The Collapse of FTX

/
The Collapse of FTX

Sam Bankman-Fried (SBF)…his name may not mean much to you, but he has become extremely popular within the cryptocurrency space… and not for good reasons. Until this last month, Sam was a crypto juggernaut. He began by his crypto fame by co-founding a crypto trading firm called Alameda Research back in 2017. In 2019, Sam stepped down from his CEO role at Alameda Research to found FTX, a cryptocurrency derivatives exchange. FTX experienced immense success and was valued at $32 billion earlier this year. As the title of the article suggests, this success came to a drastic halt. On Nov. 11th, 2022, FTX filed for chapter 11 bankruptcy in which 130 affiliated companies are included in the proceedings.

Read More

Political Uncertainty and Bear-Market Rallies

/
Political Uncertainty and Bear-Market Rallies

The primary outcome from the mid-term election results is likely a divided control of government, which is historically viewed as market-friendly overall. There’s still some counting to do in some key races, but it appears as though Republicans will take the House. The latest odds point to a roughly 13-seat House majority, with some possibility it will be narrower. Control of the Senate is down to three Senate seats and may not be finalized until the runoff election in Georgia is completed on December 6th.

Read More

November Private Client Letter - A Complicated and Shifting Environment

/
November Private Client Letter - A Complicated and Shifting Environment

We have long promised our clients that when the facts change, our outlook would change. This said, our base case has shifted to a less constructive view of the economy over the next 12 to 18 months. We now expect that economic growth to disappoint and a recession to occur 2023. This said, we are not expecting the recession to be particularly long or deep. By mid-2023 the worst may be behind us, and risk assets could begin a sustained move higher.

Read More

Inflation Implications

/
Inflation Implications

Inflation has been the hot button topic of the year. Seemingly every article, news segment, or social media post in regard to the market or economy will include at least some reference to inflation and the role it plays. Most of these references are about its effect on the consumer or how it has changed outlooks for various companies. What perhaps is lesser known, however, is the role CPI has in many government-stipulated figures such as Social Security benefits, qualified plan contribution limits, and income tax brackets. This article will focus on the various figures that are, in one way or another, tied to the CPI and its implications for American investors and retirees.

Read More

Revisiting the Roth IRA Conversion

/
Revisiting the Roth IRA Conversion

While 2022 has been a down year for the stock and bond markets, there are some actions that long-term investors can take now in order to take advantage of the market dip from an overall financial planning standpoint. For example, although it might not make sense for everybody, some investors may benefit from completing a Roth IRA conversion before the end of the year.

Read More

Private Client Letter – October 2022

/
Private Client Letter – October 2022

In our Midyear Update I observed “the current market environment is about as challenging as any I can recall in the past 40 years” and three months later this remains the case. Inflation continues to be the dominant challenge as the Federal Reserve has surged their hawkish rhetoric along with the fastest interest rate tightening cycle in the past half century.

Read More

Integrated Financial Planning – What Does it Mean for our Clients?

/
Integrated Financial Planning – What Does it Mean for our Clients?

The effective management of family wealth requires a comprehensive integrated approach. At Clearwater Capital Partners, we strive to offer the right services, to the right clients, at the right time. For all clients, some level of integrated financial planning is necessary. In this piece, we will explore how the different attributes of each client drive our decision making as to what the right services and times are for those individuals. Subsequent thought leadership will expand on what integrated financial planning & wealth strategy look like for each type of client.

Read More

An Introduction to Ethereum 

/
An Introduction to Ethereum 

Ethereum is the second largest crypto investment by theoretical value ($156.23B), second only to Bitcoin ($367.35B). Ethereum has been in the news recently as it has undergone a massive update (the Merge) that has Ethereum investors and supporters excited for the future. In order to understand the Impact these updates will have, let’s first look at what Ethereum is, and how it operates.

Read More

Currency update - U.S. dollar - why has the dollar strengthened against foreign currencies and what has been the effect of a strong dollar on the global economy, inflation and investments?

/
Currency update - U.S. dollar - why has the dollar strengthened against foreign currencies and what has been the effect of a strong dollar on the global economy, inflation and investments?

As I write this article, my daughter happens to be on a flight to Italy where she will be visiting a friend. For those who know me and my background, it is probably not a surprise that one of the things that I pointed out to her prior to her trip was the timeliness of her visit because of how cheap it currently is for Americans travelling to most countries outside of the U.S., including Italy.

