# nVest Advisors > Financial Freedom | Colorado Springs, CO > Generated by All in One SEO Pro v5.0.3, this is an llms-full.txt file, used by LLMs to index the site. ## Posts ### [Q4 2026 Letter to Clients](https://nvestadvisors.com/q4-2026-letter-to-clients/) **Published:** October 1, 2026 **Author:** nVest Advisors **Content:** # **Q4 2026 Letter to Clients** **[![CEO of nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/05/Jeremy-Torgerson-New-New-682x1024.jpg "Jeremy torgerson financial advisor nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2025/05/Jeremy-Torgerson-New-New.jpg)It’s hard to believe 2026 is almost behind us!** What strikes me most about the year we’re ending is how much uncertainty looms in the air. Whether it’s the Iran war, inflationary pressure, a job market that looks okay on the surface but many people know is a real challenge, or the markets going all over the place, 2026 has been a year of change and caution overall. Will AI replace a lot of jobs, or was it a lot of hype? Will inflation come down? Are we entering into a recession? What about the midterm elections – how will those impact future policy-making? Heck, we’re even being told by our government that UFOs are real. There is much to consider and we’re working hard to make sure we keep on top of all of it, without allowing ourselves to get “analysis paralysis” in the process. What matters, ultimately, is this: are you moving financially toward your goals? Are your investing, savings, debt and job supporting those goals? That is where we believe we should focus when the day-to-day becomes chaotic. **As your family gets ready for the holidays ahead, please know that we are hard at work to protect and grow your investments, and walk with you along the path set by your financial plan, even as things feel unsettled. We’ve got this! :)** ## **In this letter:** - **Changes to our Contact Information** - **Autumn “Surge” Meetings with your Advisor** - **Q3 2026 Economic and Market Summary** - **Goings On Around nVest** ## **Changes to our Contact Information** **We moved into new offices in August!** [![The Exchange Building Colorado Springs CO](https://nvestadvisors.com/wp-content/uploads/2026/10/ad17888c-aa6e-068c-dadf-24c6951302cf-225x300.jpeg "Ad17888c aa6e 068c dadf 24c6951302cf nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2026/10/ad17888c-aa6e-068c-dadf-24c6951302cf.jpeg)The Exchange Building, Colorado Springs, CO Our new home is in **The Exchange Building**, a beautiful and historically preserved office complex in the heart of downtown Colorado Springs’ restaurant and financial district. Construction on our building was finished in 1909 and is the first building of its kind built west of the Mississippi. It was the second building on the site to house the Exchange National Bank (the first one burned down). Founded in 1888, it was of the largest banks in Colorado after the gold and silver mining boom at the turn of the century. **Our beautiful new building is like a time travel back to the earliest days of the 20th century.** It retains nearly all of its historical perfection and beauty, including local granite and marble floors, walls, and stairs, many original fixtures, frosted glass office doors and windows, and even some of the bank vaults and safes still in place! (One of the original bank safes remains in our new office!) Changing locations is what regulators call a “material change” in our company, and as such, we had to send you an updated client disclosure brochure (called Form ADV Part 2), which we’ve done twice so far by email. If you did not see those communications, you can always view our most current brochure (and other important disclosures) on our website. [**Click here.**](https://nvestadvisors.com/general-disclosures) We’ve also updated our phone system for better communication. See below. [![nVest Advisors Contact Info](https://nvestadvisors.com/wp-content/uploads/2026/10/7edd0f1b-9179-2290-fa2a-ed2431a107f3-1024x577.jpg "7edd0f1b 9179 2290 fa2a ed2431a107f3 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2026/10/7edd0f1b-9179-2290-fa2a-ed2431a107f3.jpg)PLEASE UPDATE YOUR CONTACT INFORMATION FOR US. # **Autumn Surge Meetings** Clients who have been with us a while know that we used to have more face-to-face meetings “back in the day”. After the COVID pandemic, that became harder to schedule; for whatever reason, everyone just sort of “got out of the habit” of holding formal meetings. It was important, however, to still update you on what we were doing for you and how we were handling your investments. So we began recording brief (3-5 minute) video messages to give you an update on your investments and financial plan, show you important account information and offer a way to reply with your questions or comments. **By far, this was the single most popular thing we’ve ever done to improve your experience as a client, and we will continue to make those video messages.** But there is one drawback: in these video messages, we are talking AT you, not TO you. We need to hear from you as much as you need to hear from us. **So we decided to implement a new approach to client meetings.** Each spring and fall (after taxes are done, and again before the end of the year), we’re asking all of our clients to attend a 45-minute meeting. Because we are covering much of the same service needs, we thought it would make sense to schedule you all together, one meeting after another, over five or six weeks. Then, we could get to work on the things you need done before important deadlines, and not have to bother you all summer, or during the holidays. **Our inaugural SURGE MEETINGS are starting next week for the autumn.** Many of you have scheduled a meeting -thank you! For those of you who have not done so, please know that this is a crucial part of our professional relationship, and I will “lovingly nag” you to get with us :) , so please find a time that is convenient and help us do the best job we can for you. Clients are being sent emails and text messages asking you to book your meeting. If you are not receiving these, please check your Spam folder, and if nothing is there, please let our team know. # **Market Update** **The stock market ended the third quarter a bit higher overall, but it did not feel that way for most investors.** A small group of large technology companies tied to artificial intelligence did most of the lifting, but even those companies are starting to see sharp pullbacks whenever other news isn’t pristine. Many other parts of the market were flat or down. **The bigger story this past quarter was interest rates.** The yield on the 10-year Treasury note climbed from the mid-4 percent range earlier in the summer to around 5.25 to 5.34 percent by early October. That is the highest it has been since the early 2000s. This can be a complicated subject, but suffice to say: when yields rise that fast, bond prices fall. Portfolios that hold more bonds (often these are those held by conservative investors) felt it first. Stocks that act like bonds, such as utilities and real estate, also came under pressure because their dividends look less attractive when safer government bonds pay more. ***(We expect bond prices to correct back upward over the next several weeks, and do not anticipate the need to change many of your bond holdings at this time. Even though they may be down temporarily in sale price, you’re not selling – you’re holding them for the interest payments they provide. And those interest payments have not changed. Be patient on bonds: they are fine and will rebound in short order.)*** **Energy stocks were the standout.** Oil prices stayed elevated after the disruptions tied to the situation with Iran, and that supported the sector. Health care and consumer staples held up better than most. Technology finished the quarter positive but had several sharp down days as questions grew about how all the new AI spending will be paid for. **Those questions are showing up in the credit markets.** The cost of insurance against default on bonds issued by the big cloud and AI companies has risen sharply compared with ordinary bank debt. Investors are starting to ask whether the huge amounts being borrowed to build data centers will produce enough cash flow, soon enough, to make the math work. This is not a crisis today, but it ***is*** an early warning that the easy-money phase of the AI buildout is quickly fading. **We do not bet against the market.** We manage risk by what we own. Right now that means most of our clients are invested in a heavier mix of utilities, health care, energy, and consumer staples. These are businesses people still need when growth slows or borrowing costs stay high. The approach has helped limit the damage from the narrow rally and the jump in yields. One structural point is worth keeping in mind. **The S&P 500 is more concentrated than it used to be.** A large share of its gains comes from a handful of companies whose plans depend ***entirely*** on AI spending continuing at a very high pace. When an index is that top-heavy, it can mask real problems underneath: the headline number can look fine even while large parts of the economy are not. # **Economic Update** The economy is still growing, but the growth is uneven and several important pressures have been building for a while. **Inflation has not settled back to the Federal Reserve’s 2 percent target.** In August the Fed’s preferred measure, the personal consumption expenditures (PCE) price index, was up 3.4 percent from a year earlier. The core version, which leaves out food and energy, was up 3.0 percent. Manufacturers are also reporting higher costs. The prices-paid index from the Institute for Supply Management jumped to 77.9 in September, close to the levels seen when the Iran-related energy shock began. Steel, aluminum, tariffs, and fuel are all part of the story. **The Federal Reserve raised interest rates in September for the first time in several years**, lifting the target range to 3.75 to 4 percent. Most officials indicated they expect at least one more increase before the end of the year. They described the economy as still expanding and the unemployment rate as roughly steady, but they also said inflation remains too high. For now the path looks like rates staying higher rather than coming down quickly. **Manufacturing has improved after a long stretch of weakness.** The main factory survey has been in expansion territory for nine straight months and registered 54.5 in September. Orders and hiring picked up. The same survey, though, showed input costs rising sharply, which could slow or even reverse these gains if energy prices remain elevated. Services, which make up most of the economy, have been noticeably softer. Higher energy and borrowing costs could keep that side from strengthening. **The job market looks different depending on which report you read.** Company payroll surveys still show hiring that roughly matches the number of people entering the workforce. Household surveys and what people tell pollsters are weaker. The share of consumers who say jobs are easy to find has fallen, and the share who say jobs are hard to get has risen. Overall consumer confidence dropped to 81.9 in September, the lowest reading since 2014. People across income levels feel less secure about both the present and the next six months. **Household finances show the strain in specific places.** About 9.3 million federal student-loan borrowers are in default, and another 1.5 million are close to it. Late payments on credit cards and car loans have risen most among borrowers with lower credit scores. *These numbers do not mean banks are in trouble across the board.* However, they do mean a meaningful number of families have less room in the budget after higher prices and higher interest costs. Savings cushions are thinner than they were a few years ago. **Housing is the area that concerns us most**. Existing-home sales ran at a 3.98 million annual pace in August. The number of homes for sale has risen, and the months of supply reached about 4.9, the highest in more than ten years. Sale prices are still a little above where they were a year ago, but more sellers are cutting asking prices and homes are sitting longer. **Mortgage rates have moved up with Treasury yields.** When rates stay high and the Federal Reserve is not in a position to cut them, history shows that prices eventually have to adjust. This is the toughest housing market we have seen since the years after the global financial crisis. Prices have not dropped much yet at the national level. The conditions that produced declines in past cycles are present now. Business spending on AI data centers and related equipment is still large and is helping keep overall growth positive. At the same time, lenders and investors are beginning to charge more for the risk that the payoff takes longer than expected. The amount of revenue these projects need to generate by the later years of this decade, simply to cover the debt and reward the capital already committed, is becoming unrealistic – more then $4 TRILLION. If AI adoption or pricing falls short of ***the most optimistic*** forecasts (there is no moat for these companies), the stocks and bonds tied to that spending have less cushion than the recent market highs suggested. **This is why we do not want to buy technology stocks at current prices – we are very concerned that their valuations are unrealistically high.** **Looking at the full picture,** growth continues, but it is running into higher inflation that has not fully cooled, borrowing costs that have risen quickly, families who feel less confident and have less financial flexibility, a housing market with the slowest sales and highest relative inventory in over a decade, and an AI investment boom whose financing is starting to look more expensive. None of this requires an immediate recession to create problems for the parts of the market that depend on low rates and uninterrupted high growth. It does mean the margin for error around today’s AI spending plans is smaller than the indexes imply. # **Goings on Around nVest** **Office Hours:** With the holidays approaching, here is where our office hours will be affected: **November 26 and 27 – CLOSED FOR THANKSGIVING December 24 and 25 – CLOSED FOR CHRISTMAS January 1, 2027 – CLOSED FOR NEW YEAR’S DAY** ***Please note that your individual advisor may have different hours during this time. Reach out to them, or [check their calendar](https://nvestadvisors.setmore.com/), to see their availability.*** ### **Thank you for your continued trust in us, and HAPPY HOLIDAYS!** ### Jeremy Torgerson ### CEO, & the team at nVest Advisors LLC ### **Footnotes** 1. Bureau of Economic Analysis, Personal Income and Outlays, August 2026 (released September 30, 2026): PCE price index up 3.4 percent year-over-year, core PCE up 3.0 percent. 2. Institute for Supply Management, Manufacturing PMI Report, September 2026: headline index 54.5, Prices Index 77.9. 3. Federal Reserve, FOMC statement, September 16, 2026: target range raised to 3.75 to 4 percent. 4. U.S. Treasury yield data, early October 2026: 10-year yield in the 5.25 to 5.34 percent range. 5. The Conference Board, Consumer Confidence Index, September 2026: 81.9, lowest since April 2014. 6. Federal Student Aid data through June 2026: approximately 9.3 million borrowers in default. 7. National Association of Realtors, existing-home sales, August 2026: 3.98 million annual rate, months of supply approximately 4.9. 8. Apollo Global Management research note, September 2026, and related credit-market reports on higher protection costs for hyperscaler bonds. *Past performance is not indicative of future results. This is for informational purposes and does not constitute investment advice. Please consult your advisor for personalized guidance.* **Categories:** Business Stories, Client News, Company News, Economic Updates, Economy, From our CEO, Individuals and Families, Investing General, Investment Markets, Mailchimp, Plan Participants, Politics, Press Releases, public, Small Business, Texas Teachers Retirement --- ### [How do I know I need a financial advisor?](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) **Published:** September 21, 2026 **Author:** nVest Advisors **Content:** # How Do I Know I Need a Financial Advisor? Managing your personal finances can sometimes feel like trying to assemble complex furniture without the instruction manual—or worse, with *too many* conflicting manuals throwing advice at you all at once. Between market volatility, changing tax laws, and life’s unpredictable turns, it’s completely normal to wonder: *“Am I handling my money the right way, or am I missing something big?”* At nVest Advisors, we talk to people every day who reach out not because they aren’t smart enough to manage their money, but because life got complex, time got tight, or the financial stakes simply got higher. If you are trying to decide whether to hire a professional partner, here are **21 common questions and life events** that prompt people to reach out to a financial advisor—along with **5 scenarios where you likely don’t need one yet.** ## 21 Common Trigger Questions & Life Needs ### Major Life Transitions 1. **“I’m retiring soon. How do I turn my savings into a reliable paycheck?”** Accumulating wealth is a completely different skill set than decumulating it efficiently in retirement. 2. **“I just inherited money (or sold a business)—what do I do now?”** Managing a sudden windfall requires tax planning, risk management, and emotional pacing before making big moves. 3. **“We are getting married or starting a family—how do we blend our finances?”** Combining accounts, buying life insurance, and opening 529 college savings accounts can be overwhelming to structure alone. 4. **“I’m going through a divorce or lost a spouse.”** Navigating solo finances after a major life shift requires an empathetic, objective co-pilot to help you rebuild your roadmap. 5. **“I just got a major raise or equity promotion.”** Higher income brings stock options, restricted stock units (RSUs), and higher tax brackets that benefit from strategy. ### Retirement & Income Strategy 6. **“Am I actually on track to retire when I want to?”** An advisor can run detailed Monte Carlo simulations to show you your true probability of success. 7. **“When should I claim Social Security to maximize my benefits?”** Claiming at 62 vs. 67 vs. 70 can mean a difference of tens (or hundreds) of thousands of dollars over your lifetime. 8. **“How do I prevent inflation from eroding my purchasing power over 30 years?”** Cash in a savings account loses value every year; balancing growth and safety requires a tailored portfolio. 9. **“Will I outlive my money if I live into my 90s?”** Longevity risk is one of the biggest threats to a modern retirement plan. ### Investments & Portfolio Strategy 10. **“Is my portfolio properly diversified, or am I taking on hidden risks?”** Holding 10 different technology funds isn’t true diversification. 11. **“The stock market is down and I’m anxious—should I sell?”** Advisors act as a behavioral bridge, keeping you from making costly emotional decisions during market panics. 12. **“I have 401(k) accounts scattered across three old employers. What should I do with them?”** Consolidating and managing old retirement accounts helps eliminate unnecessary fees and streamlines your asset allocation. ### Taxes, Estate & Legacy 13. **“How can I lower my tax bill in retirement?”** Strategic Roth conversions, tax-loss harvesting, and asset location can save significant wealth over time. 14. **“How do I ensure my assets go to my loved ones instead of the government or courts?”** Advisors coordinate with estate attorneys to ensure trusts, wills, and beneficiary designations line up seamlessly. 15. **“How can I give back to charity in the most tax-efficient way?”** Leveraging Donor-Advised Funds (DAFs) or Qualified Charitable Distributions (QCDs) optimizes your charitable impact. ### Time, Organization & Peace of Mind 16. **“I don’t have the time or interest to manage my money anymore.”** Managing a comprehensive financial life takes hours of research, rebalancing, and tracking each month. 17. **“My spouse handles all the finances—what happens if something happens to them?”** Having a trusted fee-only advisor ensures both partners have a reliable guide no matter what life throws at them. 18. **“Am I protected if I need long-term care or run into a health crisis?”** Long-term care costs can quickly derail an otherwise solid retirement plan without proper risk mitigation. 19. **“How do I balance saving for my kids’ college while still saving for retirement?”** You can borrow for college, but you can’t borrow for retirement—balancing priorities requires clear math. 20. **“How can I buy my dream home or vacation property without ruining my long-term plan?”** An advisor helps you evaluate real estate purchases within the big picture of your total wealth. 21. **“I just want second-opinion validation that I’m doing everything right.”** Even self-directed investors often pay for a single plan check-up to catch blind spots they couldn’t see themselves. ## The Hidden Value: It’s More Than Just Numbers While a good financial advisor focuses on tax optimization and asset allocation, research shows that the biggest benefit is often emotional: **peace of mind**. - **Emotional Well-Being:** [A Vanguard study found that ](https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/greatest-value-financial-advice-peace-mind.html#:~:text=The%20emotional%20benefit%20that%20sets%20financial%20advice,mind%20compared%20with%20managing%20their%20finances%20alone.)**86% of advised clients report having greater peace of mind** regarding their finances, and 76% spent significantly less time worrying about money. - **Confidence Boost:** Research by the CFP Board shows that **94% of households working with a financial professional feel confident** about achieving their goals, compared to just 81% of unadvised households. - **Quantifiable Returns:** [Studies from Morningstar and Russell Investments ](https://www.planadviser.com/cfp-study-shows-its-advisers-linked-to-stronger-financial-outcomes/#:~:text=The%20CFP%20study%20shows%20that%20nearly%20all,confidence%20shows%20up%20in%20everyday%20financial%20habits.)estimate that working with a professional planner adds between **1.5% and 4.9% in net value annually** through tax-smart withdrawals, behavioral coaching, and asset rebalancing. ## 5 Examples of When You Do *NOT* Need a Financial Advisor We believe in transparency. Financial advice isn’t necessary for everyone at every stage of life. You likely **do not** need an ongoing financial advisor if: 1. **You are focused purely on paying off high-interest debt:** If you are tackling credit card debt, your best first step is a simple DIY budget (like the snowball or avalanche method). Paying advisor fees before establishing basic solvency rarely makes sense. 2. **Your finances are ultra-simple:** If you have one job, no debt, rent an apartment, and put a fixed percentage into an index fund in your employer’s 401(k), you can easily manage this yourself with basic personal finance books or free tools. 3. **You enjoy managing your own portfolio and have the time to do it:** If analyzing market trends, rebalancing asset classes, and tracking tax strategies is your hobby—and you have the emotional discipline to hold through market crashes—you may not need external help. 4. **You are looking for a “get-rich-quick” stock picker:** Advisors build long-term, risk-adjusted wealth plans. If you are looking for someone to trade penny stocks, timing crypto peaks, or beat the market every single quarter, an advisor is not the right fit. 5. **You don’t have emergency savings built yet:** Before investing or hiring an advisor, build a 3-to-6-month emergency cushion in a High-Yield Savings Account (HYSA). ## Ready to Get Clarity on Your Financial Future? Whether you are navigating a major life change, planning for retirement, or simply looking for a trusted partner to give you time back, you don’t have to figure it out alone. At **nVest Advisors**, we help individuals and families build clear, actionable paths toward their life goals. **Let’s talk about where you are and where you want to go.** **[Click Here to Schedule Your Free 15-Minute Discovery Call](https://nvestadvisors.setmore.com/services/dfaeb995-b65f-4e46-a8e6-dd2f30a43239)** *No pressure, no hard sales pitch—just a friendly 15-minute conversation to see if we’re the right fit for your journey.* **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Investment Markets, Mailchimp, Plan Participants, Small Business, Texas Teachers Retirement **Tags:** finance, financial, invest, investing, market, money management, professional, retirement, rollover --- ### [How to Rebuild Credit After Default or Bankruptcy](https://nvestadvisors.com/how-to-rebuild-credit-after-default-or-bankruptcy-2/) **Published:** December 10, 2025 **Author:** Maryam Irfanmeer **Content:** # ![how to rebuild credit after bankruptcy](https://nvestadvisors.com/wp-content/uploads/2025/10/pexels-nicola-barts-7927011-e1761171260470.jpg "Pexels nicola barts 7927011 nvest advisors")How to Rebuild Credit After Default or Bankruptcy When you have gone through a default or bankruptcy, it can feel like your financial life has been reset to zero. Clients often sit across from me and say, “I feel like I am locked out of the system. Who would ever lend to me again?” And I always tell them the same thing: you are not locked out forever. The system is tough but it is also designed with second chances in mind. When planning to rebuild credit is less about tricks and more about patience, structure, and smart decisions that slowly but surely create trust again. I have walked with clients who thought their situation was beyond repair, especially when they were trying to rebuild credit after years of financial setbacks., yet within a few years they were not only borrowing responsibly but also buying homes, cars, and even running successful businesses again. The road is never instant, but it is absolutely possible. Let’s go step by step. ## Understanding the Reality After Default or Bankruptcy and What It Takes to Rebuild Credit When you default or declare bankruptcy, your credit report takes a heavy hit. Defaults can remain on your report for seven years, while bankruptcy can last up to ten depending on the type you file. This often discourages people, but here is what most do not realize: lenders care less about what happened ten years ago and more on the steps you have taken over the last twenty-four months to rebuild credit and demonstrate stability. I have seen clients who made consistent, responsible moves for just two years after bankruptcy and they were able to qualify for auto loans or even mortgages, despite the black mark still showing on their reports. Credit is like reputation. Yes, you made a mistake, but lenders want to see if you learned from it and if your new behavior can be trusted. ## Step One: Stabilize Before You Rebuild Credit One of the biggest mistakes people make after bankruptcy is rushing to “fix” their credit by applying for every card or loan they can find. That usually backfires. The first stage is stability. This means having a steady income, keeping expenses predictable, and building at least a modest emergency cushion. I had a client who filed for Chapter 7 and within a few months applied for three credit cards. He got denied each time, which left more hard inquiries on his report. We stopped, regrouped, and focused on rebuilding his financial base. Six months later, with stable paychecks and some savings, he got approved for a secured card and we started the real rebuilding process. The foundation of credit rebuilding is not credit itself. It is stability. Without it, any progress you make will collapse under the next unexpected expense. ## Step Two: Start Small but Be Strategic as You Rebuild Credit Once stability is in place, the next move is to start small. This often means a secured credit card. You put down a deposit, usually between two and five hundred dollars, and that deposit becomes your credit limit. Many people roll their eyes at this because it feels like training wheels, but I can tell you from experience, it works when you are trying to rebuild credit with a clean, steady pattern. The key is how you use it. Use the card for one or two predictable expenses, like your phone bill or groceries. Pay it in full every month. Keep your utilization under thirty percent. It may feel like these small transactions do not matter, but they are the seeds that start growing your new credit history. For one client, we used nothing but a secured card for a year. She never carried a balance. After twelve months her score improved by more than a hundred points and she was offered an unsecured card. It was not flashy, but it worked. ## Step Three: Build Positive References Credit is essentially a story you are telling lenders. Each new line you open is a new chapter. Beyond a secured card, you might consider a credit builder loan from a local credit union. These are small loans where the money is held in a savings account while you make payments. At the end, you get the money back, plus the benefit of a year or two of on-time payments reported to the bureaus. Another overlooked tool is becoming an authorized user on a family member’s long-standing, well-managed card. If they trust you, and they have never missed payments, their good behavior starts showing up on your report. I have seen this give clients a thirty to forty point boost in just a few months. Of course, the flip side is also true. If they miss payments, it hurts you too, so only do this with someone who is rock solid financially. ## Step Four: Guard Against Old Habits Rebuilding is not just about adding positive information. It is also about preventing new negatives. This is where I often see people stumble. The temptation to overspend once you start receiving offers again is real. Remember, the first offers you receive after bankruptcy will usually have high interest rates. That is the price of rebuilding, but it is only temporary. The danger is that if you carry balances on these high rate cards, you will feel like you are back in the same hole you climbed out of. I worked with a gentleman who after two years of solid rebuilding received a store card and quickly maxed it out. The monthly payments strained his budget and one missed payment set him back significantly. We had to work twice as hard to recover. The lesson is clear: take on only what you can comfortably handle and treat every credit line like a fragile bridge to better opportunities. ## Step Five: Time and Patience Are Non-Negotiable This is the part nobody wants to hear, but it is the most important. Rebuilding takes time. There are no shortcuts. Anyone who tells you they can “erase” your bankruptcy overnight is selling you a scam. From my experience, meaningful improvement usually shows up around the twelve month mark if you are consistent. At two years, you may be eligible for mainstream products again. At four or five years, many lenders are willing to look past your bankruptcy if your current credit looks strong. And by the time the negative mark ages off your report, you may already have a full set of positive accounts carrying your score. ## The Emotional Side of Rebuilding Numbers aside, I want to speak to the emotional side. Bankruptcy or default carries shame for many people. They feel judged or embarrassed. I have had clients lower their voices when admitting it, as though they are confessing a crime. Here is what I tell them: life happens. Illness, job loss, divorce, unexpected emergencies. Bankruptcy is not the end of your financial story. It is a reset, a tough one, but one that can lead to a more disciplined and stronger chapter. Your mindset matters. If you treat this as an opportunity to learn and grow, you will find that the discipline you develop during rebuilding serves you for the rest of your life. Some of my most financially stable clients today are people who once went through bankruptcy because they never wanted to be in that situation again. ## Knowing When to Seek Guidance You can do much of this on your own, but sometimes professional guidance speeds up the process and helps you avoid costly mistakes. A financial advisor can help you balance debt repayment, savings, and credit rebuilding so you are not lopsided in your approach. If you are not sure where to start, that is often the right time to ask for help. ## The Bottom Line Rebuilding credit after default or bankruptcy is not glamorous and it does not happen overnight. But it does happen if you stay steady, make thoughtful moves, and focus on consistency rather than perfection. You are not locked out of the financial system forever. With the right steps, you can write a new financial story that lenders, and more importantly you, can trust. If you are facing this challenge right now, know that you are not alone. I have guided many people on this path, and every one of them started with the same uncertainty you may be feeling. Take the first small step today, and keep moving forward. And if you want someone to walk alongside you, reach out to us at **[nVest Advisors](https://nvestadvisors.com/)** by **[booking a consultation.](https://nvestadvisors.setmore.com/)** We will help you build a clear plan and guide you through every stage of recovery. **Categories:** Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Debt, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Mailchimp, Plan Participants, public --- ### [Cash Flow & Budgeting](https://nvestadvisors.com/cash-flow-budgeting/) **Published:** August 14, 2025 **Author:** Maryam Irfanmeer **Content:** # **Cash Flow & Budgeting** ### When You’re Earning Enough but Still Feel Behind You’re working hard. Maybe you’re even making good money. But somehow, the numbers never quite add up. You’re not careless with spending, yet the financial stress doesn’t go away. If that sounds familiar, you’re not alone. For many professionals and small business owners, the issue isn’t income. It’s about **Cash Flow & Budgeting** — where your money goes, when it goes, and what it’s quietly costing you behind the scenes. ## **The Part of Financial Planning That’s Hiding in Plain Sight** Cash Flow & Budgeting often sound like beginner-level tasks — the kind you “should” have figured out already. But that’s exactly why they tend to cause bigger problems later. As your income grows and life becomes more layered, the risks of imprecision grow with it. Small misalignments start to have bigger consequences. Savings stall. Goals drift. Financial stress creeps in. Most people [don’t have a budgeting problem](https://nvestadvisors.com/the-401k-problems-employers-dont-notice-until-they-become-expensive/). They have a clarity problem. They don’t have a clean view of their money: where it’s tied up, what it’s really doing, and how small leaks add up to lost momentum. ## **Why Cash Flow & Budgeting Isn’t Just a Math Issue** When your cash flow is out of sync, the impact goes deeper than just timing: • Real investment opportunities slip away because you’re always catching up • Debts stay expensive when a smarter repayment strategy could change everything • Taxes become more painful than they need to be because you’re always reacting • You feel financial tension even when income says you should feel secure Budgeting isn’t about cutting back. It’s about taking back control. It’s a way to align your money with what actually matters to you. ## **COMMON MISCONCEPTIONS REGARDING CASH FLOW & BUDGETING** ![Cash Flow Budgeting](https://nvestadvisors.com/wp-content/uploads/2025/08/Green-Illustrative-Mental-Health-Tips-Instagram-Post-1.jpg "Green illustrative mental health tips instagram post 1 nvest advisors") ## **The Hidden Cost of Poor Cash Flow Precision** What often gets overlooked in conversations about cash flow isn’t just the stress of “not knowing” — it’s the silent opportunity cost. Every time money sits idle in the wrong account, gets spent reactively, or is timed poorly against obligations, you’re not just losing efficiency. You’re compounding losses. Think of it this way: - **Idle cash is expensive.** If excess liquidity sits in low-yield accounts for months, that’s capital you could have strategically placed in tax-advantaged investments or even short-term opportunities that offset future liabilities. - **Reactive payments destroy leverage.** When bills, taxes, or loan payments are met without a proactive cash-flow design, you lose the negotiating power that comes with timing and preparation. - **Mismatched inflows and outflows create false ceilings.** Many high earners feel “maxed out” not because of income limitations, but because their flow system is fragmented. Consolidation and intentional sequencing often reveal far more room to grow than expected. ## **A Better Way to See and Shape Your Flow** We don’t believe in one-size-fits-all spreadsheets or cutting everything fun. What we do is help you: • Map out your complete financial landscape across both business and personal income • Spot friction points, timing gaps, and unnecessary drains • Create a flow system that works with your values and the lifestyle you’re building Instead of tracking every coffee, we ask better questions. Is your money doing what you truly want it to do? Or is it just on autopilot? ### **A Conversation That’s Often Missing Until It’s Not** You don’t need to feel guilty. Or need another budgeting app. All you need is clarity and a system built around how you live, work, and spend. If your income is growing but your confidence isn’t — that’s a sign it’s time to look under the hood. When you’re ready, we’re here to help you make the numbers feel calm again — with expert guidance, click [**here** ](https://nvestadvisors.setmore.com/)to book online consultations designed to fit your schedule. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Cryptocurrency, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, Mailchimp, Media, Plan Participants, public, Retirement, Small Business, Taxes --- ### [Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) **Published:** June 29, 2026 **Author:** Maryam Irfanmeer **Content:** # ![Your k Plan Is Compliant Why That Is Not the Same as Being Protected](https://nvestadvisors.com/wp-content/uploads/2026/06/pexels-towfiqu-barbhuiya-3440682-11350082-e1782733739844.jpg "Pexels towfiqu barbhuiya 3440682 11350082 nvest advisors") # **Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected** Many employers view compliance with federal regulations as the ultimate measure of success for their 401(k) plan. They diligently complete annual filings, pass nondiscrimination testing, satisfy disclosure requirements, and receive confirmation that the plan meets the standards set by the Internal Revenue Service and the Department of Labor. This achievement provides a reassuring sense of accomplishment, leading many business owners and human resources professionals to conclude that their obligations have been fully met. After all, compliance is tangible, documented, and often verified by third-party administrators or auditors. However, compliance represents only the minimum threshold required by law. It ensures that the plan avoids immediate penalties for technical violations, but it does not confirm that the plan delivers optimal value to participants or adequately safeguards the employer from longer-term risks. Meeting regulatory baselines does not automatically translate into reasonable fees, high-quality investment options, strong employee outcomes, or robust protection against fiduciary liability. In fact, numerous plans pass all compliance checks while harboring inefficiencies that erode retirement savings over time and expose sponsors to potential legal challenges. Compliance delivers measurable documentation and external validation, yet it rarely addresses the quality of participant experiences or the long-term sustainability of retirement assets. A plan may pass every required test while still allowing fees to erode balances quietly, default investments to deliver mediocre results for the majority of participants who never change their allocations, or communication gaps to leave [employees disengaged from one of their most valuable benefits](https://nvestadvisors.com/workplace-benefits/). Recent analysis underscores the scale of this disconnect. According to a January 2025 study conducted by **[Abernathy Daley 401(k) Consultants](https://benefitslink.com/press-release/55834)**, which reviewed the most recent Form 5500 filings for 764,729 retirement plans across the United States, approximately 84 percent of these plans display at least one red flag signaling potential regulatory or fiduciary concerns. Of those, 43 percent carry regulatory infraction red flags that could invite civil penalties or litigation, while 76 percent exhibit egregious plan mismanagement red flags tied directly to fiduciary shortcomings. These figures reveal that more than 600,000 American companies operate plans that meet minimum filing and testing requirements but still expose themselves and their participants to unnecessary risks. High fees represent one of the most pervasive yet least visible threats within otherwise compliant plans. Even when administrative and investment costs satisfy disclosure rules, they frequently exceed market benchmarks for plans of comparable size and complexity. According to the **[Investment Company Institute](https://www.ici.org/news-release/25-low-expense-ratios-benefit-retirement-savers)**, 401(k) participants investing in equity mutual funds paid an average expense ratio of just **0.26 percent in 2024**, a 66 percent decline from **0.76 percent in 2000**. Target-date funds, now the most common default investment, averaged **0.29 percent**, down 57 percent from **0.67 percent in 2008**. These figures show that investment-level costs have fallen dramatically over the past two decades. However, total plan expenses—including recordkeeping, advisory, and administrative fees—can still be significantly higher, especially in smaller and mid-sized plans, meaning participants may pay more than they realize if oversight is limited. The **U.S. Department of Labor** highlights just how meaningful fee differences can be over decades. In its guidance on plan fees, the [**DOL** ](https://www.dol.gov/node/63354)shows that if an employee begins with a $25,000 401(k) balance and earns **7 percent average annual returns** over 35 years, the ending balance can vary dramatically depending on fees. At a **0.5 percent fee level**, the account would grow to approximately **$227,000**. If fees are instead **1.5 percent**, the ending balance drops to about **$163,000**, meaning that a single percentage‑point difference in fees can reduce retirement savings by **28 percent**. ## **Default Investments: Compliance Does Not Guarantee Suitability in 401(k) plans** Default investment options present another area where compliance and optimal design diverge sharply. Most 401(k) participants, estimated at 80 percent or more in many plans, remain in the plan’s default fund throughout their tenure because they never make an active election. Qualified default investment alternatives, primarily target-date funds, satisfy regulatory safe harbors when properly selected and disclosed, yet compliance testing does not evaluate whether these options deliver competitive performance or appropriate risk-adjusted returns for the specific workforce demographics. An analysis by**[ Abernathy Daley](https://benefitslink.com/press-release/55834)** found that more than **99 percent** of examined corporate **plans included at least one investment option** for which a cheaper, higher-performing public-market alternative existed over both three- and five-year periods, with more than **70 percent** containing at least ten such underperforming funds. When defaults carry higher expense ratios or fail to adjust glide paths effectively for the average participant age and risk tolerance, the consequences multiply across the entire participant population. Employees who joined the plan years ago and never revisited their allocations may find their balances growing more slowly than expected, delaying retirement or forcing continued employment beyond desired timelines. Employers who assume regulatory approval equates to suitability miss the chance to refine defaults through periodic reviews that incorporate updated performance data, participant demographic shifts, and evolving market conditions. Plans that proactively align defaults with contemporary standards not only improve average outcomes but also reduce the likelihood of future claims alleging imprudent selection or monitoring. ## **Fiduciary Responsibility: Beyond Regulatory Checklists** Fiduciary responsibility extends far beyond satisfying compliance checklists. Under ERISA, plan sponsors and other fiduciaries must act prudently and solely in the interests of participants when selecting providers, monitoring fees and investments, and ensuring overall plan alignment with workforce needs. Compliance testing verifies operational accuracy but does not substitute for the ongoing duty of prudence, which requires documented processes, independent comparisons, and timely responses to changing circumstances. The surge in ERISA litigation illustrates the gap. In 2025 alone,[ **plaintiff firms filed approximately 155 fiduciary class-action lawsuits**](https://encorefiduciary.com/erisa-fiduciary-litigation-in-2025-plaintiff-law-firms-continuefrenetic-pace/#:~:text=Allegations%20of%20imprudent%20investments%20remained,these%20suits%20will%20ultimately%20be.) targeting defined contribution plans, many alleging excessive fees, imprudent investment retention, or misuse of forfeitures despite the plans having passed all routine regulatory reviews. Settlements in recent years have reached tens of millions of dollars per case, as seen in high-profile resolutions involving major employers. Personal liability for fiduciaries remains a real possibility, extending to individual board members or committee participants who cannot demonstrate prudent oversight. Employers who treat fiduciary duties as synonymous with compliance expose themselves to claims that surface years later when participants compare their outcomes against benchmarks or market alternatives. Robust documentation of decision-making processes, regular independent reviews, and clear delegation to qualified advisors serve as the strongest defenses, transforming potential vulnerabilities into evidence of diligence. ## **Real-World Consequences: A Case Study in Hidden Vulnerabilities** Consider the practical implications for a mid-sized manufacturer whose plan passes every annual test yet incurs total costs near the upper end of industry ranges. Participants in the default target-date series may experience returns that lag lower-cost index alternatives by 50 to 100 basis points annually, a difference that compounds to tens of thousands of dollars less at retirement for typical workers. Employee surveys reveal confusion about matching contributions and hesitation to increase deferrals, contributing to turnover among younger staff who prioritize competitive benefits. When a routine Department of Labor inquiry or participant-initiated lawsuit eventually arises, the absence of proactive benchmarking and engagement records weakens the company’s position, even though all formal filings remain pristine. ## **The Path Forward: Implementing Intentional Oversight** Organizations that recognize these patterns and implement consistent oversight achieve measurably superior results. Regular benchmarking against peer plans of similar asset size and participant count reveals hidden cost savings that can be redirected toward richer matching formulas or enhanced education. Periodic plan-design audits ensure eligibility rules, vesting schedules, and automatic features align with current workforce composition and labor-market realities. Default-fund reviews incorporate updated performance metrics and demographic data, protecting the majority of passive savers. Comprehensive communication strategies, including personalized projections and workshops, foster higher contribution rates and greater appreciation for the benefit. Thorough records of every fiduciary decision, supported by independent expert input where appropriate, demonstrate the prudence required under ERISA and deter potential challenges. ## **Long-Term Benefits of Proactive Management of 401(k)** Taking care of your 401(k) plan early and reviewing it regularly does more than improve numbers on a report. Fixing small issues now can make a big difference over time. When small inefficiencies are corrected early, the benefits grow year after year. If problems are ignored, they often turn into bigger, more expensive issues later that require major changes. Employees also notice when their retirement plan improves. When they see better projections and feel more confident about their future, they are more satisfied at work. That confidence often leads to stronger loyalty and higher morale. For employers, a well-managed 401(k) plan sends a clear message. It shows that the company truly cares about employees’ long-term financial well-being, not just meeting minimum legal requirements. In competitive job markets, this can set a company apart. Businesses that treat their retirement plan as an important benefit, not just paperwork, are more likely to attract and keep employees who value financial security and thoughtful leadership. ### **Conclusion: From 401(k) Compliance as the Floor to Protection as the Standard** Compliance will always remain the essential foundation, the floor upon which every 401(k) plan must stand. It ensures basic operational integrity and legal adherence. Yet protection resides at a higher level, achieved when employers treat their plans as living programs deserving of ongoing strategic attention. By moving past the illusion that regulatory approval equates to excellence, forward-looking organizations create retirement [benefits that genuinely secure employee](https://nvestadvisors.com/workplace-benefits/) futures while safeguarding the enterprise against hidden risks and missed opportunities. For companies whose 401(k) plans have operated primarily under the banner of compliance, the time to pursue a more comprehensive evaluation has arrived. The rewards—measured in enhanced participant outcomes, meaningful cost efficiencies, a stronger fiduciary posture, and improved organizational health—far outweigh the effort required to bridge the gap between minimum standards and true protection. Partnering with experienced professionals can make this transition seamless and highly effective. At nVest Advisors our team specializes in helping plan sponsors make exactly this transition. Our team conducts comprehensive 401(k) assessments that go well beyond compliance checklists to identify cost savings, optimize investment defaults, enhance employee engagement, and document prudent decision-making processes that stand up to scrutiny. **[Schedule a confidential appointment](https://nvestadvisors.setmore.com/), no-obligation plan review with [nVest Advisors](https://nvestadvisors.com/) today.** **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Plan Participants, public, Retirement, Small Business, Webinars --- ### [10 Effective Ways Small Businesses Can Cut Costs and Boost Profitability](https://nvestadvisors.com/small-business-cut-costs-boost-productivity/) **Published:** June 28, 2023 **Author:** nVest Advisors **Content:** Running a small business often entails managing limited resources and finding ways to optimize costs. By implementing cost-cutting strategies, small businesses can enhance profitability and ensure long-term sustainability. As the economy slows down toward a recession later this year, it’s important for businesses to “trim the fat” and build excess savings reserves without harming their customers’ experience or negatively impacting their growth prospects. That’s not as hard as it sounds. Let’s explore ten effective ways for small businesses to cut costs without compromising quality or customer satisfaction. ### 1. Review and Renegotiate Supplier Contracts Regularly evaluating and renegotiating supplier contracts can significantly reduce expenses. Reach out to existing vendors and negotiate better terms, such as volume discounts or extended payment deadlines. Additionally, compare prices and quality from different suppliers to identify cost-saving alternatives. Here at nVest Advisors, we do this regularly as a small business: we seek opportunities to create win-win situations for our firm and the companies that provide us with software and other services. For example, we might explore the chance to extend the terms of our contracts in exchange for lower rates and always do a cost/benefit analysis for every vendor once the service term is up. ### 2. Embrace Telecommuting and Remote Work The rise of technology has enabled many businesses to embrace telecommuting and remote work arrangements. By allowing employees to work from home or utilizing shared office spaces, small businesses can reduce costs associated with office space, utilities, and equipment. Remote work can also enhance productivity and work-life balance for employees. nVest Advisors moved from our original company home in south Texas to Colorado back in 2017, so we had to adopt technology and remote work and meetings long before the Covid pandemic made it a business necessity. We like to say we knew all about Zoom and Google Meet long before Covid made them “cool”. The world we live in today allows much of our work to be done away from a physical office location, so a company may have the opportunity now to downsize their commercial floor space, which will reduce both rent, utilities, and other overhead, and give employees a better quality of life. We still have physical office facilities in downtown Colorado Springs, CO, but we’ve taken the time to incorporate technology into every part of our operations so that our clients would never have to drive to our office for their entire experience if they did not choose to. ### 3. Leverage Technology We’ve touched on this twice already, but Technology adoption really deserves its own mention. Investing in technology can streamline operations and reduce costs in various areas. Adopt cloud-based software solutions for accounting, project management, and customer relationship management. These tools often require lower upfront costs and eliminate the need for expensive hardware and maintenance. Automation can also minimize manual tasks, improve efficiency, and save time and money. Literally every aspect of our company operations, from marketing to compliance, and nearly every aspect of our client service model (like paperwork, investment modeling, account transfers, etc.) has incorporated technology. This took a lot of time to work out, but it’s saved us so much more time now that we can grow quickly and actually have more time to spend with you, our client. We’re even starting to incorporate AI into our work wherever it’s feasable. Technology doesn’t have to dehumanize the client experience – it can be used to handle the daily “behind the scenes” work much more efficiently, so you have time to provide a better, more personable client experience (the ultimate competitive advantage). ### 4. Outsource Non-Core Functions Consider outsourcing non-core functions such as payroll processing, IT support, or marketing. Outsourcing allows businesses to access specialized expertise without the need for additional full-time employees. This approach reduces costs associated with salaries, benefits, and training, enabling businesses to focus on their core competencies. At nVest, nearly all of our support services have been outsourced, and technology has made the world small enough that even a “small” firm like ours can take advantage of the talent pool worldwide. Presently, we have marketing, branding, and operational efficiency teams working for us from India, Pakistan, and the Philippines, giving us extremely talented people at affordable costs. Having our primary operations assistant stationed in the Philippines allows us to work on client service needs literally 24 hours a day: as our “official” office closes each evening, work tasks pick up on the other side of the world. When we resume official operations in the morning, another full day’s work has already been done. ### 5. Optimize Energy Consumption Energy costs can significantly impact a small business’s bottom line. Implement energy-efficient measures such as using LED lighting, installing programmable thermostats, and ensuring proper insulation. Encourage employees to turn off lights and electronic devices when not in use. By adopting sustainable practices, businesses can reduce utility bills and demonstrate environmental responsibility. Shutting down or “sleeping” workstations and powering down printers and other equipment not in use help as well. ### 6. Implement Effective Inventory Management Inventory management directly affects cash flow and profitability. Analyze sales data, identify slow-moving or obsolete items, and adjust purchasing accordingly. Establish strong relationships with suppliers to negotiate better prices, bulk discounts, or consignment arrangements. Utilize inventory management software to track stock levels, minimize waste, and avoid overstocking. Tight inventory control and regular inventory counts also dramatically help to deter internal theft. Strictly service firms like ours don’t usually carry much inventory, but even watching the use of office supplies can help prop up even healthy margins. ### 7. Explore Cooperative Advertising and Collaborations Collaborating with complementary businesses for cooperative advertising can significantly reduce marketing expenses. Pool resources with other small businesses to create joint marketing campaigns, share mailing lists, or co-host events. Such collaborations expand the reach and reduce the financial burden of individual marketing efforts. ### 8. Opt for Digital Marketing Digital marketing offers cost-effective alternatives to traditional advertising channels. Utilize social media platforms, email marketing, and search engine optimization (SEO) to reach a wider audience at a fraction of the cost. Track the performance of digital campaigns to optimize marketing efforts and allocate resources more effectively. Getting it all to work online is not easy, and even though it is far less expensive than more traditional forms of advertising, it is entirely possible to throw good money away on ineffective online marketing. We’ve discovered that effective marketing cannot be an operational afterthought. Marketing takes careful planning, We’ve discovered we can work with marketing students just getting out of college by offering internships. It’s a great win-win – the cost is minimal and you are giving the students experience and the ability to add to their resume (and creative portfolio). If your company needs this kind of help, [may we recommend finding your next intern at Acadium](https://app.acadium.com/r/6gu5d6ca5). ### 9. Encourage Employee Engagement and Retention High employee turnover can be costly due to recruitment, training, and lost productivity. Invest in employee engagement programs to boost morale and job satisfaction. Provide opportunities for professional development and create a positive work environment. Engaged and loyal employees are more likely to contribute to the business’s success and reduce recruitment and training expenses. ### 10. Conduct Regular Cost Reviews Regularly review all costs and expenses to identify areas for improvement. Analyze financial statements, budgeting, and spending patterns to identify unnecessary expenses or areas where costs can be reduced. Encourage employees to contribute cost-saving ideas and reward innovative suggestions that lead to substantial savings. If your company has not done this before, or it’s been a while, you may be startled to find out how much the recent run of inflation has bloated your budget. Many subscriptions auto-increase their cost. Especially as we get close to a slow-down in economic activity, only companies that are “lean and mean” will weather what’s coming and be put in a position to take advantage of the change to increase market share. One area we can help a small business is to review the costs associated with your current company retirement plan and offer a competitive bid to reduce those expenses. [401k and similar plans](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) have become much more cost-friendly over the last few years, and if it’s been more than 2 or 3 years since you’ve done a due diligence review on your company benefits, it’s definitely time. We’ll do the analysis and bid totally free of charge, so there is no reason at all to at least explore what’s out there. ## The Bottom Line In today’s competitive business landscape, small businesses need all the advantages they can get to thrive and grow, especially during times of economic uncertainty during which business boom and bust cycles are common. Cutting costs is a crucial aspect of running a successful small business. By implementing these ten strategies, small businesses can significantly reduce expenses without sacrificing quality or customer satisfaction. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to 3(21) or 3(38) fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. If your company would like to receive professional planning and investment assistance, a competitive bid from us for your current company retirement plan, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, Colorado Secure Savings, commercial paper, custodian, economic, economy, empowerment, ERISA, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, Secure Savings, SEP, SIMPLE, SIPC, small business, state-run IRA, state-sponsored IRA, sustainable, trends --- ### [The 401(k) Decision HR Is Making Without Realizing It](https://nvestadvisors.com/the-401k-decision-hr-is-making-without-realizing-it/) **Published:** June 29, 2026 **Author:** Maryam Irfanmeer **Content:** # ![The k Decision HR Is Making Without Realizing It](https://nvestadvisors.com/wp-content/uploads/2026/06/pexels-karola-g-5900131-e1782731997680.jpg "Pexels karola g 5900131 nvest advisors") # **The 401(k) Decision HR Is Making Without Realizing It** Many HR leaders and business executives believe that once a 401(k) plan is in place, their work is done. Employees are automatically enrolled, contributions are flowing, and compliance boxes are checked. But the truth is, **the decisions HR makes around defaults—enrollment, investments, and education—can quietly determine the success or failure of your retirement plan**, affecting employee outcomes, engagement, and your company’s financial and reputational health. These are not small choices. They compound over time, often in ways that are invisible until the consequences are significant. Let’s unpack why default decisions matter more than you think—and how proactive leadership can turn them into a competitive advantage for both employees and the organization. ## **Default 401(k) Enrollment** Automatic enrollment was introduced to increase participation, and it has been successful. According to [**Vanguard’s 2023** *How America Saves* report](https://www.plansponsor.com/participation-rates-in-401k-plans-reach-all-time-high/#:~:text=For%20more%20stories%20like%20this,record%20plan%20participation%20of%2083%25.), participation in the firm’s 401(k) plans reached a record 83% in 2022, driven largely by increased adoption of automatic enrollment. ## **Key issues with default 401(k) enrollment include:** 1. **Contribution Levels Often Start Too Low** Many plans default to contributions of 3–4% of salary. While this increases participation, research shows that employees typically stick with defaults. Over decades, this can result in tens of thousands of dollars less in retirement savings than a plan starting at 6–8% . 2. **Automatic Escalation Is Underutilized in 401(k) plans** Plans that fail to implement or communicate annual automatic escalation often leave employees under-saving. A 1% annual escalation can increase retirement balances by 20–30% over a 30-year career, yet nearly half of mid-size plans neglect this feature. 3. **Behavioral Inertia** Employees are likely to “set it and forget it.” Default enrollment is powerful only if the starting point and escalation strategy are optimized for long-term growth. Otherwise, participation can be high while savings remain inadequate. 4. ![k contribution](https://nvestadvisors.com/wp-content/uploads/2026/02/250k-3-e1770896600735-1024x723.jpg "0k 3 nvest advisors") ## **Default Investments: The Silent Engine of Success** Once employees are enrolled, **the default investment option becomes the primary driver of retirement outcomes for most participants**. Yet, many plans rely on outdated or high-cost default funds that underperform relative to peers. ### **Why default fund selection matters in 401(k) plans:** - **Most employees do not actively select funds for their 401(k) plans** Research indicates that up to 80% of participants remain in the default option for years. A default 401(k) that is high-cost or growth-inappropriate can quietly erode savings. - **Outdated paths reduce long-term growth** - Target-date funds are the most common default option. However, studies show that a significant portion use funds with conservative allocations that do not match the risk profile of younger employees. - ## **Default Education in 401(k) Plans: Why Participation Rates Are Not the Only Measure of Success** For years, employers have been told that automatic enrollment and automatic escalation are the solutions to low retirement savings participation. And to be fair, those tools have improved participation dramatically. In many companies today, enrollment rates exceed 85 to 90 percent. On paper, that looks like success. But JUST participation is not preparedness. After working with business owners, HR leaders, and plan sponsors across different industries, one pattern shows up consistently. Employers feel confident because employees are enrolled. Employees feel uncertain because they do not truly understand what they are doing. The gap between enrollment and understanding is where long term retirement risk quietly builds. - ## **The Illusion of High Participation** When automatic enrollment is implemented, employees are placed into the plan at a preset contribution rate and typically into a target date fund aligned with their age. Most do not opt out. That is good. Behavioral finance supports the power of defaults. However, what rarely gets examined is this: How many employees actively review their contribution rate after enrollment How many understand the risk level of their investment option How many can estimate whether their current savings rate will realistically fund retirement In many organizations, the answer is very few. Employees often stay at the initial default contribution rate for years. If the plan starts them at 3 percent, they remain at 3 percent. If escalation is capped at a certain level, they rarely go beyond it voluntarily. They assume the default is designed specifically for them, when in reality it is designed for the average participant. There is no such thing as an average retirement. A 28 year old engineer with no dependents and a 45 year old operations manager supporting two children have fundamentally different financial trajectories. Yet both may be sitting in identical default structures. Default systems are designed for participation efficiency. They are not designed for personalized optimization. - ## **Information Distribution Is Not Financial Literacy** Most organizations believe they are providing education because they offer access to webinars, online tools, or annual enrollment meetings. However, distributing information is not the same as building financial understanding. Real education changes behavior. It equips employees to interpret their own data and make confident adjustments over time. It answers questions employees often hesitate to ask, such as how much they should realistically be contributing relative to their age, what level of risk is appropriate for their time horizon, and how market volatility fits into a long term retirement strategy. - When employees lack this clarity, they default psychologically to inaction. They remain at the original contribution percentage set at hiring. They rarely reassess whether that percentage aligns with future income needs. They assume that a target date fund automatically optimizes their outcome without understanding how glide paths or risk adjustments evolve over time. Over thirty years, this passivity compounds just as powerfully as returns do. A one or two percent difference in contribution rate sustained over decades can materially alter retirement readiness. Yet without intentional education, most employees never examine that gap. - ## **The Organizational Cost of Underinformed Participants** The consequences of limited education extend beyond individual account balances. Financial uncertainty influences workforce behavior in measurable ways. Employees who are unsure about their retirement trajectory are more likely to delay retirement. Delayed retirement affects succession planning, talent mobility, and compensation structures. It can compress advancement opportunities for younger employees and increase long term payroll strain. There is also a productivity dimension. Financial stress has been consistently linked to reduced workplace focus and increased absenteeism. When employees feel unclear about their long term financial outlook, that uncertainty does not remain abstract. It affects daily performance and decision making. From a leadership standpoint, retirement readiness is not only a benefits issue. It is a workforce planning issue. Yet most companies evaluate their plans using participation percentages rather than preparedness indicators. High enrollment does not automatically translate to adequate savings. A plan can appear healthy on paper while quietly producing a generation of employees who will struggle to retire on time. - ## **Why Employees Stay Passive** It is easy to assume employees are disengaged. In reality, most are overwhelmed. Retirement plans require individuals to make decisions about contribution percentages, asset allocation, risk tolerance, long term projections, and tax implications. These are not small decisions. They influence decades of financial security. Yet most plan education consists of an annual presentation filled with charts, fund names, and regulatory disclosures. Information is delivered, but interpretation is not. Employees leave those sessions with more terminology than clarity. When people do not understand a system, they default to inaction. And in retirement planning, inaction compounds. - ## **The Employer Impact No One Talks About** Financial stress does not stay at home. It shows up at work. Employees who feel behind on retirement are more likely to delay retirement. That creates workforce planning challenges and increased compensation pressure at senior levels. Younger employees experience slower advancement because leadership positions do not open as expected. In other cases, employees withdraw or borrow from retirement accounts to manage short term financial strain. That undermines long term savings and increases future financial vulnerability. For employers, this translates into: • Reduced productivity due to financial anxiety • Increased healthcare costs linked to stress • Greater turnover among financially unstable employees • Delayed succession planning - ### **Behavioral Blind Spots That Default Plans Cannot Solve** Even the most well-structured defaults cannot overcome how humans actually behave. Employees are not calculators; they make decisions through lenses shaped by psychology, habits, and perception. Consider **inertia**—the tendency to stick with the first option presented. A default contribution of 3% may seem like a nudge toward savings, but without escalation or guidance, most employees will stay at that level for decades. Over 30 years, this difference can cost hundreds of thousands in retirement assets. Then there is **optimism bias**. Many workers assume they will “catch up later” or that market returns will solve any shortfall. Research from the **[Employee Benefit Research Institute](https://www.psca.org/news/psca-news/2025/3/anxiety-around-daily-expenses-depress-retirement-saving/)** shows that Workers under acute financial stress, prioritize daily expenses (60%) and emergencies (46%) over retirement savings, which dropped to 19% in a survey. **Fear avoidance** is another silent saboteur. Employees may avoid reviewing investment allocations because they fear making the wrong choice, leaving them in low-performing funds or high-fee options by default. Behavioral finance shows this avoidance is strongest in mid-career employees who juggle mortgages, tuition, and retirement goals simultaneously. The organizational cost is tangible. Passive behavior leads to lower retirement readiness, higher stress, and increased risk of withdrawals or loans against retirement accounts. - ### **Leadership Decisions That Quietly Shape Retirement Outcomes** Employees notice, even subconsciously, whether benefits feel meaningful and personalized. Leadership that actively reviews defaults, ensures fees are competitive, and provides clear guidance cultivates confidence and loyalty. Conversely, passive oversight erodes trust quietly, manifesting years later in turnover or disengagement. Finally, these decisions have **regulatory and fiduciary implications**. Selecting inappropriate defaults or failing to monitor them regularly exposes the organization to potential compliance risks. It’s not just about avoiding penalties—it’s about demonstrating responsible stewardship of employee assets. In short, HR and executives are not just managing a plan—they are shaping career-long outcomes for their workforce. Treating defaults as technical checkboxes underestimates their power. Leadership that intentionally manages defaults turns a silent liability into a competitive advantage. - Every decision HR and leadership make compounds over years, influencing employee trust, engagement, retention, and even long-term financial stability. - The difference between a plan that underperforms silently and one that drives meaningful results is proactive, informed leadership. At **[nVest Advisors](https://nvestadvisors.com/)**, we partner with executives, HR leaders, and business owners to uncover hidden inefficiencies, optimize default strategies, and design education programs that actually work. [**Schedule a complimentary consultation today**](https://nvestadvisors.setmore.com/), and let us help you transform your 401(k) plan into a tool that builds confidence, loyalty, and real long-term value for your employees and your business. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, Company News, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Retirement, Small Business, Webinars --- ### [The 401(k) Problems Employers Don’t Notice Until They Become Expensive](https://nvestadvisors.com/the-401k-problems-employers-dont-notice-until-they-become-expensive/) **Published:** June 29, 2026 **Author:** Maryam Irfanmeer **Content:** # ![The k Problems Employers Dont Notice Until They Become Expensive](https://nvestadvisors.com/wp-content/uploads/2026/06/pexels-silverkblack-36697936-e1782730608910.jpg "Pexels silverkblack 36697936 nvest advisors") # **The 401(k) Problems Employers Don’t Notice Until They Become Expensive** ### Most executives assume their 401(k) plan is fine until it isn’t. Every year, as tax season approaches, many investors turn their attention to deductions, refunds, and filing deadlines. Far fewer pause to reassess one of the most powerful long-term wealth-building tools available to them: their 401(k). In my experience, retirement shortfalls rarely happen because someone ignored their future entirely. They happen quietly — through years of under-contributing, missing incremental increases, or assuming that “good enough” is sufficient. Meanwhile, contribution limits change, catch-up rules evolve, and new legislation reshapes how higher earners must structure their savings. A 401(k) is not simply a payroll deduction. It is a strategic tax shelter, a compounding engine, and in many cases the backbone of a household’s retirement security. Small adjustments made consistently over time can translate into meaningful differences in long-term outcomes. For 2025 and 2026, the IRS has increased contribution limits and implemented important structural changes, including updated catch-up provisions and new Roth requirements for certain earners under SECURE 2.0. Understanding these changes is not just about staying compliant — it is about maximizing opportunity. Before moving into another year on autopilot, it is worth reviewing what has changed and how those updates fit into your broader retirement strategy. ## **401(k) Feeses Are the Silent Drain on Retirement Savings** Fees are the most invisible cost in many retirement plans, yet they are among the most consequential. Retirement plan researchers have repeatedly documented that many plans pay significantly more in administrative and investment fees than necessary. The **[2023 *Morningstar U.S. Fund Fee Study*](https://www.morningstar.com/business/insights/research/annual-us-fund-fee-study)** > Morningstar’s U.S. Fund Fee Study highlights continued fee compression across the industry, but also underscores meaningful dispersion in what investors pay for comparable strategies, particularly across share classes. ### **What does that mean in practice?** Imagine a mid‑size company with $6 million in plan assets. If the total fees paid by the plan exceed efficient benchmarks by 0.40 percent annually, that gap may seem small on a quarterly statement. Over 30 years, however, that difference can reduce a typical participant’s retirement savings by tens of thousands of dollars. To visualize this, consider this suggested chart: ![](https://nvestadvisors.com/wp-content/uploads/2026/02/230k-lost-over-the-years-e1770854763525-1003x1024.jpg "230k lost over the years nvest advisors") Employees rarely notice this drag because fees are embedded in net returns. They see performance but not the true cost beneath it. For employers, this hidden fee burden is risky because it diminishes retirement outcomes while increasing the possibility of fiduciary scrutiny. Regulators look at fee reasonableness relative to plan size and service needs. Plans that are out of market without documented rationale invite questions. ## **Defaults Shape How Most Employees Experience the 401(k) Plan** Most employees do not actively manage their 401(k) investments. They stick with the defaults. That makes default design one of the most powerful decisions a plan sponsor makes. According to [**Vanguard’s 2024 *How America Saves* report**](https://www.plansponsor.com/vanguard-modern-plan-designs-strengthen-participant-saving/#:~:text=According%20to%20Vanguard's%20latest%20'How,their%20saving%20rates%20in%202024.&text=Because%20more%20defined%20contribution%20plans,64%25%20for%20voluntary%20enrollment%20plans.&text=%E2%80%9CWe're%20still%20seeing%20more,save%20at%20strong%20saving%20rates.%E2%80%9D), 401(k) plans that use automatic enrollment achieve an impressive **94% participation rate**, far higher than plans relying on voluntary sign-ups. Even more encouraging, many participants stick with the default investment options—typically target-date or balanced funds—for years, relying on professionally managed portfolios designed to grow steadily over time. This demonstrates the power of thoughtful plan design: with the right automatic features in place, employees are more likely to save consistently and build long-term retirement security, even without actively managing every investment decision. This pattern reflects human behavior. When a default is set, most people stick with it rather than make an active choice. If the default option is suboptimal in fees or expected returns, then a majority of your employees experience those suboptimal outcomes every year. Most people are focused on their work, their families, and daily life. They do not spend their evenings reviewing mutual fund prospectuses. They trust the plan sponsor to set defaults that make sense. When defaults have not been reviewed in years, when target date funds are not aligned with workforce age demographics, or when lower‑cost equivalents exist that have never been considered, most participants never realize the opportunities they are missing. The consequence is lower lifetime savings for employees and unrecognized inefficiencies for the employer. ## **Engagement Looks Better Than It Is** It is common to interpret a 401(k) plan’s engagement statistics as satisfactory because participation rates are high. But participation is just the beginning. Contribution rates matter. Understanding matters. Confidence matters. Studies of employee financial wellness consistently show that many participants either contribute at minimal levels or misunderstand key aspects of their plan. According to **[The *Plan Sponsor Council of America*](https://www.psca.org/news/psca-news/2024/12/401k-savings-and-participation-rates-rise/?utm_source=chatgpt.com)** **(PSCA) 67th Annual Survey of 401(k) plans** shows that although participation rates are high — with **88% of eligible employees having a 401(k) balance and 86.9% making contributions in 2023 — the average participant deferral rate remains modest at about 7.8% of pay.** This suggests that many participants are not actively increasing their savings or maximizing their contribution potential even when enrolled. From a human capital perspective, a retirement plan that functions well is a stabilizing force. From an executive perspective, disengaged employees cost money in turnover, recruiting, and lost productivity before anyone realizes it. Few HR leaders connect retirement engagement and workforce stability, but the data shows they are intertwined. ## **Compliance is Not Protection** There is a subtle but critical difference between a plan that meets regulatory requirements and a plan that protects the employer from risk. Many sponsors find comfort in compliance testing. Annual nondiscrimination tests are passed. Form 5500 is filed on time. The plan “meets the rules.” That is a necessary baseline. It is not the end goal. Regulatory and fiduciary investigations often focus not on whether the tests were completed but whether the plan sponsor prudently documented oversight, fee benchmarking, investment selection rationale, fiduciary committee activity, and ongoing monitoring. EBSA enforcement data show that compliance activities often reveal deeper fiduciary issues even when basic plan tests and filings are technically satisfied. In**[ FY 2023, EBSA’s enforcement program](https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/ebsa-monetary-results-2023?utm_source=chatgpt.com)** recovered **$1.4 billion** for plans, participants, and beneficiaries and obtained countless non‑monetary corrections like improved fiduciary governance, removing illegal plan provisions, and other fiduciary reforms — underscoring that many plans had underlying problems not identified by routine compliance testing. ## **Small Decisions Can Have Large Consequences on your 401(k)** Almost every employer I have worked with assumed that early plan decisions could simply stay unchanged indefinitely. Most decisions at inception feel reasonable at the time: choice of provider, default contribution rate, set of investment options, frequency of oversight meetings. But retirement plans are not static. Workforces evolve. Markets evolve. Benchmarking standards evolve. Employee expectations evolve. When the plan does not evolve alongside these changes, small past decisions become structural inefficiencies. For example, a default contribution rate that was common ten years ago may be below current best practices. A lineup of investment options selected when the workforce was younger may not align with current age demographics. Administrative fees that seemed acceptable a decade ago may be high relative to today’s market standards. The cumulative effect of these small decisions is larger than most executives realize. ## **The Cost of Delayed Action** When inefficiencies remain unnoticed for years, correction is not simple. Addressing silent problems often involves: • Revisiting historical participant contributions and allocations • Recalculating investment returns and reallocating balances • Communicating changes clearly and effectively to employees • Documenting fiduciary decisions for compliance purposes For smaller employers, these steps might be manageable. For medium and larger organizations, they can consume significant time and resources, distract leadership, and expose the company to legal scrutiny if not handled carefully. Proactive plan reviews save money not just in fees but in executive attention and leadership time. ### **Steps Employers Can Take Today** Clearly, silent problems are expensive problems. The difference between a plan that underperforms quietly and one that delivers tangible value is not luck. It is oversight, intention, and disciplined review. Here are steps executives can consider: 1. **Regular Plan Benchmarking** Hire an independent evaluator to compare fees, investment options, and services to market standards. 2. **Ongoing Monitoring and Oversight** Establish documented reviews of performance, fees, and participation trends at least annually. 3. **Employee Engagement Programs** Invest in communication and education so employees understand how to optimize contributions and investment choices. 4. **Proactive Compliance and Risk Review** Go beyond minimum legal requirements to document fiduciary decisions and oversight discipline. Implementing these measures early can prevent small, invisible problems from turning into significant costs and legal liabilities. The difference between a plan that underperforms quietly and one that delivers real value lies in proactive oversight, intentional decision‑making, and continuous engagement. Companies that wait until a problem surfaces often face disruption, increased costs, and exposure. If your company’s 401(k) plan has not been independently benchmarked, structurally reviewed, or evaluated for engagement outcomes recently, the question is not whether it is compliant. The question is whether it is efficient, defensible, and aligned with your workforce goals. For organizations that prefer to operate proactively rather than reactively, a **structured plan review and benchmarking process** can reveal hidden inefficiencies, align defaults and fees with best practices, and demonstrate fiduciary prudence in documented fashion. Sometimes the most valuable meeting of the year is the one that provides clarity rather than crisis management. Analysis by **[Shoven & Walton (NBER)](https://www.nber.org/papers/w27971?utm_source=chatgpt.com)** finds that differences in glide path equity allocations can significantly affect drawdowns; in early 2020, long‑dated target‑date funds lost up to *35 %* of value while nearer‑dated funds lost materially less. > This highlights the importance of using **modernized, well-managed default funds**, as participants who rely on outdated defaults may miss out on optimal long-term growth. This gap is particularly pronounced for **mid-career employees or executives with complex financial situations**. A CFO contributing 6% of salary to a target-date fund that’s overweight in bonds may see **$50,000–$100,000 less at retirement** than if the allocation had been reviewed and updated periodically. The silent risk here is twofold: 1. Employees unknowingly under-save or accumulate lower returns, reducing trust in the company’s benefits. 2. Employers face **fiduciary exposure** if defaults are demonstrably misaligned with participant demographics or industry benchmarks. ## **How Employee Psychology Determines Retirement Outcomes** Executives often assume that employees will make rational financial decisions when enrolled in a 401(k), but decades of behavioral finance research say otherwise. People are **predictably irrational** when it comes to saving, investing, and retirement planning. All of these factors—hidden fees, outdated defaults, behavioral blind spots, and disengaged participants—add up quietly but relentlessly. They do more than affect retirement balances. They ripple through your organization, influencing talent retention, employee trust, and even your bottom line. The challenge is that these risks are silent. They do not announce themselves until the costs are real, tangible, and often expensive to fix. That is why proactive oversight, thoughtful plan design, and engagement strategies that truly consider employee behavior are essential leadership decisions that protect both your people and your company. The question is not whether these problems exist. They do. The real question is how quickly you are prepared to address them before they become too costly. The good news is you do not have to face these challenges alone. At[ **nVest Advisors**](https://nvestadvisors.com/), we help executives, HR leaders, and business owners uncover hidden 401(k) inefficiencies before they become expensive problems. Our approach combines expert benchmarking, strategic plan design, and employee engagement strategies that actually work. ##### Taking action now can protect your employees’ futures, strengthen trust in your leadership, and prevent costly disruptions down the line. Schedule a **[complimentary consultation](https://nvestadvisors.setmore.com/)** with one of our advisors today. Let us help you turn your retirement plan from a silent risk into a powerful tool for growth, loyalty, and long-term success. Click [**HERE** ](https://nvestadvisors.setmore.com/)to book a FREE CONSULTATION with our advisor today! **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Company News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Retirement, Small Business, Taxes, Webinars --- ### [403(b), 457 and 401(a) Plans](https://nvestadvisors.com/403b-457-and-401a-plans/) **Published:** June 1, 2026 **Author:** Maryam Irfanmeer **Content:** # **403(b) Plan Guidance** ##### A plan that looks simple on the surface, but quietly shapes outcomes through decisions most people never revisit A 403(b) plan is often introduced as a retirement savings plan for professionals in education, healthcare, and nonprofit organizations, where contributions are made consistently and grow over time on a tax-deferred basis. At a glance, it feels straightforward, which is why most people approach it with a set-and-forget mindset. Contributions happen automatically, balances grow gradually, and over time it creates a sense that the system is working simply because it is functioning without interruption. What is less visible is that many 403(b) plans were not built with continuous optimization in mind, and as a result, they tend to preserve outdated structures far longer than other types of retirement accounts. The consequence is subtle but significant. In a 403(b) plan, outcomes are not driven by participation alone. They are shaped by the internal design of the plan itself, including the cost structure, the quality of available funds, and how frequently those options are reviewed or replaced. Two individuals contributing the same amount over the same period can end up with materially different results depending on what their contributions are actually exposed to within the plan. The concept of “menu illusion” is another nuance. A 403(b) plan may appear to offer a wide range of investment options, but a lot of them are variations of the same underlying exposure or are constrained by provider relationships that limit true diversification. Participants may believe they are making distinct allocation choices, while in practice they are operating within a narrower framework than assumed. Over time, this can lead to portfolios that are less resilient to changing market conditions, not because of poor decision making, but because of structural limitations within the plan itself. ### **Where most people unknowingly lose ground** **Investment choices are narrower than they appear** Many 403(b) plans give the impression of variety, yet actual flexibility is often limited by the provider’s structure. This shapes how easily participants can adjust risk, refine allocations, or respond to changes in their financial life over time. **Costs are built into the structure, not clearly shown** In a number of plans, especially older ones, fees are layered within the investment products themselves rather than presented clearly. While they may seem negligible in a single year, their impact compounds over time, reducing the efficiency of long-term growth. **Default settings stay in place for too long** Initial allocations are often based on broad assumptions rather than an individual’s specific situation. As income, goals, and timelines change, the allocation may remain unchanged, creating a gradual misalignment between the plan and the participant’s reality. ### **What starts to matter as your balance grows in a 403(b) plan** In the early years, small differences feel minor. Over time, they compound quietly, influencing the final outcome far more than most people expect. Slightly higher costs, a misaligned allocation, or limited investment options may not stand out in any single year, but over a decade or more, these factors become significant. This is where the 403(b) shifts from being a routine savings plan to something that benefits from a deliberate review. Within a 403(b) plan environment, certain behavioral patterns often emerge. Because these plans are common in professions that value stability and long-term commitment, participants tend to avoid revisiting investment decisions once they have been made. This is not due to neglect, but a form of implicit trust in the system. The unintended consequence is that allocations remain static even as the individual’s financial life evolves, leading to gradual misalignment that is difficult to detect without an intentional review. Perhaps the most underappreciated aspect of a 403(b) plan is not what it offers, but what it restricts. Unlike more flexible investment accounts, the boundaries of a 403(b) plan are defined by the plan provider, which means improvement must happen within a fixed ecosystem. Individuals who achieve stronger outcomes are not simply those who contribute more, but those who develop a clear understanding of how to work within these constraints to minimize friction and maximize efficiency over time. ### **How nVest Advisors Can Help** Understanding the nuances of a 403(b) is one thing; knowing how to navigate them effectively is another. That’s where nVest Advisors steps in. We work with professionals to review their plan structure, uncover hidden inefficiencies, and identify opportunities to optimize allocations and reduce costs—without disrupting the contributions you’re already making. Our approach isn’t about pushing you into risky strategies or unnecessary changes. It’s about helping you see your 403(b)plan with fresh eyes, understand the constraints, and make deliberate decisions that align with your long-term goals. With our guidance, small adjustments today can have a meaningful impact on your retirement outcome decades from now. A 403(b) plan rarely feels urgent to review because it continues to function in the background without interruption. But consistency is not the same as efficiency, and over time, that gap becomes the difference between a plan that simply runs and a plan that performs. At nVest Advisors, we help you understand what your 403(b) is actually doing beneath the surface. We assess how your investment structure, cost layers, and default decisions interact with your long term objectives, and where those elements may no longer reflect your current financial reality. If you want a clearer view of what your 403(b) is really contributing to your future, [**book a complimentary consultation**](https://nvestadvisors.setmore.com/) with [**nVest Advisors**](https://nvestadvisors.com/) and take a more informed look at your retirement position. # **457 Plan Guidance** A 457 plan is one of the rare retirement tools that combines disciplined saving with unusual flexibility. It is often offered to government employees, nonprofit staff, and specialized sectors, but unlike typical retirement accounts, its value is revealed when you understand not just the contribution rules, but the strategic ways it can be used throughout a career. Many participants treat it like a routine deposit account, but those who explore its full potential find it can create options for transitions, early retirement, and unexpected life changes that other accounts cannot match. Unlike plans that penalize withdrawals before age sixty, a 457 allows access without early withdrawal penalties. This is not a minor convenience. It changes the way you can think about timing income, bridging employment gaps, or shifting careers without jeopardizing retirement readiness. Most people do not realize how powerful this can be if combined with careful planning across other accounts. ### **The strategic advantage of timing** The real strength of a 457 is its ability to give participants choices that extend beyond typical retirement scenarios. Imagine a professional approaching retirement who wants to reduce work hours gradually or take a sabbatical. Contributions in a 457 can be used to create a bridge period without penalty, allowing access to funds while deferring Social Security or other taxable income. This is an advantage few understand, and even fewer take full advantage of. Timing matters because using a 457 strategically can reduce overall tax burdens while preserving growth potential across other retirement vehicles. ### **Common misconceptions that limit potential** One of the biggest mistakes participants make is assuming the 457 is only for long-term retirement accumulation. Many deposit contributions and forget about it, never realizing that the account can be actively managed to support transitions and financial flexibility. Another misconception is that withdrawals, even though penalty-free, are inconsequential. Without coordination with taxable income and other retirement accounts, unplanned withdrawals can push someone into higher tax brackets and erode the efficiency of the account. Finally, participants often overlook how investment choices within the 457 interact with risk levels in other accounts. Thoughtful allocation can reduce overall portfolio volatility while preserving access to funds. ### **How a 457 plan complements a broader financial strategy** When considered strategically, the 457 does more than accumulate wealth. It shapes the way other accounts are used. For example, predictable contributions allow a participant to take calculated risks in a 403(b) or 401(a) for growth without threatening stability. It can also serve as an emergency bridge or an early access tool without the punitive costs other accounts carry. The plan’s structure rewards foresight and proactive thinking rather than set-and-forget habits. By approaching the 457 as a flexible tool rather than just a savings bucket, individuals can map contributions and withdrawals in a way that maximizes both control and long-term outcomes. This mindset transforms the account from a passive benefit into an active lever for career and retirement decisions. ### **How nVest Advisors helps participants harness a 457 plan** At [**nVest Advisors**](https://nvestadvisors.com/), we focus on uncovering the hidden possibilities of a 457 plan. Our work goes beyond basic reviews. We help participants identify opportunities to use the account for flexible retirement timing, integrate it with other accounts to maximize growth and tax efficiency, and align allocations with real-world scenarios that might include career changes, early retirement, or personal milestones. The goal is not to change the plan, but to make every contribution work smarter, to anticipate needs before they arise, and to ensure the plan functions as an active component of a larger financial strategy. With careful guidance, a 457 becomes a versatile tool that combines long-term growth with strategic flexibility, providing options that most retirement accounts cannot offer. The difference between a routine approach and an intentional strategy can be profound, shaping not just retirement outcomes but the freedom to make career and life decisions confidently. If confused for a direction a focused conversation can often bring clarity. You can [**connect with an expert**](https://nvestadvisors.setmore.com/) at nVest Advisors for a personalized review and explore what adjustments may better support your goals. # **401(a) Plan Guidance** A 401(a) plan is often misunderstood because it operates behind the scenes. Unlike other retirement accounts, it is usually employer-directed, with contributions and investment options set by the organization. Many participants see it as automatic, predictable, and low-effort but its true impact lies in how it interacts with every other component of your financial life. When approached thoughtfully, a 401(a) becomes more than a savings vehicle. It forms a baseline strategy, helping determine how much risk you can take elsewhere, how flexible your other accounts need to be, and even how early you could consider retirement. Ignoring it or leaving it unexamined may result in missed opportunities, subtle inefficiencies, and misalignment with personal goals. ### **Understanding the fixed structure of 401(a) plans** #### **Contributions: more than just numbers** Most 401(a) plans require predetermined contributions from the employer, and sometimes from the employee as well. The fixed nature of these contributions creates a predictable foundation, which is a powerful tool for long-term planning. Knowing exactly how much will be deposited each period allows for precise coordination with other accounts, but it also means flexibility is limited. Unlike a 403(b) or 457, you cannot easily redirect contributions to respond to life changes or market conditions. #### **Investment options: limited, but strategic** 401(a) investment menus are usually curated and concise. While this may seem restrictive, it forces focus on a select range of strategies. Understanding the composition and historical performance of these options is critical, because small differences in allocation can compound significantly over decades. The key is not necessarily chasing the “best” fund, but aligning the available options with your broader financial trajectory. #### **The ripple effect on other accounts** The predictable contributions of a 401(a) influence decisions in other accounts. For example, if a 401(a) provides stable growth with moderate risk, you may choose to take on higher risk in your 403(b) or 457 to optimize potential returns. Conversely, if the 401(a) is conservative or heavily weighted in fixed-income, this informs how aggressively you need to allocate other savings to meet your goals. The plan quietly defines the boundaries for your entire retirement strategy. ### **Common pitfalls people overlook** #### **Believing passivity equals insignificance** Because the 401(a) is automatic, it is easy to assume it does not require attention. In reality, its structure shapes what is possible elsewhere. Ignoring it can create gaps, over- or underexposure to certain risk levels, and unintentional inefficiencies that only become apparent years later. #### **Failing to coordinate with life changes** Changes in income, career trajectory, or family circumstances can affect your broader financial picture. Without reviewing your plan periodically, it is easy to let a static allocation misalign with evolving needs, which can subtly undermine retirement outcomes. #### **Overlooking cost structures** Even within curated options, costs can vary. Small differences in expense ratios or administrative fees are magnified over decades. A plan that seems “good enough” at first glance can silently underperform if fees are left unexamined. ### **Leveraging the 401(a) effectively** The strength of a 401(a) lies in its stability, but to truly benefit, it must be viewed as part of an integrated strategy rather than a standalone account. This means: - Mapping its allocations against your other accounts to ensure balance - Considering how its predictability allows other accounts to take on complementary roles, such as flexibility or growth - Reviewing the investment menu to ensure it remains aligned with long-term objectives - Understanding how its contributions affect overall tax strategy and cash flow Approaching a 401(a) in this way turns a passive plan into a cornerstone of your retirement strategy. ### **How nVest Advisors can elevate your 401(a)** At nVest Advisors, we focus on uncovering the hidden value in 401(a) plans. Our goal is not to change what cannot be changed, but to maximize what is already working. We help participants: - Understand the long-term implications of their plan’s structure - Align 401(a) allocations with other accounts to create a coherent strategy - Identify subtle inefficiencies and optimize within the constraints - Integrate the plan into a broader roadmap for growth, risk management, and retirement timing The 401(a) may seem quiet, but when used intentionally, it becomes a powerful lever for retirement success. Our guidance ensures it works in harmony with your entire financial picture, allowing you to make deliberate, informed choices across all accounts. At [**nVest Advisors**](https://nvestadvisors.com/), we take a structured, detail oriented approach to understanding exactly where your 401(a) plan stands today and how it can work harder within your overall financial strategy. We look beyond the surface to uncover gaps, inefficiencies, and missed opportunities that often go unnoticed when a plan is left on autopilot, and align its structure with your broader goals to create a more cohesive and effective approach. We are currently offering a complimentary 401(a) plan review, designed as a focused, high value assessment rather than a generic overview. This review evaluates your plan’s structure, its impact on your wider financial picture, and provides clear, tailored insights you can act on immediately, giving you greater clarity, direction, and control over a plan that is often left unexamined for years. If you want to ensure your 401(a) is not just sitting in the background but actively contributing to your long term success, this is an opportunity worth taking. [**Book your free consultation**](https://nvestadvisors.setmore.com/) with nVest Advisors and take a more deliberate, informed step toward optimizing your retirement strategy. **Categories:** Uncategorized --- ### [Teacher Retirement System of Texas (TRS) Pension Strategy](https://nvestadvisors.com/teacher-retirement-system-of-texas-trs-pension-strategy/) **Published:** May 25, 2026 **Author:** Maryam Irfanmeer **Content:** # **Teacher Retirement System of Texas (TRS) Pension Strategy Making Your Retirement Work for You** **Understanding your pension is the first step toward leveraging it effectively.** For educators and public service professionals, the teacher retirement system of Texas provides a guaranteed lifetime benefit that can form the foundation of your retirement plan. Yet many participants treat it as a passive benefit, something that simply exists, without understanding how choices made today can dramatically influence long-term outcomes. A pension like Texas TRS is not just a safety net. How you integrate it with other retirement accounts, lifestyle choices, and career decisions determines its true value in your life. ### **Know the Core Mechanics of Teacher Retirement System of Texas** At its core, the teacher retirement system of Texas calculates benefits based on three factors: years of service, age at retirement, and final average salary. While this seems straightforward, subtle differences in timing and contribution levels can shift the lifetime value of your pension by hundreds of thousands of dollars. - **Years of service:** Every additional year of credited service can increase your benefit by a fixed percentage. Even partial years matter, especially if they push you past certain service milestones. - **Age at retirement:** Many TRS plans use a formula where benefits increase with later retirement, reflecting both additional contributions and delayed payout. Understanding the exact breakpoints for maximum value is critical. - **Final average salary:** Pensions are typically calculated based on an average of your highest earning years. Decisions about when to pursue promotions, take on extra duties, or defer compensation can influence this figure. Small, informed adjustments in these variables can substantially enhance your TRS benefit over the long term. **Timing Your Retirement Strategically in the Teacher Retirement System of Texas** One of the most underappreciated elements of planning under the Teacher Retirement System of Texas is retirement timing. While the temptation is to retire as soon as eligibility is reached, delaying even a few years can yield significant increases in lifetime income. **Maximizing accruals in the Teacher Retirement System of Texas** Some plans within the Teacher Retirement System of Texas reward later retirement with incremental percentage increases, often referred to as delayed retirement credits. Understanding the schedule of these credits allows you to make more informed career and financial decisions that directly impact lifetime benefits. **Coordination with Social Security and other accounts in the** - For educators participating in the Teacher Retirement System of Texas, Social Security benefits may be affected depending on employment history. Aligning your TRS timing with Social Security and other retirement assets helps create a smoother income transition and reduces the risk of gaps in retirement cash flow. **Health and lifestyle considerations in the Teacher Retirement System of Texas** While financial optimization within the Teacher Retirement System of Texas is important, personal health, family priorities, and desired lifestyle must also guide decision-making. A strategy that maximizes pension value may not always align with overall life goals and well-being. The key is treating retirement timing as a strategic decision rather than an administrative milestone. ### **Understanding Survivor and Spousal Options in the Teacher Retirement System of Texas (TRS)** TRS pensions often include survivor benefits or options to provide income for a spouse after your death. These choices directly affect both the size of your benefit and the financial security of your loved ones. - **Full survivor benefit:** Guarantees continued payments for your spouse but typically reduces your monthly payout during your lifetime. - **Partial survivor benefit:** Provides a compromise, offering some protection without dramatically reducing your own income. - **No survivor benefit:** Maximizes your monthly pension but leaves your spouse without this source of guaranteed income. Choosing the right option requires balancing your current income needs, your spouse’s potential reliance on TRS, and other assets. Many participants overlook these trade-offs, leaving either value on the table or exposure for their family. ### **Combining the Teacher Retirement System (TRS) With Other Retirement Assets** Even though pensions provide guaranteed income, they are rarely sufficient to cover all retirement needs. Effective TRS strategy integrates your pension with other accounts such as 403(b)s, IRAs, and taxable investments without creating unnecessary risk or duplication. - **Backfill with tax-deferred accounts:** 403(b)s or 457 plans complement TRS by offering flexibility and liquidity. Timing withdrawals from these accounts versus your pension can optimize tax efficiency. - **Roth conversions:** Converting taxable accounts to Roth IRAs before retirement can reduce tax drag and create a more flexible income stream when paired with your TRS payout. - **Investment allocation:** While TRS itself is guaranteed, your supplemental accounts require careful risk management. As your retirement horizon shortens, reallocating toward preservation while maintaining growth potential becomes increasingly important. The goal is to create a coordinated plan where guaranteed and non-guaranteed assets work together to maximize retirement security. ### **Planning for Inflation and Cost-of-Living Adjustments** TRS pensions often include cost-of-living adjustments, but they may be limited or conditional. Inflation can erode the real value of your pension over decades. - **Understanding your plan’s COLA formula:** Know how adjustments are calculated, how frequently they are applied, and whether there is a cap. - **Supplementing income for inflation:** Investment accounts and other sources can be positioned to grow faster than inflation, offsetting potential gaps. - **Long-term projections:** Running scenarios of income versus projected expenses helps anticipate when adjustments or supplemental withdrawals may be necessary. A pension is strong in nominal terms, but without proactive planning, purchasing power can diminish over time. ### **Behavioral Insights That Influence Outcomes** Many TRS participants make choices based on inertia rather than strategy. Common pitfalls include: - **Assuming automatic security:** Believing the pension alone is sufficient often leads to neglecting other financial accounts or delaying supplemental savings. - **Underestimating the impact of early retirement:** Even small adjustments to timing can create material differences over a 30-year retirement horizon. - **Ignoring spousal and survivor decisions:** Emotional or default choices here can reduce total household security. By intentionally reviewing these decisions regularly, you avoid the set-and-forget trap that diminishes long-term outcomes. #### **How nVest Advisors Can Support Your TRS Strategy** Maximizing a TRS pension is not just about understanding formulas. It is about **integrating your pension into a holistic financial plan**. At nVest Advisors, we help participants: - Analyze your TRS benefit to uncover opportunities for increased lifetime value. - Coordinate pension income with other accounts, tax strategies, and Social Security planning. - Assess survivor and spousal options to align with your family’s long-term security. - Create actionable, personalized strategies to mitigate inflation risk and optimize withdrawals. We’ve been working with Texas educators since 2008 and we know the TRS system. Our goal is not to complicate your retirement, but give you clarity, confidence, and actionable steps so that your TRS pension works as efficiently as possible for the life you want to build. If you want to see how these decisions come together in real scenarios, our [**teacher retirement webinar**](https://www.loom.com/share/da8cb3c4ed114ea3a325ec40f7cb2053?sid=f2a21c3d-3639-4ec4-b8de-d0ce1d681c4d) walks through TRS timing, income coordination, and common pitfalls in more depth. You can also explore how [**403(b)**](https://nvestadvisors.com/wp-admin/post.php?post=11349&action=edit) and [**457 plans**](https://nvestadvisors.com/wp-admin/post.php?post=11355&action=edit) fit alongside your pension to create flexibility and tax efficiency across retirement. When you’re ready to look at your own situation more closely, you can [**schedule a complimentary consultation** ](https://nvestadvisors.setmore.com/)with nVest Advisors to map out a strategy tailored to your goals. **Categories:** Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Investing General, Investment, Mailchimp, Plan Participants, public, Retirement, Texas Teachers Retirement --- ### [457 Plan Guidance](https://nvestadvisors.com/457-plan-guidance/) **Published:** May 25, 2026 **Author:** Maryam Irfanmeer **Content:** # **457 Plan Guidance** A 457 plan is one of the rare retirement tools that combines disciplined saving with unusual flexibility. It is often offered to government employees, nonprofit staff, and specialized sectors, but unlike typical retirement accounts, its value is revealed when you understand not just the contribution rules, but the strategic ways it can be used throughout a career. Many participants treat it like a routine deposit account, but those who explore its full potential find it can create options for transitions, early retirement, and unexpected life changes that other accounts cannot match. Unlike plans that penalize withdrawals before age sixty, a 457 allows access without early withdrawal penalties. This is not a minor convenience. It changes the way you can think about timing income, bridging employment gaps, or shifting careers without jeopardizing retirement readiness. Most people do not realize how powerful this can be if combined with careful planning across other accounts. ### **The strategic advantage of timing** The real strength of a 457 is its ability to give participants choices that extend beyond typical retirement scenarios. Imagine a professional approaching retirement who wants to reduce work hours gradually or take a sabbatical. Contributions in a 457 can be used to create a bridge period without penalty, allowing access to funds while deferring Social Security or other taxable income. This is an advantage few understand, and even fewer take full advantage of. Timing matters because using a 457 strategically can reduce overall tax burdens while preserving growth potential across other retirement vehicles. ### **Common misconceptions that limit potential** One of the biggest mistakes participants make is assuming the 457 is only for long-term retirement accumulation. Many deposit contributions and forget about it, never realizing that the account can be actively managed to support transitions and financial flexibility. Another misconception is that withdrawals, even though penalty-free, are inconsequential. Without coordination with taxable income and other retirement accounts, unplanned withdrawals can push someone into higher tax brackets and erode the efficiency of the account. Finally, participants often overlook how investment choices within the 457 interact with risk levels in other accounts. Thoughtful allocation can reduce overall portfolio volatility while preserving access to funds. ### **How a 457 plan complements a broader financial strategy** When considered strategically, the 457 does more than accumulate wealth. It shapes the way other accounts are used. For example, predictable contributions allow a participant to take calculated risks in a 403(b) or 401(a) for growth without threatening stability. It can also serve as an emergency bridge or an early access tool without the punitive costs other accounts carry. The plan’s structure rewards foresight and proactive thinking rather than set-and-forget habits. By approaching the 457 as a flexible tool rather than just a savings bucket, individuals can map contributions and withdrawals in a way that maximizes both control and long-term outcomes. This mindset transforms the account from a passive benefit into an active lever for career and retirement decisions. ### **How nVest Advisors helps participants harness a 457 plan** At [**nVest Advisors**](https://nvestadvisors.com/), we focus on uncovering the hidden possibilities of a 457 plan. Our work goes beyond basic reviews. We help participants identify opportunities to use the account for flexible retirement timing, integrate it with other accounts to maximize growth and tax efficiency, and align allocations with real-world scenarios that might include career changes, early retirement, or personal milestones. The goal is not to change the plan, but to make every contribution work smarter, to anticipate needs before they arise, and to ensure the plan functions as an active component of a larger financial strategy. With careful guidance, a 457 becomes a versatile tool that combines long-term growth with strategic flexibility, providing options that most retirement accounts cannot offer. The difference between a routine approach and an intentional strategy can be profound, shaping not just retirement outcomes but the freedom to make career and life decisions confidently. If confused for a direction a focused conversation can often bring clarity. You can [**connect with an expert**](https://nvestadvisors.setmore.com/) at nVest Advisors for a personalized review and explore what adjustments may better support your goals. **Categories:** 401K, Behavioral Finance, Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Financial Planning, Individuals and Families, Investing General, Investment, LifeCycle, Mailchimp, Plan Participants, public, Retirement, Small Business, Taxes, Texas Teachers Retirement --- ### [SIMPLE IRA and SEP IRA Strategy](https://nvestadvisors.com/simple-ira-and-sep-ira-strategy/) **Published:** May 25, 2026 **Author:** Maryam Irfanmeer **Content:** ## **SIMPLE IRA and SEP IRA Strategy** **Understanding where SIMPLE IRA and SEP IRA fit, where they fall short, and how they integrate into a broader retirement framework** SIMPLE IRA and SEP IRA plans are often introduced as straightforward retirement solutions for small businesses and self employed individuals. What is less frequently discussed is how these plans behave over time, how their structural limitations influence long term outcomes, and how they interact with other retirement vehicles as income, business complexity, and financial goals evolve. At a surface level, both plans provide tax advantaged growth and relatively simple administration. At a strategic level, they represent very different philosophies of retirement planning, particularly in how contributions are controlled, how flexibility is maintained, and how scalable the plan remains as circumstances change. ### **Structural Differences That Matter Over Time** The most meaningful distinction between a SIMPLE IRA and a SEP IRA is not eligibility or contribution limits alone, but how control is distributed between employer and employee. A SIMPLE IRA introduces a shared contribution framework where employees defer income and employers are required to match or contribute. This creates consistency, but also introduces rigidity. Once established, contribution obligations remain regardless of profitability, which can become a constraint during variable business cycles. A SEP IRA, by contrast, centralizes all contribution control with the employer. This allows for discretion year to year, making it highly adaptable for businesses with fluctuating income. However, that flexibility comes with trade offs, particularly when employees are involved, as contributions must be applied uniformly across eligible participants. Over time, these structural differences influence not just contributions, but hiring decisions, compensation strategies, and overall plan sustainability. ### **Contribution Dynamics and Their Strategic Implications** Contribution limits are often compared in isolation, but the real impact lies in how those limits interact with income growth and business structure. A SIMPLE IRA caps employee deferrals at a relatively modest level, which can become restrictive for higher earners seeking to accelerate retirement savings. While employer contributions provide a baseline, they do not scale meaningfully with rising income in the same way more advanced plans do. A SEP IRA allows for significantly higher contributions, calculated as a percentage of compensation. This creates an advantage for high income individuals or business owners looking to maximize tax deferred savings. However, when employees are present, this same structure requires equal percentage contributions for all eligible participants, which can rapidly increase total plan cost. As income rises, both plans begin to reveal limitations that are not immediately apparent in the early stages. ### **Interaction with Other Retirement Plans** Neither SIMPLE IRA nor SEP IRA should be viewed in isolation. Their value is defined by how they integrate with other retirement accounts and overall tax strategy. A SIMPLE IRA restricts the ability to contribute to certain other employer sponsored plans simultaneously. This limits flexibility in layering strategies and can prevent individuals from accessing higher contribution thresholds available in more advanced structures. A SEP IRA does not allow employee deferrals, which means individuals often need to supplement it with additional retirement accounts such as traditional or Roth IRAs. While this creates some diversification, it does not fully replicate the flexibility or contribution capacity of plans that combine employer and employee contributions. As financial complexity increases, the inability to coordinate seamlessly with other plans becomes a meaningful constraint. ### **Investment Structure and Long Term Efficiency for SEP IRA and SIMPLE IRA** Both SIMPLE IRA and SEP IRA plans typically rely on custodial platforms that offer a broad range of investment options. While this may appear advantageous, the absence of centralized oversight can lead to fragmented decision making. Participants often build portfolios based on convenience or familiarity rather than strategy. Over time, this can result in overlapping exposures, inconsistent risk levels, and missed opportunities for optimization. Unlike more structured plans, there is often no built in mechanism for periodic review, benchmarking, or reallocation. This places the responsibility entirely on the individual or advisor, making ongoing oversight essential for maintaining efficiency. ### **When These Plans Begin to Break Down** SIMPLE IRA and SEP IRA plans are highly effective within a specific range of circumstances. Outside of that range, their limitations become increasingly pronounced. For SIMPLE IRA, the primary constraint emerges as income grows and contribution limits become insufficient relative to savings goals. The lack of scalability and limited integration with other plans can restrict long term strategy. For SEP IRA, the challenge arises when a business expands and hires employees. The requirement to contribute equally across participants can significantly increase costs, making the plan less viable compared to alternatives that allow more targeted contributions. In both cases, what begins as a simple solution can evolve into a limiting factor if not revisited as circumstances change. ### **Transition Points and Strategic Evolution** One of the most overlooked aspects of retirement planning is recognizing when a plan has outlived its usefulness. As businesses grow or individual income increases, transitioning from a SIMPLE IRA or SEP IRA to a more flexible structure such as a 401k or SIMPLE 401k can unlock additional contribution capacity, improved tax strategies, and greater control over plan design. The timing of this transition is critical. Moving too early may introduce unnecessary complexity, while moving too late can result in years of missed opportunity. Understanding these inflection points requires a forward looking approach rather than a reactive one. ### **Integrating SIMPLE IRA and SEP IRA into a Broader Strategy** The true value of these plans lies not in their standalone features, but in how they contribute to an integrated financial strategy. This includes aligning contributions with cash flow, coordinating tax planning across multiple accounts, managing investment risk holistically, and ensuring that retirement savings evolve alongside personal and business growth. When viewed through this lens, SIMPLE IRA and SEP IRA become components of a larger system rather than isolated tools. The challenge is not just understanding these plans, but knowing whether they are still aligned with your current financial direction. At **[nVest Advisors](https://nvestadvisors.com/)**, we help individuals and business owners look beyond the surface of their retirement plans and understand how each component is actually performing within their broader financial strategy. Our review process focuses on identifying structural inefficiencies, contribution constraints, tax implications, and missed opportunities that typically go unnoticed during day to day management. We are currently offering a complimentary retirement plan review where we assess your SIMPLE IRA, SEP IRA, or other retirement accounts in the context of your full financial picture. The goal is to give you clarity on whether your current structure is still optimal or whether adjustments may better support your long term goals. If you want a clearer understanding of how your retirement plan is really working for you, book your [**complimentary consultation with nVest Advisors**](https://nvestadvisors.setmore.com/) and take a more informed step toward optimizing your financial future. **Categories:** 401K, Behavioral Finance, Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Financial Planning, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Retirement, Small Business, Texas Teachers Retirement --- ### [403(b) Plan Guidance](https://nvestadvisors.com/403b-plan-guidance/) **Published:** May 25, 2026 **Author:** Maryam Irfanmeer **Content:** # **403(b) Plan Guidance** ##### A plan that looks simple on the surface, but quietly shapes outcomes through decisions most people never revisit A 403(b) plan is often introduced as a retirement savings plan for professionals in education, healthcare, and nonprofit organizations, where contributions are made consistently and grow over time on a tax-deferred basis. At a glance, it feels straightforward, which is why most people approach it with a set-and-forget mindset. Contributions happen automatically, balances grow gradually, and over time it creates a sense that the system is working simply because it is functioning without interruption. What is less visible is that many 403(b) plans were not built with continuous optimization in mind, and as a result, they tend to preserve outdated structures far longer than other types of retirement accounts. The consequence is subtle but significant. In a 403(b) plan, outcomes are not driven by participation alone. They are shaped by the internal design of the plan itself, including the cost structure, the quality of available funds, and how frequently those options are reviewed or replaced. Two individuals contributing the same amount over the same period can end up with materially different results depending on what their contributions are actually exposed to within the plan. The concept of “menu illusion” is another nuance. A 403(b) plan may appear to offer a wide range of investment options, but a lot of them are variations of the same underlying exposure or are constrained by provider relationships that limit true diversification. Participants may believe they are making distinct allocation choices, while in practice they are operating within a narrower framework than assumed. Over time, this can lead to portfolios that are less resilient to changing market conditions, not because of poor decision making, but because of structural limitations within the plan itself. ## **Where most people unknowingly lose ground** **Investment choices are narrower than they appear** Many 403(b) plans give the impression of variety, yet actual flexibility is often limited by the provider’s structure. This shapes how easily participants can adjust risk, refine allocations, or respond to changes in their financial life over time. **Costs are built into the structure, not clearly shown** In a number of plans, especially older ones, fees are layered within the investment products themselves rather than presented clearly. While they may seem negligible in a single year, their impact compounds over time, reducing the efficiency of long-term growth. **Default settings stay in place for too long** Initial allocations are often based on broad assumptions rather than an individual’s specific situation. As income, goals, and timelines change, the allocation may remain unchanged, creating a gradual misalignment between the plan and the participant’s reality. ### **What starts to matter as your balance grows in a 403(b) plan** In the early years, small differences feel minor. Over time, they compound quietly, influencing the final outcome far more than most people expect. Slightly higher costs, a misaligned allocation, or limited investment options may not stand out in any single year, but over a decade or more, these factors become significant. This is where the 403(b) shifts from being a routine savings plan to something that benefits from a deliberate review. Within a 403(b) plan environment, certain behavioral patterns often emerge. Because these plans are common in professions that value stability and long-term commitment, participants tend to avoid revisiting investment decisions once they have been made. This is not due to neglect, but a form of implicit trust in the system. The unintended consequence is that allocations remain static even as the individual’s financial life evolves, leading to gradual misalignment that is difficult to detect without an intentional review. Perhaps the most underappreciated aspect of a 403(b) plan is not what it offers, but what it restricts. Unlike more flexible investment accounts, the boundaries of a 403(b) plan are defined by the plan provider, which means improvement must happen within a fixed ecosystem. Individuals who achieve stronger outcomes are not simply those who contribute more, but those who develop a clear understanding of how to work within these constraints to minimize friction and maximize efficiency over time. ### **How nVest Advisors Can Help** Understanding the nuances of a 403(b) is one thing; knowing how to navigate them effectively is another. That’s where nVest Advisors steps in. We work with professionals to review their plan structure, uncover hidden inefficiencies, and identify opportunities to optimize allocations and reduce costs—without disrupting the contributions you’re already making. Our approach isn’t about pushing you into risky strategies or unnecessary changes. It’s about helping you see your 403(b)plan with fresh eyes, understand the constraints, and make deliberate decisions that align with your long-term goals. With our guidance, small adjustments today can have a meaningful impact on your retirement outcome decades from now. A 403(b) plan rarely feels urgent to review because it continues to function in the background without interruption. But consistency is not the same as efficiency, and over time, that gap becomes the difference between a plan that simply runs and a plan that performs. At nVest Advisors, we help you understand what your 403(b) is actually doing beneath the surface. We assess how your investment structure, cost layers, and default decisions interact with your long term objectives, and where those elements may no longer reflect your current financial reality. If you want a clearer view of what your 403(b) is really contributing to your future, [**book a complimentary consultation**](https://nvestadvisors.setmore.com/) with [**nVest Advisors**](https://nvestadvisors.com/) and take a more informed look at your retirement position. