Category: Portfolio
Q4 2023 Commentary and Portfolio Changes
Key Takeaways: We are changing our allocations to slightly overweight U.S. quality stocks, seeking to capitalize on the recent market pullback and position for potential upside surprises in U.S. economic growth and corporate earnings. We are leaning into U.S. high-quality stocks expressing a high-conviction preference for the largest cap stocks in the U.S. that appear to have attractive growth profiles. We plan to decrease our exposure to Europe, moving underweight international Developed Market (DM) stocks due to weakening corporate earnings signals and more pronounced downside vulnerability to potential rising energy prices and geopolitical turmoil. We are underweight bonds and overweight cash and short-term instruments that offer very attractive yields. The ghost of September's past haunted markets once again in 2023 and has carried over. This notoriously weak seasonal period - combined with rising rates and declining liquidity - saw stock and bond prices press lower. The S&P 500 Index, for example, is off its late summer highs by almost 10%, and the Bloomberg U.S. Aggregate Bond Index is down a similar amount from its earlier highs. We are potentially facing an unprecedented third year in a row of bond market losses. Overall, it has been a challenging year for investors with only the largest stocks doing well while most equity and fixed-income styles are flat to down. The “Magnificent 7” stocks in the S&P 500
Introducing Lineweaver WealthTrac Analysis
We’re excited to share the arrival of our new product, the Lineweaver WealthTrac Analysis. This is a sophisticated tool that helps us not only evaluate your current and future financial goals but to also consider emotions and behavior in a way that helps set you up for success. This is a powerful tool that evaluates your current and future financial plan in 5 different areas: Personal Information, Financial Information, Investment Goals, Risk Tolerance, and Risk Score. It considers variables like your employment, career and income, your Social Security, what you want out of your retirement, what your current financial situation looks like, and much more. By doing this, it can give you a great analysis whether you’re still working or retired. Wealth planning is always about establishing a goal and working toward it. To help client’s do this, we look at their top three financial goals. We measure where they are now, and what it would take to meet their timeline. Part of those goals is looking at three time horizons and the strategies that are best matched with each. You must think about the short-term, middle-term, and long-term goals. A truly innovative aspect of this program is how it lets us visualize how your risk tolerance and your emotional tolerance match up to the risk you’re actually taking, and the progress you’re making toward your goals. Our sophisticated analyzer also goes even further and offers you a score b
Understanding Student Loans
Student loans are a great investment when continuing your education so it’s important to know the different kinds that are available and the strategies for dealing with them. According to data from Lendingtree.com, more than 2/3rds of graduates – from both public and private institutions – have student loans and it’s something that affects many Americans. For parents and grandparents of current college students, there are a few different kinds of student loans to understand. These fall into four categories: Subsidized, Unsubsidized, PLUS loans, and private loans. When it comes to Federal loans, there are essentially three kinds. Subsidized are only applicable to undergraduates with demonstrated financial need. Unsubsidized loans are not tied to financial need, and are available to all undergraduate, graduate, and professional students. PLUS loans are available for graduate and professional students, as well as the parents of dependent undergrads. Subsidized and unsubsidized federal student loans don’t require a credit check, and you are able to secure them simply by signing a form indicating that you will pay them back. However, PLUS loans and private loans will require a credit check. Private loans come from banks and other financial institutions who lend directly to students and their families. These are similar to any private loans, in that they’ll require a credit check, and the lender will want to see proof that you are
The Power of Dividends Part I: Oil and Gas
As we all deal with continued market volatility, inflation, and other economic headwinds, qualified dividends can be a great strategy for your portfolio. This is the first in a two-part series discussing possible dividend strategies. So, what are the main benefits we can expect from qualified dividends? There are three things you should consider when adding qualified dividends to your portfolio. First, they can be a major contributor to total return. Second, you need to carefully vet the quality. And third, they can have very beneficial tax treatment. There are many types of dividend-paying stocks, but there are two that are particularly timely: bank preferred shares, and oil and gas exploration and production. The first thing to understand about oil and gas E&P is that these are really just common shares of U.S. or Canadian gas and energy production companies. Many of these companies paid down debt substantially in the last 5 years, have reduced well costs, and have a break-even price with West Texas Intermediate, or WTI at $30-$35 a barrel. And as all of us know who have bought gas recently, it’s significantly more than that! These are generating significant free cash flow right now, which won’t surprise most of us who have been to the gas pump recently. But many companies have committed to use this excess cash flow to reward shareholders by raising base dividends, and some are even adding a variable dividend based
What Do Events In Ukraine Mean For Your Portfolio?
