If you can believe it, we have reached the start of 2024! We hope that everyone had a great holiday and an even better New Years celebration.
No One Knows What is Next
At the beginning of every year, we feel that this is an opportunity to take stock of what we can learn from the prior year. 2023 perfectly encapsulates exactly why we shouldn’t listen to news pundits, experts, or the financial media in general. They get compensated by the number of clicks and viewers, not by providing sound financial advice.
In early March of 2023, CNN, Fox News, Bloomberg, along with a host of economists on Wall street predicted “Market Crash”, “Bear Market”, “Economic Perfect Storm”. What took place after that? A 22% increase on the S&P 500.
Why don’t these “experts” just say “Stay invested, manage your cash to expenses and don’t overreact to the market”? Perhaps that isn’t nearly as catchy. So, let’s take inventory on the significant events that took place in 2023:
- Consistent “forecasts of a market crash in 2023”.
- Silicon Valley Bank crash and Bank crisis fear in March.
- Debt Ceiling worries in May.
- Russia/Ukraine, China concerns.
- High Rates of inflation
So, what’s our takeaway from all this? Stay the course. Will the market drop? You bet. It is extremely likely that we will experience another 25%, 35%, 45% drop in our lifetimes. The question isn't “if?” , the question is “when?”, and no one has been able to time the market, accurately forecast what the market will do, or outperform the market over the long-term - As evidenced by the “experts” forecast from the prior year.
In summation, if you're unable to stay invested during the volatile/bad times, you will less likely to be able to experience the long-term growth that the good times provide.
Taxes – wait, already?
As the old saying goes, there's only two things that are guaranteed in life: death and taxes. Elliott would like to add a third; that's the Chicago Bears never making it to the playoffs, but that's another story.
Starting in January, LPL will be sending out 1099’s. Here's a quick recap of what to expect:
- 1099-R (This is for IRAs and retirement accounts) – This will be sent out on January 19th
- 1099-Q (This is for Educational accounts like 529s)- This will be sent out on January 19th
- 1099 Consolidated (Includes accounts with the simplest tax information and not subject to income reclassification) This will be sent out on January 19 & 26
- Preliminary 1099 Consolidated (This is a Draft copy. LPL is still waiting on information to be sent from mutual funds/ETFs or other investments to finalize the tax documents) – This will be sent out on February 16
- Final 1099 date (Accounts holding securities that may be subject to income
Reclassification. This includes Mutual funds and ETFs) – This will be sent out on March 15th
2026, BRING IT ON!
As we've extensively explored over the past few years, the current tax code is poised for a significant shift, reverting to a modified version of the 2017 framework. While this may translate to lower tax burdens for some individuals, our projections indicate a substantial portion of our clientele will face increased rates. Ultimately, it depends on your unique financial situation.
Therefore, proactive tax optimization remains a cornerstone of our client service philosophy. After you file your 2023 tax return, we kindly request a copy of your full federal and state returns for a comprehensive review. Our review delves into every facet of your return, leveraging our meticulously developed 37-point checklist to, not only double check for any potential mistakes, but to also look for opportunities now and in the future to manage your tax obligations.
You can send us a digital copy through our website, www.Prairieskyfg.com, or request a FedEx envelope so you can send us a physical copy. Otherwise, - Some of the best tax preparers will, with your permission, send us a digital copy of your tax return, thus saving you the hassle. Just send us an email letting us know we can reach out on your behalf.
Should you have any questions regarding tax optimization or the aforementioned legislative changes, please don't hesitate to reach out. We're committed to navigating the complexities of the tax code alongside you, seeking your financial security and optimizing your tax efficiency.
“Last week I talked with ….”
Your dedicated team at Prairie Sky Financial Group (Elliott, Mike, Jennifer [our Operations manager], and Ben [our service advisor]) work closely together on all client aspects. Thanks to the wonders of technology and our collaborative process anytime you talk with any of us we are all notified and kept up to speed. This means that when you call, e-mail, and/or come in for a meeting we are all on the same page, providing the same great service or advice.
Quick Note: We've recently enhanced our phone system, so when you give us a ring, kindly opt for option 1 to connect directly with our team.
Thank you for your referrals!
Each year roughly 1/3 of our new clients come as a referral from our existing clients. Due to our specialty of working almost exclusively with retirees (or those close to retirement) our services are not a good fit for everyone. That said we are always glad to talk with any of your friends or family who have any kind of financial question. Even if we are not a good long-term fit, we will always give them our full attention and do whatever we can to get them introduced to the right specialist.
In addition to having time to answer any questions from your family or friends we have the capacity this year to add a limited number of new clients. Thanks to the recent addition of Jen, our operations manager, to our team we can easily take on a select group of new clients while still delivering consistent service and value to all of our existing clients, like you.
On our website, www.prairieskyfg.com, you can find our ‘start your plan’ process that helps potential clients make an educated informed decision about our firm. This process includes the requirement that before they pay us a dollar in fees or trust us with a penny of their nest egg they sleep on the decision and fully evaluate whether or not we are a good fit.
Our sincere thanks for your ongoing support of our firm.