Skip to main content
All Posts By

BayTrust Financial

Mar 24
Love0

Do You Know the Connection Between Income and Medicare Costs? 

By Medicare

As you near retirement you’re probably focused on making sure you have enough income to enjoy the years ahead. While enjoying what you’ve worked hard to build should be a priority, you should also keep in mind that withdrawing the money you’ve saved in traditional 401(k)s and IRAs can impact your Medicare costs throughout your retirement. Read on to see what having a high income could cost you in Medicare premiums and what strategies could potentially help you keep more money in your pocket and less going to Medicare premiums which are deducted from your Social Security check.

Understanding Medicare

First make sure you understand Medicare, how it’s broken up, and what plan you will likely choose. Medicare is sectioned into different parts, each serving a unique role in delivering health care coverage. These parts include Part A, Part B, Part D, and additional coverage options like Medicare Advantage (Part C) and Medigap.

  • Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and limited home health care. This is normally free for most people who have qualified for Medicare coverage.
  • Part B (Medical Insurance): Covers doctor visits, outpatient care, home health care, and preventive services like screenings and wellness visits, along with durable medical equipment (e.g., wheelchairs). Part B coverage is the premium that will be deducted from your Social Security check if you don’t choose Medigap or Part C.
  • Part D (Prescription Drug Coverage): Helps cover the cost of prescription medications, including certain vaccines. You can get Part D as a standalone plan along with Part B or as part of a Medicare Advantage Plan.
  • Medicare Supplemental Insurance (Medigap): Extra coverage from private insurers to help pay for out-of-pocket costs in Original Medicare, such as copayments and coinsurance. Plans are standardized by letter (e.g., Plan G, Plan K).
  • Part C (Medicare Advantage Plans): Private, Medicare-approved plans that may bundle Part A, Part B, and often Part D (prescription drug) coverages. Usually limited to providers within the plan’s network. May have different out-of-pocket costs and additional benefits not available in Original Medicare, like vision and hearing coverage.

 

Comparing Your Choice of Original Medicare with Medicare Advantage

Original Medicare

  • Includes Part A and Part B.
  • Option to add Part D for prescription coverage.
  • Flexibility to see any Medicare-accepting provider in the U.S.
  • You can also add Medigap for extra coverage on costs not covered by Original Medicare.
 Medicare Advantage (Part C)

  • Private, Medicare-approved plans that bundle Part A, Part B, and often Part D (prescription drug) coverages.
  • Usually limited to providers within the plan’s network.
  • May have different out-of-pocket costs and additional benefits not available in Original Medicare, like vision and hearing coverage.

 

Understanding Modified Adjusted Gross Income (MAGI)

There is one thing that will have a huge impact on your Medicare costs— your modified adjusted gross income (MAGI). Your MAGI is your adjusted gross income (AGI) minus allowable tax deductions and credits. Once you retire, you may be surprised to find that a combination of income from pensions, investment earnings, traditional (non-Roth) IRA withdrawals, and traditional 401(k) withdrawals may land you with a higher MAGI than you realized. While you may no longer be earning a traditional income from working a job, your MAGI will still reflect all of your taxable income.

RMD Impacts

A required minimum distribution (RMD) is the amount you are required to withdraw annually from specific retirement accounts, such as traditional (non-Roth) 401(k)s and traditional Individual Retirement Accounts (IRAs). Starting at age 73, you must take your first RMD by April 1 of the following year, and each subsequent RMD must be taken by December 31 each year after. These mandatory withdrawals are added to your taxable income, minus any allowable deductions or credits.

Higher Medicare Premiums for High Earners

How does retirement income connect to Medicare premium costs? If you have a high income, you will be subject to an income-related monthly adjustment amount (IRMAA) that must be paid in addition to Medicare Part B and Part D premiums, and it’s calculated every year. If the SSA determines you must pay an IRMAA, you’ll receive a notice with the new premium amount and the reason for it.

For 2025, the standard monthly premium is $185 per person per month. In 2025, single filers with 2023 MAGI of more than $106,000 and married couples filing jointly with 2023 MAGI of over $212,000 will pay more. (See Two-Year Lookback below for why we used 2023 MAGI.)

The Part B IRMAA surcharge amounts per person per month for 2025 range from $74.00 to $443.90, while Part D surcharges range from $13.70 to $85.50 depending on income!

Other Impacts

Other income sources can also contribute to an increased MAGI. Capital gains, home sale profits, and even Treasury bill yields contribute to a retiree’s MAGI.

Two-Year Lookback

Now that you know what contributes to your MAGI, know that when you go to enroll in Medicare, your MAGI from your tax return two years prior will determine your premiums. This “two-year lookback” rule can catch retirees off-guard if they receive large distributions or gains, increasing their premiums unexpectedly. This is why it’s a good idea to start preparing for premium costs as soon as possible, and be strategic about it. The last thing you want is to be settling into retirement and then be hit with a high premium if you can avoid it. Be aware that the two-year lookback is ongoing throughout your retirement, and your premiums may go up in any given year if your income goes up two years prior.

Potential Strategies

By now you know that your Medicare premiums are directly influenced by your modified adjusted gross income (MAGI)—the higher your MAGI, the higher your premiums may be. To help manage this, it helps to work with a retirement planner years before filing for Medicare at age 65, and years before you plan to retire so that a specific retirement income plan can be created for you.

Your advisor will work with you to map out your retirement with a strategy that includes which accounts to draw from and/or which taxable accounts you might want to convert to Roth accounts to potentially save money for the long-term. It all works together!

 

Planning for Medicare can seem like an overwhelming process. From knowing which retirement accounts to leverage to help keep your MAGI as low as possible, to accounting for that two-year lookback, it can be a lot. That’s why the best place to start in your plan is talking to someone knowledgeable about retirement planning.

If you need help getting started in your Medicare planning, we’re here to help! You can reach Bay Trust Financial at 813.820.0069.

 

 

Sources:
https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/parts-of-medicare

https://www.investopedia.com/terms/m/magi.asp

https://www.investopedia.com/terms/r/requiredminimumdistribution.asp

https://www.cms.gov/newsroom/fact-sheets/2025-medicare-parts-b-premiums-and-deductibles

https://www.kiplinger.com/retirement/medicare/what-you-will-pay-for-medicare-in-2025

 

 

 

Mar 04
Love0

Mitch Zacks – Weekly Market Commentary: Investors Should Start Looking Beyond the Fed

By Weekly Market Commentary

Are You Overexposed to Growth Stocks?

