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  • Writer's pictureJulie Skye

This 3rd Week of December 2022 Thoughts

Fed Fund Watch: Rates increased from 4.25%-4.50% this week. This translates to higher yields in Schwab Value Advantage.

There is a good chance that the RMD age will be increased to 75, bringing chaos to those of us who have been using 72! Get with me if you want to take charitable contributions from your IRA in 2023.

Take our Risk Assessment! Take our Risk Assessment!

The SEC is coming down hard on Advisors who text. Please email me!

The takeaway for investors is to avoid being a “noise” or “meme” trader and caught up following the herd over the investment cliff. A well-written investment plan calls for you to stick to it, re-balancing when needed and harvesting losses when there is the opportunity.

I think my most valuable job is being a wet blanket: how many times in the last 40 years have I thrown water on an IPO or other shiny new IPOs like we’ve seen the last 3 years, like the “meme” stock? While the “meme stocks” may give you a momentary thrill, in the long run, they have been heart breakers. Merriam-Webster Dictionary defines a meme as “an amusing or interesting item that is spread widely online especially through social media.” Chat boards in the late 1990s allowed investors to promote stocks with little merit, contributing to the dot-com bubble that burst in spectacular fashion in March 2000.

The COVID-19 pandemic caused emotional trading to reach historic peaks as groups of shut-in amateur investors piled into the fun-seeking meme stocks with little regard for economic fundamentals. What has been the result? The following chart shows the performance of the high-sentiment / high attention stocks relative to the performance of the rest of the market, from 1998-2001 and January 2018-October 2021. The green line is the market…and the gray line is the performance of the meme stocks, averaged

Why does it matter to you? Closely related to the meme stock was Crypto, Robinhood IPOs, Unicorns (stocks coming to market with no earnings) and the many companies that helped businesses survive COVID shutdowns. The chart above demonstrates that while attention-getting meme stocks may provide investors with a thrill, in the long term, they have been a bad omen for future returns. Never has caveat-emptor been more important.

While there are many variables involved with calculating the Social Security survivor benefit, a simplified way to think of the widow / widower benefit is that the surviving spouse receives the higher of their own benefit or the benefit of the deceased — which may have been reduced or increased, depending on whether and when the deceased had filed for Social Security benefits.

On a side note, regarding Social Security SECURITY…caller ID, texts, or documents sent by email may look official, but they are not. Fraudsters are calling to verify information about the 2023 cost-of-living adjustment for people who get benefits. Remember, this adjustment is automatic, and a beneficiary does not need to verify anything. Social Security won’t ask you to provide information or money to get your benefit increase. If they email you, about programs and services, know they will never ask for personal information via email or text. Why does it matter to you?I can help you determine the best filing strategies as early claiming can impact future widow benefits. I’ve attached a nice article on this…if it doesn’t pertain to you, pass it along. It is never too early to make a good decision. I can also help when you are concerned you might be targeted by fraudsters, by talking through it!

Why does it matter to you? For the life of me, I can not figure out why there is so much angst about whether we are, or are not, in a recession. Back in the old days, before the Fed began to monkey around so much, we had a recession, on average, every 2.74 years. They were, and ARE, a normal part of the business cycle. They clean out all the dead wood and the excess so businesses can make the changes they need to run profitability. For investors, it lets us buy the good stuff, at bargain prices. Bring on the Recession and let’s get it over with!

Read more here, in this Vanguard piece: Vanguard says a Recession is Coming

Required Disclosures: Always read the fine print! This content reflects the opinions of Julie Skye and is subject to change without notice. This content is for informational and entertainment purposes, and it is not a recommendation regarding the purchase or sale of any security. There is no guarantee that any statements, opinions, or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Securities investing involves risk, including the potential for loss of principal. There is no assurance any investment plan or strategy will be successful.

Julie is an Investment Advisor Representative of Sustainable Advisors Alliance, LLC (SAA, LLC): Advisory services are provided by SAA, LLC.

Registration with the SEC does not imply a certain level of skill or training.

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