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Financial Planning, Individuals and Families, Mailchimp, Plan Participants, public, Texas Teachers Retirement --- ### [401(a) Plan Guidance](https://nvestadvisors.com/401a-plan-guidance/) **Published:** May 25, 2026 **Author:** Maryam Irfanmeer **Content:** # **401(a) Plan Guidance** A 401(a) plan is often misunderstood because it operates behind the scenes. Unlike other retirement accounts, it is usually employer-directed, with contributions and investment options set by the organization. Many participants see it as automatic, predictable, and low-effort but its true impact lies in how it interacts with every other component of your financial life. When approached thoughtfully, a 401(a) becomes more than a savings vehicle. It forms a baseline strategy, helping determine how much risk you can take elsewhere, how flexible your other accounts need to be, and even how early you could consider retirement. Ignoring it or leaving it unexamined may result in missed opportunities, subtle inefficiencies, and misalignment with personal goals. ## **Understanding the fixed structure of 401(a) plans** #### **Contributions: more than just numbers** Most 401(a) plans require predetermined contributions from the employer, and sometimes from the employee as well. The fixed nature of these contributions creates a predictable foundation, which is a powerful tool for long-term planning. Knowing exactly how much will be deposited each period allows for precise coordination with other accounts, but it also means flexibility is limited. Unlike a 403(b) or 457, you cannot easily redirect contributions to respond to life changes or market conditions. #### **Investment options: limited, but strategic** 401(a) investment menus are usually curated and concise. While this may seem restrictive, it forces focus on a select range of strategies. Understanding the composition and historical performance of these options is critical, because small differences in allocation can compound significantly over decades. The key is not necessarily chasing the “best” fund, but aligning the available options with your broader financial trajectory. #### **The ripple effect on other accounts** The predictable contributions of a 401(a) influence decisions in other accounts. For example, if a 401(a) provides stable growth with moderate risk, you may choose to take on higher risk in your 403(b) or 457 to optimize potential returns. Conversely, if the 401(a) is conservative or heavily weighted in fixed-income, this informs how aggressively you need to allocate other savings to meet your goals. The plan quietly defines the boundaries for your entire retirement strategy. ## **Common pitfalls people overlook** #### **Believing passivity equals insignificance** Because the 401(a) is automatic, it is easy to assume it does not require attention. In reality, its structure shapes what is possible elsewhere. Ignoring it can create gaps, over- or underexposure to certain risk levels, and unintentional inefficiencies that only become apparent years later. #### **Failing to coordinate with life changes** Changes in income, career trajectory, or family circumstances can affect your broader financial picture. Without reviewing your plan periodically, it is easy to let a static allocation misalign with evolving needs, which can subtly undermine retirement outcomes. #### **Overlooking cost structures** Even within curated options, costs can vary. Small differences in expense ratios or administrative fees are magnified over decades. A plan that seems “good enough” at first glance can silently underperform if fees are left unexamined. ### **Leveraging the 401(a) effectively** The strength of a 401(a) lies in its stability, but to truly benefit, it must be viewed as part of an integrated strategy rather than a standalone account. This means: - Mapping its allocations against your other accounts to ensure balance - Considering how its predictability allows other accounts to take on complementary roles, such as flexibility or growth - Reviewing the investment menu to ensure it remains aligned with long-term objectives - Understanding how its contributions affect overall tax strategy and cash flow Approaching a 401(a) in this way turns a passive plan into a cornerstone of your retirement strategy. ## **How nVest Advisors can elevate your 401(a)** At nVest Advisors, we focus on uncovering the hidden value in 401(a) plans. Our goal is not to change what cannot be changed, but to maximize what is already working. We help participants: - Understand the long-term implications of their plan’s structure - Align 401(a) allocations with other accounts to create a coherent strategy - Identify subtle inefficiencies and optimize within the constraints - Integrate the plan into a broader roadmap for growth, risk management, and retirement timing The 401(a) may seem quiet, but when used intentionally, it becomes a powerful lever for retirement success. Our guidance ensures it works in harmony with your entire financial picture, allowing you to make deliberate, informed choices across all accounts. At [**nVest Advisors**](https://nvestadvisors.com/), we take a structured, detail oriented approach to understanding exactly where your 401(a) plan stands today and how it can work harder within your overall financial strategy. We look beyond the surface to uncover gaps, inefficiencies, and missed opportunities that often go unnoticed when a plan is left on autopilot, and align its structure with your broader goals to create a more cohesive and effective approach. We are currently offering a complimentary 401(a) plan review, designed as a focused, high value assessment rather than a generic overview. This review evaluates your plan’s structure, its impact on your wider financial picture, and provides clear, tailored insights you can act on immediately, giving you greater clarity, direction, and control over a plan that is often left unexamined for years. If you want to ensure your 401(a) is not just sitting in the background but actively contributing to your long term success, this is an opportunity worth taking. [**Book your free consultation**](https://nvestadvisors.setmore.com/) with nVest Advisors and take a more deliberate, informed step toward optimizing your retirement strategy. **Categories:** Uncategorized --- ### [When Job Security Feels Fragile With The Recent Layoffs](https://nvestadvisors.com/when-job-security-feels-fragile-with-the-recent-layoffs/) **Published:** May 4, 2026 **Author:** Maryam Irfanmeer **Content:** # **![job security](https://nvestadvisors.com/wp-content/uploads/2026/05/pexels-rsapmech-11594533-e1777894322593.jpg "Pexels rsapmech 11594533 nvest advisors")When Job Security Feels Fragile With The Recent Layoffs** There’s a certain quiet fear regarding job security that has been building across the global workforce lately. It doesn’t always show up loudly but you see it in late-night scrolling, in conversations between colleagues, in the hesitation before making a big financial decision. For years, working at a large, established company meant something. It meant stability. Predictability. A sense that if you stayed consistent, your future would take care of itself. But recent developments are challenging that belief. News of massive layoffs at Oracle—with reports suggesting tens of thousands of employees affected—has sent ripples far beyond the tech industry. Whether you work in IT, healthcare, finance, or education, the underlying message feels the same: no role is entirely immune anymore. And that realization changes how people think, plan, and live. ## **The Human Side of Layoffs** When we talk about layoffs, numbers often take center stage—30,000 jobs, 18% of a workforce, global restructuring. But behind every number is a person with responsibilities, plans, and expectations. It’s someone who just took out a mortgage, someone funding their child’s education, someone who thought they had “finally made it.” From a professional advisory standpoint, I’ve seen this pattern repeatedly. The emotional impact of sudden job loss isn’t just about income—it’s about identity, control, and uncertainty. And what makes situations like this more unsettling is the lack of warning. Traditionally, layoffs followed signals—declining performance, restructuring announcements, industry downturns. Today, decisions can feel abrupt, driven by broader corporate strategies, automation, or shifts in global priorities. ### **What Happened—and Why It Matters** While the full details around the reported layoffs at Oracle are still unfolding, one thing is clear: large organizations are continuing to optimize aggressively. This isn’t unique to one company. Across the tech sector, we’ve seen workforce reductions to improve margins, increased reliance on automation and AI, strategic realignments toward cloud and high-growth segments, and cost-cutting in areas deemed “non-essential.” From a business perspective, these moves are often rational. From an employee’s perspective, they feel deeply personal. And that gap—between corporate logic and human reality—is where anxiety grows. ### **The Ripple Effect Beyond Tech** Even if you’re not in tech, events like this matter. Because large companies often set the tone for broader workforce trends. When a major player restructures at scale, it signals a shift in how organizations think about cost, efficiency, and talent. It subtly changes employer behavior: hiring becomes more cautious, contract roles increase, benefits may become less generous, and job security becomes less predictable. As someone advising clients across different industries, I’ve noticed a clear shift: people are no longer asking “How do I grow my career?” They’re asking “How do I protect myself if something goes wrong?” That’s a very different mindset. ### **The Psychological Impact of Job Security: Fear and Decision Paralysis** One of the most underestimated effects of news like this is what it does to decision-making. Fear has a way of freezing people. You delay investing, you postpone big life plans, you hold onto cash without a clear strategy. Ironically, in trying to feel “safe,” many people end up making decisions that hurt them long-term. From experience, I can tell you: uncertainty doesn’t go away by waiting. It becomes manageable only when you have a structured plan. ### **What Job Security Means for Your Financial Life** Moments like these are not just about reacting, they’re about reassessing. At **[nVest Advisors](https://nvestadvisors.com/)**, the focus isn’t just on numbers or portfolios. It’s on helping individuals build resilience into their financial lives, not in a way that creates fear but in a way that creates clarity. Because when markets shift, industries evolve, or unexpected events happen, the goal isn’t to predict everything perfectly. The goal is to be prepared enough that no single event can derail your entire financial path. That includes structuring emergency buffers realistically—not theoretically, diversifying income and investment exposure, aligning financial decisions with real-life uncertainties, and creating long-term strategies that don’t rely on “perfect conditions.” What I’ve consistently observed is this: people who plan intentionally don’t avoid challenges—but they navigate them very differently. ### **A More Grounded Way Forward** The reality is, headlines like these will continue. Companies will evolve. Markets will shift. Roles will change. But your financial stability doesn’t have to move in the same unpredictable way. The professionals who come out stronger from uncertain periods aren’t necessarily the highest earners—they’re the ones who took the time to structure their financial lives with intention. So instead of letting news like this create fear, use it as a moment of clarity. Understanding the shift is one thing. Knowing how to respond to it is another. In our recent job market webinar, we explore how the hiring landscape is changing, what employers are actually looking for, and how to navigate uncertainty with more clarity.[ **Click here to access!**](https://www.loom.com/share/1c7dab1eee1e44f49cab78be0d73f7bf) **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, Politics, Press Releases, public, Retirement, Small Business, Texas Teachers Retirement, Webinars --- ### [nVest Advisors Recognized as “Best of 2026” Among Financial Advisors in Colorado](https://nvestadvisors.com/nvest-advisors-recognized-as-best-of-2026-among-financial-advisors-in-colorado/) **Published:** April 25, 2026 **Author:** Maryam Irfanmeer **Content:** # **nVest Advisors Recognized as “Best of 2026” Among Financial Advisors in Colorado** We are pleased to share that nVest Advisors, LLC has been recognized as a **“Best of 2026” Financial Advisors in Colorado Springs** by [BusinessRate.](https://businessrate.com/report/13287982?geocatSerial=1487221300&scoreType=br) For those evaluating financial advisors in Colorado, this recognition is based on aggregated public review data and reflects client feedback and engagement over time. While awards are never the goal, they can serve as a useful signal of consistency and client experience. ![Financial Advisors in Colorado](https://nvestadvisors.com/wp-content/uploads/2026/03/nVA-Best-Of-Award-crystal-BR559412-2026-680x1024.png "Nva best of award crystal br559412 2026 nvest advisors") At nVest Advisors, our work centers around helping individuals, families, and business owners navigate financial decisions with clarity and confidence. Whether it involves planning, investment guidance, or evaluating complex financial situations, our approach is rooted in thoughtful analysis and long-term alignment. ### **Understanding Recognition When Comparing Financial Advisors in Colorado** It is important to note that recognitions such as this are based on third-party methodologies and publicly available data. As with any award or ranking, they should be considered as one of many factors when evaluating a financial advisory firm. For those interested in reviewing the details behind this recognition, the full report is available here: [https://businessrate.com/report/13287982?geocatSerial=1487221300&scoreType=br](https://businessrate.com/report/13287982?geocatSerial=1487221300&scoreType=br) We remain focused on the work itself—continuing to support our clients with care, discipline, and a long-term perspective. Beyond recognition, moments like this are an opportunity to reflect on what truly drives meaningful financial outcomes. In our experience, it is not one-time decisions or short-term strategies that make the difference, but consistent oversight, disciplined planning, and the willingness to revisit decisions as circumstances evolve. Financial planning is not static, and neither are the needs of the people and businesses we serve. As we move forward, our commitment remains unchanged. We will continue to focus on thoughtful guidance, transparent conversations, and helping our clients make decisions that stand the test of time. Recognition is appreciated, but the real measure of our work will always be the confidence and clarity our clients gain along the way. If you’re looking to move beyond surface-level decisions and build a more intentional financial strategy, the next step is understanding how each piece fits together. From **[how your investments are managed](https://nvestadvisors.com/wp-admin/post.php?post=9934&action=edit)**, to [**how your financial plan is structured**](https://nvestadvisors.com/wp-admin/post.php?post=10008&action=edit), to what it truly means to work with an advisor who prioritizes your long-term outcomes, each element plays a role in shaping your results. If you’re ready to see how this applies to your own situation, [**schedule a complimentary consultation with our team.**](https://nvestadvisors.setmore.com/) It’s a straightforward conversation focused on where you are today, what may be working, and where there may be opportunities to move forward with greater clarity and confidence. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Company News, Cryptocurrency, Debt, Early nVestors, Early nVestors, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Media, Podcasts, Politics, Press Releases, public, Retirement, Small Business, Taxes, Texas Teachers Retirement --- ### [401(k) Contribution Limits Explained: What Changed for 2025–2026](https://nvestadvisors.com/401k-contribution-limits-explained-what-changed-for-2025-2026/) **Published:** February 25, 2026 **Author:** Maryam Irfanmeer **Content:** # **401(k) Contribution Limits Explained: What Changed for 2025–2026** As tax season rolls around in the U.S., it’s a perfect time to revisit your retirement savings strategy. One of the most important pieces of that puzzle is your **401(k)** contribution limits and plan — one of the most powerful tools workers have to save for retirement. Each year, the IRS adjusts contribution limits to keep pace with inflation and help savers put away more on a tax-advantaged basis. Whether you’re trying to maximize your contributions before the tax deadline or planning for next year, here’s a clear and up-to-date breakdown of the 401(k) limits for **2025 and 2026**. ## **What Is a 401(k)?** A 401(k) is an employer-sponsored retirement savings plan that lets you defer a portion of your paycheck into a tax-advantaged account. You can make **traditional (pre-tax)** contributions, **Roth (after-tax) contributions**, or a mix of both (if your plan allows). - **Traditional contributions** reduce your taxable income today. - **Roth contributions** are made with after-tax dollars but grow tax-free and aren’t taxed when withdrawn in retirement under qualifying rules. There are also **catch-up contributions** for older savers to help boost savings as retirement nears. ## **401(k) Contribution Limits for 2025** For the tax year 2025: - The **employee elective deferral limit** — the amount you can contribute from your own salary — is **$23,500**. - If you’re **age 50 or older**, you can make an additional **catch-up contribution of $7,500**. - Individuals **ages 60–63** can make a higher “super catch-up” contribution of up to **$11,250** in place of the $7,500, if their plan allows. This means that a saver turning age 50 during 2025 could defer up to **$31,000** total of their salary into their 401(k) (base limit + catch-up), or up to **$34,750** if eligible for the higher age-60-to-63 catch-up. The limit applies **across all 401(k) plans combined**. So if you have more than one job with separate plans, you still can’t exceed this total. ## **401(k) Contribution Limits for 2026** For the tax year 2026, the IRS increased several key 401(k) limits: - The **employee contribution limit** rises to **$24,500** — up $1,000 from 2025. - The **standard catch-up amount** for individuals **age 50 and older** increases to **$8,000**. - The **higher catch-up limit** for people **ages 60–63** remains **$11,250** (plan dependent). So in 2026: - Someone under age 50 can defer up to **$24,500** of their salary. - A saver age 50 or older could contribute up to **$32,500** total (standard catch-up). - Individuals age 60–63 who qualify for the super catch-up could defer up to **$35,750** or more (if their plan supports the higher limit). These figures include **both traditional and Roth employee contributions combined**. ## **Mandatory Roth Catch-Up for Higher Earners (2026 Rule Change)** A significant rule under the **SECURE 2.0 Act** affects how catch-up contributions are treated: - **Starting in 2026**, if your **prior year wages** from your employer exceed a specified threshold (indexed around $150,000), **your catch-up contribution must be designated as Roth (after-tax)** rather than pre-tax. - This means you’ll pay tax on catch-up dollars now but enjoy tax-free growth and withdrawals later. If your plan doesn’t offer a Roth option, you may not be able to make catch-up contributions at all under this rule. Regular elective deferrals (the base limits) can still be traditional or Roth, regardless of income. ## **Combined Contribution Limits with Employer Match** In addition to what *you* can contribute, your employer may also contribute via matching or profit-sharing. The IRS sets an **aggregate limit** on total annual additions from all sources: - For 2025, the combined employee + employer limit was **$70,000**. - For 2026, it increases to **$72,000** (not counting age catch-up amounts). Catch-up contributions for age 50+ typically do **not** count against this total limitation, meaning more room for tax-advantaged savings if you qualify. ## **Need Help Maximizing Your 401(k) Contributions?** Retirement planning can feel overwhelming, especially with rules that change every year. If you’re unsure how much you should contribute to your 401(k), whether you’re taking full advantage of catch-up provisions, or how these limits interact with your overall tax situation,[ **we’re here to help**](https://nvestadvisors.setmore.com/). **[Our team](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/)** specializes in retirement strategies that align with your income, goals, and tax picture — without the confusion. Reach out for personalized support this tax season and make sure you’re saving smart for 2025, 2026, and beyond. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Economy, Financial Planning, From our CEO, Individuals and Families, Insurance, Mailchimp, Plan Participants, public, Retirement, Small Business, Taxes --- ### [Why “side hustles from home” matter right now](https://nvestadvisors.com/why-side-hustles-from-home-matter-right-now/) **Published:** February 11, 2026 **Author:** Maryam Irfanmeer **Content:** # ![side hustles from home](https://nvestadvisors.com/wp-content/uploads/2026/01/pexels-artempodrez-8989328-e1770850448463.jpg "Pexels artempodrez 8989328 nvest advisors") Why “side hustles from home” matter right now In an era where change is constant, relying exclusively on one employer is becoming ever more uncertain. Amid automation, shifting business models, and global competition, many people are turning to side hustles from home not just to earn extra cash, but as a strategic path toward independence and resilience. Recent data underscore this shift. According to a survey by **[LendingTree](https://www.forbes.com/sites/carolinecastrillon/2025/03/19/why-nearly-1-in-3-employees-consider-quitting-for-a-side-hustle/)**, about **[40%](https://www.forbes.com/sites/carolinecastrillon/2025/03/19/why-nearly-1-in-3-employees-consider-quitting-for-a-side-hustle/)** of Americans currently have a side hustle, and among those, **61**% say their daily life would be unaffordable without it. At the same time, data from [**Bankrate** ](https://www.bankrate.com/f/102997/x/d43c881afb/side-hustle-survey-press-release_final.pdf)show about **3 in 10 side hustlers (29%)** think they will always need a side hustle to make ends meet, while **16%** want their side hustle to become their main source of income. What this means for you: developing meaningful **side hustles from home** now isn’t mere “hustle culture.” It’s part of a comprehensive approach to building financial optionality. This article guides you through a four-stage process: understanding potential risk in your job, contingency planning, selecting and activating specific home-based side hustles, and then embedding income resilience for the long term. ## **Stage 1: Scanning Your Job Environment and Workplace Signals Before Exploring Side Hustles From Home** Before diving into side hustles from home, the first smart move is to become attuned to what’s going on in your full-time job and the broader market. This isn’t about fear-mongering—it’s about clarity and proactive readiness. **Monitoring your company** Keep an eye on communications from leadership: Are there repeated emails referencing cost-controls, hiring freezes or “organizational redesign”? When companies begin widely promoting lateral moves, voluntary separation packages or job-sharing pilots, those are signs of evolving business priorities. You’ll want to observe: - Shifts in your team’s role or mission - Budget cuts: travel, training, new head-count - Leadership turnover or changes in reporting structure - Your personal performance feedback: Are expectations rising without support? Any pattern of signals suggests you should treat your main job as one pillar—not the only one. In that context, researching or preparing side hustles from home becomes a practical form. **Tracking industry- and macro-trends** Your employer is part of a larger ecosystem. Consider: - Hiring and layoff data: For example, Bankrate found only 27% of U.S. adults had side income in mid-2025—down from prior years. **[CNBC](https://www.cnbc.com/2025/07/22/fewer-americans-have-side-hustles-for-first-time-since-2017-bankrate.html?utm_source=chatgpt.com)** - Technology shifts: AI, automation and remote-work platforms are restructuring roles. If your core job is highly repetitive or historically low barrier, it may become more vulnerable. - Economic indicators: Business investment, consumer sentiment, new job applications—these often give advance warning of contraction. **Converting awareness into action** Awareness alone won’t protect you unless you act. Here’s what to do: - Maintain a career log: Make note once a month of key changes in your company, your role’s alignment, and your own performance feedback. This ongoing awareness helps you decide when preparing side hustles from home makes sense. - Revise your resume/portfolio quarterly—while things are calm, not when they’re urgent. - Identify which of your skills are transferable and thus also useful in side hustles from home (communication, project management, digital tools). - Build extra savings: Even one extra month of expenses placed aside gives you breathing space if change hits. It allows you to explore side hustles from home without financial pressure. By treating your full-time employment as one income stream within a broader plan, you gain flexibility and control. That mindset naturally sets the stage to build meaningful side hustles from home that fit your skills, schedule, and long-term goals. ## **Stage 2: Contingency Planning and Financial Safeguards While Building Side Hustles From Home** Having scanned your professional terrain, the next important piece is safeguarding your finances and your career continuity so that when change happens, you’re prepared. **Strengthening your financial base** - Emergency fund: Aim for 3–6 months of essential expenses. If you detect real risk in your workplace or industry, consider extending to 6–9 months. - Manage debt and reduce fixed obligations: The fewer heavy fixed costs you have, the more flexibility you’ll enjoy if you shift into side hustles from home. - Separate account tracking: For your side-hustle income and expenses, use a separate account or ledger. This clarity is helpful for tax, budgeting and scaling decisions. - Review benefits: If you lose your job, what happens to health insurance, retirement contributions, or stock-based compensation? Knowing ahead of time gives you time to adapt. **Career-continuity tactics** - Keep growing your network: Attend industry events, connect on LinkedIn, maintain relationships beyond your immediate team. - Dual readiness: Dedicate a few hours each week to developing side hustles from home while your main job continues—so you’re prepared and don’t have to scramble if a layoff occurs. - Know your employment terms: Check if your contract has non-compete clauses, IP assignments or moonlighting restrictions—especially relevant if your side hustle might touch your employer’s business. ### Income transition scenarios Think through three broad scenarios and your responses: - **Scenario A – minor disruption** (hours reduced, pay cut): Ramp side hustle hours, keep your job. - **Scenario B – full layoff**: Your side hustle becomes primary income while you search for new role/ side hustles from home. - **Scenario C – full pivot**: You decide to transition your side hustle into the core career, leveraging it into a full-time business. Mapping these out ahead of time means you don’t start side hustles from home in a panic instead you build them with intention and optionality. ## **Stage 3: What to do—and what to avoid—when building side hustles from home** Building side hustles from home is both an opportunity and a discipline. Let’s break down both sides: actions that help, and traps that undermine. **Do these things** - Choose something aligned with your strengths, interests and schedule: It is much easier to sustain side hustles from home when you’re using familiar skills and working in hours that don’t clash with your main job. - Validate demand early: Before making a large investment, test that people are willing to pay for what you offer. Even a small pilot or beta client can confirm viability. - Time-block your side hustle: Decide upfront how many hours/week you’ll allocate. According to LendingTree 45% of side hustlers said they spend 10+ hours/week. - Track your metrics: Treat your side hustle like a business. Track hours worked, income earned, costs incurred, profit per hour. - Reinvest strategically: Early earnings should be reinvested into better tools, software, marketing or training—not just spent on extras. - Maintain quality: Reputation matters, especially if you plan to scale. A side hustle built on referrals will outperform one built on random gigs. **Avoid these traps** - Don’t treat your side hustles from home as a hobby with no structure: Without professional discipline it remains fragile. - Don’t overinvest early: Buying expensive equipment or large marketing campaigns before you’ve proven your offering is risky. - Don’t ignore legal/tax implications: When side hustles grow, you may need business registration, separate accounting, self-employment taxes. - Don’t spread yourself too thin: Attempting multiple side hustles simultaneously may reduce your effectiveness. Better to pick one good option, do it well, and scale later. - Don’t assume fast earnings: Many side hustles from home demand time to build. Expect slow growth and keep your expectations realistic. - Don’t ignore saturation and automation risk: Some gigs become crowded fast or vulnerable to automation. Choose something defensible or niche. By proactively doing the right things and avoiding common mistakes, your side hustles from home become a durable second pillar—not just a fleeting experiment. ## **Stage 4: Five strategic side hustles from home for 2025** Here are five well-selected, home-based side hustles you can launch in 2025. Each takes into account current trends, manageable startup effort, and the potential to scale. ### 1) Leverage Micro-consulting/Online Expertise for Side Hustles From Home If your full-time job has given you domain expertise (project management, operations, digital transformation, remote team coordination), you can monetize that via micro-consulting from home. **Why it works:** Clients increasingly buy narrow, high-impact projects instead of full-time hires. Your existing experience gives you a leg up. **How to get started:** - Define your niche (for example: “helping small remote-teams implement asynchronous collaboration”). - Create a simple offer (e.g., “90-minute audit + action plan”). - Use your professional network, LinkedIn or freelance platforms to find your first clients. - Price knowingly: You’re offering convenience and expertise—not just time. **Watch-out points:** - Avoid becoming dependent on one single client (you’re recreating job risk within your side hustle). - Don’t undervalue yourself just to get started. - Don’t mix your consulting niche too closely with your employer’s market, unless you’ve cleared it. ### 2) Content creation + monetized digital assets Whether writing, podcasting, video or newsletters, turning content into paid offerings is increasingly viable as a side hustle from home. **Why it works:** You build an audience once, then monetize via affiliate links, digital products, sponsorship, memberships. Hostinger reports the global side-hustle economy at more than $550 billion in 2024. [Hostinger+1](https://www.hostinger.com/tutorials/side-hustle-statistics?utm_source=chatgpt.com) **How to get started:** - Choose a niche you’re knowledgeable about and that has audience demand (keyword research helps). - Build an email list early (often the most valuable asset). - Monetize via: digital product (e-book, mini-course), membership community or affiliate partnerships. - Automate content scheduling and delivery where possible. **Watch-out points:** - Content income often grows slowly; you’ll likely need patience. - Do not rely solely on one platform (YouTube, Instagram) because algorithms and rules change. - Don’t ignore your email list or audience engagement—it often becomes your moat. ### 3) Remote Tutoring, Coaching, or Skill Training as Side Hustles From Home The demand for flexible learning continues to rise. Offering tutoring or coaching from home is a side hustle that can be both meaningful and profitable. **Why it works:** Low overhead, you can use existing knowledge, scheduling can fit around your main job. **How to get started:** - Pinpoint your subject (academics, language, career skills, business coaching). - Begin with one-on-one sessions, build testimonials. - Transition to group programs or asynchronous modules to scale. - Market via online marketplaces (Udemy, Teachable) or niche LinkedIn/Facebook groups. **Watch-out points:** - Price appropriately—under-charging reduces perceived value and sustainability. - Avoid switching into entirely new domains unless you’re ready to invest in building authority. - Plan for diversification; if every hour is tied to your time, your growth becomes limited. ### 4) Niche e-commerce or print-on-demand store as Side Hustles From Home Running a home-based e-commerce business or print-on-demand (POD) store can be a strong side hustle from home when you approach it with strategy. **Why it works:** Startup cost can be modest; you control your brand; fulfilment can be outsourced. **How to get started:** - Identify a specific niche with demand but manageable competition (hobby communities, localized products, personalised items). - Setup a store (Shopify, Etsy, or similar) and use POD services for fulfilment. - Drive traffic via targeted social ads, influencer collaborations, email marketing. - Reinvest profits to expand product lines or improve branding. **Watch-out points:** - Avoid too broad or generic themes—they often lead to low margin competition. - Market cost cuts deep into profit; monitor cost per acquisition (CPA). - Fulfilment delays, quality issues or weak customer-service reputation can hamper future growth. - Be aware of taxation and regulatory obligations for online sales in your state or country. ### 5) Micro-services/digital freelancing (with scaling focus) as Side Hustles From Home Offering a specific remote service such as graphic design, voice-over, micro-animation, social media management is a classic home-based side hustle—but the key is to think scalability from the outset. **Why it works:** Immediate market demand; you can launch quickly; fits home schedule. A report found 44% of new business owners in 2024 started from home. [Whop](https://whop.com/blog/side-hustle-statistics/?utm_source=chatgpt.com) **How to get started:** - Choose a service you can deliver well and that you enjoy. - Build a portfolio and list yourself on platforms (Upwork, Fiverr, Freelancer). - Once you gain traction: outsource parts of your work, raise rates, package retainer models for more predictable income. **Watch-out points:** - Many freelancers fall into low-rate, high-time traps—avoid trading time for dollars indefinitely. - Don’t rely on one high-value client only—diversify so you don’t replicate job risk. - Be mindful of intellectual-property rights, contracts, client dependencies. ## **Stage 5: Selecting the right side hustle from home and planning your first 90 days** Choosing your side hustle is more than picking a “hot trend.” It’s about fit, strategy and long-term potential. ### Criteria to use - **Time availability**: realistically how many hours per week can you commit outside your main job without burning out? - **Skill leverage**: which side hustles let you use what you already know vs. ones that require full retraining? - **Risk tolerance**: do you prefer low-investment, lower-return kicks (e.g., micro-services) or higher-investment, higher-potential models (e-commerce, content)? - **Scalability**: which side hustles can grow beyond “you trading your time” into something more autonomous? - **Market demand & defensibility**: use keyword research, competitor evaluation—are there enough people willing to pay, and can you differentiate yourself? - **Exit/transition potential**: could this side hustle one day become your main income or pivot path? ### Crafting your 90-Day Launch Plan Rather than a simple “7-step list,” follow a narrative flow: - **Days 1-30 (Foundation)**: Finalize your side-hustle concept, validate demand, set up your workspace/tools, define your offer. - **Days 31-60 (Testing)**: Engage your first clients/customers, refine your process, begin tracking metrics (hours invested vs. revenue earned), collect feedback. - **Days 61-90 (Scaling or pivoting)**: Evaluate your metrics. If you see traction (for example: revenue > $X, repeat customers, good reviews), increase your time investment or automate parts. If traction is weak, revisit your niche or offer. Begin planning next phase: diversify income streams, consider partnerships or marketing expansion. Schedule monthly reviews: Are you hitting your targets? Is your hourly return worthwhile? Is your main job unaffected? With this structure you gradually shift from “just testing” to “meaningful income stream.” ## **Stage 6: Embedding long-term income resilience and security** Launching a side hustle from home is just part of your broader income-resilience plan. To fully embed security and flexibility, think beyond the short term. ### **Build your personal brand and network** Whether via your side hustle or main job, cultivate a reputation. This means: - Publishing case-studies, client testimonials, visible accomplishments - Staying active in relevant professional or online communities - Keeping your portfolio/resume updated If you face layoffs or choose to pivot, your brand and network are your bridge to opportunity. ### **Plan for career fluidity** Layoffs can feel like setbacks—but often they open new paths. By maintaining your skills and side-hustle readiness you position yourself to pivot. Consider: - What future roles will your industry demand? - What adjacent fields could absorb your skills? - Could your side hustle become your main career? - Could you move into consultancy, freelance full-time or build a portfolio career? Being ready for multiple professional futures gives you control—not just reaction. ### **Protect your mental-financial well-being** Keep your side hustle workload sustainable—burnout harms both your main and secondary work. - Track your income and time invested—doing so gives you clarity on whether it’s worthwhile or not. - Periodically assess your goals: Why are you doing this? What’s the 2- or 5-year vision? ## Conclusion: Moving forward with purpose In 2025, the idea of side hustles from home is far more than a temporary trend. It is a meaningful strategy for anyone who wants to protect their income, expand their professional muscle and strengthen their financial security. If you want to dive deeper, check out our companion post, *[When Job Loss Feels Closer Than You Think](#)*, which explores how subtle changes in your workplace and industry can affect your career before you even notice. We’re also building a full series on this topic, including videos, shorts, social posts, and additional blog articles covering the economy, job cuts, and strategies to prepare for a potential recession. All of this leads into our upcoming webinar,[ ***Inside the Job Market: What Recruiters and Employers Aren’t Saying and How to Build a Career That Withstands Any Market Cycle*.**](https://nvestadvisors.com/job-market-webinar-build-a-career-that-thrives-anywhere/) By following this series, you can go beyond reactive measures and start taking intentional steps to protect your career, grow your income streams, and build a professional foundation that thrives no matter how the market shifts. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Media, Plan Participants, Podcasts, public, Retirement, Small Business, Taxes, Webinars --- ### [Everything You Need to Know About Roth IRA Contribution Limits (2025–2026)](https://nvestadvisors.com/everything-you-need-to-know-about-roth-ira-contribution-limits-2025-2026/) **Published:** February 11, 2026 **Author:** Maryam Irfanmeer **Content:** # ![IRA contribution limits](https://nvestadvisors.com/wp-content/uploads/2026/02/pexels-leeloothefirst-6929017-e1770849314444.jpg "Pexels leeloothefirst 6929017 nvest advisors") # **Everything You Need to Know About Roth IRA Contribution Limits (2025–2026)** Tax season is here, and with it comes an important reminder: **you may still be able to make or adjust contributions to your Roth IRA for the prior tax year**. The IRS updates retirement account limits each year to reflect inflation and cost-of-living changes — and the IRA contribution limit rules for 2025 and 2026 are *noteworthy*. Understanding these limits can help you *maximize your tax-advantaged savings*, avoid penalties, and strategically plan your retirement contributions. Let’s break it all down clearly. ## What is a Roth IRA? A Roth IRA (Individual Retirement Arrangement) lets you contribute **after-tax dollars today**, so you can enjoy **tax-free growth and tax-free withdrawals in retirement** — provided certain conditions are met (generally age 59½ and account open for 5 years). Unlike traditional IRAs, **there’s no required minimum distribution (RMD)** at age 73 or later. ## **2025 Roth IRA Contribution Limits** ### **How Much You Could Contribute for 2025** Even though it’s 2026 now, you can still make or adjust **Roth IRA contributions for the 2025 tax year** until the tax filing deadline in **April 2026**. **2025 limits:** - **Under age 50:** up to **$7,000** total to all IRAs (Roth + traditional), as long as income rules are met. - **Age 50 or older:** up to **$8,000** ($7,000 base + $1,000 catch-up). - These combined limits mean you can’t contribute more than the total allowable IRA amount — even if you split between Roth and traditional accounts. ### Income Eligibility (2025) Your ability to contribute a *full* amount to a Roth IRA depends on your **modified adjusted gross income (MAGI)**. For 2025: - **Single tax filers:** contribution amount begins to phase out above about **$150,000** MAGI and is eliminated around **$165,000**. - **Married filing jointly:** phase-out begins near **$236,000** and ends around **$246,000**. - If your income exceeds these ranges, you may qualify for a *partial* contribution or need to consider a *Backdoor Roth IRA* strategy. - ## **2026 Roth IRA Contribution Limits** ### **How Much You *Can* Contribute for 2026** ### For the 2026 tax year (contributions can be made through April 15, 2027): - **Under age 50:** up to **$7,500** total to all IRAs. - **Age 50 or older:** up to **$8,600** total ($7,500 base + $1,100 catch-up). The IRS increased these limits from 2025 due to cost-of-living adjustments — meaning more opportunity to boost your retirement savings. ### 2026 Income Phase-Out Ranges Income limits for Roth IRA eligibility also increased for 2026: - **Single tax filers:** begin to phase out at **$153,000** MAGI and fully phase out at **$168,000**. - **Married filing jointly:** begin around **$242,000** and phase out by **$252,000**. These thresholds mean higher earners may have *reduced or no eligibility* to contribute directly to a Roth IRA in 2026. However, a **Backdoor Roth IRA conversion** may still be an option for those above the income limits. - ## Important Rules to Remember ### 1. Combined Limits The contribution limits apply to **both traditional and Roth IRAs combined**. For example, if you contributed $3,000 to a traditional IRA for 2026, you could only contribute up to $4,500 to a Roth IRA (if under 50) for the same year. - ### 2. Earned Income Requirement You must have **earned income** at least equal to the amount you contribute. Passive income (like dividends) doesn’t count. ### 3. Contribution Deadlines - **2025 contributions:** due by tax deadline in **April 2026** (usually April 15). - **2026 contributions:** due by tax deadline in **April 2027**. Make sure you label contributions for the correct tax year with your IRA custodian. - ### 4. Phase-Out Rules Matter If you’re *near or above* the income phase-out thresholds, your allowable Roth IRA contribution may be reduced — or you might not be eligible to contribute directly at all. In that case, you might consider a **Backdoor Roth IRA**, where you contribute to a traditional IRA and convert it to a Roth later — though that involves additional tax planning. - ## **Catch-Up IRA Contribution Limits Explained** If you’re **age 50 or older**, you’re allowed to contribute an extra amount — called a **catch-up contribution**. For 2025: - IRA catch-up: **$1,000**. For 2026: - IRA catch-up: **$1,100**. The increased catch-up provision gives older savers additional flexibility to boost their retirement savings. - ### **Need Help Navigating This Tax Season?** Retirement rules change quietly, but the impact on your long-term savings can be huge. If you’re unsure how much you’re eligible to contribute, whether a backdoor Roth strategy makes sense for your income, or how to align your Roth IRA with the rest of your tax plan, **we’re here to help (**click **[HERE](https://nvestadvisors.com/tax-planning-at-nvest-advisors/)** to read more about our tax strategy). Our team works with individuals and families to simplify retirement decisions, optimize contributions, and ensure everything stays IRS-compliant — without the stress. Reach out today to get [**personalized free consultation**](https://nvestadvisors.setmore.com/) and make sure you’re making the most of your Roth IRA for 2025 and beyond. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Company News, Cryptocurrency, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Media, Plan Participants, Podcasts, Politics, Press Releases, public, Retirement, Small Business, Taxes, Texas Teachers Retirement, Webinars --- ### [Happy New Year From nVest Advisors!](https://nvestadvisors.com/happy-new-year-from-nvest-advisors/) **Published:** January 6, 2026 **Author:** Maryam Irfanmeer **Content:** # ****Happy New Year!**** We are changing things up a bit here at nVest this year, and I wanted to start by introducing you to the first major change: ****a quarterly letter from me**** (the CEO and for most of you, your primary financial advisor) that will be more substantive and (I hope) provide a clear picture of how the markets and economy are evolving and what we are doing for your investments and financial plans in response to those changes. I’ll also share more information about things we are working on in the company behind-the-scenes to continue to improve your experience as a client. Because this is a new format, I’d greatly appreciate your feedback, so that we can continue to refine and improve! (I should also forewarn you, with this letter being the first of its kind, I cover a lot of ground from the prior year to get us “up to speed”. Future letters will generally be much shorter. I appreciate your indulgence in this first edition.) ## ****Econ and Market Recap of 2025**** 2025 had a lot of uncertainty, particularly in the last quarter of the year. After a couple of years of strong outperformance, AI-related tech stocks started seeing significant pull-backs \[1\], as did cryptocurrencies and other related tech stocks \[2\] Meanwhile, inflation-sensitive stocks and commodities had a very strong year, as well. Gold rallied all year (up approximately 65%)\[3\], with silver ramping up late in the fall and into December (up approximately 144%)\[4\]. But while markets have enjoyed a bit of euphoria until recently, the economy continued to give us increasing warning signals. Corporate bankruptcies reached levels not seen since 2010 (post-Great Recession era) \[5\]. Unemployment rose to 4.6% in November—a level that has often been associated with recession risks\[ 6\]. Delinquencies on consumer debt—personal, auto, and student loans—have risen to very elevated levels\[ 7\]. And FHA-backed mortgage delinquencies rose to around 11% in late 2025 data, and continue to climb \[8\]. ****How can this be? How can the stock market perform so strongly in some areas, while many American families face financial pressures?**** Our economic thesis since 2021 has been this: inflation has impacted the majority of Americans, but in very different ways. While asset holders (those owning things like stocks, real estate, gold, etc.) have benefited from those price increases, individuals and families (and many small businesses) have suffered real financial setbacks. ****The result has been what is known as a bifurcated or “K-shaped” economy.**** Economic conditions have benefited asset owners but challenged people who rely primarily on wage income to meet expenses ****In short, wealth inequality has widened, with asset owners gaining while many wage earners have faced greater difficulties. Or, in laymen’s terms: the rich are getting richer while the poor are getting poorer.**** The major concern I have for the markets is that consumer spending from the broader population is the primary driver of economic growth. As spending power is constrained for many households, we may see further signs of strain, particularly on small businesses. The concern from where we at nVest watch the world is that stocks continued rallying despite these major economic headwinds. But it wasn’t a broad-based rally, where all 11 sectors of the economy benefited equally. In fact, it was largely driven by a handful of tech companies focused almost exclusively on AI \[9\]. It also wasn’t driven by broad investor participation. Record amounts of cash—around $7.7 trillion—remained on the sidelines in money market funds throughout the year \[10\], and gold and silver had strong rallies. ****You can’t have defensive assets like cash and gold reaching high levels while risky assets like stocks and cryptocurrencies do the same.**** Not without some significant inconsistency in investor behavior. The answer lies in the huge amount of leverage (debt) that fueled parts of the equity and crypto markets. Margin debt reached approximately $1.21 trillion last year—one of the highest levels on record \[11\]. ****So it wasn’t a broad rally across the economy, and it wasn’t driven by the majority of investors putting new capital to work. It was concentrated buying, often with borrowed funds, in a select group of tech stocks.**** In the nearly 20 years I’ve done this as a professional, the market dynamics in 2025 raised the most serious and consistent concerns. A major concern for me, since at least 2022, has been the reliability of some government economic data. For example, month after month, initial employment reports from the Bureau of Labor Statistics often show strong hiring, yet these are continuously revised downward – often by millions of jobs – in subsequent reporting \[12\]. The jobs being touted every month turn out to be nonexistent more often than not. The recent inflation statistic is another example: after disruptions from the government shutdown affected data collection, the administration highlighted the latest inflation measure (2.7%) as evidence that inflation had moderated. It was supposed to be proof, in fact, that inflation was no longer a concern for America. However, many of the components used to calculate the Consumer Price Index did not get measured during the shutdown, and were simply assumed to be unchanged during that time. That may have seriously understated the inflation reading. This made the figure less reliable for analysis, but the markets responded positively anyway \[13\]. If we can’t’ trust the data, how can we effectively tell you that the economy really IS doing as well as the government says it is? Simply put, I cannot, especially when we try to verify the data with other, third-party sources (like surveys of actual households and small businesses). Those results tell us a very different picture – one of struggle and slowdown. ## Let’s talk about AI As we’ve shared with you in private meetings all year, we have been concerned for quite some time that valuations around AI stocks (and cryptocurrencies, for that matter) had become elevated. That view has become more widely accepted on Wall Street in recent months. We have viewed these asset classes as overvalued for some time, some to truly absurd levels. The market capitalizations of some tech companies grew larger than the entire stock markets of many countries. Nvidia (NVDA), for example, at its peak had a valuation exceeding the GDP of many developed nations \[14\]. Whether the long-term potential of AI is significant or not is separate from the question of current valuations. What concerned us as fiduciaries was that, very similarly to cryptocurrencies, AI stock prices appeared to be driven substantially by hype, hyperbole, and overly optimistic projections of demand for future projects. We questioned whether the ambitious promises from CEOs of companies like Oracle, OpenAI, Nvidia, and others could be fully realized in the near term. ****In most cases, there is, quite simply, no possible way.**** Let’s start with the energy demands of AI: the United States currently lacks sufficient grid capacity to support all the data centers projected in the coming years, which markets had partially priced in. Estimates for large-scale AI buildouts have suggested energy needs equivalent to the output of multiple nuclear reactors for individual projects or companies \[15\]. In fact, pursuing full-scale AI data center expansion with our current energy capacity could create only forced blackouts and upward pressure on electricity costs for households and businesses. ****However, we do not believe this is a near-term problem.**** In fact, despite the rhetoric, widespread adoption of AI appears to be slowing, even as companies hype AI-enhanced services. We’re seeing fewer enterprises committing to large-scale implementations after initial enthusiasm. An MIT study from mid-2025 indicated that a high percentage (95%) of corporate AI projects were not delivering any measurable returns on investment, with many (up to 30%) at risk of being scaled back or discontinued \[16\]. Company managers have responsibilities to shareholders and cannot indefinitely fund initiatives without seeing returns. After failing to find ways to use this new tool profitably, many companies are now reassessing their AI commitments. 2025 also saw growing public discussion around AI’s impacts, including concerns about job displacement, increased software costs for unwanted features, and frustration trying to distinguish real from AI-generated content. Fact-checking for AI research can take as long (or even longer) than doing the research with humans, and AI “hallucination” remains a real problem. Adoption rates for paid premium services remain low. ****I say all of this not to dismiss potential future applications of these tools; rather, similar to the Dot-Com era, enthusiasm appears to have outpaced near-term realities.**** For most of 2025, we believed AI-related stocks had become significantly overvalued and that a price adjustment would be healthy. That adjustment began in late 2025 and may continue. Another issue with the tech rally is that as these companies grew dramatically, they heavily influenced major market indexes. The S&P 500, for example, saw a substantial portion of its returns—around 60% or more in some analyses—driven by a small group of tech companies\[ 17\]. This concentrated performance lifted the overall index significantly. A reversal in those stocks could have a drastic negative impact on those same indexes. This is why, for the majority of our clients right now, we have maintained limited exposure to the tech sector. We won’t avoid it indefinitely, but we prefer to wait for more reasonable valuations. At that point, we will look to selectively include quality tech opportunities in strategies. ## Economic and Investing Outlook for Q1 2026 We expect a continued moderation of economic growth into the first half of 2026. With it, we anticipate softer performance in a number of sectors (and their associated stocks): - ****Technology**** - ****Real Estate**** - ****Financials**** (Banks and Insurance Companies) - ****Consumer Discretionary**** (the things you can cancel until your personal finances improve) - ****Cryptocurrencies**** - ****Manufacturing**** - ****Transportation**** I should note that “moderation” doesn’t mean the same thing for every industry. Some sectors may experience more significant short-term adjustments than others. When the economy moderates, investors often seek relative safety in companies and sectors that provide essential goods and services. These are where most of our clients have been positioned (in risk-appropriate amounts): - ****Consumer Staples**** (toothpaste, toilet paper, groceries, etc.) - ****Energy**** (we must keep filling our gas tanks, plus AI is adding some demand to our existing grid) - ****Utility Companies**** (we must keep the lights on) - ****Healthcare**** (doctor visits and prescriptions must be maintained if we need them) - ****Precious Metals**** - ****Commodities that are sensitive to inflation**** - ****Inflation-Sensitive and intermediate-duration bonds**** As the economy stabilizes and enters a recovery phase, those clients in our SECTORr Strategy (that’s most of you) will see us rotate industries and alternative assets in portfolios to align with historical performance patterns across economic cycles. This approach draws from extensive academic research and back-testing. One final note: if I can reflect on our Economy-focused approach (which we began in 2022): changes in economic trajectory often emerge very early and subtly. It’s a little bit like, “slow at first, and then everything all at once”. Until things are screaming, it is common for markets to be tone-deaf and slow to respond until the obvious can no longer be denied. I underestimated how long market enthusiasm could persist despite many clear signals of a slowdown. In the future, we will remain mindful that markets can extend periods of optimism (and even euphoria) even when valuations appear significantly over-stretched. When economic warning signs appear in future cycles, we may allow for a bit more time to “run with the herd” before shifting fully to defensive positioning. ## 2026 Improvements in Investing Strategies I wrote so much about the markets and economy above, that I thought a quick review of our investing strategies would be in order. Below are brief descriptions of our investing models, including links to read more about each. In all instances, your risk tolerance, time horizons, and investment objectives are incorporated into your strategy. ****1) Complete Customization**** Clients with complicated needs or “legacy” assets (like stocks and bonds you’ve owned for years) typically have custom portfolios created by their financial advisor. Customization is also vital anytime we need to carefully monitor your account for tax sensitivity or risk mitigation is a primary focus. To get it right, customization can sometimes require more assets than a pre-made model, so we usually don’t customize a portfolio until it has $100,000 or more in it. ****2) SECTOR Strategy (Model-based)**** Our SECTOR strategy is focused on monitoring economic changes in the United States and adjusting your allocation of stocks and bonds accordingly. It is an actively-managed investing approach. It ignores market sentiment and “fad” investments and instead uses back-tested academic research to invest you in those parts of our economy that have historically done the best during this phase of the economic cycle. The majority of our clients currently use this strategy, which we implemented in early 2022. [****You can read more about how this strategy works in this PDF****](https://drive.google.com/file/d/1Ii2xoBJy7TFVciL_M1sxvMdTYVck5R0I/view?usp=sharing). ****3) FACTOR Strategy (Model-based)**** Factor-based investing means that we use a rules-based approach to decide when to add a little more risk to a strategy, and when to shift a little more to safety. It is actively-manged but doesn’t move wholesale into new investments very often (which makes it more tax-sensitive for accounts that require it.) This strategy takes into account both economic conditions and global market sentiment. It is a worldwide strategy (as opposed to the SECTOR, which is entirely US-focused). This strategy is new as of the fall of 2025, and is now available to our clients who want a more strategic, global approach that, like the pendulum on a grandfather clock, swings a little toward or away from riskier assets when conditions warrant. [****You can read more about the Factor Strategy here****](https://drive.google.com/file/d/15_1xRpXe9OGNb9UHhPS96sTSjZrLXY__/view?usp=sharing). ****4) Add our pre-selected Stock Selection to your strategy**** Starting in 2026, we are very excited to allow our clients (with an appropriate risk tolerance) to add a small percentage (5-15%) of pre-selected individual US stocks to their existing portfolio / strategy. Although past performance is never a guarantee of future returns, back-testing this addition has shown significant improvements in the returns of both our SECTOR and FACTOR strategies with minimal increases in overall portfolio risk. These stocks are selected using a rules-based system that looks for quality growth in the company itself (not its stock price), hoping to capitalize on a stable company with good managers, being innovative in their markets, and is poised for internal growth over the next 6-24 months. *****Individual investments like stocks can be very volatile.***** [****Please read this PDF to learn more about how this program works, and ask your financial advisor for more details.****](https://drive.google.com/file/d/12pPKSfRYAM6Ad_P7aFNPaGUjeybNuI4O/view?usp=sharing) ****5) What about Crypto?**** I could write a book on this controversial subject. To make it short (bless you for reading this far already), we DO allow some Bitcoin (but only Bitcoin) in a discretionary Customized portfolio in risk-appropriate amounts, using only SEC-approved (and regulated) mutual funds and ETFs. We do not currently utilize crypto in our investment models and at least this quarter of 2026, have no plans to do so. That position may change as prices moderate. ## Goings on Around nVest This quarter, we’ve got a lot happening: 1\) ****JOB MARKET WEBINAR:**** [****Watch our current webinar on the US Job Market (and why it’s so hard to find a job if you’re looking).****](https://nvestadvisors.com/job-market-webinar-build-a-career-that-thrives-anywhere/) This webinar was recorded in December and includes up-to-date stats and strategies about the current state of employment in the US. 2\) ****TAX PLANNING WEBINAR:**** In February, we’ll roll out our Tax 2026 Webinar – stay tuned for details. 3\) ****TEXAS VISIT:**** I will be in HARLINGEN, TEXAS for a short visit January 15-20 for individual client meetings. [****If you are in the area and would like an individual appointment, for any reason, you may schedule it by clicking here.****](https://calendar.app.google/5yLmK24ANkcQqoNBA) 4\) ****NEW PROCESS FOR ANNUAL REVIEWS:**** Instead of asking all of our clients to try to book a meeting in January for their Annual Review Appointment, you will be receiving a request based on your original anniversary date as a client of nVest Advisors. Please watch your email as that time approaches! 5\) ****HOLIDAY:**** Our office is CLOSED in honor of Martin Luthur King, Jr. Day (December 19). ****That’s all this time! Thanks for your indulgence – this first letter was a long one. We will keep refining as we go.**** ****Have a wonderful first quarter of 2026. We’ll be messaging you all privately soon!**** ### Jeremy Torgerson CEO, nVest Advisors LLC ### ****Footnotes**** \[1\]: AI tech pullbacks late 2025 <https://www.cnbc.com/2025/12/25/2-extraordinary-artificial-intelligence-ai-stocks/> \[2\]: Crypto Q4 pullback <https://investingnews.com/crypto-market-update/> \[3\]: Gold up ~65% in 2025 <https://www.bullionvault.com/gold-news/gold-price-news/gold-silver-2025-record-price-123120251> \[4\]: Silver up ~144% in 2025 <https://www.bullionvault.com/gold-news/gold-price-news/gold-silver-2025-record-price-123120251> \[5\]: Corporate bankruptcies highest since 2010 <https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/7/63-us-corporate-bankruptcies-in-june-set-up-2025-for-highest-pace-since-2010-91441423> \[6\]: Unemployment rate 4.6% in November 2025 <https://www.bls.gov/opub/ted/2025/unemployment-rate-4-6-percent-in-november-2025.htm> \[7\]: Elevated consumer debt delinquencies <https://www.newyorkfed.org/newsevents/news/research/2025/20251105> \[8\]: FHA mortgage delinquencies around 11% <https://www.mba.org/news-and-research/newsroom/news/2025/11/14/mortgage-delinquencies-increase-in-the-third-quarter-of-2025> \[9\]: Tech concentration driving market returns <https://www.reuters.com/business/us-tech-valuations-stretched-further-earnings-contribute-less-2025-11-25/> \[10\]: Money market funds ~$7.73 trillion <https://www.ici.org/research/stats/mmf> \[11\]: Margin debt ~$1.21 trillion record high <https://www.advisorperspectives.com/dshort/updates/2025/12/15/margin-debt-finra-new-record-high-november-2025> \[12\]: Downward revisions to BLS employment data <https://fredblog.stlouisfed.org/2025/08/revisions-to-bls-employment-data/> \[13\]: Government shutdown impact on CPI (2.7% reading) <https://www.bls.gov/cpi/additional-resources/2025-federal-government-shutdown-impact-cpi.htm> \[14\]: Nvidia market cap exceeding GDP of many nations <https://companiesmarketcap.com/nvidia/marketcap/> \[15\]: AI data center energy needs equivalent to multiple nuclear reactors [https://www.rand.org/pubs/research\_reports/RRA3572-1.html](https://www.rand.org/pubs/research_reports/RRA3572-1.html) \[16\]: MIT study on high percentage of corporate AI projects failing ROI <https://fortune.com/2025/08/18/mit-report-95-percent-generative-ai-pilots-at-companies-failing-cfo/> \[17\]: Magnificent 7 / tech stocks driving ~60%+ of S&P 500 returns <https://www.fool.com/research/magnificent-seven-sp-500/> **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Company News, Cryptocurrency, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Media, Plan Participants, Podcasts, Politics, Press Releases, public, Retirement, Small Business, Taxes, Texas Teachers Retirement, Webinars --- ### [How to Save Money from Your Paycheck: Top Tips to Survive a Recession](https://nvestadvisors.com/how-to-save-money-from-your-paycheck-top-tips-to-survive-a-recession/) **Published:** January 1, 2026 **Author:** Maryam Irfanmeer **Content:** # **![how to save money](https://nvestadvisors.com/wp-content/uploads/2025/07/pexels-pixabay-106152-e1751723843559.jpg "Pexels pixabay 106152 nvest advisors")How to Save Money from Your Paycheck: Top Tips to Survive a Recession** As we head into 2026, the economic environment is expected to remain challenging for many Americans. Inflation, shifts in the job market, and the potential for layoffs mean that managing finances strategically is more critical than ever. Learning **how to save money from your paycheck** is not simply about frugality—it is about creating a structured approach to financial security that allows you to weather economic uncertainty. This guide provides actionable strategies to **save your paycheck**, protect your income, and build long-term resilience. By following these insights, you can maintain financial stability, make informed decisions, and avoid common pitfalls during a recession. ## Recognizing Early Signs of a Recession Understanding when economic shifts are occurring is the first step toward protecting your paycheck. Early recognition allows you to adjust spending, bolster savings, and make strategic decisions before financial pressure escalates. Key indicators include: - **Slowing economic growth:** GDP growth projections provide insight into economic momentum. The Federal Reserve projected a modest **[1.9 percent GDP growth](https://www.crfb.org/blogs/cbo-releases-economic-projections-2025-2028#:~:text=CBO%20previously%20projected%20rates%20would,percent%20in%202027%20and%202028.)** for 2025, signaling caution for job security and market stability. - **Rising unemployment claims:** Tracking labor market trends is critical. An increase in claims can indicate layoffs in your sector. - **Inflation and cost of living:** Inflation affects purchasing power. Over the last 12 months, the all items index **[increased 3.0 percent](https://www.bls.gov/news.release/cpi.nr0.htm)** before seasonal adjustment, impacting everyday expenses from groceries to housing. - **Company communications and restructuring announcements:** Internal signals such as reduced hiring, delayed promotions, or restructuring plans can provide early warning for employees. By monitoring these trends actively, you can learn how to save money, anticipate challenges, and implement strategies to protect your paycheck before a crisis occurs. ## How to Save Money by Evaluating Your Personal Finances and Spending Habits A cornerstone of learning **how to save money** is understanding exactly where your income goes. Many Americans underestimate the impact of small, recurring expenses on their overall financial health. ### How to Save Money By Tracking Income and Expenses Begin with a detailed analysis of your paycheck. Identify fixed expenses such as rent, utilities, and loan payments, and variable costs including groceries, entertainment, and subscriptions. Tools such as budgeting apps or spreadsheets can help visualize spending patterns and highlight areas where adjustments can be made. ### How to Save Money by Understanding Cash Flow Evaluate whether your income exceeds your expenses sufficiently to allow for savings. If your cash flow is tight, consider: - Prioritizing essential expenses - Reducing discretionary spending without compromising well-being - Identifying non-essential costs that can be paused or eliminated ### Building a Sustainable Budget While Trying to Save Your Money A budget is more than a list of expenses; it is a roadmap for financial stability. A well-designed budget allocates funds for: - **Emergency savings:** Ensuring that three to six months of expenses are accessible in case of job loss. - **Debt repayment:** Reducing high-interest debt increases the portion of your paycheck available for savings. - **Investments:** Even modest contributions to retirement or diversified portfolios build long-term resilience. Budgeting strategies not only enable you to **save your paycheck** effectively but also prepare you for unexpected challenges that accompany economic downturns. ## How to Save Your Money While Protecting Your Income and Savings Once you understand your finances, the next step is actively protecting your income and savings. This involves creating multiple layers of security that safeguard your financial health. ### Establishing an Emergency Fund An emergency fund is an essential tool for financial preparedness. Keeping three to six months of expenses in a separate, easily accessible account ensures that unexpected events—such as layoffs or medical emergencies—do not derail your finances. ### Reducing Debt While Trying to Save Your Money High-interest debt can quickly erode financial security. Focus on paying down credit cards, personal loans, and other high-cost obligations. Reducing debt not only frees up your paycheck for savings but also lowers financial stress during uncertain times. ### How to Save Your Money by Diversifying Your Income Sources Relying solely on one job can leave you vulnerable during a recession. Explore opportunities to supplement your income through freelance work, online projects, consulting, or monetizing hobbies. Diversified income streams create resilience and provide additional resources to **save your paycheck** consistently. ### Save Your Money But Also Protect Your Assets Insurance is another critical component. Adequate health, renters, or homeowners insurance shields you from unexpected costs. In some cases, supplemental insurance such as disability coverage can further safeguard your income. ## Avoiding Common Financial Pitfalls Even with a disciplined approach, common mistakes can undermine efforts to **save your paycheck**. Awareness and avoidance of these pitfalls is crucial. ### Impulsive Spending While Trying to Save Your Money Unplanned purchases erode the potential to save. Prioritize needs over wants, and delay purchases that are not essential. ### Overreliance on Credit Using credit to cover everyday expenses can create a dangerous cycle. Focus on maintaining positive cash flow and using credit only strategically. ### Neglecting Retirement Contributions Even during economic uncertainty, skipping contributions to retirement accounts can have long-term consequences. Continue contributing, even at reduced levels, to benefit from tax advantages and compound growth. ### Lack of Monitoring When Trying to Save Your Money Failing to track spending and income leaves you unprepared for sudden changes. Regular review ensures that adjustments can be made promptly. ## Save Your Money While Planning for Long-Term Financial Stability and Resilience Long-term resilience requires strategies that go beyond short-term savings. Building a foundation today will allow your finances to withstand future economic challenges. ### Strategic Investments Consider investments that protect against inflation and market volatility. Commonly this is done by taking advantage of broad diversification and making sure you have the right mix of risk-on and risk-off assets to meet your overall tolerances and the time frame you have to work with. It’s important to note that diversification alone is not a guarantee against volatility – just one of several tools that your financial advisor can use to help “smooth the ride”. ### How to Save Money from Your Paycheck by Investing in Professional Skill Development Maintaining and enhancing skills in your profession increases job security. Continuous learning ensures that you remain competitive and employable even if layoffs occur in your sector. ### How to Save Money on Your Health and Insurance Coverage Unexpected medical expenses can quickly deplete savings. Maintaining comprehensive health insurance and evaluating supplemental policies protects both your physical and financial well-being. ### Maintaining Financial Discipline to Save Your Money Consistency in saving, budgeting, and monitoring finances ensures long-term stability. Small, consistent actions compound over time, strengthening your ability to **save your paycheck** and prepare for economic uncertainty. ### How to Save Money from Your Paycheck Without Overcomplicating Your Budget To implement the principles outlined above, consider these actionable strategies: - **Automate savings:** Direct a portion of your paycheck into a dedicated savings account immediately. - **Reassess subscriptions and recurring payments:** Cancel or pause services that are not essential. - **Focus on essential expenses:** Prioritize spending on housing, utilities, food, and debt repayment. - **Plan for contingencies:** Develop a clear plan for adjusting expenses if income decreases. - **Monitor progress:** Regularly review savings growth and adjust strategies as needed. By consistently applying these strategies, you create a financial system that preserves your paycheck and strengthens long-term resilience. ## Maintaining Financial Awareness An informed approach to finances enhances the ability to protect income. Regularly monitoring economic indicators, company updates, and personal financial metrics enables proactive decisions. - Track inflation rates, interest rates, and cost-of-living trends. - Stay aware of labor market and industry-specific developments. - Monitor company announcements regarding restructuring, promotions, or layoffs. These steps provide the insight needed to save your paycheck while remaining prepared for potential changes in the economic landscape. ## Conclusion Learning **how to save money from your paycheck** is an essential skill in 2025, especially as economic uncertainty remains a reality. By evaluating finances, protecting income, avoiding common pitfalls, and planning for long-term resilience, you can maintain stability during a recession. Financial security is not the result of chance—it is the outcome of consistent, informed decisions. The strategies outlined in this guide provide a roadmap for proactive planning, ensuring that your paycheck continues to work for you rather than against you. If you found this guide helpful, we have created an entire content series designed to help you deepen your understanding of *how to save money*, protect your income, and navigate uncertain economic conditions. Over the next few weeks, we’ll be sharing: - **Short, practical social media posts** with quick tips - **Video breakdowns** to help you apply these strategies in real life - **Additional blogs** focused on budgeting, recession planning, and smart financial habits - **A detailed, step-by-step webinar**, where we walk you through creating a personalized plan to secure your paycheck and build long-term stability. This webinar will offer clear guidance, real examples, and actionable tools you can implement immediately. **Click [here](https://nvestadvisors.com/job-market-webinar-build-a-career-that-thrives-anywhere/) to reserve your spot for the webinar and follow us on our socials for more updates.** **Categories:** 401K, Behavioral Finance, Business Stories, Client News, Client Service, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Investment, LifeCycle, Mailchimp, Plan Participants, public --- ### [When the Word Job  Loss Feels Closer Than You Think](https://nvestadvisors.com/when-the-word-job-loss-feels-closer-than-you-think/) **Published:** December 22, 2025 **Author:** Maryam Irfanmeer **Content:** # ![how to deal with job loss](https://nvestadvisors.com/wp-content/uploads/2025/12/pexels-ron-lach-9830812-e1766441211535.jpg "Pexels ron lach 9830812 nvest advisors") # **When the Word Job Loss Feels Closer Than You Think** In the current moment many professionals feel a subtle but growing tension: a sense that job security is no longer assured. Though the global unemployment rate remains relatively low, the workplace of 2026 is likely to feel very different, and whispers of job loss are more than hypothetical. This article is meant to guide you through what job loss in 2026 could realistically look like, how to read the warning signs, and how to act—not in panic, but in clarity and preparedness. Think of this as a warm conversation with a financial advisor: we’re not forecasting doom, but we are admitting that the landscape is changing, and that change invites awareness and thoughtful preparation. Rather than generic tips easily found with a one‑click search, you’ll receive a nuanced narrative funnel from early recognition to practical measures to long‑term resilience, so that you’re not simply reacting, but guiding your career and finances with intention. ## **1. What Job Loss in 2026 Could Realistically Look Like** Before you can guard against something, you must first understand its shape. The notion of job loss often evokes sudden termination, but in 2026 many risks will present more subtly: redeployment, role elimination, automation of tasks, or companies restructuring rather than outright firing. Here are some of the macro‑forces shaping the risk: ### Workforce shifts and structural change According to the World Economic Forum’s [***Future of Jobs Report 2025***](https://www.weforum.org/publications/the-future-of-jobs-report-2025/in-full/2-jobs-outlook/), technology‑based trends such as AI, automation and digital access are among the top drivers of both job growth and job decline. Many roles are at risk not because of bad performance but because their core tasks are becoming redundant or can be outsourced globally. For example, the [**report** ](https://www.weforum.org/publications/the-future-of-jobs-report-2025/digest/?utm_source=chatgpt.com)also notes that 40 % of employers expect to reduce staff as their skills become less relevant. In parallel, the [**Organization for Economic Co‑operation and Development (OECD)** ](https://www.oecd.org/en/publications/the-economic-benefit-of-promoting-healthy-ageing-and-community-care_0f7bc62b-en/full-report/assessment-and-policy-recommendations-for-healthy-ageing-and-community-care_5f142e60.html#:~:text=The%20shift%20in%20the%20demographic%20composition%20leads,more%20than%20a%20quarter%20of%20OECD%20countries.)projects that ageing populations and declining working‑age population in many countries will weaken growth in employment‑to‑population ratios over time. What this means: the backdrop you operate in has more risk and fewer comfortable assumptions. ### The specific picture of 2026 A recent labor‑market forecast by the Ministry of Business, Innovation & Employment of New Zealand observes that employment growth between now and 2026 will be [**strongest for highly‑skilled occupations**](https://www.mbie.govt.nz/business-and-employment/employment-and-skills/labour-market-reports-data-and-analysis/archives/labour-market-forecasting/medium-to-long-term-employment-outlook-looking-ahead-to-2026?utm_source=chatgpt.com), while lower‑skilled roles will see much weaker growth. In effect this indicates that if your role is anchored in tasks that are routine, less specialized or repetitive, the threshold for job risk rises. Thus job loss in 2026 may often be disguised: a quiet attrition, a delayed contract renewal, a department closure, rather than a loud lay‑off. This means you cannot treat job loss risk as something far off. The signals may be present now. It also means you need a mindset shift: from “I have a job until I don’t” to “I have a role that must continue to evolve or risk becoming redundant.” Job security is no longer fixed; it is dynamic. ## **2. Early Warning Signs That Indicate Job Loss** Now that we have established the terrain, let’s move toward the early warning signs of job loss—those subtle cues in your role, team, company or industry that suggest job loss is more than a remote possibility. Recognizing these early gives you time to act. ### Signs inside your role and daily tasks Are your tasks increasingly repetitive, commoditized or subject to automation? If the bulk of what you do can be done by software or outsourced, your role is more vulnerable. Has the frequency or scope of your work changed? For instance if new tasks are no longer assigned to you or you find yourself excluded from strategic initiatives. - Are you being measured by outdated metrics or expectations? Work environments shifting toward agile, digital or AI‑enabled models may de‑prioritize roles that do not adapt. - ### Signs of job loss at the team or department level - Has headcount in your team or department been trimmed quietly? Sometimes a role is not replaced upon departure. - Are communication channels indicating shifts—like company‑wide announcements of reorganization, or new leadership bringing different priorities? - Do you see fewer opportunities for development, training or growth within your group? If the investment in future talent is shrinking, that may signal de-prioritization of current roles. - ### Signs of job loss at the company or industry level - Is your company publicly discussing “efficiency”, “automation”, “restructuring”, or “cost rationalization”? These terms often precede workforce changes. - Is your industry facing headwinds: slow growth, regulatory change, technological disruption, or shifting consumer patterns? According to Addison Group’s hiring trends for 2026, **[78 % of businesses report using AI.](https://addisongroup.com/insights/national-hiring-trends-workforce-planning-guide-2026/?utm_source=chatgpt.com)** - ### Psychological and practical reactions to notice (without panic) It is easy to confuse normal workplace flux with meaningful warning signs. A good mental filter: when changes affect your role’s purpose, growth, or visibility persistently, treat them as signals—not automatic evidence of a pending job loss, but as triggers for awareness. You may feel a sense of unease or subtle shifting energy—this is your radar working. Instead of suppressing it, use it as data. When you notice it, ask: what is different, what is being communicated, what is not being assigned, what is being invested in? These reflective questions steer you away from knee‑jerk fear and toward strategic visibility. - ## **3. What to Actively Monitor: At Work, in Corporate Communication and in Market Trends** Having recognized the warning signs of job loss, you now shift into active monitoring. This means not just watching your own role but observing three concentric circles: your immediate role, your organization, and the external market. ### First circle: Your role and its future relevance - Assess the “task‑map” of your job: what you do today, what you will do tomorrow. Are many tasks facing automation or outsourcing? - Review your skill profile: how many of your competencies will still be in demand in five years’ time? - Map your internal network: who assigns you work, who relies on you, who supports you? Isolation within an organization often correlates with higher risk of role elimination. - ### Second circle: Organizational indicators - Track public announcements: new strategic direction, mergers, divestments or repositioning. These often precede job‑loss events. - Examine internal resource allocation: which departments receive new budget, new hires, updated tools? Which do not? - Monitor turnover: if colleagues in your level or department leave and are not replaced, ask why. Sometimes this signals a change in prioritization. ### Third circle: Market, industry and macro trends - Keep abreast of workforce‑data and hiring trends. For example, the ManpowerGroup Employment Outlook survey finds that around [**15 % of companies expect reductions in staff**](https://www.manpowergroup.cz/en/meos/?utm_source=chatgpt.com). - Track your industry’s disruption potential: is your sector being heavily automated? Are new entrants or models undermining established players? - Monitor adjacent roles and emerging roles: sometimes the best defense is seeing what is growing, not just what is closing. - ### Maintaining Balance: Avoiding Paranoia and Complacency The goal is not to become hyper‑vigilant to the point of constant anxiety, nor to remain oblivious in a changing environment. Instead you calibrate a steady gaze: watch your role’s relevance, your company’s cues, and the external signals. When you notice mismatches—between your skills and future direction; your team and organizational investment; your industry and market growth—that is when you shift into more deliberate action. - ## **4. Safety Measures and Contingency Planning to Stay Financially Stable in Case of Job Loss** Once you recognize risk factors of job loss, it’s time to move from passive observation to active preparedness. This is where you build a safety net—both financially and career‑wise. ### Financial preparedness during job loss: Building your foundation - Review your budget, debt and savings: having three to six months’ worth of essential living expenses in liquid form remains prudent. - Ensure your emergency fund aligns with your job risk profile: if you recognize stronger signals of instability in your role or employer, increase your buffer. - Diversify income streams where feasible: consider side‑projects, freelance work, consulting—anything that builds income independence and reduces sole reliance on one employer. - Understand your benefits and severance: know what your employer provides in case of lay‑off or restructuring; sometimes knowing your options reduces panic and increases strategic clarity. ### Career continuity: Strengthening your resilience - Upskill strategically: focus on skills that are growing in demand—digital literacy, AI‑adjacent capabilities, problem solving, adaptability. - Maintain visibility: engage with cross‑functional initiatives, volunteer for new assignments, stay connected to broader organizational work beyond your immediate remit. - Document your achievements: keep a record of successes, contributions, positive feedback—this becomes your portfolio for either internal opportunities or external roles. - Build your network: both inside your company and outside. Relationships can create early signals of opportunity, and may provide support if job loss occurs. - Stay aligned with growth areas: if your organization is moving into a new business model, look for ways to align your work with that direction rather than resist it. - ### What to avoid - Avoid assuming “It won’t happen to me” mindset if you see credible signals. To do so is to ignore early warnings. - Avoid making panic‑driven moves such as quitting without a plan. While leaving voluntarily can be valid, without a financial and career safety net it may be ill‑timed. - Avoid over‑reliance on one skill or one employer. The world of work is shifting from long‑term linear careers to more fluid trajectories; treat your career as a portfolio, not a fixed path. - Avoid ignoring your emotional state. Job risk brings stress and uncertainty. Unaddressed anxiety can undermine judgement and readiness. - ## **5. Steps to Take and Things to Avoid—to Protect Yourself From Job Loss** This section focuses on decision points: actionable moves you should consider and pitfalls you should steer clear of. Rather than an oversimplified numbered list, you’ll encounter thematic categories of behavior. ### Proactive steps Begin by scanning your “career radar” regularly. Ask: is my role evolving? Are tasks shifting away from me? Are resources still being invested in my team? When the answer tilts toward “no”, that is your prompt to engage deeper. Engage with learning intentionally. If the future skills show digital‑AI literacy and adaptability are key, then allocate time and resources toward relevant learning. Consider not just certifications but applied work—side‑projects, internal hack‑a-thons, cross‑department collaboration. Real‑world application matters. Build what I call a “role upgrade” mindset: imagine your role two years from now and start acting as if you are functioning in that upgraded role. This may involve volunteering for new tasks, shadowing adjacent teams, proposing improvements. When you proactively position yourself, you hedge against being left behind. Strengthen your external market awareness. Even if you feel secure internally, knowing what the outside world values is power. Keep tabs on job postings in your field, salary trends, in‑demand skills, emerging business models. This doesn’t mean you are planning to leave—it means you are informed, and being informed reduces shock. Strengthen your personal brand: contribute insights inside and outside your organization. Publish short articles, speak in team forums, mentor others. Visibility does not guarantee job safety, but invisibility increases risk in a shifting landscape. ### Things to avoid Resist the temptation to interpret every organizational change as a personal threat. You want calibrated awareness, not hypersensitivity that distracts from your work. Avoid stagnation. If you are in a comfort zone role where you can perform without evolving, that comfort may lull you into higher risk. Growth often lives in discomfort. Avoid indiscriminate skill acquisition just for the sake of doing something. Focus on relevance. There is no value in learning a skill that is unlikely to matter for your role or the next evolution of your field. Avoid ignoring the personal impact: job risk is not only financial but emotional. Do not isolate yourself; keep a support network of peers, mentors, friends. The mental resilience to navigate change is as important as the skill resilience. - ## **6. Long‑Term Strategies to Build Resilience and Job Loss Protection** Having prepared the ground, the final part of the funnel is about long‑term orientation: how do you build a career and financial position that weathers not only the risks of 2026, but the ongoing turbulence of decades to come? ### Cultivate adaptive employability against job loss risk One of the strongest buffers against job loss is to make yourself rarely expendable: not by being perfectly safe, but by being always relevant. That means embracing lifelong learning, but more importantly becoming comfortable with change. When organizations restructure, they will favor those who can shift roles, take on new priorities, learn new skills quickly. This adaptability is a career asset. ### Build a diversified career portfolio Rather than putting all your career eggs in one employer’s basket, consider a career‑portfolio mindset: your core role, a side project, a network of contacts, perhaps external consulting or advisory work. This doesn’t necessarily mean you must be side‑hustling. It means you maintain optionality. When one pathway faces disruption, you have others you can lean on. ### Future‑proof your financial foundation Align your long‑term financial planning with uncertainty in mind. Be conservative in assumptions. Recognize that job loss may not always be within your control. Do not assume your company will always grow. Ensure your retirement savings, emergency funds, investment strategy are insulated, at least partly, from the exact trajectory of your current job. - ### Stay plugged into macro‑trends The future of work will not wait for you to catch up. The [**WEF report**](https://www.weforum.org/publications/the-future-of-jobs-report-2025/digest/?utm_source=chatgpt.com) suggests that broadening digital access, AI, robotics, and sustainability trends will transform business models and jobs. By staying aware of these shifts you can steer your career proactively rather than being steered reactively. ### Maintain psychological resilience against job loss fear Job security is psychological as well as financial. The mindset of “I am prepared but not paranoid” is powerful. That means positive self‑regard, realistic optimism, readiness to act, and capacity to navigate change without being destabilized by it. Your worth is not just tied to your current employer or role. - ### **Monetary Policy and Hidden Signals** Central banks have a far-reaching influence on employment—often more than most professionals realize. When interest rates rise, borrowing costs increase and businesses typically respond by delaying investment and hiring. [**The International Monetary**](https://www.imf.org/en/publications/fandd/issues/series/back-to-basics/monetary-policy) Fund notes that tighter monetary policy can slow economic activity and weaken job creation as firms adjust to higher financing costs. This means that while a company may appear stable today, macroeconomic conditions could already be setting the stage for softer labor demand next year. Employees who monitor policy and market trends gain foresight that internal updates alone rarely provide. Following central-bank briefings, corporate earnings calls, and inflation releases offers an early sense of shifting conditions. - Employees who monitor macro trends gain foresight unavailable to those who only track internal gossip. Following quarterly central bank briefings, corporate earnings calls, and inflation updates provides a strategic edge. When executives begin emphasizing phrases such as *“efficiency,” “cost discipline,”* or *“operational streamlining”* in public communications, it often echoes the broader cooling effects of a tighter monetary environment. - ### **Quiet Career Insurance:** - ### Create value visibility Document achievements in real time. Keep track of tangible outcomes — revenue saved, clients retained, efficiency gained. Visibility converts into defensibility when decisions about redundancy are made. The employee who can demonstrate measurable impact is often the one retained to stabilize transition. ### Develop external proof of worth An often-overlooked safeguard is having validation outside your employer’s walls. Publishing insights, contributing to professional communities, or participating in industry discussions enhances perceived value. Hiring managers, peers, and even your current leaders notice individuals who are recognized beyond the company. - ### Financial prepositioning Finally, treat liquidity as leverage. Having available funds is not only about surviving job loss; it is about enabling better decisions. The ability to decline a poor offer or wait for the right opportunity separates strategic movers from those acting out of fear. It is observed that households with at least three months of liquid savings experience relatively shorter unemployment durations Quiet career insurance is not dramatic. It’s slow, consistent, and rarely visible — but it converts uncertainty into options, and options are the real currency of security. - ### **How Advisors Make Navigating Job Loss Simpler** - #### Translating complexity into clarity Advisors transform overwhelming information into actionable insight. They monitor economic trends, industry forecasts, and corporate health indicators so you do not have to become an expert overnight. Instead of reacting to every rumor or headline, you gain a structured, fact-based approach tailored to your situation. #### Personalized safety nets One of the most powerful roles advisors play is designing contingency plans that fit your unique needs. From calculating optimal emergency funds to suggesting skill diversification or alternate career avenues, they provide foresight that protects both finances and professional momentum. The guidance is not theoretical; it is immediately implementable, reducing panic and increasing confidence. #### Emotional reassurance Job loss is as much psychological as financial. Advisors provide perspective, helping you maintain focus and composure. Knowing that you have a trusted voice to turn to mitigates anxiety, making it easier to act proactively rather than reactively. - In essence, advisors serve as a stabilizing force. They do not remove uncertainty — nothing can — but they make uncertainty manageable. By combining data, experience, and empathy, they allow you to navigate potential job loss with preparation and confidence rather than fear. - Ultimately, preparing for potential job loss is less about avoiding change and more about shaping it. It is about turning anxiety into strategy, disruption into opportunity, and vulnerability into resilience. By taking these steps, you do not simply survive uncertainty — you navigate it with purpose, confidence, and peace of mind. - If you found this guide on navigating potential job loss helpful, we have additional resources to help you stay financially secure while you’re employed: - Over the next few weeks, we’ll be sharing: - Practical, easy-to-apply content that helps you save intelligently, protect your income, and prepare for whatever changes may come—turning your paycheck into a tool for long-term financial security. - To take this one step further, we invite you to [**join our upcoming webinar**](https://nvestadvisors.com/job-market-webinar-build-a-career-that-thrives-anywhere/), where we’ll walk you through actionable strategies to safeguard your income, optimize your paycheck, and build long-term resilience. - Reserve your spot today and take proactive steps toward financial confidence and stability, no matter what the future holds. **Categories:** Behavioral Finance, Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Mailchimp, Plan Participants, Politics, Press Releases, public, Retirement, Small Business --- ### [Financial Aid and Scholarships: A Guide for Families](https://nvestadvisors.com/financial-aid-and-scholarships-a-guide-for-families/) **Published:** June 30, 2025 **Author:** Maryam Irfanmeer **Content:** # ![Financial Aid](https://nvestadvisors.com/wp-content/uploads/2025/06/pexels-ekrulila-2292837-e1751317786175-1024x440.jpg "Pexels ekrulila 2292837 nvest advisors") # Financial Aid and Scholarships: A Guide for Families When Sarah and Michael found out their daughter had been accepted to her dream college, they were overjoyed. But the excitement quickly turned to worry as they faced a hefty price tag. They knew paying for college was a challenge, but the sheer number of options for financial aid and scholarships left them overwhelmed. If you’re in a similar situation, don’t worry. Navigating financial aid doesn’t have to feel like decoding a secret language. With some guidance and a bit of planning, you can make college more affordable without drowning in debt. At nVest Advisors, we often meet families who aren’t sure where to begin. The good news? You don’t have to figure it out alone. Let’s walk through the essentials together — what financial aid really is, how to find scholarships, and how to increase your chances in 2025. ## Understanding Financial Aid: What It Really Means Financial aid is money to help cover the cost of college. It can come from the federal government, state programs, colleges, or private groups. Some types must be paid back, while others are gifts you don’t need to repay. The main types of financial aid include: - **Grants** — Often need-based and awarded based on your family’s financial situation. - **Scholarships** — Often merit-based and awarded for academics, talents, leadership, or community service. - **Work-study programs** — Campus jobs that let students earn money while enrolled. - **Loans** — Borrowed funds that must be paid back with interest. One of the most important steps in getting financial aid is completing the Free Application for Federal Student Aid (FAFSA). The 2025–26 FAFSA form is now available for students and their contributors to complete online at [fafsa.gov](https://studentaid.gov/h/apply-for-aid/fafsa). Completing the FAFSA opens access to federal aid — including grants, loans, and work-study — and is used by most colleges to decide what help they can offer. The federal deadline to submit the FAFSA for the 2025–26 academic year is June 30, 2026. It’s crucial to submit the FAFSA as early as possible, as many states and colleges have their own financial aid deadlines that may be earlier than the federal deadline. Submitting the FAFSA early can increase the chances of receiving aid, especially since some programs award funds on a first-come, first-served basis. For the most accurate and up-to-date information, always refer to the official Federal Student Aid website: [studentaid.gov](https://studentaid.gov/h/apply-for-aid/fafsa). ## How Financial Aid Has Shifted in 2025 There have been several important updates in 2025 that families should be aware of: - **Pell Grant Maximum Remains at $7,395**: For the 2025–26 academic year, the maximum Federal Pell Grant award remains unchanged at[ $7,395](https://studentaid.gov/understand-aid/types/grants/pell). - **Expansion of No-Loan Financial Aid Packages**: An increasing number of colleges are offering no-loan financial aid packages, replacing student loans with grants and scholarships to reduce student debt. - **State-Level Increases in Need-Based Aid**: States like California, Texas, and New York have increased funding for need-based state aid and scholarship programs, aiming to make higher education more accessible. [TICAS](https://ticas.org/new-york/new-york-enacted-budget-statement-may-2025/?utm_source=chatgpt.com) - **Simplification of the FAFSA Form**: The Free Application for Federal Student Aid (FAFSA) has been simplified, reducing the number of questions and making it faster and easier to complete. These positive changes have made the financial aid process more accessible but also more competitive. Applying early and thoroughly can enhance your chances of receiving aid. ## Scholarships: Beyond the Basics Many people assume scholarships are only for straight-A students or top athletes. But there are thousands of scholarships available for all types of students. Here are just a few categories to explore: - **Community Service Scholarships** — For students making a difference in their neighborhoods - **STEM Scholarships** — For those studying science, technology, engineering, or math - **Arts and Music Scholarships** — For creative students with passion and talent - **Diversity Scholarships** — For students from underrepresented backgrounds - **Career-Specific Scholarships** — For future teachers, social workers, or public health majors - **Employer-Sponsored Scholarships** — Some companies offer scholarships for their employees’ children If you feel lost looking for scholarships, start local. Community foundations, libraries, credit unions, and even your employer might have options that are easier to win than national ones. Want to build a simple scholarship strategy for your child’s interests and goals? Let [nVest advisor](https://nvestadvisors.com/) help you find the right mix. ## Insider Tips for Winning Scholarships After working with dozens of families over the years, here are some practical, hard-earned insights: - **Start early.** The best scholarships often have early deadlines. Begin looking in junior year or even earlier. - **Stay organized.** Use a spreadsheet or folder to track deadlines, documents, and submissions. - **Apply to local opportunities.** National scholarships can be tough to win, but local groups often receive fewer applications. - **Make it personal.** Scholarship reviewers connect with real stories. Avoid copying and pasting essays. - **Keep updating your resume.** Scholarships may ask for recent grades, volunteer hours, or leadership activities. - **Stack the small wins.** Even a few $500 awards add up over four years. ## Navigating the FAFSA in 2025 The FAFSA can feel confusing, but it remains the key to unlocking the most financial aid. Here’s what matters in 2025: - **File as close to October 1 as possible.** Some aid is first-come, first-served. - **Use the IRS Data Retrieval Tool.** It pulls your tax info in automatically and avoids errors. - **Check your state and college deadlines.** Some close weeks before the federal deadline. - **Update for any big life changes.** Lost a job? Major medical bills? You can update the FAFSA to reflect that. - **Save login info carefully.** You’ll use it every year, and lost credentials can delay everything. Need help preparing documents or making sense of FAFSA changes? An[ nVest advisor](https://nvestadvisors.setmore.com/) can walk you through it without the stress. ## Work-Study: An Underused Resource Many families skip over work-study opportunities, but they can be valuable. Students earn money in part-time jobs — often related to their field of study or supporting the school community. Some benefits of work-study: - Flexibility around class schedules - On-campus networking and real-world experience - A chance to cover costs without borrowing more money In 2025, colleges are expanding work-study opportunities and offering more options in areas like tech support, tutoring, and event planning. ## What About Student Loans? While grants and scholarships are ideal, many families still need to borrow. Here’s what to keep in mind: - **Federal loans first.** These offer lower interest and more flexible repayment terms than private loans. - **Subsidized loans help.** These don’t charge interest while your child is in school. - **Borrow only what’s needed.** Loans are easy to accept but harder to repay. Keep total borrowing in line with expected starting salary after graduation. - **Teach repayment early.** Help your student understand terms, timelines, and forgiveness options. ## A Final Word for Families Every family’s financial aid journey is unique. What worked for your neighbor may not work for you. But with patience, research, and planning, you can find options that ease the financial burden and keep your child’s educational dreams alive. If you’re ready to get started, remember this: Early preparation is your strongest ally. Reach out to financial aid offices, explore scholarship search tools, and take it one step at a time. **And if you’d like a clear, personal plan to fund your child’s education — without the confusion or stress — we’re here to help.** At nVest Advisors, we help families like yours turn overwhelm into action.[ **Book a pressure-free call**](https://nvestadvisors.setmore.com/) with one of our advisors to review your options and build a plan that works for your goals, your timeline, and your budget. **Categories:** Annuities & Insurance, Client News, Client Service, College, Debt, Early nVestors, Financial Planning, From our CEO, Individuals and Families, Investing General, LifeCycle, Mailchimp, Plan Participants, public, Small Business, Taxes, Texas Teachers Retirement --- ### [Wealth-Building for Non-Accredited Investors](https://nvestadvisors.com/wealth-building-for-non-accredited-investors/) **Published:** December 17, 2025 **Author:** Maryam Irfanmeer **Content:** # **![Non Accredited Investors](https://nvestadvisors.com/wp-content/uploads/2025/12/pexels-rdne-7414275.jpg "Pexels rdne 7414275 nvest advisors")Wealth-Building for Non-Accredited Investors** A few years ago, a young entrepreneur named Daniel was excited about investing in a promising private startup. But just like thousands of others, he was denied access—not because he lacked the funds or knowledge, but because he wasn’t an [**accredited investor**](https://nvestadvisors.com/accredited-investors-what-you-need-to-know/). This left him wondering: Do non-accredited investors have any real opportunities to build wealth, or are they locked out of the best deals forever? The truth is, while [**accredited investors**](https://nvestadvisors.com/accredited-investors-what-you-need-to-know/) get access to exclusive deals, non-accredited investors are not without options. In fact, alternative investing avenues have evolved, making wealth-building more accessible than ever. If you’re not accredited, here’s what you need to know about growing your wealth, navigating risks, and accessing high-potential investments. ## **Why Accreditation Exists** The SEC defines an accredited investor based on income, net worth, or financial certification to ensure that individuals investing in high-risk, private markets have the financial cushion to absorb losses. This system aims to protect investors from risky, illiquid investments. However, it also creates an unintended consequence: It limits opportunities for those who may be financially savvy but don’t meet the arbitrary income or asset thresholds. For decades, non-accredited investors were locked out of private equity, hedge funds, venture capital, and other high-growth investments. But with regulatory shifts and technology-driven investment platforms, the landscape is changing. ## **Opportunities for Non-Accredited Investors** > ***Note:** the examples below are not intended to be, nor should they be interpreted as specific investment recommendations. nVest Advisors will never provide specific recommendations without a signed client agreement. These examples are simply the kinds of investments that used to be available mainly to accredited investors that are finding new and creative ways to reach the broader investing public. Every investment carries a unique blend of risk and reward characteristics; consult with your advisor and know your risks before investing. [(And if you don’t have an advisor, we know some very good ones!)](https://nvestadvisors.com/meet-the-nvest-advisors-team/ "Meet the nVest Advisors Team")* ### **1. Real Estate Crowdfunding: Own a Share of Property Without Millions** Traditionally, real estate investing required significant capital, but today, non-accredited investors can participate through crowdfunding platforms. Companies like Fundrise and Roofstock allow individuals to invest in real estate projects with as little as $500. These platforms pool capital from multiple investors, granting access to high-quality commercial and residential properties. Additionally, there are a wide variety of Real Estate Investment Trust (REIT) investments available for non-accredited investors, that can be bought and sold on the broad market exchanges. ### **2. Private Market Investing Without Accreditation** In recent years, the SEC introduced [Regulation A+](https://www.sec.gov/resources-small-businesses/exempt-offerings/regulation) and [Regulation CF](https://www.sec.gov/resources-small-businesses/exempt-offerings/regulation-crowdfunding) (Crowdfunding), allowing everyday investors to participate in private companies. Platforms like WeFunder and Republic provide opportunities to invest in startups and private businesses with low minimums, and new marketable securities holding these kinds of opportunities are more common. ### **3. ETFs and Index Funds: Market Growth Without Active Management** If you prefer a hands-off approach, ETFs (Exchange-Traded Funds) and index funds are among the best ways to build wealth over time. As examples (but NOT specific recommendations), Vanguard’s Total Stock Market ETF (VTI) or the S&P 500 ETF (SPY) allow you to invest in hundreds of companies – literally an entire economy – at once, reducing individual stock risk. ### **4. Alternative Assets: Precious Metals, Farmland, and Collectibles** If you’re looking for more diversification, alternative assets like gold, silver, farmland, and even fine art can offer unique investment opportunities. Platforms like Masterworks allow investors to buy fractional shares of blue-chip art, while AcreTrader makes farmland investing accessible to everyday investors. Again, know your risks and return potential before investing any capital. ## **The Risk Factors Non-Accredited Investors Should Know** Every investment carries risk, but non-accredited investors face unique challenges. Without access to hedge funds and private equity, there is a greater reliance on publicly traded securities, alternative assets, and emerging platforms. Here’s what to consider: - **Volatility**: Stocks and crypto markets can fluctuate wildly, unlike some private equity investments which are shielded from daily price swings. However, the reason these investments are often off-limits to non-accredited investors is precisely because they often aren’t valued regularly, and often have long periods when you can’t get out of them. - **Liquidity**: Many alternative investments (real estate, startups, art) require long-term commitment before profits are realized. This is, again, why many of these are limited to welathy investors who CAN lock up their money for extended periods of time. - **Regulatory Protections**: While public markets have SEC oversight, private investments may have less transparency, requiring extra due diligence. Many also have difficult legal or tax considerations, making understanding them fully prohibitively expensive for non-accredited investors. With regulated investments, there is added government oversight and reporting requirements to help prevent unnecessary risk to non-accredited investors. ## **Comparison:** ![Accredited vs Non Accredited Investors](https://nvestadvisors.com/wp-content/uploads/2025/03/Feature-Comparison-Graph-1-1-e1743046357663.webp "Feature comparison graph 1 nvest advisors") ## **How to Increase Your Investment Options as Non-Accredited Investors** If you want to access accredited investor opportunities in the future, there are a few strategic steps you can take: 1. **Increase Your Income**: Build multiple income streams through side businesses, salary growth, or high-income skills. 2. **Grow Your Net Worth**: Focus on saving aggressively and investing consistently to reach the $1M net worth requirement. 3. **Obtain Financial Certifications**: Series 65, 7, or 82 licenses can qualify you for accreditation based on knowledge rather than income. 