Most investors are aware of the outsized impact growth stocks have had on total returns in the U.S. stock market, at least for the past couple of years. In 2024, the mega-cap technology companies often referred to as AI “hyper-scalers” accounted for 41% of the S&P 500’s total return. And perhaps not surprisingly, the two best performing sectors last year were Communications Services and Technology, where many growth stocks can be found.

Growth stocks have no doubt done well. But there is also a narrative that ‘growth’ is the only category that matters, especially given the view that we could be in the early stages of an AI-driven economic transformation.1

I’m not writing to say this is wrong, or that growth stocks’ momentum is coming to an end soon. My goal in this week’s column is to remind investors that a pure growth mindset can introduce risk in an investment portfolio—whether it’s from over-allocating to growth stocks or underweighting other attractive categories, like value stocks.

2024 offers a useful case study for the argument I’m making. As mentioned, Technology stocks led the way. But we also saw improving performance outside of the Big Tech category, with the median stock in the index returning +12% and leadership changing hands throughout the year. In the second half of the year specifically, value stocks and growth stocks performed roughly in-line with each other, as value staged a strong rally starting in July. A diversified portfolio could have captured this upside with less overall risk.

Investors who simply own an index may think they’re getting this same level of diversification, but they may actually have greater exposure to growth stocks than they’re aware of. Case-in-point: growth stocks made up over 35% of the S&P 500 Index as of the end of last year, which is substantially above the historical average of 24%.

Consider that owning the S&P 500 today could mean over-allocating to growth stocks and under-allocating to value stocks, which means having a portfolio overweight to stocks that trade at high multiples. Value stocks, by contrast, trade at relatively attractive levels today, and are far below their long-term median valuation. I estimate that value stocks would need to rise by some 40% just to get back to this historical valuation.

While past performance doesn’t guarantee future results, it’s noteworthy that the last time the valuation disparity between the Russell Growth and Russell Value indexes was as extreme—back in December 2000—value stocks went on to substantially outperform growth stocks over the following one, three, and five years. High-growth stock prices might eventually steer investors toward more reasonably priced options and expand the market focus beyond just the largest firms.

There’s also an earnings case for looking beyond growth. In aggregate, pretax corporate profit margins are near record levels, and the “non-Magnificent Seven” stocks in the S&P 500 are poised to see double-digit earnings growth for the first time in four years. While the Technology sector is expected to see strong double-digit earnings growth as well, Tech earnings growth is poised to decelerate in 2025 while other sectors in the S&P 500 could see accelerating earnings growth. Investors tend to prefer the latter.

Bottom Line for Investors

Growth stocks have undeniably driven recent market momentum, and have commanded leadership over value for much of the past decade. But over-committing to the growth theme not only increases risk in a portfolio, in my view, it also misses out on other areas of the market that trade at attractive valuations and could see accelerating earnings growth this year.

Growth stocks may grab the headlines, but emerging opportunities in other sectors are equally compelling. As market valuations shift and uncertainty rises, investors with diversified portfolios—like we manage here at Zacks Investment Management—can better position themselves for tomorrow’s gains.
​​​

1 Black Rock. 2025. https://advisor.zacksim.com/e/376582/stocks-underweight-and-unaware/5sndxr/1161199135/h/VLtq2YXm2Rfa8n9y687OZE2OFHPBjPenlz9ruOK-XeA

DISCLOSURE
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties.  Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.

The Russell 1000 Growth Index is a well-known, unmanaged index of the prices of 1000 large-company growth common stocks selected by Russell. The Russell 1000 Growth Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Nasdaq Composite Index is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Dow Jones Industrial Average measures the daily stock market movements of 30 U.S. publicly-traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-owned companies are considered leaders in the United States economy. An investor cannot directly invest in an index.  The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index is a modified market capitalization weighted index composed of preferred stock and securities that are functionally equivalent to preferred stock including, but not limited to, depositary preferred securities, perpetual subordinated debt and certain securities issued by banks and other financial institutions that are eligible for capital treatment with respect to such instruments akin to that received for issuance of straight preferred stock. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The MSCI ACWI ex U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Russell 2000 Index is a well-known, unmanaged index of the prices of 2000 small-cap company common stocks, selected by Russell. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The S&P Mid Cap 400 provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

The S&P 500 Pure Value index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme. An investor cannot directly invest in an index.  The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Feb 11
Love0

What’s Your Relationship with Your Finances?

By Financial Planning

An often-overlooked relationship is the one we have with our finances. As we celebrate the month of love, reflect on whether the relationship you have with your finances supports your long-term goals, or if a shift in that relationship is needed.

 

When you think about your finances, what’s the first feeling that comes to mind? Is it confidence? Indifference? Or perhaps anxiety? Like any relationship, your relationship with money requires consistent effort and care if you want it to be a fulfilling one. It’s also a malleable relationship, meaning that even if you feel overwhelmed by financial stress or detached from your goals right now, you can always change it to one that makes you feel confident about your financial future.

In psychology, a common way professionals assess relationships is through attachment theory. Attachment theory offers a framework for understanding how people form emotional bonds, particularly in early life with caregivers. These attachment styles include anxious, avoidant, and secure. Attachment theory can help us see how we approach all kinds of relationships, including the one we have with money!

First, understand your relationship with money was probably determined early on in life, maybe before you even understood the concept of money. This could be when you were a child seeing your parents or caregivers anxiously struggling to make ends meet, or seeing them spend money without considering long-term goals, etc. These early experiences shape how we interact with money and should be considered when assessing your current relationship with your finances. With that in mind, here’s how each attachment style may manifest in present-day financial behaviors:

Anxious

In the clinical sense, anxious attachment is characterized by a fear of abandonment and rejection. These individuals probably had inconsistent caregivers who were sometimes there and sometimes not. This made it hard for them to trust when things were good that the other shoe wouldn’t soon drop. When applied to finances, this could manifest as someone feeling overwhelmed, constantly worried that anything and everything could derail the progress they’ve made. These individuals often lack confidence in their ability to achieve their financial goals, even when all evidence suggests otherwise. Consumed by worry, they may find themselves paralyzed, unable to make the decisions necessary to reach their goals.

