Advances in Artificial Intelligence

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Advances in Artificial Intelligence

Last month I spent a week on the UPenn Wharton Campus, the conclusion of my 2nd year of the Securities Industry Institute (SII) program. The class syllabus ran the full spectrum focusing on critical topics such as market dynamics, risk management, regulatory changes, leadership development, and strategic decision-making. More interestingly, however, is that while hitting each of these key areas, the program also affords its professors flexibility on how to accomplish each noted area of study. One theme that stuck out throughout the various topics was the rate at which artificial intelligence (AI) was brought up. Whether it was Chat GPT, AI or AI ethics, the subject arose in every single class.

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Inherited IRA Required Distribution Rules Change, Again.

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Inherited IRA Required Distribution Rules Change, Again.

The rules surrounding Required Minimum Distributions (RMDs) from inherited retirement accounts have always been complex. After the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 enacted sweeping changes, the rules were made all the more complicated.  One of the most impactful changes was the elimination of the “stretch” provision for inheritances which allowed most beneficiaries to take small amounts out of the account(s) annually based on their own life expectancy. Under the new rules, many inheritances that occur after January 1, 2020 will be subject to a new 10-year rule. 

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Currency Update – Current Threats to the U.S. Dollar’s Global Role

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Currency Update – Current Threats to the U.S. Dollar’s Global Role

Last month, Brazilian President Luiz Inácio Lula da Silva urged developing countries around the world to start using alternatives to the U.S. dollar in international trade and investing. In conjunction with that, Brazil and Argentina began to explore the possibility of a common currency, partially to circumvent the need for U.S. dollars in many cross-border transactions between the two countries. 

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April Private Client Letter - Recession Risks Continue to Rise

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April Private Client Letter - Recession Risks Continue to Rise

The most significant challenge for the U.S. economy has shifted from an uncertain path for monetary policy to a potential banking crisis and associated issues connected with tightening credit conditions. 

The supply of bank credit is an important driver of macroeconomic outcomes and a contraction in credit availability serves to further slow already decelerating economic activity.  Banks will likely raise lending standards in response to the current set of problems and the pace of new loan origination, for businesses and consumers alike, will decline.  

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2023 Retirement Themes

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2023 Retirement Themes

Typically, the content in our monthly thought leadership package is reserved for original, in house written material from members of our team. There are, however, moments of exception when we come accross a piece that is just so good that we feel is worthy and worthwhile to include in this client communication. Recently, JPMorgan released their annual Guide to Retirement report. This is a piece, similar to their Guide to Markets, that we find very useful each year. This week I reviewed the 52 page report and have summarized it with their 4 major themes for 2023.

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Is Tech in Trouble?

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Is Tech in Trouble?

Last year the technology sector was down roughly 27% due to high inflation and interest rates. Tight monetary policy has significantly limited growth forecasts, and slowed down new startups. While some positive performance has returned to start the year, mass layoffs have instilled additional fear in the eyes of investors. According to TechCrunch there have already been over 150,000 layoffs in the first 3 months of this year and there are no signs of it slowing down. Large and small cap companies alike are experiencing the pain of having to let employees go.

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Special Market Update– A Banking Crisis and the Fed’s Rate Decision

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Special Market Update– A Banking Crisis and the Fed’s Rate Decision

Over the past several weeks, U.S. equity markets have been dominated by headlines involving uncertainties over banks, liquidity problems, and potential insolvencies.  The collapse of three U.S. banks and the scramble to rescue others, including Europe’s Credit Suisse Group AG and First Republic Bank, sent stocks and bond yields plunging.  Volatility in the bond markets has surged to the highest level since 2009. 

 

Today, the Federal Reserve voted to increase the Fed Funds rate by 0.25%, as was widely expected.  Some economists have suggested that the banking crisis might be equivalent to a 1.00% hike in the Fed Funds rate and that further tightening is no longer necessary to get it into restrictive territory as Fed officials have been aiming to do since they started the latest monetary policy tightening cycle a year ago (Yardeni Quicktakes).

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ROTH IRAs for High Net Worth Investors

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ROTH IRAs for High Net Worth Investors

Roth IRA’s can be one of the more misunderstood wealth accumulation tools. Traditionally, Roth IRA’s are thought of as advantageous for those earlier in their career who are earlier in their career earnings curve. However, Roth IRAs can also be used for High Net Worth individuals as a longer term wealth accumulation tool. This article will cover how individuals can utilize the account and back door Roth contributions to maximize tax free earnings.

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Secure Act 2.0

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Secure Act 2.0

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 brought key changes to many of the most popular retirement accounts and strategies. Three years later on December 23, 2022, the long awaited sequel, aptly named SECURE Act 2.0, was passed as part of the year end spending bill. Secure 2.0 builds upon the changes made by the 2019 legislation and will likely impact even more individuals than the original act did. The following is a summary of the main provisions in SECURE 2.0 that are likely to impact individual investors.

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Executor of an Estate – Top 10 list of Responsibilities

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Executor of an Estate – Top 10 list of Responsibilities

Being chosen as the executor of an estate can be both an honor and a major obligation depending on the complexity of the estate and a number of issues that may arise along the way. For this reason, a potential executor should make sure he or she knows what is involved before accepting this responsibility.

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Outlook 2023

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Establishing and maintaining an economic outlook is an essential discipline for serious investors.  A well-researched and rational perspective of the environment generates vital insights that will inform important decisions going forward. 

Clearwater Capital Partners is pleased to announce that our Outlook 2023 has been published.  You may access an Executive Summary of our commentary using the link below.  From there you may also download the full report.

As always, should you have any questions or concerns, please give us a call.

 

Special Year End Report – December 2022

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Special Year End Report – December 2022

We had generally expected 2022 would be a year in which a recession was unlikely and pent-up demand lingering from the COVID pandemic would fuel continued economic growth.  It looks like we may have gotten at least one of those expectations right.  In our Outlook 2022 report we even observed that the Fed would likely “begin raising rates in 2022, as soon as March”, which is exactly what they did.

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December Private Client Letter

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December Private Client Letter

Our economic outlook has not changed much in recent weeks. We expect the Fed’s tightening of monetary policy will keep equity market volatility high and range bound into 2023. Any indication that the Fed is contemplating a pause in early 2023 will drive sharp rallies. Any data reports that suggest inflation remains stubbornly high will trigger selloffs in equity markets. This reality was on full display as November ended and December began.

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Putting Excess Cash to Work

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Putting Excess Cash to Work

As rates have increased in 2022, short term fixed income yields are the highest they’ve been in nearly 15 years. The Federal Reserve has been aggressively tightening monetary policy to bring down inflation by increasing the Federal Funds Rate. The actions of the Fed and other central banks around the world have resulted in significant volatility in equities and in interest rates.

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Addressing your estate plan – a simple Q&A

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Addressing your estate plan – a simple Q&A

Creating and maintaining an updated estate plan is among the most important gifts you can provide for your family and those who you care most about in life. However, many find addressing the sensitive questions involved with legacy planning to be uncomfortable and, because of that, they may delay organizing the proper estate-related documents until it is too late.

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