4. **Form an Investment Entity**: Some investors pool resources with others to form an entity that meets accreditation standards. ## **Final Thoughts:** Being a non-accredited investor doesn’t mean you’re stuck with limited options. With the rise of fintech platforms, crowdfunding laws, and alternative investment vehicles, everyday investors now have access to many wealth-building opportunities once reserved for the ultra-rich. The key is education, due diligence, and strategic investment planning. At **nVest Advisors**, we help non-accredited investors navigate these options, ensuring they make informed, strategic decisions to grow their wealth. If you’re ready to explore the best strategies for your financial future, let’s **[start](https://nvestadvisors.setmore.com/)** a conversation today! **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Small Business --- ### [The Rise of ESG Funds: Balancing Profit with Purpose](https://nvestadvisors.com/the-rise-of-esg-funds-balancing-profit-with-purpose/) **Published:** December 10, 2025 **Author:** Maryam Irfanmeer **Content:** # **![ESG funds](https://nvestadvisors.com/wp-content/uploads/2025/12/pexels-quang-nguyen-vinh-222549-35105457.jpg "Pexels quang nguyen vinh 222549 35105457 nvest advisors")The Rise of ESG Funds: Balancing Profit with Purpose** When I first started advising clients in the late 2000s, ESG funds were a niche whisper in the investment world. They were called ethical funds, sustainable mutuals, or socially conscious portfolios. Fast forward to today, and ESG funds sit at the center of two unstoppable trends: a generational demand for aligning money with values, and an economic shift where climate risk, social responsibility, and governance are no longer optional—they are essential to long-term value. Here’s what most investors don’t yet appreciate: this is not simply a moral movement. The rise of ESG funds represents a structural shift in global finance—a world where purpose and profit are intertwined. Note: Some of the excess returns on E.S.G. funds in the prior years was most likely due to their trendiness and not so much the underlying performance of the companies involved. As your guide today, I’ll walk you through every layer of ESG investing—what ESG funds really are, how they evolved, how they perform, where the controversies lie, and how to position your capital intelligently in this new landscape—ultimately showing that while they have a place in a portfolio for specialized exposure, they should not comprise a significant majority of your long-term holdings. ## **What ESG Funds Really Are** Everyone knows the letters: E for environmental, S for social, G for governance. But the true value of ESG funds lies beneath the surface. ### Quantifying ESG Funds Fund managers do not simply declare they care about sustainability. They turn values into data. That means measuring carbon emissions per dollar of revenue, water use intensity per unit of production, percentage of women on boards, employee turnover, and dozens of other factors. These data points come from company reports, third-party data providers, and increasingly, technologies such as satellite imagery and AI-driven monitoring. But remember, ESG metrics are not just moral indicators—they are risk signals. A company with rising emissions, poor labor standards, and weak governance often carries hidden financial vulnerabilities. ### How ESG Data Enters the Portfolio There are three main ways managers integrate ESG data into portfolios: 1. **Screening** – Excluding certain companies or industries that conflict with ESG criteria, such as coal, tobacco, or weapons. 2. **Integration** – Incorporating ESG scores alongside financial metrics like valuation, growth, and risk in the investment process. 3. **Active Ownership and Engagement** – Holding companies while pushing for tangible improvements such as stronger governance, clearer climate targets, and fairer labor practices. ### Rating Agencies and Methodologies The biggest ESG rating agencies—MSCI, Sustainalytics, and Morningstar—have become central to this market. But their methodologies differ significantly. One company can receive an A rating from one agency and a C from another. This inconsistency means investors must look past labels to understand what criteria are actually being measured. ## **The Evolution: From Ethical Investing to ESG Integration** ### From Sin Stocks to ESG Integration Ethical or socially responsible investing used to mean avoiding sin stocks such as tobacco, alcohol, and weapons. That was the exclusion era. But it was limited, often overlooking companies that still carried environmental or governance risks. Today’s ESG funds have evolved into integration models. Instead of asking what to avoid, investors ask how sustainability metrics can strengthen the entire investment process. The focus has shifted from moral preference to material financial impact. ### Global Growth As of late 2024, there were more than 7,600 sustainable funds globally, managing over **[$3.3 trillion](https://www.todayesg.com/morningstar-2024q3-global-sustainable-fund-report/?utm_source=chatgpt.com)** in assets. In the final quarter of 2024 alone, ESG funds attracted around **[$16 billion](https://www.esginvesting.co.uk/2025/01/esg-inflows-see-jump-to-16bn-in-q4/?utm_source=chatgpt.com)** in new inflows. Despite periodic pullbacks, the long-term trajectory is clear: sustainable investing has moved from fringe to fundamental. ## **The Performance Reality** When clients ask me about ESG funds, the first question is always the same: “Can I make money doing this?” The honest answer is yes, but it depends on discipline and selection. ### Comparing Returns Data shows mixed results. In 2023, sustainable funds achieved median returns of about **[12.6 percent](https://www.morganstanley.com/ideas/sustainable-funds-performance-2023-full-year)** compared with **[8.6 percent](https://www.morganstanley.com/ideas/sustainable-funds-performance-2023-full-year)** for traditional funds. A 2025 **[Yodlear study](https://www.yodelar.com/insights/top-performing-esg-funds#:~:text=338%20ESG%20funds%20analysed%20across,companies%20with%20strong%20ESG%20credentials.)** found that only 5.4 percent of ESG funds achieved high performance ratings, while nearly three-quarters underperformed their sector peers. ### Volatility and Risk ESG funds often lean toward technology, healthcare, and renewable energy while underweighting traditional energy and industrials. This can make them more volatile depending on sector cycles. The **[OECD](https://www.oecd.org/en/publications/oecd-business-and-finance-outlook-2020_eb61fd29-en.html)** notes that integrating ESG funds considerations into investment and lending practices can enhance resilience and help manage material sustainability-related risks—such as regulatory, reputational, and transition risks—that traditional financial models often fail to capture. ### The Search for Alpha ESG funds are not a shortcut to outperformance. It is a framework for improving risk-adjusted returns over time. Managers still need to select skillfully, manage costs, and maintain consistency in integration. ## **The Profit–Purpose Paradox** Now we reach the most important tension: can an investor truly balance purpose with profit? ### The Trade-Offs Excluding high-emission sectors may limit diversification and occasionally sacrifice short-term gains. Yet ignoring ESG considerations can expose investors to long-term losses from stranded assets, lawsuits, or reputational harm. In other words, the real trade-off is not between doing good and making money—it’s between short-term optics and long-term resilience. ### The Threat of Greenwashing in ESG Funds This is where investors must stay vigilant. In 2024, WisdomTree **[paid a $4 million penalty](https://finance.yahoo.com/news/sec-fines-wisdomtree-4m-etf-203507368.html)** for falsely claiming that certain ESG funds excluded fossil fuels and tobacco. Studies suggest that many companies are [**falsely labeling themselves as “green” funds**](https://sogreenpack.com/post/greenwashing-how-companies-fake-being-eco-friendly-with-false-environmental-claims/#:~:text=What%20is%20greenwashing%20in%20green,friendliness%20through%20deceptive%20green%20marketing.) to attract investors, making misleading claims about their environmental or sustainability practices. ## **ESG Funds in Practice — What Investors Should Know** ### Evaluating ESG Funds Effectively How can investors assess ESG (Environmental, Social, and Governance) funds intelligently? Professional financial advisors typically focus on several key areas: **1. Policy and Philosophy** – Does the fund have a clearly defined ESG mandate and a transparent investment process? **2. Data Sources** – Which ESG rating agencies and methodologies does the fund rely on? Are these sources credible and consistent? **3. Transparency** – Are the fund’s holdings and engagement activities publicly disclosed? **4. Performance and Fees** – Is the higher expense ratio justified by stronger ESG integration and active shareholder engagement? **5. Benchmark Classification** – In Europe, the Sustainable Finance Disclosure Regulation (SFDR) classifies funds as *Article 8* (“light green”) or *Article 9* (“dark green”), depending on the depth of ESG integration. While the U.S. does not use this system, similar distinctions are emerging through regulatory guidance. **6. Impact Reporting** – Does the fund publish measurable results—such as carbon emissions avoided, renewable energy capacity financed, or improvements in social outcomes? Note: This isn’t personal investment advice—just general education. No single strategy outperforms forever, which is why diversification matters. ESG investing can reflect your values, but it can also be a trend. Stay mindful that what’s popular today may lose favor tomorrow, so keep long-term discipline and avoid chasing fads. ## **The Criticisms and Controversies** Every major shift invites skepticism, and ESG funds are no exception. ### Political and Regulatory Pushback In the United States, ESG investing has become politically divisive. Some states have banned ESG considerations in pension funds, arguing **[they sacrifice returns](https://ocpathink.org/post/analysis/lawsuit-highlights-poor-returns-generated-by-esg-investing)**. ### Inconsistent Ratings of ESG Funds An ESG score from one provider can differ dramatically from another. The International Organization of Securities Commissions found that [**ESG rating models vary widely**](https://www.erm.com/insights/rating-the-raters-yet-again-six-challenges-for-esg-ratings/#:~:text=As%20a%20result%2C%20different%20firms,in%20implementing%20ESG%20investment%20strategies.), making cross-comparison difficult. Investors must therefore focus less on scores and more on methodology. ## **The Performance Debate** While ESG funds can outperform, studies also show many underperform. This duality has fueled criticism that ESG is more about marketing than measurable impact. Investors need to remember that ESG is a framework for risk—not a guarantee of outperformance. ### Impact Confusion Not every ESG fund delivers direct social or environmental outcomes. Many simply invest in companies with better-than-average practices. True impact investing goes further by financing projects that create measurable positive change, such as renewable infrastructure or affordable housing. ### The Future of ESG Funds The next phase of ESG investing will be driven by technology, transparency, and accountability. ### Emerging Trends - **Artificial Intelligence and Alternative Data:** Algorithms will soon analyze satellite images, supply chains, and social sentiment to monitor ESG compliance in real time. - **Biodiversity Metrics:** Investors will begin demanding disclosures on ecosystem preservation, not just carbon reduction. - **Climate Transition Funds:** Focus will shift from static low-carbon portfolios to funds investing in companies driving decarbonization. - **Social Equity Funds:** Portfolios will expand to include firms advancing workforce inclusion and economic opportunity. - **Regenerative Finance:** The next frontier, where capital not only sustains but restores environmental and social systems. - ### **How Investors Should Prepare When Investing in ESG Funds** - Think long term. The ESG payoff is measured in decades, not quarters. - Avoid hype. Choose funds with substance, not slogans. - Revisit your allocations annually as regulations and methodologies evolve. - Keep learning. ESG is not static—it’s a living, adaptive framework. - When built correctly, ESG funds do not dilute returns—they strengthen them through risk reduction, resilience, and alignment with global trends. They make portfolios more adaptive to the realities of climate transition, social accountability, and governance integrity. So as you review your portfolio, ask yourself three questions: 1. Are my investments aligned with where the world is heading? 2. Do my ESG funds demonstrate measurable impact and transparency? 3. Am I balancing today’s returns with tomorrow’s responsibility? This is what it means to balance profit with purpose. ESG funds are not the end of capitalism—they are its evolution toward sustainability. The investors who understand that today will lead the markets of tomorrow. - > *Note: No specific strategy outperforms over long periods of time, which is why diversification is so important. We never give personalized investment advice without a client agreement. So this is for educational purposes, only and no specific recommendation should be taken or inferred from these comments. ESG funds are right now in favor, there is as much a risk that they will fall out of favor in the future. Buying ESG funds is part investing in your principles, but it’s also part investing in a trend or a fad. We need to be careful not to chase in a long-term investment strategy.* - If you’re ready to explore how ESG funds can fit into your broader investment plan, don’t do it blindly. Let’s talk about it. At [**nVest Advisors**](https://nvestadvisors.com/), we help clients design portfolios that align with both financial goals and personal values—without compromising performance. You can [**book a conversation with us today**](https://nvestadvisors.setmore.com/), and we’ll walk you through how to build a strategy that truly balances profit with purpose. **Categories:** Behavioral Finance, Business Stories, Client News, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public --- ### [Micro-Investing and Financial Literacy: How Small Decisions Build Lifelong Wealth](https://nvestadvisors.com/micro-investing-and-financial-literacy-how-small-decisions-build-lifelong-wealth/) **Published:** December 10, 2025 **Author:** Maryam Irfanmeer **Content:** # ![micro investing](https://nvestadvisors.com/wp-content/uploads/2025/12/pexels-shkrabaanthony-5583980.jpg "Pexels shkrabaanthony 5583980 nvest advisors")Micro-Investing and Financial Literacy: How Small Decisions Build Lifelong Wealth ### Why This Conversation Matters Today The way you handle money today is quietly deciding the kind of financial tomorrow you will live in. Whether you are managing a business through volatile markets or balancing your household budget, the truth is the same: wealth is not created by one dramatic breakthrough. It is built through consistent, informed decisions made long before a crisis ever appears, and micro-investing is one of the simplest ways to begin that process. Micro-investing and financial literacy are two tools that make this possible. Together, they can turn small, often overlooked choices into a foundation of security, growth, and freedom. And yet, without the right knowledge, these same tools can lead to regret, instability, and wasted opportunities. This article will show you how micro-investing works, why financial literacy is the missing piece, and how combining them can help you take control of your financial life. More importantly, it will guide you toward building a strategy that grows with you — one that does not stop at spare change but evolves into lasting wealth. ## The Rise of Micro-Investing: Why Small Capital Matters Not long ago, investing felt like a privilege reserved for people with large sums of money. Today, technology has broken down that barrier. Apps now allow someone to begin investing with as little as five dollars, and round-up features can automatically turn spare change from everyday purchases into invested capital. But here is the overlooked truth: **micro-investing is not about small money, it is about time.** A guide from the **[U.S. Securities and Exchange Commission (SEC)](https://www.investor.gov/introduction-investing/investing-basics/building-weather-over-time)** “Build Wealth Through Saving and Investing” emphasizes that regular investing — even starting small — combined with time and compounding returns, significantly improves long-term wealth-building prospects. This highlights the quiet but powerful advantage of starting early. By consistently investing, however small the amount, you give compounding years — even decades — to do its work. The misconception is that micro-investing is a short-term trick. In reality, its true value is psychological and strategic. It allows you to begin immediately, instead of waiting until you “have enough.” It teaches financial discipline while building tangible results. ## Why Micro-Investing Without Financial Literacy Is Dangerous Micro-investing has made the process of entering the markets easier than ever. But ease does not equal safety. In fact, accessibility can lead to damaging patterns: - Overloading on trending stocks without understanding the risks - Withdrawing too early and disrupting compounding - Treating investments like a savings account rather than a growth tool According to the survey cited by CNBC in March 2022, about [**57% of Gen Z investors and 50% of Millennials** ](https://www.cnbc.com/2022/03/31/more-than-half-of-young-investors-have-regrets-from-the-last-year.html?utm_source=chatgpt.com)said they regretted some aspect of how they invested over the past year. This shows that the real challenge is not starting — it is knowing how to continue wisely. ## That is where financial literacy enters the picture. Financial literacy is not about memorizing financial jargon or mastering complex formulas. It is about understanding the principles that protect you from costly mistakes: diversification, risk tolerance, time horizon, and the discipline to stay invested during downturns. Without these basics, micro-investing is like building a bridge halfway across a river. You may start with good intentions, but you will not reach the other side. ## From Spare Change to Strategic Growth Starting with an app is useful. But the goal of micro-investing should never remain at the level of spare change. Instead, it should evolve into a structured financial strategy. Here is what that transition looks like: 1. **Defining Your Goal** Are you saving for a short-term cushion, like an emergency fund, or building toward a long-term milestone such as retirement? Your time horizon determines your investment choices. 2. **Allocating Wisely** Even small accounts can be diversified. Mixing stocks, bonds, and ETFs ensures no single event can derail your progress. 3. **Reviewing Regularly** Small investments deserve the same discipline as larger ones. An annual review can highlight whether your risk tolerance, income, or goals have shifted. 4. **Scaling Contributions** The ultimate power of micro-investing is that it grows with you. A $20 monthly contribution can become $100 or more as your income rises. This scaling accelerates your progress without breaking your budget. Most people stop after step one — starting. They never build the strategy that unlocks financial independence. That is where guidance can make all the difference. ## The Psychological Advantage of Micro-Investing There is a rarely discussed benefit of micro-investing: it conditions your behavior. By investing small amounts, you expose yourself to market ups and downs without risking large sums. This training builds resilience. You learn that downturns are temporary, that patience matters, and that long-term vision pays off. Behavioral finance research shows that people who start with micro-investing are more likely to become long-term investors. Why? Because they have reframed their identity. They are no longer “thinking about investing.” They are investors. That identity shift builds confidence and curiosity, which leads them to seek more knowledge, more opportunities, and eventually, more financial freedom. ## Where Financial Advisors Fit In Apps are excellent for automation, but they cannot think about your life as a whole. They will not remind you that your tax obligations are changing, that your child’s college timeline is approaching, or that your business cash flow has shifted. A financial advisor fills this gap. We help you: - Integrate micro-investing into your larger financial picture - Adjust your strategy as your income, family, or business evolves - Avoid costly mistakes like panic-selling or mismanaging tax-efficient accounts - Turn small contributions into a plan that compounds into meaningful wealth In short, financial literacy ensures you avoid errors, and professional guidance ensures you optimize opportunities. The intersection of these two is where lasting wealth is built. ## Why This Matters More in 2025 Micro-investing is not just a trend. It is becoming a critical gateway into financial inclusion. More young professionals, small business owners, and even retirees looking to rebuild after financial setbacks are turning to these tools as a way to start, regardless of their income level. But accessibility without guidance is like handing someone car keys without teaching them to drive. Yes, they can move forward. But without direction, the risk of a crash is high. Financial literacy is no longer optional. It is the foundation that ensures every dollar — no matter how small — is working toward your future rather than against it. ## Taking the Next Step: From Reading to Action Here is the most important takeaway: micro-investing is only the beginning. Real transformation happens when you combine consistent small actions with informed strategy and professional guidance. If you have started investing through an app, you have already taken the first step. The next step is ensuring that effort compounds into something far more powerful. At **[nVest Advisors](https://nvestadvisors.com/)**, we help individuals, families, and small business owners connect the dots between small contributions today and financial independence tomorrow. We guide you through the transition from micro-investing to a holistic strategy that adapts with your life. The sooner you begin this conversation, the more years you give compounding to work in your favor. Click [**here** ](https://nvestadvisors.setmore.com/)to book a conversation with one of our experts today! **Categories:** Behavioral Finance, Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public --- ### [How Much Do I Need to Retire?](https://nvestadvisors.com/how-much-do-i-need-to-retire/) **Published:** September 24, 2025 **Author:** Maryam Irfanmeer **Content:** # ![how much do i need to retire](https://nvestadvisors.com/wp-content/uploads/2025/09/pexels-huy-phan-316220-1377070-e1758762055667-1024x432.jpg "Pexels huy phan 316220 1377070 nvest advisors") # **How Much Do I Need to Retire?** For many people, retirement isn’t just about leaving work—it’s about having the freedom to live on your own terms without financial stress. But one of the most common questions I hear as a financial advisor is: How much do I need to retire? The truth is, there’s no single number that works for everyone. The answer depends on your lifestyle, health, family situation, and even where you choose to live. Still, there are ways to calculate a retirement target that’s realistic and adaptable to your goals. ## How Much Do I Need to Retire Based on Lifestyle Choices? The first step isn’t crunching numbers—it’s asking yourself what retirement should look like. Do you picture yourself traveling, spending time with family, or maybe continuing part-time work you enjoy? Some people want a simple, low-cost retirement close to home, while others plan for adventure and new experiences. The lifestyle you choose is what sets the framework for your savings goals. ## Income Replacement as a Starting Point A helpful guideline is to plan for 70–80% of the income you earn before retirement. If you currently make $80,000, that means targeting around $56,000–$64,000 a year in retirement income. This range works because certain expenses usually fall away once you stop working—like commuting costs or retirement contributions. While some of this income may come from social security or a state pension, the rest must be accumulated ahead of time, which is why pre-retirement savings and retirement income strategies are so important. Also, remember the effects of inflation over time: even if you have enough income at the start of your retirement everything, from basic living costs to healthcare, leisure, and travel, continues to cost more every year, which is why your income strategy is so important (more on inflation below). This is a primary purpose of hiring a financial advisor before retirement, and continuing to meet with your advisor for years to come. ## The Role of Age and Health When you retire and how long you live will dramatically affect your savings target. Someone who retires at 60 may need to fund more than 30 years without a paycheck, while retiring at 68 might shorten that horizon significantly. Health also matters. A healthy person with a family history of longevity should plan for a longer retirement, while someone with higher medical needs may need to allocate more for healthcare spending in the earlier years. We’ve also seen instances where spouses have ten or more years between their ages, and this is a significant concern because the total number of years for the couple to be in retirement may be quite a bit longer than a couple with similar ages. Planning for extended income in situations like this is very important. ## Savings Milestones to Gauge “How Much Do I Need to Retire” While there’s no perfect formula, benchmarks can help you see if you’re heading in the right direction. Many advisors recommend aiming to save roughly one year’s worth of income by age 30, three years’ worth by 40, six by 50, and ten or more by retirement age. These aren’t strict rules, but they do provide a reality check and show where adjustments might be needed. ## Inflation’s Impact on How Much Do I Need to Retire One of the biggest mistakes people make is ignoring inflation. Even at a modest 3%, prices double roughly every 24 years. That means the $60,000 you think you’ll need today could easily require $120,000 in the future. Building inflation into your retirement plan ensures your savings don’t quietly lose value over time. And remember, our government’s published inflation rates are averages across all purchases. Some expense categories, such as health care, typically rise in price much faster than other products and services, and those quickly rising costs disproportionately affect older people on fixed incomes. ## How Social Security Shapes How Much Do I Need to Retire Not all retirement income has to come from savings. Social Security, pensions, annuities, or rental income can all reduce the pressure on your nest egg. The key is to know how reliable these streams will be and whether they can cover your essentials, leaving your savings free to fund lifestyle goals. ## Planning for Healthcare and Long-Term Care Healthcare is often the single largest expense in retirement. Medicare helps, but it doesn’t cover everything—especially long-term care. Building a cushion for medical costs or considering long-term care insurance can protect your retirement funds (and, indeed, your entire life’s work) from being wiped out by unexpected health needs. Long-term care planning needs to happen much earlier than you might expect – all states will cover nursing home care through their Medicaid programs, but impose strict income and asset limits to qualify, and most states have what are called “look-back provisions” that will deny you benefits for months or even years if you reduce your assets in the five years before you need a nursing home. This concern is a serious one, and needs to be addressed as early as you can. It’s an integral part of retirement planning here at**[ nVest Advisors.](https://nvestadvisors.com/)** ## The Emotional Factors Money isn’t the only factor. Retirement also comes with lifestyle changes, identity shifts, and new routines. A strong plan includes not just financial security but also clarity about how you’ll spend your days. Financial peace of mind is most valuable when paired with a fulfilling sense of purpose. ## Location Matters More Than You Think Where you live in retirement plays a huge role in how much you’ll need. Living in a high-cost city could drain your savings quickly, while relocating to a lower-cost area or even downsizing your home might extend your financial runway significantly. Some retirees even consider moving abroad for lower healthcare and living costs. ## Building a Strategy That Works for You Reaching your retirement goal requires consistency more than perfection. Saving automatically through your paycheck or setting up recurring transfers takes the emotion out of the process. Making the most of employer matches, increasing contributions when you get raises, and diversifying investments all add up over time. And if you start later or feel behind, don’t panic. Options like catch-up contributions, delaying retirement, or adjusting spending can still put you back on course. ## The Bottom Line The question of “how much do I need to retire?” doesn’t come with a single answer, but with the right approach, you can define a number that works for you. Think less about hitting someone else’s target and more about aligning your savings with your lifestyle goals. If you’re uncertain where you stand, sitting down with an advisor can give you clarity—and often the reassurance that you’re on track. Contact us today to **[book an online consultation](https://nvestadvisors.setmore.com/)** with one of our experts to help you plan your retirement the way you like. **Categories:** Behavioral Finance, Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Mailchimp, Plan Participants, public, Retirement --- ### [How Buy Now Pay Later (BNPL) Is Reshaping Personal Finance](https://nvestadvisors.com/how-buy-now-pay-later-bnpl-is-reshaping-personal-finance/) **Published:** December 9, 2025 **Author:** Maryam Irfanmeer **Content:** # ![Buy Now Pay Later BNPL](https://nvestadvisors.com/wp-content/uploads/2025/09/pexels-anete-lusina-6353681-e1759189183298.jpg "Pexels anete lusina 6353681 nvest advisors") # **How Buy Now Pay Later (BNPL) Is Reshaping Personal Finance** Over the last few years, Buy Now Pay Later (BNPL) services have exploded in popularity. Platforms like **[Afterpay](https://www.afterpay.com/en-US), [Affirm](https://www.affirm.com/), [Klarna](https://www.klarna.com/us/payments/), and [PayPal’s “Pay in 4”](https://www.paypal.com/us/digital-wallet/ways-to-pay/buy-now-pay-later)** have made it easier than ever for consumers to spread out payments with little to no upfront cost. What once felt like a niche option at checkout has now become a mainstream financial habit—especially for younger generations. But as with any financial tool, Buy Now Pay Later (BNPL) comes with opportunities and risks. In 2025, it’s reshaping personal finance in ways many people don’t fully realize. As a financial advisor, let’s break down what you need to know before clicking “split my payment.” ## Why Buy Now Pay Later (BNPL) Has Become So Popular BNPL’s rise isn’t accidental—it’s meeting consumers exactly where they are: - **Rising cost of living:** With inflation squeezing household budgets, splitting payments makes large purchases feel more manageable. - **Credit card fatigue:** Younger buyers are cautious about traditional credit cards, preferring the transparency of BNPL. - **Instant approval and convenience:** No lengthy applications—Buy Now Pay Later (BNPL) options show up at checkout on e-commerce sites, often with just a few clicks. - **Marketing psychology:** “$25 today instead of $100 upfront” feels lighter on the wallet, even if the total cost is the same. A [2024 **study by PYMNTS**](https://www.pymnts.com/study_posts/new-data-defining-the-new-buy-now-pay-later-consumer/) reported nearly **50% of Gen Z and millennials have used Buy Now Pay Later (BNPL) in the past 12 months.** ## The Psychology Behind the Purchase BNPL doesn’t just affect wallets—it affects mindsets. Studies suggest splitting payments makes consumers feel less guilty when shopping, which can normalize overspending. This “buy now, worry later” mentality can add stress when multiple payments pile up. Financial wellness isn’t only about numbers—it’s about peace of mind. If BNPL leads to anxiety, sleepless nights, or a lack of control, it may be doing more harm than good, even if you never pay a fee. ## The Benefits of Buy Now Pay Later (BNPL) ,When Used Responsibly BNPL can be a useful tool if it’s integrated into your financial plan with discipline. 1. **Short-term affordability:** Splitting payments can smooth out cash flow, especially during emergencies or for essential purchases. 2. **Interest-free periods:** Many Buy Now Pay Later (BNPL) providers don’t charge interest if payments are made on time. 3. **Alternative to credit cards:** For those avoiding revolving credit or struggling to get approved for traditional cards, BNPL offers a straightforward option. 4. **Budget-friendly planning:** Fixed, predictable installments can help with budgeting when used sparingly. ## The Hidden Risks of Buy Now Pay Later (BNPL) While the perks are tempting, Buy Now Pay Later (BNPL) isn’t free money. Here’s where people run into trouble: - - **Overspending trap:** The psychology of smaller payments makes it easier to justify purchases you don’t actually need. - **Late fees and penalties:** Missed or delayed payments often come with fees that add up quickly. - **Credit impact:** While some providers don’t report to credit bureaus, others do. Falling behind on payments can hurt your score. - **Fragmented debt:** Juggling multiple BNPL plans across different apps can leave consumers unclear on their total obligations. - **Encouraging instant gratification:** BNPL makes it easy to bypass the discipline of saving before spending. ## Smart Ways to Use BNPL in 2025 If you choose to use BNPL, approach it strategically: 1. 1. 1. **Limit BNPL purchases:** Treat them like short-term loans—only for items you *planned* to buy, not impulse spending. 2. **Track your total commitments:** Keep a simple spreadsheet or use budgeting apps that integrate BNPL tracking. 3. **Set automatic payments:** Ensure you never miss a due date by automating payments directly from your bank account. 4. **Prioritize essentials over wants:** A BNPL plan for a laptop you need for work is different from splitting payments on luxury shoes. 5. **Compare alternatives:** Sometimes a 0% APR credit card or building an emergency fund is a healthier long-term option. ## BNPL vs. Credit Cards: Which Is Better? For decades, credit cards dominated consumer spending. Now BNPL is challenging that dominance. Both have advantages: - **Credit cards** build long-term credit history, often include rewards, and offer purchase protections. But interest rates are high if balances aren’t paid in full. - **BNPL services** typically don’t charge interest for on-time payments, but they may not help build credit and can encourage fragmented borrowing. If your goal is to establish credit and earn rewards, a responsible credit card strategy wins. If you want transparent, short-term installments without revolving debt, BNPL may be more suitable. At **[nVest Advisors](https://nvestadvisors.com/)**, we help clients make these decisions within a complete financial plan that includes budgeting support, debt management strategies, and long term cash flow clarity. When these pieces work together, choosing between BNPL and credit cards becomes easier because every spending decision aligns with your broader financial goals. ## The Regulation Question: What’s Changing for BNPL in 2025 Governments and regulators worldwide are catching up with BNPL’s growth. In the U.S., the Consumer Financial Protection Bureau (CFPB) has already begun reviewing BNPL practices, focusing on: - **Transparency of fees** - **Consumer protections** similar to those of credit cards - **Data privacy concerns** as providers collect shopping behavior data In 2025, we may see BNPL providers required to report to credit bureaus consistently, making responsible use more rewarding—and misuse more damaging. ## Advisor’s Perspective: Where BNPL Fits in a Financial Plan BNPL is not inherently good or bad—it’s a tool. The key is understanding *when it fits into your financial picture*. - **BNPL makes sense** when it’s used for short-term cash flow management on essential items, with payments budgeted in advance. - **BNPL is risky** when it fuels lifestyle inflation, impulse shopping, or substitutes for an emergency fund. As financial advisors, we encourage clients to view BNPL as a *supplementary option*—not a replacement for responsible credit use, savings, or long-term planning. Like any financial trend, BNPL should serve you—not the other way around. At [**nVest Advisors**](https://nvestadvisors.com/), we help clients integrate tools like BNPL into a bigger picture that includes budgeting, debt management, and long-term planning. If you’d like guidance on building a plan that balances today’s flexibility with tomorrow’s security, visit our page on comprehensive financial planning [**here** ](https://nvestadvisors.com/why-nvest-advisors/)OR **[book a free consultation](https://nvestadvisors.setmore.com/)** with one of our advisors to start your journey today! **Categories:** Uncategorized --- ### [Importance of Financial Wellness](https://nvestadvisors.com/importance-of-financial-wellness/) **Published:** September 10, 2025 **Author:** Maryam Irfanmeer **Content:** # ![importance of financial wellness](https://nvestadvisors.com/wp-content/uploads/2025/09/pexels-pixabay-210574-e1757537429983.jpg "Pexels pixabay 210574 nvest advisors") # Importance of Financial Wellness ## Financial Wellness Begins with Real Understanding After guiding clients through decades of market ups and downs, here’s one truth that never fades: **financial wellness** isn’t about having a fat bank account, it’s about the confidence to handle today and plan for tomorrow. In 2022, only **[73](https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-overall-financial-well-being.htm)%** of U.S. adults felt they were “doing at least okay financially,” that’s a five-point drop from just a year before and marks one of the lowest levels since 2016. When financial wellness falters, even by a little, people stop seeing beyond their next paycheck. ### Stability in the Everyday A stunning **[37%](https://www.investopedia.com/are-you-financially-ready-a-third-of-americans-cant-handle-usd400-emergencies-11787407) of Americans couldn’t cover a $400 emergency expense** without scrambling by selling something or taking on debt. That’s not data, that’s panic in the face of a flat tire or a sudden bill. ### Trust in Goal Setting According to TIAA’s 2022 survey, **[78](https://www.tiaa.org/public/pdf/2022_financial_wellness_survey_final_results.pdf)% of people say they have an emergency fund**, yet fewer than half can tap into six months of expenses if income vanishes. Without that cushion, planning for the future, whether retirement, education, or the next job, is a fragile hope. ## The Link Between Money and Mental Clarity Studies consistently show a direct correlation between financial stress and mental health issues like anxiety, burnout, and sleep disruption. Building financial wellness includes creating systems that reduce decision fatigue — such as automating savings, using budgeting tools, and consolidating accounts for better oversight. The less mental energy spent on scattered money decisions, the more space you have for higher-value planning and life goals. ## The Real Pillars of Financial Wellness ### 1. **Your Money Has a Personality And So Do You** Most people don’t realize that their money habits mirror their personality. The spender who insists “I deserve this” is often avoiding deeper financial fears. The saver who hoards every penny may be trading joy today for a false sense of safety tomorrow. Identify your money personality. Are you a cautious protector, a carefree adventurer, or a strategic planner? Knowing this lets you build systems that work with your nature instead of against it. ### 2. **Small, Predictable Wins Beat Big, Sporadic Efforts** A sudden debt payoff spree or a month of extreme budgeting feels heroic, but it’s the boring, repetitive habits that build stability. **Example:** Setting up automatic transfers to a “quiet” savings account you never check works better than occasional lump-sum saving. Aim for frictionless discipline — the less you have to think about it, the more likely it will stick. ### 3. **Stop Managing Only for Crises** Financial wellness isn’t just about being prepared for the next emergency. It’s about being positioned to *say yes* to opportunities without fear. **Example:** That might mean having liquid funds ready to take advantage of a business deal, a career break, or even moving cities for a better lifestyle. So build not only an emergency fund, but also an “opportunity fund.” ### 4. **The Hidden Cost of Financial Clutter** People think stress comes from not having enough money. Often, it’s from having money scattered in too many places — old accounts, half-forgotten investments, random subscriptions. Consolidation is underrated. Knowing exactly where everything is (and why it’s there) is a wellness tool as much as a financial one. ### 5. **Your Future Self Is the Toughest Client You’ll Ever Serve** We’re wired to think short-term. But the self you’ll be in 10, 20, 30 years will thank you for decisions you make now that feel inconvenient. **Wisdom:** If your present comfort always wins over your future stability, you’re borrowing peace from tomorrow — and that bill always comes due. ### **The Quiet Power of Saying “No”** Financial wellness isn’t only about what you can afford; it’s about what you can afford to decline. Being able to say “no” to an investment that doesn’t align with your goals, to a purchase that’s more about status than substance, or to a loan you don’t actually need is the sign you’re in control. The irony? The more you say “no” to distractions, the more you can say “yes” to what really matters. Whether you’re managing the day-to-day of a business or navigating your own personal finances, the patterns are often the same. Small decisions today can quietly shape your stability tomorrow. Clarity comes from seeing the full picture, not just reacting to the latest challenge. At[ **nVest Advisors**](https://nvestadvisors.com/), we help you understand your options and take steady steps toward a more secure financial future. If you are ready to see where you stand and what is possible, we are here to help you**[ start the conversation.](https://nvestadvisors.setmore.com/)** **Categories:** Behavioral Finance, Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Mailchimp, Plan Participants, public --- ### [Life Insurance](https://nvestadvisors.com/life-insurance/) **Published:** August 14, 2025 **Author:** Maryam Irfanmeer **Content:** # **Life Insurance That Works for the Life You’re Actually Living** #### This isn’t about just life Insurance. Real protection for the people and goals you care about most. ![importance of life insurance](https://nvestadvisors.com/wp-content/uploads/2025/07/Blue-and-Cyan-Photo-centric-Fathers-Day-Facebook-Post.jpg "Blue and cyan photo centric father's day facebook post nvest advisors") ## **What Most People Get Wrong About Life Insurance** > **Life insurance isn’t for the dying. It’s for the living.** When structured properly, life Insurance can do far more than just cover funeral expenses. It can act as a financial backbone during life’s most uncertain moments — securing your family’s income when they need it most, covering your children’s education even if you’re not around, providing instant liquidity to pay off estate taxes, or even helping to keep a small business afloat. In some cases, it can also create a source of tax-free funds for retirement or legacy planning. **But here’s the key:** The value lies in the *structure*, not just the product. Most people don’t realize they can hold a policy for decades and still walk away with little to no real benefit because it wasn’t aligned with their goals. ## **What Most People Get Wrong About Life Insurance and Why It Matters** Let me walk you through something I’ve seen too many times. A client comes in. They’ve got a policy from work, maybe another one they bought years ago. They think they’re covered. But when we sit down and really go through the numbers, the details, the what-ifs… it becomes clear. They’re not protected the way they think they are. And the problem is, by the time most people realize that, it’s too late to fix. Here’s what I want you to know: #### **You can’t rely on employer coverage** Group life insurance through work is helpful, sure. But it usually ends when your job does. And most of the time, the payout wouldn’t come close to covering your family’s long-term needs. #### **Life insurance isn’t a savings plan unless it’s built very carefully** Some policies, like whole life or [**indexed universal life**](https://www.investopedia.com/articles/insurance/09/indexed-universal-life-insurance.asp) (IUL), get sold as investment tools. And they can work, but only if they’re set up with clear goals and careful coordination. Otherwise, you’re just overpaying for something that won’t grow the way you think. #### **One of the easiest ways people lose money is naming the wrong beneficiaries** This happens more than you’d believe. An ex-spouse never removed. A trust that was never updated. A child left out by accident. And suddenly, instead of helping your loved ones, your policy creates legal messes and heartbreak. #### **If you’re a business owner, life insurance needs to be part of the bigger plan** This is a big one. Whether it’s for succession, protecting your partners, or handling taxes if something happens, having the right kind of policy and naming the right owner and beneficiary can mean the difference between your business surviving or collapsing without you. #### And finally, the trap I see the most #### **People holding onto the wrong policy for too long.** You’re paying into it every month, maybe even into retirement, but it no longer fits your life or goals. You wouldn’t keep a car that doesn’t run or a phone that doesn’t turn on. Why hold onto a financial tool that’s stopped serving you? You deserve better than that. When done right, life insurance isn’t just about covering funeral costs. It can: - •Protect your family’s income for decades - •Fund your child’s college education - •Keep your business running without disruption - •Provide liquidity when your estate needs it most - •Even become a tax-advantaged asset in retirement But only if it’s structured with you in mind. ## **What Smart Life Insurance Actually Looks Like** When we sit down with families, one of the first things we talk about is this: life insurance isn’t just about death. It’s about stability, choice, and peace of mind for the people you love and the life you’ve built. Smart life insurance feels like a safety net you don’t have to think about every day. It grows with you. It knows your kids’ dreams, your business goals, your retirement hopes. And it’s coordinated with the rest of your plan so you’re not overpaying, duplicating coverage, or missing gaps. Our job is to make sure it’s not just a policy. It’s a thoughtful part of your bigger picture. ## **How We Help You Plan It Right at nVest Advisors** We know life insurance conversations can feel uncomfortable or confusing. But when we walk clients through it step by step, the fear starts to lift. You begin to see how this isn’t just about coverage. It’s about protecting your people, your hard work, and your peace of mind. At nVest Advisors, we don’t just quote you a number and send you on your way. We help you figure out what kind of coverage actually fits your life, not someone else’s idea of it. We make sure you’re not relying too much on work policies that disappear when you retire or overpaying for features you don’t need. We’re here to build a strategy that evolves with you. One that you’ll feel confident about because you understand it, and because it makes sense for where you are now and where you want to go. Life insurance shouldn’t feel like a gamble. When structured with care, it becomes one of the smartest, most flexible financial tools you own. If you want an honest, experienced review of your current life insurance strategy — we’re here. **→[ Book a consultation](https://nvestadvisors.setmore.com/) with [nVest Advisors](https://nvestadvisors.com/)** Let’s help your protection plan actually protect what matters. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Plan Participants, public --- ### [Debt & Credit](https://nvestadvisors.com/debt-credit/) **Published:** August 14, 2025 **Author:** Maryam Irfanmeer **Content:** # ![Debt Credit](https://nvestadvisors.com/wp-content/uploads/2025/07/YouTube-Banner-Drowning-in-Debt-or-Just-Trying.jpg "Youtube banner drowning in debt or just trying nvest advisors") ## **When Credit Feeds Chaos and Debt Feels Endless** ### **What Most People Miss About Debt & Credit** Debt isn’t the problem. Misused debt is. Credit isn’t dangerous. Blind credit is. Most people only learn the real impact of debt & credit after the damage is done. You’ve probably heard terms like “good debt” and “bad debt” thrown around like a motivational quote. But in practice, the way debt & credit work together is often blurry. A business credit card can help you build capital or bury you in compounding interest. A mortgage can set you up for generational wealth or lock you into a monthly panic. ### **Real stat that hits home:** In 2023, U.S. credit card interest payments crossed [**$130 billion**](https://finance.yahoo.com/personal-finance/credit-cards/article/credit-card-debt-202333700.html) — the highest ever. And **[47%](https://www.cbsnews.com/news/credit-card-apr-nearly-half-of-americans-dont-know-it/)** of cardholders don’t know their APR. Credit scores don’t forgive easily. Business debt doesn’t negotiate. And lenders rarely reward honesty over a number. This isn’t about feeling guilty for past decisions. It’s about knowing that the *system is built to make bad debt easy and good credit hard*. And unless you’re making moves with clarity, you’re likely getting pulled into someone else’s profit model. ### **A Misstep with Debt Isn’t Just Expensive — It’s Persistent** > ***“Money doesn’t disappear — it moves. The goal is to control where it flows next.”*** | **Impacts on Future Housing** | **When Small Business Credit Gets Misused** | **Revolving Debt and The Mental Fatigue** | |---|---|---| | – Missed payments affect mortgage approvals – Rent applications include soft credit checks – Settled accounts still show on credit reports | – IRS flags mixed personal/business expenses – Using credit cards for payroll = tax issues – Weak credit limits vendor trust | – Endless minimum payments = no progress – Anxiety kills decision-making – Debt burnout is rarely addressed | ### **These mistakes can hinder your growth** ![](https://nvestadvisors.com/wp-content/uploads/2025/07/compressed_Green-and-Gray-Conceptual-Graph-Instagram-Post-e1753924016324-1024x869.webp "Compressed_green and gray conceptual graph instagram post nvest advisors") ## **Leveraging Debt & Credit for Investment Opportunities** Debt & credit can act as catalysts for strategic investments. Borrowing with a clear plan—whether through business loans or personal credit—can fund projects that yield higher returns than the cost of borrowing. The discipline lies in ensuring repayment capacity while using credit responsibly, transforming potential liabilities into vehicles for financial growth. ## **The Real Cost of Mismanaged Debt & Credit** When your debt strategy is off balance and your credit use is reactive, you pay more than just interest. You might: - Miss out on investment opportunities because you’re always catching up - Overpay taxes due to poor structuring of debt - Damage your credit score in ways that raise costs for years - Face ongoing stress that impacts decision-making and business growth ## **What We Actually Do to Help** No buzzwords. No generic advice. We get into the actual structure of your financial life — and fix what’s not working. **We audit your debt by function, not just balance** Instead of just sorting debts by size, we map how they impact your daily life, business, credit profile, and taxes. **We prioritize moves that create breathing room first** Whether it’s adjusting repayment schedules, negotiating with creditors, or finding hidden leverage, we look for ways to *reduce stress before rate*. **We coach you to rebuild credit — the right way** It’s not just about score-boosting hacks. We guide you in building *strategic credit depth* that supports your long-term goals. **We help you create systems — not just plans** That means setting up auto-rules, alerts, refinancing checks, and better account architecture. ## **Let’s Take the Pressure Off** Debt isn’t a moral failure. Credit isn’t a mystery. They’re both tools — if you know how to use them. If you’re feeling overwhelmed, we don’t need to fix everything tomorrow. But we can start clarifying things today. Click [**here** ](https://nvestadvisors.setmore.com/)to book a no-obligation clarity session with one of our **[advisors ](https://nvestadvisors.com/contact-our-financial-advisor-team/)**today**.** [Let’s talk ](https://nvestadvisors.setmore.com/)about what’s really going on and what you *can* do about it. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Media, Plan Participants, Politics, public, Retirement, Small Business, Taxes --- ### [Financial Planning the nVest Way](https://nvestadvisors.com/financial-planning-the-nvest-way/) **Published:** August 18, 2025 **Author:** Maryam Irfanmeer **Content:** ![financial planning](https://nvestadvisors.com/wp-content/uploads/2025/07/pexels-viktoria-slowikowska-5332252-e1753963628640.jpg "Pexels viktoria slowikowska 5332252 nvest advisors") Financial Planning is at the heart of everything we do for our clients. If we were to boil down everything we do for our clients, we’d get two broad areas where we address different, but related, parts of your financial life. The first is managing your investing as you work toward your goals, which we cover extensively on our website (a good place to start is **[HERE](https://nvestadvisors.com/)**). The other is helping you to actually identify those goals, and laying down a map and a plan to reach them over time. This map is what we call **Financial Planning.** If you’ve never considered having a formal financial planning process created, or wondered if your situation would benefit from one, you’re not alone. Roughly half of American families never commit their financial goals to a formal financial planning approach. It’s no small wonder, then, that nearly the same percentage of Americans—more than **[40%](https://www.investopedia.com/half-of-americans-dont-have-a-written-financial-plan-11741158)**—have no retirement savings at all. It’s often considered a cliche that people don’t plan to fail, they just fail to plan, but in large part, that’s true. But even if you take the time to create a plan, failing to carry out the plan’s action steps will keep you stuck in the same situation, year after year. ## Why you need Financial Planning A financial plan is essential for the average American family because it provides a roadmap to achieve both short-term and long-term financial goals while navigating life’s uncertainties. Without a plan, families often struggle to manage expenses, save for emergencies, or prepare for major milestones like buying a home, funding education, or retiring comfortably. A financial plan helps prioritize spending, reduce debt, and build savings, ensuring financial stability. For example, with median household income around $81,000, many families face challenges like rising costs of living or unexpected medical expenses, which a plan can mitigate by creating a buffer and clear strategies. It also fosters peace of mind, reducing stress by aligning daily financial decisions with future aspirations. ## What does Financial Planning focus on? ![](https://nvestadvisors.com/wp-content/uploads/2025/07/Green-Illustrative-Mental-Health-Tips-Instagram-Post-1-300x300.jpg "Green illustrative mental health tips instagram post 1 nvest advisors") As your situation grows in complexity, a good plan also typically covers investment strategies to grow wealth, insurance planning to protect against risks like health issues or property loss, and education or family planning to fund goals like college or raising children. Those in higher tax brackets may want to include planning to help reduce their tax burden, both now and well into the future. Business owners may need startup, solvency, and later liquidation (or sale) of their business as part of their overall financial roadmap. And finally, estate planning ensures that your assets are distributed the way you want them to be, after your passing. By addressing these interconnected areas, a financial plan creates a cohesive strategy tailored to your unique circumstances and goals. ## Is Financial Planning expensive? The average cost of a financial plan in the US varies depending on the planner’s fee structure, the complexity of the plan, and the advisor’s experience, but most fall with a fairly normal range. ![](https://nvestadvisors.com/wp-content/uploads/2025/07/COST-OF-COMPREHENSIVE-FINANCIAL-PLANNING-300x300.jpg "Cost of comprehensive financial planning nvest advisors") Alternatively, some advisors charge a percentage of assets under management (AUM), typically 0.5% to 2% annually, averaging around 1% (e.g., $1,000 per year for $100,000 in assets). Retainer or subscription-based models have a median annual fee of about $4,500. Costs can be higher in metropolitan areas or for complex financial situations, while robo-advisors offer lower-cost alternatives with AUM fees as low as 0.25% to 0.5%. Because of these variables, it’s always best to shop a few advisors and find one that has the skillset and planning priorities you need, at a price that fits your budget. ## How we do it differently at nVest Advisors Although we also proudly serve the needs of older and high-net-worth clients, nVest Advisors was built to work with younger, working-income families and small business owners. We know that your time and budget is already stretched thin just due to life’s demands. It may be difficult or impossible for a family that might desperately need (and sincerely benefit) from a financial plan to come up with thousands of dollars for a typical financial plan, only to have to then implement the plan on your own after it’s created. Our team takes a different approach; one that is more family (and budget) friendly. ## World-class Financial Planning Services, for everyone. Nearly all financial plans are created now using industry software solutions, for a lot of reasons: it’s faster, usually easier for you to participate and decipher the results, reduces the advisor’s time (and, ideally, billable hours), is more accurate than hand-calculated results, and can often sync with your actual accounts so the data stays current as your plan is being worked on. nVest creates our financial plans using state-of-the-art software, which, when combined with a human advisor working alongside you, gives you a world-class planning experience. **The difference is – you’ll just pay a lot less for it.** Our pricing is based on a modular concept – pay only for the areas of planning that you need. Whether you just need a single meeting to help figure out how to invest your 401(k), or you need extensive planning that includes your small business, we offer several tiers of service to help you pay for only what your situation requires. We also offer three “all-in” planning programs that encompass a collection of planning areas, from Basic/Starter to Business Owner. These programs include a full plan plus a year of available meetings with your advisor to help implement the plan’s recommendations. See our pricing page for planning for more details. ## You’ll never have to come to the office. We love meeting our clients in person when we can, but we’re also realists: your time is better spent at work or with family and friends than it is commuting to our office, finding parking, navigating our building, etc. You’re always welcome to stop in, but you’ll never have to. In fact, everything we do for clients can be done virtually! We’ve been able to work with you 100% remotely since 2017, and we’re proud to be an industry leader in this regard. Our commitment to tech doesn’t make us an impersonal, robotic experience. Quite the opposite! Using technology as much as possible behind-the-scenes allows our advisors ***more*** time each day to meet with our clients and deepen our personal relationships. From video emails and text messages to online portals you can access 24/7, to our plan having “sandbox” features where you can look at and adjust your plan in real-time, any time, we’ve made your experience as easy, friendly, and 21st century as we can. ## We never double-dip. If you invest with us, financial planning is always free. You read that right. Instead of charging for investment management and financial planning separately, as many advisors do, clients who hire us to manage their investments are given financial planning free for the life of our working relationship. We do this for a number of reasons. First, because we aren’t here to squeeze every last penny out of our clients. If you do well, you’ll stay with us, and likely, recommend us to friends, coworkers, and family. Second, investment management is an ongoing process and therefore, our management fees are also ongoing, so it feels right to grant you access to all of our services since you’re an ongoing, paying client. Also, attaching a goal to your investments psychologically helps you stay better focused and less likely to panic during a moment of market turmoil. That makes you a more savvy investor. But perhaps most importantly, we do it because knowing what your money needs to do for you, in light of your overall financial picture, will make us better money managers for you. It’s one thing to create an investing strategy based on a simple risk tolerance and time horizon; it’s another thing entirely for us to know exactly what goals and aspirations you’re trying to reach with that investment account, and what parts of your future dreams are at risk if the investments don’t perform as they need to. ## How the planning process works Initially, getting a financial plan up and running is mostly a commitment of time for you and your advisor. You’ll need to provide a detailed description of your current financial situation and then meet with your advisor to discuss your concerns and current priorities, set your goals and talk about your future dreams, and provide timely answers to questions that come up as your plan is being created. Once we have a plan in working order, we’ll meet with you again to refine it and set up your initial plan of action. Your plan, and your to-do list, is on a website portal that you can access anytime, with or without your advisor. After things are rolling, the meetings can quiet down a bit. We typically meet with you once per quarter as the plan is implemented, to make sure you have no questions or confusion about what to do next. You might get “homework assignments” as needed, like shopping for new insurance if your coverages are too low for your plan, and your advisor works behind-the-scenes on the more technical aspects. But, as always, we’re a phone call or scheduled meeting away if you get stuck or need support. ### Let’s see if our financial planning process is a fit for you. It’s difficult to give you the full scope of financial planning, or how our clients experience it at **[nVest Advisors](https://nvestadvisors.com/)**, in a simple article like this. However, if you feel like this experience is one you might enjoy, or just have more questions about the process, our prices, and how financial planning might benefit your situation, don’t just click away. The one thing that all of us lose to make improvements in our financial lives is ***time***. Schedule a complementary, no-pressure, no-sales-pitch **[Q&A meeting](https://nvestadvisors.setmore.com/)** with a member of our team today. Ask your questions about financial planning and how your situation might be blessed by it. Then, if and when you decide the time is right, we’ll be here, ready to help. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Retirement, Small Business, Taxes --- ### [Investment Management at nVest Advisors](https://nvestadvisors.com/investment-management-at-nvest-advisors/) **Published:** August 18, 2025 **Author:** nVest Advisors **Content:** ![investment management strategies](https://nvestadvisors.com/wp-content/uploads/2025/07/pexels-mikhail-nilov-7680651-e1755778538476.jpg "Pexels mikhail nilov 7680651 nvest advisors") Finding an investment manager for your assets can feel like a lot of work, but it’s important enough to take the time, ask appropriate questions, and feel comfortable with the style and direction of each prospective advisor. There are many approaches to creating an investment management strategy, though most employee advisors will have very similar strategies due to their training and the preferences of their firms. As a fully independent, fiduciary investment management advisor, our approach at nVest has evolved over the years (and continues to do so). Layering new research, back-testing our financial planning and investment management strategies, and honoring proven principles is all a part of how we invest for our clients. Below, we’ll explain the biggest parts of our philosophy, why we believe they matter, and how this differs from many other firms out there. ## **1.First, we aim to do no harm in our investment management approach.** We all love investment gains – that’s why we are invested in the first place! But we must always keep in mind that in order to “ramp up” investing returns, you must also increase the risk. **Investing is a sliding scale of risk and reward: the greater the potential for gains, the greater the risk of loss or volatility *must* be.** Anyone who tells you that you can separate risk and return (getting you outsized gains with little to no investment management risk) is either being dishonest, or doesn’t know what they’re talking about. This is where disciplined **investment management** becomes essential. It’s also important to remember that **all investing has risk.** So-called “safe” investments like a money market fund, for instance, may have little to no risk of daily price fluctuations, but carry significant risk that your money won’t grow fast enough to outpace inflation (so it’s “safe” day-to-day, but able to buy less and less each year). ### Understanding Risk Before Reward Our investing philosophy starts with an acknowledgement of the real harm unexpected risks (or risks that are mismatched with your objectives) can have on your experience as an investor. That’s why we start with a thorough discussion with you to understand what you are trying to accomplish, by when. This includes a scientific assessment of your risk tolerance (your comfort seeing volatility affect your account values every day), a look at your liquidity and income needs, and how your invested funds might be attached to future goals. From this onboarding experience, we craft what is formally called an **Investment Policy Statement**, but it’s basically a set of guideposts for us to use going forward. [**Risk Mitigation**](https://www.investopedia.com/terms/r/riskmanagement.asp) is a fundamental part of our investment management strategy creation. While no one can promise that current or past performance of an investment will predict its future with 100% accuracy, we look at a number of metrics before finalizing one of our investment models (see below) or your customized strategy. There is nothing haphazard about our approach – our strategies are assessed for risk/reward characteristics in both short-term and long-term time frames (including the time frame you are investing for), is optimized using analytic software, and monitored regularly for consistency. **The aim is to bring on enough risk to accomplish your goals, but not more than what is needed.** We’re not seeking gains at any price; if that’s you, seek a different advisor. Our clients want to accomplish their dreams and goals, and our job is to make sure their investments, as well as the rest of their financial life, aligns to reach those objectives. ## **2.Most of our clients elect to use models instead of custom investment management strategies.** Although we definitely do have clients using custom investment management strategies for unique circumstances (or just due to personal preference to explore an approach or investing style), the vast majority of our clients don’t want the hassle of keeping up on markets or individual assets, and their objectives are capably met by using one of our investing models. **A model is just a pre-created strategy that can be useful for many clients who have the same basic objectives and time horizons.** Since we work with so many working-age families and small business owners, this tends to be true for many of our clients. Most of us are facing common challenges and have common reasons that we’re investing (for retirement, to fund a child’s college, to purchase a home, etc.). Most of our clients are also not wanting to have to constantly make decisions about what and when to invest, so using a model that is appropriate for their needs, and then managing your money using discretionary trading authority (if you grant it to us), reduces your need to constantly keep watch on your investments. ### Why Investment Management Models Work for Most Clients **We like investment management models for a number of reasons.** First, because a model can be employed hundreds of times for different client accounts, models tend to be better researched and monitored more closely than custom portfolios. The ability to use them in accounts of most any size is also a benefit – smaller accounts are able to tap into the exact same strategies larger investors may be benefitting from. We also get “buying power” when we use models, because we are buying more of the investments each time, often enabling better pricing for all clients. And when the time comes to make changes to the model, all clients are affected simultaneously, regardless of account size. This helps us treat all of our clients fairly and impartially. Not every client elects to use a model (though most do). For example, some clients choose to employ a model for part of their assets and we create a custom strategy for the rest. Others opt for full customization. That choice is yours to make, with our guidance. ## **3.We keep investing costs low.** There are no product sales at nVest Advisors. As a result, there are no products or investment management strategies that we will ever recommend that come loaded with sales charges or hidden costs that pay us commissions and add to your investing costs. In fact, because we collect a fee for managing your account that is based on the size of your account, the only motivation your advisor has is the same as yours – to grow your assets! Even a 1% fee buried down in your mutual funds (often showing up as management and 12b-1 fees) can take tens of thousands of dollars out of your pocket over 20 or 30 years of investing. What this means in practical terms is that your advisor needs to keep your investing costs as low as possible. So, we create our models and strategies employing quality investments with minimal fees (and never use a fund or investment with embedded commission or marketing fees). It’s important to note that we’re not saying all investing fees can or even should be avoided. What we are saying is that we expect the investment to be able to justify its fees and provide value above and beyond those premiums. For example, if we were investing in an emerging-market large-company stock fund, the fund may have additional costs because of the needed expertise in that part of the world, and incur currency exchange costs as investments flow over and profits flow back. As fiduciaries, as long as we feel the benefit that the fund provides outweighs its expenses, we will consider using it. ## **4.We believe in being nonpartisan, data-dependent, and rules-based.** There is a tendency in the business world of late to always feel the need to take a position on divisive political or social issues, and to “take a side” on heated online arguments, which we feel is irrelevant to the management of your money in the broader economy. Your goals will extend far beyond the current social media debate, and your retirement account doesn’t care who is President. What your investments ***do*** need, is just for things to go right in the economy so they can grow. This idea of reducing emotional and social bias in our decision making is at the core of a field of study called [Behavioral Finance.](https://www.investopedia.com/terms/b/behavioralfinance.asp) It is the science of human interaction with money, and how we often mess things up by acting emotionally or applying any number of all-too-human biases in our personal financial decisions. At nVest, our job is to be aware of, and take steps to eliminate, those biases in both ourselves and in our clients. We therefore adopt an ongoing service model that is based on some timeless money principles, trading and valuation rules, and on economic and company data. We largely ignore social media hype, “guru” recommendations, alleged magic trading formulas, etc. This, at times, might make us appear to be going in a different direction than other advisors, but our aim is to protect your assets from losses all-too-common in the frenzy of chasing fads in the stock market. Our approach is sober, goal-focused, and unemotional. ## **Are we a good fit for your investing needs?** There is obviously more to our **[investing philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/)** than what this article provides, which is why it’s important for you to sit with our team and explore whether your approach and ours is compatible and harmonious. Are we a good fit for you? Only some time spent in conversation will be able to tell. Schedule a complimentary**[ Q&A session](https://nvestadvisors.setmore.com/)** with our team today. It’ll cost you nothing but a little time, and there won’t be any pressure to decide right away – that’s our promise. **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Company News, Cryptocurrency, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Media, Plan Participants, public, Retirement, Small Business, Taxes --- ### [Comprehensive Asset Protection Strategies for Business Owners and Individuals](https://nvestadvisors.com/comprehensive-asset-protection-strategies-for-business-owners-and-individuals/) **Published:** August 18, 2025 **Author:** Maryam Irfanmeer **Content:** ## ![asset protection strategies](https://nvestadvisors.com/wp-content/uploads/2025/08/pexels-a-darmel-7642000-e1755542571506.jpg "Pexels a darmel 7642000 nvest advisors") # **Comprehensive Asset Protection Strategies for Business Owners and Individuals** When you’re building wealth, the last thing you want is to lose it because of a legal claim, a creditor, or some other unforeseen risk. The reality is that **asset protection** is not just a luxury—it’s a necessity. Whether you’re a **business owner** concerned about liability or an individual with significant assets, you need to take action to safeguard what you’ve worked so hard to build. ### **Why Asset Protection Matters** Operating a business or holding valuable personal assets comes with a significant amount of risk. You’re not just worried about making money—you’re worried about losing everything because of a lawsuit, creditor claim, or even an unfortunate accident. The reality is that lawsuits happen all the time, and without the right protection, you can lose your home, your retirement savings, and your business. Asset protection isn’t about hiding your assets or doing anything illegal—it’s about creating a legal framework that protects your wealth before the problem arises. Think of it as financial armor that prevents the unexpected from wiping out your life’s work. ### **1. Avoiding Asset Ownership in Your Own Name** This might sound too easy, but one of the **simplest** ways to protect your assets is by **not holding them in your own name**. Sounds odd, right? But here’s the thing: If you own everything personally, **everything is at risk**. For example, you’re a doctor, a lawyer, or even a contractor—professions where your personal liability can go beyond what your insurance covers. If a patient sues you, or if a business partner takes legal action against you, guess what? **Your personal assets—your house, your savings, your investments**—are all at risk. So, what can you do? #### **How It Works**: - **Transfer assets to someone else**: If you’re married, consider putting assets like your home, car, or even savings in your spouse’s name. By doing so, you **shield them** from your personal liability. - **Trusts and legal entities**: Setting up a **trust** or transferring assets into a **business structure** can move your wealth out of your personal reach. The key is to make sure it’s done before a crisis hits. #### **The Downside**: - If your spouse controls the assets, what happens if your marriage faces turbulence? Divorce, creditors from their side, or a shift in their financial status can bring the assets back into the line of fire. It’s a **double-edged sword**—protecting you on one side but leaving the door open for other risks. ### **2. Tenancy by the Entirety:** If you’re married, there’s a better alternative to simply putting assets in your spouse’s name: **tenancy by the entirety**. This is a special form of **joint property ownership** available only to married couples. It grants **rights of survivorship**, meaning if one spouse passes away, the surviving spouse automatically inherits the property. #### **How It Protects Assets:** This form of ownership offers protection from **individual creditors** of either spouse. If one spouse is sued or faces creditor claims, the creditors cannot seize property held in tenancy by the entirety. However, it’s important to note that **joint creditors**—those who have claims against both spouses—can still make a claim on these assets. #### **Limitations:** 1. **State Law Variations**: Tenancy by the entirety is only available in certain states, and the degree of protection can vary by jurisdiction. 2. **Joint Creditors**: If both you and your spouse owe a debt to the same creditor, that creditor can attach tenancy by the entirety property. 3. **Federal Creditors**: Federal creditors, such as the IRS, may be able to attach tenancy by the entirety property regardless of state law. 4. **Only Available to Married Couples**: This strategy is only available to legally married couples, excluding unmarried partners or domestic partnerships. ### **3. Asset Protection Trusts:** If you’re serious about protecting your assets, an **asset protection trust** is one of the most powerful tools available. These are typically **irrevocable trusts**, which means once you place assets into them, you **cannot** remove them. #### **How They Work**: - Once you transfer assets into an **irrevocable trust**, they are no longer part of your estate. - This means creditors **cannot** come after them. **Lawsuits**? Nope. **Divorce settlements**? Not without a fight. #### **Why This Works**: You essentially **give up ownership** of the assets—**legally**—which puts them beyond the reach of creditors. **Irrevocable trusts** are a bit more complicated than the usual asset protection, but they work effectively when done right. #### **But… The Catch**: - **Loss of control**: You can’t just decide to take the assets back once they’re in the trust. That’s part of the deal—**no control** means **creditor protection**. - **Costs and complexity**: Setting up an irrevocable trust is not free. You need a legal professional, and it can be **complex** to ensure everything is structured correctly. ### **4. Irrevocable Gifts: A Simple Yet Effective Strategy** An **[irrevocable gift](https://www.investopedia.com/terms/i/irrevocabletrust.asp)** is a strategic method of removing assets from your estate and protecting them from creditors. By gifting assets to family members, you effectively remove them from your ownership, making them harder for creditors to reach. #### **How It Works**: When you give an irrevocable gift, the assets are no longer in your possession, and you **cannot reclaim them**. This makes them protected from personal lawsuits and creditor claims. However, this strategy requires careful planning to avoid unintended tax consequences and ensure that the gift is structured properly. #### **Risks to Consider**: - **Loss of Control**: Once you gift the asset, you no longer have access to it, which may pose a challenge if your financial situation changes. - **Gift Tax Implications**: Large gifts may be subject to gift taxes, and it’s important to understand the limits and tax responsibilities involved in gifting. ### **5. Business Structures:** For business owners, your **business structure** plays a major role in determining how well your assets are protected. Incorporating your business or forming a **Limited Liability Company (LLC)** is one of the most effective ways to safeguard both business and personal assets. #### **Corporations:** Corporations provide **limited liability**, meaning business owners are not personally liable for the company’s debts or liabilities. This makes the corporation a powerful shield for business owners looking to protect their personal wealth. #### **S Corporations vs. C Corporations**: - **S Corporations**: While they offer liability protection, they also provide **pass-through taxation**, meaning profits are taxed at the individual level. - **C Corporations**: These corporations face **double taxation** (once at the corporate level and again at the shareholder level) but provide broader liability protection and can be more advantageous for larger businesses. #### **LLCs:** An **LLC** offers **flexibility** in management while providing the same liability protection as a corporation. It is ideal for small to medium-sized businesses looking for protection without the complexity of a corporation. ### **6. Comprehensive Liability Insurance: An Additional Layer for Asset Protection** While legal structures provide foundational protection, **liability insurance** provides an additional layer of security against unforeseen claims. Whether it’s **general liability insurance** for your business or **umbrella insurance** for your personal assets, it’s an essential part of your protection plan. #### **How It Works**: - Liability insurance covers **legal costs**, **settlements**, and **judgments**. If you get sued, it’s your insurance company, not your personal assets, that will cover the damages (up to your policy limits). #### **Why You Need It**: Even if you have a corporation or LLC, insurance is a necessary supplement. It provides extra protection and covers gaps that may arise in your asset protection strategy. ## FINAL THOUGHTS: Asset protection doesn’t stop at knowing the right strategies; it requires a tailored, proactive approach that aligns with your unique situation. **nVest Advisors** is here to guide you every step of the way, helping you craft a comprehensive asset protection plan designed to preserve your wealth and give you peace of mind. Whether you’re looking for professional advice, investment strategies, or guidance on setting up trusts and business structures, our experienced team is ready to help you navigate the complexities of financial security. **Don’t wait for the unexpected to threaten your assets—take action today. Contact [nVest Advisors](https://nvestadvisors.com/) to [schedule a consultation](https://nvestadvisors.setmore.com/) and ensure your wealth is properly protected for years to come.** **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Company News, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Retirement, Small Business, Taxes --- ### [Tax Planning at nVest Advisors](https://nvestadvisors.com/tax-planning-at-nvest-advisors/) **Published:** August 14, 2025 **Author:** nVest Advisors **Content:** # ![tax planning](https://nvestadvisors.com/wp-content/uploads/2025/07/pexels-karolina-grabowska-4386369-e1755182328170-1024x502.jpg "Pexels karolina grabowska 4386369 nvest advisors") # Tax Planning and Strategy at nVest Advisors ## A Beginner’s Guide to Building Wealth Wisely As a financial advisory firm that specializes in comprehensive financial planning, we’ve seen firsthand how tax planning can make or break a client’s long-term financial goals. Taxes are an unavoidable part of life, but with thoughtful strategies, you can minimize their impact and keep more of your hard-earned money working for you. Tax planning isn’t just about filing your annual return—it’s about making proactive decisions year-round to optimize your financial situation. In this article, we’ll introduce the concept of tax planning, explain a few key strategies, and emphasize why this process is critical for U.S. residents aiming to build wealth. > Please note: Although tax planning is part of our Comprehensive Financial Plan packages, [**nVest** **Advisors**](https://nvestadvisors.com/) is not a CPA or professional tax firm, and we cannot provide specific investment or financial advice without a signed client agreement. Therefore, this article is for informational purposes only. For specific tax advice, consult a qualified CPA or tax advisor. ### What Is Tax Planning? Tax planning is the process of analyzing your financial situation to reduce your tax liability while staying compliant with tax laws. It involves understanding how your income, investments, and life choices interact with the U.S. tax code and making strategic decisions to minimize what you owe. Unlike tax preparation, which focuses on filing your return accurately, tax planning is forward-looking. It’s about positioning yourself today to save money tomorrow—whether that’s in the next tax season or decades down the road during retirement. Effective tax planning integrates with your broader financial plan. Whether you’re saving for a home, building an investment portfolio, or preparing for retirement, taxes affect every dollar you earn, save, or spend. By incorporating tax strategies into your financial plan, you can maximize your wealth and achieve your goals more efficiently. ### Key Tax Planning Concepts Let’s break down a few fundamental concepts that form the foundation of tax planning: **1. Tax-Advantaged Accounts:** These are accounts designed to incentivize saving for specific goals, like retirement or education, by offering tax benefits. For example: – **401(k) and Traditional IRA**: Contributions to these accounts are often tax-deductible, reducing your taxable income in the year you contribute. The money grows tax-deferred, meaning you don’t pay taxes until you withdraw it in retirement. – **Roth IRA**: You contribute after-tax dollars, but qualified withdrawals (including earnings) are tax-free in retirement, which can be a game-changer if you expect to be in a higher tax bracket later. – **529 Plans:** These are for education savings. Contributions may be state-tax-deductible in some states, and earnings grow tax-free when used for qualified education expenses. **2. Tax Brackets and Income Management**: The U.S. has a *progressive tax system*, meaning your income is taxed at different rates depending on how much you earn. For 2025, federal tax brackets range from[ **10% to 37%**,](https://taxfoundation.org/data/all/federal/2025-tax-brackets/) with higher rates applying to higher income levels. Understanding your marginal tax rate (the rate on your last dollar of income) can guide decisions like whether to contribute to a traditional or Roth account or when to realize investment gains. **3. Deductions and Credits:** Deductions reduce your taxable income, while credits directly reduce your tax bill. Common deductions include mortgage interest, charitable donations, and certain medical expenses. Popular credits include the Child Tax Credit and the Earned Income Tax Credit. Knowing which deductions and credits you qualify for can significantly lower your tax liability. **4. Capital Gains:** When you sell investments like stocks or real estate, you may owe capital gains taxes. Long-term capital gains (on assets held over a year) are taxed at lower rates (0%, 15%, or 20% in 2025, depending on income) than ordinary income. Timing the sale of assets can help you manage your tax burden. ### Key Tax Planning Strategies Here are a few beginner-friendly strategies to consider as part of your financial plan: **1. Maximize Retirement Contributions:** Contributing to a 401(k) or IRA not only builds your retirement nest egg but can also lower your taxable income. For 2025, the 401(k) contribution limit is $23,000 (plus $7,500 for those 50 and older), and IRA limits are $7,000 (plus $1,000 for those 50+). If your employer offers a 401(k) match, prioritize contributing enough to get the full match—it’s essentially free money. **2. Bunch Deductions:** If you’re close to the standard deduction ($14,600 for single filers, $29,200 for married filing jointly in 2025), consider “bunching” deductible expenses like charitable donations or medical expenses into a single year. This can push you over the standard deduction threshold, allowing you to itemize and save more on taxes. **3. Harvest Tax Losses:** If you have investments that have lost value, you can sell them to offset gains from other investments, reducing your taxable capital gains. This strategy, called **tax-loss harvesting**, is particularly useful in volatile markets. Just be mindful of the “wash-sale” rule, which prevents you from repurchasing the same security within 30 days. Tax loss harvesting is an included feature of our investment management for clients who are investing in non-qualified (fully taxable) investment accounts. **4. Leverage HSAs:** Health Savings Accounts (HSAs) are a triple tax win: contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free. In 2025, contribution limits are **[$4,300 for individuals and $8,550 for families](https://www.fidelity.com/learning-center/smart-money/hsa-contribution-limits#:~:text=In%202025%2C%20you%20can%20contribute,have%20coverage%20for%20your%20family.)**, with an additional **[$1,000 for those 55+](https://www.fidelity.com/learning-center/smart-money/hsa-contribution-limits#:~:text=In%202025%2C%20you%20can%20contribute,have%20coverage%20for%20your%20family.)**. HSAs are a powerful tool for healthcare costs in retirement if you don’t need the funds immediately. **5. Plan for Retirement Withdrawals:** If you’re nearing retirement, think strategically about how you’ll withdraw money from your accounts. For example, drawing from taxable accounts first, then tax-deferred accounts, and finally Roth accounts can extend the life of your portfolio by minimizing taxes early in retirement. ### A Word of Caution While these strategies are widely applicable, tax planning is highly personal. Your income, family situation, and financial goals all influence what’s best for you. ### Why Tax Planning Matters Taxes can erode your wealth if left unchecked, but strategic planning can save you thousands over time. For example, choosing the right retirement account could save you 20-30% in taxes on contributions or withdrawals. Timing asset sales or bunching deductions can shave hundreds or thousands off your annual tax bill. Over decades, these savings compound, leaving you with more to spend, save, or pass on to your heirs. Moreover, tax laws change frequently. The Tax Cuts and Jobs Act of 2017, for instance, doubled the standard deduction but capped certain itemized deductions, and some of its provisions are set to expire after 2025. Staying proactive keeps you ahead of these shifts. ### Start Planning Today Tax planning doesn’t have to be overwhelming. Start by reviewing your current financial situation: Are you maximizing retirement contributions? Are you taking advantage of available deductions or credits? Do you have a plan for managing capital gains? If you’re unsure where to begin, a comprehensive financial planner can help you integrate tax strategies into your broader goals. Ready to take control of your financial future? Contact our team to schedule a free, no-commitment **[Q&A consultation](https://nvestadvisors.setmore.com/)**. We’ll discuss your goals, assess your current plan, and explore how tax strategies can enhance your wealth-building journey as part of a Comprehensive Financial Plan. Don’t let taxes chip away at your dreams—start planning wisely today! **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, LifeCycle, Mailchimp, Media, Plan Participants, public, Retirement, Taxes --- ### [Estate Planning at nVest Advisors](https://nvestadvisors.com/estate-planning-at-nvest-advisors/) **Published:** August 18, 2025 **Author:** nVest Advisors **Content:** ![estate planning at nVest advisors](https://nvestadvisors.com/wp-content/uploads/2025/08/pexels-jakubzerdzicki-31370888-e1755552508189.jpg "Pexels jakubzerdzicki 31370888 nvest advisors") Estate planning is often misunderstood as something reserved only for the wealthy or the elderly, but the truth is, it’s a critical process for everyone, no matter your age or financial status. But in reality, estate planning is often the most important thing many clients never do. At nVest Advisors, a well-crafted estate plan is a vital part of our Comprehensive **[financial plan programs](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)**. It ensures your assets are distributed according to your wishes, minimizes legal complications, and provides peace of mind for you and your loved ones. It also makes your wishes known before you pass away, but after you might need assistance managing your financial and medical affairs. The needs and priorities of estate planning evolve as you move through different life stages, making it essential to revisit and update your plan regularly. Here’s a look at why estate planning matters at various points in life and how to approach it. ## **Estate Planning in Young Adulthood: Laying the Foundation** In your 20s and early 30s, estate planning might seem unnecessary, especially if you’re just starting your career or don’t have significant assets. However, this is the perfect time to establish a foundation. Young adults often overlook the importance of basic documents like a will, a power of attorney, and a healthcare directive. These documents are critical if an unexpected illness or accident occurs. If these concepts are new to you, let’s make it simple: A **will** ensures that the assets you have—such as savings, a car, or personal belongings—are distributed according to your wishes after you die. It also appoints guardians to look over your children (and even pets), and assigns someone you trust to act as your Executor, fulfilling your last requests and the legal obligations of settling your estate. A **power of attorney** designates someone to manage your financial affairs while you are living but unable to do so yourself. You can grant someone this power for a **limited** purpose if you are traveling, undergoing surgery, or just need to have someone handle something complicated, and you can make it **durable** (ongoing) if you become too ill or incapacitated to handle things long-term. It’s also important to make your medical choices known in case you are too injured or ill to speak up when the time arises. A **healthcare directive** outlines your medical preferences, and can assign a trusted person to act as your agent. If you’re unmarried but in a committed relationship, these documents are especially important, as partners without legal status may have no authority to make decisions on your behalf. Young adults with children should also name a **guardian** to care for their kids in case of an untimely death. At this stage, estate planning is about preparing for the unexpected. It’s affordable and straightforward, often requiring just a few documents. Starting early also builds a habit of revisiting your plan as your life changes. ## **Estate Planning in Midlife: Protecting Growing Responsibilities** By your late 30s, 40s, and 50s, life often becomes more complex. You may be married, have children, own a home, or run a business. Your estate plan should reflect these growing responsibilities. This is the stage where you’re likely accumulating wealth, whether through investments, retirement accounts, or property, and protecting your family and your hard work becomes a top priority. A Comprehensive estate plan at this stage might include a **revocable living trust**, which allows you to manage assets during your lifetime and pass them on without the delays and costs of probate. If you have young children, a trust can also specify how and when they receive their inheritance, ensuring they’re financially secure but not overwhelmed by a large sum at a young age. Updating **beneficiary** designations on life insurance policies and retirement accounts is equally important, as these override a will. **Tax** considerations may also come into play. While federal estate tax exemptions are high **[(over $13 million per individual in 2025)](https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax)**, some states have lower thresholds. Consulting a skilled financial advisor or estate planning attorney can help you minimize tax liabilities and maximize what your heirs receive. ## **Estate Planning in Retirement and Beyond: Securing Your Legacy** As you enter your 60s and beyond, estate planning shifts toward legacy preservation and simplifying the transfer of wealth. At this stage, you may be retired, with adult children or grandchildren, and your focus might include charitable giving or passing down family values alongside assets. A key goal is ensuring your estate plan aligns with your current circumstances. For example, if your children are financially independent, you might prioritize setting up **trusts** for grandchildren’s education or donating to causes you care about. Reviewing and updating your will and trust is crucial, especially if your family dynamics have changed due to divorce, remarriage, or the death of a spouse. **Long-term care planning** is another critical component. With rising healthcare costs, a plan for potential nursing home or in-home care expenses can protect your assets from being depleted. Tools like long-term care insurance or **Medicaid planning** can be part of your strategy. Finally, consider the emotional aspect of estate planning. Clear communication with your heirs about your intentions can prevent misunderstandings or disputes. Providing detailed instructions for sentimental items, like family heirlooms, can also preserve family harmony. ## Why Regular Estate Planning Updates Matter Life is dynamic, and your estate plan should be too. Major life events—marriage, divorce, the birth of a child, or a significant financial change—require revisiting your plan. Even without major changes, reviewing your estate plan every three to five years ensures it reflects current laws and your wishes. ### Getting Started Regardless of your life stage, estate planning doesn’t have to be daunting, and working with[ **nVest Advisors**](https://nvestadvisors.com/) on your Comprehensive Financial Plan includes most of these basic estate plan documents if you need them. You and your advisor will start by taking inventory of your assets, considering your family’s needs, and consulting with other professionals if your situation is complex. Although we are not estate attorneys, we can help you create the basic estate documents, and in very complex situations, we can assist you with an attorney who can provide tailored advice, especially for trusts and complicated tax planning. ## Don’t Make the Mistake of Waiting One fascinating thing that happens when high-profile celebrities pass away is, their estate often becomes a matter of public record. You would think that a millionaire pro athlete or Hollywood actor would have their estate plan well managed, but it is, surprisingly, often not the case. Loved ones of many of these people end up losing tens of millions of dollars of inheritance to tax and estate mistakes that could have easily been handled. In our own firm, we’ve seen the devastation of a poorly-designed estate plan firsthand, as clients come to us with catastrophic stories of inheritances gone wrong because a parent or grandparent didn’t take the time to get their affairs in order. The bottom line is, estate planning is a lifelong process that evolves with you. By addressing it at every stage—whether you’re a young adult, in midlife, or enjoying retirement—you protect your loved ones, secure your legacy, and gain peace of mind. Don’t wait for the “right” time; the best time to start is now. Here at nVest Advisors, we’ll make sure you have the basics covered, giving peace of mind to both you and your loved ones. Ask us today for a **[free Q&A meeting](https://nvestadvisors.setmore.com/)** to ask your questions about estate planning as part of a comprehensive financial plan! **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, College, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Plan Participants, Politics, public, Retirement, Small Business, Taxes --- ### [The Benefits of Partnering with nVest Advisors](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/) **Published:** August 18, 2025 **Author:** Maryam Irfanmeer **Content:** # ![financial planning at nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/08/pexels-a-darmel-7710147.jpg "Pexels a darmel 7710147 nvest advisors") # The Benefits of Partnering with nVest Advisors Partnering with nVest Advisors, a trusted financial advisor, can transform your financial future. When it comes to managing your wealth and plotting the course for your financial future, the stakes are high. Whether you’re planning for retirement, saving for a child’s education, or navigating complex investment decisions, partnering with a trusted financial advisor can make all the difference. At **nVest Advisors**, we’re committed to helping you achieve financial clarity and confidence. Here’s what it’s like to work with nVest Advisors—and the transformative benefits that come from choosing a dedicated **Registered Investment Advisor (RIA)** to serve your family or small business. ## Personalized Financial Planning Tailored to You Almost twenty years of experience have confirmed for us this simple truth: **every client’s financial journey is unique**. That’s why we start building our relationship with you, simply by listening. In fact, during our initial meeting, we don’t have any preset agenda. Instead, we listen carefully to what your concerns and needs are, and try to see if nVest Advsiors would be a good fit for your needs. If it makes sense for us to begin the journey together, we then take the time to understand your goals, your risk tolerance and preferences, and your current financial situation, long before we start telling you what you should do. > *We believe that great advice begins with deep understanding. And it all starts with a conversation.* If we don’t take the time to listen and learn, there is simply no way we can offer meaningful advice and support. We also tailor our approach and engagement to what’s in your best interests. Some clients need a detailed, comprehensive plan that covers a multitude of areas of their financial lives, such as debt management, creating a budget, saving for college, planning for retirement, managing estate and tax concerns. Some might need help with their business planning. Other clients may only need help in one or two areas of their financial lives. Our planning programs allow you the flexibility to work with us for something as simple as a single meeting to learn how to invest your 401(k), to a multi-year relationship in which we guide your financial life and even manage your investments for you. > *No matter where you are on your financial journey, we meet you there—with advice that’s made for you.* Our advice needs to be as unique as your situation, and we promise to give your financial life our full attention and craft advice specifically tailored to you. Whether you’re a high-net-worth individual, a small business owner, or a family planning for the future, we create a customized financial plan that aligns with your current needs and your vision for your future. Unlike one-size-fits-all solutions, our personalized (and fully online) approach ensures your plan evolves with you. Life changes—whether it’s a career shift, a new family member, or an unexpected windfall—require adjustments. We’re there every step of the way, providing ongoing guidance to keep your financial plan on track. ## Fiduciary Duty: Your Interests Come First As a Registered Investment Advisor, we operate under a strict **fiduciary standard**, meaning we are legally and ethically obligated to act in your best interests. This commitment sets us apart from non-fiduciary advisors who earn their money selling products, and may prioritize their own commissions or their employer’s products, even if you’d be better off going another way. With us, you can trust that our recommendations—whether for investments, insurance, or estate planning—are driven by what’s best for you, not what’s best for our bottom line. > *We’re here to serve your goals—not to sell you something.* Being legal fiduciaries allows us to do more than just recommend strategies: we can implement them for you and continuously monitor their progress. When we do this for your investment accounts, it’s called having [**Discretionary Authority**](https://www.investopedia.com/terms/d/discretionary-investment-management.asp) over your investments. In reality, it means you can go do the more important things in your life while we handle the markets, economy, and investing concerns for you. A fiduciary duty also requires **transparency**. We always provide clear explanations of our fees, investment strategies, and potential risks, empowering you to make informed decisions. Our goal is to build a relationship rooted in trust, where you feel confident that your financial future is in capable hands. ## We Offer Comprehensive Wealth Management At nVest Advisors Working with nVest Advisors means you have access to a **holistic suite of wealth management services**, and you can choose one, a few, or all of them, depending on your needs. Beyond investment management, we offer expertise in financial planning, small business planning, estate planning, retirement strategies, and risk management. Our team collaborates with your existing professionals—like CPAs or attorneys—to ensure every aspect of your financial life is aligned. For example, we help clients optimize their portfolios for tax efficiency, reducing liabilities through strategies like tax-loss harvesting, tax-sensitive strategies, or charitable giving. We also assist with legacy planning, ensuring your wealth is transferred according to your wishes. This comprehensive approach saves you time and provides peace of mind, knowing all your financial needs are addressed under one roof. It means that your financial advisor can do more for you because we know so much about you. ## Proactive Communication and Education We believe an **informed client is an empowered client**. That’s why we prioritize proactive communication. Through regular check-ins, detailed performance reports, and market updates, we keep you informed about your portfolio and the broader financial landscape. Our advisors are always available to answer questions, whether about a market downturn or a new investment opportunity. We also provide[ **educational resources**](https://nvestadvisors.com/blog/) to enhance your financial literacy. From workshops on retirement planning to newsletters about market trends, we equip you with the knowledge to feel confident in your decisions. Our approachable team takes complex financial concepts and explains them in plain language, ensuring you’re never left in the dark. In fact, you might be a “do it yourself” type but enjoy learning from professional advisors about specific investing or planning subjects. Our growing suite of **inexpensive online training courses** may be the way you initially work with us. ## A Partner for Life’s Milestones Choosing nVest Advisors means gaining a **long-term partner** for life’s biggest moments. Whether you’re buying a home, funding a child’s education, or transitioning into retirement, we’re here to guide you. Our clients often describe us as an extension of their family—a trusted confidant who celebrates their successes and helps navigate challenges. For example, we recently helped a client transition from a high-stress teaching career to a fulfilling retirement. By creating a sustainable withdrawal strategy and diversifying their portfolio, we ensured they could enjoy their golden years without financial worry. Stories like these inspire us to deliver exceptional service every day. But it’s even more than that: our clients are our friends. We’ve been blessed to have clients stay with us long enough that their children have started their own journeys with our help. It’s impossible in an article like this to convey our true belief in earning your friendship and trust, but that is the core of what we do every day. ## Why Choose nVest Advisors? Partnering with [**nVest** **Advisors**](https://nvestadvisors.com/) means choosing **clarity, confidence, and care**. Our client-centric approach, fiduciary commitment, and comprehensive services set us apart in a crowded industry. We’re not just advisors; we’re advocates for your financial success. **Ready to experience the benefits of working with a family-owned and operated, trusted RIA with almost 20 years helping people just like you?** [**Contact us**](https://nvestadvisors.setmore.com/) **today** to schedule a complimentary consultation. Let’s start building your financial future together! **Categories:** 401K, Annuities & Insurance, Behavioral Finance, Business Stories, Client News, Client Service, Company News, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, From our CEO, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, LifeCycle, Mailchimp, Plan Participants, public, Retirement, Small Business, Taxes --- ### [Savings for College 101: 529 Plan and Other Options](https://nvestadvisors.com/savings-for-college-101-529-plan-and-other-options/) **Published:** August 13, 2025 **Author:** Maryam Irfanmeer **Content:** # ![plan for college savings](https://nvestadvisors.com/wp-content/uploads/2025/07/pexels-pixabay-106152-e1751723843559.jpg "Pexels pixabay 106152 nvest advisors") # Savings for College 101: 529 Plan and Other Options: A few months ago, I spoke with a family whose oldest child had just turned ten. They were worried — not about high school or teenage rebellion — but about college. “We know it’ll be expensive,” the dad said, “but we didn’t start early, and now we’re just overwhelmed by the options.” If you’ve ever felt that way, you’re not alone. College tuition has been rising steadily, and the pressure to “plan early” can feel like it started yesterday. But the truth is: it’s never too late to get strategic about saving. Whether your child is in kindergarten or already picking out dorm decor, the right tools and a little clarity can go a long way. Let’s walk through your most practical options, starting with the one that often gets the most attention: the 529 plan. ## What Is a 529 Plan, Really? Think of a 529 plan as a savings account built specifically for education. It’s not a magic wand, but it does come with two serious benefits: 1. **Tax-free growth** – Your money grows without being taxed. 2. **Tax-free withdrawals** – As long as you use the money for qualified education expenses. These plans were originally created for college costs, but in recent years, their flexibility has expanded. You can now use a 529 plan to cover: 1\. Tuition and fees 2\. Room and board 3\. Books and supplies 4\. Some K–12 tuition 5\. Student loan repayments (up to $10,000 per beneficiary) And the best part? You don’t have to use the plan in your own state. While many states offer tax deductions or credits for using their version of the 529, you’re free to shop around for better investment options. Some 529 plans offer automatic age-based investment options. That means they’ll shift from growth-oriented to conservative investments as your child gets closer to college. It’s a low-maintenance way to manage risk without obsessing over the stock market. If you want help choosing the best 529 plan or understanding the tax benefits,[ **nVest Advisors**](https://nvestadvisors.com/fiduciary-financial-services/) can guide you through the options to maximize your savings potential. ## How Much Should You Save for College in 2025 And How the 529 Plan Fits In: This is where many parents pause. The numbers feel big, and it’s easy to get overwhelmed. But the goal isn’t perfection — it’s preparation. According to the College Board’s 2024–2025 data, the **average annual cost** of attending a **four-year public college in-state** is around **$29,500**. For a **private nonprofit college**, the yearly cost climbs to about **$62,200**, including tuition, room, board, and fees. So how do you plan for that? If you start saving when your child is born and aim to cover **just half** of college expenses, you’ll need to set aside roughly: - **$225 to $425 per month**, depending on your savings vehicle and investment growth. - You can use a tool like the Vanguard College Savings Calculator to estimate what works for your timeline and goals. you don’t need to save for 100% of the cost. Many families aim for a blend. Even saving part of the cost can reduce future debt and give your child more flexibility when making college decisions. ## What If a 529 Plan Isn’t the Right Fit? It’s okay. A 529 plan isn’t the only way to save for college. Let’s talk about a few other routes and how they compare: ### **1. Custodial Accounts (UTMA/UGMA)** These accounts are set up under your child’s name, but controlled by you until they reach the age of majority (usually 18 or 21). - **Pros**: You can use the funds for anything that benefits the child, not just education. - **Cons**: Less favorable tax treatment, and once your child becomes an adult, they control the money. These are better suited for families who want flexibility and are okay with giving the child full access when they come of age. ### **2. Roth IRAs** Yes, retirement accounts can help with college, with a catch. While Roth IRAs are meant for retirement, you can withdraw your contributions (not earnings) at any time, and earnings can be withdrawn penalty-free for qualified education expenses. - **Pros**: Dual-purpose. If your child doesn’t go to college, the funds are still there for your retirement. - **Cons**: Annual contribution limits are low [(currently $7,000 per year)](https://www.schwab.com/ira/roth-ira/contribution-limits?utm_source=chatgpt.com), and there are income restrictions. This option is often used by parents who started saving late but want to keep flexibility. **Income Restrictions:** Eligibility to contribute to a Roth IRA phases out at higher income levels. In [2025](https://www.schwab.com/ira/roth-ira/contribution-limits?utm_source=chatgpt.com), single filers with a Modified Adjusted Gross Income (MAGI) over $150,000 and joint filers over $236,000 may face reduced contribution limits or be ineligible. If you’re unsure whether this fits your family’s financial picture, [**nVest Advisors**](https://nvestadvisors.com/financial-planning-for-families/) can help you understand the pros and cons in your specific case. ### **3. Consider a High-Yield Savings Account** If your child is getting close to college age and you don’t want to gamble with tuition money, a high-yield savings account offers a safe, reliable place to grow your savings. **Why it works:** - Your money stays accessible — no penalties, no surprises. - It’s simple to manage and easy to understand. - You earn more interest than with a regular savings account. **The trade-off:** Returns are modest compared to investing, so your savings won’t grow as quickly — but you won’t lose sleep over market swings. This option is ideal for families who value security and need their money within the next few years. ### **4. What If Your Child Doesn’t Go to College?** If your child doesn’t end up going to college, you don’t have to worry about losing access to 529 plan funds. - The 529 account must have been open for at least 15 years. - Contributions made within the last five years, and their earnings, are ineligible for rollover. - The beneficiary must have earned income equal to or greater than the amount being rolled over. - The rollover amount counts toward the annual Roth IRA contribution limit, which is $7,000 for 2025. - The total lifetime rollover limit from a 529 to a Roth IRA is [$35,000](https://www.fidelity.com/learning-center/personal-finance/529-rollover-to-roth) without penalties. Whatever your timeline or situation, taking even small steps now can ease the burden later. And if you ever feel stuck or unsure, remember you don’t have to go it alone. At [**nVest Advisors**](https://nvestadvisors.setmore.com/), we’re here to help you navigate the options, answer your questions, and create a plan that works for your family’s unique journey. Because planning for college is more than saving money — it’s investing in your child’s future, one thoughtful decision at a time. **Categories:** Client Service, College, Debt, Individuals and Families, Mailchimp, Plan Participants, public, Texas Teachers Retirement --- ### [How Debt-to-Income Ratio Affects Your Mortgage Approval](https://nvestadvisors.com/how-debt-to-income-ratio-affects-your-mortgage-approval/) **Published:** August 12, 2025 **Author:** Maryam Irfanmeer **Content:** # ![debt to income ratio](https://nvestadvisors.com/wp-content/uploads/2025/08/pexels-karolina-grabowska-5900131.jpg "Pexels karolina grabowska 5900131 nvest advisors") # How Debt-to-Income Ratio Affects Your Mortgage Approval When you’re looking to secure a mortgage, one of the most important factors lenders look at is your **debt-to-income ratio (DTI)**. This number plays a crucial role in determining whether you qualify for a loan and, if so, how much you can afford to borrow. Understanding how your **debt-to-income ratio** impacts your mortgage application is key to ensuring you are prepared for the process and can secure the best terms possible. In this blog, we’ll explore how DTI affects mortgage approval, why it matters, and how to manage it for a smooth home-buying experience. ### What is Debt-to-Income Ratio and Why Does It Matter for Your Mortgage? **Debt-to-income ratio (DTI)** is a simple calculation that compares the total amount of your monthly debt payments to your gross monthly income. It is expressed as a percentage, and the lower this percentage, the better your chances of qualifying for a mortgage. Lenders use the **DTI ratio** to assess your ability to manage monthly payments and repay debts. When it comes to a mortgage, lenders are particularly concerned about your ability to handle both the mortgage payment and your existing debts at the same time without overextending your finances. A high DTI ratio suggests that you may already have a significant portion of your income tied up in debt, making it more challenging to take on a mortgage without putting yourself at financial risk. ### How Debt-to-Income Ratio Impacts Your Mortgage Approval #### 1. **Mortgage Lenders Set DTI Limits** Lenders typically have a **maximum DTI ratio** they’re willing to accept when reviewing mortgage applications. While different types of loans have varying thresholds, the general rule of thumb is that a **DTI ratio under 43%** is ideal for most conventional mortgages. In fact, according to **Fannie Mae**, one of the largest buyers of mortgages in the U.S., a [**DTI of 36% or lower** ](https://www.bankrate.com/mortgages/why-debt-to-income-matters-in-mortgages/)is preferred for conventional loans, though higher ratios might still be accepted with compensating factors such as strong credit scores or a large down payment. For example: - **Conventional loans**: Generally, a DTI ratio under 43% is ideal. - **FHA loans**: The **Federal Housing Administration (FHA)** allows a higher DTI, up to **50%** in some cases, but it also depends on the borrower’s overall financial profile. - **VA loans**: For veterans, **Veterans Affairs (VA) loans** can be more flexible, with a maximum DTI of up to **41%**. #### 2. **The Impact of a High DTI Ratio** If your **DTI ratio** is too high, it could pose challenges in securing a mortgage. A **DTI over 43%** suggests that a large portion of your monthly income is already committed to paying off other debts, leaving you with less disposable income to cover your new mortgage payment. For example, if your **DTI ratio is 50%**, lenders may view you as a higher risk, as there’s a greater chance you could face difficulty in making monthly payments on both your existing debts and your new mortgage. In such cases, a lender may deny your mortgage application or offer you less favorable terms, such as a higher interest rate or the need for a larger down payment. A high **DTI ratio** might also trigger additional scrutiny, requiring you to provide more documentation of your financial situation, such as proof of additional income or details about your debts. #### 3. **How a Lower DTI Ratio Can Benefit You** On the other hand, if your **DTI ratio is low**, you’ll be seen as a more favorable candidate for mortgage approval. With a lower **DTI ratio**, lenders view you as having more room in your budget to handle the mortgage payment without overextending yourself. A lower **DTI ratio** could also potentially lead to more favorable loan terms, including: - **Lower interest rates** - **Higher borrowing capacity** - **Better approval odds for larger loan amounts** ## How to Calculate Your Debt-to-Income Ratio Calculating your **DTI ratio** is simple and can help you understand where you stand before applying for a mortgage. Here’s how to do it: 1. **Add up your monthly debt payments**: Include credit card payments, auto loans, student loans, personal loans, and any other recurring monthly debt obligations. 2. **Calculate your gross monthly income**: This is your income before taxes or other deductions. If you’re salaried, it’s your monthly salary. If you’re self-employed, it’s your monthly earnings. 3. **Divide your total monthly debt payments by your gross monthly income**: **DTI Ratio = (Total Monthly Debt Payments / Gross Monthly Income) x 100** For example, if your monthly debt payments are $2,000 and your monthly gross income is $5,000, your DTI would be: **DTI = ($2,000 / $5,000) x 100 = 40%** ## How to Improve Your DTI Ratio If your **DTI ratio** is higher than you would like, there are several steps you can take to improve it before applying for a mortgage: 1. **Pay Down Existing Debt**: One of the most effective ways to lower your DTI is by paying off high-interest debt. This will reduce the amount you owe monthly and improve your ratio. 2. **Increase Your Income**: If possible, find ways to boost your income—whether through a raise, a side job, or other income-generating activities. A higher income will reduce the percentage of your monthly income that’s going toward debt. 3. **Consider Refinancing**: If you have existing high-interest debt, refinancing may help lower your monthly payments, improving your DTI ratio. 