Avoidant

An avoidant attachment style involves a fear of closeness and difficulty trusting others as trusting others involved consistent disappointment in their earlier life. If someone has an avoidant style when it comes to their relationship with money, they may detach themselves from financial planning and long-term goals. If they avoid making goals, then there’s no fear of failure, but there will also never be any progress. These individuals might procrastinate, downplay the importance of financial milestones, or dismiss the need for accountability, all as a means of maintaining control while avoiding the potential disappointment that comes with falling short of their goals.

Secure

Finally, a secure attachment style enables an individual to feel safety, stability, and trust in close relationships. These are the people who had caregivers who offered affection when needed, encouraged independence, and were consistent. In the context of finances, someone with this attachment style approaches their goals with confidence. They trust their ability to make decisions that support their goals. They’re able to be present, engaged, and adaptable as circumstances change without feeling overwhelmed. Rather than fixating on the possibility of failure, they focus on success and the steps needed to achieve it.

 

Cultivating a Secure Attachment Style

If you feel like your attachment style leans avoidant or anxious at times, don’t worry! As stated previously, these attachment styles are malleable. This means you can change them! To cultivate a more secure attachment with your finances, think about what the behaviors of someone with a secure attachment might be. Some things you may want to consider:

  • General Financial Wellness: This includes having a monthly budget, an emergency fund, and a robust savings account. All of these will lay a foundation for you to build towards your bigger goals, but remember growing a “robust savings account” or creating a monthly budget are goals in themselves. So don’t let this first part overwhelm you, break it down into smaller, manageable steps and turn each one into its own goal!
  • Maintain Financial Awareness: It’s so easy to check out or lose focus on money. You see your monthly power bill or insurance premium go up, and you think, “Well it’s only $20.” But remember, that’s $240 a year! Push back the resistance that makes you want to ignore things, and instead keep track of bill increases, unnecessary purchases, and anything else that can burn a hole through your wallet. Being aware of these increases is the first step in mitigating them!
  • Set Goals: Know what you want to accomplish, because if you neglect to define your goals you will never achieve them. If your goals feel overwhelming, break them up into smaller goals. When you’re setting bigger, long-term goals, consider the power of compound interest. The returns you can gain over time can significantly help you reach those goals. For example, if you know you want to retire one day and your employer has a matching 401(k) plan, perhaps at the very least contribute enough to take full advantage of that match. If you want to send your child off to college one day, look into a 529 plan. If you are starting younger with a few decades before retirement, time is on your side, so take advantage of it.
  • Protect Yourself and Your Family: While preparing for the unexpected can be difficult, having a plan in place can help you face these challenges without feeling overwhelmed or shutting down. For this, you may want to consider a life insurance policy that works for you and your family. Life insurance policies have evolved over the last decade and can be better shaped to a policyholder’s needs, these policies can even have riders added to them to help you plan for long-term care. A will and/or estate plan will also help give you peace of mind knowing that if anything were to happen to you, you have taken steps to ensure your family will be taken care of, with your wishes spelled out and legally documented.
  • Know Your Triggers: If your attachment style leans anxious or avoidant, understand what triggers that attachment style. You can change your attachment style, but it requires a commitment to remaining present and addressing those maladaptive traits when they pop up. For example, maybe when you receive a bill you put off looking at it until the day before a late fee kicks in. Receiving a bill is the trigger, how can you address that trigger? Maybe you can enroll in automatic payments, or maybe set aside time every so many days to go over your bills, or maybe something entirely different altogether. Addressing your triggers will be something for you to figure out and can widely vary from person to person. The first step for everyone, however, is to face those triggers head-on and look for a solution.
  • Seek Help: Changing your attachment style is no small task, but you don’t have to do it alone! Partnering with an experienced financial advisor can make the process more manageable and less overwhelming. An advisor can help you define your goals, break them down into actionable steps, and provide guidance and support along the way!

If you’re looking for support in navigating your financial attachment style or want guidance to maintain a secure mindset, we’re here to help! You can reach Bay Trust Financial at 813.820.0069.

Feb 11
Love0

Mitch Zacks – Weekly Market Commentary: The Current Equity Risk Premium is Zero. Should Investors Ditch Stocks?

By Weekly Market Commentary

Stocks and Bonds Offer Similar Yields. Does That Make Stocks Too Risky?

As I write, the S&P 500 trades at roughly 22x projected 2025 earnings, and the 10-year U.S. Treasury bond yields roughly 4.5%. That makes the earnings yields on stocks and bonds basically the same.

For clarification, the earnings yield on stocks is derived by dividing the stock market’s expected earnings by its price, which currently equals about 4.5%. When you compare this earnings yield with current bond yields, that gives you the equity risk premium, which theoretically tells investors how much extra reward stocks should offer over bonds.1

As readers can see, that reward is essentially zero today—which also marks the first time we’ve seen the equity risk premium this low since the tech bubble burst.

It is logical to assume that the lower the equity risk premium, the weaker the case for owning stocks versus bonds. After all, according to this metric, investors are not being compensated at all for taking the additional risk of owning stocks over Treasurys. There’s also the case of the late 1990s, when the equity risk premium turned negative and a bear market followed.

In my view, there’s a very reasonable risk argument to be made here about the stock-bond decision. But where the argument starts to fall apart, in my view, is in assuming that a low or even slightly negative equity risk premium tells us anything about future returns. When we look back on history at the relationship between the equity risk premium and forward 12- or even 24-month returns on the S&P 500, the case for correlation fizzles. And there’s essentially no argument for causation.

In 1996, the equity risk premium fell below zero and stayed negative basically until the bear market started in early 2000 (the equity risk premium turned positive for a short time in 1998 with the market correction). Investors could have used this metric to get out of stocks in 1996, but that would have been a mistake. There was still plenty of runway left in that bull.

On the flip side, the equity risk premium was nicely positive—roughly 3%—at the start of the 2008 Global Financial Crisis, and there were periods in the 2010s when bonds outperformed stocks even though the equity risk premium suggested stocks were the better buy. As mentioned, it’s difficult to find a convincing correlation between the equity risk premium and forward returns. There have been many instances where the signal seems to work and others where it doesn’t.