Read More

Historically, Markets Bottom When Inflation Peaks, Not When Rates Peak

/
Historically, Markets Bottom When Inflation Peaks, Not When Rates Peak

One of the most significant drivers of the poor performance of the stock market this year has been the dramatic rise in interest rates, which are moving higher in response to the Federal Reserve’s battle against inflation. As rates have moved higher in 2022, stocks have fallen. That relationship is based on the uncertainty around how high the Federal Reserve will need to take rates to get inflation under control, and whether they will be forced to raise rates to a level that will cause a recession. However, history tells us that stocks tend to bottom and begin the recovery rally well before inflation is “under control” and, typically, well before the Federal Reserve has finished raising interest rates. They also tend to bottom before the economy exits recession.

Read More

Special Market Update – September 22, 2022

/
Special Market Update – September 22, 2022

Yesterday the Federal Reserve Board (Fed) voted unanimously to raise rates by three-quarters of a percentage point bringing the federal funds rate to 3.00 – 3.25%. More importantly, updated forecasts for future rate increases reflect a more hawkish path through 2023.

We now expect another 75-basis point hike at their next meeting in November, followed by a 50-point hike in December. Additional, albeit smaller, rate hikes will likely continue into 2023. As of today, 12 out of 19 FOMC members expect Fed Funds between 4.50% and 5.0% by the end of next year.

Read More

Biden's Student Loan Forgiveness Plan - An Overview

/
Biden's Student Loan Forgiveness Plan - An Overview

President Biden’s proposed Student Debt Forgivness plan has garnered much attention since it was announced on August 24th 2022. The proposed plan has not been without controversy, but has left many borrowers wondering what it would actually mean for them. Who does it apply to? How does it work? This article will not cover the various few points of the supporters or proponents, nor my opinion of its efficacy, but rather provide a general overview of how it would actually work if enacted.

Read More

Inflation Reduction Act Summary

/
Inflation Reduction Act Summary

Inflation Reduction Act Summary

If you have been following the political news lately, I am sure you have heard of the Inflation Reduction Act. Often it is difficult to get away from the sound bites meant to stir controversy and determine what is in new legislation, and how to respond accordingly. In this thought leadership piece, we have sought to distil down the main points of the new act into a concise summary and call out where action may be appropriate.

Read More

Mid Year Update - 2022

/

The current market environment is about as challenging as any we can recall in the past 40 years. A global pandemic, war in Europe, emboldened geopolitical adversaries, potential food and energy shortages, unprecedented monetary policy decisions, political divisiveness, and runaway inflation give all investors plenty to worry about. The question on everyone’s mind is what happens next.

Our goal in this mid-year strategy update is to connect the dots and offer a logical interpretation of current economic and market data. The insights presented in this report will build upon our monthly commentary (The Private Client Letters) and our Spring Symposium presentations. This report is a vital component of a continuous dialog with clients and our unwavering goal to “achieve clarity in a complex world.”

We could never have imagined 16 years ago when we adopted this tagline how complex the world would become. That said, we have always known that achieving clarity would be the greatest responsibility we would have for our clients.

July Private Client Letter

/
July Private Client Letter

The S&P 500 suffered its worst half since 1970 after inflation and recession concerns sparked a 21% sell-off. This year’s first half performance was strikingly similar to that of 1970 (also down -21%) and in both periods, high inflation was the issue. It is interesting to note that the second half of 1970 saw the S&P up 27%. Of course, that does not mean that's how it will go for the back half of 2022; however, we believe it is likely the market will move higher if inflationary pressures subside.

Read More

Estate & Wealth Transfer Strategy Considerations

/
Estate & Wealth Transfer Strategy Considerations

The current Federal Estate Tax exemption is approximately $24 million for a married couple (half for an Individual) inclusive of portability. Readers should note: no legislative action is needed to effectively cut the exclusion amount in half at the end of 2025. Meaning, the Tax Cuts and Jobs Act (TCJA) of 2017 automatically reverts without the need for Congressional vote.

Read More

Our Next Economic Tailwind – Demographics

/
Our Next Economic Tailwind – Demographics

As of 2019, the Millennial generation (those born between 1981 and 1996) officially surpassed the Baby Boomers as the largest living population group in the United States (Source: Pew Research). While much of our commentary and attention focuses on current trends and data, it can be easy to be so focused on the here and now that larger structural trends, like demographic trends, go unnoticed. While these current trends and data are critical for making tactical investment decisions, it is also important not to miss the forest for the trees given the time horizons our clients are typically working with.

Read More