4. **Avoid Taking on New Debt**: While working to improve your DTI ratio, avoid taking on new debt. Any additional loans or credit card balances will increase your DTI and make it more difficult to secure a mortgage. ### Conclusion Your **debt-to-income ratio (DTI)** plays a significant role in determining whether you qualify for a mortgage and at what terms. A lower DTI ratio increases your chances of getting approved for a loan and can lead to better loan terms, including lower interest rates and higher borrowing capacity. On the other hand, a higher DTI ratio can signal to lenders that you might struggle to handle additional debt, making it harder to secure a mortgage or result in higher costs. At **nVest Advisors**, we can help you understand how your DTI ratio impacts your mortgage prospects and provide guidance on how to improve your financial situation before applying for a home loan. It’s part of [our financial planning services](https://nvestadvisors.com/why-nvest-advisors/ "Financial Planning That Puts You First | Why nVest Advisors"), which are affordable (even in payments if that will help), and offer support and advice in every part of your financial life. If you’re ready to take the next step toward homeownership, we’re here to support you! [Click here to schedule a complimentary Q&A meeting with one of our advisors.](https://nvestadvisors.setmore.com) **Categories:** Uncategorized --- ### [What Is a Fiduciary Financial Advisor and Why It Matters](https://nvestadvisors.com/what-is-a-fiduciary-financial-advisor-and-why-it-matters/) **Published:** August 5, 2025 **Author:** Maryam Irfanmeer **Content:** # ![what is a fiduciary financial advisor](https://nvestadvisors.com/wp-content/uploads/2025/05/pexels-mikhail-nilov-7734579.jpg "Pexels mikhail nilov 7734579 nvest advisors") # What Is a Fiduciary Financial Advisor — and Why It Matters When it comes to your money, trust isn’t optional. It’s foundational. That’s what makes the word “fiduciary” stand out in a sea of financial titles. A fiduciary financial advisor isn’t just someone giving you advice — they’re legally and ethically bound to put your interests first. Sounds straightforward, right? But here’s the thing: not everyone who calls themselves a financial advisor is held to that same standard. Let’s peel back the layers and look at what really makes a fiduciary different — and why it matters more than most people realize. ## What Does “Fiduciary” in Fiduciary Financial Advisor Actually Mean? The word comes from the Latin “fiducia,” meaning trust. In finance, a fiduciary advisor is someone who has a legal obligation, not just a preference, to act in the best interests of their client. That means no pushing products for commissions, no cutting corners, and no blurry lines. This distinction becomes especially important when you realize that two professionals might look identical on paper. They may hold the same credentials and have similar experience. But only one is legally required to prioritize your interests. The other may recommend products that earn them a commission, even when a better option exists for you. This is where it gets complicated. Many advisors claim they follow fiduciary standards, but their firm operates with something called dual registration. That means in some situations they may act in your best interest, while in others they may act more like a salesperson. Dual-registered advisors have a fiduciary standard for *some* of their business, but only a **suitability standard** for the rest. [And there’s a world of difference between them.](https://www.investopedia.com/articles/professionaleducation/11/suitability-fiduciary-standards.asp) The phrase “fiduciary financial advisor” might sound like a promise, but unless the firm’s entire structure, compensation model, and values support it, that promise may not hold up. ## The Hidden Problem with Non-Fiduciary Financial Advisors: According to [survey](https://www.cfainstitute.org/about/press-room/2020/cfa-institute-survey-trust-in-investment-management-more-valuable-than-ever?utm_source=chatgpt.com) by CFA Institute, **75% of retail investors** believe their financial advisor is legally required to act in their best interest—but **only 35%** say their advisor *always* puts the client’s interests first. **Here’s why it matters:** Let’s say you walk into a bank and ask for investment advice. The person across the table might be called an “advisor,” but if they’re not a fiduciary, they may only need to offer what’s considered “suitable.” That could mean suggesting products that generally work for people like you — but also earn them higher commissions. And the worst part? It’s all perfectly legal. ## The Cost of Non-Fiduciary Advice: In 2015, the Obama administration’s Council of Economic Advisers estimated that Americans were losing approximately [$17 billion](https://obamawhitehouse.archives.gov/blog/2015/02/23/effects-conflicted-investment-advice-retirement-savings) a year due to conflicted financial advice. That’s not just a rounding error. That’s people’s future security chipped away by incentives that put the advisor’s bottom line above the client’s best interest. A fiduciary advisor isn’t allowed to play both sides of the fence. The guidance they give has to be in your best interest, even if that means they make less. ## How a Fiduciary Financial Advisor Is Audited and How That Impacts You: Most people don’t realize that fiduciary advisors (like us here at nVest Advisors) are registered either with the SEC or state regulators, which means they’re subject to rigorous, regular audits. These reviews go beyond checking a few recordkeeping boxes — they closely examine whether client recommendations were in their best interest, backed by documentation and reasoning. Why does this matter? Because fiduciary advisors have to justify every move. If you’re getting retirement advice, they need to show why that plan fits your unique situation, not just that it met a general suitability rule. That level of accountability isn’t just regulatory. It becomes part of the culture. You’re not working with someone who’s trying to “sell and forget.” You’re working with someone whose entire practice depends on long-term client outcomes — and who can’t afford shortcuts. ## What You Can Ask to Spot a True Fiduciary: When it comes to managing your money, the difference between a financial advisor and a fiduciary advisor can be worth tens of thousands of dollars over time—and in many cases, your peace of mind. If you’re working with or vetting a financial advisor, don’t be afraid to ask direct, clear questions. A true fiduciary will not only welcome them—they’ll encourage them. - **Are you always acting in my best interest?** A true fiduciary will say *yes* without hesitation. They are legally and ethically required to prioritize your financial well-being. - **How are you compensated?** Fiduciaries are usually fee-only, meaning they earn from you—not commissions from selling products—so there’s less conflict of interest. - **Are you independent or affiliated with a brokerage?** Independent advisors have more freedom to recommend what’s best for you. Affiliated advisors may be influenced by company products. - **Can you put that fiduciary commitment in writing?** A genuine fiduciary won’t mind documenting their obligation to act in your best interest. If they avoid it, that’s a red flag. - **Do you earn commissions or referral fees?** This question helps reveal any hidden incentives. Fee-only fiduciaries typically avoid commission-based compensation altogether. - **What certifications do you hold?** Designations like CFP® or CPA often indicate fiduciary duty. Always verify if their role includes a legal fiduciary obligation. ## Why nVest Advisors Puts You First: At **nVest Advisors**, we don’t just use the term “fiduciary” — we live by it. Every recommendation we make is driven by your best interest, not ours. As a **100% fiduciary, fee-only firm**, we are committed to providing transparent, unbiased advice rooted in your unique financial goals. You won’t find hidden commissions, sales incentives, or one-size-fits-all solutions here. Instead, you’ll find a team of credentialed professionals who take the time to understand your full financial picture — from investments and retirement planning to debt management and business strategy. Click [here](https://nvestadvisors.setmore.com/) to book an appointment! Our advisors are here to [simplify your decisions](https://nvestadvisors.com/), help you move forward with confidence, and ensure your financial life supports the one you want to live. **Categories:** Uncategorized --- ### [The Ultimate Family Financial Planning Checklist](https://nvestadvisors.com/the-ultimate-family-financial-planning-checklist/) **Published:** February 19, 2025 **Author:** Maryam Irfanmeer **Content:** # ![family financial planning](https://nvestadvisors.com/wp-content/uploads/2025/02/pexels-kindelmedia-7979595-1024x682.webp "Pexels kindelmedia 7979595 nvest advisors") # **The Ultimate Family Financial Planning Checklist** Family financial planning aims to build a strong basis for future growth, stability, and financial security rather than only controlling spending. Whether you’re beginning a family or seeking to enhance your existing financial plan, a systematic method guarantees you’re ready for both expected and unexpected life events. Having a comprehensive strategy that addresses income management, savings, investments, and emergency readiness is more crucial than ever given the current state of the unpredictable economy and growing expenses. ## **Understanding Family Financial Planning** Setting clear financial objectives, managing income sensibly, controlling spending, and building savings and assets to create a stable future are all components of effective family financial planning. Families may manage unforeseen costs, avoid debt, and progressively increase their wealth with the support of an appropriate financial strategy. A survey by [LendingTree](https://www.lendingtree.com/debt-consolidation/paycheck-to-paycheck-survey/?utm_source) found that **64% of Americans live paycheck to paycheck**, with 46% experiencing this consistently and 18% occasionally. The study also highlighted that **35% of respondents have less than $100 left after covering monthly expenses**. ## **Establishing Clear Financial Goals** Setting financial objectives offers guidance and inspiration. Divide them into three categories: #### **Short-Term Goals:** These might include repaying credit card debt, preparing for a family vacation, or establishing an emergency fund. Creating a reserve that covers at least three to six months of spending should be a top focus. According to a [survey by the Federal Reserve](https://www.empower.com/press-center/37-americans-cant-afford-emergency-expense-over-400-according-empower-research), **nearly 37% of Americans cannot cover a $400 emergency expense**. Establishing a fund that covers at least three to six months of expenses should be a priority. #### **Mid-Term Goals:** These objectives involve significant commitments like purchasing a house, enhancing a vehicle, or saving for kids’ education. The expense of college tuition has increased considerably, making advance planning essential. A report by [College Board](https://www.bankrate.com/loans/student-loans/average-cost-of-college/) shows that the **average in-state tuition at a public university reached $10,940** for the 2022–2023 academic year. #### **Long-Term Goals:** Retirement planning is essential, especially considering the increasing cost of living. A survey by [Fidelity ](https://www.fidelity.com/viewpoints/retirement/how-much-money-should-I-save#:~:text=Fidelity's%20suggested%20total%20pre%2Dtax,to%20potentially%20support%20a%20replacement)recommends saving at least 15% of your annual income for retirement . Planning for long-term healthcare costs is also crucial, as medical expenses continue to rise. Planning for long-term healthcare costs is also crucial, as medical expenses continue to rise, impacting family financial stability. Structuring investments and insurance to protect your family’s future is a critical part of a comprehensive financial plan. ## **Creating a Household Budget** Well organized, budgets help families have a clear financial map so that spending is modest and funds are used wisely. By monitoring their spending habits, recognizing areas for savings, and focusing on essential expenses, households can build financial stability and steer clear of unnecessary debt. - **50% Needs:** Essential expenditures including utilities, food, rent or mortgage payments, health insurance, and other costs necessary for daily life are covered by this section of the budget. - **30% Wants:** Discretionary spending falls into this category, including dining out, entertainment, vacations, and non-essential shopping. While these expenses enhance lifestyle quality, they should remain within reasonable limits to maintain financial balance. - **20% Savings & Debt Repayment:** This segment is dedicated to financial security and long-term planning, including contributions to an emergency fund, retirement savings, and paying off debts like credit cards and student loans.. Budgeting apps like Mint and YNAB help streamline the process by categorizing expenses and identifying areas for improvement. We also have a [**completely free DIY planning tool you may use**](https://us.planswell.com/discovery/adv-nvest) (and no, you don’t have to become a client to use it), and **incredibly affordable, comprehensive financial planning** with the help of a human advisor for an entire year, if you would rather have the help of a pro (more on that below). ## **Building an Emergency Fund** By serving as a safety net, an emergency fund keeps unexpected expenses from throwing your budget off course or leading to debt. A car breakdown, unexpected medical expenses, or a brief loss of income may all be handled without the need for high-interest credit cards or loans if you have money in hand. Setting away a few month’s worth of essential expenses is a smart place to start, but the optimal amount may vary depending on responsibilities and lifestyle. Family financial planning can make this process easier by helping to determine the right savings goal. It might be less stressful to build this fund gradually by allocating windfalls like tax returns or by using automatic payments, making family financial planning more effective. ## **Managing Debt Wisely in Family Financial Plan** Effective debt management is crucial for maintaining financial stability within [family financial planning](https://nvestadvisors.com/financial-planning-for-individuals-families/). Prioritizing the repayment of high-interest debts, such as credit card balances, can significantly reduce the total interest paid over time. Since credit card interest rates are still high in the year 2025, it is crucial that the families handle their debt thoughtfully. Carrying a balance on high-interest debt can swiftly undermine financial stability, highlighting the importance of intelligent repayment options. Here are three common approaches: - #### **Debt Snowball Method:** Focuses on paying off the smallest debts first, creating a sense of achievement and motivation to tackle larger ones. - #### **Debt Avalanche Method:** Prioritizes debts with the highest interest rates, minimizing overall interest costs and accelerating debt freedom. - #### **Debt Consolidation:** Combines multiple debts into a single loan with a lower interest rate, simplifying repayment and reducing financial strain. (At nVest, we also employ a fourth strategy called **Debt Optimization**: making sure the loans you must carry for a while have the very best rates and terms available while we work to pay them down. You can learn more about this unique feature of our financial planning service by scheduling a free Q&A session with one of our advisors, below.) A survey by the [American Psychological Association](https://www.blueprint.ai/blog/inflation-and-mental-health-tackling-financial-stress-for-a-healthier-2024-holiday-season#:~:text=A%20survey%20commissioned%20by%20the,depression%2C%20especially%20during%20the%20holiday) found that **financial stress affects 72% of families**, underlining the importance of debt management. Choosing the right strategy depends on individual financial goals and discipline, but consistency is key to achieving long-term financial stability. ## **Prioritizing Family Financial Planning for Early Retirement** One of the best strategies for families to create long-term financial stability is to begin retirement savings early. The power of compound interest allows even small contributions to grow significantly over time. Employer-sponsored 401(k) plans, particularly those that allow matching contributions, are a great way to speed up savings, essentially offering free money that families should take full advantage of. Individual Retirement Accounts (IRAs) also provide broad investment alternatives and significant tax benefits for people without access to a 401(k). A well-prepared future may be ensured by further strengthening financial stability through the diversification of retirement funds through a combination of stocks, bonds, and other assets. ### Investing for the Future with Family Financial Planning A strong investment strategy is a key component of family financial planning, helping families build wealth, protect against inflation, and create financial security for future generations. Investing wisely not only ensures long-term financial growth but also provides a safety net during economic downturns. To maximize returns while managing risk, families should consider diversifying their investments across different asset classes in correct measures to meet your expected time horizons, investment preferences, and risk tolerance. **If you don’t know your risk tolerance, you can learn this for free right now by completing our [Risk Tolerance Questionnaire.](https://nvestadvisors.com/assess-your-investment-risk-tolerance/)** Incorporating investments into family financial planning ensures that wealth grows steadily over time. Families who start early, contribute consistently, and reinvest earnings can benefit from the power of compounding, leading to financial independence and a more secure future. ## **Securing Proper Insurance Coverage** Securing the right insurance coverage is a key element of family financial planning, offering protection against unexpected life events. Families should assess their needs and ensure they have: - **Health Insurance:** Helps cover medical expenses, reducing the financial burden of healthcare costs. - **Life Insurance:** Provides financial support for dependents in case of death. According to a 2023 study by [LIMRA](https://www.limra.com/en/newsroom/news-releases/2023/new-study-shows-interest-in-life-insurance-at-all-time-high-in-2023/), interest in life insurance reached an all-time high, yet many families still lack adequate coverage. - **Disability Insurance:** Replaces lost income if an illness or injury prevents working, ensuring financial stability. - **Home & Auto Insurance:** Protects assets from property damage, theft, and liability claims. ### How Regular Financial Check-Ins Improve Family Financial Planning Regular financial check-ins are a crucial part of family financial planning, helping families stay on track and adapt to changing financial situations. Partnering with a financial planner can make this process more effective, ensuring financial decisions align with long-term goals. According to the Financial Planning Standards Board [(FPSB)](https://fpsb.org/news/financial-planning-leads-to-better-outcomes-beyond-wealth-but-myths-persist/), individuals who engage in financial planning experience greater financial confidence, stability, and overall well-being. By scheduling quarterly or annual reviews, families can evaluate their budgeting, savings, and investment strategies, making adjustments as needed. ### Secure Your Family’s Financial Future with Expert Guidance Navigating family financial planning can feel overwhelming, but you don’t have to do it alone. At [nVest Advisors](https://nvestadvisors.com/), we help [families](https://nvestadvisors.com/individuals_families_finances/) take control of their finances, build long-term security, and achieve their financial goals with confidence. Whether you’re looking to manage debt, grow investments, or plan for the future, our expert advisors are here to guide you every step of the way. **Schedule a [consultation](https://nvestadvisors.setmore.com/) with nVest Advisors and start building a stronger financial future for your family!** **Categories:** Behavioral Finance, Business Stories, Client News, Client Service, Debt, Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Investing General, Investment, Mailchimp, Plan Participants, public, Retirement, Small Business, Taxes, Texas Teachers Retirement --- ### [What Is A Safe Harbor 401(k)?](https://nvestadvisors.com/what-is-a-safe-harbor-401k/) **Published:** June 17, 2025 **Author:** Maryam Irfanmeer **Content:** ### ![](https://nvestadvisors.com/wp-content/uploads/2025/06/What-is-a-Safe-Harbor-401k-2.pdf-image-001-1-e1749135092233-1024x307.png "What is a safe harbor 401k 2 Pdf image 001 nvest advisors") Imagine you’re a small business owner working hard to offer your team a competitive benefit. You know your employees deserve a reliable retirement plan, but you’re also weighed down by the complexities of tax compliance and IRS testing. Does it feel like a challenge to offer a great 401(k) plan that meets everyone’s needs? This is where a **Safe Harbor 401(k)** can make all the difference—helping you offer a solid plan without the stress of complex regulations. The Safe Harbor 401(k)—a game-changing retirement plan that can offer you the perfect balance of compliance, simplicity, and employee satisfaction. But why is this plan so important, and how can it make a tangible difference for your business? Let’s dive into why the Safe Harbor 401(k) is a tool every business owner should consider, especially if you’re looking to simplify your plan, save on tax expenses, and create a retirement benefit that your employees will truly appreciate. ### **What is a Safe Harbor 401(k)?** A **Safe Harbor 401(k)** is a type of employer-sponsored retirement plan that helps businesses comply with IRS regulations, particularly the **non-discrimination testing** that ensures fairness in retirement contributions across different income groups. The IRS mandates that businesses offering traditional 401(k) plans must pass annual tests to make sure highly compensated employees (HCEs) aren’t benefiting disproportionately compared to lower-income employees. The tests aim to prevent businesses from favoring top-tier earners in the distribution of retirement funds. But with a Safe Harbor 401(k), employers can bypass these tests by making specific, mandatory contributions to their employees’ retirement plans, ensuring that all employees, regardless of income, benefit equally. ### **Why Safe Harbor 401(k) Makes Sense for Small Business Owners** While traditional 401(k) plans can be complicated, with paperwork and frequent testing requirements, a **Safe Harbor 401(k)** simplifies everything. Here’s how: 1. **No Discrimination Testing Required**: The primary advantage of Safe Harbor 401(k) is that it automatically passes the non-discrimination tests. That means, as an employer, you won’t have to worry about failing compliance and dealing with penalties. This makes the administration simpler, much less expensive, and more straightforward. 2. **Guaranteed Employer Contributions**: Unlike standard 401(k) plans, where employers are only required to match contributions on a voluntary basis, a Safe Harbor 401(k) mandates that employers contribute a fixed amount each year. This contribution ensures that everyone, including lower-income employees, is receiving a fair share, even if they aren’t able to contribute to the plan themselves. 3. **Simplified Plan Design**: With a Safe Harbor 401(k), the plan design is more streamlined and less prone to errors. This helps business owners save time, reduce administrative overhead, and, most importantly, avoid potential costly mistakes that could lead to audits or penalties. 4. **Tax Benefits**: Business owners enjoy significant tax deductions for contributions made to their employees’ 401(k) accounts. The contributions to a Safe Harbor 401(k) plan are deductible on the business’s taxes, helping reduce taxable income, which can provide immediate financial relief. 5. **Attractive to Employees**: In a world where employee benefits are a significant deciding factor when people choose where to work, offering a Safe Harbor 401(k) helps you stand out from competitors. It’s an attractive way to ensure your employees are not only saving for their future but are being treated fairly, regardless of their income level. ### **Key Contributions in a Safe Harbor 401(k) Plan** To qualify as a **Safe Harbor 401(k)**, employers must make specific contributions that meet the IRS guidelines. These contributions can be made in one of two ways: #### **1. Basic Matching Contribution** - Employers match 100% of the employee’s contributions **up to 3%** of their salary, plus 50% of contributions for the next 2% of salary. - Example: If an employee contributes 5% of their salary, the employer contributes 4% (3% + 1%). #### **2. Non-Elective Contribution** - Employers contribute [**at least 3%**](https://www.investopedia.com/terms/n/non-electivecontribution.asp) of each eligible employee’s salary, regardless of whether the employee contributes to the plan. - This guarantees that all employees, including those who choose not to participate, receive a contribution toward their retirement savings. ### **Tax Advantages of a Safe Harbor 401(k) for Employers** Offering a Safe Harbor 401(k) comes with several tax advantages for business owners: - **Tax-Deductible Contributions**: Employer contributions to the plan are tax-deductible for the business, helping reduce overall taxable income. - **Maximized Employee Satisfaction**: A better retirement plan can make your business more attractive to potential employees, helping to improve talent acquisition. ### **Can You Switch Between Safe Harbor and Other 401(k) Options Mid-Year?** Many employers may wonder: once you commit to a Safe Harbor 401(k), can you change the plan’s structure or switch to another retirement plan down the road? The short answer is: Yes, but with limitations. Employers can switch between a Safe Harbor plan and a traditional 401(k), but doing so mid-year can be tricky, as it requires careful planning to ensure compliance and avoid penalties. It’s always wise to work closely with a financial advisor to ensure that the switch won’t cause issues with employee contributions or tax treatment. ### **What Are the Potential Pitfalls of a Safe Harbor 401(k)?** #### **1. Employer Contribution Requirements** While these contributions are great for employees, they can be a burden on employers. Some businesses may struggle with the 3% mandatory contribution or the matching requirements, particularly if their profits fluctuate or if they have a smaller workforce. #### **2. Limited Flexibility in Contributions** Employers are bound to the contribution structure outlined by the Safe Harbor rules. This may not be as flexible as other retirement plans, where employers can choose when and how much to contribute. ### **What It Doesn’t Cover:** - **Loans (often)**: Safe Harbor plans often don’t allow loans, depending on the setup. Employees won’t have the flexibility to borrow from their 401(k) in emergencies unless the plan is structured to offer loans. This is an important consideration, and selecting the right plan advisor will make sure you get it right. - **Limited Contribution Flexibility**: Employers must make fixed contributions (matching or non-elective) and cannot adjust based on profits. This lack of flexibility might not work for businesses that need more dynamic or variable contributions depending on annual profits or other business factors. - **Employee Eligibility**: Must include all eligible employees, even part-time or seasonal workers who meet criteria. ### **Safe Harbor 401(k) for Seasonal and Part-Time Workers:** - **Eligibility**: Employees must meet the 1,000-hour requirement to participate. Seasonal/part-time workers may be excluded. However, if a business hires seasonal or part-time employees who don’t work that many hours, they may not be eligible to participate in the plan. - **Employer Contributions**: Employers must provide contributions for eligible employees, including seasonal workers if they meet requirements. ### **How Safe Harbor 401(k) Plans Are Evolving Under the SECURE Act:** - **Increased Age for Required Minimum Distributions (RMDs)** One key change brought about by the SECURE Act is that the age at which employees must begin taking Required Minimum Distributions (RMDs) has been raised from 70 ½ to 72. This change impacts Safe Harbor 401(k) plans, as it delays the requirement for participants to begin drawing down their accounts, potentially allowing for greater compounding growth. - **Automatic Enrollment for New Plans** The SECURE Act encourages employers to adopt **automatic enrollment** for new 401(k) plans, including Safe Harbor 401(k) plans. Automatic enrollment can significantly increase **employee participation rates** by making it easier for employees to start saving for retirement. It also helps with compliance, as employees are automatically enrolled unless they opt out. This change aligns with the growing emphasis on making retirement savings more accessible. - **Expanded Tax Credits for Small Businesses** The SECURE Act provides a **tax credit** for small businesses that set up a 401(k) plan, including Safe Harbor 401(k)s. This credit has been **increased**, making it more affordable for small business owners to offer retirement benefits. Small businesses with up to **100 employees** can receive a tax credit for their startup costs, which is especially helpful for businesses looking to provide retirement plans to their employees without burdening the company financially. - **Consolidation of Retirement Plans** Another key change in the SECURE Act involves the ability to **consolidate** multiple retirement plans into one, helping employers streamline their operations and offer employees a simpler retirement benefit. This could make it easier for businesses to manage multiple employee accounts and keep their retirement offerings organized. In conclusion, the **Safe Harbor 401(k)** offers **numerous benefits** for businesses, especially those with diverse workforces or those looking to simplify plan administration. By offering a **Safe Harbor 401(k)**, you not only ensure compliance with IRS regulations but also provide your employees with a meaningful retirement plan that helps them build wealth. If you’re considering setting up or switching to a **Safe Harbor 401(k)** plan for your business, [**nVest Advisors**](https://nvestadvisors.com/) can guide you through every step of the process, helping you select the best retirement plan options tailored to your company’s unique needs. Click [here](https://nvestadvisors.setmore.com/) to book a meeting! **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Retirement, Small Business, Taxes, Texas Teachers Retirement, Uncategorized --- ### [What Impacts Your Car Insurance Cost?](https://nvestadvisors.com/what-impacts-your-car-insurance-cost/) **Published:** June 12, 2025 **Author:** Maryam Irfanmeer **Content:** ## ![car insurance cost tips ](https://nvestadvisors.com/wp-content/uploads/2025/06/pexels-pixabay-35967-e1749780291673-1024x430.jpg "Pexels pixabay 35967 nvest advisors") ## **What Impacts Your Car Insurance Cost? A Complete Breakdown** ### **Introduction: Why Understanding Car Insurance Cost is Essential** Car insurance cost is one of those expenses that often feels unavoidable, but knowing exactly what influences your premiums can unlock opportunities for savings. **While the U.S. national average for full-coverage car insurance in 2025 is approximately [$2,638 per year](https://www.propertycasualty360.com/2025/06/09/real-but-weird-us-driving-laws/)**, premiums are far from one-size-fits-all. It’s not just about the type of coverage you choose; there are multiple, often overlooked factors that can impact the price of your insurance, from your credit score to how your car interacts with modern technology. Understanding how your premium is calculated not only helps in managing costs but also ensures that you’re not overpaying for coverage you might not need. In this article, we dive deeper into the hidden forces behind car insurance premiums and how they’re shaping the market in 2025. ### **How Car Insurance Cost Is Calculated (and Why It Matters)** The process by which insurers calculate your premium involves far more than a simple formula. Here’s a deeper look into the components: 1. **Data Modeling and Predictive Analytics**: Insurers now use complex data models that factor in over 100 variables to assess risk and set premiums. These models go beyond basic demographic info (age, location) and include data from connected cars and driving apps. 2. **Personal Data Analytics**: Beyond just age and gender, insurers analyze your **driving habits** (e.g., hard braking, cornering) and **connected car data** to predict how often you might file a claim. This can significantly affect your premium, even if you haven’t had any claims or accidents. - **Example**: Your car’s telematics system may track acceleration and braking patterns, affecting your rates. For instance, driving aggressively could add 10%-15% to your premium. 3. **Location-Based Factors**: Premiums are also heavily influenced by local data, like accident and theft statistics in your area. Insurers are using machine learning to predict claims based on environmental and road conditions specific to your ZIP code. - **Fresh Insight**: Areas prone to extreme weather events like floods or hail might result in higher premiums for drivers living in those areas. However, some insurers now offer weather-specific discounts for cars equipped with advanced safety features like lane assist or automatic emergency braking. ### **What’s Included in Your Car Insurance Cost?** Most people know that car insurance includes liability, collision, and comprehensive coverage. But there are newer options available that might affect your premium. - **Telematics and Usage-Based Insurance (UBI)**: With connected cars, insurers can now offer pay-per-mile insurance or behavior-based discounts. UBI tracks how safely you drive through telematics and can significantly lower costs for good drivers. - **Roadside Assistance and Add-Ons**: While most policies include these add-ons by default, many people don’t know that they can opt-out. This can lower your premium by $50–$100 annually, depending on your insurer. - **Rental Car Coverage**: If your car is in the shop, having rental car coverage can also increase premiums. However, many policies now offer this as an optional add-on that can save you up to 10% by excluding it. ### **Key Factors That Influence Your Car Insurance Cost** While age and driving history are well-known factors, here are some lesser-known influences: 1. **Credit Score**: Insurers in many states use credit scores to determine premiums. Studies show that those with poor credit pay up to **59% more** for car insurance compared to drivers with excellent credit ([Consumer Reports](https://www.consumerreports.org/money/car-insurance/how-to-save-big-on-your-car-insurance-a5155263103/?utm_source=chatgpt.com)). - **Pro Tip**: If your credit score has improved, it’s worth asking your insurer to rerun your quote to reflect your better financial standing. 2. **Job Type**: Insurers now factor in your occupation. If you work in a high-risk job (e.g., delivery drivers or contractors), your rates may be higher because you are statistically more likely to file a claim. 3. **Car Technology**: Modern car safety technology like lane assist, automatic braking, and adaptive headlights can help lower your rates by up to **20%** ([Forbes](https://www.forbes.com/)). ### **How Age and Driving History Impact** It’s well-established that younger drivers pay more. However, here’s what many people don’t know: - **Driver Experience vs. Age**: Insurance companies are now analyzing the length of your driving experience more than just your age. For example, a 40-year-old with 20 years of driving experience could pay less than a 30-year-old with only 5 years behind the wheel, despite being in the same age group. - **Violation Severity**: Not all violations impact premiums equally. For example, speeding tickets might increase your premium by 20%, to 30%. ### **How Your Credit Score Affects Car Insurance Cost** Your credit score plays a surprisingly large role in determining car insurance rates, especially in states where it is allowed. Here’s how: - **Credit-Based Insurance Scores**: Insurers use your credit score to predict future claims. Poor credit is seen as an indicator of greater risk, which leads to higher premiums. Drivers with good credit can save up to [**$1,500 a year**](https://www.thezebra.com/auto-insurance/driver/other-factors/car-insurance-good-credit-drivers/) compared to those with poor credit. - **Improving Your Score**: Improving your credit score can reduce your premiums significantly. Paying down high balances, making timely payments, and keeping credit utilization low are key ways to improve your credit score and, in turn, reduce your insurance costs. ### **How Your Car’s Make and Model Influence Your Insurance Cost** The type of vehicle you drive is a major factor in how much you pay for car insurance. Here’s what to consider: - **Luxury Vehicles**: Expensive cars like luxury models (e.g., Audi, BMW) and sports cars (e.g., Porsche) typically have higher premiums due to expensive repairs and theft risks. However, high-end vehicles with advanced safety features (e.g., collision avoidance) may lower costs. - **Electric vs. Gas Cars**: Electric vehicles tend to have higher premiums due to the high repair costs of battery packs and specialized parts. However, insurance companies offer discounts for EVs equipped with state-of-the-art safety features. ### **Electric vs. Gas Cars: Which Has the Lower Cost?** While gas-powered vehicles tend to be cheaper to insure, electric vehicles (EVs) come with a unique set of benefits and drawbacks: - **EVs**: Generally, EVs cost more to repair due to their expensive parts, especially their batteries. However, insurers are starting to offer discounts for EV owners who also use green insurance products (e.g., low-mileage or eco-friendly policies). - **Gas-Powered Vehicles**: These vehicles tend to have lower repair costs, but they don’t offer the same safety features or fuel-efficiency benefits as EVs, which can affect your long-term premium. ### **How Location and Driving Habits Affect Car Your Insurance** Your location and driving habits are major factors influencing your insurance premiums: - **Zip Code**: Urban areas with more accidents, theft, and vandalism lead to higher premiums. But certain insurers now offer **usage-based insurance** (UBI) or **pay-per-mile insurance** that can benefit drivers in low-traffic areas. - **Driving Habits**: Aggressive driving, frequent long commutes, or driving in high-traffic areas can increase your rates. Adopting safer driving habits, like avoiding hard braking, can lower premiums. ### **New Drivers: What to Expect?** New drivers, especially teens, face high premiums. However, there are ways to reduce these costs: - **Adding to Parent’s Policy**: Adding a new driver to a parent’s policy rather than having a separate one can cut costs. - **Good Student Discounts**: Many insurers offer discounts for students who maintain good grades (above a B average), as they are statistically less likely to file a claim. ### **Conclusion: Recap of Major Cost Influencers** Car insurance premiums are not one-size-fits-all. Your rates depend on multiple factors, from your age and driving history to the technology in your car and the area where you live. Regularly reviewing your coverage, improving your credit score, and opting for telematics can help you lower your premiums while still maintaining proper protection. At [**nVest Advisors**](https://nvestadvisors.com/), we understand the importance of making informed financial decisions. [Contact us](https://nvestadvisors.setmore.com/) today for expert guidance on optimizing your car insurance costs and ensuring you’re adequately covered without overpaying. **Categories:** Annuities & Insurance, Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Mailchimp, Plan Participants, public, Texas Teachers Retirement --- ### [How to Create a Diversified Portfolio with Low-Risk Investments](https://nvestadvisors.com/how-to-create-a-diversified-portfolio-with-low-risk-investments/) **Published:** May 21, 2025 **Author:** Maryam Irfanmeer **Content:** # ![how to build a diversified portfolio](https://nvestadvisors.com/wp-content/uploads/2025/05/pexels-goumbik-590011-e1747838697732-1024x517.jpg "Pexels goumbik 590011 nvest advisors") # How to Create a Diversified Portfolio with Low-Risk Investments You’ve likely heard the phrase, “Don’t put all your eggs in one basket,” and if you’ve ever dropped a basket full of eggs, you know exactly why it’s a good piece of advice. The same principle applies to creating a **diversified portfolio**. If you put all your money into one investment, like a stock or a bond, you’re taking a risk that it could all go down the drain if the market takes a tumble. But when you spread your money across different investments—just like putting your eggs in different baskets—you reduce your chances of losing everything in one go. This is where **diversification** comes in. Diversifying your portfolio means spreading your investments across various asset types, industries, and regions. This way, when one area takes a hit, the others can help cushion the blow. > **A quick note about this article before we continue:** nVest Advisors does not make specific investing or financial planning recommendations in blog posts such as this, for obvious reasons: we don’t know who is reading it, and have no idea about your individual needs, preferences, and situation. These concepts are discussed here for general education purposes only. If you have specific investing questions, [reach out to one of our advisors for a complimentary Q&A phone or video meeting.](https://nvestadvisors.setmore.com) > > Likewise, diversification does not guarantee a portfolio’s value, and while it can help to “smooth the ride”, it does not *eliminate* investing risk. [All asset types have various risks](https://nvestadvisors.com/2023/05/15/risk-tolerance-management-investing/ceo/ "11 kinds of investment risk you need to know"), depending on what is going on in the world at the time. Diversification *dilutes* particular risks (like market volatility), but there is no way to fully eliminate investing risk from any asset class. ## Principles of a Diversified Portfolio Diversification works by tapping into a simple yet powerful principle called correlation. Think of it like this: different investments react to market changes in their own unique ways. When you combine assets that don’t always move in sync, you’re creating a **low-correlation portfolio**—one that has a better chance of staying steady when the market becomes volatile. Here’s the trick: when the stock market drops, bonds usually go up. It’s not a guarantee every time, but it’s a pattern that helps balance out those ups and downs. So, by having both stocks and bonds in your portfolio, you’re really just smoothing out those big, uncomfortable swings. Think of it like riding a bike with training wheels—you’re still moving forward, but it’s way steadier. The goal is simple: lower your risk and be ready for whatever the market throws your way. ## Building a Diversified Portfolio with Low-Risk Investments Now that we understand what diversification is, let’s talk about how to actually build a diversified portfolio that doesn’t expose you to high levels of risk. Here are some key steps: #### 1. **Understand Your Risk Tolerance** Before you start picking investments, you need to [know how much risk you’re comfortable taking.](https://nvestadvisors.com/assess-your-investment-risk-tolerance/) Risk tolerance is essentially how much market fluctuation you’re willing to accept without panicking. If you’re someone who loses sleep during market downturns, you’ll want a more conservative approach, with a higher allocation in bonds and other lower-risk assets. For example: - **Aggressive portfolios** might be 90% stocks and 10% bonds, aimed at high growth, but with higher risk. - **Moderate portfolios** typically have a 70/30 split between stocks and bonds, which balances growth and stability. - **Conservative portfolios** might be 50% stocks and 50% bonds, focusing more on stability. **If you don’t know your Risk Tolerance, [click here to take our totally-free Risk Tolerance Questionnaire](https://nvestadvisors.com/assess-your-investment-risk-tolerance/ "Assess Your Investment Risk Tolerance") (the same one we use with our clients), and find out.** #### **2. Asset Allocation:** Your asset allocation is the proportion of stocks, bonds, and other assets in your portfolio. For a low-risk portfolio, you’ll want a larger portion of your investments in bonds and cash equivalents like certificates of deposit (CDs), while also holding some stocks for growth. A popular starting point for many investors is the 60/40 split—60% in stocks and 40% in bonds. However, that is not a one-size-fits-all solution; you need to adjust that based on your risk tolerance, investing time horizon, and financial goals. #### **Diversify Within Asset Classes** To build a truly diversified portfolio, you need to go beyond just mixing stocks and bonds. Within each asset class, make sure you have variety. For example, in your stock portfolio: - **Market Capitalization**: Include both large-cap stocks (big, established companies) and small-cap stocks (newer, potentially higher growth companies). - **Stock Investing Methodology:** Some people look for stocks that are currently inexpensive (called “value investors”), while others prefer to look for companies with strong future earnings potential, regardless of their share price today (called “growth investors”). - **Sectors**: Invest in different industries—healthcare, tech, energy, finance—to reduce the impact of a downturn in any one industry. - **Geographic Regions**: Don’t just focus on the U.S. markets. International stocks and emerging markets can help diversify your portfolio further. For your bonds: - **Bond Types**: A mix of **government bonds**, **corporate bonds**, and **municipal bonds** will give you different levels of risk and return. - **Bond Credit Quality:** Most (but not all) bonds have a credit rating, similar to your Experian or Equifax score. Bonds with higher credit scores have theoretically a lower risk of default, but are much more sensitive to changes in a country’s base interest rate. - **Bond Duration**: Consider a mix of short-term and long-term bonds to balance interest rate risk. According to **Morningstar’s [research](https://www.morningstar.com/portfolios/why-portfolio-diversification-has-helped-2025)**, “Diversification is an effective way to reduce portfolio volatility by spreading exposure across different asset classes that do not move in lockstep.” This demonstrates the importance of diversification in protecting your portfolio from sharp market fluctuations. #### **3. Explore Index and Bond Funds** To expand your portfolio, think about including **index funds** or **bond funds**. These funds follow the performance of broad market indexes such as the S&P 500 or the bond market, offering you access to a wide variety of investments across different industries without the hassle of choosing individual assets. Index funds are particularly attractive because of their **minimal fees**, making them a budget-friendly option for diversification and maximizing potential returns. With lower operating expenses, you keep a larger share of the profits from your investments. However, index funds are **passively managed**, meaning they don’t adjust based on market changes or opportunities. In more volatile periods, **actively managed funds** may have the advantage, particularly in the bond market, where fund managers can adjust strategies to take advantage of shifting market conditions. #### **4. Use Mutual Funds and ETFs** Let’s face it—building a diversified portfolio from scratch can be overwhelming. The good news? You don’t have to buy individual stocks and bonds for every sector, country, or asset type. **Mutual funds** and **ETFs (exchange-traded funds)** can do the hard work for you, as the primary benefit of a mutual fund or ETF is built-in diversification. These funds pool money from multiple investors and invest in a wide variety of assets, giving you instant diversification. The beauty of mutual funds and ETFs is that they’re professionally managed, so you don’t have to worry about constantly researching and adjusting your holdings. As an example (but this is NOT a specific endorsement or recommendation), funds like Vanguard’s Total Stock Market Index Fund or iShares MSCI Emerging Markets ETF give you exposure to hundreds or even thousands of stocks, across different industries and countries, all with one investment. #### **5. Rebalance Your Portfolio Regularly** Building a diversified portfolio isn’t a one-time task—it requires ongoing attention. Over time, some investments will grow faster than others, which can throw off your initial asset allocation. Rebalancing involves adjusting your portfolio back to your desired mix by buying or selling assets as necessary. Rebalancing helps ensure that you maintain the right balance of risk and growth in your portfolio. It’s recommended to review your portfolio at least once a year or after major life events (like retirement or a significant financial milestone). #### **6. Diversification Goes Beyond Stocks and Bonds** When people think of building a diversified portfolio, they often picture a simple mix of stocks and bonds. For years, financial advisors have used the ratio of these two assets to assess risk and diversify portfolios. But true diversification goes much further than just stocks vs. bonds. As time goes on, certain asset classes or sectors in your portfolio can become too dominant, leaving you exposed to specific risks. For example, during the tech boom of the late 1990s, investors who thought they were diversified by owning a range of technology stocks were actually concentrated in one sector. This resulted in significant losses when the Nasdaq Composite index, mostly made up of tech stocks, dropped nearly 80% from its peak in 2000 to its low in 2002. It’s essential to think about the industries and sectors you’re exposed to within your portfolio. If any area is overrepresented, it’s wise to rebalance your investments to maintain true diversification. ### The Benefits of Diversification Diversification isn’t just about minimizing risk; it’s about optimizing your chances for long-term growth. By spreading your investments across various asset types, sectors, and regions, you reduce the risk of losing everything from one poor-performing asset. This strategy helps buffer your portfolio against market swings, allowing you to sleep easier knowing that your investments are more stable. Ultimately, diversification is a crucial part of a strategy for building a lower-risk portfolio that has the potential to grow steadily over time. By avoiding the “all eggs in one basket” trap, you’re positioning yourself better for long-term success by reducing (but never eliminating) concentration risk in a portfolio. At **nVest Advisors**, we specialize in crafting diversified portfolios and professionally designed and managed models that align with your financial goals, giving you the confidence to plan for the future. Let’s work together to ensure your investments are set for long-term success. Click [here](https://nvestadvisors.setmore.com/) to book an appointment. **Categories:** Uncategorized --- ### [Smart Ways to Lower Your Car Insurance Cost](https://nvestadvisors.com/smart-ways-to-lower-your-car-insurance-cost/) **Published:** May 19, 2025 **Author:** Maryam Irfanmeer **Content:** # ![how to reduce your car insurance cost](https://nvestadvisors.com/wp-content/uploads/2025/05/pexels-jagmeetsingh-1134857-e1747654172109-1024x485.jpg "Pexels jagmeetsingh 1134857 nvest advisors") # Smart Ways to Lower Your Car Insurance Cost Car insurance cost can often feel like an unavoidable expense, and for many, it’s one of the largest ongoing costs after a mortgage or rent.[ **In 2025, the average cost of full-coverage car insurance in the U.S. is approximately $2,638 per year, a 12% increase from the previous year.**](https://www.bankrate.com/insurance/car/the-true-cost-of-auto-insurance/) This rise is influenced by factors such as inflation, increased repair costs, and a surge in vehicle thefts. In this article, we’ll dive into proven strategies for reducing car insurance costs—without compromising on the coverage you need. ### **1. Why is Your Car Insurance Cost Higher Than Others?** Understanding the reasons behind your premium is the first step to lowering it. Here’s how various factors influence your rates: - **Age and Experience**: Drivers under 25, especially teenagers, are considered high-risk due to a higher likelihood of accidents. As drivers age and gain more experience, their premiums tend to drop. - **Driving Record**: Safe driving rewards you with lower premiums. A single accident or speeding ticket can hike your rates. - **Location**: Urban areas or places with high crime rates (like car theft) often lead to higher premiums. If you live in a high-density area, consider options to offset those costs. - **Vehicle Type**: The car you drive matters. Expensive cars or those with higher repair costs usually come with higher insurance rates. ### **2. How Car Insurance is Calculated** To lower your car insurance, you need to understand how it’s calculated. Insurers typically consider the following when determining your rate: - **Risk Assessment**: Your insurer will assess how risky you are to insure based on factors like your driving history, age, and even your credit score in some cases. - **Coverage Type**: Full coverage, which includes liability, collision, and comprehensive insurance, will obviously cost more than minimum coverage. So, understanding your needs is key to balancing cost and coverage. ### **3. Practical Strategies to Lower Your Car Insurance Cost** Now that you understand the major factors influencing your premium, let’s explore actionable strategies for reducing your car insurance cost without sacrificing necessary coverage. #### **a) Increase Your Deductible** One of the simplest ways to lower your premium is by increasing your deductible. The deductible is the amount you pay out-of-pocket before your insurance kicks in. Here’s how it works: - **Example**: If you increase your deductible from $500 to $1,000, you could save up to 25% on your annual premium, depending on your insurer and location. **Graphical Representation**: - Increase in deductible -> Decrease in premium - Lower deductible -> Higher premium #### **b) Bundle Your Policies** If you have more than one insurance policy, bundling them with the same provider could lead to discounts. For example, combining your car insurance with your home or renter’s insurance often results in savings. Many insurance companies offer discounts of up to 20% for bundling. #### **c) Take Advantage of Discounts** Many insurers offer discounts, but these can often be overlooked. Make sure you’re taking full advantage of: - **Safe Driver Discount**: If you’ve maintained a clean driving record, you might qualify for a discount. - **Low Mileage Discount**: If you don’t drive much (say, under 10,000 miles annually), some insurers offer a discount. - **Good Student Discount**: If you’re a student with good grades, insurers may provide a discount, recognizing that they are statistically safer drivers. #### **d) Consider Usage-Based Insurance (UBI)** Usage-based insurance is a relatively new model where your premium is based on how much and how safely you drive. By using a telematics device, insurers can track your driving habits, such as how often you drive, how fast you go, and how sharply you brake. - **Example**: If you drive less or are a cautious driver, you could see significant savings. #### **e) Regularly Review Your Coverage** As your car ages or its value depreciates, you might find that you’re paying for coverage you no longer need. For instance, if your car is worth less than $3,000, it might not make sense to maintain collision or comprehensive coverage. - **Tip**: Review your policy every year and adjust your coverage to match your car’s current value. ### **4. Hidden Fees That Could Be Increasing Your Car Insurance Costs** Many drivers are unaware of additional charges that can inflate their premiums. Here’s a breakdown of some common hidden fees: - **Monthly Payment Fees**: Some insurers charge an extra fee if you choose to pay monthly instead of annually. - **Paper Billing Fees**: Opting for paper billing rather than electronic statements can sometimes come with an added charge. - **Roadside Assistance Fees**: Some plans automatically include this, even if you don’t need it. Be sure to ask about these hidden costs and adjust your payment methods if possible to avoid unnecessary charges. ### **5. Is Paying a High Car Insurance Cost Worth It?** It’s essential to find a balance between adequate coverage and affordability. While you might be tempted to lower your coverage to reduce costs, it’s critical to ensure you’re not leaving yourself exposed to financial risks. Here’s a breakdown of when paying a high premium is justified: - **Full Coverage for New Cars**: If your car is new or has a high value, full coverage is typically a wise choice. The peace of mind it offers in case of an accident can far outweigh the higher cost. - **Higher Liability Limits for Young Drivers**: For younger drivers, investing in higher liability limits can be beneficial, as they are statistically more likely to cause accidents. ### **6. Conclusion: Make Smart Decisions to Lower Your Premium** Reducing your car insurance cost doesn’t have to mean sacrificing coverage. By understanding how your premium is calculated, taking advantage of discounts, bundling policies, and increasing your deductible, you can significantly lower your premiums. However, always remember to maintain adequate coverage, especially for high-value cars or inexperienced drivers. Implementing these strategies requires regular policy review and staying proactive. With these smart steps, you’ll not only ensure you’re getting the best possible price for your insurance but also that you’re covered when you need it most. At[ nVest Advisors](https://nvestadvisors.com/), we understand the importance of smart financial decisions, including managing your car insurance costs. Our team of experts is here to help you navigate your financial journey and optimize your spending without compromising on coverage. Contact us today to explore personalized strategies to align your insurance needs with your financial goals. Let us help you make informed choices for a secure future. **Categories:** Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Insurance, Mailchimp, Media, Plan Participants, public, Small Business, Texas Teachers Retirement --- ### [Accredited Investors : What You Need to Know](https://nvestadvisors.com/accredited-investors-what-you-need-to-know/) **Published:** April 3, 2025 **Author:** Maryam Irfanmeer **Content:** # ![accredited investors](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-rdne-7414212-1-1024x682.jpg "Pexels rdne 7414212 nvest advisors") # Accredited Investors: What You Need to Know A few years ago, I had a conversation with a friend eager to invest in a private real estate fund. He had done his research, set aside funds, and was ready to move forward. But when he tried to invest, he was turned away. The reason? He wasn’t an accredited investor. At that moment, he realized that not all investments are open to everyone. Some opportunities come with restrictions, and one of the biggest dividing lines in the investing world is accreditation. So, what exactly does it mean to be an accredited investor, and why does it matter? #### **Example of an Accredited Investor:** Sarah is a successful entrepreneur with a net worth of $2 million, excluding her primary residence. She also earns an annual salary of $350,000. Because she meets both the net worth and income requirements, Sarah qualifies as an accredited investor. With her status, she gains access to private equity funds, venture capital opportunities, and exclusive hedge fund investments that are not available to the general public. She decides to invest in a pre-IPO startup through a private placement, a high-risk, high-reward opportunity typically reserved for accredited investors. This investment allows her to diversify her portfolio beyond traditional stocks and bonds, potentially leading to significant long-term gains./ ## **Requirements to qualify as an accredited investor** The [SEC](https://www.sec.gov/resources-small-businesses/capital-raising-building-blocks/accredited-investors) defines an accredited investor using financial and professional criteria. To qualify, individuals must meet at least one of the following conditions: ### **1. Income Requirement** - Individuals must earn over **$200,000 annually** ($300,000 jointly with a spouse) for the past two years, with a reasonable expectation of maintaining this income level. ### **2. Net Worth Requirement** - Individuals must have a **net worth exceeding $1 million**, excluding the value of their primary residence. This ensures that investors have the financial capacity to absorb potential losses. ### **3. Professional Certifications** - Holding **Series 7, Series 65, or Series 82** financial licenses qualifies an individual as an accredited investor, as these certifications demonstrate investment expertise. ### **4. Entity Accreditation** Certain business entities can qualify as accredited investors under specific conditions: - **Entities with assets exceeding $5 million**, including: - Corporations, partnerships, and limited liability companies (LLCs) - Trusts - 501(c)(3) organizations - Employee benefit plans - Family offices and their clients - **Entities where all equity owners are accredited investors** - **Investment firms and financial institutions**, including: - SEC-registered investment advisers - State-registered or exempt reporting advisers - SEC-registered broker-dealers - Banks, insurance companies, and registered investment companies - Business development companies and small business investment companies ### **5. Additional Qualifications** Other individuals and entities that qualify as accredited investors include: - **Executives and key personnel**: Directors, executive officers, or general partners (GPs) of the company offering the securities. - **Knowledgeable employees of private funds**, if investing in that specific fund. - **Family offices and their clients**, provided the office manages at least $5 million in assets. ## How Accredited Investors Become Qualified There is no formal application or certification process administered by a regulatory body. Instead, when an investor wants to participate in a private offering, they must verify their accredited status. This verification typically involves: - Providing tax returns, W-2s, or income statements. - Presenting brokerage and bank statements to verify net worth. - Obtaining written confirmation from a **licensed financial advisor, CPA, or attorney**. - Submitting proof of relevant financial certifications. Private investment firms and fund managers are responsible for ensuring that all participants meet these requirements before allowing access to accredited-only investments. ## **Privileges of Accredited Investors** Accredited investors gain access to financial opportunities that are not available to the general public. These investments include: ### **1. Private Equity and Venture Capital** - Early investment in startups and private companies with high growth potential. ### **2. Hedge Funds and Private Funds** - Alternative investment vehicles that use advanced strategies beyond traditional stock and bond portfolios. ### **3. Private Placements** - Direct investments in private companies without needing to go through public exchanges. ### **4. Real Estate Syndications** - Large-scale real estate deals that allow investors to pool capital and share in ownership and profits. These opportunities typically offer **higher return potential**, but they come with increased risk, complexity, and lower liquidity than publicly traded investments. ## **The Role of Accredited Investors in Financial Markets** Accredited investors play a critical role in financial markets by funding innovative startups, supporting private companies, and contributing to alternative investment sectors. Many early-stage businesses and private funds rely on accredited investors to secure capital that fuels growth and expansion. Without these investors, many companies would struggle to raise funds outside of traditional lending institutions or public stock offerings. This dynamic helps create new jobs, drive economic growth, and support industries that might otherwise be underfunded. ## Due Diligence and Risk Considerations for Accredited Investors: While accredited investors have more opportunities, these investments come with significant responsibilities. Some key considerations include: - **Higher Risk Exposure:** Private investments lack the same level of regulation and oversight as public securities, increasing the potential for financial loss. - **Limited Liquidity:** Many accredited investor opportunities involve long holding periods before capital can be accessed or withdrawn. - **Less Transparency:** Private funds and placements do not have the same reporting standards as publicly traded investments. - **Regulatory Protection:** Unlike retail investors, accredited investors are expected to conduct their own due diligence and assume greater responsibility for their investment choices. ## Ways Accredited Investors Can Qualify Faster For individuals who do not currently meet accreditation standards but want to gain access to these opportunities, there are several strategies to consider: ### **1. Increase Your Income** - Advancing in your career, taking on higher-paying roles, or building additional income streams can help meet the income requirement. ### **2. Grow Your Net Worth** - Focus on saving, investing wisely, and accumulating assets outside of your primary residence to exceed the $1 million threshold. ### **3. Obtain Financial Certifications** - Earning relevant financial licenses such as **Series 7, 65, or 82** can help qualify through professional expertise rather than net worth alone. ### **4. Form an Investment Entity** - Pooling resources with other investors or structuring an investment entity can provide accreditation status for group-based investments. ## **Are Accredited Investors Driving Wealth Inequality?** Private markets have outperformed public markets over the past two decades, yet they remain inaccessible to most individuals. Venture capital, hedge funds, and private equity firms largely cater to accredited investors, allowing them to accumulate disproportionate wealth. - **The Wealth Gap Effect:** The more capital you have, the greater your access to high-yield investments, further compounding wealth over time. - **Restricted Access to High-Growth Startups:** Early-stage investments in companies like **Uber, Airbnb, and SpaceX** were exclusive to accredited investors, locking out the public from exponential growth opportunities. - **The Democratization Debate:** Some policymakers argue for **lowering accreditation barriers** based on financial literacy rather than net worth. The SEC has hinted at potential reforms to allow broader participation in private markets. ## **Changes to Accreditation Rules for Accredited Investors** The SEC has explored expanding the definition of an accredited investor beyond income and net worth thresholds. Some proposals suggest allowing individuals with strong financial literacy, regardless of income, to qualify. This could democratize access to private markets while still ensuring investor protection. ## Final Thoughts: Is Becoming an Accredited Investor Worth It? Accredited investors have access to exclusive financial opportunities, from venture capital and hedge funds to private real estate deals. While these investments offer higher return potential, they also come with greater risks and fewer protections than publicly traded assets. If you’re considering pursuing accreditation, it’s essential to evaluate your financial position, risk tolerance, and investment knowledge. At [**nVest Advisors**](https://nvestadvisors.com/), we help accredited investors and those aspiring to qualify make informed decisions about private market opportunities. Whether you’re looking to diversify your portfolio, assess risk, or strategize your path to accreditation, our team provides expert guidance tailored to your financial goals. [**Connect with us today** ](https://nvestadvisors.setmore.com/)to explore investment strategies designed for high-net-worth individuals and sophisticated investors. **Disclaimer:** The information provided in this blog is for informational purposes only and does not constitute tax, legal, or financial advice. Please consult with a qualified tax professional or attorney for advice tailored to your specific situation. **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Small Business, Texas Teachers Retirement --- ### [Small Business Taxes and Deductions You Shouldn't Miss](https://nvestadvisors.com/small-business-taxes-and-deductions-you-shouldnt-miss/) **Published:** May 13, 2025 **Author:** Maryam Irfanmeer **Content:** # ![small business taxes and deductions](https://nvestadvisors.com/wp-content/uploads/2025/05/pexels-leeloothefirst-8962449-e1747190602107-1024x492.jpg "Pexels leeloothefirst 8962449 nvest advisors") # **Small Business Taxes and Deductions You Shouldn’t Miss** Running a small business means you wear many hats, and navigating taxes is one of the most important yet challenging parts. Understanding small business taxes and the deductions available to you isn’t just about compliance—it’s about strategy. When you master this, you’re not only reducing your tax burden but also keeping more of what you’ve worked hard to earn. Here’s the key takeaway: with the right knowledge and approach, taxes don’t have to be a source of stress. They can be a tool for building a more solid financial foundation for your business. It’s not about avoiding taxes, but rather optimizing them. Knowing the nuances of your tax obligations and deductions can make all the difference. So, think of this as a guide to not just filing taxes, but maximizing your financial opportunities. ## **Understanding Small Business Taxes** ### **1. Income Taxes for Small Businesses** Just like individuals, small businesses must pay taxes on their earnings. However, the rate at which they are taxed can vary based on their structure. Sole proprietors, partnerships, and S corporations are considered “pass-through” entities, meaning business income is reported on the owner’s personal tax return. On the other hand, C corporations are taxed separately from their owners. ### **2. Self-Employment Tax**: If you run a business as a sole proprietor or a partner, you’ll need to pay self-employment tax. This tax is used to fund Social Security and Medicare and is based on your net earnings. For 2025 tax year, the self-employment tax rate remains at **15.3%**, which is composed of: - **12.4%** for Social Security - **2.9%** for Medicare ![](https://nvestadvisors.com/wp-content/uploads/2025/04/Comparison-Table-List-Diagram-Brainstorm-1-1.png "Comparison table list diagram brainstorm 1 1 nvest advisors") ### **3. Sales Tax** If your small business sells products or services, collecting sales tax is often a required part of doing business. Since Small Business Taxes include obligations like sales tax, it’s crucial to understand your state, county and municipal rules and rates, which can vary widely. Failing to collect or remit sales tax properly can lead to costly penalties and legal issues. As a business owner, staying up to date with changes in local and state tax regulations is essential. Monitoring updates ensures your small business remains compliant and avoids surprises at tax time. ### **4. Employment Taxes**: If you have employees, you are responsible for payroll taxes. These include Social Security and Medicare taxes, as well as federal and state unemployment taxes. ## Small Business Taxes and Deductions Every Owner Should Understand Small business owners are often unaware of the tax deductions they can claim, leaving money on the table. The [IRS](https://www.irs.gov/newsroom/get-ready-for-tax-filing-season-2025) allows various business-related expenses to be deducted, which can significantly reduce taxable income. Here are some of the key deductions you shouldn’t miss: - ### **Home Office Deduction** If you run your business from home, you may be eligible for the home office deduction. According to the IRS, the space used for business must be your principal place of business, and you must use it exclusively for business purposes. To claim the home office deduction, your workspace must be used exclusively for business. Be sure to keep detailed records of how the space is used. ​For the 2025 tax year, the **Home Office Deduction** allows small business owners to choose between two methods:​ 1. **Simplified Method**: Deduct $5 per square foot of your home office, up to a maximum of 300 square feet, resulting in a maximum deduction of $1,500. ​ 2. **Regular Method**: Calculate the actual expenses of your home office by determining the percentage of your home’s total square footage that is used for business. Deduct a corresponding percentage of expenses such as mortgage interest, property taxes, utilities, and repairs. Both methods can result in significant tax savings. The simplified method offers convenience with minimal record-keeping, while the regular method may yield a larger deduction if your actual expenses are considerable. It’s important to remember that the simplified method, available since 2013, remains an option in 2025. - ### **Vehicle Expenses and Small Business Taxes** If you use your vehicle for business purposes, you can deduct vehicle expenses under **small business taxes**. You can either choose the **standard mileage rate** set by the IRS or the **actual expense method**, which allows you to deduct actual costs like gas, maintenance, insurance, and depreciation. Be sure to track your mileage accurately, as it’s essential for maximizing your tax savings. 1. **Standard Mileage Rate**: For 2025, the IRS allows a deduction of 65.5 cents per mile driven for business purposes. 2. **Actual Expenses Method**: This method lets you deduct the actual costs related to your vehicle, including gas, repairs, insurance, and depreciation. ### Standard Mileage vs Actual Expenses ![](https://nvestadvisors.com/wp-content/uploads/2025/04/Screenshot-90-e1744289961184.png "Screenshot 90 nvest advisors") - ### **Qualified Business Income Deduction (QBI)** In 2025, the Qualified Business Income (QBI) deduction remains a valuable tool for business owners seeking to reduce their tax burden. For the 2025 tax year, the QBI deduction is available to businesses with taxable income of up to **$179,550** for single filers and **$359,100** for joint filers. Beyond these thresholds, the deduction gradually phases out, but for eligible taxpayers, it can provide significant savings on business income. This deduction applies to pass-through entities like sole proprietorships, partnerships, S corporations, and LLCs, allowing business owners to deduct up to 20% of their qualified business income. While the phase-out starts at higher income levels, it’s still an effective tax reduction strategy for many small businesses. The rules for the QBI deduction can be complex, especially for higher earners, so it’s beneficial to consult with a tax advisor to ensure you’re maximizing the benefit. - ### **Retirement Plan Contributions** Setting up a retirement plan for yourself and your employees can not only help you save for the future but also provides a valuable tax deduction. There are several retirement plan options available to small businesses: ![](https://nvestadvisors.com/wp-content/uploads/2025/04/Green-Professional-Corporate-Project-Roadmap-Brainstorm-1024x576.jpg "Green professional corporate project roadmap brainstorm nvest advisors") - ### **Health Insurance Premiums** If you provide health insurance for yourself and your employees, those premiums are tax-deductible. As a self-employed individual, you can also deduct your own health insurance premiums, which include dental and long-term care insurance, as long as you aren’t eligible for coverage through a spouse’s employer. This deduction can be especially beneficial for small business owners who are self-employed, as it reduces taxable income and provides necessary coverage. What many small business owners don’t realize is that this deduction **reduces your adjusted gross income (AGI)**, lowering your overall tax liability and potentially boosting your eligibility for other tax credits and deductions, such as education credits. ### **Final Thoughts: Why These Deductions Matter for Small Business Taxes** By properly claiming these key small business deductions, you can significantly reduce your taxable income and lower your tax bill. The key is keeping detailed records, staying organized, and consulting with a tax professional who can help you maximize your deductions. Understanding the tax landscape and knowing which deductions you qualify for is essential in managing your small business’s finances effectively. By taking advantage of these opportunities, you’ll keep more of your hard-earned money and invest it back into your business, helping it grow and thrive. Remember, tax laws change frequently, so it’s important to stay updated and consult with qualified tax professionals who can provide advice tailored to your unique situation. At nVest Advisors, we help small business owners navigate complex issues, including tax planning. Our team works to ensure your finances are in top shape, helping you stay organized, minimize liabilities, and make informed decisions. With our support, you can reinvest in your business for continued growth and success. Click [here](https://nvestadvisors.setmore.com/) to book an appointment and let us optimize your tax strategy and help you achieve your goals. **Disclaimer:** The information provided in this blog is for informational purposes only and does not constitute tax, legal, or financial advice. Please consult with a qualified tax professional or attorney for advice tailored to your specific situation. **Categories:** Business Stories, Client News, Economic Updates, Economy, Financial Planning, Individuals and Families, Mailchimp, Media, Plan Participants, public, Small Business, Taxes, Uncategorized --- ### [What Is Tax Form 5498 and Why It Arrives After Tax Day](https://nvestadvisors.com/what-is-tax-form-5498/) **Published:** May 13, 2025 **Author:** Maryam Irfanmeer **Content:** # ![understand tax form](https://nvestadvisors.com/wp-content/uploads/2025/05/pexels-n-voitkevich-6863255-e1747190081574.jpg "Pexels n voitkevich 6863255 nvest advisors") # What Is Tax Form 5498 and Why It Arrives After Tax Day If you’ve recently received a **Tax Form 5498** in the mail long after you filed your return, you’re not alone—and no, you likely don’t need to do anything with it. This form always sparks confusion, especially because it shows up after tax season ends. But once you understand its purpose, you’ll see why it’s not a cause for panic. Let’s walk through it together. Imagine I’m your advisor, sitting across the table from you, cup of coffee in hand. Here’s everything you should know about Form 5498, including when it matters and when it doesn’t. ## Who Receives Tax Form 5498 and What It Includes: You’ll get Tax Form 5498 if you made contributions to any of the following retirement accounts: - Traditional IRA - Roth IRA - SEP IRA - SIMPLE IRA The Tax Form 5498 comes from your IRA custodian—that’s the financial institution holding your retirement account—and they also send a copy to the IRS. The goal? To confirm the amount you contributed, what kind of account it was, and whether anything about your contributions could trigger limits or penalties. **Note: Feeling unsure about what this means for your specific account? or not sure which type of IRA you have or whether this form applies to you? At[ nVest Advisors](https://nvestadvisors.com/), we’re happy to review your retirement forms with you—no strings attached.** ### What Form 5498 Reports: Tax Form 5498 is more than a receipt. It summarizes: - Annual contributions - Rollovers - Required minimum distributions (RMDs) for those over a certain age - Recharacterizations - Fair market value of your account ## Why You Get Tax Form 5498 After You File Your Return: This is the part that throws people off. You might wonder—why is the IRS sending me something related to taxes after I just filed them? Here’s why: The deadline for IRA contributions doesn’t match the calendar year. You can make contributions for the previous year up to the tax filing deadline, typically April 15. Your IRA provider then has until May 31 to finalize and report those contributions. That’s why Form 5498 shows up in your mailbox in late May or even June. You don’t need to amend your tax return just because you got this form late. It’s for your records, not for refiling. **If you’re not sure whether your contribution was counted correctly, don’t guess. Our team at nVest advisors can review your IRA contributions and help you stay compliant** ## What Do the Boxes on Tax Form 5498 Actually Mean? Tax Form 5498 might seem overwhelming at first glance, with its many boxes filled with numbers, codes, and acronyms. However, each box provides important details about your IRA activity from the previous year. Let’s break down the key sections that matter most: ### **Box 1: Contributions to a Traditional IRA** This box reflects your tax-deductible contributions to a Traditional IRA. Whether you contributed $1,000 or the full $7,000 limit (if you’re 50+), it’s tracked here. If the contribution amount in Box 1 doesn’t match what you’ve reported on your tax return, it’s time to reconcile. These are the contributions you may be deducting from your taxable income. ### **Box 10: Contributions to a Roth IRA** This shows your contributions to a Roth IRA, which are made with after-tax dollars and grow tax-free. Unlike traditional IRAs, these contributions aren’t deductible on your tax return. If your income exceeds Roth IRA limits and you contribute anyway, this box will show it. You’ll need to address any excess contributions promptly to avoid penalties. ### **Box 2: Rollover Contributions** Box 2 reports any rollovers, such as moving funds from a 401(k) to an IRA. However, note that **direct trustee-to-trustee transfers** are generally not reported here — only rollovers where you took possession of the funds, even temporarily. The IRS allows only one indirect rollover per 12-month period. If you exceed that limit, the second rollover might be treated as taxable income. Box 2 helps ensure compliance. ### **Box 13a: Required Minimum Distribution (RMD) Amount** For those over 73, this box shows the RMD amount — the minimum you’re required to withdraw from your IRA in the current year. Missing an RMD can result in a hefty penalty — up to 25% of the amount you were supposed to withdraw. Box 13a serves as a reminder of your withdrawal obligations. Many assume this proves you took your RMD—but it only shows what was required. ### **Box 13c: Are You Subject to RMDs?** This checkbox indicates whether you need to take an RMD for the year. If it’s checked, it means you either turned 73 or inherited an IRA, triggering the need for a mandatory distribution. **Why it matters:** If Box 13c is checked, you’re required to take the RMD by December 31. The responsibility is on you, not your IRA custodian, to ensure the withdrawal is made on time. ## What If Tax Form 5498 Says You Contributed Too Much? This is important. If the form reports more than the allowable contribution limit, it could mean: - You accidentally went over your limit - A rollover or recharacterization was reported incorrectly - You made contributions to multiple IRAs without realizing the combined limit The fix? Reach out to your IRA custodian to verify the numbers. If there’s an excess contribution, you’ll need to withdraw it before the deadline (usually October 15 of the same year) to avoid a penalty. It’s not always a disaster, but ignoring it can lead to a 6% penalty each year the excess stays in your account. ## What to Do If You Don’t Receive Tax Form 5498: Not everyone gets this form. If you didn’t contribute to an IRA in the prior year, or if you only did a trustee-to-trustee transfer (which isn’t reported), you won’t receive one. If you think you should have gotten one and didn’t, check with your IRA custodian. It could be an address issue or a misclassification. It’s always better to double-check rather than assume nothing is needed. ## Rollovers and Recharacterizations: Not all retirement contributions are created equal. If you moved money from a 401(k) to an IRA, for example, that’s a rollover—and it gets reported differently from a direct contribution. What many people miss is that **direct trustee-to-trustee transfers** (where the money never touches your hands) often don’t show up at all on Tax Form 5498. But indirect rollovers, where you take possession of the funds briefly, do appear. If you’re recharacterizing a Roth contribution back into a Traditional IRA, or vice versa, that’s also captured on the form. Understanding how these are reflected can help you stay in control of your retirement strategy and make sure you’re not flagged for excess contributions or early withdrawal issues. ## **FAQ’s About IRS Tax Form 5498:** ### 1. **How does Tax Form 5498 track nondeductible contributions to a Traditional IRA?** Form 5498 itself doesn’t distinguish between deductible and nondeductible contributions. It simply reports the total amount contributed. You’ll need to track nondeductible contributions using IRS **Form 8606**, which helps calculate the basis in your IRA. ### 2. **If I recharacterized a contribution from a Traditional IRA to a Roth IRA (or vice versa), how is that reported on Form 5498?** The original contribution will appear on the first Tax Form 5498, and the recharacterized amount will be shown on a separate Form 5498 from the receiving account. Make sure both forms reflect the proper reporting year for accurate records. ### 3. **Why did I receive a Form 5498 showing a contribution I already withdrew as an excess?** Form 5498 reports the gross contribution amount, regardless of whether it was later returned. If you corrected an excess contribution, it won’t update the original 5498 — but you should receive a **Form 1099-R** showing the corrective distribution instead. ### 4. **I did a backdoor Roth IRA conversion. How do I read that across my tax forms?** You’ll see the nondeductible contribution on Form 5498 (Box 1), and the Roth conversion reported separately on **Form 1099-R**. You’ll also need to file Form 8606 to track basis and report the conversion correctly to avoid double taxation. ### 5. **Can I use Tax Form 5498 to prove I met the RMD for the year?** Not quite. **Form 5498 only shows the RMD amount required** (Box 13a) and whether you’re subject to RMDs (Box 13c). It doesn’t confirm if the withdrawal was actually made. You’ll need **Form 1099-R** to show your distributions. ### 6. **How do I verify a Qualified Charitable Distribution (QCD) using Form 5498?** QCDs aren’t reported on Form 5498. They show up on **Form 1099-R** as part of your total distribution, but there’s no specific box for QCDs. You must keep your own documentation from the charity and notify your tax preparer. ### 7. **What if my year-end fair market value (FMV) is incorrect on Form 5498?** Contact your IRA custodian immediately. The FMV reported (Box 5) is based on your account balance as of December 31 of the previous year. If investment pricing or accounting errors occurred, a corrected form may be issued upon request. ## BOTTOM LINE: Understanding tax forms like 5498 is one piece of a bigger retirement picture. If you want a second opinion on your IRA strategy or need help preparing for next year, connect with an [nVest Advisor](https://nvestadvisors.setmore.com/) today to book an appointment. We’re here to help simplify your financial life **Categories:** Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Mailchimp, Plan Participants, public, Retirement, Texas Teachers Retirement --- ### [Understanding Common Types of Bias in Investing](https://nvestadvisors.com/understanding-common-types-of-bias-in-investing/) **Published:** April 24, 2025 **Author:** Maryam Irfanmeer **Content:** # ![different types of bias and how to overcome them](https://nvestadvisors.com/wp-content/uploads/2025/04/pexels-artempodrez-5025636-1024x576.jpg "Pexels artempodrez 5025636 nvest advisors") # Understanding Common Types of Bias in Investing Investing isn’t just about numbers; it’s deeply intertwined with human psychology. Our minds often play tricks on us, leading to decisions that might not align with our financial goals. Recognizing these common types of bias in investing is the first step toward making more informed choices. ## Different Types of Bias: ## Overconfidence Bias: When Confidence Costs You Ever made a winning investment and thought, “I’ve got this figured out”? That’s overconfidence bias at work. It makes investors believe they know more than they actually do, leading to risky decisions like excessive trading or ignoring expert advice. For example, someone who picks a few successful stocks might assume they can consistently beat the market. They start trading aggressively, convinced their instincts are better than research. But [studies show](https://www.investopedia.com/articles/active-trading/013015/worst-mistakes-beginner-traders-make.asp) that frequent traders often earn lower returns than those who stick to a steady, diversified plan. A financial advisor can provide a clear, objective perspective, helping you avoid costly mistakes driven by overconfidence. Understanding this type of bias in investing can save you from making impulsive financial decisions. Overcoming these types of bias in investing leads to more rational, long-term success. ## Availability Bias: Trusting What’s Easy to Recall Availability bias happens when investors rely too much on recent or easily remembered information instead of considering a broader set of data. If a stock has been in the news for its record-breaking gains, people might assume it’s a great investment without evaluating its actual performance. For example, after hearing multiple stories about a tech company’s success, an investor might rush to buy shares, believing the trend will continue. This bias can lead to overvaluing popular stocks while overlooking hidden risks. The best way to counteract availability bias is to focus on thorough research rather than being swayed by what’s most visible in the media. ## Confirmation Bias: Hearing What We Want to Hear Imagine you strongly believe that tech stocks are the best long-term investment. Every day, you read articles that praise the growth of companies like Apple and Google, reinforcing your belief. But when you come across a report warning about potential market corrections in the tech sector, you scroll past it or dismiss it as overly pessimistic. This is confirmation bias in action. Confirmation bias happens when we actively seek out information that supports what we already believe and ignore anything that contradicts it. In investing, this type of bias can be risky. If an investor is convinced that a particular stock or sector will always perform well, they might overlook red flags, miss critical insights, or fail to diversify. For example, during the [dot-com boom of the late 1990s](https://www.investopedia.com/articles/personal-finance/062315/five-largest-asset-bubbles-history.asp), many investors believed internet companies were the future and ignored warnings about excessive valuations. When the bubble burst, those who had dismissed the risks suffered huge financial losses. A smart investor makes decisions based on a full picture, not just the parts that feel comfortable. This is where financial advisors can help. They provide an objective perspective, challenge biases, and ensure that investment decisions are based on facts rather than selective information. Recognizing types of bias in investing can prevent costly mistakes. Addressing these types of bias in investing helps investors stay objective and make balanced choices. ## Recency Bias: When the Recent Past Feels Like the Future Imagine watching the stock market climb for months. Everything looks great, and you start thinking, “This will keep going up—I should invest more.” That’s recency bias. It tricks investors into believing recent trends will continue, even when history shows markets move in cycles. For example, during a market boom, many people rush to buy stocks at high prices, assuming the good times will last. But when the market corrects, they panic and sell at a loss. This cycle of buying high and selling low can erode long-term gains. A balanced investment strategy considers long-term trends, not just recent performance. A financial advisor helps filter out short-term noise and keeps your decisions grounded in strategy, not emotion. Recognizing this type of bias in investing allows investors to take a broader, more rational approach. Understanding how these types of bias in investing affect decision-making can improve financial outcomes. ## Hindsight Bias: The “I Knew It All Along” Trap Ever looked at a market crash and thought, “I saw that coming”? That’s hindsight bias. It makes us believe past events were obvious, even if we had no real way of predicting them at the time. For instance, after a stock market drop, an investor might convince themselves they knew it would happen. Next time, they trust their instincts too much and make risky moves based on gut feelings rather than solid research. This false confidence can lead to bigger mistakes, like over-trading or ignoring expert advice. Markets are unpredictable, and even seasoned investors can’t foresee every turn. A financial advisor helps separate hindsight from reality, ensuring your strategy is based on logic, not false confidence. Recognizing this type of bias in investing can help investors make sound, evidence-based decisions. Awareness of these types of bias in investing is essential for building a stable, well-informed approach to the market. ## Self-Attribution Bias: Taking Credit for Wins, Blaming Losses on Others Self-attribution bias occurs when investors attribute their successes to their skill and intelligence while blaming failures on external factors like market conditions or bad advice. For example, if an investor picks a winning stock, they might believe it was due to their keen market insight. But if the stock underperforms, they may blame the economy or misleading reports instead of recognizing a potential miscalculation. This mindset can prevent investors from learning from mistakes and lead to overconfidence and repeated errors. A more balanced approach that acknowledges both good and bad decisions helps in refining investment strategies over time. ## Anchoring Bias: Stuck on the First Number Imagine buying a stock at $50. Later, the price drops to $30. Instead of reassessing based on new market conditions, you keep holding onto it, convinced it will bounce back just because you paid more. That is anchoring bias in action. Investors often get emotionally attached to the first price they see, whether it is a stock’s purchase price or a market forecast. This bias can lead to poor decisions, like refusing to sell a declining investment or hesitating to buy a stock that has already gone up, assuming it is now too expensive. An [Experimental Insight](https://www.mdpi.com/1911-8074/16/8/349?utm_source=chatgpt.com) into the Impact of the Anchoring and Disposition Effect on Portfolio Performance,” published in the *Journal of Risk and Financial Management*. This study investigates how anchoring bias affects investors’ trading decisions and portfolio performance. The researchers observed that investors exhibiting anchoring bias tended to hold onto losing investments longer, leading to suboptimal portfolio performance. A smart investor focuses on the bigger picture, not just one number. Financial advisors help break this mental trap by evaluating investments based on current data, not past prices. Understanding and recognizing these types of bias in investing is the first step toward making better financial decisions. Whether it is anchoring to past stock prices, feeling overconfident, or letting recent trends cloud your judgment, these biases can lead to costly mistakes. However, by staying informed, questioning assumptions, and relying on objective research, investors can minimize these biases and improve their long-term success. ## FINAL APPROACH: One of the best ways to counteract these psychological traps is by working with a financial advisor who can provide an outside perspective. They can help you stay grounded, ensure you make decisions based on facts rather than emotions, and keep your investment strategy aligned with your goals. If you want to learn more about how to make better investment decisions and build a strategy that works for you, reach out to a financial expert today. Making informed choices now can set you up for long-term financial growth. At [nVest Advisors](https://nvestadvisors.com/), we help investors navigate these psychological traps with expert guidance and data-driven strategies. Our advisors provide objective insights to ensure your financial choices align with your long-term goals. If you are ready to take control of your investments with a clear, bias-free approach, [connect](https://nvestadvisors.setmore.com/) with one of our financial experts at nVest Advisors today. Let us help you build a strategy that works for you. **Categories:** Behavioral Finance, Business Stories, Client News, Cryptocurrency, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Investment, Mailchimp, Plan Participants, Politics, public, Retirement, Small Business, Texas Teachers Retirement --- ### [Mental Accounting: The Hidden Bias in Financial Decisions](https://nvestadvisors.com/mental-accounting-the-hidden-bias-in-financial-decisions/) **Published:** April 2, 2025 **Author:** Maryam Irfanmeer **Content:** # ![mental accounting](https://nvestadvisors.com/wp-content/uploads/2025/04/pexels-mikhail-nilov-8297240.jpg "Pexels mikhail nilov 8297240 nvest advisors") # Mental Accounting: The Hidden Bias in Financial Decisions **Mental accounting** is a cognitive bias that influences how individuals perceive, categorize, and manage their money. Instead of evaluating all financial resources as part of a single, flexible system, people mentally assign different values to money based on its source, intended use, or emotional significance. While mental accounting may seem harmless, it can lead to inefficient financial decisions, such as overspending windfalls, holding onto losing investments, or failing to optimize debt repayment. Recognizing and mitigating this bias is essential for sound financial planning. It’s something we see often as we work with individuals and families working on a financial plan or an investing strategy, and it’s a very human bias that takes some work to overcome. ## **Understanding Mental Accounting: Why Do We Treat Money Differently?** The concept of mental accounting was first introduced by economist Richard Thaler, who argued that people irrationally separate money into different “mental accounts” rather than viewing it as a fungible asset. This behavior is rooted in several psychological factors: - **Loss aversion** – People are more sensitive to losses than gains, which affects how they manage financial decisions. - **Emotional attachment** – Money received as a gift or windfall often feels different from earned income, leading to different spending behavior. - **Cognitive simplification** – Categorizing money into different “accounts” makes financial decision-making feel easier but often leads to suboptimal choices. For example, an individual may treat a $1,000 tax refund as “free money” and splurge on non-essential items rather than using it to reduce high-interest debt. In reality, that money is no different from their regular paycheck. ## **How Mental Accounting Affects Financial Decision-Making** ### **1. The Illusion of “Bonus Money”** Many individuals treat unexpected income such as tax refunds, bonuses, or lottery winnings—differently from their regular earnings. Rather than integrating these funds into a structured financial plan, they often spend them on discretionary purchases, underestimating their long-term financial impact. This mindset leads to missed opportunities for financial growth. Instead of viewing windfalls as extra cash, incorporating them into debt repayment, emergency funds, or investments can significantly strengthen long-term financial stability. ### **2. Holding on to Failing Investments** Mental accounting also plays a significant role in investment decisions, particularly in the form of the [**sunk cost fallacy**.](https://nvestadvisors.com/2025/02/25/understanding-the-sunk-cost-fallacy/investment/) Investors often hold onto underperforming stocks or assets simply because they initially paid a higher price, rather than evaluating whether the investment remains financially viable. A [study ](https://www.tandfonline.com/doi/abs/10.1080/1351847X.2015.1048375?utm_source=chatgpt.com)found that investors who focus on their initial purchase price often exhibit the “disposition effect,” where they hold onto losing stocks longer than those who base decisions on market fundamentals. This behavior can lead to suboptimal investment performance. ### **3. The Mismanagement of Debt and Savings** Mental accounting often causes individuals to separate their savings and debt repayment decisions rather than considering the most financially efficient approach. This behavior leads to situations where people maintain savings accounts earning **1% interest** while carrying high-interest credit card debt at **20% or more**. In this scenario, the individual is experiencing a net financial loss of 19% annually. Logically, prioritizing debt repayment would yield greater financial benefits than holding onto low-yield savings. However, the psychological comfort of having a savings cushion often leads to suboptimal financial choices. A more strategic approach involves balancing liquidity needs with financial efficiency, ensuring that funds are allocated where they provide the highest return. ### **4. Overspending Due to Budget Categories** Budgeting is essential for financial discipline, but rigidly categorizing money can sometimes lead to inefficient spending. For example, individuals who set aside funds specifically for travel, entertainment, or shopping often feel compelled to use the entire budget—even when they find a lower-cost alternative. A 2022 [study](https://phys.org/news/2022-04-consumers-underestimate-future-annual.html?utm_source=chatgpt.com) featured on Phys.org (April 2022), found that consumers in the UK, US, and Canada underestimate their future expenses by an average of £75 per week (approximately $100), leading to potential overspending. A more effective strategy involves periodically reviewing spending allocations and adjusting them based on current financial priorities, rather than treating each category as a fixed spending requirement. ## **How to Overcome Mental Accounting Bias** Recognizing and addressing mental accounting can lead to more effective financial decision-making. This psychological tendency often causes people to separate their finances into categories that may not align with their overall financial well-being. Here’s how to take a more strategic and rational approach to money management. ### **1. Streamline Financial Accounts to Improve Decision-Making** Many individuals manage their money through multiple bank accounts, credit lines, and investment portfolios, each serving a specific purpose. While this may seem organized, it can reinforce artificial distinctions that lead to inefficient financial choices. For example, someone may hesitate to withdraw money from a vacation fund to pay off a high-interest debt, even though doing so would be financially beneficial. A more effective approach is to maintain fewer accounts and view finances holistically. Digital financial tools and apps allow users to see their total assets, debts, and expenses in one place, making it easier to make informed decisions. ### **2. Focus on Net Worth, Not Individual Accounts** Many people evaluate their financial standing by looking at isolated figures—how much they have in savings, how much they owe in student loans, or how well one particular investment is performing. This fragmented perspective can lead to decisions that feel right in the moment but do not contribute to long-term financial security. For instance, a person might feel comfortable maintaining $10,000 in savings while carrying $8,000 in credit card debt at a 20% interest rate. Emotionally, the savings provide a sense of security, but mathematically, paying off the debt would save thousands in interest over time. Before making a financial decision, ask, “How does this impact my overall net worth?” Shifting the focus from individual accounts to long-term financial growth encourages more rational decision-making. ### **3. Use Unexpected Income Wisely** Receiving a tax refund, work bonus, or inheritance often feels like “extra” money, which can lead to impulse spending. This mindset prevents people from using windfalls in ways that strengthen their financial future. Rather than viewing windfalls as bonus money, integrating them into a financial plan ensures they serve a meaningful purpose. **Practical Strategy:** Follow a structured approach, such as the **50-30-20 rule**: - **50%** toward financial priorities (paying down debt, investing, or emergency savings). - **30%** toward essential expenses. - **20%** for discretionary spending. ### **4. Make Investment Decisions Based on Future Value, Not Past Prices** Mental accounting often leads investors to make emotional decisions, especially when they anchor to a stock’s original purchase price. Many hold onto underperforming stocks, believing they must at least “break even” before selling. However, the market does not recognize past prices—only future potential matters. Set clear investment rules, such as using **stop-loss orders** to limit potential losses. Diversifying investments based on current market conditions, rather than emotional attachment, can lead to more effective portfolio management. ### **5. Seek an Outside Perspective for Objective Financial Guidance** Mental accounting often happens subconsciously, making it difficult to recognize and correct on your own. A financial advisor provides an external perspective, ensuring that your financial decisions align with real goals rather than emotional biases. Many people hesitate to seek advice, assuming they can manage their finances independently. However, research consistently shows that those who work with financial advisors tend to build greater long-term wealth and make more informed financial choices. At **[nVest Advisors](https://nvestadvisors.com/)**, we understand that financial decisions can feel overwhelming. That’s why we’re happy to offer a second opinion—at no cost and with no obligation. Whether you’re reconsidering an investment, planning for the future, or just want to ensure you’re on the right track, we’re here to provide clarity and guidance tailored to your needs. Click [here](https://nvestadvisors.setmore.com/) to book a meeting with one of our experts today! **Categories:** Behavioral Finance, Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Mailchimp, Plan Participants, public, Small Business, Texas Teachers Retirement --- ### [What Are Tariffs and How Do They Impact the Economy?](https://nvestadvisors.com/what-are-tariffs-and-how-do-they-impact-the-economy/) **Published:** March 26, 2025 **Author:** Maryam Irfanmeer **Content:** # ![what are tariffs and how do they effect our economy](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-markus-winkler-1430818-30855417-1024x682.jpg "Pexels markus winkler 1430818 30855417 nvest advisors") # **What Are Tariffs and How Do They Impact the Economy?** What are tariffs? Tariffs, which are taxes imposed on imported goods, are one of the oldest and most widely used tools in economic policy. Nearly every country on the planet imposes tariffs in some form, whether to protect domestic industries, generate revenue, or exert geopolitical influence. While critics argue that tariffs increase consumer prices and disrupt global supply chains, their continued use suggests they provide strategic advantages. If tariffs were purely detrimental, why do governments around the world, from the United States to China to the European Union, rely on them so heavily? To understand this, we need to dissect the core arguments for and against tariffs, their broader economic effects, and the real-world strategic motivations behind their implementation. ## What Are Tariffs and Why Do Governments Use Them? ### 1. What Are Tariffs Doing to Protect Domestic Industries and Jobs? One of the primary justifications for tariffs is shielding domestic industries from foreign competition. Emerging industries, particularly in developing countries, often struggle to compete with well-established multinational corporations. By imposing tariffs, governments create a buffer, allowing local businesses to grow without being overwhelmed by cheaper imports. For example, Japan has long imposed steep tariffs on agricultural imports sometimes exceeding 700% on rice, to protect its domestic farmers. Critics argue this leads to inefficiencies, but proponents claim it ensures food security and preserves traditional farming practices. Similarly, the U.S. steel tariffs imposed in 2018 helped stabilize employment in the domestic steel industry, though at the cost of higher prices for industries that rely on steel. ### 2. National Security and Economic Independence Tariffs are often justified as a means to secure critical industries, especially in times of geopolitical instability. The COVID-19 pandemic and the 2022 Russian invasion of Ukraine underscored the risks of over-reliance on global supply chains. Governments responded by imposing tariffs and trade barriers to encourage domestic production of essential goods such as pharmaceuticals, semiconductors, and energy supplies. China’s “Made in China 2025” policy, which combines industrial subsidies with trade restrictions, is a prime example of how nations use tariffs strategically to build self-sufficiency. The Trump administration imposed tariffs on Chinese technology imports starting in 2018, citing unfair trade practices, intellectual property theft, and national security concerns. These tariffs were maintained and adjusted under the Biden administration as part of broader efforts to counter China’s tech ambitions. ### 3. What Are Tariffs Doing to Generate Government Revenue? For many developing nations, tariffs remain a crucial source of government revenue. Unlike income taxes, which require complex administrative structures, tariffs are relatively easy to collect at ports and border checkpoints. Countries such as Nigeria and Bangladesh derive significant portions of their fiscal budget from customs duties. In 2020, **[Bangladesh’s](https://www.macrotrends.net/global-metrics/countries/bgd/bangladesh/tariff-rates) tariff rate was 10.99%**, reflecting a **2.35% increase from 2019.** While reliance on tariffs for revenue can make goods more expensive for consumers, in nations with weak tax enforcement, they often represent a necessary trade-off to fund public infrastructure and services. ### 4. What Are Tariffs Doing in Trade Negotiations and Retaliation? The Geopolitical Weapon Beyond economic policy, tariffs serve as powerful bargaining tools in international relations. Countries frequently use them as leverage in trade negotiations or as retaliatory measures against perceived economic aggression. For instance, the European Union’s Carbon Border Adjustment Mechanism imposes tariffs on imports from countries with lower environmental standards. This policy is framed as an environmental measure but also functions as an economic strategy to push trading partners into adopting greener policies. Similarly, China’s 200% tariffs on Australian wine in 2021 (later eased in 2024) were widely seen as a response to Australia’s criticism of Chinese political actions. ## **The Economic Downsides of Tariffs** ### 1. Rising Consumer Prices and Inflation A key drawback of tariffs is their impact on consumer prices. When import taxes are levied, businesses often pass these costs onto consumers, leading to inflationary pressures. The U.S.-China trade war demonstrated this effect. A [study](https://www.forbes.com/sites/dereksaul/2025/02/04/china-tariffs-heres-what-may-cost-more-in-the-us/) found that U.S. tariffs on Chinese imports cost American consumers and businesses around $40 billion annually. Price increases affected electronics, household goods, and even food items, disproportionately hurting low- and middle-income consumers. ### 2. Supply Chain Disruptions and Business Uncertainty Modern manufacturing relies on global supply chains, where components are sourced from multiple countries. Tariffs disrupt these networks, increasing production costs and forcing companies to relocate manufacturing, which can be both time-consuming and expensive. For example, post-Brexit tariffs between the UK and EU led to logistical bottlenecks, increased shipping costs, and major setbacks for UK automakers, who rely on just-in-time inventory systems. Such disruptions create long-term inefficiencies and slow economic growth. ### 3. Retaliation and Escalation into Trade Wars Tariffs rarely exist in isolation. When one country imposes them, others often retaliate, leading to escalating trade wars that harm industries on both sides. A historical example is the U.S. Smoot-Hawley Tariff Act of 1930, which raised U.S. tariffs to record levels. In response, trading partners imposed counter-tariffs, causing a collapse in global trade and deepening the Great Depression. Similarly, during the 2018-2019 U.S.-China trade war, retaliatory tariffs hurt industries ranging from agriculture to technology, demonstrating how protectionist policies can backfire. ### 4. Long-Term Economic Complacency While tariffs can provide short-term relief to domestic industries, prolonged protectionism can lead to stagnation. When businesses are shielded from competition, they often lack the incentive to innovate, improve efficiency, or reduce costs. Argentina is a case study in the pitfalls of overreliance on tariffs. Decades of high trade barriers protected local industries, but instead of fostering competitiveness, the result was economic stagnation, inflation, and inefficiencies. Countries that fail to balance tariffs with innovation risk falling behind in global markets ## **What Are Tariffs Doing for Political Strength?** ### 1. Tariffs as a Tool for Economic Sovereignty? Tariffs empower nations to take control of their economic destiny rather than being at the mercy of foreign markets. Leaders who implement strategic tariffs demonstrate a commitment to national strength, ensuring that industries remain competitive and jobs stay within the country. By strategically adjusting tariff rates, governments can regulate trade flows, prevent excessive dependence on foreign goods, and stimulate local innovation and production. This approach reduces vulnerability to global market fluctuations and strengthens national economic resilience. ### 2. What Are Tariffs Doing for Fairness in Global Trade? Many of the world’s largest economies claim to support free trade while imposing tariffs to protect their own industries. The United States, the European Union, and China all use tariffs to secure economic advantages. Rather than seeing tariffs as obstacles, smaller economies can use them to level the playing field and promote fair trade policies that benefit their citizens. When applied strategically, tariffs can counteract trade imbalances, ensuring that domestic producers are not undercut by artificially low prices caused by government subsidies or unfair trade practices in other countries. ### 3. What Are Tariffs Doing as a Shield Against Economic Aggression? As economic competition intensifies, tariffs serve as a defensive mechanism against exploitative trade practices. Nations facing dumping, currency manipulation, or unfair subsidies can use tariffs to protect their markets and prevent economic exploitation. By leveraging tariffs effectively, countries can ensure that they are not taken advantage of by larger economic powers. For example, anti-dumping tariffs have been used to counteract the practice of foreign companies selling goods below market value to drive local competitors out of business. Additionally, tariffs can deter economic coercion by foreign governments, reinforcing national sovereignty and economic stability. ## **Final Thoughts:** While tariffs serve as powerful economic tools, their implementation must be carefully managed to avoid unintended consequences. Over-reliance on tariffs without complementary economic strategies can lead to inefficiencies, supply chain disruptions, and diplomatic tensions. Some industries may struggle with increased production costs, and consumers may face price fluctuations depending on the scope of tariff policies. However, these challenges do not negate the broader benefits of tariffs when applied strategically. Rather than adopting an extreme stance—either fully embracing or completely rejecting tariffs—policymakers must strike a balance. Tariffs should be used alongside domestic investment, innovation, and trade negotiations to create a resilient, self-sufficient economy. When employed effectively, they serve as an essential pillar of economic policy, securing national interests while promoting long-term stability. The key lies in intelligent application, ensuring that tariffs protect and enhance the economy without stifling growth or cooperation. **For more insights on global trade, economic policies, and financial strategies, visit our website at [nVest Advisors ](https://nvestadvisors.com/blog/)and explore our latest articles. Stay informed and make smarter financial decisions with expert analysis and in-depth reviews.** **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Individuals and Families, Insurance, Investing General, Investment, Mailchimp, Media, Plan Participants, Politics, Press Releases, public, Retirement, Small Business --- ### [Loss Aversion: How to Minimize Its Risks](https://nvestadvisors.com/loss-aversion-how-to-minimize-its-risks/) **Published:** March 25, 2025 **Author:** Maryam Irfanmeer **Content:** # ![loss aversion](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-pixabay-534216-e1742949492463.jpg "Pexels pixabay 534216 nvest advisors") # **Loss Aversion: How to Minimize Its Risks** Imagine this, you’re checking your investments, and one stock is down 10%. You panic. Your first instinct? Sell it before it drops even further. Meanwhile, another stock is up 20%, and you think, “I should take my profits now before it dips.” Sounds familiar? That’s **loss aversion** in action. Loss aversion is our natural tendency to fear losses more than we value gains. [Studies suggest](https://www.investopedia.com/terms/l/loss-psychology.asp) that losing $100 feels about twice as painful as gaining $100 feels good. This psychological bias leads to emotional decision-making, missed opportunities, and financial regret. But here’s the good news, you can overcome it. Let’s break down how. ## **How Loss Aversion Leads to Costly Mistakes** This psychological bias can creep into financial decisions in ways you may not even realize. - **Holding onto losing investments for too long** Many investors refuse to sell an underperforming asset, hoping it will recover, even when better opportunities exist (this is also called “[sunk cost fallacy](https://nvestadvisors.com/2025/02/25/understanding-the-sunk-cost-fallacy/investment/ "Understanding the Sunk Cost Fallacy: Why It Matters in Financial Decision-Making")“). - **Selling winning investments too early** Fear of losing gains often leads to premature selling, cutting off potential long-term growth. - **Avoiding investments altogether** Some people keep their money in cash or low-risk assets, missing out on opportunities for wealth accumulation. - **Reacting emotionally to market downturns** Investors who panic-sell during downturns often lock in their losses instead of allowing time for recovery. ## **Why Some People Fear Losses More Than Others** Everyone experiences loss aversion differently. While it’s a natural human instinct, some people handle it better than others. Research suggests that professional traders and economists tend to have a lower sensitivity to losses compared to everyday investors. Their experience, education, and exposure to financial risks help them make more rational decisions. For most people, past experiences, financial confidence, and personal risk tolerance influence how strongly they react to losses. Those who have experienced significant financial setbacks in the past may be more prone to loss aversion, while those with a long-term investment mindset tend to worry less about short-term fluctuations. ## **The Hidden Cost of Playing It Too Safe** Picture this. You have been saving for years, working hard, and building a solid financial cushion. But every time someone suggests investing, you hesitate. What if the market crashes? What if you lose your money? So you keep it in a savings account where it feels safe. At first, this seems like the responsible thing to do. But over time, something sneaky happens. The money you worked so hard to save starts losing value. Inflation slowly eats away at it, making your dollars worth less every year. What could have bought you a dream vacation or helped with your child’s college tuition now barely covers basic expenses. Then there are the missed opportunities. Maybe you wanted to start a business, but the fear of losing money kept you from taking the leap. Maybe you wanted to invest in stocks, but the thought of seeing red numbers on your screen made you back out. Playing it safe feels comforting in the moment, but in the long run, it can cost you more than any short-term loss ever could. The key isn’t to take reckless risks. It’s to find a balance—protect what you have while allowing it to grow. Because avoiding all risk isn’t the same as being financially secure. ## **How Successful Investors Break Free from Loss Aversion** If you have ever watched a seasoned investor, you will notice something different about them. They don’t panic when the market dips or obsess over small daily losses. They don’t let fear drive their decisions. It’s not because they are fearless. They have just trained themselves to think differently. A successful investor understands that losses are part of the journey. Instead of fearing them, they focus on the bigger picture. They stay committed, even when things feel uncertain and invest regularly, knowing that consistency is more important than perfect timing. They don’t put all their money in one place. Instead, they spread it across different assets so that even if one investment performs poorly, the others can balance it out. A [study](https://pmc.ncbi.nlm.nih.gov/articles/PMC9407664/?utm_source=chatgpt.com) published in the Proceedings of the National Academy of Sciences explored how loss aversion and related biases influence preferences for non-instrumental information. The findings suggest that understanding and addressing these biases can lead to more rational decision-making. ## **How Is Loss Aversion Different From Risk Aversion?** While both loss aversion and risk aversion influence financial decisions, they are not the same. - **Risk aversion** refers to a person’s willingness to take on financial risks based on their unique circumstances. Factors like income, assets, investment goals, and age all shape individual risk tolerance. Someone nearing retirement, for example, may prefer safer investments, while a young investor with a long time horizon may be comfortable with more risk. - **Loss aversion** is different because it creates an irrational fear of losses. Unlike risk aversion, which balances potential gains and losses logically, loss aversion causes people to overreact to potential losses, even when the risk level remains the same. This can lead to emotional, short-sighted decisions that hurt long-term financial growth. ## **Is Everybody Risk Averse?