U.S. stock markets have been declining since the beginning of January and fell further into correction territory after the Russian invasion, though markets recovered from their lowest levels since then. During this correction, the S&P 500 declined nearly 15% from peak to trough, while the Russell 2000 Index and the Nasdaq Composite both briefly entered bear market territory (down 20% or more). While we recognize that the current geopolitical landscape in Eastern Europe remains highly uncertain, we believe history may be a reasonable guide for what to expect from financial markets. If history is any guide – and by history, we mean Iraq’s invasion of Kuwait and N. Korea’s invasion of S. Korea, since these are the most recent and similar events - financial markets tend to peak before the actual conflict date, as tensions rise, and the overall S&P 500 decline has historically been 14-21%. Therefore, equity markets may have more downside in the short term, but we may be closer to the end of this correction than the beginning, based on current geopolitical circumstances. However, we do expect financial markets to continue to experience heightened volatility in the short term. In our experience, sometimes individual investors tend to make emotional and often irrational decisions during periods of financial market volatility. Your emotions in situations like these can be your greatest enemy when it comes to making the right financial
HealthWatch: What Are Some Foods To Ease Your Anxiety?
People can make a variety of lifestyle changes to help manage their anxiety. Eating a diet high in vegetables, fruit, legumes, whole grains, and lean protein can be helpful. Anxiety is a widespread condition, affecting millions of people globally. Symptoms vary, and some people only experience them now and then. However, someone who experiences symptoms for 6 months or longer may have a generalized anxiety disorder (GAD). Doctors often treat GAD with a combination of treatments, including talking therapies, such as cognitive behavioral therapy (CBT), alongside medications. Sometimes, these conventional treatments do not work long-term. However, some research suggests that proper nutrition can help improve symptoms. Nine foods to eat to help reduce anxiety: 1. Brazil nuts 2. Fatty fish 3. Eggs 4. Pumpkin seeds 5. Dark chocolate 6. Tumeric 7. Chamomile 8. Yogurt 9. Green tea Eating a healthful diet should provide all the nutrients needed for healthy brain function. A healthful diet that contains antioxidant and anti-inflammatory compounds, as well as vitamins and minerals might help reduce inflammation and oxidative stress. Reducing foods that are high in added sugar, salt, and fats - especially trans fats - may help reduce inflammation. Reduce alcohol, sugar, and coffee as these may increase episodes of anxiety and the associated symptoms. One report states that participating in enjoyable physical activity may also have a positive effect on mental
The WealthWatch: Protecting Your Legacy for Future Generations
Most of us spend our whole lives building wealth, and we want our families and the next generation to benefit. But without planning, it doesn’t work out that way. For example, one study found that most wealth is lost in America within three generations. The biggest concern we hear from clients is, “how will our children (or grandchildren) be spending their inheritance?” It’s not uncommon for an entire inheritance to be spent within a couple of months – which is fast when you consider that these inheritances are often substantial. Sometimes, it’s simply due to reckless spending. But more often, we see it caused by one of three issues: emotion-based decision making, pressure from family and friends, and/or a lack of professional assistance. Let’s look at each of these a little more deeply. 1. Emotion-Based Decision Making While we can understand grief and emotion in the wake of losing a parent or grandparent, we never make good decisions when we’re making decisions based on our emotions. And sometimes it is the impulse purchases that are the issue – like buying a car, or house, or taking a vacation. But, more often it involves making major life changes, like quitting a job, or sinking an entire inheritance into a new business venture that eventually fails. In the case of starting a new business, people often have a passion for a specific type of business, but don’t have the education or experien
President's Letter: Tax Tips For 2022
