SECURE ACT 2.0 Planning

Congress passed The SECURE Act 2.0 in late December 2022 to encourage retirement savings.  The law has over 90 provisions that create various planning opportunities now and in the future. Some changes will take effect this year while others are delayed until later.  We have laid out some of the more significant changes below, including the 529 Plan Roth Conversion option set to take effect in 2024.

Economic and Investment Outlook for 2023

Will the U.S. experience a recession this year or shortly thereafter?  In this report, we explore the outlook for recession and how stocks, bonds, real estate, and other assets are expected to behave.  We discuss how investors should be positioned in 2023.

WESCAP Q4 2022 Quarterly Commentary: High U.S. Household Demand, Tight Labor Markets, & Unexpected Shortages

Portfolio results for the last quarter of 2022 were generally positive, although 12-month returns were almost uniformly negative. High U.S. household demand, tight labor markets, unexpected energy and supply chain shortages due to the Russia-Ukraine conflict and repeated Zero-Covid China lockdowns contributed to higher-than-expected inflation.  The aggressive Federal Reserve interest rate hike policy to bring down inflation had a very detrimental effect on growth stocks, longer-term bonds, and foreign currencies. Some of this reversed in the last quarter, consistent with fading recession fears and the post-mid-term election historical trend of strong 6-month returns.

Year-End 2022 Planning Opportunity Checklist

Now is a good time to review year-end tax strategies and plan for the year ahead.  Below are some items that should be completed or reviewed before year-end:

WESCAP Q3 Quarterly Commentary: Rising Interest Rates & Recession Fears

The U.S. Federal Reserve increased the Fed Funds rate by 0.75% in September, bringing the total rate increases in 2022 to 3%.  Over the next 6 months, 1.25% to 2% in additional rate hikes are expected; depending upon the path of future inflation.

As mentioned in our prior quarterly letter, such interest rate increases have been a good predictor of a recession, as has the recent inversion of the U.S. Treasury yield curve.