** People naturally lean toward loss aversion, but not everyone experiences it at the same level. Studies suggest that professional traders and economists tend to show lower levels of loss aversion than the average person. This difference may stem from experience, financial education, and repeated exposure to risk-taking in controlled environments. Even among everyday investors, loss aversion varies based on personality, past financial experiences, and confidence in decision-making. Recognizing your own level of loss aversion is the first step toward overcoming it. ## **How to Minimize Loss Aversion and Invest with Confidence** ### Understand that Every Investment Option has Risk Involved When thinking of the terms “risk” and “loss”, many investors with loss aversion are actually only thinking of seeing daily fluctuations in the value of their holdings. For some reason, most investors see their portfolio value as something like a bank balance, when it is really more like their home’s value. Certainly, home values fluctuate, but it is largely immaterial to your enjoyment of your home until it is time to sell it. The same is true of your investments: yes, theoretically, the value of your shares of stock may be higher or lower today than when you bought them, but unless you actually sell those shares today, the value of the account is only an estimation of what you’d get for it *if you sell them today*. If you didn’t sell, the information is irrelevant. It’s also vitally important to understand that all kinds of investing vehicles and asset classes have risk and reward parameters. The question is, what *kind* of risk does it have, and is it a risk you can tolerate? A low-yielding savings account, for instance, doesn’t fluctuate day-to-day, but over time, due to inflation, it is buying less and less. This is called “inflation risk”. A treasury bond might lose resale value if the current interest rates are higher than when you bought your bond (interest rate risk and reinvestment risk). A company’s stock may decline in value due to a number of factors that might have to do with how the company is being managed (un-systemic risks) or it might be impacted by political or economic factors out of the company’s control, like the recent Covid-19 pandemic (systemic risks). Knowing your risk tolerance, your nVest financial advisor would help you create a strategy that takes these factors into account. We can’t eliminate risk, but we most certainly can mitigate it. ### **Choose Low-Volatility Investments to Reduce Emotional Stress** Volatile investments can trigger emotional decision-making, leading investors to sell at the first sign of trouble. To counter this, consider assets known for their stability. Dividend-paying stocks, blue-chip companies, and funds that prioritize low volatility offer a smoother investment experience. By minimizing drastic price swings, these investments allow you to stay focused on long-term growth rather than reacting to short-term dips. ### **Think Beyond Short-Term Losses and Focus on Long-Term Gain** One of the biggest mistakes loss-averse investors make is abandoning investments too early due to short-term declines. Given enough time, the stock market has always rebounded from downturns, rewarding those who stay patient. Instead of making impulsive decisions, look at long-term trends and remind yourself that temporary setbacks are part of the process. ### **Use a Structured Investment Strategy to Remove Emotion** Investing emotionally, based on greed or fear (and often, switching between the two) invariably leads to poor outcomes. While not a guarantee against losses, using a structured strategy such as dollar-cost averaging helps you psychologically stick to a plan regardless of market fluctuations. By investing a fixed amount at regular intervals (like what you might do in your company retirement plan), you remove the temptation to react emotionally and instead build wealth steadily over time. ### **Diversify to Protect Against Unpredictable Losses** Relying too heavily on a single type of investment increases risk. A diversified portfolio that includes stocks, bonds, real estate, and other asset classes helps absorb losses in one area by balancing them with gains in another. This approach not only reduces overall risk but also helps investors feel more secure, making it easier to stay committed to their financial goals. ## FINAL THOUGHTS: Understanding loss aversion is the first step to overcoming it. By recognizing its impact, using structured investment strategies, and diversifying wisely, you can reduce emotional decision-making and build long-term financial stability. However, navigating these challenges alone can be overwhelming. That’s where expert guidance makes a difference. A financial advisor can help you create a strategy that aligns with your goals, keeps emotions in check, and maximizes your financial potential. At [nVest Advisors](https://nvestadvisors.com/), we specialize in helping individuals and business owners make informed, confident decisions. Ready to take control of your financial future?[ **Get in touch with us today**](https://nvestadvisors.setmore.com/) and let’s build a plan that works for you. **Categories:** Behavioral Finance, Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public, Retirement, Small Business, Texas Teachers Retirement --- ### [Understanding the Causes and Effects of Inflation](https://nvestadvisors.com/understanding-the-causes-and-effects-of-inflation/) **Published:** March 18, 2025 **Author:** Maryam Irfanmeer **Content:** # ![effects of inflation](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-karolina-grabowska-5900153-1024x682.jpg "Pexels karolina grabowska 5900153 nvest advisors") # **Understanding the Causes and Effects of Inflation** ## **What is Inflation and Why Does it Matter?** Inflation is a term that is often discussed in financial circles but remains widely misunderstood. At its core, inflation refers to the general increase in prices over time, eroding the purchasing power of money. In this article, we will dive into the **effects of inflation** and its causes. We will examine how these effects influence everyday consumers, businesses, and the broader economy. ## **Causes of Inflation: Unpacking the Factors Behind Rising Prices** Inflation is caused by several interrelated factors. While central banks and financial analysts often cite demand-pull inflation, cost-push inflation, and built-in inflation as the main drivers, the story of inflation is far more nuanced. ### **1. Demand-Pull Inflation:** One of the primary causes of inflation is the imbalance between supply and demand. As demand for goods and services increases, particularly in a growing economy, the supply of goods may not keep pace. When demand outstrips supply, businesses may raise prices to balance the two. The result is higher inflation. - #### **2022 Example:** According to the U.S. [Bureau of Labor Statistics,](https://www.bls.gov/opub/reports/consumer-expenditures/2022/) consumer spending in 2022 outpaced production levels, contributing to significant price increases across a wide range of sectors. A report from the Federal Reserve notes that this gap between demand and supply can lead to sustained inflationary pressures. ### **2. Cost-Push Inflation:** Another major cause of inflation is an increase in production costs, which businesses pass on to consumers in the form of higher prices. This is particularly evident when there are spikes in the cost of raw materials, labor, or energy. For example, the price of oil has a direct effect on transportation costs, which impacts nearly every aspect of production. - #### **2023 Observations:** In recent years, supply chain disruptions and rising energy prices, especially in sectors like energy and transportation, have caused notable cost-push inflation. This has led to price increases in everything from food to electronics. ### **3. Built-In Inflation: Wage-Price Spiral** Inflation can also be self-perpetuating. When wages increase, people tend to spend more, increasing demand for goods and services. However, as demand increases, businesses may raise prices to accommodate the higher labor costs. This creates a feedback loop known as the “wage-price spiral.” - #### **Recent Trend:** In 2022 and 2023, as labor markets tightened and wages grew, businesses continued raising prices to maintain profit margins. This is a significant factor in the **effects of inflation** that have affected families’ budgets. ## **The Effects of Inflation: How Rising Prices Impact Our Lives** While inflation is an inevitable part of any economy, the effects of inflation ripple through households, businesses, and financial markets. Let’s break down the **effects of inflation** and how they are felt across different sectors. ### **1. Devaluation of Fixed-Income Assets** One of the most significant yet often overlooked effects of inflation is the erosion of the value of fixed-income assets such as cash, savings accounts, bonds, and fixed-interest annuities. For individuals who rely on these assets for steady income, inflation can significantly diminish their purchasing power. When the rate of inflation outpaces the return on these investments, the real value of the returns is reduced. Which can be especially concerning for retirees or others living on fixed incomes. For instance, if inflation is at 5% and a savings account yields only 2%, the actual purchasing power of any funds held in that account is effectively declining. Individuals are forced to reconsider their investment strategies and look for alternatives to safeguard their wealth against inflation’s erosive effects. ### **2. The Effects of Inflation on Consumer Spending** As inflation drives prices up, consumers often alter their spending habits to cope with the increased cost of living. This can lead to what economists call a “trade-down” effect, where individuals substitute lower-cost goods and services for those they would have otherwise purchased. For example, when food and energy prices rise sharply, families may reduce discretionary spending, shifting to lower-priced groceries or taking fewer trips to restaurants. In more severe cases, people may cut back on larger expenses, such as vacations or home renovations. While these shifts can help families manage their budgets in the short term, they often signal broader shifts in consumer sentiment, which can impact economic growth. As more people curtail spending, businesses may see reduced demand, potentially leading to slower economic recovery. ### **3. Increased Price Volatility** One of the more unpredictable effects of inflation is price volatility across industries. This uncertainty complicates decision-making for both individuals and businesses. Families may struggle to make long-term financial plans, unsure of how much their expenses will increase in the coming months. Meanwhile, businesses face similar challenges, as they must set prices in a fluctuating market while ensuring their own profitability. ### **4. Wage Pressure and Labor Market Tension** As inflation pushes up the cost of goods and services, workers may demand higher wages to keep pace with rising living expenses. This creates a challenge for employers, especially those in industries that are already operating with slim profit margins. While some workers may see wage increases, the effects of inflation on the labor market includes difficulties in securing better pay, particularly if they are in low-wage industries or if their job skills are easily replaced by automation or outsourcing. However, when wages rise significantly in response to inflation, it can lead to a cycle of **cost-push inflation**. ### **5. Asset Bubbles and Financial Instability** One of the most significant effects of inflation is the formation of asset bubbles, particularly in real estate and the stock market. These bubbles occur when demand for an asset rises rapidly due to inflationary pressures, pushing prices beyond what is considered sustainable. The real estate market, for instance, can be particularly susceptible to these bubbles. As home prices soar, people may overextend themselves financially to purchase property, leading to increased household debt. These bubbles pose a significant risk to financial stability. When inflation eventually stabilizes or decreases, asset prices may fall, leaving individuals who purchased during the peak of the bubble with significant financial losses. This was seen during the[ housing crisis of 2008](https://www.investopedia.com/articles/economics/09/subprime-market-2008.asp), when rapid inflation in housing prices led to widespread foreclosures and a global economic downturn. As inflation has challenged us again during the past few years, we saw bubbles form in housing, stocks (particularly in the technology sector), and cryptocurrencies. Our internal investing process saw these problems coming and we protected our clients from overexposure to these inflation-sensitive areas. ### **6. The Psychological Effects of Inflation** While the financial strain caused by inflation is obvious, the psychological toll it takes on individuals cannot be overstated. The rising costs of essential goods and services can lead to heightened stress and anxiety, which in turn impacts mental health. Families may worry about how they will make ends meet, while workers may feel the pressure of stagnant wages amid increasing living costs. In some cases, this stress leads to a phenomenon called **financial anxiety**—an ongoing fear of not having enough money to cover expenses or save for the future. This anxiety often manifests in unhealthy coping mechanisms, such as impulsive buying, excessive saving to an unhealthy extent, or even complete financial avoidance, where individuals stop tracking their spending entirely ### **7. The Effects of Inflation on Retirement Planning** As inflation rises, the purchasing power of retirement savings diminishes, making it harder for retirees to maintain their standard of living. A fixed sum of savings, which may have seemed sufficient at retirement, can lose value due to rising costs. Retirees are particularly vulnerable, as their income often comes from fixed sources such as pensions, Social Security, or fixed investments that don’t adjust to inflation. For instance, someone who planned to live on $50,000 annually during retirement might find that due to inflation, that amount doesn’t stretch as far as expected. This is compounded by rising healthcare costs, which are among the fastest-growing expenses in an inflationary environment. As medical expenses increase, they can take up a larger portion of a retiree’s savings. **If you’re concerned about how inflation could affect your retirement plans, consulting with a financial advisor can help. [nVest Advisors](https://nvestadvisors.setmore.com/) professionals can provide guidance and strategies to help you navigate inflation and keep your retirement goals on track.** ### **8. Impact on Government Policy and Social Programs on The Effects of Inflation** Inflation puts pressure on government policy, particularly social welfare programs and fiscal decisions. As prices rise, the cost of funding programs like unemployment benefits, food assistance, and healthcare also increases. Governments must decide whether to raise these benefits to match inflation, which can strain tight budgets. If benefits aren’t adjusted, vulnerable populations may struggle more, as their fixed incomes can no longer meet their basic needs. This can widen the socioeconomic divide, pushing certain groups further into marginalization during inflationary times. Inflation often leads central banks to raise interest rates to curb rising prices, making borrowing costlier. Higher rates can burden consumers with existing debts, such as mortgages, credit cards, and car loans, leading to higher default rates. By staying informed about inflation’s trends, individuals and businesses can better prepare for its challenges. Whether through smart investment strategies, budgeting, or adapting to higher borrowing costs, it is possible to mitigate the impact of inflation and protect your financial future. **For personalized advice on how inflation may impact your investments and financial planning, [reach out to nVest Advisors today and book a meeting with one of our experts](https://nvestadvisors.setmore.com/). Let us help you navigate these uncertain times and secure your financial future.** **Categories:** Behavioral Finance, Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Individuals and Families, Investing General, Investment, Mailchimp, Media, Plan Participants, Politics, public, Retirement, Small Business, Texas Teachers Retirement --- ### [nVest Advisors featured on the Good Neighbor Podcast](https://nvestadvisors.com/nvest-advisors-featured-on-the-good-neighbor-podcast/) **Published:** March 17, 2025 **Author:** nVest Advisors **Content:** [![nVest Advisors Good Neighbor Podcast](https://nvestadvisors.com/wp-content/uploads/2025/03/g2qea4ryp9ugpty2c68dw12dgnil.jpg "Nvest advisors good neighbor podcast nvest advisors")](https://www.buzzsprout.com/2439884/episodes/16659248)nVest Advisors Good Neighbor Podcast # nVest Advisors featured on the Good Neighbor Podcast In March, nVest Advisors CEO Jeremy Torgerson was featured on the **Good Neighbor Podcast**, and we are happy to share that podcast with our clients. In the podcast, Jeremy discusses the beginnings of our firm, why we have always been committed to working with small businesses and individual families, and who we might be the right fit for as a fiduciary financial firm. You may listen to the podcast on your favorite podcast app (Spotify, Apple Podcast, etc.), [or by clicking here.](https://www.buzzsprout.com/2439884/episodes/16659248) nVest Advisors is regularly interviewed or quoted in major media. [Here is our archive of those media mentions or interviews.](https://nvestadvisors.com/media/ "nVest in the Media | Archives") **Categories:** Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, From our CEO, Individuals and Families, Mailchimp, Media, Plan Participants, Press Releases, public, Small Business, Texas Teachers Retirement --- ### [Shaping Our Future Together: The nVest Advisors Client Advisory Group](https://nvestadvisors.com/shaping-our-future-together-the-nvest-advisors-client-advisory-group/) **Published:** March 14, 2025 **Author:** nVest Advisors **Content:** [![Client Advisory Committee](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-photo-3182781-1024x683.webp "Pexels photo 3182781 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-photo-3182781.webp) # Shaping Our Future Together: The nVest Advisors Client Advisory Group We’re excited to announce the launch of our Client Advisory Group, a new initiative designed to strengthen our partnership with you, our valued clients, and ensure we continue to meet and exceed your expectations. At nVest Advisors, a true commitment to client happiness is much more than a corporate mission statement. As our client, we believe that your insights are absolutely critical to the success of our firm. We’re committed to continuous improvement, and we recognize that the best way to enhance our services is to listen directly to those we serve. That’s why we’re creating a forum for open dialogue and collaboration through our **Client Advisory Group**. ## **What is the Client Advisory Group?** The **Client Advisory Group** will consist of a select group of clients who will meet quarterly to provide feedback and share their perspectives on our services, technology, and communication. This group will play a crucial role in shaping the future of nVest Advisors, helping us to: - **Enhance Client Satisfaction:** By understanding your needs and preferences, we can tailor our services to better serve you. - **Improve Operational Efficiency:** Your feedback will help us streamline our processes and eliminate unnecessary complexities. - **Innovate and Evolve:** We’ll explore new technologies and service offerings based on your input. - **Strengthen Our Partnership:** This group will foster a closer relationship between our firm and our clients. ## **Why Are We Creating This Group?** We’re dedicated to providing you with the highest level of service and support. In today’s dynamic financial landscape, it’s essential to stay ahead of the curve and adapt to your evolving needs. The Client Advisory Group will provide us with the insights we need to do just that. ## **How Will It Work?** - We will invite a small group of clients each year to participate. - The group will meet quarterly for focused discussions. - Participants will also have the opportunity to provide feedback through brief surveys between meetings. - We will share key findings and updates with all of our clients. - Your participation will be completely confidential. ## **What Will We Discuss?** We’ll cover a range of topics, including: - Your experience with our service offerings. - The usability and effectiveness of our technology platforms. - Your communication preferences. - The overall client experience and our value proposition. - Future services that would be valuable. ## **How Can You Get Involved?** We will be reaching out to select clients to invite them to participate in the Client Advisory Group. If you are interested in potentially participating in the future, [please reach out to us](https://nvestadvisors.com/contact/ "Contact")! We’re excited about this new initiative and the opportunity to work closely with you to build an even stronger partnership. Thank you for your continued trust and support. ***The Team at nVest Advisors, LLC*** **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, Individuals and Families, Mailchimp, Media, Plan Participants, Press Releases, public, Small Business, Texas Teachers Retirement **Tags:** announcement, client, client service, clients, news, PR, update --- ### [Cryptocurrency Markets Update: Trends & Insights](https://nvestadvisors.com/cryptocurrency-markets-update/) **Published:** March 13, 2025 **Author:** Maryam Irfanmeer **Content:** # ![cryptocurrency markets and their ups and downs](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-rdne-8370752-e1741898162400-1024x488.jpg "Pexels rdne 8370752 nvest advisors") # **Cryptocurrency Markets Update: Trends & Insights** The cryptocurrency markets have experienced significant turbulence over the past weekend, leaving investors concerned about the future of digital assets. This downturn follows a period of substantial growth and heightened interest, including a recent U.S. presidential commission meeting addressing cryptocurrencies. The abrupt decline has raised questions about the sustainability of the markets’ previous valuations and the broader economic implications. ## **The Liquidity Crunch & What It Means for Cryptocurrency Markets** Liquidity is a key driver of cryptocurrency markets, and when it dries up, price volatility increases. Recent sell-offs indicate that large investors, or “whales,” may be exiting positions, which creates ripple effects throughout the market. With major exchanges like Binance seeing massive liquidations, the stability of digital assets is being tested. A shrinking pool of active buyers and sellers worsens the issue, making price swings more extreme. Market makers, who help maintain liquidity, are pulling back, causing and increasing the risk of sudden drops. Traders face slippage, where orders execute at unfavorable prices due to low liquidity. Without fresh capital inflows, the market remains vulnerable to further shocks, heightening uncertainty. ## **Cryptocurrency** Markets Were Overvalued for the Past Three Years In our opinion much of the past three years, cryptocurrency markets have been in a speculative bubble. Prices surged beyond sustainable levels due to excessive liquidity, speculative trading, and widespread enthusiasm. This kind of overvaluation has historically led to sharp corrections, and the recent downturn suggests that the market is recalibrating to more realistic valuations. This latest decline suggests the market is undergoing a necessary reset, where inflated valuations are giving way to more realistic pricing. Investors are reassessing their positions, and with liquidity tightening, only assets with strong fundamentals may hold ground in the evolving landscape. ## Housing, Credit, and Savings Rates Are Real Challenges Beyond the crypto sphere, broader economic challenges are intensifying. High home prices, rising interest rates, and stagnating wage growth are putting pressure on consumers. Credit card debt is at record highs, and personal savings rates have declined, limiting the ability of many households to absorb financial shocks. As investors reevaluate risk, speculative assets like cryptocurrencies often see the steepest declines. With inflation still affecting purchasing power , economic uncertainty extends far beyond digital assets. The recent downturn has also exposed the growing disconnect between market optimism and financial reality. Higher borrowing costs are slowing down discretionary spending, further tightening liquidity across markets. As financial strain mounts, risk appetite has diminished, pushing investors toward safer assets and away from speculative investments like cryptocurrencies. This shift has contributed to the rapid sell-offs witnessed in the past few days. ## **Inflation Continues to Challenge Family Budgets** The impact of inflation is being felt across all sectors, from everyday expenses to long-term investments. While cryptocurrency markets often react independently, they are not immune to macroeconomic forces. As inflation erodes purchasing power, many investors are reconsidering their financial strategies, seeking stability in a time of volatility. While the Federal Reserve has taken aggressive steps to curb rising prices, the cost of essential goods and services remains elevated. This has reduced disposable income, affecting retail investment in cryptocurrencies. ## Layoff Announcements and Hiring Slowdowns Impact Investor Sentiment Recent layoff announcements across major industries highlight growing concerns about economic stability which is also affecting cryptocurrency markets. Companies in tech and finance have been downsizing in response to economic uncertainty, leading to reduced consumer confidence. Investors tend to move away from volatile assets during periods of economic stress, contributing to the ongoing decline in crypto valuations. ## **Investor Psychology, Fear, Greed, and Market Swings** Market sentiment plays a huge role in cryptocurrency valuations. After years of aggressive speculation, many investors are now facing the reality of market corrections. Fear, uncertainty, and doubt (FUD) are driving panic selling, while others see this as a potential entry point. Understanding these cycles is crucial to navigating volatile markets. ## **Lessons from Past Cryptocurrency Markets Corrections and Future Outlook** This is not the first time cryptocurrencies have faced a major downturn. Previous crashes, like the 2018 bear market, were followed by recoveries and new highs. What’s different now is how crypto is evolving. Unlike past cycles driven mostly by speculation, today’s market is seeing more real-world use, like businesses using blockchain for payments and contracts. Governments are also exploring digital currencies, which could change how crypto fits into the global economy. This means recovery isn’t just about prices going back up—it’s about which cryptocurrencies will actually prove useful in the long run. ## **Strategic Considerations for Investors of Cryptocurrency Markets** Given the current economic landscape, investors should adopt a cautious and informed approach: - **Assess Employment Stability:** Evaluate job security and consider the potential impact of economic downturns on employment. - **Review Family Budgets:** Adjust household budgets to account for inflation and other economic pressures, ensuring essential needs are prioritized. - **Reallocate Retirement Assets:** Consider moving retirement funds to more stable investment vehicles managed by fiduciary advisors to protect long-term savings. - **Plan Career Development:** Develop strategies for career advancement or transition, preparing for potential changes in the job market. ## The Need for a Financial Advisor in Uncertain Times When markets swing wildly, emotions take over. Fear and uncertainty can lead to rushed decisions such as selling too soon, holding on too long, or missing key opportunities. This is where a financial advisor becomes essential. Having an expert by your side means more than just investment advice. It means having someone to guide you through volatility with a level head and a clear plan. A good advisor doesn’t just tell you what to do, they help you understand the bigger picture. They evaluate your financial health, assess risks, and provide strategies to protect and grow your assets. But what if you’re unsure about the advice you’re getting? Second opinions matter. If something doesn’t feel right or you need reassurance, we’re here to help with no strings attached. A fresh perspective can be the difference between staying on course and making a costly mistake. At [**nVest Advisors**](https://nvestadvisors.com/), we offer second opinions at no cost because we believe financial confidence starts with clarity and trust. You don’t have to face these challenges alone let us help you! **Categories:** Behavioral Finance, Business Stories, Client News, Cryptocurrency, Economic Updates, Economy, Financial Planning, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, public --- ### [Why Your Family Budget Feels Tighter Than It Did 4 Years Ago](https://nvestadvisors.com/why-your-family-budget-feels-tighter-than-it-did-4-years-ago/) **Published:** March 12, 2025 **Author:** Maryam Irfanmeer **Content:** # ![family budget in inflation](https://nvestadvisors.com/wp-content/uploads/2025/02/pexels-rdne-8369827-1024x682.jpg "Pexels rdne 8369827 nvest advisors") # Why Your Family Budget Feels Tighter Than It Did 4 Years Ago If you’ve noticed that your family budget feels a bit tighter than it did four years ago, you are not alone. Many families across the United States are experiencing financial strain due to rising costs and stagnant wages. In this article, we will explore the key factors that have contributed to the tightening of family budgets, using the latest data from the **2023 [Bureau of Labor Statistics](https://www.bls.gov/opub/reports/consumer-expenditures/2023/home.htm) (BLS) Consumer Expenditures Report**. Let’s dive into why your budget feels more strained and how you can adapt. - ### The Rising Cost of Living One of the most immediate reasons your family budget feels tighter is the general rise in the cost of living. Over the past few years, inflation has steadily increased, pushing up the prices of everyday goods and services. While inflation has cooled somewhat recently, many families are still grappling with the effects of these price hikes. According to the **[2023](https://www.bls.gov/opub/reports/consumer-expenditures/2023/) Bureau of Labor Statistics** report, costs for essential items like food, housing, and transportation rose considerably over the past year. This means your dollar doesn’t stretch as far as it used to, especially when you’re trying to cover all the basics. Take food, for example. Grocery prices have soared in recent years, making it hard to keep up with a growing family’s needs. This increase in grocery prices means families have to dedicate more of their budget to basic sustenance. Unfortunately, it’s not just food. Household items, utilities, and even healthcare have seen steep price increases, forcing families to prioritize essentials while cutting back on less urgent expenses. - ### Housing: For many families, housing is the largest monthly expense, and in recent years, it’s only gotten more expensive. Whether you’re renting or paying a mortgage, the costs associated with housing have increased significantly. According to the **[2023](https://www.bls.gov/opub/reports/consumer-expenditures/2023/) Bureau of Labor Statistics** report, rent prices have risen significantly over the past several years, and housing costs continue to be a major financial strain for many households. For homeowners, the situation is not much better. The cost of purchasing a home has surged due to higher home prices and rising mortgage interest rates. As a result, many families have found it difficult to buy homes, even as they face increasing rental costs. - ### Transportation: Another significant factor contributing to tighter family budgets is the rise in transportation costs. Whether it’s commuting to work or running errands, many families rely on their vehicles to get by. However, gas prices have fluctuated wildly in recent years, with some periods of sharp increases. The **BLS 2023 [report](https://www.bls.gov/opub/reports/consumer-expenditures/2023/)** noted a significant spike in fuel prices, contributing to a growing transportation cost burden. These rising fuel prices are compounded by the increased costs of vehicle maintenance, including parts and repairs. For families who depend on personal transportation, these costs quickly add up, leaving less money for other aspects of daily life. For families in areas without reliable public transportation, the strain is even more pronounced. With no other affordable options, they are forced to bear the rising transportation costs. - ### Healthcare Costs: Healthcare is another category where families are seeing increased costs. Whether it’s the premiums for health insurance, out-of-pocket expenses, or prescription costs, families are being forced to allocate more of their budget to healthcare. For many, high-deductible health plans and rising premiums are a significant burden. These expenses often increase faster than wages, leaving families with less financial freedom. This financial strain is particularly felt by families with young children or older members who require regular medical attention. For some, medical debt is becoming an unavoidable reality. - ### Wages vs. Inflation: While expenses have steadily risen, wages have not kept pace. In the **BLS 2023 report**, it was highlighted that wage growth in 2022 didn’t keep up with inflation, which means that even though you may be earning more, it feels like your paycheck is going nowhere. In real terms, your family’s purchasing power is weaker than it was just a few years ago. This growing gap between wages and inflation creates a financial pinch for families trying to maintain their standard of living. It makes it harder to save for the future, pay down debt, or even afford basic needs without going into debt. - ### The Role of Debt and how it destroys your family budget: As family budgets tighten, many households are turning to credit cards or personal loans to fill the gaps. This cycle of debt can quickly snowball, especially when interest rates are high, as they are in today’s economic climate. Credit card debt, in particular, can quickly accumulate, making it even harder to make ends meet each month. If you’ve been relying on credit to cover everyday expenses, it may feel like your budget is permanently stretched thin. Paying off high-interest debt can become a significant challenge, leaving families with little financial wiggle room. Optimizing your debt right now, and eliminating it over time is a fundamental part of a proper financial plan, and [it is a vital part of what we help our clients achieve](https://nvestadvisors.com/financial-planning-for-individuals-families/ "Financial Planning for Individuals & Families | nVest Advisors, LLC"). ## Deficit Spending and Its Impact on Family Budget: Economist Milton Friedman once famously said that inflation is. “first, and always a monetary issue.” What he meant is that if an economy sees broad price increases across most of our regular purchases, the problem isn’t coming from supply problems (like a bad growing season might affect the yield of coffee harvests, causing a temporary shortage in supply). When prices rise on everything, all at once, the problem is too many dollars circulating in our economy. Since the Covid-19 pandemic and the shutdowns that resulted, many governments of the world went dramatically into debt (invented money) and gave that money out in the form of stimulus checks, forgivable business loans, and other forms of economic “steroids”, called quantitative easing. Suddenly, without being created through productive means, trillions of new dollars were flooded into the economy that still only had the same number of houses, cars, boxes of cereal, and tennis shoes as it did before Covid. Many more dollars chasing the same number of products means the value of each of those dollars declines. In short, the more dollars are out there in the economy, the less they will buy. The problem for working-income families, and those on fixed incomes like retirees, is that your wages didn’t rise as fast as prices did. Very wealthy individuals were less affected because they own significant assets that actually go up in value during periods of inflation. Also, wealthy families tend to receive more investment income and don’t rely as much upon a monthly paycheck to meet their needs. As a result, they often don’t struggle under the weight of inflation nearly as much as the average American household, which must grapple with stagnating wages, mounting debt, and soaring living costs. Many politicians like to make promises of “free” things in order to curry favor at election time, but those “free” items always come with a cost attached: the money has to come from somewhere. Often, especially in the last 30 years, that money is simply invented out of thin air and dropped unproductively into the economy. ## The Role of Big Tech and Economic Disruption Another major factor contributing to the strain on family budgets is the role of major tech companies and their monopolistic control over key sectors of the economy. Giants like Amazon, Google, and Apple wield enormous economic power, not just because of their vast wealth, but because of their ability to disrupt traditional industries. While many consumers benefit from lower prices on goods and services, the long-term impact on family budgets is far more insidious. “Big tech” has drastically shifted the labor market, with automation and artificial intelligence gradually replacing human workers across multiple industries. While these technological advancements lead to more convenience and lower costs for consumers in some instances, they also result in job displacement, particularly for middle-skill workers in manufacturing, retail, and customer service sectors. The result? Families are left to cope with unemployment or the pressure of transitioning to new, often lower-paying, fields. Many individuals who lose jobs to automation face the financial instability of finding work in a rapidly changing economy, while the companies responsible for these job losses see their profits soar. ## Other Hidden Factors Contributing to Your Tight Family Budget While the rising costs of food, housing, and transportation are the most obvious reasons your family budget feels tighter, there are other underlying factors at play. 1. **Lifestyle Inflation**: As your income increases, so does your spending. This phenomenon, known as lifestyle inflation, happens when you increase your spending in proportion to your income. While it’s natural to want to upgrade your lifestyle, it can lead to tighter budgets if you’re not careful. 2. **Emergencies**: Unexpected events—such as home repairs, medical emergencies, or car accidents can throw your budget off track. Without an emergency fund, families are left scrambling to cover these unexpected expenses, which can contribute to financial strain. 3. **Education Costs**: For families with children, education costs whether for daycare, school supplies, or tuition, can take a significant chunk out of the budget. These costs have also risen in recent years, contributing to the overall financial squeeze. ## How to Adapt Your Family Budget Given all these rising expenses, it’s clear that families need to be more strategic when managing their finances. Here are a few steps families can take to help ease the pressure: 1. **Track Your Spending**: The first step to adapting your budget is understanding where your money is going. Use budgeting tools or apps to track every dollar and find areas where you can cut back. 2. **Prioritize Needs Over Wants**: It’s important to focus your spending on essential needs like housing, food, and healthcare. Cut back on discretionary spending, such as entertainment or dining out, to free up more money for necessities. 3. **Save for Emergencies**: Building an emergency fund can provide a safety net when unexpected costs arise. Even setting aside a small amount each month can help protect you from financial setbacks. 4. **Pay Down Debt**: High-interest debt, like credit card balances, can quickly drain your budget. Focus on paying down debt systematically to reduce monthly payments and free up funds for other expenses. 5. **Look for Alternative Income Sources**: Consider side gigs or freelance work to supplement your family’s income. This can help ease the strain of rising expenses. ## The Future: Is There Hope for Relief? The looming question for many families is whether any relief is in sight. Political and economic analysts are split on the future, as the U.S. economy faces deep structural challenges. Political leaders are divided on the best course of action where some argue for a more aggressive social safety net, while others believe that tax cuts and deregulation will stimulate the economy and ease financial pressures. However, what’s clear is that without comprehensive and forward-thinking policy changes, the trend of tighter family budgets will likely continue. This ongoing financial squeeze makes it harder for families to plan for the future, cover unexpected expenses, or even afford day-to-day necessities without falling into debt. Without the right financial strategy, small setbacks can quickly spiral into long-term financial hardship. That’s why having a solid plan in place is more important than ever. **At [nVest Advisors](https://nvestadvisors.com/), we help families navigate these challenges by creating tailored financial strategies that align with their needs and goals. Whether you need help managing debt, building savings, or planning for the future, we’re here to guide you. Book a [meeting](https://nvestadvisors.setmore.com/) with us today and take the first step toward a more secure financial future.** **Categories:** Behavioral Finance, Business Stories, Client News, Client Service, Debt, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Plan Participants, Politics, public, Retirement, Small Business, Texas Teachers Retirement --- ### [What Is a Credit Report? Your Personal and Family Guide](https://nvestadvisors.com/what-is-a-credit-report/) **Published:** March 10, 2025 **Author:** Maryam Irfanmeer **Content:** # ![what is a credit card report](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-rdne-7821529-1024x682.jpg "Pexels rdne 7821529 nvest advisors") # What Is a Credit Report? Your Personal and Family Guide Managing credit is an essential part of financial well-being, yet many people only think about their credit report when a problem arises. Whether applying for a mortgage, securing a loan, or planning for long-term financial stability, understanding what a credit report is can make all the difference. These reports, compiled by Equifax, Experian, and TransUnion, are used by lenders, landlords, insurers, and even some employers to assess financial responsibility. In this comprehensive guide, we’ll break down what a credit report is, why it matters, how to monitor it effectively, and how families can work together to maintain strong credit health. ## What Is a Credit Report and What Information Does It Contain? A credit report is a detailed record of your financial history that lenders use to assess your creditworthiness. So, *what is a credit report* exactly? It includes key details such as: - **Personal Information** – Your name, address, Social Security number, and employment history. - **Credit Accounts** – A list of open and closed accounts, including credit cards, mortgages, auto loans, and personal loans, along with balances, payment history, and credit limits. - **Public Records** – Any bankruptcies, tax liens, or civil judgments that may affect your financial standing. - **Inquiries** – A record of who has accessed your credit report, distinguishing between hard inquiries (which can impact your credit score) and soft inquiries (which do not). ## **Why Does a Credit Report Matter?** A credit report isn’t just a financial record, it’s a reflection of your financial habits and can impact major life decisions. So, what is a credit report, and why should you care? Lenders use it to determine your eligibility for loans and interest rates, while landlords check it before approving rental applications. Even some employers review credit reports to assess financial responsibility, particularly for positions that involve money management. A strong credit report can increase your chances of loan approvals, secure lower interest rates, and provide greater financial flexibility. It can also enhance borrowing power, making it easier to access credit when needed. More importantly, maintaining a positive credit history contributes to long-term financial stability, ensuring you’re well-positioned for opportunities like homeownership or business funding. On the other hand, a poor credit report can create financial barriers. Higher borrowing costs, difficulty securing housing, and even limited job prospects can all stem from a weak credit profile. That’s why staying informed about your credit report isn’t just about numbers—it’s about safeguarding your financial future and ensuring access to the opportunities that matter most. ## **How to Get and Keep Track of Your Credit Report** What is a credit report and Understanding it is is just the first step. Keeping an eye on it is just as important. It reflects your financial habits and can impact major decisions in your life. Yet, many people do not check theirs until they run into a problem, making it harder to fix mistakes or fraud in time. You are entitled to a free credit report from Equifax, Experian, and TransUnion once every 12 months. The best way to get yours is through [AnnualCreditReport.com](https://www.annualcreditreport.com), the only government-approved site for free credit reports. Getting your report is one thing, but knowing what to look for is what really helps. Errors and identity theft can go unnoticed for months, affecting your financial stability when you least expect it. ## **How to Review Your Credit Report the Right Way** Start by requesting reports from all three credit bureaus. Since they might have different information, reviewing each one gives you the full picture. Check that your name, address, and Social Security number are correct to avoid mix-ups. Next, go through your credit accounts carefully. If you spot an unfamiliar account, an incorrect balance, or a payment marked as late when you know it was on time, there may be an issue. Also, check for credit inquiries you do not recognize, this could mean someone is trying to open accounts in your name. Mistakes on credit reports are more common than people realize. A 2021 [report](https://www.forbes.com/sites/sarahhansen/2021/06/10/34-of-consumers-have-found-a-mistake-on-their-credit-report-new-survey-shows/) investigation found that 34% of Americans discovered errors in their personal information and details related to their financial accounts. Regularly checking your report is not just about fixing problems. It helps you stay in control of your financial reputation and avoid unnecessary roadblocks. ## **How Credit Reports Shape a Family’s Financial Future** When families discuss finances, they often focus on budgeting and saving, but credit health is just as important. Understanding what a credit report is and how it affects a household can help secure better mortgage rates, lower car loan payments, and reduce insurance costs. A weak credit history can create obstacles that impact the entire family’s financial stability. ## **What Is a Credit Report’s Role in Shared Family Finances?** Many families have joint financial obligations, such as shared credit cards, co-signed loans, or mortgages. While these arrangements offer convenience, they also carry risks. When one person mismanages credit, it does not just impact them, it can affect their spouse, co-signer, or even future financial opportunities for their children. For instance, if one spouse misses a payment on a joint loan, both of their credit reports may reflect the late payment, potentially lowering their scores. A parent co-signing a student loan for their child is just as responsible for repayments, meaning any missed payments could damage their own creditworthiness. Couples who share a credit card must ensure payments are made on time, as even one late payment can affect both individuals’ credit reports. > **At nVest Advisors, we help individuals and small business owners navigate debt challenges, improve credit health, and create a path toward financial stability** ## **Why Monitoring Your Credit Report is Essential for Families** Regularly checking ensures that financial decisions do not lead to long-term consequences. Families who monitor their credit can catch errors early, prevent identity theft, and manage shared accounts more effectively. Since credit reports are used by lenders, landlords, and even some employers, maintaining good credit is essential for securing financial stability and future opportunities. A credit report is more than just a record, it is a reflection of a family’s financial health. By staying informed and proactive, families can avoid unnecessary financial stress and work toward long-term financial security together. ## How to Improve and Maintain a Healthy Credit Report Whether you’re managing credit as an individual or as a family, these strategies can help you maintain a strong credit profile: ### 1. Pay Bills on Time Payment history makes up **35% of your credit score**, making timely payments one of the most effective ways to maintain a healthy report. Setting up autopay or reminders can prevent missed payments. ### 2. Keep Credit Utilization Low Credit utilization, which is how much of your available credit you are using, accounts for 30% of your credit score. Experts recommend keeping utilization below 30% for a good credit standing. ### 3. Avoid Opening Too Many Accounts at Once Each hard inquiry can slightly lower your credit score. If you apply for multiple credit cards or loans in a short period, lenders may view it as risky behavior. ### 4. Dispute Errors Immediately Since mistakes on credit reports are common, reviewing them at least once a year and disputing inaccuracies promptly is essential. The Consumer Financial Protection Bureau [provides](https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/) guidance on filing disputes. ### 5. Educate Your Family About Credit Responsibility Young adults and teenagers should learn the importance of good credit early on to avoid financial mistakes in the future. Encouraging responsible credit use helps build a strong financial foundation for the next generation. ## How Economic Trends Impact Credit Reports - **Trade Policies and Tariffs** The implementation of tariffs on imports from countries like Mexico, Canada, and China has led to increased consumer prices, with estimates [suggesting](https://www.marketwatch.com/story/sweeping-tariffs-are-finally-here-americans-say-they-arent-ready-especially-this-group-b9b07dde?utm_source=chatgpt.com) an annual rise of nearly $1,000 to $1,200 per household. This escalation in living costs has resulted in higher credit card usage, particularly among lower-income households, as they rely more on credit to manage these expenses. Consequently, this increased reliance on credit can lead to higher credit utilization ratios and potential declines in credit scores. - **Employment Concerns** Economic uncertainties, such as fears of job losses due to government layoffs and policy changes, have led to a deterioration in consumer sentiment. This anxiety can result in reduced consumer spending and a cautious approach to taking on new debt. For those already carrying significant debt, concerns about job security may lead to difficulties in meeting debt obligations, potentially resulting in missed payments and lowered credit scores. At **nVest Advisors**, we help individuals and small business owners navigate financial challenges, improve credit health, and create personalized strategies for long-term stability. Whether you’re dealing with debt, errors on your credit report, or concerns about your financial future, our team is here to guide you toward better financial outcomes. Don’t let credit issues hold you back. **[Reach out](https://nvestadvisors.setmore.com/) to nVest Advisors today** and take the first step toward financial confidence and security. **Categories:** Business Stories, Client News, Debt, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, LifeCycle, Mailchimp, Plan Participants, public, Retirement, Small Business, Texas Teachers Retirement --- ### [Tax Preparation Checklist For Small Businesses](https://nvestadvisors.com/tax-preparation-checklist-for-small-businesses/) **Published:** March 6, 2025 **Author:** Maryam Irfanmeer **Content:** # ![tax preparation checklist for small businessess](https://nvestadvisors.com/wp-content/uploads/2025/03/pexels-tara-winstead-7111590-1024x682.jpg "Pexels tara winstead 7111590 nvest advisors") # Tax Preparation Checklist For Small Businesses Tax season can be overwhelming for small business owners, but having a clear tax preparation checklist can help you stay organized, avoid penalties, and maximize deductions. With changing tax regulations and evolving financial challenges, preparing early and correctly is more critical than ever. This guide provides a practical, research-backed tax preparation checklist for small businesses to ensure a smooth tax filing process. ## **Why Tax Preparation Matters for Small Businesses** Taxes are more than just a legal obligation, they directly impact your business’s financial health. According to a [report](https://advocacy.sba.gov/2024/07/23/frequently-asked-questions-about-small-business-2024/) small businesses account for **99.9% of all U.S. businesses**, making their tax compliance crucial for economic stability. Proper tax preparation helps you: - Avoid IRS penalties and audits - Claim all eligible deductions to reduce tax liability - Improve cash flow by planning ahead - Maintain accurate records for financial growth ## **What Is Tax Preparation Checklist? Key Steps for Small Businesses** ### **1. Gather and Organize Essential Documents** One of the most time-consuming parts of tax filing is document collection. Ensuring all required financial records are in order prevents errors and delays. Essential documents include: - **Income Statements & Balance Sheets** – Provide an overview of revenue, expenses, and profits. - **Bank & Credit Card Statements** – Ensure all business-related transactions are recorded. - **Receipts & Invoices** – Track deductible expenses such as office supplies, marketing, and travel. - **Payroll Records** – Document wages paid to employees, including tax withholdings. - **Previous Year’s Tax Return** – Helps compare financial trends and identify any changes. ### **2. Review Business Expenses & Deductions** Missing out on deductions can cost small businesses thousands of dollars. According to the IRS, businesses can deduct **ordinary and necessary expenses** related to operations . Common deductions include: - **Home Office Deduction** – If you work from home, you may qualify for a deduction based on the portion of your home used for business. - **Vehicle Expenses** – If you use a car for business, mileage, fuel, and maintenance costs may be deductible. - **Health Insurance Premiums** – Self-employed individuals can deduct health insurance premiums. - **Retirement Contributions** – Contributions to SEP IRAs, SIMPLE IRAs, or 401(k) plans may lower taxable income. ### **3. Identify and File the Correct Tax Forms** Different business structures require different tax forms. Filing the wrong form can result in processing delays or fines. Here’s a quick guide: - ***Sole Proprietors & Single-Member LLCs*** – Use **Schedule C (Form 1040)** to report business income. - ***Partnerships & Multi-Member LLCs*** – File **Form 1065** and issue Schedule K-1s to partners. - ***Corporations (C-Corp & S-Corp)*** – Use **Form 1120** (C-Corp) or **Form 1120-S** (S-Corp). ### **4. Verify Payroll & Employee Tax Compliance** If you have employees, keeping up with payroll taxes is essential to avoid IRS penalties. In 2022, businesses paid over $7 billion in payroll tax fines. To stay compliant: - Make sure W-2s for employees and 1099s for contractors are correct and sent before the deadline. - Verify that you have paid employer taxes, including Social Security, Medicare, and unemployment taxes. - Submit tax payments on time based on IRS rules. ### **5. Estimate Quarterly Taxes & Plan for the Future** If your business anticipates owing more than $1,000 in taxes for the year, it’s essential to make quarterly estimated tax payments to avoid underpayment penalties. The IRS has established the following schedule for estimated tax payments in 2025: - **First Quarter:** Payment due by **April 15, 2025**, covering income earned from January 1 to March 31. - **Second Quarter:** Payment due by **June 16, 2025**, covering income earned from April 1 to May 31. - **Third Quarter:** Payment due by **September 15, 2025**, covering income earned from June 1 to August 31. - **Fourth Quarter:** Payment due by **January 15, 2026**, covering income earned from September 1 to December 31. ### **6. File Your Taxes on Time or Request an Extension** Missing tax deadlines can lead to late fees and interest charges. The primary tax deadlines for small businesses in 2024 are: - **March 15** – Deadline for Partnerships & S-Corps (Form 1065 & 1120-S) - **April 15** – Deadline for Sole Proprietors & C-Corps (Form 1040 Schedule C & 1120) - **October 15** – Extended deadline (if requested by April 15) If you need more time, file **Form 7004** for businesses or **Form 4868** for individuals to request a six-month extension. However, an extension **only applies to filing, not to payments,** any owed taxes must still be paid by the original deadline to avoid penalties. ## **Make Tax Season Easier with Professional Support** Navigating small business taxes can be complicated, but the right preparation can save you time and money. A well-structured tax preparation checklist ensures compliance, reduces stress, and maximizes savings. However, tax laws change frequently, and mistakes can be costly. At[ **nVest Advisors**](https://nvestadvisors.com/), we help small businesses simplify their tax preparation process, identify opportunities for savings, and stay compliant with the latest regulations. Whether you need assistance with bookkeeping, payroll taxes, or deductions, our team is here to provide expert guidance tailored to your business needs. **Take control of your business taxes today! [Contact](https://nvestadvisors.setmore.com/) nVest Advisors for professional tax planning and preparation support.** **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, Financial Planning, Mailchimp, public, Small Business, Taxes **Tags:** business, IRS, small business, tax, tax planning --- ### [Staying in our lane](https://nvestadvisors.com/staying-in-our-lane/) **Published:** March 5, 2025 **Author:** nVest Advisors **Content:** ## A message from nVest Advisors CEO Jeremy Torgerson: > Note: we originally published this post in May of 2023, but feel it is important to reiterate now. Poltical and social issues are important, but relationships matter more. [![Senior Financial Advisor CEO Jeremy Torgerson](https://nvestadvisors.com/wp-content/uploads/2024/08/THINK-JT-200x200.png "Financial advisor & ceo jeremy torgerson nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/08/THINK-JT.png)Senior Financial Advisor & CEO Jeremy Torgerson ***More and more often, we are seeing companies needlessly step into the middle of inflammatory and polarizing social and political disagreements and “take a side”. This is done nearly always to the delight of professional pundits with a podcast, TV show, or book to sell, but nearly always to the detriment of the company’s customers, shareholders, and employees.*** ***We are all confronted with a wide range of social and political debates today, and to be sure, things have never felt more polarized than they are right now. But it’s important to remember that these issues are divisive precisely because they provoke a wide variety of strong viewpoints and impassioned disagreements, and there are often no places to compromise.*** > ***If my work as a financial planner, fiduciary, and investment manager would somehow be better or worse because of my client’s lifestyle, political opinions, or religious beliefs, then I’d be pretty lousy at my job.*** ***It’s also important to remember that like all things, these problems will eventually find solutions. The heated fight of the moment will fade away, leaving in its wake a mountain of resentment, bitterness, and distrust. We may win the argument, but ultimately lose what really matters in life: our friends and family, our neighbors, and our colleagues. I think I’d rather end the day with a new friend than a victory in an online argument no one will remember a week from now. I believe we can disagree without ever becoming disagreeable.*** ***It’s weird for me to even have to write this. Ten years ago, most companies understood that our job was to make and sell a good product at a fair price, try to be good community members and strive hard to be a great place for good people to want to work. But sadly, companies feel more pressure than ever to dive deeply into the issues that divide us. Often, that’s at the expense of, or perhaps as a cynical distraction from, their product and service.*** ***I couldn’t disagree more strongly with the idea that a company needs to have, and broadcast, a formal opinion on every polarizing subject.*** ***If my work as a financial planner, fiduciary, and investment manager would somehow be better or worse because of my client’s lifestyle, political opinions, or religious beliefs, then I’d be pretty lousy at my job. If I allowed my own lifestyle, politics, or religious convictions to interfere with the work I do for you, then I’d be just as incompetent. Your financial future doesn’t rely upon my political opinions being the same as yours; it relies upon my objectivity, skill, empathy, and ability to listen.*** ***At nVest Advisors, we believe is not our place as a financial planning and investment management firm to wade into the public fray on matters that don’t directly affect our ability to do our best work for our clients, and we will not do so. Regardless of the issue at hand, we don’t believe any company should be telling you how to think, believe, or vote. You do you, and we’ll be there to help you do it bigger and better than you ever thought possible.*** ***So in this world of strong opinions and counter-opinions from every corner of our lives, our promise as your financial advisor is that we’ll be the boring ones. We’ll keep focused on the work you’ve hired us to do, decline to engage in divisive social debates, remain politically agnostic, and stay laser-focused on improving our talent, tools and insight to give our clients the best financial outcomes we’re capable of.*** ***Put simply: we’ll stay in our lane, keep our heads down, keep our mouths shut, and work our hearts out for your financial success.*** ***We hope that’s enough.*** - ***Jeremy*** **Categories:** Behavioral Finance, Business Stories, Client News, Client Service, Company News, Economic Updates, Economy, From our CEO, Individuals and Families, Mailchimp, Politics, Press Releases, public, Small Business, Texas Teachers Retirement **Tags:** bud, bud light, company, debate, divisive, divisiveness, Facebook, linkedin, political, politics, social, twitter --- ### [Staying in our lane](https://nvestadvisors.com/staying-in-our-lane-2/) **Published:** May 19, 2023 **Author:** nVest Advisors **Content:** ## A message from nVest Advisors CEO Jeremy Torgerson: > Note: this post was originally published May 19, 2023. We feel it is important to revisit now. [![Senior Financial Advisor CEO Jeremy Torgerson](https://nvestadvisors.com/wp-content/uploads/2024/08/THINK-JT-200x200.png "Financial advisor & ceo jeremy torgerson nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/08/THINK-JT.png)Senior Financial Advisor & CEO Jeremy Torgerson ***More and more often, we are seeing companies needlessly step into the middle of inflammatory and polarizing social and political disagreements and “take a side”. This is done nearly always to the delight of professional pundits with a podcast, TV show, or book to sell, but nearly always to the detriment of the company’s customers, shareholders, and employees.*** ***We are all confronted with a wide range of social and political debates today, and to be sure, things have never felt more polarized than they are right now. But it’s important to remember that these issues are divisive precisely because they provoke a wide variety of strong viewpoints and impassioned disagreements, and there are often no places to compromise.*** ***It’s also important to remember that like all things, these problems will eventually find solutions. The heated fight of the moment will fade away, leaving in its wake a mountain of resentment, bitterness, and distrust. We may win the argument, but ultimately lose what really matters in life: our friends and family, our neighbors, and our colleagues. I think I’d rather end the day with a new friend than a victory in an online argument no one will remember a week from now. I believe we can disagree without ever becoming disagreeable.*** ***It’s weird for me to even have to write this. Ten years ago, most companies understood that our job was to make and sell a good product at a fair price, try to be good community members and strive hard to be a great place for good people to want to work. But sadly, companies feel more pressure than ever to dive deeply into the issues that divide us. Often, that’s at the expense of, or perhaps as a cynical distraction from, their product and service.*** ***I couldn’t disagree more strongly with the idea that a company needs to have, and broadcast, a formal opinion on every polarizing subject.*** ***If my work as a financial planner, fiduciary, and investment manager would somehow be better or worse because of my client’s lifestyle, political opinions, or religious beliefs, then I’d be pretty lousy at my job. If I allowed my own lifestyle, politics, or religious convictions to interfere with the work I do for you, then I’d be just as incompetent. Your financial future doesn’t rely upon my political opinions being the same as yours; it relies upon my objectivity, skill, empathy, and ability to listen.*** ***At nVest Advisors, we believe is not our place as a financial planning and investment management firm to wade into the public fray on matters that don’t directly affect our ability to do our best work for our clients, and we will not do so. Regardless of the issue at hand, we don’t believe any company should be telling you how to think, believe, or vote. You do you, and we’ll be there to help you do it bigger and better than you ever thought possible.*** ***So in this world of strong opinions and counter-opinions from every corner of our lives, our promise as your financial advisor is that we’ll be the boring ones. We’ll keep focused on the work you’ve hired us to do, decline to engage in divisive social debates, remain politically agnostic, and stay laser-focused on improving our talent, tools and insight to give our clients the best financial outcomes we’re capable of.*** ***Put simply: we’ll stay in our lane, keep our heads down, keep our mouths shut, and work our hearts out for your financial success.*** ***We hope that’s enough.*** - ***Jeremy*** **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Press Releases, public **Tags:** bud, bud light, company, debate, divisive, divisiveness, Facebook, linkedin, political, politics, social, twitter --- ### [Protecting Your Family from Financial Scams](https://nvestadvisors.com/protecting-your-family-from-financial-scams/) **Published:** February 26, 2025 **Author:** Maryam Irfanmeer **Content:** # ![protect yourself and your family against financial scams](https://nvestadvisors.com/wp-content/uploads/2025/02/pexels-leeloothefirst-7247410-1024x684.jpg "Pexels leeloothefirst 7247410 nvest advisors") # Protecting Your Family from Financial Scams In today’s interconnected world, financial scams have become increasingly sophisticated, posing significant threats to individuals and families. Understanding these scams and implementing protective measures is essential to safeguard your family’s financial well-being. ## The Rising Threat of Financial Scams Financial scams are escalating in both frequency and complexity. In 2023, consumers [reported](https://www.ftc.gov/news-events/news/press-releases/2024/02/nationwide-fraud-losses-top-10-billion-2023-ftc-steps-efforts-protect-public) losses exceeding $10 billion due to fraud, marking a 14% increase from the previous year. This surge highlights the pressing need for awareness and proactive defense against such fraudulent activities. As scams become more sophisticated, individuals and businesses must stay informed to recognize and counter emerging threats. ## Why Are Financial Scams Increasing? Several factors contribute to the rise in financial scams: ### Advancements in Technology AI and deepfake technology enable scammers to create highly convincing frauds. Sophisticated voice cloning and video manipulation allow criminals to impersonate trusted individuals, leading to deceptive schemes such as fraudulent investment pitches or fake emergency requests from family members. ### Economic Uncertainty During times of financial instability, scammers prey on vulnerable individuals by offering fake job opportunities, fraudulent relief programs, and high-return investment schemes. People facing economic hardship may be more susceptible to promises of easy money, making them prime targets for deception. ### Increased Online Activity The shift towards digital transactions has provided scammers with a larger pool of potential victims. As more people manage their finances online, cybercriminals have developed advanced phishing tactics, fake banking websites, and social engineering strategies to gain unauthorized access to financial accounts. ### The Global Nature of Scams With international financial transactions becoming more common, scammers now operate on a global scale. Fraud rings based in one country can target victims worldwide, making it harder for authorities to track and dismantle these operations. The anonymity of cryptocurrency also enables scammers to launder stolen funds more efficiently. ## Common Types of Financial Scams Recognizing various forms of financial scams is the first step in protecting your family. Some prevalent scams include: ### 1. Investment Scams Scammers lure victims by promising substantial financial gains with little to no risk. Many fraudulent schemes operate through Ponzi structures, fake stock opportunities, or deceptive cryptocurrency ventures, preying on people’s desire for quick wealth. Once the money is handed over, victims often find it impossible to recover their investments. #### **Red Flags:** - Guaranteed high returns with little or no risk - Unregistered or unlicensed investment firms - Pressure to invest quickly ### 2. Imposter Scams Scammers pose as trusted figures such as government officials, tech support, or family members in distress to extract money or personal information. A notable example involves AI-driven voice cloning, where fraudsters replicate a loved one’s voice to make urgent, deceptive requests for funds. #### **How to Avoid Imposter Scams:** - Never send money to someone claiming to be a relative in distress without verification. - Ask unexpected callers questions only your real family member would know. - Hang up and call back using a verified number. ### 3. Online Shopping Scams The convenience of online shopping has been exploited by scammers creating fake e-commerce sites or listings. Consumers may pay for goods that never arrive or receive counterfeit products. Scammers often lure victims with extremely low prices and fake customer reviews. #### **How to Spot Fake Online Stores:** - Check for secure payment options (HTTPS, trusted payment gateways). - Read independent reviews (not just those on the website). - Be wary of deals that seem too good to be true. ### 4. Romance Scams Fraudsters create fake online identities to build emotional relationships with victims, eventually requesting money under false pretenses. In 2022, approximately 70,000 individuals [reported](https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2023/02/romance-scammers-favorite-lies-exposed#ft1) falling victim to romance scams, resulting in total losses of $1.3 billion. The median amount lost per person was $4,400. #### **Signs of a Romance Scam:** - The person avoids in-person meetings or video calls. - They claim to be working overseas or in the military. - Requests for money come early in the relationship. ## Emerging Threat: AI-Driven Voice Cloning Scams Advancements in artificial intelligence have introduced new challenges in fraud prevention. AI-driven voice cloning technology enables scammers to mimic voices with high accuracy using just a few seconds of audio. In 2024, [Starling Bank](https://www.starlingbank.com/news/starling-bank-launches-safe-phrases-campaign/) warned that millions could be targeted by such scams, where fraudsters use cloned voices of relatives to request urgent financial help. This development underscores the necessity for robust verification methods beyond voice recognition. ### **How to Defend Against AI Voice Financial Scams:** - Set up a family verification phrase only you and your close relatives know. - If you receive a distress call, hang up and call back using a known number. - Be skeptical of urgent financial requests made over the phone. ## Protecting Your Family from Financial Scams To shield your family from financial scams, consider implementing the following strategies: ### 1. Educate Family Members to Avoid Financial Scams Awareness is a powerful defense. Regularly discuss common scam tactics with family members, including children and elderly relatives, who may be more vulnerable. Share real-world examples to illustrate potential threats and encourage skepticism toward unsolicited communications. ### 2. Establish Verification Protocols Develop family-specific code words or questions that only trusted members would know. This practice can help verify identities during unexpected requests for assistance, especially in scenarios where voice alone may not be reliable due to AI cloning. ### 3. Monitor Financial Accounts Regularly Frequent review of bank statements and credit reports can help detect unauthorized activities early. Set up account alerts for significant transactions to stay informed of account movements. Promptly report any suspicious activity to your financial institution. ### 4. Use Multi-Factor Authentication (MFA) Enhance account security by enabling MFA, which requires multiple forms of verification to access accounts. This adds an extra layer of protection, making it more challenging for unauthorized users to gain access. ### 5. Be Cautious with Personal Information to Avoid Financial Scams Limit the sharing of personal details online, especially on social media platforms. Scammers often gather information from public profiles to craft convincing fraudulent schemes. Regularly review privacy settings to control who can view your information. ### 6. Verify Before Trusting Before responding to unsolicited communications, independently verify the source. Use official contact information to reach out directly to organizations or individuals purportedly making the request. Be wary of high-pressure tactics urging immediate action. ### 7. Consult Financial Professionals Engage with trusted financial advisors to review investment opportunities and financial decisions. Professionals can provide insights into the legitimacy of offers and help navigate complex financial landscapes. This is something we here at nVest Advisors can help with, whether you are a client or not ## **The Role of Financial Institutions in Preventing Financial Scams** Financial institutions play a critical role in fraud prevention. Many banks are enhancing security measures and educating customers about potential scams. For instance, Starling Bank has highlighted the risks associated with AI voice-cloning scams and advises customers to establish “safe phrases” for identity verification. Collaborating with your bank and staying informed about their security protocols can bolster your defenses against fraud. ## Conclusion Protecting your family from financial scams requires a combination of awareness, proactive measures, and collaboration with trusted financial partners. By staying informed about emerging threats like AI-driven scams and implementing robust verification and monitoring practices, you can safeguard your family’s financial future. For personalized guidance and comprehensive financial planning, consider [consulting](https://nvestadvisors.com/) with the professionals at nVest Advisors, who are dedicated to empowering your financial journey. **Categories:** Behavioral Finance --- ### [Understanding the Sunk Cost Fallacy: Why It Matters in Financial Decision-Making](https://nvestadvisors.com/understanding-the-sunk-cost-fallacy/) **Published:** February 25, 2025 **Author:** Maryam Irfanmeer **Content:** # ![sunk cost fallacy](https://nvestadvisors.com/wp-content/uploads/2025/02/pexels-n-voitkevich-6919698-1024x682.jpg "Pexels n voitkevich 6919698 nvest advisors") # **Understanding the Sunk Cost Fallacy: Why It Matters in Financial Decision-Making** Cognitive biases often interfere with rational decision-making, leading individuals to persist in unproductive choices. Among these biases, the sunk cost fallacy is particularly damaging, influencing financial decisions, business strategies, and even personal commitments. Understanding its psychological roots, real-world consequences, and effective ways to counteract it can help individuals and businesses make more strategic, forward-thinking decisions rather than being held back by past investments. **One of the most common challenges we see with investors and small business owners (in many ways, the same mindset) is known as sunk cost fallacy**. This is the belief that a poor business or investing decision must (or even can) be remedied with enough effort or additional money spent on it. This article delves into what the sunk cost fallacy is, its psychological underpinnings, real-world implications, and strategies to mitigate its influence. ## **What Is the Sunk Cost Fallacy?** The sunk cost fallacy occurs when individuals or businesses continue investing in a decision based on past expenditures rather than evaluating its current and future viability. The term “sunk cost” refers to resources already spent—time, money, or effort that cannot be recovered. Instead of making rational choices based on present realities, people let past investments dictate their next move, even when logic suggests cutting losses. ### **A Simple Example** Imagine a company that has invested heavily in developing a new product. Midway through development, market research indicates a declining demand for such a product. Despite this, the company decides to continue the project, citing the substantial resources already invested. This decision exemplifies the sunk cost fallacy, where past investments unduly influence current choices. Another example is when an individual invests in a company that begins having serious financial difficulties, resulting in a significantly reduced stock price. The investor may feel that they should continue to hold that investment, or even add to it, hoping to eventually recover their losses. There is a major difference between holding an investment (or adding to it using the concept of **dollar cost averaging**) during a broad market correction, and placing undue faith in a single company that is having challenges staying afloat on its own. ## **Why Do We Fall for the Sunk Cost Fallacy?** This cognitive bias is deeply rooted in human psychology. Several factors contribute to our inability to walk away from bad investments: ### **1. Loss Aversion and the Fear of Losing Money** People feel losses more intensely than equivalent gains, a concept from [**prospect theory**](https://www.investopedia.com/terms/p/prospecttheory.asp) by Daniel Kahneman and Amos Tversky. Investors often hold onto bad stocks, hoping for a rebound, even when selling would be the wiser choice. Research in the Journal of Economic Behavior & Organization [shows](https://www.jstor.org/stable/2327802) investors are more likely to sell winning stocks while keeping losing ones, worsening their financial outcomes. This aversion can lead to continued investment in failing projects to avoid acknowledging a loss. ### **2. Commitment Bias and the Trap of Past Effort** The more time, money, or energy we put into something, the harder it is to walk away. Businesses continue funding failing projects to justify past investments. A famous example is the **Concorde jet project**, where governments kept spending billions despite clear evidence of commercial failure. This bias also affects personal decisions, keeping people in unfulfilling careers or relationships simply because they have already invested so much. ### **3. Fear of Regret and Avoiding the Pain of a Wrong Decision** Letting go of a failed investment often feels like admitting we made a mistake. This fear of regret makes people continue down a losing path rather than face the emotional discomfort of acknowledging a poor decision. Research in behavioral economics suggests that the anticipation of regret influences decision-making more than the actual consequences of the decision. ### **4. Social and Professional Reputation** Business leaders and investors worry about how abandoning a project may affect their credibility. In corporate environments, decision-makers persist with failing ventures to avoid appearing indecisive or incompetent. ## **Empirical Evidence** Research has consistently demonstrated the prevalence of the sunk cost fallacy: - A [study](https://onlinelibrary.wiley.com/doi/10.1002/mar.21750) published in Psychology & Marketing examined how childhood environments influence susceptibility to the sunk cost fallacy. The researchers found that individuals from lower socioeconomic backgrounds are more prone to this bias due to heightened loss aversion developed during childhood. This suggests that early-life resource scarcity can program individuals to perceive the loss of prior investments as more wasteful, leading to irrational commitment to failing endeavors. - A [study](https://www.businessthink.unsw.edu.au/articles/sunk-costs-investment-decisions?utm_source=chatgpt.com) by The Wharton School of the University of Pennsylvania found that firms systematically fall into the sunk cost fallacy, leading to distorted investment decisions. Analyzing acquisitions from 1980 to 2016, the research showed that firms were 8–9% less likely to divest from failing deals if their stock price had risen post-announcement. CEOs who initiated the deals were especially prone to justifying past investments rather than making rational financial choices. This highlights how sunk costs drive firms to persist in unprofitable ventures, ultimately harming performance. ## **How to Mitigate the Sunk Cost Fallacy** Escaping the grip of the sunk cost fallacy isn’t easy. The weight of past investments can cloud judgment, making it difficult to cut losses and move forward. However, by shifting your mindset and adopting rational decision-making strategies, you can avoid the trap of throwing good money after bad. #### **Shift from Past Costs to Future Gains** One of the biggest mistakes people make is evaluating decisions based on what they’ve already spent rather than what they stand to gain. Instead of asking, “How much have I invested?” ask, “What is the best decision moving forward?” This small shift forces you to focus on future benefits rather than sunk costs. Research in behavioral finance suggests that those who make future-oriented decisions rather than clinging to past investments tend to experience better financial outcomes. #### **Set Boundaries Before You Invest** One of the most effective ways to avoid falling into the sunk cost fallacy is to establish clear exit points before committing to an investment, business, or project. For instance, traders set stop-loss orders (this is something we do regularly for our investing clients), define ahead of time what the objective criteria will be for deciding when to enter and exit an investment (with a rule that how we feel emotionally at any given moment will not be one of those criteria), entrepreneurs define key performance indicators, and businesses outline budget limits before launching a venture. Without predefined boundaries, emotions take over, making it harder to walk away when things go south. #### **Detach Emotion from Financial Decisions** The stronger the emotional attachment, the harder it is to let go. People tend to persist in failing projects because they feel a personal connection, whether it’s a business they’ve built from the ground up or an investment they’ve defended for years. Viewing financial decisions objectively rather than emotionally can help break this cycle. Many successful investors apply strict risk management strategies, ensuring decisions are based on data rather than personal attachment. This is important when looking at your financial professional relationships, as well Having a financial advisor who doesn’t always beat the market (none of us do), isn’t necessarily a reason to seek a new advisor relationship. But just being afraid of hurting their feelings when they fail consistently to produce value for you over time, might be a valid reason to consider seeking a second opinion. #### **Understand That Quitting Isn’t Failing** The fear of being wrong keeps people tied to bad decisions. Admitting that an investment was a mistake can feel like failure, but in reality, recognizing a lost cause and pivoting is a mark of strong decision-making. Some of the world’s top investors and business leaders have walked away from massive projects when the numbers no longer made sense. Knowing when to cut your losses is a sign of wisdom, not defeat. #### **Evaluate the Opportunity Cost** Every investment should be seen as having both opportunity, and an [**opportunity cost**](https://www.investopedia.com/terms/o/opportunitycost.asp). Every dollar and every hour spent holding onto a poor investment is a missed opportunity elsewhere. Instead of asking whether to continue, ask yourself, “What better use of my resources exists?” A ***2023 study*** found that businesses that reallocated funds from failing projects into stronger opportunities saw higher overall growth than those that stubbornly persisted with underperforming initiatives. #### **Seek Outside Perspective** When caught in the middle of a decision clouded by sunk costs, an external opinion can be invaluable. Unbiased feedback from a financial expert, mentor, or even a trusted friend can help you see the situation more clearly. Often, outsiders can recognize when emotions are distorting judgment long before the person experiencing it does (the hard part then, is, overcoming another cognitive challenge: **confirmation bias**, which is the belief that our opinions and beliefs tend to always be the correct ones). ### **Conclusion** The sunk cost fallacy is a powerful psychological trap that can lead to poor financial decisions. Recognizing when past investments are influencing your choices allows you to shift focus toward future gains rather than irreversible losses. Whether in personal finance, business, or investing, the key is to approach each decision with clarity and objectivity. If you’re looking for expert guidance to navigate complex financial decisions, **[nVest Advisors](https://nvestadvisors.com/)** can help. Our team provides personalized strategies to ensure your resources are working toward your long-term success. **Schedule a [consultation](https://nvestadvisors.setmore.com/) today and take the next step toward smarter financial choices.** **Categories:** Behavioral Finance, Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investment, Investment Markets, Mailchimp, Plan Participants, public, Retirement, Small Business, Texas Teachers Retirement **Tags:** behavior, behavioral finance, consumer, finance, financial, invest, investing, portfolio, professional, sunk cost, sunk cost fallacy --- ### [Business Budgets: A Step-by-Step Guide to Set Up](https://nvestadvisors.com/business-budget-a-step-by-step-guide-to-set-up/) **Published:** February 19, 2025 **Author:** Maryam Irfanmeer **Content:** # ![create a business budget for small business](https://nvestadvisors.com/wp-content/uploads/2025/02/pexels-jakubzerdzicki-27960363-1024x683.jpg "Pexels jakubzerdzicki 27960363 nvest advisors") # Business Budgets: A Step-by-Step Guide to Set Up A business budget is more than just numbers on a spreadsheet. It is a strategic financial plan that helps small business owners manage cash flow, minimize financial risks, and maximize growth opportunities. Without a structured budget, businesses often face overspending, debt accumulation, and revenue shortfalls, ultimately leading to financial instability. ## **Why a Business Budget is Essential for Small Business Owners** A recent[ U.S. Bank](https://spend.usbank.com/blog/cash-flow-monitoring-strategies-for-small-businesses-tips-and-best-practices/#:~:text=In%20fact%2C%20according%20to%20The,in%20data%20entry%20and%20calculation.) study found that 82% of small businesses fail due to cash flow issues. Many business owners struggle to track their income and expenses, leading to financial shortfalls that can disrupt operations, delay growth, and even force closures. Without a structured budget, it becomes difficult to allocate resources effectively, prepare for unexpected costs, or invest in long-term success. A well-crafted budget isn’t just about tracking numbers, it’s a strategic tool that helps you set financial goals, control spending, and make informed decisions. It provides a clear picture of where your money is going, allowing you to identify wasteful expenses, optimize cash flow, and ensure profitabilit**y. If your business lacks a defined budget, now is the time to establish one**. By doing so, you’ll create a solid foundation for stability, growth, and financial resilience. ### **Step 1: Track and Analyze Business Revenue** A solid budget starts with a clear understanding of your revenue. Knowing where your income comes from allows you to plan effectively, manage cash flow, and make strategic financial decisions. To get an accurate picture of your revenue, identify all the sources contributing to your business income. These may include: - **Sales from products or services** – The core of your business revenue, whether from one-time purchases or recurring clients. - **Contracts and retainers** – Ongoing agreements with clients that provide predictable income. - **Subscription or membership fees** – Regular payments from customers who subscribe to your services. - **Other income sources** – This could include commissions, licensing fees, or any passive revenue streams. Many small businesses experience seasonal revenue fluctuations, with a significant portion of their annual income concentrated during specific periods. For instance, a study by [Constant Contact](https://www.prnewswire.com/news-releases/new-study-from-constant-contact-shows-how-heavily-small-businesses-rely-on-holiday-sales-to-meet-yearly-revenue-goals-301973311.html?utm_source=chatgpt.com) revealed that 50% of small businesses generate more than 25% of their annual sales during the holiday season. To maintain financial stability throughout the year, it’s crucial to analyze revenue trends. Utilizing accounting software such as [QuickBooks](https://quickbooks.intuit.com/global/oa/online-accounting-software-for-small-business/?cid=ppc_QBO_PK_B_Intuit-QuickBooks_BMM_G_S&gad_source=1&gclid=CjwKCAiAzba9BhBhEiwA7glbart9LQ4KW3D_ZZ34cSrKDTaghqxQfSJvWbtuglqN-Zv-4I9Uo9t7VRoCa0QQAvD_BwE&gclsrc=aw.ds) or [FreshBooks](https://www.freshbooks.com/?srsltid=AfmBOorXhVFN4kXsU3s289CO32l0uGVL9L_ukl3QzIbhth5z8EA_HoAz) can help you monitor these patterns. This data enables you to predict future earnings and prepare for slower periods by setting aside financial reserves, ensuring your business remains resilient despite seasonal fluctuations. ### **Step 2: Categorize and Prioritize Business Expenses** Small business owners often overlook certain costs, which can lead to unexpected financial strain. To create an effective business budget, categorize expenses into three main groups: #### **Fixed Costs: Essential Monthly Expenses** These are predictable expenses that remain constant regardless of sales volume. Examples include: - Rent or lease payments - Employee salaries and benefits - Business insurance - Loan repayments - Software subscriptions for accounting, marketing, or project management #### **Variable Costs: Expenses That Fluctuate** These costs change based on business activity. They include: - Marketing and advertising expenses - Raw materials and inventory purchases - Freelance or contractor fees - Shipping and logistics #### **Hidden Costs: Unexpected Financial Strains** Many small business owners underestimate hidden costs, which can erode profit margins over time. Examples include: - Payment processing fees for online transactions - Equipment maintenance and replacements - Regulatory compliance fees - Inventory shrinkage from theft or damages ## Step 3: Build an Emergency Fund in Your Business Budget Unexpected expenses can arise at any time, from equipment breakdowns to sudden legal fees or supply chain disruptions. Without a financial cushion, even a minor setback can strain cash flow and disrupt operations. Setting aside a portion of your revenue each month—ideally 10-20% creates a reserve that allows you to handle surprises without scrambling for external funding. This fund acts as a safeguard, ensuring that short-term issues don’t turn into long-term financial struggles. With a solid backup plan in place, you can make strategic decisions with less stress, knowing your business can weather unforeseen challenges and continue growing steadily. ## **Step 4: Reduce Costs and Increase Profitability** Budgeting is not just about tracking expenses, it is about making smart financial decisions. Improving profit margins involves optimizing spending and increasing efficiency. Consider these strategies: - **Negotiate with suppliers** to secure better pricing on raw materials and services. - **Automate administrative tasks** using software to reduce labor costs. - **Invest in high-ROI marketing strategies**, such as SEO and targeted advertising, to generate more revenue with lower expenses. - **Monitor cash flow daily**, as companies that do so are **40% less likely to experience liquidity issues**. ### **Step 5: Optimize Tax Planning to Maximize Savings** Taxes can be one of the most significant expenses for small businesses. Strategic tax planning helps reduce liabilities and increase profitability. Some effective strategies include: - **Leveraging tax deductions** for business expenses, including office space, equipment, and travel. - **Structuring your business appropriately** (LLC, S-corp, or C-corp) to take advantage of tax benefits. - **Tracking quarterly estimated taxes** to avoid penalties and cash flow issues. - **Working with a tax professional** to ensure compliance and identify potential tax-saving opportunities. ### Step 6: Regularly Review and Adjust Your Business Budget A budget is not a fixed document but a dynamic tool that should evolve with your business. Regular reviews help ensure that financial planning remains aligned with current goals, market conditions, and operational realities. Assessing revenue trends allows you to compare actual earnings with projections, providing insight into whether adjustments are needed. Analyzing expenses helps identify rising costs, areas of inefficiency, and opportunities for better resource allocation. It is equally important to evaluate growth potential by reallocating funds to initiatives that show promise while refining investments in areas that are not delivering expected results. Consistent budget adjustments keep a business financially agile. This proactive approach not only safeguards against financial strain but also positions the business to capitalize on new opportunities with greater confidence. ## **Bottom Line** A well-structured business budget is the foundation of financial stability and long-term success. It provides clarity, minimizes financial risks, and ensures your business is always prepared for growth opportunities or unexpected challenges. By consistently tracking revenue, managing expenses, and making strategic financial adjustments, you can build a strong, resilient business that thrives in any market condition. **If you need expert guidance in creating a budget tailored to your business, our team at nVest Advisors is here to help. Book a free [consultation](https://nvestadvisors.com/) today and take the first step toward smarter financial management.** **Categories:** Business Stories, Client News, Financial Planning, Mailchimp, public, Small Business --- ### [The Social Security Fairness Act of 2025](https://nvestadvisors.com/social-security-fairness-act/) **Published:** February 15, 2025 **Author:** Maryam Irfanmeer **Content:** # ![The Social Security Fairness Act of](https://nvestadvisors.com/wp-content/uploads/2025/02/pexels-rdne-7821544-e1738928629428-1024x682.jpg "Pexels rdne 7821544 nvest advisors") # **The Social Security Fairness Act of 2025** The Social Security Fairness Act of 2025 is a groundbreaking piece of legislation that addresses one of the most significant financial challenges faced by public servants in the United States. A new law, signed into effect on January 5, 2025, removes two provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which had historically reduced or even eliminated Social Security benefits for federal employees, teachers, police officers, firefighters, and other public service workers. In this guide, we break down what the Social Security Fairness Act means for you, how it solves long standing problems, and how it changes the retirement landscape for public servants moving forward. ## **What is the Social Security Fairness Act of 2025?** The fundamental goal of the Social Security Fairness Act was to alleviate the financial inequality experienced by those who held government jobs that were not covered by Social Security. Before this law, the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) decreased Social Security benefits for people who worked in public service, such as teachers, state and local employees, and federal employees under the Civil Service Retirement System (CSRS). In order to account for the fact that workers in these positions did not contribute to Social Security while employed by the government, they were nevertheless eligible to collect benefits from their previous employment. Unfortunately, these rules often resulted in unfair reductions to Social Security benefits, leaving individuals with much lower retirement income than they anticipated. The Social Security Fairness Act of 2025 eliminates these provisions for all future claims, as well as retroactively for claims beginning in January 2024. This change ensures that those who were previously affected will now receive their full Social Security benefits. Millions of public servants, including federal retirees, teachers, police officers, and firefighters, will see an immediate increase in their Social Security benefits as a result of this new law. ## **How the Act Solves Real Financial Problems for Public Servants** For years, public servants have faced a challenging financial reality. Despite spending decades in careers dedicated to serving the public, they were unfairly penalized when it came time to access their Social Security benefits. These penalties often caused substantial financial hardship, particularly for retirees on a fixed income who relied on Social Security as a significant portion of their retirement income. Now that the WEP and GPO provisions have been repealed, public servants can breathe easier knowing their Social Security benefits will no longer be unfairly reduced or eliminated. Here’s how the Social Security Fairness Act specifically addresses these long-standing problems: ### **1. Increased Social Security Benefits for CSRS Retirees** Federal employees under the Civil Service Retirement System (CSRS) and CSRS Offset were previously penalized under the WEP. This provision unfairly reduced Social Security benefits for those workers who had significant work histories but were penalized because they had a pension that wasn’t covered by Social Security. With the repeal of the WEP, these federal employees will now receive the full Social Security benefit based on their work history. For example, a CSRS retiree with a long career in federal service and additional earnings outside the federal government that qualified for Social Security could previously have seen their Social Security benefit reduced by as much as 60% under the WEP. Now, they will receive the full benefit they earned, without any penalty. ### **2. Restored Spousal and Widow Benefits** Under the GPO, spouses or widows of Social Security contributors who themselves received a government pension had their spousal Social Security benefits reduced or eliminated entirely. This was especially problematic for surviving spouses who relied on those spousal benefits to help maintain their financial stability after the death of their spouse. Now, with the repeal of GPO, surviving spouses will be eligible for the full Social Security survivor benefits without penalties. The repeal also ensures that current spouses who are not eligible for Social Security on their own can receive the full spousal benefits they are entitled to, based on their partner’s work record. For example, a widow who was previously receiving a reduced Social Security benefit due to the GPO will now see an increase in her monthly check, as the benefit she is entitled to from her deceased spouse will no longer be reduced. ### **3. Social Security Fairness Act for State and Local Government Workers** State and local government workers, such as teachers, firefighters, police officers, and other public service employees, were also significantly impacted by the WEP and GPO. Many of these individuals contributed to their pensions but were still penalized when they worked in private-sector jobs and paid into Social Security. The WEP disproportionately reduced their Social Security benefits, while the GPO penalized those who might have otherwise qualified for spousal benefits. Now, teachers who have long careers in public schools and also contribute to Social Security through private-sector jobs will receive full Social Security benefits based on their actual work history. Similarly, police officers and firefighters who were penalized under the GPO when their spouses earned Social Security benefits will no longer face a reduction, ensuring they receive the benefits they are entitled to. This change allows public service workers to retire with greater security, knowing that their hard-earned Social Security benefits will not be reduced due to their public service careers. ## **What You Need to Know About the Changes** For those impacted by the Social Security Fairness Act, it’s important to understand the steps you can take to maximize your benefits and ensure that you receive the full entitlement you are now eligible for. #### **1. Verify Your Social Security Benefit Records** If you are a public servant who has been affected by the WEP or GPO, now is the time to verify your Social Security records. With the Social Security Fairness Act of 2025 repealing these provisions, the Social Security Administration (SSA) will begin adjusting your benefits retroactively. It’s important to make sure your personal information, such as your address and bank account details, is up to date with the SSA to avoid any delays in receiving your increased benefits. The SSA has started the process of implementing these changes, but it may take some time for all affected individuals to see the adjusted benefits. Therefore, ensuring your details are correct will help streamline the process and ensure you receive the full benefits you’re entitled to. #### **2. Retroactive Payments Will Be Issued** The Social Security Fairness Act guarantees that you will be compensated retroactively for any Social Security benefits that you lost as a result of the prior penalties if you were a WEP or GPO subject. These payments will be distributed as a lump sum based on the amount you were underpaid. The SSA is actively working on this change and has suggested that it may take [over a year](https://www.cassidy.senate.gov/newsroom/press-releases/cassidy-leads-colleagues-in-calling-for-quick-implementation-of-the-social-security-fairness-act/) to review cases manually, update benefits, and distribute all retroactive payments required by the Social Security Fairness Act. #### **3. Seek Professional Guidance for Financial Planning** **The Social Security Fairness Act has a big impact on how you plan for retirement**. For financial planners, this involves updating retirement income forecasts and recalculating how much you can count on Social Security in the future. It is strongly advised that you speak with a financial counselor to modify your financial plan if you are unclear how this law may impact your particular financial situation. ## Implications of the Social Security Fairness Act for Small Businesses Even though the Social Security Fairness Act of 2025 mostly targets individual seniors, **small businesses should be mindful of how the change may impact their operations**, particularly if they plan to hire older workers or employ retirees from the public sector. The following are important factors for small business entrepreneurs to think about: ### **1. Payroll Tax Reporting Adjustments** Payroll tax reporting may be impacted by the increase in Social Security payments for small firms that hire retirees from the public sector. Retirees may experience changes in their income levels as their benefits increase, which may have an effect on their tax bracket and the way payroll taxes are deducted. Employers should stay informed about these changes and adjust their payroll tax processes accordingly. ### **2. Reviewing Employee Retirement Benefits** The increased Social Security benefits for public sector retirees could alter their retirement expectations, possibly reducing their reliance on employer-sponsored retirement plans. Small businesses may need to review and potentially adjust their retirement benefit offerings to stay competitive and align with the evolving needs of their workforce, especially as some employees may now rely more on Social Security benefits rather than private retirement savings. ### **3. Overlooking Business Deductions** Small business owners should be mindful of potential tax deductions they may overlook, including home office expenses, vehicle mileage, health insurance premiums for self-employed individuals, and retirement contributions like SEP IRAs. Additionally, the Social Security Fairness Act may introduce new considerations for business owners, especially regarding employee benefits. **Tip**: Keep detailed records of business expenses and consult a tax professional to ensure you are claiming all eligible deductions. Staying informed about tax law changes, including those introduced by the Social Security Fairness Act, is essential for optimizing tax filings. In conclusion, the Social Security Fairness Act of 2025 offers significant financial relief to public servants by ensuring they receive the full Social Security benefits they’ve earned. For small businesses, it’s essential to stay informed and adjust retirement benefit offerings accordingly. **If you’re looking to make informed decisions about your retirement or need expert advice on financial planning, consider consulting with nVest Advisors.** Our advisor team can guide you through these changes and help you secure a stable financial future. **Reach out to us by [scheduling a meeting](https://nvestadvisors.com/) with one of our advisors today!** **Categories:** Business Stories, Client News, Client Service, Company News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, LifeCycle, Mailchimp, Media, Plan Participants, Podcasts, Press Releases, public, Retirement, Texas Teachers Retirement --- ### [DeepSeek vs ChatGPT: AI’s Financial Impact Explained](https://nvestadvisors.com/deepseek-vs-ai-rivalry-a-financial-advisors-perspective-on-the-impact-of-deepseek-and-chatgpt/) **Published:** February 14, 2025 **Author:** Maryam Irfanmeer **Content:** # ![DeepSeek vs chatgpt](https://nvestadvisors.com/wp-content/uploads/2025/02/pexels-bertellifotografia-30530424-1024x682.jpg "Pexels bertellifotografia 30530424 nvest advisors") # DeepSeek vs ChatGPT: AI’s Financial Impact Explained The artificial intelligence landscape is constantly evolving, and new players are emerging with the potential to reshape industries in unprecedented ways. Among these players, DeepSeek and ChatGPT are gaining considerable attention for their unique capabilities and advanced features. As an investor, it’s crucial to understand the potential impact of these AI models, not just for technology enthusiasts, but also for individuals and businesses making critical financial decisions. This blog will explore the rivalry between DeepSeek and ChatGPT, focusing on their differences, potential applications, and the broader economic implications that could shape the future of finance and business. ## What is DeepSeek? DeepSeek is a highly advanced AI model that is often compared to other popular models like OpenAI’s ChatGPT. While the details of DeepSeek’s development and algorithms are less publicly known than ChatGPT, what sets it apart is its specific focus on deep data analysis, pattern recognition, and predictive modeling. DeepSeek has the ability to process vast amounts of information in real-time, enabling it to generate insights from complex data sources that would be otherwise difficult for humans or traditional algorithms to decipher. This ability makes DeepSeek particularly valuable for industries such as finance, healthcare, and logistics, where data-driven decisions are critical. For financial professionals, DeepSeek represents an opportunity to leverage artificial intelligence to enhance portfolio management, conduct market analysis, and predict future financial trends with a higher degree of accuracy. ## ChatGPT and its AI Rivalry with DeepSeek ChatGPT, developed by OpenAI, has quickly gained traction as one of the most widely used conversational AIs in the world. Known for its ability to understand natural language and engage in dynamic conversations, ChatGPT’s primary strength lies in its language generation abilities. It can assist users in everything from drafting emails to answering questions, and it has even been used in customer service applications. However, when it comes to financial analysis, DeepSeek may have the upper hand. While ChatGPT is impressive in terms of language and conversational capabilities, DeepSeek’s edge comes from its ability to process large sets of data, recognize trends, and generate predictions based on complex patterns. In short, DeepSeek excels in areas where raw data processing and predictive analytics are required. So, where does this rivalry leave us? ## DeepSeek’s Potential Impact on Stock Markets With AI tools like DeepSeek becoming more powerful, their impact on the stock market could be profound. Here’s how: ### 1. **Improved Market Predictions and Forecasts** AI tools like DeepSeek have the ability to process large sets of data from financial markets, global economic trends, and corporate performance. By recognizing patterns that would be difficult for human analysts to spot, DeepSeek could offer more accurate market predictions, providing investors with a competitive edge. For example, imagine using DeepSeek to predict stock movements based on an analysis of market sentiment, interest rates, and political events. DeepSeek could help identify opportunities that might otherwise go unnoticed, allowing investors to make more informed decisions. This increased accuracy could lead to more efficient markets, where prices reflect true value more quickly, which could result in less volatility. On the other hand, if too many investors start using similar AI tools, this could lead to overreaction in the markets, causing prices to become overly influenced by AI-driven predictions. ### 2. **Enhanced Risk Management** Investors are always looking for ways to manage risk, and AI models like DeepSeek can play a significant role in this area. DeepSeek’s predictive capabilities could help investors and financial advisors identify potential risks more accurately and in real-time. It could predict changes in the stock market before they happen, allowing investors to adjust their portfolios accordingly. For example, DeepSeek might detect signs of a market downturn or a sector-specific decline before it becomes widely apparent. By identifying these risks early, investors could sell off at-risk assets or hedge their portfolios against potential losses. In terms of financial advice, risk management will become even more data-driven and less reliant on traditional methods. Financial advisors who adopt AI tools like DeepSeek will be able to offer clients more personalized and timely risk assessments. ### 3. **Automation of Investment Strategies** Another major impact of DeepSeek and similar AI technologies is the potential for automating investment strategies. By analyzing vast amounts of market data and executing trades based on that analysis, AI could automate many of the investment decisions that are currently made manually by traders and financial advisors. Automated investment strategies, like robo-advisors, are already on the rise, and tools like DeepSeek could take them to the next level by enabling more sophisticated and data-driven decision-making. At nVest Advisors, we are early technology adopters; being one of the first small independent advisory firms to employ robo-advisory services all the way back in 2015. ## Is It a Good Time to Invest in AI Companies Like DeepSeek? ***It is important that you understand that as a fiduciary advisory firm, we cannot, nor would we ever, give specific investment advice to the general public. By law, specific investment advice or planning recommendations can only be given after you have entered into a client agreement. So the following information should be taken as the genera observations of our firm, and in no way constitute specific investment advice. Always consult with your financial professional before making any investing decision.*** Given the growing importance of AI technologies like DeepSeek and ChatGPT, many investors are looking at AI-driven companies as potentially lucrative investments. But is now a good time to invest in AI stocks, or should you wait? Here are some factors to consider: ### 1. **Current Market Conditions** As with any investment, the broader market conditions are crucial. The stock market has seen significant volatility over the past few years, influenced by global events such as the COVID-19 pandemic, inflation, war, and economic uncertainty. The rise of AI ***might*** be a silver lining in an otherwise uncertain market, but it’s important to consider whether the market is currently overpriced, or if there are opportunities to invest at a more reasonable valuation. ### 2. **Long-Term vs. Short-Term Gains in AI Stocks like DeepSeek** AI stocks, particularly those focused on cutting-edge technologies like DeepSeek, may be suitable for long-term investments. These companies are still in their early stages, and while there are significant growth prospects, they may face extreme volatility – to the point of total business failure – in the short term. If you’re looking for quick gains, AI stocks might not be the best option, as their potential, like all quality investments, appears to be more sustainable over a longer time horizon. #### 3. **Diversification and Risk** As a financial advisor, we always emphasize the importance of diversification. While AI is a promising area for growth, it should never be the sole focus of an investment portfolio. Make sure that your portfolio is balanced with exposure to other sectors, such as healthcare, consumer goods, and real estate. While AI could drive major changes in the market, it’s crucial to have a diversified investment approach that minimizes risk. At nVest, we can create a custom portfolio for your needs and risk tolerance that includes some specialty areas of interest like AI or cryptocurrency, but we will always stress the importance of minimizing overexposure in any one niche, sector, company, or commodity. ## Problems with AI: Security Breaches and Other Risks While AI technologies like DeepSeek and ChatGPT bring significant promise, they also come with their own set of challenges. One of the biggest concerns is security. As AI systems become more integrated into financial services, the risk of cyberattacks increases. Hackers could exploit vulnerabilities in AI systems to manipulate data or disrupt services, leading to potential financial losses. Another issue is the possibility of bias in AI models. If not carefully managed, AI can perpetuate biases in data, which could result in unfair or inaccurate predictions. This is particularly concerning in areas like finance, where biased decision-making can lead to discriminatory practices or poor investment choices. Furthermore, AI models are only as good as the data they are trained on. Inaccurate, outdated, or incomplete data can cause AI systems to make erroneous predictions, which could negatively affect decision-making processes in finance and other industries. ## Is AI the Right Investment for You? Why It Might *Not* Be While AI technologies like DeepSeek and ChatGPT are gaining attention for their potential, investing in AI may not be suitable for all investors. The AI industry is still in a developmental phase, and with that comes a level of uncertainty about which companies will truly succeed. Some investors may find it difficult to navigate this uncertainty, especially given the rapid pace of technological advancements and evolving market conditions. Moreover, many AI companies, especially startups or those in early stages, face significant risks, to the point of total company failure and complete loss of your investment capital. These companies are often not yet profitable, and their growth potential is still being tested in the marketplace. This makes them inherently more volatile and subject to sudden shifts. Investors who rely on a stable income or need liquidity might find these investments too risky. The ethical and regulatory uncertainties around AI may also deter some investors. It’s crucial for investors to assess their risk tolerance, investment goals, and the level of uncertainty they’re willing to accept before diving into any kind of investments. ## Bottom Line: Our General Recommendations Here are some key pieces of advice for DIY investors considering the DeepSeek vs AI rivalry: 1. **Do Your Research:** Make sure to understand the specific AI technologies and companies you’re investing in. DeepSeek and ChatGPT may be game-changers, but not all AI companies will succeed. Research the companies behind the technology and their track record. 2. **Stay Informed:** The world of AI is evolving rapidly, so it’s essential to stay updated on the latest developments. Follow news, read reports, and keep an eye on how AI companies are performing in the market. 3. **Be Cautious with Short-Term Bets:** If you’re looking to invest in AI, remember that it’s a long-term play. AI companies may face volatility, from lucrative buyouts or tech breakthroughs, all the way to total failure of the company and its project. Also, it’s a very speculative space right now, and so short-term fluctuations in stock prices can be difficult to predict. 4. **Consider ETFs or Funds:** For investors who are uncertain about picking individual AI stocks, consider ETFs (exchange-traded funds) that focus on AI and technology sectors. These funds offer exposure to a wide range of companies involved in AI and help spread risk. While AI presents a promising growth opportunity, it’s essential for investors to remain cautious and ensure their portfolios are diversified and aligned with long-term financial goals. Whether you’re looking to invest in AI companies or leverage AI to make smarter financial decisions, staying informed and seeking professional advice is crucial. Expert guidance can help you navigate this rapidly evolving technology landscape, minimizing risk and maximizing potential returns. At [nVest Advisors](https://nvestadvisors.com/), our team of professionals is here to offer personalized strategies and insights, ensuring that your investments are well-positioned for the future. [Reach out to us today](https://nvestadvisors.setmore.com/) and let our fiduciary experts help you make informed, strategic choices that protect and grow your wealth. **Categories:** Behavioral Finance, Business Stories, Client News, Client Service, Company News, Cryptocurrency, Economic Updates, Economy, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, Media, Plan Participants, Press Releases, public, Small Business --- ### [Understanding the 2025 tax brackets](https://nvestadvisors.com/understanding-the-2025-tax-brackets/) **Published:** January 23, 2025 **Author:** Maryam Irfanmeer **Content:** # ![tax brackets](https://nvestadvisors.com/wp-content/uploads/2025/01/pexels-n-voitkevich-6863244.jpg "Pexels n voitkevich 6863244 nvest advisors") # **Understanding the 2025 tax brackets** As tax season approaches, it’s essential to understand the changes to 2025 tax brackets for federal income tax. The IRS has adjusted the 2025 tax brackets to account for inflation, impacting both individuals and businesses. Let’s break down the key updates and how they could affect your financial planning. ## **1. Understanding the 2025 Tax Brackets** For 2025, there are seven federal income tax brackets. These brackets determine how much tax you owe on different portions of your income. The more you earn, the higher the rate applied to your taxable income over certain thresholds. Here’s a look at the updated 2025 tax brackets: - **10%**: Up to $11,000 for single filers, up to $22,000 for married couples filing jointly. - **12%**: $11,001 – $44,725 for single filers, $22,001 – $89,450 for married couples. - **22%**: $44,726 – $95,375 for single filers, $89,451 – $190,750 for married couples. - **24%**: $95,376 – $182,100 for single filers, $190,751 – $364,200 for married couples. - **32%**: $182,101 – $231,250 for single filers, $364,201 – $462,500 for married couples. - **35%**: $231,251 – $626,350 for single filers, $462,501 – $751,600 for married couples. - **37%**: Over $626,350 for single filers, over $751,600 for married couples. ## **2. Standard Deduction and Personal Exemption** The[ standard deduction](https://taxfoundation.org/taxedu/glossary/standard-deduction/) will increase by $400 for single filers and by $800 for joint filers (Table 2). Seniors over age 65 may claim an additional standard deduction of $2,000 for single filers and $1,600 for joint filers. The personal exemption for 2025 remains at $0 (eliminating the personal exemption was part of the Tax Cuts and Jobs Act of 2017 (TCJA). | Filing Status | Deduction Amount | |---|---| | Single | $15,000 | | Married Filing Jointly | $30,000 | | Head of Household | $22,500 | ## **3.Earned Income Tax Credit (EITC) Adjustments** The EITC is designed to help lower-income workers. In 2025, the credit amount will vary depending on your filing status, number of children, and income. Be sure to check the updated guidelines to determine eligibility and how much you can claim. ![](https://nvestadvisors.com/wp-content/uploads/2025/01/Green-and-White-Simple-Beauty-Treatment-Comparison-Chart-1-1.webp "Green and white simple beauty treatment comparison chart 1 1 nvest advisors") ## **4. Alternative Minimum Tax (AMT) Exemption Phaseout Thresholds** For 2025, the AMT exemption amounts will increase slightly due to inflation adjustments. The exemption phaseout begins at higher income levels, which can affect high-income earners. It’s essential to consider whether you may be impacted by the AMT and plan accordingly. The AMT exemption amount for 2025 is $88,100 for singles and $137,000 for married couples filing jointly. ## **5. Child Tax Credit** The child tax credit, which is not inflation-adjusted, has a maximum of $2,000 per eligible child. After accounting for inflation, the child tax credit’s refundable component will stay at $1,700 in 2025. ## **6. Capital Gains Tax Rates and Brackets** Capital gains tax rates are updated alongside ordinary income tax brackets. Long-term capital gains (on assets held for over a year) remain taxed at favorable rates, ranging from 0% to 20%, depending on your taxable income. Short-term capital gains are taxed at regular income tax rates. Understanding these changes can help with your investment strategy. ## **7. Qualified Business Income Deduction** Small business owners and self-employed individuals can benefit from the Qualified Business Income (QBI) deduction. This deduction allows eligible taxpayers to deduct a percentage of their qualified business income, which can reduce taxable income and save on taxes. Limits on the deduction begin phasing in for taxpayers with income above $197,300 (or $394,600 for joint filers) in 2025. sources: https://taxfoundation.org/data/all/federal/2025-tax-brackets/ To make sure you’re taking full advantage of your tax benefits for 2025, it’s important to stay up to date on how the IRS changes will affect your filing as a result of the updated tax brackets and credit adjustments. These changes may have an impact on your tax liability or your potential savings. For more details and comprehensive tax planning guidance, think about speaking with a tax professional to be sure you’re optimizing your 2025 tax benefits. Click [here](https://nvestadvisors.setmore.com/) to follow with up with one of our experts at [nVest advisors](https://nvestadvisors.com/) for customized plans and assistance ! **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investing General, Mailchimp, Media, Plan Participants, Press Releases, public, Retirement, Small Business, Texas Teachers Retirement --- ### [Top Budgeting Tips for Families to Build a Stronger Financial Future](https://nvestadvisors.com/budgeting-tips-for-families/) **Published:** January 23, 2025 **Author:** Maryam Irfanmeer **Content:** ![best budgeting tips for families](https://nvestadvisors.com/wp-content/uploads/2025/01/pexels-mikhail-nilov-6964353.jpg "Pexels mikhail nilov 6964353 nvest advisors") # **Top Budgeting Tips for Families to Build a Stronger Financial Future** Budgeting Tips for Families are not just about cutting corners, they’re about making the most of what you have and building a secure, happy future. A well-thought-out family budget can help reduce financial stress, make room for memorable experiences, and ensure everyone’s needs are met. By planning together, you’re not just saving money, you’re strengthening your family bond. Budgeting is at the heart of a happy, stress-free family life. It’s not just about numbers on a spreadsheet, it’s about creating a plan that works for your unique family, helps you achieve dreams together, and brings peace of mind. Let’s dive into some real-life budgeting tips for families that make life simpler and more fulfilling. ## **Why Budgeting Tips for Families Matter** - ### **Facing Common Challenges with Budgeting** Life is full of unexpected twists, and without a solid budget, even small expenses can quickly spiral into larger financial challenges. From stocking up on diapers to planning family vacations, the costs of family life add up fast. But budgeting isn’t just about cutting corners or pinching pennies. It’s about creating a plan that reflects your family’s values and helps you achieve your goals. For growing families, the financial demands can feel overwhelming. Everyday essentials like groceries and housing blend with surprises like medical bills or last-minute school projects, making it all feel like a delicate balancing act. The right budgeting strategies don’t just help you stay afloat. They give you the tools to face life’s financial curveballs with confidence, clarity, and less stress. ## **The Benefits of Budgeting Tips for Families** - ### **Track Spending and Cut Unnecessary Costs Track Spending and Cut Unnecessary Costs** One of the most important budgeting tips for families is to start by tracking your expenses. A detailed breakdown allows you to identify areas where you may be spending more than necessary. Perhaps you’ve forgotten about those unused subscription services or are eating out more than planned. With a budget, you can plug these leaks, saving money for more important goals. - ### **Budgeting Tips for Families to Ensure Savings for Emergencies and Future Plans** Life’s unexpected events like car repairs, medical emergencies, or job changes are much easier to handle when you’ve set aside money for them. Budgeting tips for families stress the importance of building an emergency fund. It’s the peace of mind that helps you keep going when things don’t go according to plan. Setting savings goals for family vacations, home improvements, and your children’s education also becomes easier with a clear budget. - ### **Pay Down sand Prioritize Repayments** Debt can feel like a heavy burden, but budgeting can help lighten the load. The best budgeting tips for families encourage paying off high-interest debt first, such as credit card balances, and using the money saved to build your savings or pay down other debts. Little by little, you’ll reduce your financial stress. - ### **Promote Teamwork and Financial Transparency** A family budget isn’t just for the adults. Budgeting tips for families include making your budget a team effort, where everyone is involved in the financial decision-making process. Whether it’s cutting back on expenses, saving for a goal, or planning for the future, budgeting together teaches valuable life skills and strengthens your bond as a family. ## **A Step-By-Step Guide to Implementing Budgeting Tips for Families** - ### **Assess Your Family’s Income** Start by determining exactly how much money is coming into your household each month. Budgeting tips for families start with understanding your income sources. This includes salaries, freelance work, rental income, or any other regular payments you receive. Knowing your available income gives you the foundation you need to build a realistic budget. - ### **Track Your Family’s Expenses** Once you know your income, the next step is to track where your money is going. Categorize your expenses into three main groups: 1. #### **Fixed Expenses:** These are the essentials, such as rent or mortgage payments, utilities, insurance premiums, and savings contributions. 