I'm very excited to share with you our 4th quarter newsletter! The newsletter provides updates on the economy, markets, new technology, services, and features that will help us better serve you.
In no way does this replace our personal communication with you. We enjoy that more than anything and are always excited to speak with each and every one of you.
If you prefer more frequent communication and updates, and like being immersed in the details, we share more often on our social media platforms. You can follow them here if you'd like:
Service & Technology Update
Income Lab / Guardrails
Earlier this year, we implemented a new technology aimed at helping our retirees understand their "guardrails" in retirement. Guardrails are, in short, pre-set portfolio values that trigger potential income increases and decreases in retirement. Guardrails are created for each retiree's individual spending plan. Your plan is simulated through different historical periods to see the outcome from varying market and inflation environments. If you are interested in learning more, we did an entire webinar on this, I highly suggest watching it first so you understand the theory and methodology behind this:
Here are what guardrails look like for a hypothetical retiree:
There was an overwhelmingly positive response that this methodology was much easier to understand than the probability of success, which looks like this:
We will now be adding the guardrails to every retiree's (and soon to be retiree's) portal so they are easily accessible. This reassurance is more important than ever during market and economic times like the present. In my opinion, knowing the exact point where a change in your spending might be warranted, and exactly what that change would be, brings instant relief to bad market and economy anxiety.
For our retirees, we will have the guardrails uploaded to your Town Capital portal no later than 11/12. For our near retirees, they will be uploaded by 11/19. For everyone else, we will be sharing them with you individually as we update your plans.
Here is a video showing how to access your guardrails and where to find them on the portal:
Cash has been the second best performing asset of 2022, behind the US Dollar. This is a very rare occurrence. Having cash in your portfolio is a good thing, especially this year. However, for some, you may have too much. We have some new cash solutions with very attractive rates for you including private notes, structured notes, CDs, MYGAs, etc.
If you have cash (must be outside of an IRA or Roth IRA) that you want to invest for terms of 2,3,5 or 10 years, we have some solutions that are definitely more attractive than your checking or savings rate. Contact us to talk about it.
In 2023, we will be implementing a service calendar. We will share this calendar with you when finished. Basically, this is a way for us to systematically review a particular topic each month, to ensure that portion of your plan is reviewed and updated. For example, January could be Estate Planning Month where we review your beneficiaries and wills to ensure they are up to date. May could be tax month where we collect returns and make adjustments to withholdings, etc. We will try and coordinate this with a webinar as well, and have industry experts join us to provide their perceptive and insights.
Bracket Management & Roth Conversions
Congratulations to all our retirees who made the smart decision to do Roth conversions this year as part of your bracket management plan. Roth conversions are a great tool to save money in taxes. Throw on top of that a down market, and the Roth conversion becomes even more powerful. All in all, we converted well over 1 Million Dollars to Roth this year. If you want a deep dive into the benefits of managing your tax bracket in retirement, here is a webinar we held on the topic:
Our clients who chose to move to our Active portfolios, the Town Capital Growth & Protection Series, have definitely realized the benefits. Those portfolios are benchmarked against T Rowe Price and Fidelity, and are beating those benchmarks by multiple percentage points, and that is after fees are paid. Exact results are different for each person due to the use of the bucket strategy, meaning each retiree's cash requirements might be different, resulting in slightly different performance. Here is an example portfolio comparison from an actual client.
Congratulations to everyone who made that leap!
If you want more information on the Town Capital Growth & Protection Series, here is a link with more detail:
Access to New Investment Vehicle
We will be expanding our active options by opening our private investment strategy to additional investors. The Growth and Protection Series, due to being tailored to mostly IRA/Roth IRA (retirement) money, is a Long Only strategy, meaning we only buy investments. This limits the opportunity to Short, or bet against, certain investments in addition to that. IRAs and other retirement accounts cannot Short securities. Only taxable brokerage money or other types of cash is available for this type of strategy.
If you are interested, please let us know and we will share the details. Again, this has to be for NON IRA/Roth money.
Economy and Market Update
A Main Street Recession...
It absolutely does not matter what the government, news, or your buddy tells you, we are in a recession. We meet the literal definition: 2 consecutive quarters of declining GDP. Period.
There are two major types of recessions, a Wall Street and a Main Street Recession. What is a Wall Street Recession? It is when there is a fundamental thing broken with the system that drives us into a bad economy, i.e. subprime lending and subsequent mortgage blowups in 2008. A Main Street Recession is induced by higher prices and/or less spending by the consumer, resulting in corporations making less profit, laying people off, etc.
This is where we are.
Have no fear, our next Market and Economy Update webinar will be held on Tuesday, November 22nd, at 6pm ET. As in our previous webinars, we will dig into the details of the stock market, economy, and give our honest assessment of where we are heading next.
You can register for the webinar here:
If you would like to view our previous Market and Economy Update from last quarter to check the accuracy of our sentiment, you can view it here:
Town Capital In The News
We are pleased to help the finance community whenever we can, especially when it comes to ensuring people have access to accurate information. We have become a relatively regular contributor for MarketWatch, one of the biggest finance websites in the US. Here are some articles we contributed to...
I was honored to be invited on the Financial Advisor Success Podcast with Financial Expert Michael Kitces. It was very exciting to share the journey from nuclear power plant control room supervisor to financial advisor. Here is a link on Apple podcasts if you are interested:
I hope you enjoyed this newsletter, and please reach out if you have any questions or just want to chat.