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The $trategist - Looking Back & Ahead

Q4 2023

Looking Back & Ahead

Grant Beck, Investment Research/Support Advisor

Happy New Year to all of you and your families from us at Liberty! The new year is an exciting time for people all around the world as we say goodbye to the past and focus on the future. In this article, I’m highlighting some of the economic and market trends we saw last year and then we’ll stare into our “crystal ball” as we look towards 2024. For a variety of reasons, 2023 was an interesting year in the markets. The pessimism that started the year, high inflation, rising interest rates, and constant talk of a recession painted a dreary picture of what was to come for all of us. But taking a deeper look at the numbers in our rearview mirror paints a slightly better picture of what actually happened in 2023.

Stock Market: Those threats, continued high inflation, and rising interest rates weighed heavily on the forward-looking outlook of the stock market early last year. Many (me included) expected to see a drawdown and a slowing economy. In contrast to those expectations, we had three quarters of positive GDP growth and an S&P 500 that returned 24%! A lot of this growth was fueled by tech stocks and the excitement around AI. This certainly beat the expectations of many analysts and was welcomed by investors, including ours.

Inflation: High inflation, measured in part by increases in prices for goods and services, has been a constant topic of conversation over the last few years and for good reason. In 2021, we saw year-over-year inflation of 7%. For context, the last time inflation was over 7% before that was 1981. Coupled with the 6.5% we experienced in 2022, it makes sense that this was such a large worry headed into 2023 as we all felt the crunch at the gas pumps and grocery store. Thankfully, inflation slowed by year end, although prices are not coming down as fast as we would all like.

Interest Rates: It seems the Federal Reserve gradual rate hikes had some impact—helping to slow borrowing and spending and thus economic growth— because inflation dropped to 3.4% in 2023. Many analysts think this means interest rates will continue coming down as soon as March of 2024, but I would not be surprised if it takes longer than that.

As we look towards 2024, we are seeing a lot of the same headlines and expectations that we saw for 2023. Most are expecting the S&P to return closer to 5% and for the economy to continue to slow. At times like this, it is important that we don’t change our course in hopes of a repeat of last year’s stock market. Our commitment to value stocks and a diversified portfolio will give us all the best chance for a successful 2024. We look forward to continuing to work with you to achieve your goals in the new year and beyond!

Planning Notes

June Schroeder, R.N. CFP

Tom Wargin Retires, But Stays Connected

After nearly 50 years in the financial services industry, over 40 of those as a founder and owner of LFG, Tom has officially “left the building.” Clients and coworkers alike, especially long-time partner, June Schroeder, bid him a hearty “thank you” for all he has done for us and for the industry as it evolved over those years. Tom will continue to serve as a consultant to LFG in a business continuity and development capacity.

Financial Advice Is in Demand

According to a report in Investment News, more households are willing to pay for financial advice, with 63% saying they would do so, up from just 38% as recently as 2009. Also, those saying they are getting the financial advice they need has nearly doubled, going from 41% to 78% over the same period.

Debt Trap

According to Federal Reserve Bank of New York, collectively Americans now owe $1.08 trillion on their credit cards. Balances spiked by $154 billion year over year, the largest increase since 1999.

Client Alerts

Shannon Nook, FPQP™

LFG Winter Hours

8:30am - 6:00pm Monday to Thursday

8:30am - 5:00pm Fridays

Closed March 29, May 27

Tax Year 2023 Contribution Limits

401k, 403b, 457 = $22,500 over age 50 = $30,500 IRA (includes Roth) = $6500 over age 50 = $7500 Deadline for deposits: April 18, 2024 Note: Anyone working for earned income, at least part-time, can contribute to an IRA (which may be tax deductible) or to a Roth. Contact us if we prepare your taxes or call your accountant early to be sure you get these deposits in before the April tax filing deadline.

Liberty Tax Prep Clients

Look for our blast email message or snail mail letter in early February. We’re requesting that you get us your 2023 tax season data by mail, drop off, or through your secure online Client Alerts Intuit tax software account—which will be referenced in the email or mailed letter. If you need an in-person tax only appointment, please call the office as soon as possible at 262-785- 1377, or use our online calendar at Liberty Scheduling Site. Note: It is not mandatory to make a tax appointment, only if you prefer or there are any major changes to your return.

Required Minimum Distributions

Anyone who turned 72 after December 31, 2022 will begin RMDs at age 73. Update to all over age 70: If you plan to make any 2024 Qualified Charitable Distributions (QCD) from your IRA, please inform us of the total estimated dollar amount you expect to give from your IRA to your charities by June 30th. This allows us time to manage your allocation. In RMD cases, we need to plan for any remaining balance that needs to be distributed to complete the RMD, whether it is reinvested in the brokerage or sent to your bank account.

Giving Back

In lieu of 2023 client holiday gifts, Liberty contributed to multiple charities in your honor. See the list in our upcoming Valentine blast.

Featured Artist: Karen Williams-Brusubardis

Karen grew up in rural Wisconsin and spent most of her childhood exploring the woods of her parents’ 20+ acres. An introverted, quiet, sensitive child on the autism spectrum, she loved exploring both the world around her and the world inside her mind. “My paintings and drawings are reflections of my mind’s journey through those childhood places where the remembered and imagined intersect,” she says. Karen achieved a BFA in painting from the Milwaukee Institute of Art & Design. Over the years, she refined her aesthetic style of painting, calling it “My Paracosm.” Karen creates whimsical, meditative, vibrant contemporary landscapes inspired by autobiographical experiences, memories, and places. She shares a studio with her husband in Milwaukee’s Third Ward. To learn more about Karen and her work, stop by our conference room or visit her website at www.wbartist.org.