2. #### **Variable Expenses:** These fluctuate each month, like groceries, transportation, and healthcare costs. 3. #### **Discretionary Expenses:** These are the “extras” like entertainment, dining out, or hobbies. Tracking these expenses is one of the most effective budgeting tips for families as it helps identify where cuts can be made to free up more money for savings or debt reduction. - ### **Budgeting Tips for Families to Set Financial Goals** Before diving into numbers, take the time to set specific financial goals. This is one of the key budgeting tips for families that makes your budget meaningful. Ask yourselves what you want to achieve in the short, medium, and long term: 1. #### **Short-Term Goals:** Paying off credit card debt, saving for a family vacation, or covering emergency expenses. 2. #### **Medium-Term Goals:** Building an emergency fund, saving for home improvements, or funding a child’s extracurricular activities. 3. #### **Long-Term Goals:** Planning for retirement, saving for your children’s college education, or buying a home. Setting goals gives you direction and helps everyone in the family stay motivated. - ### **Creating a Spending Plan is One of the Most Important Budgeting Tips for Families** With your income, expenses, and goals in mind, it’s time to create a spending plan. Prioritize the essential costs first, then allocate money for savings, and finally, set aside amounts for discretionary expenses. The best budgeting tips for families encourage prioritizing your most important goals while also ensuring there’s room for enjoyment and self-care. - ### **Review Your Family Budget Regularly** A family budget should never be a one-time thing. Life changes, and so will your financial needs. One of the best budgeting tips for families is to schedule regular budget reviews—whether monthly or quarterly. During these check-ins, you can evaluate whether your goals are on track and make necessary adjustments based on new circumstances. ## **Proven Budgeting Tips for Families to Stay on Track** - ### **Make Budgeting a Team Effort** Engage the whole family in budgeting. Even children can learn from budgeting tips for families that involve them in simple tasks like meal planning or sorting out recycling. Teaching kids the value of money and financial responsibility creates a team mindset, where everyone is working together toward shared financial goals. - ### **Leverage Technology to Manage Money** Tracking and managing your finances can be streamlined using apps like [Mint](https://mint.intuit.com/), [YNAB](https://www.ynab.com/), or [EveryDollar](https://www.ramseysolutions.com/ramseyplus/everydollar?srsltid=AfmBOooifq2NrOiM6kyY3CJbNfpUo5Q_a-TrZjl8YW_e5wZe7vws5NgO). These tools make it easier to stick to your budget, track your spending, and set goals. With everything in one place, these budgeting apps are essential budgeting tips for families that keep you organized and motivated. - ### **Build and Prioritize an Emergency Fund** One of the most powerful budgeting tips for families is the practice of building an emergency fund. Aim for at least three to six months of expenses saved up for unexpected life events. Even if you can only contribute a small amount each month, it will add up over time and provide a crucial financial safety net. - ### **Get Creative with Saving Money** Being mindful of your spending doesn’t always mean cutting out everything fun. Try secondhand shopping, hosting potlucks, or finding creative ways to entertain the family without breaking the bank. Little habits like these are simple yet effective budgeting tips for families that make a big difference over time. - ### **Rethink Big Purchases and Family Vacations** Travel doesn’t have to be expensive. Instead of splurging on international trips, consider local getaways or road trips to explore nearby destinations. The best budgeting tips for families encourage experiences that build memories without putting unnecessary strain on the budget. ## **Budgeting Tips for Families & Common Mistakes to Avoid** - ### **Overestimating Income** Plan your budget based on reliable, guaranteed income. Many families make the mistake of budgeting based on expected raises, bonuses, or irregular freelance work, only to find themselves short when things don’t go as planned. - ### **Ignoring Seasonal Expenses** Be prepared for expenses that happen seasonally, such as back-to-school shopping, holiday gifts, or summer activities. Factor them into your budget well in advance to avoid financial surprises. - ### **Not Allowing for “Fun Money”** A budget that’s too restrictive can be discouraging. Make sure your budget includes some flexibility for fun spending whether it’s for a family outing or a treat for yourself. These small joys are important for keeping spirits high and everyone motivated. ## **How to Stick to Your Family Budget** - ### **Celebrate Your Wins Together** Every time you hit a savings goal, pay down a debt, or stick to your budget for the month, celebrate it! Recognizing these achievements encourages everyone to stay committed to the family’s financial goals. - ### **Holding Regular Budget Check-Ins Is a One Of the Crucial Budgeting Tips for Families to Set** It’s important to review your budget as a family regularly. These meetings allow everyone to stay on the same page, make necessary adjustments, and celebrate progress. Accountability is key to success, and holding check-ins is one of the most helpful budgeting tips for families. ## **Stay Flexible and Adjust as Needed** Life is constantly changing, and your budget should evolve with it. Be open to adjusting your spending plan as needed, whether it’s due to a new job, an increase in expenses, or a change in family priorities. By following these practical and heartfelt budgeting tips for families, you can create a financial plan that doesn’t just keep your family afloat but helps you thrive. If you need help creating or managing your family budget, at nVest Advisors, we specialize in helping individuals, [families](https://nvestadvisors.com/individuals_families_finances/), and small businesses take control of their finances. For more information [click here to book a meeting](https://nvestadvisors.setmore.com/) or have access to your personalized financial plan by clicking [here](https://us.planswell.com/en-US/discovery/adv-nvest). Let’s work together to build a secure and stress-free financial future! **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Financial Planning, Individuals and Families, Mailchimp, Plan Participants, public --- ### [Why Emergency Funds Are a Financial Lifesaver](https://nvestadvisors.com/why-emergency-funds-are-a-financial-lifesaver/) **Published:** February 3, 2025 **Author:** Maryam Irfanmeer **Content:** ## ![importance of emergency funds](https://nvestadvisors.com/wp-content/uploads/2025/01/pexels-clickerhappy-12619-1024x678.jpg "T nvest advisors") # **Why Emergency Funds Are a Financial Lifesaver** Life rarely follows a predictable script. One day is a postcard-perfect scene; the next, bang, you have a medical bill, a car repair, or job loss coming out of nowhere. These situations highlight why having emergency funds is not just a financial luxury but a crucial necessity. However, according to a 2023 [Bankrate survey](https://www.bankrate.com/f/102997/x/fca64133d1/2023-january-fsp-emergency-savings-press-release.pdf), 57% of Americans cannot find any way to cover a $1,000 emergency expense without going into debt. What exactly is an emergency fund? And why is it important? Most importantly, how do you set up one that is useful to you and your family? That’s what we are going to explore. ## **What Are Emergency Funds?** If you fall short on your savings while managing any kind of emergency, you might have to depend on high-interest credit cards or personal loans, which can worsen your financial stress. This cycle of borrowing and repaying can create a long-term burden that many find difficult to escape. Emergency funds are a savings reserve created for you to cover unforeseen expenses or financial emergencies. It offers you peace of mind, allowing you to face sudden expenses without the anxiety of needing to borrow money and piling up debt. Without such savings, even small setbacks can escalate into significant financial challenges. Therefore, emergency funds gives you the confidence that you can handle unfortunate circumstances without compromising your financial stability. ## **The Stark Reality: Are You Prepared?** Recent research highlights a troubling trend regarding emergency savings: - ### **The 2023 Study on Low-Income Families**: A study by the [Urban Institute](https://www.urban.org/sites/default/files/publication/99521/what_explains_the_widespread_material_hardship_among_low-income_families_with_children_0.pdf) focused specifically on families with children revealed that more than two-thirds (68.5 percent) of low-income parents living with children under age 19 reported problems paying for housing, utilities, food, or medical care. - ### **LMU Newsroom Report on Emergency funds**: According to the [LMU Newsroom](https://newsroom.lmu.edu/lmu-in-the-news/only-19-of-americans-increased-their-emergency-savings-in-2023-that-puts-households-in-a-bind-expert-says-2/?utm_source=chatgpt.com), only 19% of Americans increased their emergency savings in 2023, potentially leaving many households financially vulnerable. - ### **Bankrate 2024 Annual Emergency Savings Report**: A [Bankrate](https://www.aol.com/finance/bankrate-2024-annual-emergency-savings-051035918.html?utm_source=chatgpt.com) poll indicates that nearly six in ten (59%) U.S. adults are uncomfortable with their level of emergency savings. ## **Over 1 in 4 people have no Emergency funds** Keeping at least three months of expenses saved can help you weather a [job loss, major unexpected bill or other sudden expense](https://www.bankrate.com/banking/savings/when-to-use-emergency-fund/). However, 27 percent of U.S. adults have no emergency [savings](https://www.bankrate.com/banking/savings/rates/) at all, the highest percentage since Bankrate asked the question in 2020. Generationally, Americans vary widely in their emergency savings levels. Over 1 in 3 (34 percent) millennials have no emergency funds, the highest percentage of any generation: - **Gen Zers (ages 18-27):** 29 percent - **Millennials (ages 28-43):** 34 percent - **Gen Xers (ages 44-59):** 31 percent - **Baby boomers (ages 60-78):** 16 percent Source: [Bankrate](https://www.bankrate.com/banking/savings/emergency-savings-report/) ## **Determining the Right Amount to Save in Your Emergency Funds** Considering professional recommendations from financial advisors, it’s advised to set aside enough savings to chase the next three to six months down the road. However, given the unpredictability of modern life, particularly amidst economic uncertainties, it is now only wiser to strive for savings that cover up to a year’s worth of living costs, especially for individuals in unstable industries. Remember, the goal of an emergency fund is not only to cover day-to-day expenses but also to keep you afloat during longer periods of financial uncertainty. If you are the sole breadwinner or work in an industry with limited job security, aiming for a more substantial emergency fund will help safeguard against potential income interruptions. ## **Optimal Places to Keep Your Emergency Funds** Liquidity and security are the key advantage factors to take into account when deciding upon where to keep your emergency funds. You want an account that is both conveniently accessible and not overly handy to prevent needless withdrawals and unnecessary expenditures. Here are some tried and true choices: - ### **High-yield savings accounts or HYSAs:** Accessibility and return are balanced in these accounts. Some of the best high-yield savings accounts in January 2025 offered [annual percentage yields (APYs) up to 4.75%, ](https://www.investopedia.com/high-yield-savings-accounts-rise-to-new-record-rate-8411631)which was significantly higher than that of regular savings accounts. This keeps your emergency funds liquid while allowing them to develop. Liquidity, or the ability to swiftly access cash in an emergency, is one of the primary advantages of a HYSA. While you won’t earn the highest returns, the interest rate is still enough to make your emergency fund work for you. - ### **Money Market Accounts:** These are another popular choice for emergency savings. They typically offer higher interest rates compared to regular savings accounts and also provide check-writing privileges. As of late 2023, many money market accounts offer interest rates in the range of 5% APY, with some of the top accounts reaching as [high as 5.35% APY](https://www.investopedia.com/nations-best-money-market-rate-rises-record-8398963). Like HYSAs, money market accounts provide a safe, liquid option for keeping your emergency fund. One added benefit is that many accounts allow limited check-writing capabilities, which can be useful in a true emergency situation where you need to pay a bill or expense immediately. - ### **Certificates of Deposit (CDs) with Short-Term Maturity:** While not as liquid, if you don’t expect to need immediate access to your emergency fund, short-term CDs can offer competitive interest rates. Ensure that you choose a term length of less than a year, so you’re not locked in when an emergency arises. While CDs offer a slightly higher return than a savings account, they do come with restrictions. You may face penalties for early withdrawal, which is why they may not be the best option for funds that you may need quickly. However, if you’re confident you won’t need to dip into your emergency savings in the short term, a short-term CD can be a good way to grow your savings. ## **Strategies to Build Your Emergency Funds** 1. #### **Set Clear Goals: Begin by determining how much you need. A good starting point is $1,000, as many emergencies fall into that range. Once you reach that, aim for a larger target that covers a full month or more of living expenses. 2. #### **Automate Savings:** Set up automatic transfers to your emergency fund from your checking account. Even $50 to $100 per paycheck can add up over time. For instance, in one year, $100 bi-weekly could build $2,600 in savings. 3. #### **Reduce Unnecessary Spending: Look for small ways to cut back on discretionary spending. 4. #### **Utilize Windfalls:** Rather than spending tax refunds, bonuses, or cash gifts, direct these funds toward your emergency savings. This can make a significant impact over time, allowing you to reach your savings goals more quickly. 5. **Increase Your Income: Consider exploring side gigs or freelance opportunities to increase your income. According to a 2023 article from [Entrepreneur](https://www.entrepreneur.com/starting-a-business/nearly-50-of-americans-have-a-secondary-source-of-income/481849?utm_source=chatgpt.com), nearly 50% of Americans have a secondary source of income or side hustle. ## **Common Challenges and How to Overcome Them** - ### “I don’t have enough money to save.” Even saving $5 or $10 a week can add up. Focus on starting small, and gradually increase your savings amount as you reduce other costs. - ### “I keep dipping into my savings.” Consider keeping your emergency fund in a separate, harder-to-access account. Some banks allow you to open a separate savings account that requires more than just an online transfer to access the money. - ### “I don’t know where to start.” The first step is tracking your expenses. Once you understand your spending patterns, you can identify areas to cut back and reallocate those funds to your savings. ## **The Bigger Picture** An emergency fund does more than just cover unexpected expenses. It provides financial stability, reduces stress, and allows you to focus on long-term goals like buying a home, saving for retirement, or investing in your children’s education. Financial experts agree that an emergency fund is the cornerstone of a solid financial plan. Without it, even minor setbacks can derail your progress and force you into debt. But with it, you’re empowered to handle life’s surprises with confidence. At [nVest Advisors](https://nvestadvisors.com/), we provide high-yield savings options via our custodian partner, Betterment, to help you in building your emergency funds with competitive interest rates. We additionally offer a variety of other savings and cash-equivalent investments with some of the best interest rates available. [Book a meeting](https://nvestadvisors.setmore.com/) with one of our financial experts today, to discover how we can assist you in creating a stable financial base for life’s uncertainties. **Categories:** Business Stories, Client News, Client Service, Debt, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Mailchimp, Plan Participants, public --- ### [Common Tax Mistakes Families Make and How to Avoid Them](https://nvestadvisors.com/common-tax-mistakes-families-make-and-how-to-avoid-them/) **Published:** February 3, 2025 **Author:** Maryam Irfanmeer **Content:** # ![common tax mistakes made by families](https://nvestadvisors.com/wp-content/uploads/2025/01/pexels-rdne-7821915-1024x682.jpg "Pexels rdne 7821915 nvest advisors") # Common Tax Mistakes Families Make and How to Avoid Them Tax season can be stressful, especially for families. While it’s easy to overlook small details, these common tax mistakes can lead to significant financial consequences, whether it’s overpaying, missing deductions, or even getting audited. But with the right knowledge and preparation, families can avoid these issues. In this article, we’ll walk you through the most frequent common tax mistakes families make and provide you with practical tips to avoid them. By addressing these errors, you can save time, reduce stress, and ensure your tax filing is done correctly. ## **1. Failing to Claim All Eligible Tax Deductions: A Common Tax Mistake that Families Make** One of the most frequent common tax mistakes families make is overlooking valuable tax deductions. Families may miss out on deductions such as the [Child Tax Credit](https://www.irs.gov/credits-deductions/individuals/child-tax-credit), mortgage interest deductions, or other tax-saving opportunities. These missed deductions can result in overpaying on taxes and fewer savings in your pocket. How to avoid it: Take the time to review all the deductions you’re eligible for before filing. Deductions like the Child Tax Credit are especially important for families with children. Additionally, keep track of mortgage payments, charitable contributions, and medical expenses throughout the year to ensure you don’t miss out. ## **2. Mixing Up Standard Deductions and Itemized Deductions** Another common tax mistake is failing to properly evaluate whether to take the standard deduction or itemize your deductions. Many families automatically choose the standard deduction, without realizing that itemizing could result in greater savings. How to avoid it: Review your expenses, such as medical costs, property taxes, and mortgage interest, to determine whether itemizing could give you a better tax break. Tools and resources like tax software can help you make this decision, ensuring you get the maximum tax benefit. ## **3. Not Reporting All Sources of Income: A Common Tax Mistake That Can Lead to Penalties** Families sometimes make the tax mistakes of not reporting all income, especially income from freelance work, side gigs, or even sporadic income sources. The [IRS](https://www.irs.gov/filing/taxable-income) requires you to report all income, regardless of whether you receive a Form 1099. Failure to do so can trigger audits and hefty penalties. How to avoid it: Track all your income sources, not just those reported by your employer. Keep detailed records and use accounting software to help manage your finances. This ensures that no income slips through the cracks and helps you avoid penalties. ## **4. Avoiding Tax Mistakes When Claiming Dependents Incorrectly** Claiming dependents incorrectly is one of the most common tax mistakes. This can happen if a parent mistakenly claims a dependent that doesn’t qualify or if both parents file separately and claim the same child. These errors can cause delays in processing your tax return, and may even trigger an audit. How to avoid it: Ensure you meet all the [IRS](https://www.irs.gov/credits-deductions/individuals/dependents) criteria for claiming a dependent. Verify that the child or relative you’re claiming qualifies under the IRS guidelines. If you’re unsure, consider coordinating with your spouse if you’re filing separately to avoid double-claiming the same dependent. ## **5. Missing the Tax Payment Deadline** Missing the tax payment deadline is another common tax mistake that many families make. Even if you file your tax return on time, failing to pay the amount owed by the deadline can result in interest, late fees, and penalties. How to avoid it: Set reminders for payment deadlines and ensure you pay any taxes owed on time. If you’re unable to pay the full amount, consider setting up a payment plan with the IRS to avoid additional fees. Remember, paying on time can prevent unnecessary penalties. ## **6. Forgetting to File for an Extension** A common tax mistake many families make is forgetting to file for an extension when they need more time. An extension allows you additional time to file your tax return, but it doesn’t extend the deadline for paying taxes owed. How to avoid it: If you’re not ready to file your taxes by the due date, file for an extension with the IRS before the deadline. Just make sure you estimate and pay any taxes owed by the original due date to avoid late payment penalties. ## **7. Avoiding Tax Mistakes by Keeping Yourself Updated with Changes in Tax Laws** Tax laws change from year to year, and failing to stay updated can lead to missed opportunities for tax savings. Families who don’t keep up with changes in tax credits, such as the Child Tax Credit or deductions, often make common tax mistakes that could have been avoided. How to avoid it: Keep yourself informed of tax law updates every year. Visit the IRS website for the latest changes, or consult a tax professional to ensure you’re taking full advantage of any new tax benefits. ## **8. Avoiding Tax Mistakes Consulting a Tax Professional** Many families make tax mistakes by attempting to file their taxes on their own, even when their financial situation is complex. If you’re managing investments, dealing with self-employment income, or going through a life change such as divorce, it’s easy to overlook important tax details. How to avoid it: If your tax situation is complicated, don’t hesitate to consult a tax professional. A tax expert can help you navigate complicated filings and ensure you’re following the correct procedures, reducing your risk of costly mistakes. ## **9. Overlooking Tax Credits** Tax credits like the Earned Income Tax Credit (EITC) or education credits can significantly reduce the amount of taxes you owe. Not claiming these credits, either by misunderstanding eligibility or overlooking them, is another common tax mistake that families make. How to avoid it: Make sure to check if you qualify for tax credits such as the EITC or credits for education expenses. These can directly reduce your tax liability and boost your refund. Review the IRS guidelines carefully or speak to a professional to ensure you’re taking advantage of these credits. ## **10. Failing to Organize Your Tax Documents** Disorganization is one of the most common tax mistakes families make. Not keeping track of important documents, such as W-2s, 1099s, receipts for deductions, and other paperwork, can lead to filing errors, delays, and even audits. How to avoid it: Keep all your important tax documents organized throughout the year. Using a digital or physical filing system can help you stay on top of everything. Organizing these documents early in the tax season will make the filing process much easier and more efficient. By being aware of the most common tax mistakes families make, you can avoid costly errors and potentially increase your refund. Take time to review your deductions, report all income, and stay informed about any changes in tax laws. If you’re ever unsure, seeking the help of a tax professional can help ensure your taxes are filed correctly. Tax season doesn’t have to be stressful. By avoiding common tax mistakes, you can protect your hard-earned money and ensure a smooth filing process. With a little preparation and attention, you can file with confidence and keep more of your money in your pocket. If you’re feeling uncertain, seeking help from a professional can make all the difference. At **[nVest Advisors](https://nvestadvisors.com/),** we’re here to guide you through tax season, helping you avoid costly errors and focus on what truly matters—your family and financial future. Learn more about our **[financial solutions for individuals and families](https://nvestadvisors.com/individuals_families_finances/)** or**[ book a meeting](https://nvestadvisors.setmore.com/)** with one of our experts today! Take control of your taxes today and experience the peace of mind that comes with getting it right for you and your family! **Categories:** Business Stories, Client News, Client Service, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Financial Planning, Individuals and Families, Investment, Mailchimp, Plan Participants, public, Small Business --- ### [Common Tax Mistakes to Avoid as a Small Business Owner](https://nvestadvisors.com/common-tax-mistakes-to-avoid-as-a-small-business-owner/) **Published:** February 3, 2025 **Author:** Maryam Irfanmeer **Content:** # ![tax filing mistakes by small business](https://nvestadvisors.com/wp-content/uploads/2025/01/pexels-karolina-grabowska-4386369.webp "Pexels karolina grabowska 4386369 nvest advisors") # Common Tax Mistakes to Avoid as a Small Business Owner For small business owners, filing taxes can feel like navigating a minefield, with even higher stakes due to the increased risks and potential penalties. Even the smallest tax mistakes can lead to costly penalties, audits, or worse, legal challenges. Navigating tax season effectively without making any tax mistakes requires awareness of the common errors businesses make and how to avoid them. In this article, we explore tax mistakes that small businesses often make, backed by up-to-date research and expert advice to help you stay on track. ## **1. Inaccurate Income Reporting** One of the most frequent tax mistakes small businesses make is the misreporting of income. This could range from failing to report all revenue streams to incorrectly categorizing income types, such as mixing personal income with business revenue. Any mistake in income reporting can trigger audits or result in severe penalties. ### **Why it matters:** In the 2020-2021 Tax Gap Report, the [IRS](https://www.irs.gov/newsroom/irs-updates-tax-gap-projections-for-2020-2021-projected-annual-gap-rises-to-688-billion#:~:text=Tax%20gap%20details%3A%20late%20payments,that%20is%20paid%20on%20time.) projected the total annual tax gap at $688 billion, with underreporting of income being a major contributor. For small businesses, this often happens when income from cash transactions or side services is not properly reported. For example, a small business owner might fail to report revenue earned from side jobs or freelance work, which isn’t captured by information returns like 1099s. Since the IRS already receives income-related documents like W-2s and 1099s from other parties, any discrepancies between the business’s reported income and the IRS records can lead to audits or penalties. ### **Prevention Strategies:** - **Careful Record Keeping:** Keep meticulous records of all income, even if it’s from side gigs or occasional projects. If it’s revenue, it needs to be tracked. - **Cross-check Information Returns:** Ensure that all W-2s, 1099s, and K-1s received from clients or employers match the income you report on your tax return. The IRS has access to these forms, and discrepancies can easily raise red flags. - **Leverage Tax Software to avoid tax mistakes:** Use trusted tax software that can automatically flag mismatches and guide you through your filing to ensure every income source is reported accurately. ## **2.** Failing to Separate Business and Personal Expenses** Mixing business and personal expenses is a common mistake for small business owners, but it can lead to complications when filing taxes. Not only does it increase the chances of missing deductions, but it can also make the IRS suspicious. ### **Why it matters:** When you mix personal and business expenses, it becomes difficult to track deductible expenses properly. This could mean that you miss valid deductions or, worse, find yourself subject to an audit. For instance, claiming personal expenses, like groceries or a family vacation, as business expenses could trigger penalties. If the IRS notices discrepancies or suspects fraudulent reporting, you could face serious consequences. ### **Prevention Strategies:** - **Use Separate Accounts:** Set up a dedicated business bank account and credit card. Keep your personal and business finances separate to avoid confusion and errors. - **Track Expenses to avoid tax mistakes:** Use accounting software to categorize and track business expenses properly. This will help ensure that only valid business expenses are claimed. ## **3. Misclassifying Employees vs Contractors is one of the crucial tax mistakes** Many small business owners wrongly classify their employees as independent contractors. This is not just an oversight, it can lead to back taxes, penalties, and legal issues with the IRS. ### **Why it matters:** Misclassifying workers is a significant problem for businesses worldwide. In fact, according to the [U.S. Department of Labor](https://www.darrow.ai/resources/penalties-for-misclassifying-employees-as-independent-contractors), businesses that misclassify employees as independent contractors could face penalties of up to $1,000 per misclassified worker. The IRS has strict guidelines for worker classification, and with increased scrutiny from tax authorities, businesses must be vigilant about ensuring they follow the correct guidelines to avoid significant penalties and retroactive tax liabilities. ### **Prevention Strategies:** - **Review IRS Guidelines**: Make sure you understand the legal distinction between employees and independent contractors by reviewing the IRS guidelines. - **Document Roles Clearly**: If you classify someone as an independent contractor, make sure the contract is detailed and reflects the true nature of the working relationship. - **Consult a Professional**: When in doubt, seek the advice of a tax or HR professional to ensure proper classification ## **4. Avoiding Tax Mistakes from Missing Tax Deadlines** Tax deadlines are not suggestions, they are legally binding dates. Missing these deadlines can lead to costly fines and interest charges, which are entirely avoidable with some simple planning. ### **Why it matters:** In the U.S., the IRS imposes penalties on [businesses that file taxes late](https://www.irs.gov/payments/failure-to-file-penalty). The penalty is typically 5% of the unpaid tax for each month or part of a month that a tax return is late, with a maximum penalty of 25%. For example, if a small business owes $1,000 in taxes and files 3 months late, the penalty could be as much as $150. In addition to the fines, interest on the unpaid tax continues to accrue until the amount is fully paid. ### **Prevention Strategies:** - **Use Digital Tools**: Set automatic reminders in your calendar for key tax dates. - **Get Ready Early**: Begin assembling documents and reviewing your tax situation well before the due date to avoid last-minute stress. - **Enlist Help**: Hire a professional to handle the filing process, especially if you’re unsure about complex forms or calculations. ## **5. Avoid Tax Mistakes by Addressing International Tax Issues for Global Operations** If your business operates internationally or even accepts foreign clients, it’s crucial to understand international tax treaties, VAT obligations, and transfer pricing rules. Many small businesses neglect to track income generated abroad, leading to discrepancies when filing. ### **Why it matters:** A U.S.-based small business owner working with clients in the EU faced severe penalties after failing to report Value Added Tax (VAT) due on sales made in Europe, resulting in an unexpected bill from both local tax authorities and the IRS. ### **Prevention strategies:** - If your business operates internationally, stay updated on the tax obligations of the countries where you do business. Consulting with a professional who understands international tax law can help you avoid costly mistakes. ## **6.** **Incorrectly Handling Digital Assets and Cryptocurrencies** In recent years, digital currencies like Bitcoin, Ethereum, and others have gained traction in business transactions. However, many small business owners fail to realize that these digital assets must be reported on their tax returns. The IRS treats cryptocurrencies as property, meaning that any sales, exchanges, or income from mining and staking activities must be accurately reported. In 2024, the IRS emphasized the importance of reporting digital asset transactions to avoid costly penalties and interest. ### **Why it matters** In 2024, the [IRS](https://www.irs.gov/newsroom/taxpayers-need-to-report-crypto-other-digital-asset-transactions-on-their-tax-return) clarified that taxpayers must report all transactions involving digital assets, including sales, exchanges, and income from activities like mining or staking. Failure to report these transactions can lead to substantial penalties, interest charges, and possible audits. The IRS cross-checks these transactions with the information it receives from exchanges and other third parties, so any discrepancies in your tax return are likely to trigger scrutiny. Proper reporting helps avoid these risks and ensures compliance with tax regulations. ### **Prevention Strategies:** - **Track Every Transaction:** Keep a detailed log of each crypto transaction, including the date, amount, and fair market value at the time of exchange or sale. - **Use Crypto Tax Software:** Leverage platforms like [CoinTracker ](https://www.cointracker.io/)or [Koinly](https://koinly.io/) that integrate with exchanges to automate tracking and reporting, ensuring accuracy. - **Consult a Tax Professional:** If you’re involved in cryptocurrency transactions, it’s crucial to consult with a tax professional experienced in digital assets to ensure you’re compliant with IRS reporting requirements. ## **7. Not Taking Advantage of Available Tax Credits** Small businesses can save a lot of money on taxes by claiming various [tax credits](https://www.irs.gov/credits-and-deductions), but many business owners miss out on them. These credits, like the Research and Development (R&D) Tax Credit or the Work Opportunity Tax Credit (WOTC), are meant to help businesses save money for doing certain activities, like creating new products or hiring people from specific groups. Not claiming these credits means businesses could end up paying more in taxes than they need to. ### **Why it matters:** Tax credits are a way to directly reduce the amount of tax a business has to pay. For example, businesses that invest in sustainable practices may qualify for green energy credits, or might be eligible for the R&D Tax Credit, but many businesses don’t apply for it, missing out on potential savings. This means businesses could pay more in taxes than they should. ### **Prevention Strategies:** - **Stay Informed:** Make sure you know about the credits available to your business. Websites like the IRS and other tax resources often provide updates on new or existing credits. - **Get Help from a Professional:** A tax expert can help you avoid tax mistakes by determining if your business qualifies for any credits and ensuring they are claimed correctly. - **Check Credits Every Year:** Tax credits can change, so it’s a good idea to look over them every year to ensure you don’t miss any new opportunities. ## **8.** **Overlooking Tax-Free IRA Rollovers & Mixing Up Tax-Exempt with Taxable** When managing retirement accounts, mistakes involving IRA rollovers are more common than you might think. A typical error occurs when a tax-free IRA rollover is mistakenly entered as a taxable distribution, leading to unnecessary taxes and potential penalties. ### **Why it matters:** The IRS treats rollovers differently than regular withdrawals. If you roll over funds from one IRA to another and mark it as taxable income, you’ll end up paying taxes on money that you don’t owe taxes on because rollovers are typically tax-free if done correctly. This mistake could trigger both immediate taxes and penalties. Even though tax software can help prevent some errors, it’s crucial to carefully review all the information before submitting. ### **Prevention Strategies:** - **Double-Check Your Forms:** Carefully go over the distribution forms for your IRA rollover. Ensure you don’t place the tax-free rollover amount in the taxable section by mistake. - **Verify Entries in Tax Software:** Tax software can flag potential errors, but you should always cross-check your final return. Confirm that every detail is in the right place, especially with rollovers. - **Consult a Professional:** If you’re unsure about how to handle your IRA rollover, consider reaching out to a tax expert. They can help you avoid costly mistakes and ensure you’re following all the IRS rules correctly. Running a small business is tough, and tax season can make it feel even harder. It’s easy to make mistakes, and even small ones can cause big problems down the road. But you don’t have to go through it alone. Understanding these common tax pitfalls and taking the right steps now can save you from stress, unnecessary penalties, and lost opportunities. At nVest Advisors, we truly care about the success of your business. We understand the challenges small businesses face, and we’re here to help you navigate through all of it without all the confusion and worry. Whether you need guidance on keeping your finances separate or making sure you get every tax break you’re entitled to, we’re here to support you every step of the way. If you’re ready to tackle tax season with confidence, **[book a meeting](https://nvestadvisors.setmore.com/)** with us today. We’re excited to help your **[business](https://nvestadvisors.com/businesshome/)** thrive! **Categories:** Business Stories, Client News, Economic Updates, Economy, Financial Planning, Individuals and Families, Mailchimp, Plan Participants, public, Retirement, Small Business --- ### [Navigating Rising Homeownership Costs in Colorado](https://nvestadvisors.com/rising-homeownership-costs/) **Published:** November 8, 2024 **Author:** nVest Advisors **Content:** # The Colorado Dream on Hold: Navigating Rising Homeownership Costs Colorado’s majestic scenery and vibrant communities have long attracted residents seeking a fulfilling life. But for many, the dream of homeownership seems increasingly distant. Here in the Centennial State, housing costs have skyrocketed, leaving some wondering if they’ll ever be able to afford a piece of the Colorado dream. Here are some ideas about navigating rising homeownership costs in Colorado. ## **Steep Climb, Tight Inventory** Let’s look at the numbers. According to the Denver Post, citing data from Clever, Denver ranks as the 11th-least affordable metro area for homebuyers based on income-to-home-price ratios \[1\]. The median home value in Colorado has jumped significantly. Data from the Colorado Department of Local Affairs (DOLA) shows the median home value of owner-occupied housing units increased from $334,600 in 2017 to $465,900 in 2022 \[2\]. That’s a staggering 42% increase in just five years! Additionally, low inventory keeps competition fierce, pushing prices even higher. ### **Facing the Challenge of Homeownership:** Soaring housing costs present a significant hurdle for Coloradans, especially first-time homebuyers. Saving for a down payment amidst rising living expenses can be incredibly difficult. Even with a down payment saved, qualifying for a mortgage can feel out of reach with escalating home prices. ## **A Fiduciary Advisor: Your Partner in Homeownership** In this competitive and complex market, a fiduciary financial advisor can be your trusted partner on the path to homeownership. Here’s how: 1. **Financial Planning:** A fiduciary advisor will create a personalized financial plan considering your income, expenses, and long-term goals. They’ll help you develop a savings strategy to reach your down payment target and ensure you’re financially prepared for homeownership responsibilities. 2. **Investment Strategies:** They can suggest investment options that align with your risk tolerance and timeline. Growing your savings for a down payment may require a strategic investment approach. 3. **Mortgage Guidance:** They can guide you through the complex world of mortgages, helping you understand different loan types and find the best rates and terms for your situation. 4. **Negotiation Support:** Navigating the home buying process can be stressful. A fiduciary advisor can offer valuable guidance during negotiations, ensuring you get the best possible deal on your dream home. ### **The Bottom Line** Owning a home in Colorado remains a desirable dream for many. While rising costs pose a challenge, it’s not insurmountable. By working with a qualified [fiduciary financial advisor,](https://nvestadvisors.com/) you can gain the knowledge, strategies, and support needed to navigate this competitive market and achieve your homeownership goals. **Sources:** 1. [The Denver Post](https://www.denverpost.com/2024/05/03/colorado-housing-market-booms-prices-double-in-past-decade-as-supply-dwindles-real-estate-voices/) 2. Colorado Department of Local Affairs **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Individuals and Families, Investing General, Investment, Mailchimp, Plan Participants, public **Tags:** colorado, home prices, homeownership, inflation --- ### [Weathering the Storm: Job Security and Economic Downturns](https://nvestadvisors.com/weathering-the-storm-job-security-and-economic-downturns/) **Published:** November 8, 2024 **Author:** nVest Advisors **Content:** # Weathering the Storm: Job Security and Economic Downturns The American economy is a complex system, and job security can feel particularly precarious during periods of economic uncertainty. With whispers of a potential recession on the national horizon, many Americans might be feeling a pang of anxiety about their careers. Understanding how job losses typically occur during economic downturns can empower you to prepare to weather the storm. ## **The Layoff Cycle: Before, During & After:** According to the Bureau of Labor Statistics, job losses tend to follow a predictable pattern throughout an economic recession \[1\]. - **Pre-Recession:** Companies often start by cutting back on discretionary spending, like travel or training, and may institute hiring freezes. - **During Recession:** As economic conditions worsen, layoffs become more common, often targeting positions deemed non-essential or in struggling departments. - **Post-Recession:** Even after the official recession ends, the job market can be slow to recover. Businesses might remain cautious about hiring, and some industries might experience permanent shifts. ### **Understanding Industry Vulnerability:** While the overall national economy might experience a downturn, some sectors are typically more susceptible to job losses than others. According to a 2023 report by the McKinsey Global Institute, leisure and hospitality, retail, and certain manufacturing sectors are more likely to see job cuts during a recession \[2\]. ## **Peace of Mind Through Preparation: How to Protect Your Finances in Economic Downturns** A potential job loss can be financially devastating. However, by working with a fiduciary financial advisor, American families can take proactive steps to prepare for an uncertain job market: 1. **Emergency Fund:** Building a healthy emergency fund is crucial. Aim for 3-6 months of living expenses to cover essential costs if you face unemployment. 2. **Review Budget & Expenses:** A financial advisor can help you analyze your budget and identify areas for potential cuts. Reducing unnecessary expenses creates more financial breathing room during a job search. 3. **Debt Management:** High-interest debt can significantly strain your finances in uncertain times. A financial advisor can develop a debt repayment strategy to minimize interest charges and free up cash flow. 4. **Multiple Income Streams:** Exploring alternative income sources can provide a safety net. A financial advisor can discuss options like freelance work, side hustles, or passive income investments that align with your skills and interests. 5. **Investment Review:** Reviewing your investment portfolio with your advisor can ensure it’s balanced and aligned with your risk tolerance. Some adjustments might be necessary to weather potential market volatility during a recession. ### **Taking Control of Your Future:** Economic downturns are inevitable, but proactive planning can significantly reduce the stress and financial impact of a job loss. By partnering with a [fiduciary financial advisor](https://nvestadvisors.com/2024/06/07/5-common-retirement-planning-mistakes-for-texas-teachers/retirement/), you can gain the knowledge, strategies, and support needed to navigate a challenging job market and secure your family’s financial well-being. **Sources:** 1. Bureau of Labor Statistics: <https://www.bls.gov/> 2. McKinsey Global Institute: [https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/somethings-coming-how-us-companies-can-build-resilience-survive-a-downturn-and-thrive-in-the-next-cycle](https://www.mckinsey.com/capabilities/%3C0%3Erisk-and-resilience/our-insights/somethings-coming-how-us-companies-can-build-resilience-survive-a-downturn-and-thrive-in-the-next-cycle) **Categories:** 401K, Business Stories, Client News, Client Service, Early nVestors, Economic Updates, Economy, Emerging nVestors, Individuals and Families, Investment, Mailchimp, Plan Participants, public **Tags:** economy, job loss, layoff, Layoffs, recession --- ### [Small Business Owners: Fiduciary Responsibilities and the Power of Outsourcing](https://nvestadvisors.com/small-business-owners-fiduciary-responsibilities/) **Published:** December 5, 2024 **Author:** nVest Advisors **Content:** # Small Business Owners: Fiduciary Responsibilities and the Power of Outsourcing As a small business owner, you wear many hats. From CEO to janitor, you’re often juggling numerous responsibilities. One crucial role you might not fully appreciate is the fiduciary responsibilities you hold for your company’s retirement plan. ## **What Does It Mean to Fulfill Fiduciary Responsibilities?** A fiduciary is a person who has a legal and ethical obligation to act in the best interests of another party. As a plan sponsor, you are a fiduciary, responsible for managing your company’s retirement plan. This responsibility comes with a set of duties and obligations. ## **The Five Key Fiduciary Responsibilities of a Plan Sponsor** 1. **Plan Design and Implementation:** You must establish a plan that meets ERISA requirements and aligns with your company’s goals and employee needs. 2. **Investment Selection:** Carefully select investment options that are prudent and appropriate for your plan participants to fulfill your fiduciary responsibilities. 3. **Fee Monitoring:** Regularly monitor and review plan fees to ensure they are reasonable and competitive. 4. **Participant Education:** Provide employees with the information and tools they need to make informed decisions about their retirement savings and their own fiduciary responsibilities in managing the plan. 5. **Plan Monitoring and Compliance:** Stay current with ERISA regulations and ensure your plan complies with all applicable laws and regulations. ## **The Power of Outsourcing Fiduciary Responsibilities** While these responsibilities may seem daunting, you don’t have to shoulder them alone. Outsourcing to a fiduciary plan advisor can significantly alleviate your burden and help you fulfill your fiduciary responsibilities effectively. ## **The Role of a Fiduciary Plan Advisor in Navigating Your Fiduciary Responsibilities** A fiduciary plan advisor can act as either an **[ERISA 3(21) or 3(38) fiduciary](https://www.forusall.com/401k-blog/3-21-fiduciary-vs-3-38#:~:text=As%20Carol%20points%20out%2C%20a,day%2Dto%2Dday%20investments.)**. In either role, they are responsible for making prudent investment decisions on behalf of the plan. This includes selecting investment options, monitoring fees, and conducting regular reviews. ## **Other Key Roles in Your Retirement Plan** - **Recordkeeper:** The recordkeeper handles the administrative tasks of the plan, such as processing enrollments, loans, and distributions. - **3(16) Plan Administrator:** This individual or firm is responsible for day-to-day plan administration, including processing participant transactions and providing customer service, all in line with fiduciary responsibilities. ## **The Importance of Shopping Your Plan** Just like you shop for the best deals on other business expenses, you should also shop your retirement plan. By periodically reviewing your plan’s fees and investment options, you can ensure that your employees are receiving the best possible value. ## **Take the Next Step** If you’re a small business owner seeking to fulfill your fiduciary responsibilities effectively, consider outsourcing to a qualified fiduciary plan advisor. By[ partnering with an expert](https://nvestadvisors.com/contact/), you can protect your business, your employees, and your own financial future. Here at nVest Advisors, we specialize in working with small business owners to maximize their plan’s potential benefit for your employees, while working to protect the business from regulatory or civil problems that may arise from a plan that was poorly constructed or not correctly administered. **Ready to take the next step?** [**Schedule a free virtual Q&A appointment**](https://nvestadvisors.setmore.com/jeremyt?step=time-slot&products=7f1e48ca-51f7-4cf2-b17c-e81ba96f5527%7C03913af2-540d-495e-a42b-29ce4c52d132&type=service&staff=af307f9d-547d-4a1a-85d9-4aef50ae0203&staffSelected=false) with Jeremy Torgerson, our Senior Advisor and CEO, for a competitive bid on your company’s retirement plan. Let us help you navigate the complexities of ERISA and ensure your plan is designed to meet your employees’ needs. **Categories:** 401K, Business Stories, Client News, Economic Updates, Individuals and Families, Mailchimp, Plan Participants, public, Small Business **Tags:** 3(21), 3(38) 3(16), 401a, 401k, 403b, 457, ERISA, fiduciary, fine, lawsuit, regulator, SEP IRA, SIMPLE, SIMPLE IRA, sponsor --- ### [Top 10 New Year Financial Resolutions For a Stronger Financial Future](https://nvestadvisors.com/top-10-new-year-financial-resolutions/) **Published:** January 23, 2025 **Author:** Maryam Irfanmeer **Content:** # ![best financial resolutions](https://nvestadvisors.com/wp-content/uploads/2025/01/pexels-leeloothefirst-8358129-e1736892691816.jpg "Pexels leeloothefirst 8358129 nvest advisors") # Top 10 New Year Financial Resolutions For a Stronger Financial Future The start of a new year gives you a chance to rethink and reframe your approach to different aspects of your life, including your finances. For many people, managing money is an afterthought until something goes wrong. But what if this year instead of waiting to learn from your financial mistakes, you actively take control of your financial journey and set meaningful financial resolutions to guide your path? This year we’re steering away from the typical “save more” or “spend less” advice, providing a new perspective on achieving meaningful change. These ten steps are all practically designed to line up with strong financial goals, and create habits that can help you in the long run. ### **1. Clarify Your Financial Priorities for Strong Financial Resolutions** A lot of people set financial resolutions with a vague sense of success, but clarity is key. Start by defining what really matters to you, ensuring that your financial resolutions align with your life’s priorities. List your short-term and long-term financial goals, such as “Save 20 percent of my income each month” or “Pay off credit card debt by this year’s end.” Try to define what success looks like in practical terms. By getting clear on your priorities and coming up with a reasonable plan of action, you will be able to allocate resources more effectively. ### **2. Automate Your Savings to Strengthen Financial Goals** One of the easiest ways to save money consistently is to automate the process. With automated savings, you’re less likely to spend the money elsewhere, and you’ll be building wealth without even thinking about it. Create an automated direct deposit from your checking account to your savings or investment account. Even small amounts, such as $50 per paycheck, can grow significantly over time. If your employer offers a 401(k) or similar plan, make sure your contributions are enough to take advantage of any available match. Treat your savings like a bill, prioritizing it just as you would your rent or utilities, ensuring it’s non-negotiable. Automation takes the burden off and helps you save consistently, even when life gets busy. ### **3. Build an Emergency Fund as a Core Part of Your Financial Resolutions** An emergency fund acts as your financial safety net. It is there to cover unexpected expenses, such as medical bills or urgent car repairs, without throwing other goals off track. Establish a savings goal that covers three to six months’ worth of your living expenses. Make sure these funds are kept in a separate account that you can access easily. Instead of using your long-term savings or credit cards, these emergency funds allow you to weather any storm without derailing your financial journey. ### **4. Consolidate and Manage Debt to Achieve Financial Freedom** One of the most powerful financial resolutions is to get rid of high-interest debt. Debt is a significant barrier to achieving financial goals, especially with the compounding interest that rapidly increases the outstanding balance. High-interest debt, such as credit card balances, can empty your resources and seriously limit your capabilities to save and invest. Start with documenting all your debts, including balances, interest rates, and down payments. Decide on a repayment method, which can either be the method of snowballing (where you pay off the smallest debts first) or the avalanche method (where you pay off the high-interest debts first). Consider consolidating your debts into a single loan with a lower interest rate if it’s feasible. ### **5. Review Your Insurance Coverage as Part of Your Financial Resolutions** Reviewing your insurance coverage is essential for ensuring financial security. Take time to assess whether your current policies, such as health, life, home, and auto, adequately protect you and your loved ones. Make sure your coverage aligns with your current needs and financial goals. Periodically revisiting your insurance ensures you are not overpaying or underinsured, keeping you prepared for any unexpected events. ### **6. Start or Diversify Your Investments to Meet Financial Goals** Starting or diversifying your investments is an important step in accomplishing your financial goals. If you’re a beginner, explore [beginner friendly investment strategies](https://www.bankrate.com/investing/investment-strategies-for-beginners/) to get started. But if you have been investing for years, checking out different investment opportunities, like stocks, bonds, and real estate can help you spread out risk and increase your chances for growth. Make sure to stay updated with your investment strategy regularly to see if it still matches your goals and comfort with your estimated risk. This way, you can steadily grow your wealth and set yourself up for a more secure future. ### **7. Increase Your Financial Literacy** Understanding how money works gives you the power to make smarter choices and take control of your future. Financial literacy is not just a skill, it is the key to feeling secure and confident about your decisions. Whether it is staying on top of tax tips, investment trends, or figuring out how current market events affect your finances, knowledge gives you a sense of control in a world that often feels unpredictable. This year, why not take a step to invest in yourself? Pick up a financial book, read a blog post or an article, join a webinar, or take a course. ### **8. Embrace Patience to Build Wealth and Realize Your Financial Goals** It can be challenging to maintain financial patience in today’s world of quick fixes and instant results. But when it comes to building wealth, it’s true that slow and steady wins the race. This year, focus on increasing your wealth with consistent, intentional steps such as saving a percentage of your income, paying down debt, or investing in diversified funds. This strategy has the advantage of not calling for significant sacrifices. Trust the process, make smart decisions, and watch your financial freedom grow over time. ### **9. Plan for Big Moments in Advance** Planning for big moments in advance is essential to avoid unnecessary financial stress. When it comes to weddings, buying a home, or your child’s college education, having clear goals and starting to save early can make all the difference. Break your plans into manageable steps and create a dedicated fund for these milestones. You may enjoy these times to the fullest without worrying about the cost if you plan ahead. Planning well now creates the foundation for wonderful experiences later. Make sure to revisit your plan periodically to adjust for changing circumstances. ### **10. Schedule a Meeting with a Financial Advisor for Guidance** The best financial resolution you can make this year is to seek professional financial advice. Partnering with an expert will give you a fresh perspective on your financial journey and help you optimize your strategy. Whether you’re unsure about how to allocate investments, navigate tax planning, or set long-term savings goals, working with an advisor provides clarity and expertise. At [nVest Advisors](https://nvestadvisors.com/), we believe in empowering individuals with the knowledge and resources they need to achieve financial success. Want more guidance to refine your financial resolutions for the new year? [Schedule](https://nvestadvisors.setmore.com/) a call with one of our experts at nVest Advisors for personalized insights to align your goals with your aspirations. Remember, improving your financial health is a journey, and small, steady steps can lead to big results. **Categories:** Business Stories, Client News, Economic Updates, Individuals and Families, Mailchimp, Plan Participants, public --- ### [Top 10 Financial Tips for Small Business Owners](https://nvestadvisors.com/financial-tips-for-small-business-owners/) **Published:** January 23, 2025 **Author:** Maryam Irfanmeer **Content:** # Top 10 Financial Tips for Small Business Owners Life as small business owners comes with its own set of financial challenges. As small business owners, from managing cash flow to planning for growth, the financial decisions you make today can determine your business’s long-term success. Let’s dive into some practical tips that can help you take control of your finances and set your business up for success. ### **1. Separate Personal and Business Finances** Here’s the thing, mixing your personal and business finances is a recipe for confusion and stress. Keep them separate from the start. Open a business bank account and maybe even get a business credit card. This makes tracking your expenses so much easier and keeps everything clean when tax season rolls around. Avoid the headache of untangling mixed finances. By having a dedicated business account, small business owners can gain clarity on cash flow and prevent costly mistakes. Plus, it’s a great way to build your business credit, which can be valuable down the road. Keeping them separate is one of the simplest yet most powerful financial habits you can adopt ### **2. Create a Detailed Budget** Think of your budget as your financial GPS. It guides you by showing where your money is going and where you might be overspending. Start by laying out all your monthly expenses, from fixed costs like rent and utilities to variable costs like marketing or supplies. Set clear revenue goals for the month, quarter, and year. Be sure to include a buffer for unexpected costs, like equipment repairs or opportunities that may arise. A well-structured budget not only keeps small business owners on track but also gives them the flexibility to make adjustments. It helps them identify areas to cut back on unnecessary spending and find opportunities for reinvestment. ### **4. Don’t Be Afraid of Loans, Strategic Borrowing Can Help Small Business Owners Grow** Taking out a loan can seem daunting, but it can also be a powerful tool for growth. Whether you’re expanding your product line or investing in new technology, loans can provide the capital needed to scale. The key is to borrow strategically. Small business owners should always ensure that their borrowing aligns with long-term growth strategies. Only take on debt that will have a clear and positive return on investment (ROI). A well-thought-out loan can help bridge the gap when you need immediate cash flow or invest in opportunities that will increase profits in the long run. ### **5. Small business owners should closely monitor cash flow** Cash flow is the heartbeat of your business, and without it, everything comes to a standstill. Regularly track both incoming and outgoing funds to get a clear view of your financial health. Even small discrepancies in cash flow can quickly escalate into larger problems if left unchecked. If clients are delayed in making payments, don’t just sit there and wait, take action by offering early payment incentives or sending timely reminders. The more proactive small business owners are, the more stable their cash flow will be. A positive cash flow allows you to meet daily expenses, invest in growth, and weather unexpected challenges. ### **6. As Small Business Owners, Understanding Your Taxes is a Must** Taxes might feel intimidating, but staying ahead of them is one of the smartest moves you can make for your business. Keep track of what you owe and ensure you’re recording everything. It’s essential to stay organized so you’re not caught off guard. Taxes are more than just a compliance issue, they directly impact your bottom line. If it’s all too much to handle, an accountant can save you time and help you find deductions you wouldn’t even think of. A good accountant can guide you through the complexities and help you make smarter financial decisions, especially for small business owners who handle most things on their own. By mastering your taxes, you give your business the freedom to grow, adapt, and succeed without the constant fear of the taxman. ### **7. Invest in Financial Tools and Technology** Managing finances manually is time-consuming and prone to errors. Invest in software like [QuickBooks](https://quickbooks.intuit.com/global/oa/online-accounting-software-for-small-business/?cid=ppc_QBO_PK_B_Intuit-QuickBooks_Exact_G_S&gad_source=1&gclid=Cj0KCQiAs5i8BhDmARIsAGE4xHxyonjYbyh00Jq8FXkFIFSKEh1RewFDzCVsi9fIwlJKEB3uc8-9pm8aAun8EALw_wcB&gclsrc=aw.ds), [Xero](https://www.xero.com/us/), or [Wave](https://www.waveapps.com/) to automate tasks such as invoicing, tracking expenses, and generating financial reports. These tools offer real-time insights, helping you identify areas to save or invest more effectively. Payroll systems like Gusto or ADP also integrate seamlessly, ensuring accuracy and efficiency. Using technology not only simplifies your financial management but also provides data-driven insights to help small business owners make smarter decisions for growth. ### **8. Plan for Seasonal Fluctuations** Planning for seasonal fluctuations is crucial for maintaining financial stability. During busy periods, allocate a percentage of your revenue to a reserve fund specifically for slower months. This helps you avoid financial stress when sales drop and keeps you from relying on debt or loans to cover operating costs. Be proactive and analyze past seasonal trends to accurately predict when you’ll experience slow periods. This allows you to adjust your marketing efforts or reduce expenses in advance. Having a financial cushion also gives small business owners the flexibility to take advantage of opportunities that may arise during slow seasons, like investing in product development or improving operations. Instead of reacting to changes, you’ll be in control, ensuring consistent cash flow throughout the year. ### **9. Focus on Profitability, Not Just Revenue** Revenue is an exciting metric, but profitability is what truly drives the success of your business. Many small business owners make the mistake of focusing solely on top-line sales while ignoring whether they’re truly making money. A company could have high sales but still be struggling if its profit margins are too thin. It’s vital to shift your focus to profitability by carefully managing costs, adjusting pricing strategies, and evaluating the value of every expense. When you prioritize profit over sheer volume, you’ll ensure that your business isn’t just generating money, but actually building wealth. Keep an eye on the bigger picture, revenue without profitability is just noise. ### **10. Reach Out for Professional Help** Managing the finances of your business can be overwhelming, and sometimes, it’s best to seek guidance from experts. Whether it’s an accountant, financial advisor, or a business consultant, professional help can provide invaluable insights and help you avoid costly mistakes. These experts can offer a fresh perspective on your financial strategy, identify potential risks, and guide you through complex tax or investment decisions. By bringing in professionals, you free yourself to focus on what you do best while ensuring your business stays on a solid financial path # Let Us Help You Turn Your Business Around At nVest Advisors, we focus on supporting both small business owners and individuals facing financial challenges. If your financial situation feels out of control, we’re here to offer the support and guidance you need to get back on track and set your business or personal finances up for long-term success. **Interested in Exploring Retirement Options for Your Business?** If you’re considering how to secure your financial future and plan for retirement, small IRAs could be a better choice for your business 401(k) plan. Learn how small IRAs can provide tax advantages and better savings opportunities by clicking [here](https://nvestadvisors.com/2024/10/11/small-business-401k-plans/retirement/) to read our blog. Ready to reclaim your financial stability? **[Click here to book a session](https://nvestadvisors.setmore.com/)** with one of our experts and take the first step toward achieving long-term financial peace of mind. **Categories:** Behavioral Finance, Business Stories, Client News, Debt, Economic Updates, Economy, Established nVestors, Financial Planning, Individuals and Families, Investing General, Mailchimp, Plan Participants, public, Retirement, Small Business --- ### [Feeling Uncertain About Your Financial Future? Here's How nVest Advisors Can Help](https://nvestadvisors.com/secure-your-financial-future/) **Published:** October 27, 2024 **Author:** nVest Advisors **Content:** # Feeling Uncertain About Your Financial Future? Here’s How nVest Advisors Can Help Planning for your family’s financial future can feel overwhelming, especially during times of market volatility. At nVest Advisors, we understand that navigating investment strategies and securing your retirement goals requires a personalized approach. That’s where our unique value proposition comes in. ## **Going Beyond Traditional Financial Planning** Many financial advisors focus solely on investment management. While that’s important, nVest Advisors takes a holistic approach. We believe in building a strong foundation for your financial well-being by: - **Understanding Your Needs:** We take the time to listen to your unique goals, risk tolerance, and family situation. There’s no one-size-fits-all solution, and we tailor our strategies accordingly. - **Data-Driven Investment Models:** We leverage data analysis and economic forecasting to build resilient investment models. This goes beyond simply following market trends and provides a well-rounded approach to managing risk. - **Transparent Communication:** We believe clear communication is key. You’ll always be kept informed of your financial progress and any adjustments made to your plan based on economic data. ## **Taking Control of Your Financial Future** nVest Advisors offers a complimentary 30-minute consultation. This isn’t a sales pitch – it’s an opportunity to discuss your financial situation and see if we’re a good fit for your needs. Here’s what you can expect: - **Review Your Investment Portfolio:** We’ll analyze your current investments and identify any potential areas for improvement. - **Discuss Your Financial Goals:** We’ll work with you to define your short and long-term financial aspirations. - **Explore Strategies:** We’ll discuss personalized financial planning and investment strategies that align with your risk tolerance and goals. ### **Don’t Wait Until Tomorrow to Secure Your Family’s Future** Market downturns and economic uncertainty can create anxiety around your financial security. By taking a proactive approach, you can gain control and build a strong financial foundation for your family. Schedule your free consultation with nVest Advisors today. Let’s discuss your financial goals and explore how our unique approach can help you navigate market volatility and achieve long-term success. Visit <https://nvestadvisors.com/> or call us at \[Phone Number\] to schedule your free consultation and take charge of your financial future. **Categories:** Business Stories, Client News, Economic Updates, Economy, Emerging nVestors, Individuals and Families, Investing General, Mailchimp **Tags:** advice, advisor, economy, financial, invest, investing, job loss --- ### [Holiday Hours 2024](https://nvestadvisors.com/holiday-hours-2024/) **Published:** December 23, 2024 **Author:** nVest Advisors **Content:** # Holiday Hours 2024 ## Merry Christmas, Happy Hanukkah, and Happy New Year! Our holiday hours are: - **Tuesday, December 24 – CLOSED to Appointments** - **Wednesday, December 25 – CLOSED** - **Tuesday, December 31 – Closed to Appointments** - **Wednesday, January 1 – CLOSED** Last-minute client trading and withdrawal needs will be honored as best we are able to, but due to short market days and mailing delays from the holidays, please reach out immediately for year-end account service needs. The final RMDs for our clients who must take them are also in process and will be completed before December 31. ### Have a wonderful holiday season! **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, public **Tags:** 2024, 2025, christmas, hanukakh, holiday hours, new year --- ### [Top 10 Features Employees Want in their Workplace Retirement Plan](https://nvestadvisors.com/0-features-employees-want-in-their-workplace-retirement-plan/) **Published:** October 11, 2024 **Author:** nVest Advisors **Content:** ## Top 10 Features Employees Want in Their Workplace Retirement Plans As an employer, offering a workplace retirement plan to your employees is a valuable benefit that can help them secure their financial future. However, to attract and retain top talent, it’s essential to provide a plan that meets their needs and expectations. At nVest Advisors, helping small businesses build and manage great – and affordable – employee benefits is a big part of our mission. Here’s what our experience, backed by research, can tell you about what your employees want in their company retirement plan: ### 1. **Robust Investment Options** Employees want a diverse range of investment options to suit their risk tolerance and financial goals. This includes: - **Index funds:** These funds track a specific market index, offering low-cost diversification. - **Target-date funds:** Automatically adjust the asset allocation over time based on the employee’s retirement date. - **International funds:** Provide exposure to global markets, potentially reducing risk. - **Alternative investments:** Options like real estate or commodities can offer diversification. In the 401(k) plans we’ve been asked to review and re-vamp, we’ve noticed a trend toward fewer and fewer investment options for participants over the last few years, and we think that’s a step in the wrong direction. What employees are asking for, is the ability to either use a pre-made solution, or build their own strategy. A robust workplace retirement plan can empower employees to make these choices. The plans we build and manage offer that. We even survey your team once per year to ask them what kinds of investing options they want! **Reference:** Investopedia: <https://www.investopedia.com/terms/i/indexfund.asp> ### 2. **Automatic Enrollment and Escalation** A significant feature that employees appreciate is automatic enrollment, where they are automatically enrolled in the plan unless they opt out. Additionally, automatic escalation, where contributions gradually increase over time, can help employees save more consistently. **Reference:** Fidelity Investments: [https://sponsor.fidelity.com/bin-public/06\_PSW\_Website/documents/Automatic\_Enrollment\_FAQ.pdf](https://sponsor.fidelity.com/bin-public/06_PSW_Website/documents/Automatic_Enrollment_FAQ.pdf) ### 3. **Employer Matching Contributions** Employer matching contributions are a powerful incentive for employees to participate in the plan. Matching contributions can be a fixed percentage of the employee’s contribution or a dollar-for-dollar match up to a certain limit. **Reference:** The Motley Fool: <https://www.fool.com/retirement/2024/07/19/heres-what-the-average-401k-match-is-worth/> ### 4. **Low Fees** High fees can erode the value of retirement savings over time. Employees prefer plans with low expense ratios, especially on index funds. Consider negotiating with plan providers to obtain favorable fee structures. Not only are high fees unpopular (for obvious reasons), they can set your company up for regulatory problems or even lawsuits. **Reference:** Vanguard: <https://investor.vanguard.com/investment-products/mutual-funds/low-cost> ### 5. **Financial Education Resources** Providing employees with access to financial education resources can help them make informed decisions about their retirement savings. This can include workshops, webinars, or online tools. **Reference:** AARP: <https://www.aarp.org/money/> ### 6. **Roth IRA Option** A Roth IRA allows employees to contribute after-tax money and potentially withdraw funds tax-free in retirement. This option can be attractive to employees who believe their tax rate will be higher in retirement. **Reference:** IRS: <https://www.irs.gov/retirement-plans/roth-iras> ### 7. **Spouse or Domestic Partner Benefits** Offering benefits to spouses or domestic partners can be a valuable perk for employees in committed relationships. This includes allowing them to participate in the plan and potentially receive survivor benefits. **Reference:** Human Rights Campaign: <https://www.hrc.org/resources/corporate-equality-index> ### 8. **Flexible Retirement Options** Employees may have different retirement goals and lifestyles. Consider offering flexible retirement options, such as phased retirement or part-time work after retirement. **Reference:** Society for Human Resource Management (SHRM): <https://www.shrm.org/topics-tools/news/hr-magazine/ways-to-phase-retirement> ### 9. **Disability and Death Benefits** Providing disability and death benefits can offer employees peace of mind and financial security in case of unforeseen circumstances. **Reference:** MetLife: <https://www.metlife.com/insurance/disability-insurance/short-term/> ### 10. **Access to Financial Advisors** This one often catches employers off-guard, but **employees want access to a financial advisor as part of their 401k investing strategy.** Offering employees access to financial advisors can provide them with personalized guidance and support in planning for retirement. This can be through a group financial planning arrangement or individual counseling. At nVest Advisors, building a relationship with your employees is one of the top priorities of our advisory team. They’ll have access to basic and comprehensive financial planning with a real advisor, debt management and optimization tools, a local phone number to speak with a human advisor, and much more. ## Give your employees a workplace retirement plan that works for them [![workplace retirement plan](https://nvestadvisors.com/wp-content/uploads/2024/07/Investment-Management.png "Investment management nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/07/Investment-Management.png)*Your 401(k) plan should be more than a simple investment account. It can be an immersive experience to help your employees build real wealth and security.* Whether you are a company of one, or have hundreds of loyal team members, your benefits plan needs to meet the needs of the participants, and the budget of the company. A comprehensive workplace retirement plan can be a key component of this strategy. At nVest Advisors, our job as a fiduciary employer plan advisor is to provide you with both. **If your company doesn’t have a plan**, let us show you the options available – some require no cost or effort on your part, at all! **If your current plan needs an overhaul**, or you haven’t shopped it in the past few years, it’s time for a plan review and a competitive bid. As a champion for small businesses and their employees, we’d love to be able to show you how working with a family-owned, independent, [fully fiduciary financial advisor](https://nvestadvisors.com/2023/05/03/erisa-retirement-plan-401k-fiduciary/ceo/ "Understanding the Fiduciary Roles in ERISA Retirement Plans") can dramatically improve your employees’ experience with a 401k, and provide you [the peace of mind and protection from liability that a properly created and managed plan can be](https://nvestadvisors.com/2024/10/11/the-importance-of-fiduciary-responsibility-in-401k-plans/investment/). **The first step is a simple and no-cost [Plan Q&A Meeting](https://nvestadvisors.setmore.com/services/e0cf4206-7775-4426-9b8f-c0e1ed2294fa?source=easyshare) with our team.** Let’s examine your needs and see if we’d be a good fit for your company and your team. [Book your consultation today](https://nvestadvisors.setmore.com/services/e0cf4206-7775-4426-9b8f-c0e1ed2294fa?source=easyshare)! **Categories:** 401K, Business Stories, Individuals and Families, Retirement **Tags:** 401(k) management, 401k, 403b, ERISA, fiduciary, non-ERISA, plan participant, plan sponsor, risk, SEP IRA, SIMPLE IRA --- ### [SOUTH TEXAS CLIENTS: Schedule In-Person Meetings Nov 1-6](https://nvestadvisors.com/south-texas-clients-schedule-in-person-meetings-nov-1-6/) **Published:** September 29, 2024 **Author:** nVest Advisors **Content:** # We will be in South Texas for in-person meetings November 1-6. ## Our clients in the Rio Grande Valley are welcome to schedule your meeting time now. Both current and prospective clients are welcome to book meetings. As we have done since 2017, nVest Advisors offers its clients, plan sponsors, and plan participants living and working in South Texas the opportunity to have in-person meetings with your nVest financial advisor twice per year. The time is now to book your last opportunity for an in-person visit with our team in South Texas for 2024. Unless other arrangements are made directly with our office, all meetings will be held at: ## [**Country Inn & Suites**](https://www.google.com/maps/place/Country+Inn+%26+Suites+by+Radisson,+Harlingen,+TX/@26.1653711,-97.6879781,15z/data=!4m2!3m1!1s0x0:0x52ead2a71a6a0ded?sa=X&ved=1t:2428&ictx=111) ### **3825 S Expressway 83, Harlingen, TX 78550** Meetings during this visit are 45 minutes in length and can be about any subject you wish. For your convenience, daytime, evening and weekend meeting slots are available. However, these meetings book up quickly, and this is our last in-person visit to Texas until the Spring of 2025. ### If you’d like an in-person meeting in Harlingen TX during the first week of November, [please click here](https://calendar.app.google/bqATcvN1nUgDNRK37) to go to our RGV Meeting scheduling page, or use the tool below. We’ll see you there! **Categories:** Business Stories, Client News, Client Service, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Press Releases, public **Tags:** announcement, appointment, clients, economics, economy, retirement, RGV, Rio Grande Valley, texas, United States --- ### [401k Fiduciary Responsibility: What Employers Must Know](https://nvestadvisors.com/401k-fiduciary-responsibility-for-employers/) **Published:** October 11, 2024 **Author:** nVest Advisors **Content:** # **401k Fiduciary Responsibility: What Employers Must Know** As a small business owner, you are likely wearing many hats. You are responsible for the overall success of your business, which includes managing your employees’ retirement savings. One of the most important aspects of **401k fiduciary responsibility** is ensuring that your company’s 401k plan is operating in your employees’ best interests. If you fail to meet your fiduciary obligations under ERISA, you could face significant financial and legal risks. These risks can include: - **Department of Labor (DOL) investigation and enforcement action:** The DOL has the authority to investigate 401k plans that are not being managed properly. If the DOL finds that you have violated your 401k fiduciary responsibility you could face fines and penalties. These fines can be substantial, and the DOL may also order you to take corrective action, such as making restitution to plan participants. - **Participant lawsuits:** Employees who believe that their 401k plan has been mismanaged can file lawsuits against the plan sponsor (your company) and the plan fiduciaries. These lawsuits can be expensive and time-consuming to defend. In addition to financial damages, participants may also seek injunctive relief, such as requiring the plan to make changes to its investment options or fees. - **Personal liability:** In some cases, plan fiduciaries can be held personally liable for breaches of their fiduciary duties. This means that you could be responsible for paying damages out of your own pocket, even if your company is not. ## **Examples of Regulatory and Tort Cases Involving 401k Fiduciary Responsibility:** There have been many recent cases where 401k plan sponsors have been held liable for failing to meet their fiduciary obligations. For example, in 2018, the DOL filed a lawsuit against a company for allegedly charging excessive fees to its 401k plan participants. The DOL alleged that the company had breached its fiduciary duties by failing to act in the best interests of its employees. The company eventually agreed to pay a $1 million settlement to the plan participants. In another case, a group of 401k plan participants sued their employer for failing to properly diversify their plan’s investments. The participants alleged that the employer’s investment choices were too risky and that they had lost money as a result. The court ruled in favor of the participants and awarded them damages. [![k fiduciary responsibility](https://nvestadvisors.com/wp-content/uploads/2023/04/Business-Web-Page-Graphics-3.png "Business web page graphics 3 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/Business-Web-Page-Graphics-3.png)Exploring the right fit of plan, vendor, and advisor is a crucial step every employer should do at least every 3-5 years. ## **The Due Diligence Process:** To avoid facing legal and financial risks, it is important to conduct due diligence when selecting and managing your 401k plan. This process should include: - **Reviewing the plan’s investment options:** Make sure that the plan offers a variety of investment choices that reflect the **fiduciary duty** of providing appropriate options for your employees’ different risk tolerances and retirement goals. Consider factors such as the plan’s investment mix, expense ratios, and historical performance. - **Evaluating the plan’s fees:** Compare the fees charged by your plan to the fees charged by other similar plans. Make sure that the fees are reasonable and that they are not excessive. Look for hidden fees, such as revenue-sharing arrangements or excessive administrative fees. - **Monitoring the plan’s performance:** Keep track of the plan’s investment performance over time. If the plan is not performing well, you may need to make changes to your investment strategy. Consider hiring an independent investment advisor to help you evaluate the plan’s performance. - **Ensuring that the plan is properly administered:** Make sure that the plan is being administered in accordance with ERISA’s rules and regulations to maintain your 401k fiduciary responsibility. This includes ensuring that the plan is properly funded, that participant contributions are being invested in the appropriate accounts, and that the plan is being audited annually. ## 401k Fiduciary Responsibility: Red Flags That Signal a Need for Change There are a number of red flags that may indicate that it is time to change your 401k plan. These red flags include: - **High fees:** If your plan is charging excessive fees, it may be time to switch to a plan with lower fees. - **Poor investment performance:** If your plan’s investments are not performing well, you may need to change your investment strategy. - **Administrative problems:** If you are having problems with the plan’s administration, it may be time to switch to a plan that is better managed. - **Regulatory or legal issues:** If your plan is facing regulatory or legal scrutiny, it may be time to make changes to the plan. ### **The Value of Adding an ERISA Section 3(21) or 3(38) Plan Advisor** One way to help ensure that your 401k plan is being managed properly is to [hire an ERISA Section 3(21) or 3(38) plan advisor, like nVest Advisors.](https://nvestadvisors.com/2023/09/13/small-business-401k-fiduciary/ceo/ "Shopping your 401k plan for success") As an ERISA plan advisor, we act as fiduciaries and are responsible for always doing our jobs in the best interests of plan participants. A fiduciary plan advisor can help you with a variety of tasks, such as: - Selecting and monitoring investments - Evaluating and negotiating plan fees - Ensuring that the plan is properly administered - Addressing participant questions and complaints By hiring an ERISA Section 3(21) or 3(38) plan advisor, you can help to protect yourself and your employees from the risks associated with poorly managed 401k plans. [![Climbing financial mountains together](https://nvestadvisors.com/wp-content/uploads/2023/08/Untitled-design-30.png "Untitled design 30 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/Untitled-design-30.png)*A 401(k) plan should help your employees reach new financial heights. We’re committed to being their guide.* ## Take the responsibility seriously, and partner with an advisor to carry the burden for you As a small business owner, it is important to take your fiduciary responsibilities seriously. By ensuring that due diligence is conducted, plan performance is monitored, and any red flags are addressed, the 401k fiduciary responsibility can be upheld and operated in the best interests of your employees. In addition, It may also be advisable for an ERISA Section 3(21) or 3(38) plan advisor to be hired to help manage the plan. As a result, by taking these steps, you protect yourself and your employees from the financial and legal risks associated with poorly managed 401k plans. Most employers, however, don’t want to shoulder all of those fiduciary responsibilities themselves. You have a company to run. That’s why [partnering with a plan advisor makes so much sense](https://nvestadvisors.com/2024/04/23/empower-your-employees-strengthen-your-business-a-guide-to-small-business-retirement-plans/retirement/ "Empower Your Employees, Strengthen Your Business: A Guide to Small Business Retirement Plans"). You can outsource the majority of the fiduciary responsibilities for the plan and offer your employees a significant benefit at the same time: a personal relationship with a fiduciary advisor to help them manage not only their 401(k), but their entire financial lives ### Are we a good fit for your company’s plan? **The first step is a simple and no-cost [Plan Q&A Meeting](https://nvestadvisors.setmore.com/services/e0cf4206-7775-4426-9b8f-c0e1ed2294fa?source=easyshare) with our team.** Let’s examine your needs and see if we’d be a good fit for your company and your team. [Book your consultation today](https://nvestadvisors.setmore.com/services/e0cf4206-7775-4426-9b8f-c0e1ed2294fa?source=easyshare)! **Additional Resources** - Department of Labor: <https://www.dol.gov/> - Employee Retirement Income Security Act of 1974 (ERISA): <https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/erisa> - Investment Company Institute: <https://www.ici.org/> - American Benefits Council: <https://www.americanbenefitscouncil.org/> **Categories:** 401K, Business Stories, Individuals and Families, Investment, Mailchimp, Retirement, Small Business **Tags:** 401k, ERISA, fiduciary, plan, plan sponsor --- ### [Small RIAs Are Better Choice for Small Business 401(k) Plans](https://nvestadvisors.com/small-business-401k-plans/) **Published:** October 11, 2024 **Author:** nVest Advisors **Content:** # Small RIAs Are Better Choice for Small Business 401(k) Plans When it comes to managing your small business’s 401(k) plan, you have several options. One popular choice is to work with a large, well-known financial services company directly, like Vanguard of Fidelity. While these companies may offer a certain level of brand recognition, they often fall short in providing the personalized service and attention that that small business 401(k) plans require. That’s where small Registered Investment Advisor (RIA) firms, like nVest Advisors, come in. ## **The Advantages of Small RIAs for Small Business 401(k) Plans** If you are an employer looking to start a plan for the first time, or are a small or micro-company with $5 million or less in the plan already, we need to be perfectly frank with you here: [a small or startup 401(k), SEP IRA, SIMPLE IRA, 4o3(b) or other workplace retirement plan](https://nvestadvisors.com/2024/10/11/0-features-employees-want-in-their-workplace-retirement-plan/retirement/ "!0 Features Employees Want in their Workplace Retirement Plan") will often have two significant disadvantages when it comes to working directly with large retirement plan vendors: they consider your plan too small to devote much time to, and their fee structures will make your plan prohibitively expensive (or at least place your company at risk of regulatory problems or even civil lawsuits by your employees). Working with a smaller RIA firm, like nVest Advisors, puts your company and your team at the greatest advantage to maximize your plan’s potential benefit. There are a number of ways that working with a smaller RIA firm will benefit both your management team, and your loyal employees: 1. ### **Personalized Service and Attention For Small Business 401(k) Plans:** - **Individualized Investment Advice:** Unlike large firms that often rely on automated systems, small RIAs like nVest can provide personalized investment advice tailored to your specific needs and goals. They take the time to understand your business, its unique characteristics, and the retirement objectives of your employees. - **Direct Access to Decision-Makers:** When working with a small RIA, you will always have direct access to the decision-makers who are responsible for managing your plan. This means that you can get answers to your questions quickly, and have your concerns addressed effectively. - **Proactive Communication:** Small RIAs are more likely to proactively communicate with you about your plan’s performance, changes in the market, and any potential risks. This can help you – and your employees – make informed decisions about your plan’s management. 2. ### **Focus on Client Needs:** - **Smaller AUM Plans Receive More Attention:** Small RIAs like nVest Advisors specialize in serving smaller businesses and their 401(k) plans. It’s our “bread and butter”. This means that your plan will receive more attention and personalized service compared to larger plans managed by mega-companies. - **Tailored Investment Strategies:** Small RIAs can develop investment strategies that are specifically designed to meet the needs of your employees. They can consider factors such as age, risk tolerance, and time horizon when making investment decisions. At nVest Advisors, we even actively survey your employees every year, to hear what kinds of investments they want available. - **Comprehensive Plan Design:** Smaller firms can take the time to help you design a 401(k) plan that is not only compliant with ERISA regulations but also meets the specific needs of your business and employees, because your plan is much more important to them than a small plan swimming in an ocean of billion-dollar mega-corporations. [![Partnership with a small RIA firm is best for most small business retirement plans](https://nvestadvisors.com/wp-content/uploads/2024/03/business-spon-main-image-1.png "Types of retirement plans nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/business-spon-main-image-1.png) 3. ### **Lower Costs:** - **Competitive Fees:** Firms like nVest Advisors typically offer more competitive fees than larger financial services companies. This is because they have lower overhead costs and can pass those savings on to their clients. - **Transparent Fee Structures:** Small RIAs are more likely to have transparent fee structures, making it easy for you to understand how we charge you for your plan. This can help you avoid hidden fees and ensure that your plan is being managed efficiently. 4. ### **Fiduciary Responsibility For Small Business 401(k) Plans:** - **Acting in Your Best Interests:** As fiduciaries, [small RIAs are legally obligated to act in the best interests of your employees](https://nvestadvisors.com/2023/05/03/erisa-retirement-plan-401k-fiduciary/ceo/ "Understanding the Fiduciary Roles in ERISA Retirement Plans"). This means that they must put your employees’ needs ahead of their own and avoid conflicts of interest. - **Regular Monitoring and Reporting:** Small RIAs will regularly monitor your plan’s performance and provide you with detailed reports. This can help you ensure that your plan is on track to meet your employees’ retirement goals. 5. ### **Strong Relationships:** - **Building Trust:** When you work with a small RIA, you can develop a strong relationship with your advisor. This can make it easier to discuss your concerns, get answers to your questions, and make informed decisions about your plan. - **Personalized Service:** A strong relationship with your RIA can also ensure that you receive personalized service and attention. Your advisor will understand your unique needs and goals and can tailor their advice accordingly. ## **Working together, small businesses are unstoppable** While large financial services companies may offer brand recognition, small RIAs like nVest Advisors provide the personalized service, much higher levels of attention, and expertise about your company, your plan, and your team, that small business 401(k) plans require. By working with nVest Advisors, you can ensure that your employees’ retirement savings are being managed effectively and in their best interests. ### Are we a good fit for your company’s plan? **The first step is a simple and no-cost [Plan Q&A Meeting](https://nvestadvisors.setmore.com/services/e0cf4206-7775-4426-9b8f-c0e1ed2294fa?source=easyshare) with our team.** Let’s examine your needs and see if we’d be a good fit for your company and your team. [Book your consultation today](https://nvestadvisors.setmore.com/services/e0cf4206-7775-4426-9b8f-c0e1ed2294fa?source=easyshare)! **Categories:** 401K, Business Stories, Individuals and Families, Mailchimp, Retirement, Small Business **Tags:** 401(k) during recession, 401(k) management, 401k, fiduciary, plan advisor, plan sponsor, RIA, small business --- ### [Maximizing Your 401(k): Avoid Penalties, Smart Rollovers & Free Consultation](https://nvestadvisors.com/maximizing-your-401k-avoid-penalties-smart-rollovers-free-consultation/) **Published:** August 30, 2024 **Author:** Atta **Content:** # Maximizing Your 401(k): Navigating Penalties, Rollovers, and Financial Planning During Uncertain Times ### **The Importance of 401(k) Management in Uncertain Times** Managing your 401(k) effectively has never been more crucial in an ever-changing economic landscape. With talk of recessions and the looming threat of layoffs, securing your financial future requires careful planning and informed decision-making. Whether you’re concerned about potential penalties, considering a rollover to an IRA, or simply looking to make your money work harder, understanding your options is key. At [nVest Advisors](https://nvestadvisors.com/), we understand that these decisions can be overwhelming. That’s why we’re offering a free consultation or a second opinion with our founder, Jeremy Torgerson, to help you navigate these challenges and optimize your retirement strategy. ### **Understanding 401(k) Withdrawal Penalties:** A 401(k) is a powerful tool for retirement savings, offering tax advantages and the potential for long-term growth. However, accessing these funds before retirement can come with significant penalties. - **What is a 401(k)? A [401(k)](https://www.irs.gov/retirement-plans/401k-plans) is a retirement savings plan sponsored by an employer, allowing employees to save and invest a portion of their paycheck before taxes are taken out. The funds in a 401(k) grow tax-deferred until they are withdrawn. - **Early Withdrawal Penalties: Withdrawing from your 401(k) before the age of 59½ typically results in a 10% penalty, on top of the income tax you’ll owe on the withdrawn amount. This can severely reduce the funds available for your retirement. However, certain exceptions exist, such as for first-time home purchases, higher education expenses, or financial hardships. - **Impact of Recession and Layoffs: During a recession or in the event of layoffs, many people are tempted to dip into their 401(k) to make ends meet. While this might seem like a quick fix, it’s important to consider the long-term consequences. Early withdrawals can undermine your retirement goals, leaving you financially vulnerable later in life. ### **Rolling Over Your 401(k) to an IRA: A Strategic Move?** When changing jobs or facing layoffs, rolling over your 401(k) into an IRA is a common consideration. But is it the right move for you? - **What is a Rollover? A rollover involves transferring your 401(k) funds into an IRA (Individual Retirement Account), which can offer more flexibility and a broader range of investment options. This process helps you maintain the tax-deferred status of your retirement savings. - **Benefits and Drawbacks: Rolling over to an IRA can provide greater control over your investments, often with lower fees and a wider selection of assets. However, it also comes with potential downsides, such as losing access to some 401(k) loan features and possibly higher management fees depending on the IRA provider. - **Timing and Process: The rollover process typically takes a few weeks, but it’s essential to handle it correctly to avoid any tax implications. A direct rollover, where the funds are transferred directly from your 401(k) to your IRA, is the safest way to avoid unnecessary taxes. ### **Rollover Tax Consequences: Traditional IRA vs. Roth IRA:** One of the most critical aspects of rolling over your 401(k) is understanding the tax consequences, especially when choosing between a Traditional IRA and a Roth IRA. **Traditional vs. Roth IRA:** When you roll over to a Traditional IRA, your funds remain tax-deferred, and you only pay taxes upon withdrawal in retirement. In contrast, rolling over to a Roth IRA requires you to pay taxes upfront, but your withdrawals during retirement are tax-free. **Using a Tax Calculator:** Before making this decision, it’s wise to use a tax calculator to estimate the immediate tax impact and compare it against the potential long-term benefits. This can help you make an informed choice that aligns with your financial goals. **Long-Term Planning:** If you anticipate being in a higher tax bracket during retirement, a Roth IRA could be advantageous despite the upfront tax hit. Conversely, if you expect to be in a lower tax bracket, a Traditional IRA might be the better option. ### **Making Your Money Work for You During a Recession** In times of economic uncertainty, making strategic decisions about your 401(k) and other investments is crucial. **Maximizing 401(k) Contributions:** Even during a recession, contributing regularly to your 401(k) is essential. Consider increasing your contributions, especially if your employer offers a matching program. This can significantly boost your retirement savings over time. **Diversifying Your Investments:** To protect your 401(k) from market volatility, diversification is key. Spread your investments across different asset classes, such as stocks, bonds, and mutual funds, to reduce risk and enhance growth potential. **Emergency Funds and Financial Resilience:** While your 401(k) should be preserved for retirement, it’s also important to maintain an emergency fund. This can prevent the need to tap into your retirement savings during tough times, such as a layoff or unexpected expenses. ### **Free Consultation: Get a Second Opinion on Your Financial Strategy:** Navigating the complexities of 401(k) management, especially in uncertain economic times, can be challenging. That’s why we’re offering a free consultation or a second opinion with Jeremy Torgerson, the founder of nVest Advisors. **Why a Second Opinion Matters:** Even if you already have a financial plan in place, a second opinion can provide valuable insights and uncover opportunities you might have overlooked. Jeremy’s expertise can help you ensure that your retirement strategy is optimized for current and future market conditions. **What to Expect:** During your free consultation, Jeremy will review your current 401(k) setup, discuss your goals and concerns, and provide personalized advice tailored to your unique situation. Whether you’re considering a rollover, worried about penalties, or simply want to make your money work harder for you, this consultation is an opportunity to get expert guidance. ### **Conclusion: Secure Your Financial Future Today:** In a world where economic uncertainty is becoming the norm, taking proactive steps to manage your 401(k) and other retirement savings is crucial. Whether you’re concerned about penalties, contemplating a rollover, or seeking to maximize your investment returns, making informed decisions can significantly impact your financial future. Don’t navigate these challenges alone. Contact us today to schedule your free consultation with Jeremy Torgerson and take the first step toward securing your retirement. Your future self will thank you. [Secure Your Financial Future Today](https://nvestadvisors.setmore.com/) **Categories:** 401K, Investment, Retirement **Tags:** 401(k) management, 401(k) penalties, Financial advice, Free financial consultation, IRA rollover, Jeremy Torgerson, nVest Advisors, Retirement planning, Roth IRA conversion --- ### [Navigating 401(k) Plans in Uncertain Times: Taxes, Risks, and Rollovers](https://nvestadvisors.com/navigating-401k-plans-in-uncertain-times-taxes-risks-and-rollovers/) **Published:** September 8, 2024 **Author:** Atta **Content:** # Navigating 401(k) Plans in Uncertain Times: Taxes, Risks, and Rollovers ### Navigating 401(k) Strategies During Economic Uncertainty As economic uncertainty looms, many investors find themselves grappling with the implications of market downturns, potential company bankruptcies, and the risks associated with their retirement funds. With the volatility of financial markets, especially during recessions, it’s crucial to reassess your 401(k) strategies to ensure your retirement savings remain secure. ### What Are the Tax Implications of Withdrawing from My 401(k) Early During a Recession? One of the biggest concerns during a recession is the temptation to withdraw from your 401(k) early. While this may provide immediate financial relief, it’s essential to consider the long-term tax implications. When you withdraw from your 401(k) before the age of 59½, you typically face a 10% early withdrawal penalty in addition to regular income taxes. This can significantly reduce the amount of money you receive. For example, if you withdraw $50,000, you could lose $15,000 or more to taxes and penalties, depending on your tax bracket. Moreover, withdrawing funds during a market downturn may lock in losses, as you sell investments that could recover value over time. Exploring other financial options before tapping into your 401(k) is advisable. You might consider loans or hardship withdrawals if you’re in a dire situation, but these should be last-resort measures. If you would like more detailed advice tailored to your situation, please consider scheduling a consultation with our advisors at **[nVest Advisors](https://nvestadvisors.setmore.com/)**. ### What Happens to My 401(k) If My Company Goes Bankrupt? If your company files for bankruptcy, it’s natural to worry about the security of your 401(k). The good news is that 401(k) plans are generally protected by federal law. The Employee Retirement Income Security Act [**(ERISA)**](https://www.dol.gov/general/topic/health-plans/erisa#:~:text=The%20Employee%20Retirement%20Income%20Security,for%20individuals%20in%20these%20plans.) ensures that your 401(k) assets are held in a trust separate from the company’s assets. This means they should remain safe even if your employer goes under. However, if you have company stock in your 401(k), its value could plummet if the company goes bankrupt, severely impacting your retirement savings. To mitigate this risk, it’s wise to diversify your investments within your 401(k), reducing your exposure to any single company’s stock. ### Should I Continue Contributing to My 401(k) If the Market Is Crashing? It’s common to feel hesitant about continuing 401(k) contributions during a market downturn. However, halting contributions might actually be counterproductive. Market downturns can present opportunities to buy stocks at lower prices, potentially increasing your returns when the market recovers. This strategy, known as dollar-cost averaging, allows you to purchase more shares for the same amount of money when prices are low. Over time, this can significantly enhance the growth potential of your 401(k). It’s important to stay the course with your long-term investment strategy and avoid making decisions based on short-term market movements. For more personalized advice, consider reaching out to [**our team** ](https://nvestadvisors.com/aboutus/)at nVest Advisors. ### What Are the Risks of Keeping My 401(k) Invested in Company Stock During a Recession? Investing heavily in your employer’s stock can be risky, particularly during economic uncertainty. If the company suffers financial losses or goes bankrupt, the value of your 401(k) could be drastically affected. This is why financial experts generally recommend that no more than 10% of your retirement portfolio be invested in company stock. By diversifying your investments, you spread out your risk across different sectors and asset classes, which can help protect your retirement savings from significant losses. If you’re unsure about your current investment mix, it may be time to rebalance your portfolio. ### Is It a Good Idea to Roll Over My 401(k) into an IRA During Economic Uncertainty? Rolling over your 401(k) into an IRA during economic uncertainty can offer several benefits, including more investment options, better fee structures, and greater control over your retirement funds. An IRA also provides flexibility in managing your investments and may offer better estate planning options. However, there are also considerations to keep in mind, such as the potential costs of rolling over and the loss of certain 401(k) benefits like creditor protection and loan provisions. Before making a decision, it’s essential to evaluate your current 401(k) plan’s features and compare them to the IRA options available to you. Our team at nVest Advisors can help you weigh the pros and cons to determine the best course of action. ### Conclusion Economic downturns and recessions bring unique challenges for 401(k) investors, but with the right strategies, you can navigate these turbulent times and safeguard your retirement savings. Whether you’re considering early withdrawals, worried about your company’s financial health, or pondering a rollover into an IRA, informed decisions are key. For more personalized advice, visit nVest Advisors to schedule a consultation with our experienced team. We’re here to help you secure your financial future, no matter what the market conditions. [Get My Free 401k Review](https://nvestadvisors.setmore.com/) **Categories:** 401K **Tags:** 401(k) during recession, 401(k) investment risks, 401(k) withdrawal risks, Company bankruptcy and 401(k), Get My Free 401k Review, IRA rollover strategies, Retirement planning in recession --- ### [5 Common Retirement Planning Mistakes for Texas Teachers](https://nvestadvisors.com/5-common-retirement-planning-mistakes-for-texas-teachers/) **Published:** June 7, 2024 **Author:** Atta **Content:** # 5 Common Retirement Planning Mistakes for Texas Teachers Texas teachers must plan for retirement to ensure financial stability in their golden years. Unfortunately, many instructors make avoidable blunders that might jeopardize their retirement prospects. This blog article will look at five common retirement planning mistakes, and offer practical tips to assist Texas instructors make educated decisions. ### **1. Back-loaded Retirement System:** Texas’ Teachers’ Retirement System (TRS) has a back-loaded pension structure. While it provides stability, it denies many teachers proper retirement benefits. This is how it works. - TRS benefits are computed using years of service and final average wage. - Teachers must serve at least five years to be eligible for a pension. - The “Final Average Salary” is calculated based on the years earned, which might result in inflation erosion over time. **Solution**: Consider boosting your TRS benefits with alternative retirement savings options like 403(b) or 457(b) plans. Here at nVest Advisors, we specialize in 403(b) and 457 supplemental retirement accounts, and have clients all over Texas education (and beyond). ### **2. Not starting early:** Delaying retirement planning is a typical error. The power of compounding works greatest when you begin early. Texas teachers should start contributing to their retirement accounts as soon as feasible. - Make use of tax-advantaged choices such as 403(b) plans. - Investigate different investing options to increase their nest egg. ### **3. Ignoring Social Security:** Texas teachers have the choice to enroll in Social Security, but it is not required. Some districts opt not to participate, resulting in patchwork coverage. - Teachers should understand their Social Security eligibility and benefits. - Consider the long-term effects of not engaging. - Investigate other approaches to construct a safety net. ### **4. Neglecting Debt Management:** Having too much debt when you retire might make things difficult financially. Texas educators ought to give paying off high-interest debt priority. - Make a plan to pay off your debts. - Prevent taking on additional debt while they are employed. ### **5. Housing Cost Underestimation:** Retirement savings plans may be greatly impacted by housing costs. Teachers in Texas should: - Budget for home expenses, such as utilities, upkeep, and property taxes. - Think about moving to a more reasonably priced location or downsizing. - Look at home options that fit their retirement budget. ## **In summary:** Teachers in Texas should have a secure retirement. Educators in their golden years might achieve financial independence by avoiding typical pitfalls and making good judgments. Consult with a financial expert to tailor your retirement strategy to your specific situation. At [nVest Advisors](https://nvestadvisors.com/), we are committed to helping you towards a future in which financial freedom meets wanderlust. Our knowledge and personalized retirement solutions can assist you in turning your aspirations into plans and making your travel goals a reality. Take the first step towards financial independence today. Contact us and let’s start planning your path to retirement success! [**Let’s Get Started** ](https://calendar.google.com/calendar/u/0/appointments/schedules/AcZssZ1A6pPyHFsfHGAOo8_5pDwopmwylwHKnHDUnF619kG0RTdNHF0mpVj2jupD9qX4Dltg5SWQ3oOp) **Categories:** Individuals and Families, Mailchimp, Retirement, Texas Teachers Retirement, Webinars **Tags:** 401a, 401k, 403b, 457, debt, education, financial planning, investing, retire, retirement, retiring, teachers, Teachers Retirement Planning, texas, TX --- ### [Economics: Letting world events guide our investing](https://nvestadvisors.com/economics-letting-world-events-guide-our-investing/) **Published:** April 19, 2024 **Author:** nVest Advisors **Content:** # Economics: Letting world events guide our investing Investing in a changing world means being aware of the economy. Our approach to investing has evolved over the years. Particularly since the COVID-19 pandemic, we’ve seen the impact policy and monetary decisions can have on families and companies. In the ever-evolving landscape of financial services, geopolitical changes, fast-moving markets and globalization, we proudly stand out as a pioneering firm dedicated to crafting unique investment strategies that leverage both micro and macroeconomic principles, in an attempt to democratize financial planning and investment services for working families and small business owners. Here’s how we employ these economic disciplines to create accessible and innovative strategies for our clients. ### Microeconomics and Macroeconomics: A Dual Approach The economy is the starting point for all of our investing decisions. If the stock market is the beautiful bedroom furniture on the second floor, consider the economy the foundation of the house itself. And it tells us the story of where our companies, and therefore, our investment markets, are headed in the coming months. We spend countless hours every month researching, analyzing, and employing strategies that blend microeconomic and macroeconomic insights. Microeconomics focuses on individual and business decisions that get made when resources are limited, and the interactions among these various entities. In contrast, macroeconomics looks at the economy as a whole, studying broad factors like national productivity, total national income, and the overall levels of prices and employment. By integrating these two fields, we can tailor investment strategies that are not only responsive to global economic trends but also deeply personalized to meet individual client needs. This approach allows the firm to navigate complex market dynamics and craft strategies that are attuned to both personal and broader economic factors. ### Innovative Strategies: Sector Rotation and More One of the key strategies employed by nVest Advisors is sector rotation, which is based on shifting investments among stock market sectors as economic conditions change. This strategy capitalizes on the cyclical nature of industries by investing in sectors expected to outperform others based on current economic indicators and forecasts. The economy moves in a sine wave over a period of seven to ten years on average, and not every part of the economy performs well during up, or down, parts of that cycle. Our strategy helps us shift your investing exposure to what typically does best during the current phase of the economy, and drops all of the “dead weight” that historically under-perform. ### Addressing Fixed Income Challenges During Inflation, QE and QT Quantitative easing (QE) and quantitative tightening (QT) present unique challenges and opportunities in fixed income markets. QE tends to depress the yields on bonds, savings accounts, and CDs, making it hard to find attractive returns. Conversely, QT can lead to higher yields but also increased volatility. We navigate these conditions by adjusting bond portfolio durations and diversifying across credit qualities and geographic boundaries, to ensure that our clients’ portfolios are robust against such macroeconomic changes. ### Commodities as a Strategic Component Commodities often act as a hedge against inflation and are crucial in times of economic uncertainty. Although we don’t always use them, we do incorporate commodities into portfolios to exploit these characteristics, adjusting allocations based on macroeconomic indicators like global economic growth rates, currency strength, and inflationary trends. ### The Role of Technology and Personalization Technology plays a pivotal role at nVest Advisors. We utilize advanced digital platforms to manage portfolios actively, considering the latest economic data and trends. This tech-driven approach enhances the firm’s ability to offer personalized advice to a much more diverse, and larger group of clients and that reflects timely economic conditions rather than the reactive, often outdated advice typical of many traditional advisory offices. ### Challenges and Adaptations Despite the innovative approach, nVest Advisors faces challenges like any firm. The need to balance between micro-level client personalization and macro-level economic shifts requires constant adaptation and foresight. The firm addresses these challenges through continuous learning, client education, and a proactive communication strategy that keeps clients well-informed and engaged in their financial journey. **Not everyone needs a complex, customized investing strategy; but those who do will work one-on-one with their advisor to create it.** ### Conclusion nVest Advisors’ unique approach of integrating micro and macroeconomic principles to develop personalized investment strategies allows us to serve the underserved sector of working individuals and small businesses effectively, and by providing strategies and expertise commonly only available to the already-wealthy. By focusing on technology, client education, and adaptive strategies, we not only navigate the complex world of investment but also ensure that our clients are well-prepared to meet their financial goals in any economic environment. **For more information on our services and investment philosophy, we encourage you to [schedule a free, no-obligation Q&A visit with us](https://calendar.app.google/8gPAAENdDCwZTmAy5). If you’re ready to see the difference our approach can make with your own portfolio, we’d love the opportunity to show you!