economy may grow 4% this year, well above the pace of the last decade. Corporate America is showing once again during fourth quarter earnings season that it is thriving with S&P 500 earnings poised to increase by more than 25% year-over-year.

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Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of February 2, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

What is a “second opinion” of my portfolio?

We are often asked to provide “second opinions” on investment portfolios. Sometimes an investor has managed their own finances for years and is looking for a professional “tune up”. Other times they have been using an advisor and simply want the comfort of some extra due diligence.

Second opinions help to ensure proper investment selection, financial alignment, and reasonable fees.

In this video, Dean and Brock discuss the information they look for when conducting a “second opinion” analysis.

Roth vs Traditional IRA

“Should I choose a Roth IRA or a Traditional IRA.” This is one of the most common questions we hear from individuals who are saving for retirement. There are some important differences regarding when you pay tax and who is eligible.

The most important thing you can do is SAVE! Yes, you will be able to look back in 30 years and say definitively if a Roth or Traditional IRA was your best choice. Some of this will depend on forces that you can’t fully control. Things like tax law changes, your income in retirement, and the rate that you will draw upon your retirement savings. What you can control is your dedication to a savings program.

What the video above for a more complete discussion on Roth vs Traditional IRAs.

Big Bank or Independent Advisor?

There are a lot of places you can go to get financial advice.

So why choose a local, independent advisor vs. a “Big Bank” or National Chain?

In this video we discuss some important characteristics of our Independent Advisor business model.

Many Reasons to Be Thankful

The past year and a half have tested all of us, but overall, the economy continues to strengthen, COVID-19 trends are greatly improving, and this still relatively young bull market is alive and well. As the leaves turn colors and begin to fall to the ground, there are many reasons to be thankful.

The economy slowed considerably in the third quarter (as the growth rate of gross domestic product [GDP] slowed to 2.0% from 6.7% in the second quarter), well below the 10% that was expected back in early June. The good news is—this likely isn’t the start of a new trend. The COVID-19 Delta variant slowed the economy considerably in the third quarter, but growth is expected to pick up in the next few quarters. Big purchases were likely pushed back a few months, which helps the growth outlook for the fourth quarter. Additionally, consumer balance sheets remain very healthy, with trillions of dollars in savings and money market accounts. The consumer, which makes up about two-thirds of the economy, is in very good shape heading into 2022.

Supply chain disruptions are being felt all across our country. Goods are taking longer to get to us and costing more than they did in the past. But over the past few weeks, we have seen some signs that the worst of the supply issues may be ending. Although these issues lasted longer than most expected, the bottlenecks will continue to work their way out of the system over the coming months and provide relief—something consumers are sure to appreciate.

Earnings drive long-term stock gains and continue to justify stocks at current levels. Third quarter S&P 500 Index earnings have been extremely strong once again, with more than 80% of companies beating estimates (FactSet) and earnings up nearly 40% from 2020 levels. Yes, many companies have been impacted by the recent COVID-19 Delta variant-induced economic slowdown and supply chain problems, but corporate America remains quite optimistic about the future.

The strong stock market performance this year is yet another thing to be thankful for. In fact, November has been historically the best month of the year for stocks, with the usually strong December right after that. Although some of the late seasonal gains could have been pulled forward by the 6% gain in October, the bull market is alive and well.

The loss of so many lives to COVID-19 is a tragedy beyond comprehension, but some recent trends show light at the end of the tunnel. Approved booster shots and vaccines for children will continue to help the economy reopen. Additionally, hospitalizations are down by more than half from their September peak, suggesting we are over the worst from the Delta worries. Another reason to be thankful indeed.

These last two months will go by quickly, as this time of year is always busy—and that’s a good thing because it means we are getting closer to normal. We’ve come a long way since early 2020 when COVID-19 first arrived on U.S. shores, so let’s not forget to take some time to remember how lucky we all are.

Please contact us if you have any questions.

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Important Information

All data is provided as of November 1, 2021.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Preparing For Retirement

What is your dream for retirement?

Retirement use to mean moving to Arizona and playing golf everyday. If that is your dream, great!! Or maybe you envision a different lifestyle for your “second act.”

In this video we discuss 3 basic steps that will help prepare you for retirement.

Your Kimball Creek Partner Team is Growing!

We are pleased to announce Erica Bearer has joined the Kimball Creek Partners team as our office manager.

Erica is a veteran in financial services, having previously worked for another wealth management firm. In addition, Erica has held administrative positions in the health care and recycling industries. A native of Washington, Erica lives in Spanaway with her husband and two boys. She is an active member of the PTA, serves as a Sunday School Teacher, and enjoys home improvement projects.

We feel fortunate to bring on an experienced professional like Erica. Her expertise in handling office duties will allow Dean and Brock more time to focus on the most important part of Kimball Creek Partners: You

As we begin to wind down 2021 and look forward to 2022, we are focused on achieving excellence for you in both service and performance. To help meet these goals, Brock has moved over to an advisor role and directly assists Dean in building financial strategies.

The current and future growth of Kimball Creek Partners is designed to strengthen your team so we can provide excellent services for decades to come. If you are wondering, Dean has NO plans to retire (he enjoys his job too much).

In 2022 we look forward to having more conversations about what matters most to you, and how your financial strategy can support those priorities. Thank you for you support and business.

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Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice and financial planning offered through Financial Advocates Investment Management, DBA Kimball Creek Partners, a registered investment advisor. Financial Advocates Investment Management, Kimball Creek Partners and LPL Financial are separate entities.