The Flyer:

Have you ever walked into a store looking for a specific product and find a few different options? You may opt for the cheapest option because it will probably work just as well as the more expensive one. When our CPA Emily Agosto worked at a hardware store as a teenager, she saw many customers face this choice. Her store offered two hammers for sale: a cheap store brand and a superior, albeit more expensive, brand. Which one did customers typically buy? If you guessed the cheap one, you’re right. They figured the cheap hammer would get the job done for what they needed to do. After all, how much difference could there be between hammers?

Traditional retirement accounts like employer-sponsored 401(k)s are a large part of retirement savings, but there are benefits to using multiple account types. Contributing to accounts outside of your employer’s 401(k) not only gives you greater investment choice, but can free you from: age restrictions on withdrawals, administrative burdens of RMDs, and valuable tax flexibility.

In light of the recent bank closures, advisors Amanda Vaught, JD and David Vaught, CFA created a short video explaining the recent bank runs on Silicon Valley Bank and Signature Bank. They discuss:  The regulatory environment that led to their collapse, The FDIC response, What this could mean for the Fed hiking rates, and How we think investors should think of the recent news.

Social Security has gotten a lot of attention in the media recently. As a result, I answer questions from clients regularly that primarily ask, “Will Social Security exist when I retire?” The answer is yes, of course, for two main reasons: 1) The federal government owns a printing press for currency as was demonstrated spectacularly during the COVID crisis; and 2) the younger workers (which is a rather large group of people making more money than you did) are paying more into the system. Thus, it is important to be aware of the rules that surround your benefit. Too often, folks file for Social Security without doing any planning whatsoever. We cannot stress enough the importance of understanding how your benefit will impact you.

Most financial media keeps their focus on the stock market, but the bond market can be a significant portion of an investment portfolio and a major driver of returns. This often overlooked asset has the potential to be exciting this year. The bond market turned heads in 2022 by putting up its worst year for returns since1926. One might think that means that bonds can only move up from here. But will they? To start, fixed income is paying income again! As the chart below illustrates, an increasing share of the bond market is paying north of 4% yields now. This is significantly more than we've seen over the past decade.

The debt ceiling, the Fed, and continuing issuance of Treasury bonds appear daily in our news today. Their historic roots tell us something about how they have worked, or failed in the past. President Lincoln faced the daunting task of the Civil War with a traitorous military rebellion, a traditional limited federal budget, and a not yet complete national banking system. How he and his Treasury Secretary, Salmon Chase, confronted this multi-front crisis tells us a great deal about the successful origins of our financial system today.