The key thing to remember, in my view, is that stocks’ earnings yield—again, theoretically—tells investors what return they should expect over the long run if earnings stayed constant and no dividends were paid. But as we all know, many stocks pay dividends, and earnings are rarely constant. As we begin to parse Q4 2024 earnings, the picture that emerges is one of improving outlook, with companies not only coming ahead of estimates but also providing reassuring guidance for coming quarters (see chart below).

There’s a scenario where earnings come in far better-than-expected in 2025, while long-duration Treasury bond yields remain range-bound. That would be a positive scenario for stocks, in my view, regardless of whether the equity risk premium turned positive or not.

Bottom Line for Investors

The equity risk premium is a useful metric that investors can use in evaluating the stock-bond decision, but it’s certainly not the only consideration, in my view. Investors should also think about where they expect interest rates, inflation, and earnings to be a year from now, which is another way of assessing whether the equity risk premium is expected to rise or fall looking forward. From my vantage, I expect inflation to moderate, earnings to accelerate, and growth to continue above trend—all of which bolster the case for equities, in my view, even as Treasuries now offer a more attractive risk-free rate.

1 Wall Street Journal. January 27, 2025. https://advisor.zacksim.com/e/376582/bonds-has-disappeared-c3f9c223/5sksqg/1143709360/h/oV5BlINqgf8gjfV1x98TM8Vm5hn9sYINQwDJg8KhF_A

DISCLOSURE
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties.  Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.

The Russell 1000 Growth Index is a well-known, unmanaged index of the prices of 1000 large-company growth common stocks selected by Russell. The Russell 1000 Growth Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Nasdaq Composite Index is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Dow Jones Industrial Average measures the daily stock market movements of 30 U.S. publicly-traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-owned companies are considered leaders in the United States economy. An investor cannot directly invest in an index.  The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index is a modified market capitalization weighted index composed of preferred stock and securities that are functionally equivalent to preferred stock including, but not limited to, depositary preferred securities, perpetual subordinated debt and certain securities issued by banks and other financial institutions that are eligible for capital treatment with respect to such instruments akin to that received for issuance of straight preferred stock. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The MSCI ACWI ex U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Russell 2000 Index is a well-known, unmanaged index of the prices of 2000 small-cap company common stocks, selected by Russell. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The S&P Mid Cap 400 provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

The S&P 500 Pure Value index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme. An investor cannot directly invest in an index.  The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Jan 17
Love0

Start 2025 Strong with These 5 Financial Wellness Tips!

By Financial Planning

The new year is here, which means a fresh start to be the best, healthiest version of yourself, but don’t limit that to just physical health. Make 2025 the year of prioritizing your financial wellness!

As we welcome 2025, it’s the perfect time to refocus on your health and set the tone for your year. Remember, wealth and health often go hand in hand. Use this time to take a closer look at your financial wellness and identify areas where you can grow, improve, and create a stronger foundation for your future. From doing a general review of your budget to revamping your portfolio, harness the momentum of the new year to help set yourself up for a financially successful and healthy 2025!

 

  1. Review Where Your Money is Going

Do you know where all your money is going? From small impulse buys to monthly bills, the start of the year is a great time to review your spending habits. Take a close look at your spending history to get a clear picture of where your money is going. To begin, think of your expenses as being in one of two groups: either needs or fun. For example, healthcare expenses would fall under needs, while a new wardrobe might fit into the fun category.

Next, break down your expenses into fixed, flexible, and discretionary costs. Fixed expenses are those that stay the same each month, like rent, mortgage, or insurance, while flexible (but necessary) expenses fluctuate, such as utility bills or groceries.

Discretionary costs can be decreased or increased. For instance, if you have necessary extra health or dental expenses for the month, you can choose to spend less on coffee or going out to eat. Remember to think about your life goals when you decide what is discretionary. If you have been putting only a small amount that’s left over each month into savings or retirement, consider changing that to have a fixed amount of savings deducted from your income before it ever hits your checking account.

This is also a great time to review your subscriptions to ensure they are still important to you as well as automatic payments to make sure there haven’t been any overlooked changes you need to rectify. Additionally, you may want to set up spending alerts on your accounts to help you monitor your finances throughout the year.

 

  1. Update Your Budget

Once you understand where your money is going, you can begin to determine your necessary monthly spending. Start by identifying your fixed expenses and calculating an average for your flexible and discretionary expenses to estimate your total essential monthly costs for the new year. You can input this information into a spreadsheet or your budgeting app of choice to compare it with your monthly income. Whether you rely on active income from work or retirement income sources such as 401(k)s, pensions, or Social Security, having a clear understanding of how much money you need to maintain your lifestyle is key.

Living within your means should be your biggest goal, and that may require taking an honest look at your spending habits and developing a strategy to better manage your income. By comparing your income streams to your budget and keeping savings and other financial goals in mind, you can create a sustainable plan for the year ahead.

 

  1. Have an Emergency Fund

Once your budget is set, ensure you have an emergency fund of liquid assets to cover at least three to six months of expenses. (Some people may want or need to have more than that, depending on their situation.) Your emergency fund should remain untouched unless needed for those necessary expenses. This will allow you some cushion during market downturns, unexpected expenses like a car breakdown, or hiccups in your income.

 

  1. Check-Up on Your Portfolio

Your portfolio can play a significant role in your overall financial plan, so it’s important to reassess its performance and consider any adjustments for the year ahead. Take some time to reflect on your goals and any planned life events for the upcoming year. While you can’t predict the future, you can evaluate what you expect the year may bring.

This assessment can influence your risk tolerance and guide decisions about diversifying your investments. If your current strategy doesn’t align with what you anticipate for the new year, now is the perfect time to rebalance your portfolio to help support your financial goals.

 

  1. Keep Your Goals in Mind

In everything you do, keep your goals at the forefront. Whether you’re aiming to build a nest egg for retirement, save for your child’s education, or leave a legacy for your loved ones, your financial strategy should reflect that. This is where strategic financial planning comes in.