** **Categories:** Business Stories, Client News, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, public, Small Business **Tags:** economics, economy, global economy, invest, investing, macroeconomics, market, money management, portfolio, recession, US economy --- ### [Empower Your Employees, Strengthen Your Business: A Guide to Small Business Retirement Plans](https://nvestadvisors.com/empower-your-employees-strengthen-your-business-a-guide-to-small-business-retirement-plans/) **Published:** April 23, 2024 **Author:** nVest Advisors **Content:** In today’s competitive job market, attracting and retaining top talent is crucial for any small business. Competitive salaries are essential, but what truly sets an employer apart is offering a comprehensive benefits package. One of the most powerful tools in your arsenal? A **small business retirement plan**. Retirement plans strengthen your business by empowering your employees’ financial decision-making and adding loyalty. And they don’t have to be burdensome or expensive to offer. ### **Why Offer a Retirement Plan? It’s a Win-Win** Think beyond just the financial benefits – a well-designed retirement plan offers a multitude of advantages for both your company and your employees: **For Your Employees:** - **Financial Security:** A retirement plan empowers your employees to take control of their financial future. Knowing they’re actively saving for retirement reduces stress and fosters a sense of security, leading to: - **Increased Employee Satisfaction:** Happy employees are more engaged and productive. - **Reduced Turnover:** Employees who feel valued are less likely to leave for a competitor offering a retirement benefit. - **Improved Morale:** A strong benefits package fosters a positive company culture, where employees feel appreciated and invested in the company’s success. **For Your Business:** - **Attract Top Talent:** In a competitive job market, a retirement plan makes your company a more attractive employer. It demonstrates your commitment to your employees’ long-term well-being. - **Tax Advantages:** Contributions made to your employees’ retirement plans are often tax-deductible for your business, lowering your tax burden. - **Increased Productivity:** Employees focused on their financial future are less likely to worry about retirement savings, leading to better focus and improved work performance. - **Stronger Employer Brand:** Offering a retirement plan positions your company as a responsible and forward-thinking organization, attracting high-quality candidates who value a long-term career path. ### **Choosing the Right Plan for Your Business** Now that you understand the benefits, let’s explore the different types of retirement plans available for small businesses: - **Simplified Employee Pension IRA (SEP IRA):** A [SEP IRA](https://www.investopedia.com/terms/s/sep.asp) is an ideal option for businesses with one to a few employees (including yourself, the owner). Here’s how it works: - You, as the employer, contribute a fixed percentage of each employee’s salary (including your own) to their individual IRAs. - Contribution limits are set annually by the IRS. - SEP IRAs are known for their ease of setup and administration, making them a popular choice for small businesses. - **Savings Incentive Match Plan for Employees (SIMPLE IRA):** [This plan](https://www.investopedia.com/terms/s/simple-ira.asp) is well-suited for businesses with less than 100 employees. Here’s the breakdown: - You, as the employer, are required to make a matching contribution to your employees’ eligible salary deferrals. This match can be a percentage of their contribution (up to a certain limit) or a fixed non-elective contribution for all eligible employees. - SIMPLE IRAs offer some administrative advantages compared to traditional 401(k) plans, making them a good option for businesses seeking a simpler solution. - **Solo 401(k):** [This plan](https://www.investopedia.com/retirement/401k-plans-small-business-owner/) is specifically designed for sole proprietors and businesses with only a spouse as an employee. Here are the key benefits: - Solo 401(k)s offer the highest contribution limits compared to other small business retirement plans. You can contribute as both an employer and an employee, maximizing your retirement savings potential. - Solo 401(k)s provide greater flexibility in terms of permissible contributions. You can choose to contribute pre-tax dollars (reducing your taxable income) or post-tax dollars (allowing for tax-deferred growth on earnings). ### **We Can Help You Choose the Perfect Plan** Selecting the right retirement plan depends on your specific business size, budget, and employee demographics. **As a [fiduciary plan advisor](https://nvestadvisors.com/2023/02/07/fiduciary-responsibility-in-401k-plans/investing-general/ "Fiduciary Responsibility in 401(k) Plans")**, we prioritize your needs above all else. We’ll walk you through each plan option, compare features and benefits, and answer any questions you may have. Our goal is to help you implement a retirement plan that aligns with your business goals and empowers your employees to achieve their long-term financial objectives. ### **Don’t Wait! Invest in Your Future** Offering a retirement plan is a strategic investment in both your employees and your business. It fosters loyalty, attracts top talent, and strengthens your company culture. By partnering with a fiduciary advisor, you gain access to expert guidance and ensure you’re making the best decision for your unique situation. **Ready to take the next step? [Contact us today!](https://nvestadvisors.com/contact/)** Let’s discuss your needs and help you create a retirement plan that propels your business forward. **Categories:** Business Stories, Mailchimp, public, Retirement, Small Business **Tags:** 401k, advisor, colorado, fiduciary, Kansas, plan, retirement, SEP, SEP IRA, SIMPLE, SIMPLE IRA, small business, texas, Utah --- ### [Weekly Market & Economic nSight | March 11, 2024](https://nvestadvisors.com/economic-update-03-11-2024/) **Published:** March 11, 2024 **Author:** nVest Advisors **Content:** **A Note from Jeremy, CEO/CIO: Economic News** **Happy Monday! The economy continues to show signs of slowing and the stock market, particularly the tech stocks we’ve been arguing are overvalued, have started a downside correction.** Last Friday, especially, equity indexes were significantly down and the trend continues as we complete this update this morning. Remember that markets, with rare exception, “zig-zag” their way up or down, though when panic sets in, it can feel much faster on the downside than the upside. There’s an old saying that stocks take the stairs up, but the elevator down, and that is why we have our clients very defensively allocated until we see the “elevator” back on the ground floor in coming weeks. **NOTE:** Starting April 1, I will be providing a DAILY economic update on my personal blog, [“Think Like A Rich Guy”](https://thinklikearichguy.com). Economic and market insight from all over the world will begin appearing there. We are also working on a weekly podcast! Stay tuned. *~ Jeremy, CEO* - **Markets remain grossly overbought** - **Jobs Update** - **Real Estate Update** ## Markets remain overbought. Last week, we looked closely at overall market valuation metrics, to show you two important concepts: 1. The Market as a whole is grossly overbought, and 2. The Market is concentrated at historical levels (this means only a few companies are actually up, but up so much that they’re dragging the entire index with them). We reiterate that sentiment this week, even as we see markets starting to pull back from these astronomical high valuations in these “meme” stocks that grab the attention of the public at large, and suddenly, valuations are up so high that they can’t be logically justified or sustained. There is a strategy called “Momentum Investing” that we are studying more closely for our client models that may be able to capture – safely – some of those returns for our model portfolios, but at the moment, we are still skeptical that the tops and bottoms of these stocks can be ascertained. These charts show why that’s the case – momentum factors didn’t drive investment returns early in 2023 at all, but did do so strongly later in the year, and the Momentum Factor is, for all intents and purposes, the Magnificent Seven stocks. At first glance, the rally looks strong and sustained since the November Fed meeting, in which markets immediately priced in seven (what is it with the number “7” that the market obsesses with so much?) interest rate cuts in 2024 that we now know for certain will not happen. We told our clients back then that the recent run-up was not sustainable because the premise upon which it was built was entirely speculative and unrealistic. We remain confident that the recent rally can – and likely will – “snap back” with very little warning to investors. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/JEREMY-FOR-STUDY-4.png "Jeremy for study 4 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/JEREMY-FOR-STUDY-4.png) What is causing the stocks to rally is also a backward-looking indicator right now. Many factors can contribute to a stock’s value rising or falling, but currently, the reported change in their sales is having the biggest impact. This is allowing investors to forget many of the more important fundamentals such as the total yield of the stock (dividends plus or minus price changes), the Price/Earnings ratios (these meme stocks’ valuations are astronomically too high based on this measure alone), and the improvement in their profit margins. Right now, a high reported sales figure wins the day, even though those sales have already in the past. Past sales (not profit) is driving future valuations at the moment, and that doesn’t make sense to us. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-Top-10-stocks-return-attrib-S.png "Eq top 10 stocks return attrib s nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-Top-10-stocks-return-attrib-S.png) Because of this extreme focus on only a few companies, and only their sales for the previous quarter, the concentration risk in stocks has reached its highest point in several generations. Not even the Tech Bubble of 1999-2001 comes close to where we are today. In fact, it’s been since the 1920s for us to have we seen the top 10 stocks in the S&P 500 be as much as a third of the overall valuation of the index. Think of it this way: out of 500 stocks that make up the S&P, only 10 (2% of companies) are providing 33% of the returns. 490 companies are responsible for the rest. When concentration gets this high, it can cause the index to crash suddenly if one or more of these companies suddenly drop due to changing economic or business conditions. This is not a broad-based rally across the entire economy – this is a highly focused rally, in 10 stocks only, in stock prices only. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-Concentr2403050544.jpg "Eq concentr2403050544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-Concentr2403050544.jpg) Let’s give you just one example of this concentration in real time. Nvidia (NVDA), the maker of microchips and every graphics card my kids ever owned, reported sales last year of $63 billion. This sounds like a lot, but the stock price change as a result of this report was so astronomically and unsustainably high, it created a company valued at $2.3 TRILLION. In comparison, NVDA now dwarfs the sizes of the companies on the right, COMBINED (and those companies, combined, have total sales of over $1.04 Trilion, more than 20 TIMES what NVDA produces, and a combined profit EBIT of roughly 5 TIMES Nvidia’s): [![](https://nvestadvisors.com/wp-content/uploads/2024/03/IMG_2116-816x1024.jpg "Img_2116 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/IMG_2116.jpg) The recent rally is so strong that previously, it’s only happened immediately AFTER a recession (when stock prices had been down 40% or more), or when bubbles formed like in 1999. Since we have not yet seen the retraction in stock prices due to an economic downturn, we conclude that this is an asset bubble that cannot be sustained, because it’s not rallying back from an irrational sell-off first. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-AAA-Bubble-rally2403050544.png "Eq aaa bubble rally2403050544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-AAA-Bubble-rally2403050544.png) Indeed, ancillary evidence tells us that we have likely past the peak of the bubble, and things will begin to cool off. Google searches for the “Magnificent 7 stocks” is fading quickly: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/BT-AAA-Mag-7-are-becoming-boring.png "Bt aaa mag 7 are becoming boring nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/BT-AAA-Mag-7-are-becoming-boring.png) I’d like to take an additional minute to discuss the current rally in crypto, which I believe is coming from three different sets of investors. First, we have what I call the “crypto bros”; investors who have an almost religious fervor for cryptocurrencies being a sort of financial savior for the world, someday replacing fiat currencies and decentralizing (or often, in their words, “democratizing” finance). The second comes from the investors who are speculating simply because crypto coins trade wildly and completely without logic. And the third are people who are normally more conservative investors who are looking at Bitcoin, especially, as a form of safety similar to gold. These three are rallying at the same time for different reasons, and it’s caused the Fear and Greed Index in crypto to reach record levels of “extreme greed”. Again, this is an emotional bubble that must eventually burst and return to earth, and when it does so, it can be extremely fast. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/BT42403050544.png "Bt42403050544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/BT42403050544.png) And many coins are rallying in the wake of Bitcoin, none of which makes any logical or rational sense, none of which can be valued accurately day-to-day, and none of which have anything to offer on their own except they sit in Bitcoin’s shadow: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/BT-Specs2403050544-308x1024.png "Bt specs2403050544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/BT-Specs2403050544.png) **Where markets are today alarms us at nVest Advisors from a perspective of safety for our client portfolios. We are not “bears” here and take no short positions against the market. Instead, we are data-dependent and focus first on risk aversion and letting events in the macroeconomy guide our model construction. As fiduciary advisors, we believe that it is preferable to sidestep markets when they rally too high and return to your typical risk profile once the market prices have corrected.** So, we believe the market has to come to a reckoning about the recent rally, based mostly on pipe dreams and the smoke-and-mirrors of a few tech companies promising what they simply cannot deliver. We may have a few more months of tech company overvaluation, but both the weakening economy and the failure of many of these AI projects (or promised projects that never take off), will correct stock prices back down to earth. ### What this means for you We continue to adjust our investment models for our clients who engage with us, and our recommendation is to remain conservatively invested for now. ## Jobs Update The weekly jobs numbers continue to give many economists the (we believe, false) notion of a robust economy. The issue is that unemployment filings are one indicator (typically, the last one) of a deteriorating labor market. Companies don’t want to lay off workers until they have to, and we’ve shown our readers several times over the last few months that unemployment filings typically don’t start really climbing until we are about 1/3 of the way through a recession. Job losses are the ***result*** of a recession, not a ***predictor***. That said, the current initial unemployment filings came in low last week, and followed seasonal trends (job losses typically drop off at the start of the year): [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims2403080541-493x1024.png "Us claims2403080541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims2403080541.png) Continuing claims continues to buck the trend and give us a different picture of the long-term job market. And as you’ll see below, we strongly believe that the initial claims will begin to rise rapidly in the coming few weeks due to WARN notices and other indicators: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims-Cont2403080541-523x1024.png "Us claims cont2403080541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims-Cont2403080541.png) The disconnect between the inital claims and the continuing claims is, historically, very unusual. Normally, they are very closely correlated. We believe that as continuing claims continue to trend upward, initial claims will rise to reconnect. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims-Divergence2403080541.png "Us claims divergence2403080541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims-Divergence2403080541.png) Also, WARN notices are skyrocketing since the beginning of the year. A WARN notice is an announcement of an intended layoff by a company that has 100 or more employees, which must be given at least 60 days in advance. As you can see below, the number of initial unemployment claims (black line) is lagging behind a big rise in layoff notices. We believe the unemployment claims will spike in coming weeks. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-WARN-Notices2403050544.jpg "Us warn notices2403050544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-WARN-Notices2403050544.jpg) There is also the number of job cut announcements by the Challenger report. 2024 is the highest number of announced layoffs in any February for the last decade (and January was the second-highest in that same time period). Those people have not been laid off yet, or are just starting to be. We believe this will reflect in initial claims very quickly. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Challenger2403080541-454x1024.png "Us challenger2403080541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Challenger2403080541.png) We can also see it in the hiring plans for small businesses, of which there are over 33 million in the United States. Small business makes up about 34% of our total GDP: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-NFIB-Hiring-Plans2403110544.png "Us nfib hiring plans2403110544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-NFIB-Hiring-Plans2403110544.png) Of note is that the overall unemployment rate has risen to 3.9% despite the low layoff notices. This is getting close to recession territory, in which unemployment above 4% is typically described as a soft or declining economy. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-NFP-Unempl2403110544.png "Us nfp unempl2403110544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-NFP-Unempl2403110544.png) We can also see unemployment rising if we look city by city. As of now, more than 60% of the country’s metro areas are showing rising unemployment (let me note here that the last times we were anywhere near this figure, without exception, we had a recession): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1762-1024x576.jpg "Img_1762 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1762.jpg) ### What this means for you We continue to watch employment for several reasons. First, and most obviously, employment tends to give you an inside look at the overall financial health of a company, industry, and economy. But also, when unemployment spikes (and it does indeed spike it doesn’t usually just creep up, as the chart above demonstrates), it can happen very quickly. That loss of income will immediately impact spending and credit payments, which is where the recessionary pain comes from. Employment is a lagging indicator. It is not logical to watch for unemployment to change before you alter your investment risk profile ahead of economic challenges. We believe we have already positioned our clients properly for what Wall Street will always claim is a “surprise” or “unexpected” spike in unemployment, because we have no reason to believe this business cycle will be substantially different than prior ones.[![](https://nvestadvisors.com/wp-content/uploads/2024/03/FB-POSTS-20.png "Fb posts 20 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/FB-POSTS-20.png) ## Inflation Update We continue to be concerned about several current and leading indicators, hinting strongly that we are going to have an upsurge in inflation in the coming months. This will significantly retard the Fed’s efforts to lower interest rates, which is a large part of the reason for the stock market rally that began in November. First, independent analysis from the BLS and Barclay’s shows that the CPI inflation index significantly increased in January: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Infl-momentum2402220505.png "Us infl momentum2402220505 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Infl-momentum2402220505.png) [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-FOMC-supercore2402220505.png "Us fomc supercore2402220505 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-FOMC-supercore2402220505.png) The Cleveland Fed also revised their January and February inflation metrics upward, providing a third confirmation (this time from an official Fed source): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1926.jpg "Img_1926 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1926.jpg) ### Small businesses also report that their cost of goods is increasing, indicating that they will likely have to raise prices on their products and services shortly: ### [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-CPI-reacceleration2402230541.png "Us cpi reacceleration2402230541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-CPI-reacceleration2402230541.png) ### **What this means for you** We do not believe the Fed will be able to lower interest rates shortly, unless something significant “breaks” first in the economy. This event might be a string of bank failures or other liquidity and credit issues, or else a dramatic upswing in unemployment. We urge our clients and readers to remain conservatively invested for the time being. ## Recession Warning Signs It’s not a surprise to our clients or readers that we believe a recession is very near. We also believe that stock prices, being astronomically out-of-touch with the economic reality, must correct sharply in the wake of the recession’s arrival. Are there indicators besides the ones we’ve discussed above and in previous weeks, that help us see what is our possible near-term future? Certainly, there are. First, a look at the borrowing happening in private companies at the moment. Companies are pulling back sharply on their own lending. If we are really rallying and the economy is booming, this would not be the case: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Private-credit2402260504.png "Us private credit2402260504 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Private-credit2402260504.png) There is also the Conference Board’s Leading Economic Index (LEI), which we’ve reviewed many times in this space. Currently, the LEI continues to contract: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board2402210444-1.png "Us conf board2402210444 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board2402210444-1.png) This has been the second-longest period of consecutive monthly declines in decades (and we are actually very near the WORST of the GFC and we haven’t even hit a recession yet). [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board-Streak2402210444.png "Us conf board streak2402210444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board-Streak2402210444.png) This chart gives us a breakdown of what makes up the LEI and where each component is today. **Presently, there are only three positive components:** availability of credit (which is rapidly declining), consumer goods orders (that index also went negative in February), and stock prices, which we’ve argued above are grossly overvalued. We do not see, from the indicators below, that there is any reasonable cause to believe a recession is going to be avoided. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Leading-Adverse-weather-condi.png "Us leading adverse weather condi nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Leading-Adverse-weather-condi.png) You can see the impact of the stock market’s rally on the LEI below We are still well below the start of all previous recessions (blue bar), and the only reason the trendline reversed slightly was the recent market rally, which we strongly believe is unsupportable and unsustainable. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-6m2402210444.png "Us conf 6m2402210444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-6m2402210444.png) Finally, the Fed’s OWN RECESSION INDICATOR is flashing a 62% chance of a recession this year: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/GGJHZEdWkAA3vfA-1024x636.jpg "Ggjhzedwkaa3vfa nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/GGJHZEdWkAA3vfA.jpg) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **A year ago, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* \[/fusion\_text\]\[/fusion\_builder\_column\]\[/fusion\_builder\_row\]\[/fusion\_builder\_container\] **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Weekly Market & Economic nSight | February 19, 2024](https://nvestadvisors.com/economic-update-02-19-24/) **Published:** February 19, 2024 **Author:** nVest Advisors **Content:** **A Note from Jeremy, CEO/CIO: Economic News** **Happy Monday!** The markets are starting to settle in to the reality of both a declining economy, increasing unemployment, and inflation that appears to be reversing and heading in the wrong direction. This paints the Federal Reserve Bank into a tight corner. The Fed is tasked with two mandates: maintain price stability (inflation) and stable employment. Their actions since early 2022 (collectively known as Quantitative Tightening) have been to lower inflation back to the Fed’s target of 2% per year, without causing a recession and sending unemployment higher. The problem is, this has never been accomplished before. I think today’s preamble should discuss the causes and impacts of inflation, since that is what seriously concerned Wall Street last week (though, as our readers will recognize, we’ve been expecting inflation to remain sticky and stubborn for many months). **First, what is inflation?** Inflation is mistakenly believed by many to mean rapid price increases on the goods and services we consume. These price changes are the result of inflation, not inflation itself. Inflation is a rapid swelling of the supply of money in an economy. This can happen organically, as the economy runs “too hot” for a long period of time, or it can happen as a result of excessive money creation due to other circumstances, such as government spending during wartime. If your wages keep up with inflation, you won’t notice a change in your quality of life, but historically, wages can’t keep up with prices. Prices can rise every day – how often are you given a pay raise? And if you’re feeling like life really is getting more expensive, that’s not “in your head”, as many of our politicians are trying to gaslight you right now. Our wages have always bought less and less, and it gets much worse after each recession:[![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1812.jpg "Img_1812 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1812.jpg) When inflation happens naturally, it’s usually after a long period of solid economic growth in an economy, which has emboldened companies and individuals to take on more debt. A company feeling optimistic may borrow to expand their factory operations and hire more workers, buy the corporate jet, and lavish their managers and employees with pay raises. Individuals who are optimistic about their job security and earning prospects may start to borrow to increase their standard of living – a new luxury car, a bigger home, etc. These loans, to both businesses and individuals, typically come from banks. Because of our nation’s fractional reserve system, most of the money in these loans does not come from the bank’s depositors, as you might think (a bank accepts your savings deposit and then lends it out). Banks are allowed to lend out many times more than the money they have on deposit, and this money did not exist before the bank made your loan. This is the source of most of the inflation in modern economies. A bank with, say, $10 million of their customer’s deposits on account might be allowed to lend up tp $150 million – or more – of money the bank does not have. Your deposit money is part of the loans the bank makes, but they are required to keep only a fraction of those deposits on hand for withdrawal requests (called the bank’s “reserve requirement”). The rest they can lend out, along with a multiple of those deposits that do not physically exist. This is why the banking system in most of the developed world is known as a “fractional reserve system”, and inflation is a natural part of the process because our banks invent money each time they underwrite a new loan. Normally, it doesn’t get out of hand because borrowers pay back the loan, plus interest (which the bank keeps as profit), so most of the “invented” money is only temporary. This simplified example is the first way inflation can occur. The second is when the governments of the world spend more than they take in from taxes. In this case, the government acts very much like a company or a consumer – they must borrow the extra they want to spend. This is called deficit spending. Getting the extra money can be done in two ways; both of which cause inflation. First, a government can simply print more dollars at the treasury. This immediately and directly causes inflation because new money just “shows up” in the economy. The other, slower method is for the government to borrow money by issuing IOUs (we call them Treasury bills, notes or bonds, depending on how long the government is going to borrow it). The government pays interest just like a business or individual, and when the IOU comes due (“matures”), the bond owner gets their money back. Individuals and companies, and even foreign governments can buy government bonds, but so can our Federal Reserve Bank, and a lot of our government debt is carried by the Fed, which just like a smaller community bank, simply invents the money out of thin air to purchase the government’s IOUs. The process of creating money in order to purchase government debt is called Quantitative Easing. Inflation, then, is the increase in the amount of money in circulation. It can be kept under control if we are, at the same time, producing more goods and services for the new money to be spent on, but when there is a dramatic shift in the availability of products or services compared to the money out there to purchase them, the price of those items will go up, sometimes very rapdidly. So inflation can happen both when there are too few items to buy, or when there is too much money circulating. They are different in cause and solution. Let’s imagine that this year, a series of early spring freezes extended so far south that it wiped out much of this year’s coffee crops in central and south America. There would suddenly be much less coffee available on the market, but the dollars out there wanting to buy some. This is inflation created by a supply disruption, and as soon as that lack of supply is corrected, prices will typically return to normal. The other problem is much more serious. When there has simply been too much lending and deficit spending, the supply of dollars is too high for all products and services, and so prices rise on everything at once. There are only so many cars, houses, heads of lettuce, and gallons of gasoline out there at any given time. If you have the same number of items for sale as the year before, but suddenly trillions more dollars out there to purchase them, prices will go up on everything simply because the value of each dollar is much less than before the surplus cash arrived. This situation is what the governments of the world subjected us to during the Covid-19 pandemic. During that time (and most analysts and even political leaders now agree this policy was a colossal mistake), the economies of the world were shut down. You could not go to work or school, ships with cargo stopped being loaded and unloaded, and life basically ground to a halt. To keep the economy alive during this shutdown the governments of the world tried to stimulate their economies with lots of money, printed literally out of thin air. Here in the United States, those came in the form of stimulus checks and forgivable Paycheck Protection Program (“PPP”) loans to businesses, to keep making payrolls until the company could resume its operations. The total spent in the United States in the wake of the Covid-19 shutdowns, in pure deficit spending, was greater than $6 Trillion. This money was created out of thin air and dropped – often unproductively – into the economy. And because we had so many supply disruptions, prices on nearly everything jumped immediately. Our Fed at first believed that as supply problems subsided, so would prices. We did not believe this was true. We believe that widespread inflation, in all parts of the economy, all at once, is first and always a problem with too much money. We knew that the Fed would have to start taking drastic action to lower inflation, but we also know from history that inflation tends to come in waves, and if banks, thinking they’ve got inflation beaten, stop tightening the money supply too quickly, inflation often comes roaring right back: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-CPI-Double-Wave2402070343.jpg "Us cpi double wave2402070343 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-CPI-Double-Wave2402070343.jpg) The recent 3-month rally in the stock market (let’s set aside the fact that the rally was not the broader economy, but just a few tech stocks) was because Wall Street believed that the Federal Reserve had done enough to conquer inflation and that interest rates would be coming down for nearly all of 2024 (making borrowing cheap again). In a far-t00-premature celebration, stocks rallied way up on the (false) hope of lower rates, cheaper borrowing, and economic stimulus. However, last week gave us solid confirmation that inflationary pressure had resumed (exactly as history shows and that we predicted it would). The return to reality has started, and this will, sadly, mean that all of the recent rallies – and likely, even more – must be unwound. Add to that the fact that our economic analysis shows we are on the razor’s edge of a recession (as we’ve shown for well over a year), which naturally follows periods of quantitative tightening and marks the end of a perfectly normal business cycle. When we get rising prices and a slowing economy, we get what is known in economics as “stagflation”, and it can be a frustrating and economically challenging time for families and businesses. We are not here to “doom and gloom,” just to provide our clients and prospective clients with the economic reality. For our clients who grant us discretionary trading authority, we are adjusting your investing strategy to accommodate this analysis and protect your assets from the worst aspects of this coming downturn. This blog serves as one part of our transparency commitment to our clients to give you a look “behind the curtains” of the investing decisions we make, and why we make them. ***Later this week, we will lay out our case for why we believe a recession is now imminent or has already started. Stay tuned for this special report.*** *~ Jeremy, CEO* - **Jobs Update** - **Real Estate Update** - **Housing Update** ## Jobs Update We did a deep dive into the jobs market in our last update, so today we’ll just show you the most recent numbers. Needless to day, we strongly believe unemployment will soon become a concern in the economy, and that will serve not as a predictor of an impending recession, but that we’re already well into one. Initial unemployment filings are still near historical lows and started off the year a little better than 2023, but we have several points to make that this is misleadingly optimistic: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims2402160540-490x1024.jpg "Us claims2402160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims2402160540.jpg) The first is that the government survey data is increasingly disconnected from household surveys. In other words, when you ask actual WORKERS instead of government computer models, the employment situation is completely different. According to government models, 355,000 jobs were created in January, but when you ask families, 200,000 reported losing their jobs. This is greater than a half-million job discrepancy, just in a single month. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-HH-v-Establishment-survey.jpg "Us nfp hh v establishment survey nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-HH-v-Establishment-survey.jpg) Next is the continuing claims for unemployment benefits. 2024 continues the trend of last year, in that it is still relatively easy, but slowing getting harder, to find a new job if you lose your current one: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-Cont2402160540-497x1024.jpg "Us claims cont2402160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-Cont2402160540.jpg) We believe this trend will worsen, as surveys of small business (where about 75% of our jobs come from) show a continuing trend to slow their hiring, as business optimism erodes: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFIB-Hiring2402150443.jpg "Us nfib hiring2402150443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFIB-Hiring2402150443.jpg) And it is not just that companies will stop hiring (which is the first step). Layoffs are typical as recessions are underway. Mentions in company earnings calls of “operational efficiency” (this always means cutting staff and lowering payroll expenses) are spiking: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Operational-efficiency-often.jpg "Us operational efficiency often nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Operational-efficiency-often.jpg) This is in addition to the number of WARN notices (60-day required advance notices of layoffs for companies with more than 100 employees). So while we currently have a low initial claims rate, we have a substantially higher number of companies who have now given advance warning of layoffs coming (over 300,000 next month): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1782.png "Img_1782 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1782.png) And a strong jobs market is more a matter of where you live, than a wide, robust economy throughout the United States. More than 60% of the country’s metro areas are now showing rising unemployment: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1762-1024x576.jpg "Img_1762 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1762.jpg) Once again, tech companies are leading with the layoff announcements, which is one reason that we believe the recent rally in tech company stocks was far too optimistic and premature: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Tech-layoffs-are-picking-up-a.jpg "Us tech layoffs are picking up a nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Tech-layoffs-are-picking-up-a.jpg) However, unlike last year in which nearly all of the layoffs were in the tech sector, 2024 layoff announcements are far more widespread, with financial companies and manufacturers outpacing tech so far this year. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-Mentions-of-layoffs-on-ea.jpg "Us nfp mentions of layoffs on ea nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-Mentions-of-layoffs-on-ea.jpg) One area we expect to see more job losses is in construction. The housing market (see below) is now in freefall, and we can see now that the gap between construction employment (very high) and construction activity (low and dropping quickly) has never been greater. There will, sadly, be many more layoffs coming in the real estate and construction sector in the coming weeks. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1799-1024x530.jpg "Img_1799 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1799.jpg) ### What this means for you We continue to watch employment for a number of reasons. First, and most obviously, employment tends to give you an inside look at the overall financial health of a company, industry, and economy. But also, when unemployment spikes (and it does indeed spike it doesn’t usually just creep up, as the chart above demonstrates), it can happen very quickly. That loss of income will immediately impact spending and credit payments, which is where the recessionary pain really comes from. Employment is a lagging indicator. It is not logical to watch for unemployment to change before you alter your investment risk profile ahead of economic challenges. We believe we have already positioned our clients properly for what Wall Street will always claim is a “surprise” or “unexpected” spike in unemployment, because we have no reason to believe this business cycle will be substantially different than prior ones. ## Real Estate Update After a brief attempt at a rally as mortgage interest rates dipped in the past few months, the real estate industry is in freefall. The headlines last week were bleak as the markets were caught off-guard by the drop in housing activity (our readers, however, were not – we’ve been expecting this since the summer of 2022): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1791-1024x494.jpg "Img_1791 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1791.jpg) First, new construction updates. Housing starts, as the headline above alerts us, dropped massively: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Starts-Starts-SA2402190445.jpg "Us starts starts sa2402190445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Starts-Starts-SA2402190445.jpg) After a long run of new apartment construction keeping the industry afloat, that sector has slowed down even worse than single-family housing: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1795.jpg "Img_1795 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1795.jpg) This is due to mortgage rates increasing and bank lending standards tightening again as inflation starts to make a second wave (as we discussed above) and the recession finally arrives. Mortgage demand dropped back down after a brief respite in November and December: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-MBA2402150443-511x1024.png "Us mba2402150443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-MBA2402150443.png)[![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-SLOOS-Mortg-Demand2402060413.jpg "Us sloos mortg demand2402060413 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-SLOOS-Mortg-Demand2402060413.jpg) The good news in all of this is that, as the economy worsens and sadly, some homes will be lost to foreclosure (and Real Estate investors walk away from unprofitable AirBnB-style ventures), home prices are finally declining (and will continue to do so): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1730-1024x729.jpg "Img_1730 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1730.jpg) But it won’t be easy for those working as realtors or mortgage brokers. Currently, real estate agents have fewer transactions per year than at any time in recent history, even worse than during the Great Financial and Subprime Mortgage Crisis of 2007-2011: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1801-1024x574.jpg "Img_1801 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1801.jpg) We believe the biggest concern in real estate right now is not residential (but that will come later in this recessionary cycle), but rather, COMMERCIAL real estate, which has struggled ever since “work from home” became common during the Covid-19 pandemic. As office space vacates, landlords are faced with more than $2 Trillion of mortgages on commercial property that are due to be refinanced this year… [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-maturity-wall2402140443.jpg "Cr cre maturity wall2402140443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-maturity-wall2402140443.jpg) …and with interest rates remaining much higher than many real estate investors believed they would be, we think a cascade of defaults and bankruptcies in the commercial real estate market will be the first of two major credit events in this recessionary cycle. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-Risk2402140443.jpg "Cr cre risk2402140443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-Risk2402140443.jpg) Most commercial property lending is actually handled by regional and local banks, not by larger international banks. Almost none of the commercial real estate loans are protected by government-backed insurance: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-Small-bank-CRE-exposure224021.jpg "Cr small bank cre exposure224021 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-Small-bank-CRE-exposure224021.jpg) ### What this means for you We believe there will be continued pain in the mortgage and real estate sectors, particularly in commercial real estate investments where office space is a high percentage of the assets. A large number of people who bought homes in 2021, 2022 and 2023 did so in the hope of a quick refinance to a lower rate as soon as the Fed pivoted. However, with inflation running well above the target, and inflationary pressures resuming, this may not happen very quickly. Additionally, a large number of investors in homes for short-term rentals (think AirBnB) are starting to struggle with fewer and fewer bookings, and cities and counties starting to restrict or even ban these kinds of uses of residential property. We believe a large number of the homes currently listed on AirBnB may, in fact, return to the market as they prove to be harder and harder to achieve profits. If you are in the market to buy a home, we urge patience – we believe that both house prices and interest rates will decline in the coming months. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. No one knows exactly when a recession will be declared, but we believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movements that run counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most of Wall Street. We do believe, however, that the recent rally has fully run its course, and the shift from stocks into safer investment options such as gold, cash, and government bonds will continue. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Almost a year ago, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* \[/fusion\_text\]\[/fusion\_builder\_column\]\[/fusion\_builder\_row\]\[/fusion\_builder\_container\] **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Office Hours for Good Friday & Easter](https://nvestadvisors.com/office-hours-for-good-friday-easter/) **Published:** March 22, 2024 **Author:** nVest Advisors **Content:** **Good Friday and Easter Office Hours:** US government agencies, banks, and investment markets are closed Friday, March 29, 2024 in observance of Good Friday / Easter Sunday. Our office is also closed Friday, March 29 and no client meetings are available Saturday, March 30. We will return to the office on Monday, April 1. **For those who celebrate, have a Happy Easter!** **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp **Tags:** alert, announcement, Easter, Good Friday, holiday, holiday hours, press release --- ### [Now Serving Clients in Utah](https://nvestadvisors.com/now-serving-clients-in-utah/) **Published:** January 29, 2024 **Author:** nVest Advisors **Content:** **Serving Clients in Utah!** nVest Advisors, LLC is proud to announce that our firm’s registration has been approved by the Utah Division of Securities. Registration approval in a state allows us to market to and work with clients in their state of residence. It does not imply the state regulatory body has endorsed or recommended our firm but does provide regulatory approval of our firm’s offerings for the residents of the state and enables us to serve the needs of families and businesses throughout the Beehive State. We are happy to add Utah to our firm’s client family, which includes Texas, Colorado, and Kansas. We also work with clients in several other states on what is called a de minimis basis. **Categories:** Business Stories, Client News, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Press Releases, public **Tags:** announcement, colorado, Kansas, RIA firm, texas, Utah --- ### [Weekly Market & Economic nSight | March 18, 2024](https://nvestadvisors.com/economic-update-9/) **Published:** March 18, 2024 **Author:** nVest Advisors **Content:** **A Note from Jeremy, CEO/CIO: Economic News** **Happy Monday!** Although the data continues to confirm our current position, of a deteriorating economy, the stock market continues to try to rally further (which is very common at the end of these kind of bull-market cycles). We will be moving the “hard data” analysis to my personal blog, [“Think Like A Rich Guy”](https://thinklikearichguy.com) and provide a DAILY market and economic update. We are also working on a weekly podcast! Stay tuned. For this week, we are going to forego our normal report to give you an idea of how the newer, simpler economic update will be provided. **Each week, our clients will receive the following basic update:** 1. **A current look at any major changes in the economic indicators, including Economic Output, Employment, Inflation, Housing, and Small Business concerns.** 2. **A brief summary of changes in the stock market over the previous week.** 3. **A note to our clients and readers – in general – about our company’s investment models and investing decisions.** [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ### **[Our clients and readers can always access upcoming and archived webinars, live market and economic news feeds from here.](https://nvestadvisors.com/education-financial-events/)** Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. We hope this information helps. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **A year ago, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ### [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* \[/fusion\_text\]\[/fusion\_builder\_column\]\[/fusion\_builder\_row\]\[/fusion\_builder\_container\] **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Beware Scams at Tax Time](https://nvestadvisors.com/beware-scams-at-tax-time/) **Published:** January 25, 2024 **Author:** nVest Advisors **Content:** ## Identity theft runs rampant during tax season ### Here’s what to know and how to protect yourself. Identity thieves often swipe your bank or credit card account numbers, birth date information or Social Security Number (SSN) to steal from your accounts, open a new and phony account or make illegal purchases. According to a new report, 15.4M consumers were victims of identity theft or fraud last year, as per Javelin Strategy & Research. All sorts of nefarious schemers can come after you via the phone or email. Your tax return offers a trove of your personal information, and this time of year scammers also prey on your apprehension about paying taxes. The Internal Revenue Service recently published its latest list of scam warnings, freely admitting, “It’s true: Tax scams proliferate during the income tax filing season. ### **Among IRS tips:** - Beware of unexpected communication at the start of tax season that claims to come from the IRS. - Don’t fall for phone and phishing email scams that use the IRS as a lure. The fake messages typically probe you for personal information thieves often pose as the IRS offering a bogus refund or warning you to pay past-due taxes – sometimes, with phone scams, threatening you with immediate arrest if you hang up. - The IRS sends letters by postal mail and initiates no contact with taxpayers by email to request personal or financial information. This means any e-communication, such as text messages and messages over social media. - The IRS doesn’t ask for personal identification numbers (PINs), passwords or similar confidential information for your credit card, bank or other accounts. - If you get an unexpected email, open no attachments and do not click links in the message. Forward the email to phishing@irs.gov. See more about reporting phishing scams involving the IRS at the agency’s website. **(Note: Only IRS.gov is the website of the U.S. government’s Internal Revenue Service.)** ## Identity Theft And Fraud Complaints, 2013-2016 Source: Federal Trade Commission, Consumer Sentinel Network. ### **To protect against scams and identity theft:** - Don’t carry your Social Security card or any documents that include your SSN or Individual Taxpayer Identification Number (ITIN). Don’t keep forms containing that information in your car, either. - Don’t give any business your SSN or ITIN just because someone who claims to represent the company asks. Give such information only when required and when positive who you’re talking to. - Check your credit report every 12 months. Stay aware of your credit status and learn quickly about any illegal use of your credit or accounts. - Secure personal information in your home. - Protect your personal computers with firewalls and anti-spam and anti-virus software, updating security patches and changing passwords for your home Internet accounts. - Give no personal information over the phone, through the mail or on the Internet unless you initiated the contact and are sure of the recipient. - Choose a tax preparer carefully. Most preparers provide excellent service a relative few are unscrupulous. The IRS recommends watching for preparers who try to manipulate or change your income figures or make up deductions to qualify you for tax credits and unusually large refunds. ### Tax season brings enough to worry about. Cross identity theft off your list. **Categories:** Business Stories, Client News, Client Service, Company News, Early nVestors, Early nVestors, Economic Updates, Emerging nVestors, Established nVestors, Individuals and Families, LifeCycle, Mailchimp, public, Retirement, Small Business **Tags:** identity theft, IRS, scams, tax, tax prep, tax return, tax season --- ### [Weekly Market & Economic nSight | January 29, 2024](https://nvestadvisors.com/economic-update-01-29-24/) **Published:** January 29, 2024 **Author:** nVest Advisors **Content:** **A Note from Jeremy:** **Good morning!** We resume our weekly economic updates in 2024 with a revised approach. For more than a year, we’ve provided regular updates for our clients about the state of the economy as it slows down due to high inflation and the actions of the Federal Reserve as they combat it. We’ve seen a slow but consistently negative trend in most economic indicators that has pointed us directly at a recession. This is historically correct, as well, whenever the Federal Reserve must undergo a period of quantitative tightening like we’ve seen since early 2022. **However, the U.S. stock market has not followed the economic trends,** with alarming implications for investors who are following market sentiment instead of the reality of the economic conditions upon which companies must build and grow their businesses. Sentiment simply means emotional response and collective intuition, and market participants tend to make decisions not based on reasoned research, but on where the herd is running. It is very easy to “run with the bulls” we instinctively want to do so – even when the cliff’s edge is directly ahead. But because investors will ignore economic trends for as long as possible and run with gut instinct, peer pressure, headline hype, and emotional responses, we need to keep a closer eye on market movements as well, to try to determine when they are consistent with what we know about the economy, and when they run wildly off-course. In the past, I’ve taken the approach that our investment recommendations would largely ignore short-term market reactions (because no one can predict those with any degree of accuracy), and instead make investing decisions for trends we see taking place for six months or longer. We still wholeheartedly believe that, but as we learn more about market sentiment, the prevalence of robotic, algorithmic trading, and the timing of the mistakes most investors make, we can begin to take market sentiment into account more for the benefit of our clients and readers. F**or that reason, 2024’s economic updates will include much more about current market conditions, as well.** As the CEO and CIO of nVest Advisors, I have been cautioning our clients for over a year about deteriorating economic conditions, and many of our clients have placed their funds in our protective defensive models as we anticipate a significant pullback in equity prices ahead of what looks more and more like an inevitable recession. “The market”, particularly in the last 3 months, has gone the other direction, to what I consider absurd and unsustainable highs. **Let’s look back at 2023 for a moment.** The year started with the markets rallying strongly in large tech company stocks after a pretty brutal 2022 that our clients had been largely protected from. Stocks rallied strongly on the belief that the Fed would surely reverse course (you’ll hear the word “pivot” a lot regarding the change in policy investors are betting on the Fed taking). Actually, let me clarify. It’s incorrect to say that ***stocks*** rallied. About ***10*** stocks were all that meaningfully rallied for nearly all of 2023. And those 10 stocks were tech companies whose stock prices were beaten up significantly in 2022. Yet these 10 also make up a disproportionately large portion of what you see reflected in the S&P 500 and the NASDAQ index each day. So while these stocks rallied strongly, the rest of the index didn’t. (Not coincidentally, all of these companies also made a point to mention, repeatedly, that they were interested in pursuing “AI” (artificial intelligence) projects when they had their investor conference calls last year, but I digress.) The AI-hype-fueled rally ended in March of 2023 with the failure of four large regional banks, mostly related to cryptocurrency and tech companies. Stocks erased all of their gains for 2023 in just a couple of weeks. Many banks were already struggling with significant losses on their books from the drop in prices in their treasury bond holdings in 2022, and these four were also disproportionately exposed to tech companies and crypto. The Fed stepped in with an emergency line of credit for distressed banks (called the “BTFP”), investors felt the crisis was contained, and the rally started again and continued into July, when it hit a brick wall, again, on deteriorating economic news and the reality that inflation was going to be harder to pull down than most investors thought. The much-predicted summer Fed “pivot” didn’t happen, and stocks again erased their gains for 2023 in August and September and bobbed up and down into October. On October 7, Hamas terrorists invaded Israel, sparking a Middle East conflict that is increasing in spread and intensity even as I write this today. Then, at the November Fed meeting, Chairman Jerome Powell told reporters that he was cautiously optimistic that inflation was on a sustainable path back down to a 2% annual rate (this is the Fed’s “target”), and the Fed’s voting members decided not to increase interest rates for the fourth meeting in a row. **This simple statement was the cause of the market rally that continues to this day. But it’s not based on an improving economy or growing corporate profits, or even the current trend in inflation, which looks like it might try to head up again.** Instead, this rally is based entirely on the hope that interest rates will be coming down in rapid succession, starting in a month. Investors were so eager to once again believe the Fed was soon going to “pivot” and start lowering rates, that they sent stock markets to record highs on merely the hope of something happening this year that no one at the Fed has promised or even implied. **The Federal Reserve Open Markets Committee only meets eight times each year. The markets fully priced a total of 7 rate cuts out of those 8 meetings.** Even the Fed speculated there might only be 2 or 3, and that would be late in the year as the economy worsened, if at all. But Wall Street decided to go “all-in” on words no one at the Fed said, but that the market believes were implied. Investors read “between the lines” and drew their own conclusions, again. **And that is the reason for this recent rally.** ***Rallies based entirely on hype and hope and “hidden meaning in Fed comments” cannot be sustained.*** ***The market is currently “buying the rumor, and selling the news,” which is a terrible strategy for anything but casino-style day trading.*** It is often said that markets are “rational and efficient”; this is based on what is known as the Efficient Market Hypothesis, and it’s something I’ve grown increasingly more skeptical about over my tenure as a professional investment manager. In short, the market is rallying like the best of times are directly ahead, which is in direct contradiction to what the economic indicators are telling us. There is much talk about “soft landings” for the economy, which seems to be the same mistake investors make immediately before most prior major market and economic downturns: [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Soft-landing-stories240122054.png "Us soft landing stories240122054 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Soft-landing-stories240122054.png) **There are a number of reasons we believe stocks will correct downward in the near future.** First, the rally itself was based entirely on speculation of a Fed “pivot” that went wildly overboard. Also, the BTFP program for distressed banks is being terminated in a month, so banks will have to deal with any liquidity problems in more conventional ways. Third, interest rates will likely remain higher for longer than the market expects because inflation appears to have bottomed out and may be headed higher, particularly in energy and shipping costs related to the Middle East conflict. Fourth, the markets are notoriously wrong around the timing of economic events. This is because the economy appears to be chugging along until it “suddenly” and “unexpectedly” hits serious turbulence. Essentially, the feeling is that nothing happens for forever, and then everything happens all at once. Investors are strongly prone to a number of cognitive biases, one of which – recency bias – makes them believe that what has happened in the recent past will remain the same going forward. The data supports this. Here, for example, is a comparison between the predicted price/earnings ratios of the Nasdaq index with that of 10-year treasury bonds. The idea is that once bond yields are higher than the growth potential of stocks, investors will smartly move away from riskier (and now overpriced) investments and toward the relative safety of a bond giving the same or better return. What we’ve had for all of 2023 is an unprecedented disconnect between these asset classes: [![](https://nvestadvisors.com/wp-content/uploads/2024/01/EQ-NDX-valuation-disconnected-fr.png "Eq ndx valuation disconnected fr nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/EQ-NDX-valuation-disconnected-fr.png) US stocks have also completely disconnected from stocks in other parts of the world, as well. This is the price of stocks both in the developed world (chart 1) and emerging markets (chart 2) compared to the prices of stocks in the S&P 500. Again, if investors are to be rational and efficient, these “cheap” investments won’t remain so for long, and there logically should be a move out of US stocks. International economies are actually in worse shape at the moment than our own, but once there are signs of recovery outside the U.S., the best investing returns may be found there for a while. [![](https://nvestadvisors.com/wp-content/uploads/2024/01/EQ-International-stocks-continue.png "Eq international stocks continue nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/EQ-International-stocks-continue.png) There is also the total lack of concern among investors in the U.S. right now which tells us that irrational exuberance and, frankly, greed, are the prevailing emotions. Here we can see that stock prices have risen by more than 1.5 standard deviations above the VIX (volatility index that measures fear and risk-aversion). When this happens, sharp contractions in stock prices typically follow because the market has rallied far too high. The last time we were anywhere near this overbought territory was during the years of recovery after the Great Recession, at which time the Trump tax cuts had taken effect, interest rates were at zero and the Fed was pumping a lot of money into the economy: [![](https://nvestadvisors.com/wp-content/uploads/2024/01/EQ-SPX-stretched2401170510.png "Eq spx stretched2401170510 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/EQ-SPX-stretched2401170510.png) As we do our jobs for our clients each day, it is important for you to know our rationale for the decisions we make. Right or wrong, there is tremendous effort put into assembling and interpreting the data, both in isolation and how they interconnect to tell us a bigger story. The markets will do what they do, but the economy is the foundation of the entire house and is the “lighthouse” by which we try to steer your assets away from the rocky shores of speculation and wild swings in market sentiment. We’ll never be perfect at it – no one in this business is – but we will continue the process of study, learning from our mistakes and correcting the course a little bit at a time, for your benefit. **Have a great week.** Jeremy - **Jobs Update** - **Real Estate Update** - **Consumer Confidence Reports** - **Inflation isn’t finished** ## Jobs Update We do a lot of looking at jobs, so I’ll spare you this week and we will begin looking at them closely starting next week. However, this week, I wanted to bring your attention to the way job losses typically occur in recessions. Generally, laying off staff is the last thing a company wants to do, and they will avoid doing so until the business needs demand a cut in expenses. It’s just too hard to re-hire skilled and trained employees on the other side of the downturn. So we often don’t see major layoffs until we are into the first third or half of most prior recessions. Job losses, therefore, are a lagging indicator, not a leading one. Layoffs are the result of a recession, not a predictor. However, historically we get warning signs right before major layoffs begin. The chart below shows current job openings that employers cannot fill (blue line), with the unemployment rate (red line). You can see that they work opposite each other, as they should. But the correlation here, and what is important to observe, is that whenever the blue line reverses trend and heads down, the red line quickly follows, and significant job losses result quickly afterward: [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-JOLT-v-Unempl2401230322.png "Us jolt v unempl2401230322 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-JOLT-v-Unempl2401230322.png) If history is any guide, unfortunately, layoffs should start rising rapidly in the coming weeks. ### What this means for you We continue to watch employment for a number of reasons. First, and most obviously, employment tends to give you an inside look at the overall financial health of a company, industry, and economy. But also, when unemployment spikes (and it does indeed spike it doesn’t usually just creep up, as the chart above demonstrates), it can happen very quickly. That loss of income will immediately impact spending and credit payments, which is where the recessionary pain really comes from. Employment is a lagging indicator, as I mentioned above. It is not logical to watch for unemployment to change before you alter your investment risk profile. We believe we have already positioned our clients properly for what Wall Street will always claim is a “surprise” or “unexpected” spike in unemployment, because we have no reason to believe this business cycle will be substantially different than prior ones. ## Real Estate Update Home builder confidence improved slightly this past month based on slightly lower mortgage rates and, again, the hope of a Fed “pivot”: [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-NAHB2401180539.png "Us nahb2401180539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-NAHB2401180539.png) We believe there will still be much more pain in the housing market, as the supply of homes is still far too tight. Mortgages and sales of existing homes started out the year at decade lows: [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-MBA2401180539.png "Us mba2401180539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-MBA2401180539.png) [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-MBA22401180539.png "Us mba22401180539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-MBA22401180539.png) [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Existing2401220547.png "Us existing2401220547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Existing2401220547.png) ### What this means for you We believe there will be continued pain in the mortgage and real estate sectors, particularly in commercial real estate investments where office space is a high percentage of the assets. A large number of people who bought homes in 2021, 2022 and 2023 did so in the hope of a quick refinance to a lower rate as soon as the Fed pivoted. However, with inflation running well above the target, and inflationary pressures resuming, this may not happen very quickly. Additionally, a large number of investors in homes for short-term rentals (think AirBnB) are starting to struggle with fewer and fewer bookings, and cities and counties starting to restrict or even ban these kinds of uses of residential property. We believe a large number of the homes currently listed on AirBnB may, in fact, return to the market as they prove to be harder and harder to achieve profits. If you are in the market to buy a home, we urge patience – we believe that both house prices and interest rates will decline in the coming months. ## Leading Economic Indicators We have had 21 months (and counting) of negative leading indicators (first graph). As far back as 1960, there has never been anything even close to this that did not end up in a recession (second graph). If at first the smaller number in December looks promising, remember that this is a Month-over-Month graph, so for two years now, we have had the leading economic indicators get progressively worse and worse. [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Leading2401230322.png "Us leading2401230322 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Leading2401230322.png)[![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Leading-21-months2401230322.png "Us leading 21 months2401230322 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Leading-21-months2401230322.png) If no recession occurs after 2 years of warning signs in this index, it will be the first time in history: [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Leading-6m2401230322.png "Us leading 6m2401230322 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-Leading-6m2401230322.png) ### What this means for you We currently have two paradigms in the investing world: a stock market at record highs, and an economy telling us over and over, 100 different ways, that there is danger ahead. ***One of these must be wrong.*** Because the economy is measured by thousands of different metrics and approached from hundreds of different angles and is dispassionate and has no political agenda, the congruity of the economic data is what convinces us that caution must be taken in your investments at this time. ## Inflation isn’t finished Most of the recent market rally has been based on the notion that inflation has truly been beaten and the Federal Reserve will now begin to lower interest rates. It’s a rally based, again for the fifth time, on a narrative that so far has not been true, and ultimately reverses. So is inflation finished this time? We don’t believe it is. Inflation tends to run in waves over successive years, each wave slightly higher than the one before (because after each wave, you’re still slightly above where you started). We therefore have said for months now that the Federal Reserve will likely have to hold interest rates high, or even raise them slightly from here, in order to make sure inflation is truly crushed. Even [Fed Chairman Jerome Powell tried to warn the markets last week that inflation was likely not finished](https://www.cnbc.com/2023/11/09/powell-says-fed-is-not-confident-it-has-done-enough-to-bring-inflation-down.html#:~:text=Federal%20Reserve-,Powell%20says%20Fed%20is%20'not%20confident'%20it%20has%20done,enough%20to%20bring%20inflation%20down&text=Fed%20Chair%20Jerome%20Powell%20said,have%20achieved%20such%20a%20stance.%E2%80%9D), a warning that market participants, hell-bent on a “Santa Claus” rally to end the year, ignored. We not only heed his warning; we’ve been saying the same thing for months. The evidence of inflationary pressure resuming is easily seen in this composite graph of other indexes. In each instance, the lower inflation trend of late has reversed and is headed up again. [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PCE-Too-early-to-call-end-to.png "Us pce too early to call end to nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PCE-Too-early-to-call-end-to.png) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. No one knows exactly when a recession will be declared, but we believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movements that run counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most of Wall Street. We do believe, however, that the recent rally has fully run its course, and the shift from stocks into safer investment options such as gold, cash, and government bonds will continue. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Almost a year ago, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Communicating with you better in 2024](https://nvestadvisors.com/client-communication/) **Published:** January 29, 2024 **Author:** nVest Advisors **Content:** There are a lot of important parts of a successful relationship with a financial advisor, but maintaining consistent and frank communication is one of the most important. It’s also one of the most challenging, because we lead busy lives, and the majority of our clients are either business owners themselves, or else are working professionals raising families. For that reason, it’s often hard to carve out time for regular meetings (especially during normal business hours). **Here at nVest, we’ve always tried to find ways to communicate with you enough, without making it a hassle or a burden for you.** We’ve done this in a variety of ways, such as: - Having an open, 24/7 online calendar for our clients to request meeting times when you need it. - Making most of our communication with you in ways you can respond to when it’s convenient for you (such as email, video email, and text messages). We rarely call you unless there is an urgent issue to address. - Providing blog articles, social media posts, weekly economic updates, and monthly newsletters for our clients and plan participants in a passive way that seeks to inform you without requiring your constant response. All of those methods will continue, but we also feel like we’re sending too many “general interest” posts without making it specific to you, and building our relationship. We’re also, frankly, just not hearing back from many of our clients often enough to truly be of service to you. **In short, we’ve always felt it was our job to be available for you when you need us, not the other way around. This definitely has some advantages in terms of time savings on both sides, but it also means we’re sometimes not taking the necessary time to refresh your goals and objectives, review your investing and financial plans, let us hear from you how we can improve our services, etc.** As CEO [Jeremy Torgerson mentioned in a recent letter to our clients](https://nvestadvisors.com/2024/01/02/from-jeremy-torgerson-ceo-to-our-clients/), if only because of the way we work today (especially post-Covid, in which nearly every meeting is now virtual) most of our outgoing communication to our clients has become totally one-sided, and we often don’t hear back from you even when it’s time to schedule a required annual review meeting. We also want to make sure we are reporting our behind-the-scenes activities to you more often, particularly when they relate directly to your financial plan or investment accounts. ### Communications in 2024 So, effective February 1, **we have decided to implement a process of giving our clients consistent, repeated personal contact throughout the year.** We know not every client needs or wants to hear from us too frequently, so we’ve created three schedules for communication: 1. **Monthly contact –** this will mostly be for clients who request it, but also for those who have custom portfolios, complicated tax situations, are currently building or refining a financial plan, or have had a major life event. 2. **Quarterly contact –** this will be the vast majority of our clients and plan sponsors by default. 3. **Semiannual contact –** our 401k, 403b, and other plan participants, as well as those clients who have minimal assets or planning needs, or who specifically request less frequent communication, will be placed here. 4. **Annual Review Meetings** – all clients and plan sponsors (not plan participants) are requested and required to attend at least one meeting with us, once per year. This is a bare minimum meeting expectation. Our firm generally requests these meetings in the first quarter of each year. ### Each time we connect with you on this schedule: 1. Our office team will review your records and files, and note anything we might need to update or correct. If so, you might get an email or a form to help us make sure your records are 100%. 2. Your advisor will personally review your investment(s) and/or financial plan and the advisor (or a member of our Investment Adviser service team) will provide you with an emailed or video report of that activity. 3. You will be invited to schedule a 30-minute check-in appointment, specifically to review the work we are doing for you already, answer any questions, and communicate any concerns to each other. ### Our clients will also receive the normal communications you’re already used to: 1. Communications and statements from the investment custodian and our client portal on account activity and performance. 2. To-Do items in your financial plan that had been given a deadline. 3. Our weekly economic update for clients who opt-in to receive them. 4. Our monthly newsletter that all clients are auto-subscribed to (the economic updates are also included in this monthly letter). 5. Periodic and timely news, insights and updates on our blog and on social media. 6. Required regulatory communications (usually on an annual basis). 7. 24/7 Access to your advisor’s appointment calendar, text message communication, emails, and phone calls during office hours. ### “Email First” Our firm believes we should communicate with you in ways that are fast, convenient, and secure. We therefore typically send all communications with you to your email before trying other methods, and email is our primary method of communication. However, if you need our communications sent to you by physical mail, please let us know, and that can be accommodated. **Because we send so much email, from a variety of technology partners, it is possible some of our communications may end up in your Spam or Junk folder.** You can eliminate that by whitelisting ‘nvestadvisors.com”, and by periodically checking your spam/junk folder for communications from us that might have ended up there by accident. ## ***We sincerely hope these changes will refresh and deepen our relationships with our clients in the challenging year ahead, and as always, we warmly welcome your feedback!*** **Categories:** Business Stories, Client News, Client Service, Company News, From our CEO, Individuals and Families, Mailchimp **Tags:** accountability, alert, client, client news, client service, communication, email, performance, text message, update, video --- ### [Weekly Market & Economic nSight | February 5, 2024](https://nvestadvisors.com/economic-update-01-29-24-2/) **Published:** February 5, 2024 **Author:** nVest Advisors **Content:** **A Note from Jeremy, CEO/CIO:** **Happy Monday!** We are watching the markets come down sharply this morning after [last week’s Fed FOMC meeting](https://www.youtube.com/watch?v=gRTBRV2_S5Q), in which Chairman Powell stressed that the Fed wants to see more progress on inflation before any real talk of interest rate cuts will be considered, and Mr. Powell’s reiteration of that plan [last night in a public interview on CBS’ “60 Minutes” news show](https://www.youtube.com/watch?v=ImrKxlLJCEY). We’ve warned our clients and readers since 2022 of the very real likelihood of a recession based on the Fed’s actions, and have been warning about the stock market being preposterously and unjustifiably over-bought since November of last year, when investors fully priced in SEVEN rate cuts (out of a total of eight Fed meetings) in 2024. I have stressed repeatedly that the markets got far ahead of the actual economy and investors were piling in, quite literally, on what I can only describe as false hope. [As I mentioned in our post last week](https://nvestadvisors.com/2024/01/29/economic-update-01-29-24/): > **“…the U.S. stock market has not followed the economic trends,** with alarming implications for investors who are following market sentiment instead of the reality of the economic conditions upon which companies must build and grow their businesses. Sentiment simply means emotional response and collective intuition, and market participants tend to make decisions not based on reasoned research, but on where the herd is running. It is very easy to “run with the bulls” – we instinctively want to do so – even when the cliff’s edge is directly ahead… > > “…As the CEO and CIO of nVest Advisors, I have been cautioning our clients for over a year about deteriorating economic conditions, and many of our clients have placed their funds in our protective defensive models as we anticipate a significant pullback in equity prices ahead of what looks more and more like an inevitable recession. “The market”, particularly in the last 3 months, has gone the other direction, to what I consider absurd and unsustainable highs. > > “…***Rallies based entirely on hype and hope and “hidden meaning in Fed comments” cannot be sustained.*** > > ***“The market is currently “buying the rumor, and selling the news,” which is a terrible strategy for anything but casino-style day trading.”*** The gravity of economic reality, combined with the dashed hopes of investors this morning for lots of rate cuts in 2024, is now weighing heavily on the equity markets. [As we write this, the DOW Jones Industrial Average is down over 415 points to start the day.](https://www.cnbc.com/2024/02/04/stock-market-live-updates.html) [**I made a longer argument for why I expected to see significant market corrections last week in the blog. I encourage you to read it for more detail.**](https://nvestadvisors.com/2024/01/29/economic-update-01-29-24/) The market is also weighing [the absolute meltdown overnight in the Chinese equity markets](https://www.cnbc.com/2024/02/05/asia-markets.html). For all of the economic concerns we have here in the U.S., the world’s second-biggest economy is in far worse shape. Chinese equities were down over 8% overnight until central authorities in China stepped in and started restricting stock sales for domestic institutional investors, but the index still closed down over 6%. (For comparison, an 8% single-day drop in the DOW JONES Industrial Average would be approximately 3,000 points down from its current levels.) Since Chinese real estate companies started failing back in 2022, we have avoided long exposure to China in our own investment models, but investors should look carefully at the contagion in their own portfolios. The main reason China’s economy is failing is because the rest of the world is slowing down, and China depends nearly entirely on exports to support itself. When we stop buying, no one in China has anyone to sell to. I’ve said many times that the recent stock market rally was a fallacy, anyway. In fact, it was only 7 tech stocks that had a great 2023, but those 7 companies were large enough to drag up the entire index. Nearly all of the rest of the economy had negative stock returns last year. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/EQ-Tech-flows22401301256.jpg "Eq tech flows22401301256 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/EQ-Tech-flows22401301256.jpg) The following chart shows clearly that the “rally” of the last three months was not broad or widespread, and that except for only a few companies, profits are dropping rapidly for most of the companies in the U.S. Here, the “Magnificent 7” tech stock companies all revised their previous quarters’ earnings higher, but the remaining 493 companies that make up the S&P 500 (the gray line), revised their earnings per share DOWN by 15% on average. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image14.jpeg "Image14 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image14.jpeg) ***This is NOT a sustainable rally. It’s not even a MARKET rally. This is a MAGNIFICENT 7 RALLY.*** And the major players in Wall Street know it. One of the things you need to keep a watch on is where the “big guys” are in terms of sentiment. Are the institutions buying or selling? As of last week, institutional investors were dumping stocks at a very large clip (and have been all year): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image12.jpeg "Image12 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image12.jpeg) (I should note that most of the “Corporate” stock buying in the graph above was stock buy-backs – companies buying their own stocks back to boost the price in the market.) As we do our jobs for our clients each day, you need to know our rationale for the decisions we make. Right or wrong, there is tremendous effort put into assembling and interpreting the data, both in isolation and how they interconnect to tell us a bigger story. The markets will do what they do, but the economy is the foundation of the entire house and is the “lighthouse” by which we try to steer your assets away from the rocky shores of speculation and wild swings in market sentiment. We’ll never be perfect at it – no one in this business is – but we will continue the process of study, learning from our mistakes and correcting the course a little bit at a time, for your benefit. ***Have a wonderful week.*** *~ Jeremy* - **Jobs Update** - **Real Estate Update** - **Housing Update** - **Inflation Update** - **Miscellaneous** ## Jobs Update The Bureau of Labor Statistics (BLS) released their monthly Establishment Jobs report last week. It was a positive blow-out. The government claimed that more than 350,000 jobs were created in January, and also upgraded their estimates for several previous months, as well. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP2402050437.jpg "Us nfp2402050437 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP2402050437.jpg) This report took nearly every economist by surprise, and for good reason: **nearly every other measure of employment is showing the exact opposite.** I have two major issues with the current BLS data. First, it is politically manipulatable, and we are in an election year. The BLS is part of the government’s Executive Branch, and therefore, may have inherent bias to make things look as optimistic as possible going into a year in which the incumbent President, their boss, is up for reelection. The BLS data used to run very closely to the other metrics, until 2021 (that graph is below), when it completely decoupled from the data and always presents a very positive view of the job market. I therefore look for correlation with all the other measures of job gains and losses, and discard the outliers. At this point, the BLS data is the outlier. The second reason is that the BLS data is not based on actual headcounts or survey data (as most of the other jobs reports are), but is instead created using computer modeling. Let’s look at these other job measures in a little more detail. First, here’s a composite graph of other jobs estimates for January, nearly all of them are based on actual counts of jobs and changes to payrolls. All of them placed January far below the BLS: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-Alternative-measures24020.jpg "Us nfp alternative measures24020 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-Alternative-measures24020.jpg) The primary challenger to the BLS Establishment data has always been the Household Survey, which as the name suggests, polls actual families and asks what their employment situation is for the prior month. The Household survey (purple) shows substantial deviations from the Establishment Survey, specifically since mid-2021. While the BLS showed robust hiring in December and January, for instance, the Household survey in December showed the biggest number of job losses since Covid, and a net negative for jobs in January: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NF-HH-Survey2402050437.png "Us nf hh survey2402050437 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NF-HH-Survey2402050437.png) Here is another look at the difference between the Establishment Survey and the Household Survey. Note when they disconnected from each other. You can see that while the official BLS computer model shows slow, steady growth, households are reporting a totally different experience. There is now a discrepancy of more than 9 MILLION jobs between what the government claims are out there versus what actual families are sharing with surveyors: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image8.jpeg "Image8 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image8.jpeg) We also learned from the BLS survey that nearly all of the jobs created in 2023 were government jobs. In fact, private sector jobs DECLINED significantly throughout the second half of the year. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image9.jpeg "Image9 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image9.jpeg) And when we ask the workers themselves how things are going at their companies: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image15.jpeg "Image15 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image15.jpeg) Now let’s look at actual unemployment claims being filed in the States. Initial claims jumped unexpectedly in January: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims2402020342.jpg "Us claims2402020342 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims2402020342.jpg) …. but as I’ve written about repeatedly over the last two years, the CONTINUING claims is what you need to watch closely. It says one thing about the economy when people lose their jobs, but it says another thing entirely if they can’t quickly find another one. Continuing claims, while still on the low end of the spectrum historically, jumped also, quickly crossing 2019 and 2020 in headcount of people who could not find a new job quickly, and had to remain on unemployment benefits for an extended period. It is also starkly against the seasonal trends – hiring tends to improve at the start of each year, but this year, it’s going against the trend of the entire previous decade: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-Cont2402020342.png "Us claims cont2402020342 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-Cont2402020342.png) We can also track new job postings on websites like Indeed.com. In this case, we can see that the number of jobs being listed declined all of last year, at a rate worse than right before the Covid pandemic. In all categories, job listings are down from 15% to 50%: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/GFl9YiHXMAQ8BUb.jpg "Gfl9yihxmaq8bub nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/GFl9YiHXMAQ8BUb.jpg) We also have a tracking of companies as they announce layoffs. In January, 82.300 jobs were cut (thousands more have been cut since this report was issued). In all of 2023, there were only 224,000 layoffs; there have already been 37% of that number, in a single month of 2024: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-cuts2402020342.png "Us job cuts2402020342 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-cuts2402020342.png) And finally, here is confirmation of the decline in employment from the Manufacturer’s Survey, where the actual companies are asked if they are currently hiring or letting workers go. Again, this completely refutes the BLS labor estimates for January: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-ISM-Empl2402020342.jpg "Us ism empl2402020342 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-ISM-Empl2402020342.jpg) Another measure we can watch is the number of job openings employers say they can’t fill because they can’t find a qualified worker (meaning, hiring is really strong and there just aren’t enough workers to go around). That’s the blue line in the graph below. The red line is the national unemployment rate. There is an INVERSE relationship between these two numbers, meaning whenever employers start saying that they ARE able to find workers with relative ease, the unemployment rate is about to jump up. Right before recessions, both lines quickly reverse course. **(In fact, since 1975, this occurrence has always predicted that a recession has either already started or was imminent, without fail. If history is any guide, unfortunately, layoffs should start rising rapidly in the coming weeks.)** [![](https://nvestadvisors.com/wp-content/uploads/2024/01/US-JOLT-v-Unempl2401230322.png "Us jolt v unempl2401230322 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/01/US-JOLT-v-Unempl2401230322.png) One thing that has historically happened before mass layoffs is that workers will find their hours cut. This is because employers don’t want to have to lay people off until business conditions force them to. So as the new orders for their products and services start slowing down in the early days of a recession, we often just see a decline in the number of hours people are working each week. It is only during the first third of most previous recessions that we see the actual layoffs spike up dramatically. So while the BLS claims that hiring was robust in January, their own reports show that the hours people are working have declined rapidly in recent weeks. This gives us yet another very important bit of evidence that an economic slowdown is underway (source: BLS): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-Hours2402050437.jpg "Us nfp hours2402050437 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-Hours2402050437.jpg) This is in part explained by the BLS survey. Over the last year, we’ve lost 97,000 full time jobs (career, benefits, etc.) but created 870,000 part-time / gig – type jobs: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image0.jpeg "Image0 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image0.jpeg) In fact, in just the last rolling three months, full-time employment has dropped by nearly 1.4 million. That hasn’t happened in history except for a few instances during major recessions (shaded red areas): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/Image-1.png "Image 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/Image-1.png) So as an investment manager and economist, I am faced with either believing the government hiring computer model (one that is constantly being revised downward months later), or the numerous other data points on employment (most of which are based on actual counts and not estimates). At the moment, they tell an entirely different picture of the job market. Either the BLS data is wrong, or ***all*** of the other measures – collectively – are wrong. Until we see congruence again, we have to discard the outlier and work with the preponderance of the evidence we have. ### What this means for you We continue to watch employment for a number of reasons. First, and most obviously, employment tends to give you an inside look at the overall financial health of a company, industry, and economy. But also, when unemployment spikes (and it does indeed spike it doesn’t usually just creep up, as the chart above demonstrates), it can happen very quickly. That loss of income will immediately impact spending and credit payments, which is where the recessionary pain really comes from. Employment is a lagging indicator. It is not logical to watch for unemployment to change before you alter your investment risk profile ahead of economic challenges. We believe we have already positioned our clients properly for what Wall Street will always claim is a “surprise” or “unexpected” spike in unemployment, because we have no reason to believe this business cycle will be substantially different than prior ones. ## Real Estate Update We hit the real estate markets very regularly in this space, so this week I will only point out that, while following seasonal trends following the Christmas and New Years holidays, mortgage applications climbed slightly in January. We are still at the lowest point for mortgages since approximately 1995, and certainly, as the graph below shows, the lowest in the previous decade: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-MBA2402010257.jpg "Us mba2402010257 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-MBA2402010257.jpg) But part of the economic optimism of late has been the idea that interest rates would soon be dropping, and with them, the rates for mortgages. This gave a lot of hope to mortgage brokers, homebuilders, realtors, and even consumers desperate to refinance current high-rate mortgages or buy their new home. The challenge is, that interest rates are not likely to drop anytime soon, and the market is starting to figure that out. [In fact, mortgage rates have climbed back up to nearly 7% nationally in the past week.](https://www.businessinsider.com/personal-finance/best-mortgage-refinance-rates-today-sunday-4-2024-2) Here in our home state of Colorado, a 30-year mortgage on a $350k home with a 720 credit rating is currently at 7.512% and climbing. ### What this means for you We believe there will be continued pain in the mortgage and real estate sectors, particularly in commercial real estate investments where office space is a high percentage of the assets. A large number of people who bought homes in 2021, 2022 and 2023 did so in the hope of a quick refinance to a lower rate as soon as the Fed pivoted. However, with inflation running well above the target, and inflationary pressures resuming, this may not happen very quickly. Additionally, a large number of investors in homes for short-term rentals (think AirBnB) are starting to struggle with fewer and fewer bookings, and cities and counties starting to restrict or even ban these kinds of uses of residential property. We believe a large number of the homes currently listed on AirBnB may, in fact, return to the market as they prove to be harder and harder to achieve profits. If you are in the market to buy a home, we urge patience – we believe that both house prices and interest rates will decline in the coming months. ## Inflation Update Most of the recent market rally has been based on the notion that inflation has truly been beaten and the Federal Reserve will now begin to lower interest rates. It’s a rally based, again for the fifth time, on a narrative that so far has not been true, and ultimately reverses. So is inflation finished this time? We don’t believe it is. Inflation tends to run in waves over successive years, each wave slightly higher than the one before (because after each wave, you’re still slightly above where you started). We therefore have said for months now that the Federal Reserve will likely have to hold interest rates high, or even raise them slightly from here, in order to make sure inflation is truly crushed. Even [Fed Chairman Jerome Powell tried to warn the markets last week that inflation was likely not finished](https://www.cnbc.com/2023/11/09/powell-says-fed-is-not-confident-it-has-done-enough-to-bring-inflation-down.html#:~:text=Federal%20Reserve-,Powell%20says%20Fed%20is%20'not%20confident'%20it%20has%20done,enough%20to%20bring%20inflation%20down&text=Fed%20Chair%20Jerome%20Powell%20said,have%20achieved%20such%20a%20stance.%E2%80%9D), a warning that market participants, hell-bent on a “Santa Claus” rally to end the year, ignored. We not only heed his warning; we’ve been saying the same thing for months. The evidence of inflationary pressure resuming is easily seen in this composite graph of other indexes. In each instance, the lower inflation trend of late has reversed and is headed up again. [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PCE-Too-early-to-call-end-to.png "Us pce too early to call end to nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PCE-Too-early-to-call-end-to.png) Of note: oil prices have continued to climb in recent weeks, and as we say here often: where the price of energy goes, so goes the price of everything else: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-AAA-Oil-Infl-Exp2401301256.jpg "Us aaa oil infl exp2401301256 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-AAA-Oil-Infl-Exp2401301256.jpg) This was partly explained by the surprise, dramatic revision in the actual supply of oil in the United States last week: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image11.png "Image11 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image11.png) The Middle East conflict grew in intensity last week, as the U.S. started attacking terrorist encampments in Iraq, Yemen, Jordan, Syria and other locations. This was in response to missle and drone attacks on our bases and on military and commercial shipping in the region. As a result of this hotbed of active combat, most shipping companies are steering clear of the Suez Canal and the Red Sea as shipping lanes between Asia and Europe and northern Africa. They are opting to traverse the entire way around Africa, which has dramatically slowed shipping and more than tripled its cost. This will add further increases to inflationary pressure in the short- to mid-term. Here is the traffic through the Suez Canal, which normally accounts for 12-15% of all global trade: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image5.jpeg "Image5 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image5.jpeg) Inflation might improve a company’s short-term profits but it will wreck its long-term success. Paying more for fewer and fewer products and services is not economic growth. The black line below shows the purchase of actual items – manufactured things – at current prices, but if you remove the recent price hikes due to inflation (the blue line), you can see very clearly that we are buying less and less with the money we do have. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Dur-Real2401301256.jpg "Us dur real2401301256 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Dur-Real2401301256.jpg) [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image7.jpeg "Image7 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image7.jpeg) ## Miscellaneous Let me address a few more economic data points that weigh on our investing decisions that don’t neatly fit into some of the other categories. This week I want to look at other indications of financial difficulties in the country, that have in all periods of the recent past, resulted in a recession we firmly believe is imminent, and investors should take caution to prepare for. First is an indicator that measures the economic activity in each of the 50 United States. The graph shows a count of the states with a current economic slowdown underway. We currently have 30 states – 60% of the country – in recession already. If you look back across the graph, anytime we had a measure above 50% of the states showing economic slowdown, we had a recession: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image1.jpeg "Image1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image1.jpeg) Another sign that things are hard for families is the amount of theft taking place in retail stores. This is partially internal theft by employees but is mostly the result of shoplifting, not ringing everything up at self-checkout lanes, etc. Some people steal because they have the opportunity, but most people resort to stealing when they have no other option: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/VTB-A-growing-wave-of-theft-in-U.png "Vtb a growing wave of theft in u nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/VTB-A-growing-wave-of-theft-in-U.png) Why would theft now be something consumers are increasingly resorting to? One major reason is, our expenses are so high from inflation, we’ve run out of savings: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Pers-Saving2401301256.jpg "Us pers saving2401301256 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Pers-Saving2401301256.jpg) People are putting more and more on credit to maintain their current standard of living, and even that is now coming with a price. As interest rates have climbed, inflation continues (albeit at a slower pace than the previous two years), we can see the rate of default on debts climbing, as well: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-12401301256.png "Cr 12401301256 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-12401301256.png) And yet, the market rallied hard in the face of a decaying economic outlook. This also has historical precedent, particularly when the largest companies rally strongly against the rest of the market. What we have never had in history has been such a disconnect between the economy at large, and a few favorite brand names getting all of the market attention. This simply MUST correct: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/image13.jpeg "Image13 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/image13.jpeg) ### What this means for you We do not believe there will be any way out of the current economic conditions without a recession, and we believe the groundwork has been laid for this recession to be harsher and longer than many economists currently believe. In fact, there is a minority but growing consensus that there will not even be a recession, which we categorically reject. The data, as we try to show our clients and readers every week in this space, tells us anything but a recession can be avoided. We hate to “doom and gloom” in this space, because we’re ultimately optimists about the future. But we must be realistic and willing to confront data that tells us that, at least in the short term, things will get worse for our economy before they get better. Wall Street is starting to figure out what we’ve been telling our clients for more than a year: the economy is headed for rocky shores. Today’s stock market is the first leg down in what we predict will be many more as reality sets in. We are patiently on the sidelines for most of our clients’ assets for now, ready to take the opportunity to reinvest once the market has come down to realistic price levels. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. No one knows exactly when a recession will be declared, but we believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movements that run counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most of Wall Street. We do believe, however, that the recent rally has fully run its course, and the shift from stocks into safer investment options such as gold, cash, and government bonds will continue. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Almost a year ago, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [CLIENTS: How to stop our emails from going to Spam](https://nvestadvisors.com/clients-how-to-stop-our-emails-from-going-to-spam/) **Published:** February 20, 2024 **Author:** nVest Advisors **Content:** **As a nearly 100% virtual investment advisor firm with clients in several states, we tend to rely a lot on email to communicate with you.** Whether that is in personal text or video messages, our monthly newsletter and other bulk announcements, or sending you forms and appointment reminders, the use of email is a vital part of our relationship with our clients. Unfortunately, because so much of our communication comes from only a few email addresses, Google, Yahoo, and other email services can mistakenly assume those messages are Spam, and send them to your Spam or Junk folder without your knowledge. ***It’s vital to instruct your mail service to let all emails from nVest Advisors reach your inbox!*** To that end, we’re providing the most current step-by-step instructions for our clients, to “whitelist” emails from nVest Advisors. ***Remember that you want to whitelist the entire domain “nvestadvisors.com”, not just your financial advisor’s email.*** Here’s how to do it for Gmail, Outlook, Yahoo! Mail, AOL Mail, and iCloud Mail (the five most common email services in the United States): ### For Gmail: 1. Open Gmail and click the gear icon to go to ‘Settings’. 2. Go to ‘Filters and Blocked Addresses’ and click on ‘Create a new filter’. 3. In the ‘From’ section, enter the domain you want to whitelist (e.g., @companydomain.com). 4. Click on ‘Create filter with this search’. 5. Check ‘Never send it to Spam’ and click ‘Create filter’. ### For Outlook: 1. Open Outlook and go to ‘Settings’ > ‘View all Outlook settings’. 2. Choose ‘Mail’ > ‘Junk email’. 3. Under ‘Safe senders and domains’, click ‘Add’. 4. Enter the domain you wish to whitelist and press ‘Enter’. 5. Click ‘Save’ at the top of the page. ### For Yahoo! Mail: 1. Click the gear icon and go to ‘More Settings’. 2. Click on ‘Filters’ and then ‘Add new filters’. 3. Give the filter a name, and in the ‘Set rules’ section, select ‘contains’ and enter the domain you want to whitelist. 4. In the ‘Then move the message to this folder’ section, select ‘Inbox’. 5. Click ‘Save’. ### For AOL Mail: 1. Click on ‘Options’ and select ‘Mail Settings’. 2. Go to ‘Filter Settings’ and click on ‘Create filter’. 3. Name your filter, and in the “From” field, enter the domain you want to whitelist. 4. In the ‘Move to’ dropdown, select ‘Inbox’. 5. Click ‘Save’. ### For iCloud Mail: 1. Go to iCloud.com and open Mail. 2. Click on the gear icon at the bottom left corner and select ‘Rules’. 3. Click ‘Add a Rule’, and in the ‘is from’ field, enter the domain you want to whitelist. 4. Choose ‘Move to Folder’ and select ‘Inbox’. 5. Click ‘Done’. These instructions provide a general approach to whitelisting; however, interfaces and options may change over time, so it might be helpful to consult the support or help section of your email provider for the most up-to-date instructions. Whitelisting by domain ensures that all emails from that domain bypass the spam filter, improving the chances that you won’t miss important communications. **Categories:** Client News, Company News, Individuals and Families, Mailchimp **Tags:** alert, announcement, client, how-to, junk, spam, whitelist --- ### [Weekly Market & Economic nSight | February 26, 2024](https://nvestadvisors.com/economic-update-02-16-2024/) **Published:** February 26, 2024 **Author:** nVest Advisors **Content:** **A Note from Jeremy, CEO/CIO: Here is your Economic nSight this week!** We continue to be concerned about the lack of breadth in the stock market’s seeming never-ending “AI and Rate Hike” rally, though it appears the “smarter money” is starting to fall in line with our analysis. We also see significant evidence of a return of inflation, that will make the Fed’s job of lowering rates and creating a “soft landing” for the economy much harder. *~ Jeremy, CEO* - **Markets are grossly overbought** - **Jobs Update** - **Real Estate Update** - **Inflation Update** - **Recession Warning Signs** ## Markets are grossly overbought. We continue to believe very strongly that there will soon be a sharp downward correction in the stock market, for two reasons. First, because the recent market rally has been predicated on two conflicting narratives: that the Federal Reserve bank would be dramatically cutting interest rates in 2024, and that the economy is growing at a rapid pace and employment remains very strong. These two narratives are polar opposites. The Fed will lower rates when it has cause to – namely, to stave off a recession or to provide additional liquidity to the markets if things start breaking. But it has no reason to – at all – if the economy is booming. To lower rates in a growing economy, with inflationary pressure resuming (see below) would mean the Fed is surrendering its fight to reduce inflation back to the Fed’s 2% annual target. The second reason for the rally for all of 2023 (though it fizzled out twice before November) is this almost religious fervor regarding the potential of artificial intelligence (“AI”). As a result, tech stocks, particularly (and cynically) those companies who were smart enough to pledge AI development in the past year’s investors’ earnings calls, saw their stocks soar so much, it actually dwarfs the catastrophic bubble in tech stocks in 1999 and 2000 that resulted in a harsh, sharp recession, and tech stocks falling almost 90% from their peaks. **Where markets are today alarms us at nVest Advisors from a perspective of safety for our client portfolios. We are not “bears” here and take no short positions against the market. We are data-dependent and focus first on risk aversion and letting events in the macroeconomy guide our model construction. We believe that it is preferable to sidestep markets when they rally too high and return to your typical risk profile once the market prices have corrected.** We never believed the November-to-Today rally in stocks (and actually, it’s not ALL stocks rallying, only about a dozen or so large-cap tech stocks) was sustainable or justifiable. Both the economy and the reality that AI, while carrying massive promise for the future like green energy does, is in its infancy. Just the launch of Gemini, Google’s language AI, last week, and the widespread outrage over its overpromised capabilities, [built-in political bias, manufactured quotes,](https://www.digitalinformationworld.com/2023/12/google-in-hot-seat-after-its-viral.html) and [chaotic (and inadvertently racist) image generation](https://venturebeat.com/ai/google-apologizes-for-ahistorical-and-inaccurate-gemini-ai-images-we-missed-the-mark/), [should give investors pause going forward that AI has a long way to go before it can be incorporated into the workplace and academia the way the “Magnificent Seven” tech companies promised a year ago](https://www.cmswire.com/digital-experience/googles-gemini-marketing-trick/). We also know market history, and the technology sector, for lack of a more polite was to say it, is often found peddling B.S. Whether that’s in the capabilities of their products, the pacing of product delivery, or even the value of their companies, **no sector in U.S. history has had more concentrated incidents of fraud, over-hyped valuations, and wishful thinking.** So, we believe the market has to come to a reckoning about the recent rally, based mostly on pipe dreams and the smoke-and-mirrors of a few tech companies promising what they simply cannot deliver. We may have a few more months of tech company overvaluation, but both the weakening economy and the failure of many of these AI projects (or promised projects that never take off), will correct stock prices back down to earth. As it stands today, we can see several indications of the stock market being wildly disconnected from reality. First, in historical P/E ratios : [![](https://nvestadvisors.com/wp-content/uploads/2024/02/sp500-10year-pe-ratio-st-1-1024x853.png "Sp500 10year pe ratio st 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/sp500-10year-pe-ratio-st-1.png) Then there is the “Buffett Indicator”, which compares stock valuations to the actual productive output of the economy: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/buffett-indicator-standa-1024x853.png "Buffett indicator standa nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/buffett-indicator-standa.png) **The “Fear and Greed Index” echoes our sentiment.** Stocks are wildly out-of-alignment with realistic valuations: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1963.jpg "Img_1963 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1963.jpg) Then we are concerned about the concentration of the rally in only a few stocks. This graph shows the value of the top 10% of stocks in the United States compared to the rest of the market as a whole. When rallies get this concentrated into only a few stocks, it gives a misguided view of the market as a whole. The S&P 500 LOOKS like it’s climbing, but the rally is in less than a couple dozen companies (out of 500 the index tracks). **The last time stock valuations were this concentrated was in 1929, right before the crash that led to the Great Depression. The last time it even got close to now was the 1999 Dot Com Bubble:** [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1924.jpg "Img_1924 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1924.jpg) Obviously, tech stocks weren’t around in 1929, but if we look at the last time tech stocks rallied into the stratosphere (without justified earnings), it was the 1990s, when the tech bubble burst in 2000 and caused a serious recession in 2001. **Today’s AI-fever bubble is actually bigger than anything we saw during the Dot Com era, by a lot:** [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1935-1024x576.jpg "Img_1935 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1935.jpg) Here’s a better look at how tech stocks, particularly “blue chip”, “darling” tech stocks, are disproportionately skewing their indexes, giving a false impression of a broader market rally. The top graph shows that the tech sector has increasingly dominated the S&P 500 (black line), compared to energy stocks (blue line). The second graph, however, shows just one tech company, Nvidia (NVDA)’s valuation compared to the **entire energy sector** components of the S&P 500. ***One company, wildly overbought in our opinion, suddenly has more influence over the S&P 500’s price than all of the energy companies combined.*** This is not sustainable, in our opinion. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/EQ-The-SPX-is-increasingly-tech.png "Eq the spx is increasingly tech nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/EQ-The-SPX-is-increasingly-tech.png) Is everyone asleep at the wheel, or are some of the smarter money managers catching on? This chart shows the net flow of money, for the last 5 days (blue) and 20 days (black) of hedge fund managers in the United States. **Money managers are sensing that this rally, particularly in tech stocks, is way above what’s rational, and a correction is likely coming very quickly:** [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1962.png "Img_1962 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1962.png)Also, watching what company insiders are doing with their stocks is always telling. No one knows the inner strength (or lack of it) of a company better than people who work there. Insiders are now extremely bearish, selling more shares of their own stocks than any time in recent history. **To give you some perspective, anything above 20 in this graph is considered “bearish”. We’re at 150 and climbing:** [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1953.jpg "Img_1953 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1953.jpg) Also, if inflation is coming back, how does that affect stock valuations (especially the “darling” ones of the time)? In the 1970’s there was a group of company stocks that seemed to rally forever, just like our “Magnificent Seven” are doing today, and the Doc Com stocks did in the late 1990s. We called them the “Nifty Fifty”. As you can see, if inflation is going to rally again (we strongly believe it will unless a recession finally arrives first), the prices of stocks take a significant hit. The blue lines are inflation as measured by CPI. The red line is the S&P 500. You can see that they are inversely correlated; when inflation rises, stocks typically retreat. When inflation retreats, stocks rally. **The same pattern happened in 2023:** [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1912-1024x657.jpg "Img_1912 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1912.jpg) ### What this means for you We continue to adjust our investment models for our clients who engage with us, and our recommendation is to remain conservatively invested for now. ## Jobs Update The weekly jobs numbers continue to give many economists the (we believe, false) notion of a robust economy. The issue is that unemployment filings are one indicator (typically, the last one) of a deteriorating labor market. Companies don’t want to lay off workers until they have to, and we’ve shown our readers several times over the last few months that unemployment filings typically don’t start really climbing until we are about 1/3 of the way through a recession. Job losses are the ***result*** of a recession, not a ***predictor***. That said, the current initial unemployment filings came in low last week, and followed seasonal trends (job losses typically drop off at the start of the year): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims2402230541.png "Us claims2402230541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims2402230541.png) But as we’ve warned for over a year now, CONTINUING claims are telling us another part of the story. It is difficult to replace a job if you do lose it. **Continuing unemployment is now higher than 2018, 2019, pre-Covid 2020, 2022, and 2023, and the trend is worsening (2nd graph):** [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-Cont2402230541-488x1024.png "Us claims cont2402230541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-Cont2402230541.png) There is also the simple truth that the numbers no longer make sense, and haven’t since late last year. Generally, they run pretty closely to each other, and that makes perfect sense – if jobs are hard to get, losing one means it may take a while to find a new one. If jobs are plentiful, you won’t have trouble and layoffs will be minimal. But that’s not the case for the last six months. One of these will have to adjust sharply to reconnect with the other. We believe it will be INITIAL claims pulling up sharply, for the reasons we discuss below. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-SA2402230541.png "Us claims sa2402230541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-SA2402230541.png) These graphs show what has already occurred, but do we have any indication of what’s coming? Yes, several. Mentions in company earnings calls of “operational efficiency” (this always means cutting staff and lowering payroll expenses) are spiking: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Operational-efficiency-often.jpg "Us operational efficiency often nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Operational-efficiency-often.jpg) This is in addition to the number of WARN notices (60-day required advance notices of layoffs for companies with more than 100 employees). So while we currently have a low initial claims rate, we have a substantially higher number of companies who have now given warning of layoffs coming (over 300,000 next month): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1782.png "Img_1782 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1782.png) And a strong jobs market is more a matter of where you live, than a wide, robust economy throughout the United States. More than 60% of the country’s metro areas are now showing rising unemployment: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1762-1024x576.jpg "Img_1762 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1762.jpg) Once again, tech companies are leading with the layoff announcements, which is one reason that we believe the recent rally in tech company stocks was far too optimistic and premature: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Tech-layoffs-are-picking-up-a.jpg "Us tech layoffs are picking up a nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Tech-layoffs-are-picking-up-a.jpg) However, unlike last year in which nearly all of the layoffs were in the tech sector, 2024 layoff announcements are far more widespread, with financial companies and manufacturers outpacing tech so far this year. