The Power of a Donor Advised Fund
December 1, 2024
Raising Money-Smart Kids
February 1, 2025
By Brett Freese
Finding joy and purpose in the seasons of life:
My wife (Susan) and I are sometimes asked for parenting advice now that our sons are 22 and 19. Susan remembers many more helpful suggestions than I do, but the two pieces of advice I almost always give are:
- Have a stated and practiced family/personal values list. “The Freese Family Values” are: Love God, Family First, Work Hard, Tell the Truth, and be Kind to People. It is not a comprehensive list, but very foundational to our family’s intentionality towards life, each other, and others.
- “To enjoy every season with your child(ren) and other loved ones, because time goes by faster than we think.” If we are not careful, we can wish away time in the name of “I can’t wait for a time when…” Then that time comes and there may be something else difficult to deal with and we can easily wish away that time as well.
The main goal of financial planning is not to “retire” or be “rich” per say, but a successful financial plan helps you have time and resources to intentionally have joy and purpose in everyday life and with those you love. May you have great joy and purpose in 2025!
What steps will you take today to a healthier, more joyful, and purposeful life? Take the time to assess your life plan and return on life (ROL) and please know that we are ready to travel that journey with you.
Economic & Investment Highlights:
- The Federal Reserve (Fed) is four months into a shift in monetary policy and has begun to lower the Fed Fund rate in an effort to decrease the restrictiveness of the rates on businesses and consumers. Interestingly, since the 50bps decrease in the Fed Funds Rate, short-term rates have decreased, but long-term rates (including mortgage rates) have actually increased. Note: The Fed governors now believe one or two 25 bps cuts are likely to happen in 2025, but they are highly data dependent. Always keep in mind that The Federal Reserve has a dual mandate to achieve both stable prices and maximum sustainable employment.
- First 100 days of the Trump Administration: What will we see in early 2025? Will Trump talk of tariffs come to fruition or were they mostly negotiating statements. “Drill Baby Drill?” Will oil and natural gas prices decrease dramatically? Massive changes in deregulation and heightened amount of mergers and acquisitions? Immigration rule changes and enforcement: What will the overall labor condition look like? What will the changes in tax law and rates look like? How will Trump work with a razer thin Republican majority in the House of Representatives where many Republicans do not have exactly the same agenda? How does Trump Administration interact with an “Independent” Federal Reserve Chairman? There are so many Trump agenda items to keep track of but always keep in mind that 100% of the House of Representatives and 1/3 of the Senate are running for reelection in two years, (2026 Election is already in the mix of motivations). Additional note: Good or bad (unlike President Biden) Trump does seem to look at the “Stock Market” as a scorecard.
- International Watch:
- China – Beijing continues to try and figure out how to stimulate it’s economy. They have struggled as their maturing economy should shift more to in-country consumer focus away from a total focus on producing less expensive products.
- India – Continues to outpace China in growth and economic demographics.
- Germany – A short-sighted dependence on Russian energy has left a once-powerhouse economy trying to find stronger footing going forward.
- Brazil – Currency falls to an all-time low amid Government spending issues.
- Argentina – Difficult choices have lead to lower inflation. Continue to watch, but they are having better economic momentum than Brazil.
- Japan – Learning how to be a consumer economy instead of just one of exports and savings.
- South Korea – Political turmoil causing much economic uncertainty.
- Gold was down 0.47% price per ounce, and the broad basket of commodities was up 0.01% for the last 90 days. Oil was up 1.47% for the quarter.
- Bitcoin was up 47.16% for the quarter.
Historical Stock Market Declines:
Market declines and inclines rarely look the same or even feel the same, but they do happen and the ups and downs are a part of the process – It is important to have a plan/strategy so emotions don’t dictate buying or selling.
A 5% or greater loss occurs about 3 times a year
A 10% or greater loss occurs about once a year
A 15% or greater loss occurs about once every 2 years
A 20% or greater loss occurs about once every 3.5 years
Please know that when stock prices go down the “market collapse gurus” receive the most air time. Likewise, when stock prices go up all the “bull market gurus” talk about how the market will continue to be up BIG. Please know that most “gurus” are great with hindsight to justify how important it is to have their voice heard.
Market Scorecard for the last 13 weeks ending 12/31/2024:
US Equities:
+ 2.41% S&P 500 (Index of the largest US publicly traded companies)
+ 5.41% Large Cap Growth – Morningstar Category
– 1.55% Large Cap Value – Morningstar Category
+ 1.70% Russell 2000 Growth (Index of Small-cap growth US publicly traded companies)
– 1.06% Russell 2000 Value (Index of Small-cap value US publicly traded companies)
International Equities:
– 6.94% Foreign Large Growth – Morningstar Category
– 7.29% Foreign Large Value – Morningstar Category
– 7.30% Foreign Small/Mid Growth – Morningstar Category
– 6.51% Foreign Small/Mid Value – Morningstar Category
Bonds:
– 3.14% U.S. Aggregate Bond (Index representing intermediate term investment grade bonds in the U.S.)
– 2.61% Corporate Bond – Morningstar Category
– 0.14% Short Government – Morningstar Category
– 1.02% Muni National Bond Intermediate Index – Morningstar Category
Other:
– 0.47% Gold Price
+ 47.16% Bitcoin
+ 0.01% Commodities Broad Basket – Morningstar Category
Current Annual Money Market Rates ending 12/31/2024:
4.30% Schwab Value Money Market
4.15% Schwab Treasury Money Market
Market Indicators:
Inflation:
2.75% as of November (Down 0.14% from 2.89% on 08/01/24)
Unemployment:
4.2% as of 12/06/24 (Unchanged from 4.2% in August 2024)
Fed Funds Target Rate:
4.25-4.50% as of 12/26/24 (Down from 4.75-5.00% as of 09/27/24)
Suggested Next Steps:
- Understand that market cycles are normal. The markets go up and down in mostly unpredictable directions and amounts. Many times, the ups and downs of investments seem to make sense only after they happen, however, market prediction is very difficult. (i.e. the next stock market crash has been predicted every year since 2008).
- Your investments are just one factor in the success of your life, money, and purpose. Make sure that you are confident in your full financial plan, so you can successfully have an amazing ROL (Return on Life).
- Your investment allocation and diversification are important factors in both risk management and future returns. Therefore, if you have questions about your investment plan, please schedule a phone or in-person meeting with your TrustWell Financial Advisor(s).