For your bigger or more long-term goals, you may want to consider exploring strategies such as Roth conversions or charitable contributions to help with taxes, setting up 529 college savings plans for your children, or purchasing life insurance to create a tax-advantaged legacy for your loved ones. There are countless tools and strategies available, and the right ones for you will depend entirely on your unique situation and goals. By keeping your goals in mind with every financial decision you make this year, you’ll be supporting your long-term success.

 

Planning for the year ahead and the goals it entails can be stressful, but rest assured we’re here to help! If you need help with your financial wellness, give us a call! You can reach Bay Trust Financial at 813.820.0069.

 

Sources:

https://sfs.harvard.edu/financial-fitness-basics

https://solsticeseniorliving.com/financial-wellness-tips-for-seniors/

https://smartasset.com/investing/portfolio-management-tips

 

This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.

529 Plan, or “qualified tuition plan,” is an investment account that provides tax benefits when the savings are used for qualified education expenses. Withdrawals from a 529 plan account can be taken at any time, for any reason. But, if the money is not used for qualified education expenses, you will incur a 10% penalty and owe taxes on any investment gains.

 

Jan 07
Love0

Mitch Zacks – Weekly Market Commentary: Is the Fed Steering the U.S. Economy and Stock Market?

By Weekly Market Commentary

Are the U.S. Economy and Stock Market in the Fed’s Hands Now?

The Federal Reserve made some waves at the end of last year.

The 25 basis-point rate cut they announced at their December meeting was widely expected. What the market was not expecting, however, was the insinuation that rates may not necessarily follow the downward trajectory the Fed had previously projected. The one particular comment that jolted markets appeared to be when Chairman Jerome Powell said: “From here, it’s a new phase, and we’re going to be cautious about further cuts.”

Cautious about further rate cuts? Wasn’t the inflation fight largely won, with the benchmark fed funds rate destined to fall back to a neutral rate in the 3% to 3.5% range? The financial media and investor community were aghast at the news.

My advice to investors: do not overthink or overstate the importance of rate cuts in 2025. The economy and markets can do just fine with or without them.

Just take 2024 as your prime example. At the end of 2023, futures markets were forecasting six or more rate cuts for 2024, which turned out to be quite wrong. As it turned out, the Fed cut rates three times during the year, lowering the fed funds rate to a range of 4.25% to 4.5%. The economy and stock market did not seem to mind the ‘higher-for-longer’ level of rates, with GDP growth coming in strong and stocks rallying more than +20%.

If we know the economy and stock market can perform well even with the benchmark fed funds rate north of 4.5% or even 5%, then why would a 4% level of rates somehow be prohibitive to growth? Fed officials projected at the December meeting that rates would finish 2025 at 3.9%, which is one fewer cut than they had suggested at the September meeting. Investors who are up in arms over this news are missing the big picture, I think. I do not see 25 basis points in either direction as a very meaningful move.

The big debate in markets now is where the so-called “neutral rate” is for benchmark fed funds. The neutral rate is a moving target depending on economic conditions—it’s the rate of interest that sustains the economy at full employment with stable inflation. In other words, the interest rate that keeps the economy not too hot, and not too cold. If consumers and businesses are borrowing and spending too much, and inflation starts to tick higher again, it likely means rates are too low. If the jobs market is loosening and lending activity is tepid, rates may be too high.

If you want to know exactly where the Fed sees the neutral rate today, you will not get a clear answer from Chairman Powell. After the December meeting, he said: “We don’t know exactly where it is, but … what we know for sure is that we’re a hundred basis points closer to it right now.” Some Fed officials think it’s closer to 3%, some say it’s 4%. Perhaps it’s somewhere in between.

The point I’d repeat here is that I’m not sure the level of rates matters as much as many think. The idea that the U.S. economy and the stock market’s fate are in the Federal Reserve’s hands—and hinges on whether they get the neutral rate exactly right—is simply not substantiated by what we know from history, or even from 2024 for that matter. Interest rates remained ‘higher-for-longer’ all year, and stocks powered higher.

Monetary policy decisions are not meaningless, of course, but my argument here is that they are not as important as many investors assign them to be.

In my view, what would hurt markets most is if inflation and inflation expectations start to drift higher and become un-anchored from their current 2.5% to 3.5% level, perhaps because of some unforeseen shock in geopolitics or the global economy. If the Fed is forced to go in the other direction—raising rates instead of cutting them because of a negative inflation surprise—I think that could be very detrimental to stocks. For now, however, inflation data continues to show modest progress toward the Fed’s long-term goal. In November, the Fed’s preferred inflation gauge—the PCE price index—came in at 2.4% year-over-year, well within striking distance of the target.

Bottom Line for Investors

With inflation hovering near its target and the unemployment rate at 4.2%, there is little expectation that interest rates will go any higher. Whether or not they go lower, and by how much, is an ongoing debate. But it’s not one I think investors should be focused on. If you spend too much time framing your market and economic outlook around shifting expectations for interest rates, it may mean de-emphasizing stocks’ main driver—earnings growth.

By understanding 2024’s market surprises, you can unlock valuable insights to stay ahead and capitalize on opportunities in 2025.

DISCLOSURE

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.

The Russell 1000 Growth Index is a well-known, unmanaged index of the prices of 1000 large-company growth common stocks selected by Russell. The Russell 1000 Growth Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Nasdaq Composite Index is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Dow Jones Industrial Average measures the daily stock market movements of 30 U.S. publicly-traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-owned companies are considered leaders in the United States economy. An investor cannot directly invest in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index is a modified market capitalization weighted index composed of preferred stock and securities that are functionally equivalent to preferred stock including, but not limited to, depositary preferred securities, perpetual subordinated debt and certain securities issued by banks and other financial institutions that are eligible for capital treatment with respect to such instruments akin to that received for issuance of straight preferred stock. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The MSCI ACWI ex U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Russell 2000 Index is a well-known, unmanaged index of the prices of 2000 small-cap company common stocks, selected by Russell. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The S&P Mid Cap 400 provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

The S&P 500 Pure Value index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme. An investor cannot directly invest in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Dec 30
Love0

Mitch Zacks – Weekly Market Commentary: Is the “January Effect” Actually a Thing?

By Weekly Market Commentary

The January Effect

Darren L. from Boise, ID asks: Hi Mitch, Happy New Year! I’m curious if you think there’s anything to the so-called “January Effect”? It feels like 2025 is set up for a January rally given the choppiness that happened last December. I’m asking because this year I plan to sell stocks to have cash for the full year, and I’m wondering if I should go ahead and do it or wait until prices recover. Thanks for your insight!