by Jim Lineweaver, CFP®, AIF® President and Founder Most of us have already filed our taxes for 2021, but that doesn’t mean we’re happy about it! As we saw our tax bills this year, many of us may have wished we would have planned differently last year. While there aren’t many strategies that still apply for 2021, we want to remind everyone that planning for next year’s taxes starts now. In 2021, many people started their own business or added consulting to their list of services. If you find yourself in this situation, there are a wide variety of tax deductions you can take advantage of, such as writing off a lease or mileage on your car, your home, and computer equipment you might have previously owned. For your new venture, there are also a wide variety of retirement plans available. Another common question we get each year is about gifting – whether it’s to a friend, family member, or a favorite charity. I always recommend that clients consider gifting appreciated securities rather than their hard-earned cash. Gifting an appreciated security means getting a write-off for its current full value. So, even if you only paid $10,000 for a security, and it’s now valued at $20,000, you can write off the whole $20,000 when you donate or gift it. And you can even gift appreciated property or real estate. This year, the IRS has also increased the “above the line” deduction that came about in 2020, to $300 a person
Charitable Giving as a Wealth Strategy
Watch Cleveland Clinic’s Associate Chairman of Philanthropy Chris McMahan and Jim Lineweaver on The Financial Quarterback! Jim and Chris discuss charitable giving strategies you can use. They also examine the Cleveland Clinic’s impact and donor engagement around the entire globe! Financial Quarterback - Charitable Giving as a Wealth Strategy Air date
Protecting Your Legacy for Future Generations
Most of us spend our whole lives building wealth, and we want our families and the next generation to benefit. But without planning, it doesn’t work out that way. For example, one study found that most wealth is lost in America within three generations. The biggest concern we hear from clients is, “how will they be spending their inheritance?” It’s not uncommon for an entire inheritance to be spent within a couple of months – which is fast when you consider that these inheritances are often substantial. Sometimes, it’s simply due to reckless spending. But more often, we see it caused one of three issues: emotion-based decision making, pressure from family and friends, and/or a lack of professional assistance. Let’s look at each of these a little more deeply. 1. Emotion-Based Decision Making While we can understand grief and emotion in the wake of losing a parent or grandparent, we never make good decisions when we’re making decisions based on our emotions. And while sometimes it is the impulse purchases that are the issue – like buying a car, or house, or taking a vacation. But, more often it involves making major life changes, like quitting a job, or sinking their entire inheritance into a new business venture that eventually fails. In the case of starting a new business, people often have a passion for a specific type of business, but don’t have the education or experience with the kind of b
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Case studies are intended to illustrate the types of financial issues faced by actual clients. They should not be construed as a testimonial for or endorsement of Lineweaver Wealth Advisors. They do not represent the experience of any advisory client. Each client’s situation is different, and their goals may not always be achieved. Lineweaver Wealth Advisors, LLC, is not engaged in the practice of law or accounting. Tax information provided is general in nature and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation. Tax rules and regulations are subject to change at any time.
Crain's Cleveland Business is a print and online newspaper delivering local business news and information to Cleveland's business executives, which is published by Crain Communications Inc. The Crain's 2024 list may employ different methodology than described above for similar designations granted in other years. No clients were consulted and no fees were paid to determine the winners; the award is based on assets under management. Neither the participating candidates nor their employees pay a fee in exchange for inclusion on Crain's 2024 List. However, recipients may pay a fee to Crain, an affiliate, or an unaffiliated third party in exchange for plaques or article reprints commemorating the designation. The publication should not be construed by a client or prospective client as a guarantee that they will experience a certain level of results if the recipient is engaged, or continues to be engaged, to provide investment advisory services; and should not be construed as a current or past endorsement of the recipient by any of its clients. Lineweaver Wealth Advisors was ranked in the Top 25 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. The award is based on assets under management in the years 2024. In 2023, Lineweaver Wealth Advisors was ranked in the Top 15 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. The award is based on assets under management in the years 2023. In 2021 and 2022, Lineweaver Wealth Advisors was ranked in the Top 20 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. The award is based on assets under management in the years 2021 and 2022 respectively.
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