Mitch’s Response:

Thanks for writing, Darren, and Happy New Year to you as well! The January Effect, in my view, is one of the many ‘seasonal effects’ that may have worked for a time historically, but whose predictive power probably diminished at this point.

Early in my career, there was something to it—many investors and mutual funds would harvest gains and losses near the end of a calendar year, and then scoop those shares back up in January. There was a reasonably good argument that these actions helped bolster stock prices in the new year. Going back to 1928 (which predates the current S&P 500 as we know it), January would see an average return of +1.2%.1

But the ‘effect’ is far less pronounced today. Looking at just the last 35 years, the average return for the S&P 500 in January is +0.5%, which doesn’t make it much different than any other month in the year. Now to be fair, I have seen some recent research showing that the previous calendar year’s laggards tend to outperform in January. In the last 35 years, S&P 500 companies that declined by -10% or more in the previous calendar year post an average return of +2.3% the following January. But I’m not sure this seasonal trend makes for a very robust investment strategy.

As it relates to your question, I would certainly advise against trying to strategically sell stock or other securities on such a short time frame. Your strategy to raise cash should be more about keeping your investment portfolio’s asset allocation aligned with your goals, risk tolerance, and time horizon. It should not necessarily be about making the most profitable trade in a four-week time span.

Big picture, the data clearly showed the January effect was real for many decades. But in my view, markets eventually discounted the positive surprise – deeming it no longer effective. Markets work efficiently to discount widely known information, in my view, so it was only a matter of time before the January effect stopped working.

1 UBS. December 11, 2024. https://advisor.zacksim.com/e/376582/arketnews-article-1729783-html/5scgnj/1113594162/h/1jKdAg0gX51xM_PO4BEci1bvkW0YcvXLuTh2SIf-tt8

DISCLOSURE

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation. 

Certain economic and market information contained herein has been obtained from published sources prepared by other parties.  Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.

The Russell 1000 Growth Index is a well-known, unmanaged index of the prices of 1000 large-company growth common stocks selected by Russell. The Russell 1000 Growth Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Nasdaq Composite Index is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Dow Jones Industrial Average measures the daily stock market movements of 30 U.S. publicly-traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-owned companies are considered leaders in the United States economy. An investor cannot directly invest in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index is a modified market capitalization weighted index composed of preferred stock and securities that are functionally equivalent to preferred stock including, but not limited to, depositary preferred securities, perpetual subordinated debt and certain securities issued by banks and other financial institutions that are eligible for capital treatment with respect to such instruments akin to that received for issuance of straight preferred stock. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The MSCI ACWI ex U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Russell 2000 Index is a well-known, unmanaged index of the prices of 2000 small-cap company common stocks, selected by Russell. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The S&P Mid Cap 400 provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

The S&P 500 Pure Value index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme. An investor cannot directly invest in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Dec 17
Love0

Mitch Zacks – Weekly Market Commentary: The Growing Risk to Long-Term Investor Returns

By Weekly Market Commentary

The Growing Risk to Long-Term Investor Returns

Humans are not wired to be successful long-term investors.

We are too emotional, have too many biases, and frequently make decisions outside of an established, disciplined framework. At the end of the day, we listen to “our gut” too much.

To be a successful long-term investor, one needs to inhabit the exact opposite traits. We should approach investment decisions dispassionately, with a disciplined process, and devoid of emotion and bias. Of course, that’s easier said than done.

For me to say investors are prone to missteps probably does not strike many readers as newsworthy. There is plenty of research affirming this point. For instance, the research firm DALBAR has been publishing their Quantitative Analysis of Investor Behavior report for 30 years, and it consistently shows that retail investors are underperforming markets. DALBAR’s report compares the returns equity markets are delivering versus the returns investors are realizing. There’s consistently a gap, and the 2024 report was no exception.1

According to DALBAR, the average equity investor underperformed the S&P 500 Index by 5.5% in 2023, marking the third-largest performance gap in the last decade. Underperformance was seen in the fixed-income realm as well, with the average fixed-income investor underperforming the Bloomberg Barclays Aggregate Bond Index by 2.63%. The research continues to indicate that emotional decisions are hurting investor returns. Investors sell during downturns and miss rebounds, and they get overconfident during strong rallies. Both actions tend to hurt returns.

Zooming out to 20-year returns, the average equity investor earned an annualized return of 8.7% according to DALBAR, while the S&P 500 Index has delivered an annualized return of 9.7% over the same period. This 1% difference in annualized return may not seem like much, but on a $1M initial investment, it would mean having roughly $5.3M at the end of the 20-year period for the average investor, instead of $6.3M. Simply put, that’s huge.

As I mentioned previously, investors may be aware of this issue already. What’s new, however, is research suggesting that the problem may be getting worse.

A finance professor at George Mason University analyzed all return data for U.S. dollar-denominated mutual funds over the last 10 years, separated actively managed funds from index-tracking passive funds, and then looked at the difference between the stated annual return and the actual dollar-weighted return in the fund (known as the return gap). This gap is very similar to the one published by DALBAR—it shows the average return for the fund versus what the average investor actually experiences.

This new study confirmed what DALBAR has been saying for decades—that the average investor underperforms. What’s different is the level of underperformance observed from 2015 to 2019 (pre-Covid) compared to 2020 through October 31, 2024. In the pre-Covid period, poor market timing cost investors 0.53% per year. In the post-Covid period, however, that number nearly doubled to 1.01%. Interestingly, the area where investors are seeing the most damage to portfolios is in actively traded small-cap funds, perhaps because of information being scarcer and volatility being more prevalent. The average return gap was 0.62% before Covid, but it has grown to 1.38% since.

While this is consistent with DALBAR’s long-term finding, the more recent study suggests that the trading practices that have become popular in the wake of the pandemic—whether it’s day-trading, being actively engaged on discussion boards, experimenting with options and other derivatives, etc.—are costing investors dearly. As far as I can tell, these ‘trading strategies’ are only becoming more popular, which means the risks to investors’ long-term returns could continue growing over time as well.

Bottom Line for Investors

The retail investment community was relatively strong and growing before the pandemic, but there is a good argument that stimulus money and more time spent at the computer—combined with the proliferation of trading platforms and discussion forums—has catalyzed retail investor participation. Generally speaking, I view this trend as a good thing. It means more people are investing in markets, which hopefully enables more people to generate wealth over time.

The research cited above suggests that many investors are missing the forest for the trees. Instead of owning equities long-term because investors want to participate in value creation and earnings growth, they’re focusing too much on daily price changes, event-driven market news, or the latest social media investment buzz. That’s the opposite of a long-term, disciplined approach, and it’s costing investors.

1 Wall Street Journal. December 5, 2024. https://advisor.zacksim.com/e/376582/-7e5af96a-mod-djemMoneyBeat-us/5s9yk4/1105472349/h/awbVFROscF6XrYoJa7QiRfHVECoWO88qmbvtNLwG9WI

DISCLOSURE
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties.  Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.

The Russell 1000 Growth Index is a well-known, unmanaged index of the prices of 1000 large-company growth common stocks selected by Russell. The Russell 1000 Growth Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Nasdaq Composite Index is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Dow Jones Industrial Average measures the daily stock market movements of 30 U.S. publicly-traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-owned companies are considered leaders in the United States economy. An investor cannot directly invest in an index.  The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index is a modified market capitalization weighted index composed of preferred stock and securities that are functionally equivalent to preferred stock including, but not limited to, depositary preferred securities, perpetual subordinated debt and certain securities issued by banks and other financial institutions that are eligible for capital treatment with respect to such instruments akin to that received for issuance of straight preferred stock. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The MSCI ACWI ex U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Russell 2000 Index is a well-known, unmanaged index of the prices of 2000 small-cap company common stocks, selected by Russell. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The S&P Mid Cap 400 provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

The S&P 500 Pure Value index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme. An investor cannot directly invest in an index.  The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Dec 12
Love0

Mitch Zacks – Weekly Market Commentary: Can the Post-Election Rally Last to the End of the Year?

By Weekly Market Commentary

At the outset of 2024, most large banks were forecasting the S&P 500 Index to finish around 5,200, which would have implied a roughly 10% gain for the year. U.S. stocks had different plans.

Bolstered by stronger-than-appreciated U.S. consumer spending, steady economic and earnings growth, declining inflation, and the Federal Reserve’s pivot to looser monetary policy, U.S. stocks have delivered a rally over double the magnitude of most expectations.1

The U.S. presidential election seems to have catalyzed the momentum. In the week following the election, the S&P 500 Index jumped +4.7% – the strongest week since October 2022. I’ve argued before that the ‘removal of uncertainty’ was a key driver of this short-term market strength, but I also think it’s fair to say the market was pricing-in hopes for lower taxes and lighter regulation, both of which could promote growth.

The question for investors is, can this post-election rally continue through the end of the year?

I think it can.

The first factor I’d consider is seasonal. Looking back to 1950, December ranks as the second-best performance month for the S&P 500, with an average gain of 1.3%. But December is also the most consistently positive month, with the highest frequency of advances of any month with the lowest volatility (based on data since 1950). On average, gains have been broad-based, but small- and mid-caps have tended to outperform historically.

Strong gains leading up to December have also ushered in a strong close to the year. In the last ten instances when the S&P 500 Index entered December up more than +20%, the final month saw an average gain of +2.4%. In this historical context, strong gains beget more strong gains.

I also think the market could keep pricing-in major policy shifts as the new administration’s agenda comes into clearer focus. The prospect of sizable fiscal stimulus (tax cuts) into an economy that’s already growing roughly 2.5% to 3% could be a significant catalyst to growth, and it could also mean adding to an already historically large U.S. fiscal deficit. In my view, this could put upward pressure on long-duration U.S. Treasuries, which could finally un-invert and eventually steepen the yield curve (Fed rate cuts would also help). A steeper yield curve would arguably help Financials while also having the potential to stimulate more lending, an economic positive.

The Yield Curve Could Steepen with Further Fed Cuts and Rising Long-Duration Treasury Yields

Source: Federal Reserve Bank of St. Louis2

Finally, no commentary about the potential for more stock market appreciation would be complete without talking about earnings.3

For the third quarter, total earnings for the S&P 500 index are expected to be up +8.1% from the same period last year on +5.7% higher revenues. If we exclude the volatile Energy sector, whose Q3 earnings were down -22.9% from the same period last year on -2.7% lower revenues, then earnings would have been up +10.6% on +6.3% higher revenues. This level of solid earnings growth has been present throughout 2024, and as seen on the chart below, is expected to accelerate in the new year:

A final point to make on earnings is that unlike the unusually high magnitude of estimate cuts we had seen ahead of the Q3 earnings season, estimates for Q4 are holding up a lot better, as the chart below shows. Heading into the final stretch, companies are feeling more confident about sales and earnings than they were previously.

Bottom Line for Investors

I want to be clear that while I think stocks can continue to rally into the end of the year and early next, based on the factors laid out above, I am not suggesting they will rally. No one can truly predict what stocks will do in the short term, and downside volatility and/or a correction can occur at any time and for any reason.

Thinking further ahead, I do think economic fundamentals remain supportive of higher equity prices, and earnings and economic growth could benefit from lower taxes and looser regulation. In other words, the ingredients for more equity market gains are present, it’s just a matter of whether the realities of those policies and growth will meet and/or exceed expectations. For now, I think they can.

1 Black Rock. November 20, 2024. https://advisor.zacksim.com/e/376582/vidual-insights-election-rally/5s8v1t/1098587475/h/lpAEtTBFFKn6Ol5QwGYSy7rFtGjMG6N-c6dLF5__9Rw

2 Fred Economic Data. December 3, 2024. https://advisor.zacksim.com/e/376582/seriesBeta-T10Y3M-/5s8v1x/1098587475/h/lpAEtTBFFKn6Ol5QwGYSy7rFtGjMG6N-c6dLF5__9Rw

3 Zacks.com November 22, 2024. https://advisor.zacksim.com/e/376582/-stock-of-the-earnings-picture/5s8v24/1098587475/h/lpAEtTBFFKn6Ol5QwGYSy7rFtGjMG6N-c6dLF5__9Rw

DISCLOSURE
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties.  Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.

The Russell 1000 Growth Index is a well-known, unmanaged index of the prices of 1000 large-company growth common stocks selected by Russell. The Russell 1000 Growth Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Nasdaq Composite Index is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Dow Jones Industrial Average measures the daily stock market movements of 30 U.S. publicly-traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-owned companies are considered leaders in the United States economy. An investor cannot directly invest in an index.  The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index is a modified market capitalization weighted index composed of preferred stock and securities that are functionally equivalent to preferred stock including, but not limited to, depositary preferred securities, perpetual subordinated debt and certain securities issued by banks and other financial institutions that are eligible for capital treatment with respect to such instruments akin to that received for issuance of straight preferred stock. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The MSCI ACWI ex U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Russell 2000 Index is a well-known, unmanaged index of the prices of 2000 small-cap company common stocks, selected by Russell. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The S&P Mid Cap 400 provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

The S&P 500 Pure Value index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme. An investor cannot directly invest in an index.  The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Dec 02
Love0

Mitch Zacks – Weekly Market Commentary: After a Big Year, are Stocks Headed for a Big Drop?

By Weekly Market Commentary

As I write, the S&P 500 is up more than +20% for the year, and global stocks as measured by the MSCI World Index are up over 15%. Double-digit gains are prevalent elsewhere as well, across small-cap stocks, the Nasdaq, value stocks, growth stocks, and more. It’s been a strong run for equity market investors.

Barring a major correction in the final six weeks of the year, it looks like 2024 will be a ‘big up year’ for stocks. And, if the 20+% return level holds, it would mark the first time since 1998 – 1999 that the S&P 500 delivered two consecutive years of greater than 20% returns.1

This fact has many investors convinced—and others concerned—that 2025 is poised to deliver lackluster or even negative returns. If the late 1990s serves as a historical precedent, the bursting of the tech bubble in 2000 could be replicated in 2025 with a sharp reversal of artificial intelligence enthusiasm.2

I’ve written recently that investors often get a ‘fear of heights’ when the market delivers a powerful rally, particularly when valuations are already elevated. This explains some of the skepticism as we head into 2025. Where concerns get misplaced, however, is in the assumption that weak markets are caused by strong bull market rallies, and/or immediately follow them.

But that’s not correct.

In fact, strong returns often happen in clusters within a bull market, and annual returns of 20+% are not an anomaly—they’re actually quite common. If we look at just bull market years since 1932, the average annualized return for U.S. stocks is 23%, which puts 2023 and 2024 returns well within the norm.

The chart below shows S&P 500 returns since 1980. One thing readers may notice immediately is that there are far more positive years than negative ones, and a lot of them are big up years. Digging a little deeper into the data, we find that exactly one in four years from 1980 to 2024 has seen a return of 25% or greater. If we lower the bar to 20+% returns, the S&P 500 gone up that much roughly one-third of the time.

J.P. Morgan.3

I’m not arguing that investors should expect another 20+% year from the S&P 500 in 2025. But the opposite—a low single-digit or negative return—should not necessarily be expected either. From 1928 to 2023, the average return for U.S. stocks in the year following a 20+% year has been 8.92%. Not gangbusters, but not weak either.

As we look out to the end of the year and early next, we’re seeing a high likelihood of earnings growth broadening beyond the tech giants, as the Federal Reserve continues to ease monetary policy. We’ve also been seeing strong consumer spending data via retail sales, and business cycle indicators continue to show signs of holding firm. In other words, the U.S. economy remains in strong shape, in my view.

The risks I see in the market today go the other way, i.e., the risk of economic overheating. Major tax cuts and efforts to deregulate in an otherwise strong economy could cause an acceleration of investment and activity, which could in turn tip investor sentiment into the realm of too optimistic. These are all just possibilities, however—we need to see actual policy before making any forecasts or projections. And we’re not there yet.

Bottom Line for Investors

Bull markets do not downshift significantly just because stocks have risen sharply for two years in a row. Stocks do not have a mean to revert to, and corporate earnings and profit margins do not expand or contract on any sort of timeline. If corporate earnings continue to grow at a brisk pace and cash flow accelerates from one year to the next, there is no reason to assume stocks ‘need a breather’ following two consecutive 20+% return years. 2025 could easily be the third.

1 Yahoo Finance. November 18, 2024. https://advisor.zacksim.com/e/376582/-historic-rally-182124444-html/5s6pw4/1086080841/h/42NHJBj_Zn46Qb4ZFZw6MiXFNfZFZ3hyUgPeI-JvIXY

2 A Wealth of Common Sense. November 12, 2024. https://advisor.zacksim.com/e/376582/-up-years-in-the-stock-market-/5s6pw7/1086080841/h/42NHJBj_Zn46Qb4ZFZw6MiXFNfZFZ3hyUgPeI-JvIXY

3 J.P. Morgan. Guide to the Markets. 2024. https://advisor.zacksim.com/e/376582/insights-guide-to-the-markets-/5s6pwb/1086080841/h/42NHJBj_Zn46Qb4ZFZw6MiXFNfZFZ3hyUgPeI-JvIXY

DISCLOSURE
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.

The Russell 1000 Growth Index is a well-known, unmanaged index of the prices of 1000 large-company growth common stocks selected by Russell. The Russell 1000 Growth Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Nasdaq Composite Index is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Dow Jones Industrial Average measures the daily stock market movements of 30 U.S. publicly-traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-owned companies are considered leaders in the United States economy. An investor cannot directly invest in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index is a modified market capitalization weighted index composed of preferred stock and securities that are functionally equivalent to preferred stock including, but not limited to, depositary preferred securities, perpetual subordinated debt and certain securities issued by banks and other financial institutions that are eligible for capital treatment with respect to such instruments akin to that received for issuance of straight preferred stock. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The MSCI ACWI ex U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The Russell 2000 Index is a well-known, unmanaged index of the prices of 2000 small-cap company common stocks, selected by Russell. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

The S&P Mid Cap 400 provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

The S&P 500 Pure Value index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme. An investor cannot directly invest in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor.

Close Menu
BayTrust Financial
MAIN OFFICE:
15316 N Florida Ave.
Tampa, FL 33613
Toll free: 1.833.373.9227