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-Mentions-of-layoffs-on-ea.jpg "Us nfp mentions of layoffs on ea nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-NFP-Mentions-of-layoffs-on-ea.jpg) We mentioned over the last two updates that most of the recent hiring was in government positions, not in private companies. The number of total number of PRIVATE job hires is rapidly declining, following exactly the same kind of trend that has always led into recessions:[![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1939-1024x562.jpg "Img_1939 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1939.jpg) Digging a little deeper, we can see the private jobs more closely. In companies with 10 or more employees, you can see that both the hiring (black line) and the job listings (red line) have been in sharp decline since 2022: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-openings22402200445.png "Us job openings22402200445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-openings22402200445.png) But in companies with less than 10 employees, we see things appear to be a little more optimistic (or at least, on the surface). While hiring in very small firms never really took off after Covid, the number of jobs available appears to have soared in a way that never occurred in the last 20 years. **In recent weeks, [a number of owners and employees of very small companies publicly admitted that they post a large number of jobs they have no intention of ever filling, because it gives their company the false impression of robust growth](https://www.cbsnews.com/news/job-openings-fake-listings-ads-federal-reserve-jolts/).** In short, we do not believe most of the listings for jobs in small companies are real, and that explains the strange disconnect in 2021 from the previous measures of this metric.[![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-openings2402200445.png "Us job openings2402200445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-openings2402200445.png) One area we expect to see more job losses is in construction. The housing market (see below) is now in freefall, and we can see now that the gap between construction employment (very high) and construction activity (low and dropping quickly) has never been greater. There will, sadly, be many more layoffs coming in the real estate and construction sector in the coming weeks. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1799-1024x530.jpg "Img_1799 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1799.jpg) ### What this means for you We continue to watch employment for several reasons. First, and most obviously, employment tends to give you an inside look at the overall financial health of a company, industry, and economy. But also, when unemployment spikes (and it does indeed spike it doesn’t usually just creep up, as the chart above demonstrates), it can happen very quickly. That loss of income will immediately impact spending and credit payments, which is where the recessionary pain comes from. Employment is a lagging indicator. It is not logical to watch for unemployment to change before you alter your investment risk profile ahead of economic challenges. We believe we have already positioned our clients properly for what Wall Street will always claim is a “surprise” or “unexpected” spike in unemployment, because we have no reason to believe this business cycle will be substantially different than prior ones. ## Real Estate Update After a brief attempt at a rally in home sales in December and January due to temporarily lowered mortgage rates, housing again resumed its downward fall below the same period in 2023 (2023 is the green line): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Starts-Starts2402190445.png "Us starts starts2402190445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Starts-Starts2402190445.png) Of note is the significant drop in multifamily housing starts, which were only worse in 2019 and 2020: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Starts-Starts-5-unit240219044.png "Us starts starts 5 unit240219044 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Starts-Starts-5-unit240219044.png) There looks to be even further weakness, as the Year-over-Year starts and completions fall to levels not seen since the throes of the Covid-19 crisis: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Starts-Starts-SA2402190445.png "Us starts starts sa2402190445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Starts-Starts-SA2402190445.png) Much of it still has to do with housing affordability. We’ve looked at home inventories a lot in recent weeks and will do so again, but combining high home prices with both higher mortgage rates and the willingness of banks to offer mortgage loans (the chart below), you can quickly see there is much more weakness coming in the housing market. Buyers simply cannot afford the mortgage payments, and banks are very nervous to lend with a deteriorating economy underway. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1950.jpg "Img_1950 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1950.jpg) We believe the biggest concern in real estate right now is not residential (but that will come later in this recessionary cycle), but rather, COMMERCIAL real estate, which has struggled ever since “work from home” became common during the Covid-19 pandemic. As office space vacates, landlords are faced with more than $2 Trillion of mortgages on commercial property that are due to be refinanced this year… [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-maturity-wall2402140443.jpg "Cr cre maturity wall2402140443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-maturity-wall2402140443.jpg) …and with interest rates remaining much higher than many real estate investors believed they would be, we think a cascade of defaults and bankruptcies in the commercial real estate market will be the first of two major credit events in this recessionary cycle. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-Risk2402140443.jpg "Cr cre risk2402140443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-Risk2402140443.jpg) Most commercial property lending is actually handled by regional and local banks, not by larger international banks. Almost none of the commercial real estate loans are protected by government-backed insurance: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-Small-bank-CRE-exposure224021.jpg "Cr small bank cre exposure224021 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-Small-bank-CRE-exposure224021.jpg) And this week, we got a look at foreclosures now occurring in commercial properties. It is rapidly climbing, and already at levels not seen in over a decade (the aftermath of the Great Financial Crisis of 2007-2010): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1945.jpg "Img_1945 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1945.jpg) ### What this means for you We believe there will be continued pain in the mortgage and real estate sectors, particularly in commercial real estate investments where office space is a high percentage of the assets. A large number of people who bought homes in 2021, 2022 and 2023 did so in the hope of a quick refinance to a lower rate as soon as the Fed pivoted. However, with inflation running well above the target, and inflationary pressures resuming, this may not happen very quickly. Additionally, a large number of investors in homes for short-term rentals (think AirBnB) are starting to struggle with fewer and fewer bookings, and cities and counties starting to restrict or even ban these kinds of uses of residential property. We believe a large number of the homes currently listed on AirBnB may, in fact, return to the market as they prove to be harder and harder to achieve profits. If you are in the market to buy a home, we urge patience – we believe that both house prices and interest rates will decline in the coming months. ## Inflation Update We continue to be concerned about several current and leading indicators, hinting strongly that we are going to have an upsurge in inflation in the coming months. This will significantly retard the Fed’s efforts to lower interest rates, which is a large part of the reason for the stock market rally that began in November. First, independent analysis from the BLS and Barclay’s shows that the CPI inflation index significantly increased in January: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Infl-momentum2402220505.png "Us infl momentum2402220505 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Infl-momentum2402220505.png) [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-FOMC-supercore2402220505.png "Us fomc supercore2402220505 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-FOMC-supercore2402220505.png) The Cleveland Fed also revised their January and February inflation metrics upward, providing a third confirmation (this time from an official Fed source): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1926.jpg "Img_1926 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1926.jpg) ### Small businesses also report that their cost of goods is increasing, indicating that they will likely have to raise prices on their products and services shortly: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-CPI-reacceleration2402230541.png "Us cpi reacceleration2402230541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-CPI-reacceleration2402230541.png)What this means for you We do not believe the Fed will be able to lower interest rates shortly, unless something significant “breaks” first in the economy. This event might be a string of bank failures or other liquidity and credit issues, or else a dramatic upswing in unemployment. We urge our clients and readers to remain conservatively invested for the time being. ## Recession Warning Signs It’s not a surprise to our clients or readers that we believe a recession is very near. We also believe that stock prices, being astronomically out-of-touch with the economic reality, must correct sharply in the wake of the recession’s arrival. Are there indicators besides the ones we’ve discussed above and in previous weeks, that help us see what is our possible near-term future? Certainly, there are. First, a look at the borrowing happening in private companies at the moment. Companies are pulling back sharply on their own lending. If we are really rallying and the economy is booming, this would not be the case: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Private-credit2402260504.png "Us private credit2402260504 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Private-credit2402260504.png) There is also the Conference Board’s Leading Economic Index (LEI), which we’ve reviewed many times in this space. Currently, the LEI continues to contract: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board2402210444-1.png "Us conf board2402210444 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board2402210444-1.png) This has been the second-longest period of consecutive monthly declines in decades (and we are actually very near the WORST of the GFC and we haven’t even hit a recession yet). [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board-Streak2402210444.png "Us conf board streak2402210444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board-Streak2402210444.png) This chart gives us a breakdown of what makes up the LEI and where each component is today. **Presently, there are only three positive components:** availability of credit (which is rapidly declining), consumer goods orders (that index also went negative in February), and stock prices, which we’ve argued above are grossly overvalued. We do not see, from the indicators below, that there is any reasonable cause to believe a recession is going to be avoided. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Leading-Adverse-weather-condi.png "Us leading adverse weather condi nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Leading-Adverse-weather-condi.png) You can see the impact of the stock market’s rally on the LEI below We are still well below the start of all previous recessions (blue bar), and the only reason the trendline reversed slightly was the recent market rally, which we strongly believe is unsupportable and unsustainable. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-6m2402210444.png "Us conf 6m2402210444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-6m2402210444.png) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **A year ago, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* \[/fusion\_text\]\[/fusion\_builder\_column\]\[/fusion\_builder\_row\]\[/fusion\_builder\_container\] **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Weekly Market & Economic nSight | March 4, 2024](https://nvestadvisors.com/economic-update-03-04-2024/) **Published:** March 4, 2024 **Author:** nVest Advisors **Content:** **A Note from Jeremy, CEO/CIO:** **Happy Monday!** We continue to watch the markets reach very narrow all-time highs as the economy starts showing the first real signs of cracks in the foundation. We reiterate that the current rally is so narrowly focused, and so fragilely constructed, a large “snap back” is the most likely short-term scenario. While our clients in our discretionary models remain defensively protected for this event, casual readers should seek a financial advisor to help assess their overall exposure to a broad downturn in equity prices in the coming weeks. *~ Jeremy, CEO* - **Markets remain grossly overbought** - **Jobs Update** - **Real Estate Update** ## Markets remain grossly overbought. Last week, I stressed the incongruity between current tech stock prices and the broader macroeconomy. This trend has continued into this week. We continue to believe very strongly that there will soon be a sharp downward correction in the stock market, for two reasons. First, the recent market rally has been predicated on two conflicting narratives: that the Federal Reserve bank would be dramatically cutting interest rates in 2024, and that the economy is growing at a rapid pace and employment remains very strong. These two narratives are polar opposites. The Fed will lower rates when it has cause to – namely, to stave off a recession or to provide additional liquidity to the markets if things start breaking. But it has no reason to – at all – if the economy is booming. To lower rates in a growing economy, with inflationary pressure resuming (see below) would mean the Fed is surrendering its fight to reduce inflation back to the Fed’s 2% annual target. The second reason for the rally for all of 2023 (though it fizzled out twice before November) is this almost religious fervor regarding the potential of artificial intelligence (“AI”). As a result, tech stocks, particularly (and cynically) those companies who were smart enough to pledge AI development in the past year’s investors’ earnings calls, saw their stocks soar so much, that it dwarfs the catastrophic bubble in tech stocks in 1999 and 2000 that resulted in a harsh, sharp recession, and tech stocks falling almost 90% from their peaks. The rally into specific tech stocks is remarkable. This shows the rally in only a few tech stocks compared to the rest of the economy. Most are flat or down; ONLY technology is rallying so strongly. This is, we would argue, a blatantly obvious “Tech Bubble 2.0”: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-AAA-Strong-inflows22403040544.png "Eq aaa strong inflows22403040544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-AAA-Strong-inflows22403040544.png) You can see the “AI Bubble” in the graph below. The Top 10 tech companies (all aggressively hyping AI projects that have either been disappointments or not brought to market yet) is the green bar, and 2024 is on the far right. [![AI bubble bigger than s tech bubble](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-The-top-10-valuations-look-fr.jpg "Eq the top 10 valuations look fr nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-The-top-10-valuations-look-fr.jpg) Every rally (or panic sell) period that extends far past its moving average, has a strong propensity to pull back to its average price. This is called “reversion to the mean”, but think of it like a rubber band, stretched unnaturally up (or down) beyond what is its natural shape, MUST eventually snap back. In this case, the S&P 500 has stretched well beyond its 200-day moving average, indicating an overbought situation that will, with all likelihood, snap back. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-SPX-distance-from-200d-MA-AAA.jpg "Eq spx distance from 200d ma aaa nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-SPX-distance-from-200d-MA-AAA.jpg) And the longer and higher we stretch the rubber band, the snap back can be harsh. This is the longest weekly rally in the market without a necessary correction back to reality since I was born in 1971: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-Its-been-over-half-a-century.png "Eq its been over half a century nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-Its-been-over-half-a-century.png) This isn’t the good news it looks like at first glance. When we get this kind of massive rally, in just a few stocks, the draw-down after that bubble pops can be significant (and pretty predictable). Here we see the last 1971-1972 bubble in the blue line, and the tech bubble in the gold line. Once these kind of irrational rallies end, the draw-down after was more than 40%: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-Prior-periods-of-corrections2.png "Eq prior periods of corrections2 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-Prior-periods-of-corrections2.png) And the optimism is being projected forward into next year, again, without support or evidence: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-2024-EPS-7-v-spx2402290532.jpg "Eq 2024 eps 7 v spx2402290532 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/EQ-2024-EPS-7-v-spx2402290532.jpg) If it were true that these companies are thriving, business is booming, and profits are likely to soar, then the insiders at those companies would know it first, right? If the future for these companies was nothing but “up”, we would always see evidence from insider trading activity – company directors and managers buying more stock in expectation for great times ahead. **But that’s not what’s going in. Just the opposite is occurring – insiders all over these companies are SELLING stock, not buying it:** [![](https://nvestadvisors.com/wp-content/uploads/2024/03/IMG_2072-1024x540.jpg "Img_2072 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/IMG_2072.jpg) Insider trading, in fact, is SO bearish right now, we haven’t seen this kind of activity since the throes of the Covid pandemic: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1953.jpg "Img_1953 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1953.jpg) **Where markets are today alarms us at nVest Advisors from a perspective of safety for our client portfolios. We are not “bears” here and take no short positions against the market. We are data-dependent and focus first on risk aversion and letting events in the macroeconomy guide our model construction. We believe that it is preferable to sidestep markets when they rally too high and return to your typical risk profile once the market prices have corrected.** We never believed the November-to-Today rally in stocks (and actually, it’s not ALL stocks rallying, only about a dozen or so large-cap tech stocks) was sustainable or justifiable. Both the economy and the reality that AI, while carrying massive promise for the future like green energy does, is in its infancy. Just the launch of Gemini, Google’s language AI, last week, and the widespread outrage over its overpromised capabilities, [built-in political bias, manufactured quotes,](https://www.digitalinformationworld.com/2023/12/google-in-hot-seat-after-its-viral.html) and [chaotic (and inadvertently racist) image generation](https://venturebeat.com/ai/google-apologizes-for-ahistorical-and-inaccurate-gemini-ai-images-we-missed-the-mark/), [should give investors pause going forward that AI has a long way to go before it can be incorporated into the workplace and academia the way the “Magnificent Seven” tech companies promised a year ago](https://www.cmswire.com/digital-experience/googles-gemini-marketing-trick/). We also know market history, and the technology sector, for lack of a more polite way to say it, is often found peddling B.S. Whether that’s in the capabilities of their products, the pacing of product delivery, or even the value of their companies, **[few sectors in U.S. history have had more concentrated incidents of fraud, over-hyped valuations, and wishful thinking](https://www.extremetech.com/extreme/279670-why-tech-companies-lie)[.](https://www.extremetech.com/extreme/279670-why-tech-companies-lie)** So, we believe the market has to come to a reckoning about the recent rally, based mostly on pipe dreams and the smoke-and-mirrors of a few tech companies promising what they simply cannot deliver. We may have a few more months of tech company overvaluation, but both the weakening economy and the failure of many of these AI projects (or promised projects that never take off), will correct stock prices back down to earth. As it stands today, we can see several indications of the stock market being wildly disconnected from reality. First, in historical P/E ratios : [![](https://nvestadvisors.com/wp-content/uploads/2024/02/sp500-10year-pe-ratio-st-1-1024x853.png "Sp500 10year pe ratio st 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/sp500-10year-pe-ratio-st-1.png) Then there is the “Buffett Indicator”, which compares stock valuations to the actual productive output of the economy: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/buffett-indicator-standa-1024x853.png "Buffett indicator standa nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/buffett-indicator-standa.png) **The “Fear and Greed Index” echoes our sentiment.** Stocks are wildly out-of-alignment with realistic valuations: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1963.jpg "Img_1963 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1963.jpg) ### What this means for you We continue to adjust our investment models for our clients who engage with us, and our recommendation is to remain conservatively invested for now. ## Jobs Update The weekly jobs numbers continue to give many economists the (we believe, false) notion of a robust economy. The issue is that unemployment filings are one indicator (typically, the last one) of a deteriorating labor market. Companies don’t want to lay off workers until they have to, and we’ve shown our readers several times over the last few months that unemployment filings typically don’t start really climbing until we are about 1/3 of the way through a recession. Job losses are the ***result*** of a recession, not a ***predictor***. That said, the current initial unemployment filings came in low last week, and followed seasonal trends (job losses typically drop off at the start of the year): [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims2403010545-477x1024.png "Us claims2403010545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims2403010545.png) But as we’ve warned for over a year now, CONTINUING claims are telling us another part of the story. It is difficult to replace a job if you do lose it. **Continuing unemployment is now higher than 2018, 2019, pre-Covid 2020, 2022, and 2023, and the trend is worsening (2nd graph):** [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims-Cont2403010545-497x1024.png "Us claims cont2403010545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Claims-Cont2403010545.png) There is also the simple truth that the numbers no longer make sense, and haven’t since late last year. Generally, initial claims and continuing claims run pretty closely to each other, and that makes perfect sense – if jobs are hard to get, losing one means it may take a while to find a new one. If jobs are plentiful, you won’t have trouble and layoffs will be minimal. But that’s not the case for the last six months. One of these will have to adjust sharply to reconnect with the other. We believe it will be INITIAL claims pulling up sharply, for the reasons we discuss below. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-SA2402230541.png "Us claims sa2402230541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Claims-SA2402230541.png) These graphs also show what has already occurred, but do we have any indication of what’s coming? Yes, several. Let’s begin with the number of WARN notices (60-day required advance notices of layoffs for companies with more than 100 employees) that have taken place so far. So while we currently have a low initial unemployment claims rate, we have a substantially higher number of companies who have now given warning of layoffs coming (over 300,000 next month): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1782.png "Img_1782 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1782.png) And a strong jobs market is more a matter of where you live, than a wide, robust economy throughout the United States. More than 60% of the country’s metro areas are now showing rising unemployment (let me note here that the last times we were anywhere near this figure, without exception, we had a recession): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1762-1024x576.jpg "Img_1762 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1762.jpg) Once again, tech companies are leading with the layoff announcements, which is one reason that we believe the recent rally in tech company stocks was far too optimistic and premature. How can tech company profits be booming but the companies are laying off more and more people? We believe: they can’t. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Tech-layoffs-are-picking-up-a.jpg "Us tech layoffs are picking up a nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Tech-layoffs-are-picking-up-a.jpg) We also mentioned over the last two updates that most of the recent hiring was in government positions, not in private companies. The number of total number of PRIVATE job hires is rapidly declining, following exactly the same kind of trend that has always led into recessions (and, you will note that the bulk of the layoffs happened DURING the recession, not BEFORE it):[![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1939-1024x562.jpg "Img_1939 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1939.jpg) Digging a little deeper, we can see the private jobs more closely. In companies with 10 or more employees, you can see that both the hiring (black line) and the job listings (red line) have been in sharp decline since 2022: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-openings22402200445.png "Us job openings22402200445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-openings22402200445.png) But in companies with less than 10 employees, we see things appear to be a little more optimistic (or at least, on the surface). Hiring in the very small firms never really took off after Covid, but the number of available jobs appears to have soared in a way that never happened in the last 20 years. [In recent weeks, a number of owners and employees of very small companies publicly admitted that they post a large number of jobs they have no intention of ever filling, because it gives their company the false impression of robust growth to potential investors](https://www.forbes.com/sites/karadennison/2023/11/27/how-ghost-job-postings-are-creating-a-false-sense-of-hope/?sh=110c03217dc0). In short, we believe many of the listings for jobs in small companies are “ghost jobs” as the linked article above describes, and that explains the strange disconnect in 2021 from the previous measures of this metric. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-openings2402200445.png "Us job openings2402200445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Job-openings2402200445.png) One area we expect to see more job losses is in construction. The housing market (see below) is now in freefall, and we can see now that the gap between construction employment (very high) and construction activity (low and dropping quickly) has never been greater. There will, sadly, be many more layoffs coming in the real estate and construction sector in the coming weeks. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1799-1024x530.jpg "Img_1799 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1799.jpg) ### What this means for you We continue to watch employment for several reasons. First, and most obviously, employment tends to give you an inside look at the overall financial health of a company, industry, and economy. But also, when unemployment spikes (and it does indeed spike it doesn’t usually just creep up, as the chart above demonstrates), it can happen very quickly. That loss of income will immediately impact spending and credit payments, which is where the recessionary pain comes from. Employment is a lagging indicator. It is not logical to watch for unemployment to change before you alter your investment risk profile ahead of economic challenges. We believe we have already positioned our clients properly for what Wall Street will always claim is a “surprise” or “unexpected” spike in unemployment, because we have no reason to believe this business cycle will be substantially different than prior ones. ## Real Estate Update The sale of new single family homes are pacing below 2022 and 2023, but still relatively strong historically. We believe this will drop further due to increases in the mortgage rates since January: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-New-price2402270521.png "Us new price2402270521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-New-price2402270521.png) The time to sell a newly built home sits at almost 3 months, a relatively short time and in line with 2022 (longer than 2023): [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-New-inv2402270521.jpg "Us new inv2402270521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-New-inv2402270521.jpg) Much of it still has to do with housing affordability. We’ve looked at home inventories a lot in recent weeks and will do so again, but combining high home prices with both higher mortgage rates and the willingness of banks to offer mortgage loans (the chart below), you can quickly see there is much more weakness coming in the housing market. Buyers simply cannot afford the mortgage payments, and banks are very nervous to lend with a deteriorating economy underway. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1950.jpg "Img_1950 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1950.jpg) As interest rates climb again in the wake of likely higher-for-longer Federal Funds rates, we can see the issue of affordability for buyers remains a major challenge. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Affordability2402270521.png "Us affordability2402270521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Affordability2402270521.png) And with the strength in home prices (and now rent rates resuming their climb after a brief pull-back), inflationary pressures may persist for much longer than investors are expecting. If rates cannot come down to make expensive homes affordable, then the home prices themselves MUST come down: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-HPA-Broad2402270521.png "Us hpa broad2402270521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-HPA-Broad2402270521.png) And we can see that the price of a home and/or rent are nearly all showing a flattening or rebound back up (depending on who is tracking). Inflationary pressures are, frustratingly, resuming: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Housing-CPI2402270521.png "Us housing cpi2402270521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Housing-CPI2402270521.png) The cost of living isn’t just a problem for homeowners, obviously. Renters are subject to inflation in this expense, too. This chart is kind of hard to read, but this shows the number of rent rate INCREASES vs. DECREASES in a given month. The GREEN portion shows the number of rental rates that have declined over a prior month, and the gray line shows the number of rental prices that have gone up. We can see that rent rate drops peaked in August of last year, but that rent rates have been climbing ever since. [![](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Housing-CPI22402270521.png "Us housing cpi22402270521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/US-Housing-CPI22402270521.png) We believe the biggest concern in real estate right now is not residential (but that will come later in this recessionary cycle), but rather, COMMERCIAL real estate, which has struggled ever since “work from home” became common during the Covid-19 pandemic. As office space vacates, landlords are faced with more than $2 Trillion of mortgages on commercial property that are due to be refinanced this year… [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-maturity-wall2402140443.jpg "Cr cre maturity wall2402140443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-maturity-wall2402140443.jpg) …and with interest rates remaining much higher than many real estate investors believed they would be, we think a cascade of defaults and bankruptcies in the commercial real estate market will be the first of two major credit events in this recessionary cycle. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-Risk2402140443.jpg "Cr cre risk2402140443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-CRE-Risk2402140443.jpg) Most commercial property lending is actually handled by regional and local banks, not by larger international banks. Almost none of the commercial real estate loans are protected by government-backed insurance: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-Small-bank-CRE-exposure224021.jpg "Cr small bank cre exposure224021 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/CR-Small-bank-CRE-exposure224021.jpg) And this week, we got a look at foreclosures now occurring in commercial properties. It is rapidly climbing, and already at levels not seen in over a decade (the aftermath of the Great Financial Crisis of 2007-2010): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1945.jpg "Img_1945 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1945.jpg) ### What this means for you We believe there will be continued pain in the mortgage and real estate sectors, particularly in commercial real estate investments where office space is a high percentage of the assets. A large number of people who bought homes in 2021, 2022 and 2023 did so in the hope of a quick refinance to a lower rate as soon as the Fed pivoted. However, with inflation running well above the target, and inflationary pressures resuming, this may not happen very quickly. Additionally, a large number of investors in homes for short-term rentals (think AirBnB) are starting to struggle with fewer and fewer bookings, and cities and counties starting to restrict or even ban these kinds of uses of residential property. We believe a large number of the homes currently listed on AirBnB may, in fact, return to the market as they prove to be harder and harder to achieve profits. If you are in the market to buy a home, we urge patience – we believe that both house prices and interest rates will decline in the coming months. ## Inflation Update We continue to be concerned about several current and leading indicators, hinting strongly that we are going to have an upsurge in inflation in the coming months. This will significantly retard the Fed’s efforts to lower interest rates, which is a large part of the reason for the stock market rally that began in November. First, independent analysis from the BLS and Barclay’s shows that the CPI inflation index significantly increased in January: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Infl-momentum2402220505.png "Us infl momentum2402220505 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Infl-momentum2402220505.png) [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-FOMC-supercore2402220505.png "Us fomc supercore2402220505 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-FOMC-supercore2402220505.png) The Cleveland Fed also revised their January and February inflation metrics upward, providing a third confirmation (this time from an official Fed source): [![](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1926.jpg "Img_1926 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/IMG_1926.jpg) ### Small businesses also report that their cost of goods is increasing, indicating that they will likely have to raise prices on their products and services shortly: ### [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-CPI-reacceleration2402230541.png "Us cpi reacceleration2402230541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-CPI-reacceleration2402230541.png) ### **What this means for you** We do not believe the Fed will be able to lower interest rates shortly, unless something significant “breaks” first in the economy. This event might be a string of bank failures or other liquidity and credit issues, or else a dramatic upswing in unemployment. We urge our clients and readers to remain conservatively invested for the time being. ## Recession Warning Signs It’s not a surprise to our clients or readers that we believe a recession is very near. We also believe that stock prices, being astronomically out-of-touch with the economic reality, must correct sharply in the wake of the recession’s arrival. Are there indicators besides the ones we’ve discussed above and in previous weeks, that help us see what is our possible near-term future? Certainly, there are. First, a look at the borrowing happening in private companies at the moment. Companies are pulling back sharply on their own lending. If we are really rallying and the economy is booming, this would not be the case: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Private-credit2402260504.png "Us private credit2402260504 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Private-credit2402260504.png) There is also the Conference Board’s Leading Economic Index (LEI), which we’ve reviewed many times in this space. Currently, the LEI continues to contract: [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board2402210444-1.png "Us conf board2402210444 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board2402210444-1.png) This has been the second-longest period of consecutive monthly declines in decades (and we are actually very near the WORST of the GFC and we haven’t even hit a recession yet). [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board-Streak2402210444.png "Us conf board streak2402210444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-board-Streak2402210444.png) This chart gives us a breakdown of what makes up the LEI and where each component is today. **Presently, there are only three positive components:** availability of credit (which is rapidly declining), consumer goods orders (that index also went negative in February), and stock prices, which we’ve argued above are grossly overvalued. We do not see, from the indicators below, that there is any reasonable cause to believe a recession is going to be avoided. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Leading-Adverse-weather-condi.png "Us leading adverse weather condi nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Leading-Adverse-weather-condi.png) You can see the impact of the stock market’s rally on the LEI below We are still well below the start of all previous recessions (blue bar), and the only reason the trendline reversed slightly was the recent market rally, which we strongly believe is unsupportable and unsustainable. [![](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-6m2402210444.png "Us conf 6m2402210444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/02/US-Conf-6m2402210444.png) Finally, the Fed’s OWN RECESSION INDICATOR is flashing a 62% chance of a recession this year: [![](https://nvestadvisors.com/wp-content/uploads/2024/03/GGJHZEdWkAA3vfA-1024x636.jpg "Ggjhzedwkaa3vfa nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2024/03/GGJHZEdWkAA3vfA.jpg) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **A year ago, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Important Tax Dates for clients using Betterment](https://nvestadvisors.com/important-tax-dates-for-clients-using-betterment/) **Published:** January 25, 2024 **Author:** nVest Advisors **Content:** For our clients using Betterment as an account custodian, please take note of the following announced tax dates and helpful links that have been provided to us from Betterment: We know tax season is one of the busiest times of the year, so we want to keep you informed on important dates and information that will help you manage your clients’ tax needs. - [Top Dates Investors Should Know for 2024:](https://www.betterment.com/e3t/Ctc/5C+113/cDvSg04/VVPLMd41WHQxW1H09VZ1F9X-QW2XSKgS58H69XN880g4g3qgyTW7Y8-PT6lZ3lNW2gqXRj9ltZjSN2vkbKzMCrRbW4DTcCS3XmRtlW4_MPbQ7P_2N5W6xhPj-2rgHr0W52tKj22T6756W5T6R9s6YB2BXN378G1P50mtbW779yMH8F6jq0W7HM8f84-qL8xW1j85Zn96YdF5W5lcFmT7mSQBZW3bqvVb3pR_M7VWF-h61gTPxhVr3R6j4Nr7FfW7ytCfM5dJGb4W6SZ9_25kVFNZVZ20Tx68HwQcW1Nmggm8vdwfHW1GK-Cw5Rbp75W5flwGt75SrWpW9fRq268BhXdqW27CwWv48MjWFW8-ssCT1DZcZrW2tC0sF59wg35W8LvVzh7gFDCjf4twzBK04) - **January 31:** Forms 1099-R, 1099-INT, and FMV/RMD will be available by this date. - **February 15:** Forms 1099-B, 1099-DIV, and the supplemental tax form will be available by this date. - **February 15:** The first day clients will be able to import tax forms into an online tax preparation service (i.e. TurboTax). Please note that even if your clients’ forms are available in their Betterment account before this date, they will not be able to import them until February 15th. - **April 15, 11:59 PM ET:** Betterment’s 2023 IRA contribution deadline. - **April 15:** Last day for your clients to file their 2023 taxes with the IRS. This is also the deadline to recharacterize their 2023 contributions if they do not file an extension. - [The Most Common Tax Form Questions](https://www.betterment.com/e3t/Ctc/5C+113/cDvSg04/VVPLMd41WHQxW1H09VZ1F9X-QW2XSKgS58H69XN880g4g3qgyTW7Y8-PT6lZ3nKW5-kLnw2G6D7XW4rmFRp6Gg2rNVYWs_l2z6y7xW5yYdV842dl2gW3BQPf84jHKKrW3S-FtY2b3yZxW5xsjQZ1F69d5VdtzL28dPdQJW4fTc604KFhz0W7P_3Xz5VczDFW9901mZ6D0z05W1gCbVD24MMxsW4Tb67V902gdSW6SG_rW96jh2kW99d4bs8F_MWdW2tzx1t5Ww6cSW2zyhXt1HykdtW6FcBD85kzgwHN1WtsCZZ2lSRW6bl6F_4-X4dBW5kg3kW2pvKKwW2KFz_n4_gZ8lN5cwMfQPrBybW8gddrj5xnkWRW4JBTts6tmMJbVvbRC-5Rh86sf8hCCGT04) – Including answers about 1099-R distribution codes and more - [Answers to questions about reporting or calculating](https://www.betterment.com/e3t/Ctc/5C+113/cDvSg04/VVPLMd41WHQxW1H09VZ1F9X-QW2XSKgS58H69XN880g4z3qgyTW8wLKSR6lZ3mHW2pg8g73bBdpXW4jTnNd5fg_lfW76ks4Z7kkHFpW2qS_2M5JcPDBW5fXVQR6XN2BvW2NsvBY5z_WKtVnZ-2s5tXDzBW7lJcM08jQtGrW4Ywgy_2sZRz2W5NGJhR8zHhSGW2wBwhy4F7fs_W48NLfv8YgyPgN3pyvLTTNVYVW894dVy26YmYbW8CkRsY6S9NzrW2gkVWm8nTnvQW4T4v0655HDMYW1hVj1J21Q-KgW99X58V7jDyw4N4dpQ9N2m0QpW4yB79t2-nrW0VRvGPd3xfrglW1pHP7G5_tMc3W5YrjYh2-QHvGW6wTkcK76TWvNVpG_KG8wJtDZW3l5zkl6FHDspW8TLdgP3bLNcgf6M9NLP04) – For Municipal, State, Federal, and Foreign income from Form 1099-B/DIV (see “Income Sources” heading) - [Troubleshooting Tips for Importing Tax Forms](https://www.betterment.com/e3t/Ctc/5C+113/cDvSg04/VVPLMd41WHQxW1H09VZ1F9X-QW2XSKgS58H69XN880g4g3qgyTW7Y8-PT6lZ3nkW8C0zf333PNb9W1htSTh49vYb-VHtSWz8FHzrVW3_cT015BQlRYW5zhB039bv06DW3YXjVL8WkCF5W28-3jV2CV2jDN770Nx_rvYXWW6Y3L1Y56KQG9W43Nt0Y6SbxMPW9jQqqb8lPJ1RW245j768r_GkmVGfl9H6hnRS5W7zWZzD6k-6vSW1vHbsk318XpTW4R3sKw8_c_TNW5WS46038R76KW34TkdZ57JyKfW2qFFMp6m4DQ8W8ZYtz538CZp-W6lrCYq1rMR-4W3GcBd02XN9WTW3Gx1zy52jPGVW7P36Mv2VLtCSW4YYFyV146bR3W3pxW3T6PbYpLdysW_204) – Instructions on how to import tax forms directly into tax software, such as TurboTax and H&R Block **Categories:** Client News, Client Service, Company News, Economic Updates, Individuals and Families, Mailchimp **Tags:** alert, announcement, Betterment, Betterment Institutional, nVest, nVest Advisors, tax, tax season, taxes --- ### [Important Client Alert - Bitcoin and Recessions](https://nvestadvisors.com/q1-investment-models/) **Published:** January 10, 2024 **Author:** nVest Advisors **Content:** # From CEO & CIO Jeremy Torgerson: **Hello nVest Advisors clients-** **We hope you have all enjoyed the holiday season and entered 2024 happy, healthy, and surrounded by family and friends.** We are watching several developments that we believe will impact the creation of our investment models for 2024. Although our macroeconomic research and analysis strongly points to a recession in the second half of the year, we know that many of our clients have been defensively positioned for quite some time. We made changes to our “Total Defense” model in August of 2023 to give some protective exposure to stocks for those accounts, but we are exploring additional options to increase your return and yield even while we prepare for what 99 out of 100 economic indicators is strongly predicting: a sharp economic downturn, soon. **I wanted to bring light to a couple of specific areas of concern to our firm, and what we are doing in the short term:** ## The Bitcoin ETF has been approved One of the biggest financial events in recent years was the announcement today, January 10, 2024, of the SEC approval of a handful of Bitcoin ETFs (exchange-traded funds). Prior to this event, Bitcoin and all other cryptocurrencies had to be purchased through either offshore crypto trading exchanges, or else some US-linked ones that have had a large swatch of legal and/or financial difficulties. As you know, nVest Advisors takes a very cautions view of cryptocurrencies in general, for several reasons. First, there is no real purpose for them in a client’s portfolio. As the CIO of our firm, I could never determine a reason to own them. Recent experience has proven that they do not hold their value in any stable way (so they’re not really “money”), they do not act as a hedge against inflation (they collapsed the moment inflation arrived in late 2021), and they are too volatile to be a short or medium-term store of value (which is the third and final argument their adherents constantly give us). Additionally, unlike most investments, they are impossible to accurately value. With no sales or revenue, no product or service, no customers, no annual reports, etc. cryptocurrencies only seem to be valuable if there is buying interest in them. Without constant promotion on social media to find new investors, the price tends to collapse pretty quickly. The push to centralize control over Bitcoin (remember: only one coin is now available on the U.S. investment markets) seems anathema to the original purpose for it in the first place: that of a decentralized currency for trade that is not manipulated or controlled by the world’s banking systems. These ETFs eliminate that primary purpose, as they will now be decidedly controlled and regulated by the largest banks and government agencies in the world. **So where do we go with Bitcoin?** We are watching it for now, but will likely make it an investment option for our clients once we have an idea of how it will behave as a traded investment product in different economic and market situations. We also need to learn what it will be most closely correlated with, and how it will act differently than other investments in the technology space. Adding Bitcoin to a portfolio with a lot of tech stocks, for instance, may concentrate your risk instead of diversifying it if Bitcoin begins to trade in tandem with other stocks in the tech sector. So we want to wait and see first if it behaves more like a currency, like a small startup tech company, like gold, or if it does something entirely different. It’s just too early to know, and for that reason, it’s too early to add this to our core investing strategy at this time. However, clients who wish to own a small portion of this in their accounts now can do so. We strongly recommend not more than 5% into this, or any single investment. We will research the dozen or so ETFs that were approved today to find the lowest management cost and the most stable presentation and make that available to you by next week. ## Transitioning back to our normal risk models We are not going to be in a protective mode with our models forever. We are waiting for the markets to correct downward before the coming recession. Stock investors tend to try to front-run economic events by as much as 6 to 12 months, so once the markets accept the inevitability of the coming recession (you can follow that analysis once a week on our blog), they will begin to abandon riskier investments with increasing speed. This usually results in panic selling, what we call in the industry, “capitulation”. You’ll recognize it when you start seeing markets fall 3% or more in a single session, for a few sessions in a row. The last time we saw panic selling was in the early days of the Covid-19 pandemic in March 2020. It is at that moment that we want to restart our normal risk models. This means, your assets will revert to appropriate investments based on your risk tolerance and account objectives. We have the models ready and are simply waiting for a deep correction, which always comes with economic downturns, to do so. Until then, we ask for your continued patience. The economy is like a huge ocean liner; it doesn’t turn on a dime. And history shows us that recessions start slowly, and then rapidly pick up momentum. We are ready to resume more traditional investing strategies but we must have the “all-clear” in economic data to do so. ## Updates to our current protective portfolios Until we reach the time when we can move back completely into risk-based models, we will continue to try to seek out better and better returns for you that are *NOT* directly correlated to the stock market. These involve some actively managed funds that use a combination of strategies to do their work, and we insist that they have a track record of performing at or above our expectations during similar conditions that we are facing today. Some of the strategies are fairly novel and complex and may have different paths to their expected outcomes, but please know that we never invest in something we do not fully understand. I ask you to communicate with us if you have concerns about the markets, the economy, or any other financial matter. Recessions hurt real people. Sadly, some businesses and jobs will be lost, placing extreme hardship on families. I pray nightly for all of your protection and prosperity, but it would be foolish and irresponsible of me as a financial fiduciary to believe our country, economy, businesses, and families won’t be affected in some meaningful ways by an economic downturn. We can’t walk between the raindrops; no one can. ## Welcome Joshua Torgerson And finally, I wanted to let you all know that my son, Joshua Torgerson, has passed his securities exams and is now officially a junior advisor here at our firm. Joshua will begin by assisting me with our current clients and business operations as he begins to build his own family of clients in Colorado. Josh graduated from the University of Texas – RGV in May of 2016. He has been married to his beautiful bride Anjelika for almost five years and they live in Lakewood, Colorado. Later in the year, Joshua will relocate to Colorado Springs and work from nVest Advisors main office. (At the moment we have one more trainee preparing for his securities exam, to continue to grow nVest Advisors as an independent financial advisor under our banner in Texas. I look forward to sharing his success story with you in the weeks ahead.) ***Thank you all for your patience, good spirits, trust and friendship. We are growing more every day, learning more every day, and working harder every day to get this right.** **I’m always at your service.*** ***Jeremy*** **Categories:** Business Stories, Client News, Client Service, Company News, Cryptocurrency, Early nVestors, Early nVestors, Economic Updates, Economy, Emerging nVestors, Established nVestors, From our CEO, Individuals and Families, Mailchimp, Media, Press Releases, public **Tags:** alert, announcement, BTC, colorado, ETF, nVest, nvestadivosrs, texas --- ### [From Jeremy Torgerson, CEO to our clients](https://nvestadvisors.com/from-jeremy-torgerson-ceo-to-our-clients/) **Published:** January 2, 2024 **Author:** nVest Advisors **Content:** | \| **Happy New Year!*****I wanted to take a moment today to thank you for your faith and confidence in the work we do at nVest Advisors to be your choice to meet your financial planning and investing needs.*** The last few years have given us all so many challenges, particularly in the wake of the COVID-19 pandemic and the recent military escalations, plus the challenging effects of the inflation that’s been the result of so much recent government spending and the hikes in interest rates that began in 2022. All of this is coalescing, in my opinion, into a recession that will likely affect us in just the next few months. In short, it’s been a challenging time for all of us, and I want you to know that I and our growing team at nVest Advisors wake up each day with a single purpose: to shepherd your family’s finances through the confusing, often contradictory world of markets and economics with all the care, diligence, and absolute seriousness of purpose that we can. My message today is to give you all a quick update on what’s going on here, where we plan to be later in 2024, and how we’ll keep you informed and actively participating in the work we do for you. **1) Please sign our new New Unified Client Agreement if you haven’t already.** We use several account custodians to safekeep your accounts, and there were significant enough changes at some of those custodians in 2023 that the State of Colorado (where our company is located and who is our primary regulator), requested that we update our client service agreements to address those custodial changes. For many years before this, we had a different client agreement for each custodian (since they often have different features, costs, etc.) but we decided to take the opportunity to re-write all of these into one Unified Agreement, no matter which custodian(s) you may have accounts held at. **You’ve all been sent this Agreement to sign by now and many of you have already signed it (thank you!), but if you haven’t yet, please do so as soon as possible. This is important enough that we will be sending you reminders and text messages to ask you to do so.** **2) We’re committed to connecting with you much more often in 2024.** We work diligently all day for our clients, but I’ll be the first to admit that our reports back to you on that work were spotty in 2023. There are valid reasons for it – our company experienced tremendous growth, we relocated to more permanent offices, we are training our first two junior advisors, and we even went through our first state-level administrative audit – but those reasons are not excuses. We need to be talking with you much more regularly, but frustratingly, we let other internal matters get in the way of that in 2023. That’s something I’m not okay with and it is something that we will fix – with your help – in 2024. Systematically (but meaningfully) communicating with our clients has always been a challenge for our firm because most of our clients are still working and raising families. Your time is limited – we know that. And we don’t want to just “go through the paces” of taking ***AT*** you without talking ***TO*** you. We strongly feel it’s our job to be there when you need us, not the other way around, so we’ve always tried a strategy of being ***available*** to you without ***intruding*** on you, such as having our appointment calendar always available online so you can book meeting times whenever you want one. But if you don’t book a meeting, we may not talk to you for months at a time. That’s not okay. So we’ll work with you to find an optimal call, email, and meeting schedule that works for you. You need relevant information about your financial plan and accounts, but you also need the “face time” with your advisor so that we can truly listen to your concerns and needs that help us do our job better for you. So we need to talk more. That will begin with the Annual Review Meetings, which I will soon be asking you to schedule (see below): **3) It’s annual review time.** At least once each year, we are expected to meet with you to review our relationship and update the information we have from you so that our advice and fiduciary investing work always remain in your best interests. This is called our Annual Review Meeting, and we typically try to do them in the first weeks of each calendar year. We start this process by sending you a survey of relevant questions. At the end of that brief survey, you can schedule your meeting. This survey will be sent to all of our clients this week. When you receive it, please take 5 minutes or so to complete it (it’s MUCH shorter than in previous years), and book the meeting. \| \|---\| | |---| | \| **I look forward to reconnecting with you all in the weeks ahead. If there is anything you need to discuss ahead of our first meeting in 2024, please do not hesitate to reach out to me.**As we gear up for what may be an important and challenging year for all of us financially, please take confidence in the fact that this company exists for the sole purpose of serving **YOU**. **YOU** are why we do what we do every day. Your concerns and worries matter to me personally. I pray for you often. Your faith and confidence are overwhelmingly appreciated; more than we’ll ever be able to express. We will never take it for granted, and we promise to work, day in and day out, to earn it over and over again. **In short, we are here to serve. We’ve always had this spirit of service, but we promise to do it better in 2024 than ever before. Your suggestions are welcome as we continue to build the best financial planning and investing firm for “regular people” that we can.** Here’s to a great 2024 to all of us! :) *Jeremy Torgerson, CEO nVest Advisors LLC* \| \|---\| | |---| **Categories:** Business Stories, Client News, Client Service, Company News, From our CEO, Individuals and Families, Mailchimp, Media, Press Releases --- ### [2023 Wrap-Up](https://nvestadvisors.com/2023-wrap-up/) **Published:** December 18, 2023 **Author:** nVest Advisors **Content:** ## Happy Holidays from nVest Advisors! We hope all of our “family” of clients have a safe, happy, and healthy holiday season, and we look forward to serving you in bigger and better ways in 2024! **A few last-minute reminders for our clients as the year winds down:** ### Office Hours - Our office is CLOSED to appointments (service-related activity is still happening) from Friday, December 22 until Tuesday, December 26. We will resume normal office hours on Wednesday, December 27. - Our office is CLOSED on Monday, January 1, 2024, in observance of New Year’s Day. All banks, government offices, and investment markets are also closed. We will resume normal office hours on Tuesday, January 2. ### New Client Service Agreements - **All of our clients need to sign an updated service agreement BEFORE DECEMBER 31.** We are sending those agreements to your email for easy e-signature TODAY. Please take a moment and complete this important regulatory document. ### RMDs from Retirement Accounts - We believe all of our clients who have required minimum distributions have already taken them for 2023, but if you have not yet received your distribution check(s), please notify our office by Thursday, December 21. - Clients with INHERITED IRAs were granted a waiver of fees for missed RMDs for 2022 and 2023 (meaning, essentially, that you did not have to take one), but we emailed all clients with an inherited IRA and asked if you wanted funds anyway. Again, please reach out to us NOT LATER THAN Thursday, December 21 if you wish to take an RMD. ### Tax Loss Harvesting - We will be making a last-minute model change and rebalancing our clients this week to take advantage of any remaining tax losses for your non-qualified accounts and to set us up for what we believe will be a challenging 2024. ### Annual Review Meetings in January - As usual, we will be sending all of our clients an invitation to schedule an annual review meeting to update your risk tolerances and personal information, and to discuss your investing and financial planning needs as we go into 2024. Please book that meeting when you see the invitation. ### Texas In-Person Meetings in January - And finally, we will be in South Texas (San Antonio and south to the RGV) January 18-23 for in-person client meetings. Invitations for our Texas clients will be sent out the first week of January to schedule your meeting if you need it. Your Annual Review Meeting can be conducted at this time if you wish. **Thank you all for your years of friendship, trust, referrals, and recommendations. We are forever grateful to be your choice for your family’s (and business’) financial advisor. We hope to excel even more in 2024. Have a Merry Christmas and a prosperous and healthy New Year!** ***Jeremy Torgerson and the team at nVest Advisors*** **Categories:** Business Stories, Client News, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Media, Press Releases, public **Tags:** alert, announcement, christmas, holiday, hours, new year, news --- ### [Weekly Economic nSight | December 4, 2023](https://nvestadvisors.com/economic-update-12-04-2023/) **Published:** December 4, 2023 **Author:** nVest Advisors **Content:** **Good morning! It’s been a month since we last published an economic update due to a number of interruptions to our normal posting schedule in November, including the Thanksgiving holiday and an anniversary trip to Costa Rica. There were not many major changes to the trajectory of the main economic indicators during the month, either, so there was little news to report. However, we are finally starting to see some divergence from the months-long status quo, and we will address these changes today.** Because nearly all of our investment clients grant us what is known as discretionary trading authority, keeping up with global economic changes is an important part of our client service work. As a financial planning and investment management firm that is committed to doing independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but simply gather and present this information. Their vital service saves dozens of hours a week. We want to give a big shout-out (and a thank you) to [CurrentMarketValuations](https://currentmarketvaluations.com), [FRED](https://fred.stlouisfed.org/), [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **nFocus: PMI Reports** - **Jobs Update** - **Real Estate Update** - **Consumer Confidence Reports** - **Inflation isn’t finished** ## nFocus: PMI Reports The Q3 2023 GDP was revised upwards from 4.9% to 5.2% in the past month, and markets rallied on the supposedly strong economic output. We’ve had a lot of issue with the current GDP reports for one reason only: none of the underlying data supports it, and most of the data contradicts it. First, there is another broad way to assess a country’s economy other than GDP (gross domestic product). It’s called GDI (gross domestic income). It’s pretty much the same thing except GDP looks at all production created within the United States, and GDI looks at the income from productive activity of U.S. companies. The difference is that companies may produce revenue from factories and offices outside of the U.S. or its territories, so that’s included in GDI. One might assume that GDI, then, might actually look better than GDP since it includes work done by US companies, from which they receive revenue, outside of US factories and offices. You’d be surprised how closely correlated GDP and GDI usually are – until recently. In short, GDP shows startlingly good economic activity in the U.S., whereas GDI shows the exact opposite. It is rare for GDI and GDP to be way off like this, but when it’s happened before, we had the last two serious recessions: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/gdp-gdi-1024x683-1.png "Gdp gdi 1024x683 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/gdp-gdi-1024x683-1.png) The disconnect between GDP and GDI has NEVER been higher than it is right now, by the way. Now let’s look directly at manufacturing and service as it’s reported by the actual companies, which is called a PMI report. We got several just in the last week. First, Chicago, which is the only one that actually reported in positive territory after being down for almost the entire year so far: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-MNI-Chicago-PMI2312010547.png "Us mni chicago pmi2312010547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-MNI-Chicago-PMI2312010547.png) This was so far above expectations that I expect it to reverse sharply in the next reading. It looks like a data mis-fire for October. Here’s Dallas: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Dallas2311280444.png "Us dallas2311280444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Dallas2311280444.png) Dallas reports layoffs in manufacturing in the district: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Dallas-Employee2311280444.png "Us dallas employee2311280444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Dallas-Employee2311280444.png) Here is Richmond, VA’s district info: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Richmond2311290448.png "Us richmond2311290448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Richmond2311290448.png) And here is the entire country rolled up into one PMI report. Does this look like 5.2% GDP to you? Not to us, either: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PMI-Manuf2311270507.png "Us pmi manuf2311270507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PMI-Manuf2311270507.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PMI-Serv2311270507.png "Us pmi serv2311270507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PMI-Serv2311270507.png) Employment is slowed nationally, as well: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PMI-Manuf-Empl2311270507.png "Us pmi manuf empl2311270507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PMI-Manuf-Empl2311270507.png)[![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PMI-Serv-Empl2311270507.png "Us pmi serv empl2311270507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PMI-Serv-Empl2311270507.png) This is the 13th straight month that US Manufacturing has reported itself in recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-ISM-13-months2312040542.png "Us ism 13 months2312040542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-ISM-13-months2312040542.png) ### What this means for you We frankly cannot reconcile the currently published GDP numbers with all of the other available data on economic activity in the United States. GDP itself is the outlier; all other sources of data about the productive health of our industries show significant and sustained slowdowns. Time will tell, but economists are famous for revising data long after the fact to reflect reality after it’s obvious the original data was way off-course. We believe it is foolish to assume the country has rounded the corner and it’s “full steam ahead” economically. Literally every data point we track says the exact opposite. We therefore remain very cautious and keep our clients in a very defensive posture in terms of their investment strategies. ## Jobs Update Jobs are very slowly starting to become an economic issue. Typically, hiring remains strong right into each recession, and job losses come in the middle to end of an economic slowdown, so in many ways it’s not surprising that the jobs market has remained so tight for this long. When you consider the fact that Baby Boomers are retiring in record numbers, the labor pool is just very low. However, new unemployment claims ticked up slightly in line with seasonal norms but remain low. There is always a drop in filings the week of Thanksgiving (you can see that repeated every year in this chart) because most filing offices are only open Mon-Wed: [ ](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Claims-Less-than-200k-America.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Claims-Less-than-200k-America.png "Us claims less than 200k america nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Claims-Less-than-200k-America.png) But as we’ve said many times before, CONTINUING claims tell the story so far. It is increasingly difficult to find a job if you lose one. The second graph shows that this trend has been the same for nearly the entire year so far: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Claims-Continuing-claims-ease.png "Us claims continuing claims ease nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Claims-Continuing-claims-ease.png) ### What this means for you We continue to watch employment carefully but it is a lagging indicator in terms of predicting a recession. Hiring typically stays strong right up to the start of a recession, because laying people off is the very last thing most companies want to do (or even have to do). However, once sales drop off and hours have been reduced, job cuts always follow. We anticipate a sudden spike in layoff announcements as the recession gets underway. Indeed, companies with more than 100 employees who are required to give 60-day advance notice of a layoff jumped massively this month: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-claims-v-WARN-notices2310110440.webp "Us claims v warn notices2310110440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-claims-v-WARN-notices2310110440.webp) This tells us that higher unemployment numbers are imminent. If past recessions are any indication of what is very likely ahead, look at how fast unemployment claims shot up in each of the last 7 recessions after the yield curve inverted (which ours has for 18 months and counting): [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-after-yield-curve-inversion2310100445.png "Us claims after yield curve inversion2310100445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-after-yield-curve-inversion2310100445.png) ## Real Estate Update As has long been the trend, real estate continues to cool off in this high-interest-rate environment. Very few mortgage loans were reported again last week, and by far, the slowest mortgage market in a decade: ### [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-MBA2311270507.png "Us mba2311270507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-MBA2311270507.png) We are finally starting to see inventories of new homes climb quickly, being only lower than the same time in 2022 when interest rates were again in the 7% range for a 30-year mortgage: ### [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-New-Months2311280444.png "Us new months2311280444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-New-Months2311280444.png) This is having a chilling effect on homebuilders, who must now offer significant incentives, and lower the price of their new homes, in order to get people to qualify. For the first time in almost 20 years, new home prices are now LOWER than existing home prices, and new home prices are now officially below 2022 and 2021’s spikes in fact, (graph 2) they are on average 17.6% lower than they were a year ago, and crashing fast. Still a lot higher than the average of the other seven years in the last decade, but we believe home prices will continue lower as the recession gets underway. This is GOOD news for prospective home buyers. ### [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-NEw-Price2311280444.png "Us new price2311280444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-NEw-Price2311280444.png) ### What this means for you We’ve said in this space for a very long time now that home prices will come down long before interest rates do. This is good news for home buyers but bad news for current homeowners. We recommend that you keep your debts minimal, clean up your credit score, and try to save as much as possible. If you are dealing with a high-interest mortgage that you thought you could refinance by now, you may have to adjust your budget, as we anticipate that it will be another 1-2 years before you can refinance your home at a measurably lower rate, and even longer if you have less than 15% equity in your home (because you may be “underwater” in terms of home equity and may be unable to refinance until your home value climbs back up). ## Consumer Confidence Reports Just like GDP is wildly off from its usual data partner, GDI, we have seen a similar divergence in the two major indicators of consumer confidence. In both instances, GDP and Consumer Confidence, one of the indicators is now clearly wrong. The most recent data from the Conference board shows that consumer confidence GREW slightly last month (100 is considered neutral). Consumers seemed to say things were okay right now (graph 2) but believe things are going to get much worse in the short term (graph 3). [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Conf2311290448.png "Us conf2311290448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Conf2311290448.png) This renewed confidence happens fairly commonly after a sustained stock market rally, and when gasoline prices drop for long enough: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Gaso2311290448.png "Us gaso2311290448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Gaso2311290448.png) However, consumers are now showing us that the employment analysis we’ve been reporting to our clients is, in fact, accurate, as they report getting a job is increasingly difficult: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Conf-Labor-Diff-Jobs-Hard-to.png "Us conf labor diff jobs hard to nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Conf-Labor-Diff-Jobs-Hard-to.png) Now, let’s look at the two different consumer confidence reports side-by-side. You just saw the Conference Board’s information (in black in the graph below). The purple line shows the results from the very similar survey conducted by the University of Michigan. You can see that these two surveys were always very closely correlated until 2021, when they fractured and are now wildly different. University of Michigan is reporting MUCH worse consumer sentiment. Which is correct? We tend to believe Michigan’s data… [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Conf-v-MIch2311290448.png "Us conf v mich2311290448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Conf-v-MIch2311290448.png) … particularly when you combine the jobs numbers with other reports of financial health for consumers, like their use of credit cards and ability to make payments. Delinquency rates on credit cards are skyrocketing, in every income bracket:[![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-CC-Delinq2311290448.png "Us cc delinq2311290448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-CC-Delinq2311290448.png) And despite news to the contrary about Black Friday weekend, consumer spending has significantly slowed down, into very near recessionary territory: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Beige12311300446.png "Us beige12311300446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Beige12311300446.png) This is confirmed again by rising retail inventory levels, indicating that product is starting to back-log at the stores: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Retail-inventories-Oct2311300.png "Us retail inventories oct2311300 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Retail-inventories-Oct2311300.png) But even if we use just the Conference Board data, and compare current conditions with future expectations, a pattern can be found that concerns us. Each time we examine the difference between them (“now is good, but the future looks bleak”) as consumers report it to the survey, we can see that any time there’s been a big gap between the present and future expectations, a recession immediately follows: [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Conf-Exp-Curr2311290448.png "Us conf exp curr2311290448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-Conf-Exp-Curr2311290448.png) ### What this means for you Consumer confidence matters because it becomes a self-fulfilling prophecy. When we’re confident about the future, we tend to spend more and are willing to assume more debt, but when were worried about the future, the opposite happens. We believe consumer confidence is both a current and leading (future) indicator and definitely worth tracking closely. ## Inflation isn’t finished Most of the recent market rally has been based on the notion that inflation has truly been beaten and the Federal Reserve will now begin to lower interest rates. It’s a rally based, again for the fifth time, on a narrative that so far has not been true, and ultimately reverses. So is inflation finished this time? We don’t believe it is. Inflation tends to run in waves over successive years, each wave slightly higher than the one before (because after each wave, you’re still slightly above where you started). We therefore have said for months now that the Federal Reserve will likely have to hold interest rates high, or even raise them slightly from here, in order to make sure inflation is truly crushed. Even [Fed Chairman Jerome Powell tried to warn the markets last week that inflation was likely not finished](https://www.cnbc.com/2023/11/09/powell-says-fed-is-not-confident-it-has-done-enough-to-bring-inflation-down.html#:~:text=Federal%20Reserve-,Powell%20says%20Fed%20is%20'not%20confident'%20it%20has%20done,enough%20to%20bring%20inflation%20down&text=Fed%20Chair%20Jerome%20Powell%20said,have%20achieved%20such%20a%20stance.%E2%80%9D), a warning that market participants, hell-bent on a “Santa Claus” rally to end the year, ignored. We not only heed his warning; we’ve been saying the same thing for months. The evidence of inflationary pressure resuming is easily seen in this composite graph of other indexes. In each instance, the lower inflation trend of late has reversed and is headed up again. [![](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PCE-Too-early-to-call-end-to.png "Us pce too early to call end to nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/12/US-PCE-Too-early-to-call-end-to.png) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. No one knows exactly when a recession will be declared, but we believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movements that run counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most of Wall Street. We do believe, however, that the recent rally has fully run its course, and the shift from stocks into safer investment options such as gold, cash, and government bonds will continue. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past spring, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. This article may include forward-looking statements as defined in our general disclosures. [Please see our general disclosure page for additional details.](https://nvestadvisors.com/general-disclosures/)* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Year-End and Holiday Updates](https://nvestadvisors.com/year-end-and-holiday-updates-2023/) **Published:** November 20, 2023 **Author:** Jeremy Torgerson **Content:** We hope everyone is kicking off the holiday season with a great Thanksgiving, and that you enjoy all of the blessings of the Holiday season over the next few weeks. ## As we close out 2023, we wanted to make sure our clients remembered these important year-end financial and investing items: - **Clients over the age of 72 with an IRA account need to take their RMD (required minimum distribution) by December 29!** We will be in contact with each of you individually if this important distribution hasn’t been made yet. - All clients contributing to IRAs and ROTH IRAs (and any workplace retirement plans): check and make sure you haven’t contributed too much to them over the course of the year! **You still have time to withdraw any excess contributions prior to the end of the year.** [In case you don’t know, for 2023, the maximum contributions for all kinds of tax-sheltered accounts can be found here (courtesy of Investopedia](https://www.investopedia.com/401-k-vs-ira-contribution-limits-4770068)). - With the markets battered down so significantly this year, **it is an excellent time to harvest tax losses in non-qualified (non-tax-sheltered) accounts**. Tax losses offset capital gains and investment income from earlier in the year, and can even carry over into future tax years. Let’s talk today if you need some tax losses before the year ends. - Many clients want to file their tax returns as soon as they get their W-2s from work in late January. However, keep in mind that the deadline for investment accounts (and the investments themselves) to report your profits can be as late as the end of March! You will receive a Preliminary 1099 for your investment accounts as soon as practical in late January / early February, but **you may get up to two revised 1099s after that as more investment funds report their profits**. Be prepared, if you file too early, to file an amended return if you “jumped the gun” on getting your final 1099. - Also, remember: as you work on your tax returns in early 2023, **you can still open and fund an IRA account for 2023 all the way to your tax filing date in 2024** (typically April 15) if it will reduce your taxable income. With your permission, we’re happy to talk directly to your tax professional. - There can be no more major changes to ERISA-governed retirement plans until January. ## All clients will be signing updated service agreements in December Due to changes at several custodians in 2023, we are forced to update our client agreements for nearly all of our clients, so we decided to take the opportunity to update all of our client agreements to take effect on January 1, 2024. **Please look for that updated client agreement starting December 1, and have it e-signed by December 22.** ## Our Annual Client Survey & Review Appointments are coming up soon! As long-time clients know, we try to conduct our annual account reviews during the first quarter of each year. Ahead of those meetings, we always send out our annual client service survey, which lets us know what’s going well for you this year, gets your feedback on how you feel about the services we provide you, gives you a chance to recommend improvements, and lets you update your contact information, beneficiaries, etc. **Please look for this survey to be delivered to your inbox the week of December 11 and have it completed by December 31**, because inside the survey will be the calendar to book your Annual Review Appointment in January. ## Holiday Market & Office Hours Investment markets are generally required to observe U.S. government holidays. This means there will be no trading on the following dates: - **Thursday, November 24 (Thanksgiving Day)** - **Friday, November 25 (half day only)** - **Monday, December 25 (Christmas Day)** - **Monday, January 1, 2024 (New Year’s Day)** Our office will also be closed on these days. In addition, we will have limited appointment slots available December 26-29 so that end-of-year service needs can be addressed. If you have any questions about the information we’ve provided above, [**please reach out to us!**](https://nvestadvisors.com/contact/) Otherwise, please have a wonderful Hanukkah, Christmas, and New Year, and we’ll be seeing you soon for an annual catch-up in January. **Categories:** Client News, Client Service, Company News, From our CEO, Mailchimp **Tags:** 401k, company, ERISA, holiday, IRA, IRS, market, nVest Advisors, RMD, ROTH IRA, update --- ### [Weekly Economic nSight: October 30, 2023](https://nvestadvisors.com/economic-update-10-30-23/) **Published:** October 30, 2023 **Author:** nVest Advisors **Content:** **Good morning and Happy Halloween! We continue to monitor the escalating conflict in the Middle East as a potentially serious impact on global macroeconomic events in the coming weeks. Despite rising resistance to the scale of Israel’s response to the terror attacks earlier this month, the statements from the military and political leadership in Israel and its allies are that they intend to pursue the elimination of Hamas and that the conflict will be a matter of “months”. Our thoughts and prayers are for the many innocent lives that will be lost or permanently impacted by the conflict, on both sides.** The coming week may have major impacts on the market, as a large number of economic events happen, including the FOMC meeting, additional information on inflation and productivity show up, and more than 200 of the S&P 500 companies report prior quarter results. Because nearly all of our investment clients grant us what is known as discretionary trading authority, keeping up with global economic changes is an important part of our client service work. As a financial planning and investment management firm that is committed to doing independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but simply gather and present this information. Their vital service saves dozens of hours a week. We want to give a big shout-out (and a thank you) to [CurrentMarketValuations](https://currentmarketvaluations.com), [FRED](https://fred.stlouisfed.org/), [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **nFocus: GDP & PCE** - **Jobs Update** - **Real Estate Update** - **Manufacturing Updates** ## nFocus: GDP & PCE The Q3 2023 GDP was released last week, surprising many analysts when it came in at 4.9% Quarter-over-Quarter. At first glance, this appears to be very good news for the U.S. economy. However, as we will look into the details and ancillary evidence, this doesn’t paint as clear of a picture as it appears at first glance. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-gdp2310270542.jpg "Us gdp2310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-gdp2310270542.jpg) It appears that the majority of the GDP was durable goods orders, which came in nearly 3 times higher than anticipated. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-dur2310270542.jpg "Us dur2310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-dur2310270542.jpg) This appears to be a stockpiling of inventories. Why would a company do this? Most likely, because they are concerned about prices rising in the near-term, and so are stocking up on durable goods at what they assume to be the lowest prices for a while: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-gdp-z-invent2310270542.jpg "Us gdp z invent2310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-gdp-z-invent2310270542.jpg) Actual business investment – the use of business capital to expand operations – which is a sign of business optimism, was **zero** last quarter. It appears more likely rise in the GDP and in durable goods orders specifically, was simply a precautionary measure due to fears of rising prices. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-gdp-z-bus-inv2310270542.jpg "Us gdp z bus inv2310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-gdp-z-bus-inv2310270542.jpg) And indeed, inflation is eating away at the purchasing power of companies. The black link shows the spending on all capital goods (excluding aircraft and aircraft parts), which on the surface looks healthy, but the blue line shows those same purchases if we removed the recent inflation. We are BUYING much less than we did before the Covid-19 pandemic; we’re just paying much more for those goods. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-dur-cap-goods-real2310270542.jpg "Us dur cap goods real2310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-dur-cap-goods-real2310270542.jpg) That brings us to the Personal Consumption Expenditures (PCE) that was released for October. Similar to CPI (Consumer Price Index), PCE shows what we’re spending and gives us a good look at how inflation is moving. Core PCE, in fact, is one of the Fed’s favorite indicators. PCE rose higher than expected, as well, indicating that inflation is still trending higher month-over-month. In fact, this was the sixth month-over-month increase in PCE in a row, indicating that inflation likely resumed an upward climb in the spring of this year. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Pers-Spend-MoM2310300452.png "Us pers spend mom2310300452 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Pers-Spend-MoM2310300452.png) The CORE PCE (again, the Fed’s favorite inflation indicator) is a collection of the items we most often and regularly spend money on. That came in with expectations but is noticeably higher than the previous six months, as well. We do not believe the Fed’s work to curb inflation is anywhere near finished yet. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-PCE2310300452.png "Us pce2310300452 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-PCE2310300452.png) What concerns us most here at nVest Advisors is that the purchases by consumers are now growing much faster than incomes are. But the extra money for this spending needs to come from somewhere. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Pers2310300452.png "Us pers2310300452 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Pers2310300452.png) During the Covid-19 pandemic, it came from PPP loans to businesses, stimulus checks to consumers, and the forbearance of student loan payments, which resumed this past month: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Pers-Saving-v-DIsposable-Pers.png "Us pers saving v disposable pers nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Pers-Saving-v-DIsposable-Pers.png) Indeed, we can see that for the last 4 months, consumers are depleting their savings again after a half-year of being able to “bank” some surplus: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Pers-Saving-MoMN2310300452.png "Us pers saving momn2310300452 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Pers-Saving-MoMN2310300452.png) The Fed is actually hoping for this coming slow-down, however, as it is a primary way to lower prices. You can see that prices closely follow the availability of money (which makes perfect economic sense – when you have more dollars chasing the same number of products and services, prices will go up, and when there are fewer dollars to spread around, prices will drop). [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-cpi-money-supply2310240447.jpg "Us cpi money supply2310240447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-cpi-money-supply2310240447.jpg) ### What this means for you The stock market did not take the GDP as good news, for three reasons: first, once we dug into the statistics, it wasn’t the robust report it appeared to be at first. Second, a strong GDP number, coupled with strong labor numbers (see below), means the Federal Reserve will likely have to take additional measures to pull the economic growth down. And finally, because the growth in consumer spending is happening on credit now, and no longer comes from their depleted savings. You only have so much available in credit – once that is maxed out, there is nothing you can do but slow down on your spending. We believe we are at that point, particularly as student loan payments have resumed this month. The coming quarter should show a marked slowdown in spending by consumers. ## Jobs Update New unemployment claims ticked up slightly in line with seasonal norms but remain very low. We will see in a moment why this actually may give us a Red Flag for the economy in moment: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims2310270542.jpg "Us claims2310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims2310270542.jpg) After a drop in jobless claims two weeks ago compared to the average of the last 3 normal years, jobless claims ticked up slightly for last week: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims22310270542.jpg "Us claims22310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims22310270542.jpg) But as we’ve said for a very long time in this blog, the CONTINUING claims are far more instructive and need much closer scrutiny. Continuing claims remain low – for now – but we started the year with the lowest continuing claims in a decade and are now trending dead in the middle: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont2310270542.jpg "Us claims cont2310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont2310270542.jpg) Once again, compared to the last three normal years, the trend in continuing claims is alarmingly high and consistent: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont22310270542.jpg "Us claims cont22310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont22310270542.jpg) How can strong hiring (or the appearance of it) be BAD news? Because as history has shown us, hiring tends to remain strong right into recessions and layoffs only begin AFTER the recession is well underway. Consider the graph below: unemployment claims always trended DOWN right into the recession (shaded red area), but then spiked significantly during the established recessionary period. Simply put, companies are pretty bad at pre-emptively seeing a recession on the horizon, and therefore continue as if one is not approaching. It is only when sales slow down and revenue falls that layoffs start, but by then we are WELL into the recession, typically. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/Unemployment-and-Recessions-Hist.jpg "Unemployment and recessions hist nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/Unemployment-and-Recessions-Hist.jpg) What we CAN see ahead of a recession, typically, is a fall-off of the hiring of temp workers, which accelerates into a recession, but generally starts ahead of the recession’s arrival: We are very much following that trend again in late 2023: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/1x-1.jpg "1x 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/1x-1.jpg) ### What this means for you We continue to watch employment carefully but it is a lagging indicator in terms of predicting a recession. Hiring typically stays strong right up to the start of a recession, because laying people off is the very last thing most companies want to do (or even have to do). However, once sales drop off and hours have been reduced, job cuts always follow. We anticipate a sudden spike in layoff announcements as the recession gets underway. Indeed, companies with more than 100 employees who are required to give 60-day advance notice of a layoff jumped massively this month: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-claims-v-WARN-notices2310110440.webp "Us claims v warn notices2310110440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-claims-v-WARN-notices2310110440.webp) This tells us that higher unemployment numbers are imminent. If past recessions are any indication of what is very likely ahead, look at how fast unemployment claims shot up in each of the last 7 recessions after the yield curve inverted (which ours has for 18 months and counting): [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-after-yield-curve-inversion2310100445.png "Us claims after yield curve inversion2310100445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-after-yield-curve-inversion2310100445.png) ## Real Estate Update As has long been the trend, real estate continues to cool off in this high-interest-rate environment. Very few mortgage loans were reported again last week, and by far, the slowest mortgage market in a decade: ### [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-mba2310260447.jpg "Us mba2310260447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-mba2310260447.jpg) Additionally, home purchase deals are now falling a the fastest rate in 15 years: ### [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-house-purchases-falling-out2310240447.jpg "Us house purchases falling out2310240447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-house-purchases-falling-out2310240447.jpg) New homes surprised slightly to the upside as the builders themselves have begun to lower prices and increase incentives to get a new home sold: ### [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-new2310260447.jpg "Us new2310260447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-new2310260447.jpg) And we can now definitely see a decline in the median price for a new home showing up in the stats: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-new-price2310260447.jpg "Us new price2310260447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-new-price2310260447.jpg) The home building forecast going forward, however, remains at historically low levels for now, indicating prices have much further to fall: ### [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-bbg-existing-home-sales2310240447.jpg "Us bbg existing home sales2310240447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-bbg-existing-home-sales2310240447.jpg) ### What this means for you We continue to believe home prices will come down long before interest rates do. This is good news for home buyers but bad news for current homeowners. We recommend that you keep your debts minimal, clean up your credit score, and try to save as much as possible. If you are dealing with a high-interest mortgage that you thought you could refinance by now, you may have to adjust your budget, as we anticipate that it will be another 1-2 years before you can refinance your home at a measurably lower rate, and even longer if you have less than 15% equity in your home (because you may be “underwater” in terms of home equity). ## Manufacturing Update Once a month, each of the regional Federal Reserve bank districts report on economic activity in their areas. This past week, we got an update from the Richmond Fed for their services index, and the Kansas City region. First, Richmond Services: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-richmond-serv2310250446.jpg "Us richmond serv2310250446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-richmond-serv2310250446.jpg) Services had been faring better than manufacturers nationwide throughout 2023, but that appears to have been strongly reversed. We can see the outlook (the graph immediately above) sharply reverse downward from the summer optimism. Likewise, manufacturing in the Kansas City, MO area remains well in recessionary territory, with a strong drop in new orders reported: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/us-kc2310270542.jpg "Us kc2310270542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/us-kc2310270542.jpg) ### What this means for you We see nothing to change our view of the worsening economic trajectory we’ve talked about many times in this space. Manufacturing has been in recession all year, and finally, surveys of service companies are starting to get there, too. We believe we are actually already in a recession but it will take months before one is retroactively declared. ## Leading Indicators & Consumer Confidence Most of the data we look at are backward-looking, but it’s important to look at current and leading indicators, as well. It’s one thing to know where the economy has already been, but the value of this analysis for our clients is trying to determine where it is headed. Consumer confidence is both a current and a leading indicator because it gives us insight into how you and I will spend our money. If we are confident about our future prospects, we will be willing to make a major purchase or go into debt, which in turn spurs economic activity. If we are fearful, though, we tend to pull back on spending and the economy slows down naturally. The University of Michigan puts out a monthly Consumer Sentiment index. Although consumers are feeling slightly better than they did in the middle of 2022, the trend has now sharply reversed back down and came in well below what analysts protected: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Mich2310160446-1.webp "Us mich2310160446 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Mich2310160446-1.webp) Expectations of consumers going forward also took a significant hit last month, as people worried about their future prospects. This typically means less spending and borrowing in the coming months. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Mich-Exp2310160446.webp "Us mich exp2310160446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Mich-Exp2310160446.webp) Another survey created by Investors’ Business Daily showed similar, major drops in optimism among both individuals and businesses, with the six-month outlook falling much worse than expected: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-IBD-TIPP-Economic-Optimism-Index2310200441-1.png "Us ibd tipp economic optimism index2310200441 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-IBD-TIPP-Economic-Optimism-Index2310200441-1.png) One anecdotal piece of data that crossed our desk this week bears out that consumers are struggling right now – the number of subprime car loans in a state of “serious” delinquency is the highest ever recorded: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Subprime-auto-delinq2310230501.webp "Us subprime auto delinq2310230501 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Subprime-auto-delinq2310230501.webp) The Conference Board creates an index of leading indicators that includes consumer confidence surveys, expected major purchases by businesses, and a few others, and creates a forward-looking survey of economic activity in the near future. Once again, the index came in lower month-over-month, telling us economic activity should slow further in coming months: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Leading2310200441.png "Us leading2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Leading2310200441.png) This is the 18th consecutive month of declining leading indicators. The last time this happened was right before the Great Financial Crisis of 2007-2010: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Leading-18-months-in-a-row2310200441.webp "Us leading 18 months in a row2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Leading-18-months-in-a-row2310200441.webp) You can see some of this “self-fulfilling prophesy” play out in the graph below. The red line indicates consumer confidence, and the blue line indicates the economic output (adjusted for inflation). Sentiment tends to lead GDP by a matter of a few months: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/GL-Depressed-consumer-confidence-points-to-slower-economic-growth-ahead2310230501.webp "Gl depressed consumer confidence points to slower economic growth ahead2310230501 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/GL-Depressed-consumer-confidence-points-to-slower-economic-growth-ahead2310230501.webp) ### What this means for you We hate to have to be the bearer of bad news but we are committed to being data-dependent and not allowing our emotions to govern our investing decisions for our clients. In every metric we can find, the economy looks headed into a recession. We have defensively positioned our clients for the eventuality. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. No one knows exactly when a recession will be declared, but we believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and the shift from stocks into safer investment options such as gold, cash, and government bonds will continue. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past spring, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. This article may include forward-looking statements as defined in our general disclosures. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic nSight: October 23, 2023](https://nvestadvisors.com/economic-update-10-23/) **Published:** October 23, 2023 **Author:** nVest Advisors **Content:** **Good morning and happy Monday! The growing conflict in the Middle East continues to add pressure to an otherwise strained economic outlook for the United States and several other nations. We pray for a peaceful resolution to this conflict.** Now, let’s get on with economic indicators for last week: Because nearly all of our investment clients grant us what is known as discretionary trading authority, keeping up with global economic changes is an important part of our client service work. As a financila planning nd investment management firm that is committed to doing independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but simply gather and present this information. Their vital service saves dozens of hours a week. We want to give a big shout-out (and a thank you) to [CurrentMarketValuations](https://currentmarketvaluations.com), [FRED](https://fred.stlouisfed.org/), [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **nFocus: Interest Rates and the Yield Curve** - **Jobs Update** - **Real Estate Update** - **Manufacturing Update** - **Leading Indicators and Consumer Confidence** ## nFocus: Interest Rates and the Yield Curve The equity markets dropped last week, fueled by concerns about economic growth as the yield curve for U.S. Treasuries surged strongly last week. There is a lot to be said about the Yield Curve and its impact on economic activity, and we’ve discussed it at length in previous weeks’ updates, but for the uninitiated, you can learn about the yield curve [here.](https://www.investopedia.com/terms/i/invertedyieldcurve.asp) In a nutshell, a bond’s YIELD is a calculation of its INTEREST RATE, plus or minus the PRICE an investor pays to buy the bond. If the investor pays more for the bond than its face value (because they are in high demand), the yield the investor receives will be lower than the interest rate the bond pays. If the investor pays less for the bond (because there is less demand for them), the yield on a bond is higher than the interest rate. So the yield takes into account both the interest rate the bond promises to pay to the investor, plus or minus any change in price for the bond due to market demand. At the time of this writing (Monday, October 23, 2023, the current Yield Curve looks like this (on the left, with the S&P500 historical graph on the right): [![](https://nvestadvisors.com/wp-content/uploads/2023/10/yield.png "Yield nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/yield.png) The yield curve shows the borrowing costs for the federal government for different periods of time, with very short-term rates (the “Fed Funds Rate” being the leftmost point on the curve, and the 30-year treasury bond rate at the far right. Normally, this curve is much lower on the left and slopes upward as you go right (as it should: the longer you borrow someone’s money, the more interest you normally have to pay). You can see the recent changes by the “trail” on this chart, which indicates that the long end of the curve has risen dramatically in recent days and the overall curve has flattened significantly. This indicates that the yield curve is going to uninvert fairly quickly, which is when most recessions have begun in the past. What makes this so significant is that all other interest rates are based on the ones the Federal Government pays. Your credit card, business loan, student loan, mortgage, auto loan, all of your borrowing, and that of businesses is based on these rates. And when interest rates rise, it does two things: it will incentivize you to save more money (since your bank is giving you more interest as it “borrows” your savings account and CD money) and significantly slows economic activity (it is now much more expensive to buy a house or car, start or expand a business, etc.). Indeed, mortgage rates have hit 8% in the last week, the first time since 1995, which we will see in a moment is continuing to devastate the demand for mortgages: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-1-Mortg2310190526.webp "Us 1 mortg2310190526 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-1-Mortg2310190526.webp) These rate increases will slow business activity, as well, as small businesses typically take out adjustable-rate, 10-year business loans when they need them. Small businesses, which create approximately 75% of all of the jobs in the United States, are reporting 25-30% higher loan payments over the next decade due to these rate increases: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Interest-expense22310200441.png "Us interest expense22310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Interest-expense22310200441.png) It’s also putting a serious strain on the Federal government, which has spent an alarming amount of money over the past three years that it did not have, and therefore had to borrow. The government issues its bonds in auctions, and because there is little interest in more federal bonds by investors, the price of those bonds keeps dropping, raising the overall yield: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-30y2310230501.webp "Us 30y2310230501 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-30y2310230501.webp) As this deficit spending continues, and old bonds mature and have to be refinanced, the amount of interest the Federal government will have to pay out will consume more and more of the budget: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Budget2310230501.webp "Us budget2310230501 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Budget2310230501.webp) All of this is leading to tighter financial conditions across the board, slowing economic output: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-1-Fed-Fin-Cond2310230501.webp "Us 1 fed fin cond2310230501 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-1-Fed-Fin-Cond2310230501.webp) ## Jobs Update Jobs numbers are something we get weekly from the Bureau of Labor Statistics, and monthly from other sources like ADP. As I mentioned last week, I am now leery of the BLS statistics for a variety of reasons, and so are many economists who cannot reconcile the wide disparity between what the GOVERNMENT says hiring is doing, and what COMPANIES themselves are saying. However, the official BLS numbers for last week show us that initial jobless claims dropped significantly from the week prior. Whether this holds up or is revised later (this is very common, especially for the last two years), we will see. It’s one reason why I tend to ignore initial claims and focus instead on the CONTINUING claims: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims2310200441.webp "Us claims2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims2310200441.webp) As I’ve said many times, it is the CONTINUING claims that we need to pay more attention to because these are people who have lost their jobs, have worked through whatever severance package they were given, and now still cannot find another job. Continuing claims, while still low at the moment, have moved up across the graph of several previous years over the last decade, and are now about middle-of-the-road.[![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont2310200441.png "Us claims cont2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont2310200441.png) When you compare the continuing claims to the last three “normal” years, however, we can see a strong trend toward more ongoing joblessness ahead: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont22310200441.png "Us claims cont22310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont22310200441.png) ### What this means for you We continue to watch employment carefully but it is a lagging indicator in terms of predicting a recession. Hiring typically stays strong right up to the start of a recession, because laying people off is the very last thing most companies want to do (or even have to do). However, once sales drop off and hours have been reduced, job cuts always follow. We anticipate a sudden spike in layoff announcements as the recession gets underway. Indeed, companies with more than 100 employees who are required to give 60-day advance notice of a layoff jumped massively this month: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-claims-v-WARN-notices2310110440.webp "Us claims v warn notices2310110440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-claims-v-WARN-notices2310110440.webp) This tells us that higher unemployment numbers are imminent. If past recessions are any indication of what is very likely ahead, look at how fast unemployment claims shot up in each of the last 7 recessions after the yield curve inverted (which ours has for 18 months and counting): [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-after-yield-curve-inversion2310100445.png "Us claims after yield curve inversion2310100445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-after-yield-curve-inversion2310100445.png) ## Real Estate Update We read a statistic this week that [60,000 realtors have exited the industry so far in 2023](https://www.axios.com/2023/05/26/realtor-nar-real-estate-jobs), and that there are still currently 2 realtors for every 1 home on the market. Real estate, particularly commercial real estate, has long been where we believed a significant amount of economic harm would be felt, and we are starting to see that happen now. The average interest rate on a new 30-year mortgage climbed to 8% last week. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-1-Mortg2310190526.webp "Us 1 mortg2310190526 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-1-Mortg2310190526.webp) This is simply crushing demand for home purchases and refinances. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-MBA2310190526.webp "Us mba2310190526 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-MBA2310190526.webp) This is significantly cooling off home purchases, both for existing homes and new builds: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Existing2310200441.png "Us existing2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Existing2310200441.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-NAHB2310180440.webp "Us nahb2310180440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-NAHB2310180440.webp) We are slowly seeing existing homes for sale start to climb. It is the lack of homes on the market – so far – that has kept home prices elevated despite the high interest rates on mortgages. We do not believe that will continue long-term as many investment properties are put back on the market and, frustratingly, many families lose their homes due to unaffordable changes in property taxes and insurance. Plus, many recent buyers were told by their realtors to buy the home even at unaffordable interest rates because they anticipated the owner would be able to quickly refinance as rates dropped back down. With inflation remaining stubbornly high, we do not believe interest rates will decline significantly for at least another year. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Existing-Inv2310200441.png "Us existing inv2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Existing-Inv2310200441.png) But finally, with that slight rise in inventory, we are seeing a slight decline in home prices: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Existing-price2310200441.png "Us existing price2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Existing-price2310200441.png) ### What this means for you We continue to believe home prices will come down long before interest rates do. This is good news for home buyers but bad news for current homeowners. We recommend that you keep your debts minimal, clean up your credit score, and try to save as much as possible. If you are dealing with a high-interest mortgage that you thought you could refinance by now, you may have to adjust your budget, as we anticipate that it will be another 1-2 years before you can refinance your home at a measurably lower rate, and even longer if you have less than 15% equity in your home (because you may be “underwater” in terms of home equity). ## Manufacturing Update Once a month, each of the regional Federal Reserve bank districts report on economic activity in their areas. This past week, we got an update from the New York Fed and the Philly Fed. In both cases, they report their manufacturing and service sectors in recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-NY-Fed-Services2310200441.png "Us ny fed services2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-NY-Fed-Services2310200441.png) The biggest challenge small businesses are reporting is that it is getting harder and harder to find a loan and they are paying MUCH more interest to get the ones they can. Banks are tightening up their lending requirements on small businesses because during recessions, many small businesses aren’t able to endure 12-36 months of lower revenue, and therefore default on debts at a higher rate than larger businesses: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Philly2310200441.png "Us philly2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Philly2310200441.png) The Philly Fed’s expected future manufacturing output was dire: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Philly-Shipments2310200441.png "Us philly shipments2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Philly-Shipments2310200441.png) And alarmingly, and worth note: manufacturers also reported the expectation that they would be raising prices again in the near future. This does not bode well for the Federal Reserve’s fight against inflation, and may indicate that interest rates and other tightening measures the Fed is currently pursuing must continue or even be amplified: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Philly-prices2310200441.webp "Us philly prices2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Philly-prices2310200441.webp) ### What this means for you We see nothing to change our view of the worsening economic trajectory we’ve talked about many times in this space. Manufacturing has been in recession all year, and finally, surveys of service companies are starting to get there, too. We believe we are actually already in a recession but it will take months before one is retroactively declared. ## Leading Indicators & Consumer Confidence Most of the data we look at are backward-looking, but it’s important to look at current and leading indicators, as well. It’s one thing to know where the economy has already been, but the value of this analysis for our clients is trying to determine where it is headed. Consumer confidence is both a current and a leading indicator because it gives us insight into how you and I will spend our money. If we are confident about our future prospects, we will be willing to make a major purchase or go into debt, which in turn spurs economic activity. If we are fearful, though, we tend to pull back on spending and the economy slows down naturally. The University of Michigan puts out a monthly Consumer Sentiment index. Although consumers are feeling slightly better than they did in the middle of 2022, the trend has now sharply reversed back down and came in well below what analysts protected: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Mich2310160446-1.webp "Us mich2310160446 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Mich2310160446-1.webp) Expectations of consumers going forward also took a significant hit last month, as people worried about their future prospects. This typically means less spending and borrowing in the coming months. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Mich-Exp2310160446.webp "Us mich exp2310160446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Mich-Exp2310160446.webp) Another survey created by Investors’ Business Daily showed similar, major drops in optimism among both individuals and businesses, with the six-month outlook falling much worse than expected: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-IBD-TIPP-Economic-Optimism-Index2310200441-1.png "Us ibd tipp economic optimism index2310200441 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-IBD-TIPP-Economic-Optimism-Index2310200441-1.png) One anecdotal piece of data that crossed our desk this week bears out that consumers are struggling right now – the number of subprime car loans in a state of “serious” delinquency is the highest ever recorded: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Subprime-auto-delinq2310230501.webp "Us subprime auto delinq2310230501 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Subprime-auto-delinq2310230501.webp) The Conference Board creates an index of leading indicators that includes consumer confidence surveys, expected major purchases by businesses, and a few others, and creates a forward-looking survey of economic activity in the near future. Once again, the index came in lower month-over-month, telling us economic activity should slow further in coming months: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Leading2310200441.png "Us leading2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Leading2310200441.png) This is the 18th consecutive month of declining leading indicators. The last time this happened was right before the Great Financial Crisis of 2007-2010: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Leading-18-months-in-a-row2310200441.webp "Us leading 18 months in a row2310200441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Leading-18-months-in-a-row2310200441.webp) You can see some of this “self-fulfilling prophesy” play out in the graph below. The red line indicates consumer confidence, and the blue line indicates the economic output (adjusted for inflation). Sentiment tends to lead GDP by a matter of a few months: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/GL-Depressed-consumer-confidence-points-to-slower-economic-growth-ahead2310230501.webp "Gl depressed consumer confidence points to slower economic growth ahead2310230501 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/GL-Depressed-consumer-confidence-points-to-slower-economic-growth-ahead2310230501.webp) ### What this means for you We hate to have to be the bearer of bad news but we are committed to being data-dependent and not allowing our emotions to govern our investing decisions for our clients. In every metric we can find, the economy looks headed into a recession. We have defensively positioned our clients for the eventuality. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. No one knows exactly when a recession will be declared, but we believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and the shift from stocks into safer investment options such as gold, cash, and government bonds will continue. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past spring, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. This article may include forward-looking statements as defined in our general disclosures. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Scaling Financial Peaks: Your Path to Wealth](https://nvestadvisors.com/scaling-financial-peaks-your-path-to-wealth/) **Published:** October 20, 2023 **Author:** nVest Advisors **Content:** [![](https://nvestadvisors.com/wp-content/uploads/2023/01/3.png "3 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/01/3.png)Here in our company headquarters in Colorado Springs, Colorado, the Rocky Mountains loom large in our western sky. Pike’s Peak, made famous as the place from which Katherine Lee Bates wrote the poem that became “America the Beautiful”in 1895, dominates the landscape of our area. Needless to say, hiking, camping, skiing, and just admiring these awesome peaks is a local lifestyle. But as majestic and beautiful as these mountains are, there is potential peril for the uninitiated. Climbing a mountain is similar to the journey a family takes in mastering their financial lives, so we use the analogy a lot here at nVest Advisors. Just as mountaineers meticulously plan their ascent to conquer towering peaks, our approach to financial planning and investing is based on a well-thought-out strategy. We believe that building and managing wealth is like embarking on a mountain climbing expedition – it requires preparation, precision, and a clear path to reach your financial summit. Join us as we guide you through the steps, from the base camp to the summit and back down, ensuring you achieve your financial goals with confidence. ### **Base Camp: Setting Your Goals** Much like climbers establish their base camp at the foot of a mountain, our journey begins with setting clear financial goals. What are you climbing towards? A comfortable retirement? Your child’s education? Financial security? We’ll help you define your goals, so you have a firm foundation to build upon. ### **Step 1: Assessing Your Resources – The Climb Begins** As climbers check their equipment before ascending, we assess your financial resources. What assets and liabilities do you have? What’s your risk tolerance? Knowing your financial landscape is essential as you take your first steps towards the summit of your financial dreams. ### **Step 2: Planning Your Route – The Ascent** Just as climbers carefully plan their route, we create a customized financial plan tailored to your goals and circumstances. This plan will include asset allocation, investment strategies, and risk management, all designed to lead you safely upward. ### **Step 3: Investment Strategy – The Path to the Summit** Ascending a mountain requires careful navigation, and so does growing your wealth. We’ll recommend investments aligned with your risk tolerance and financial objectives. Diversifying your portfolio is akin to choosing the right path, ensuring steady progress towards your financial summit. ### **Reaching the Summit: Achieving Your Goals** Reaching the financial summit involves patience, discipline, and the right strategies. When you finally achieve your goals, it’s like standing atop the highest peak, taking in the breathtaking views of your success. ### **The Descent: Protecting Your Gains** Descending from a peak can be as challenging as the ascent. We’ll help you implement strategies to protect your hard-earned gains and ensure a smooth transition into retirement or the next phase of your financial journey. ### **Base Camp Again: Review and Adjust** Just as climbers return to base camp to rest and regroup, we encourage regular reviews of your financial plan. Life changes, markets fluctuate, and goals evolve. We’ll be by your side to adjust your plan as needed, ensuring you stay on course. ## **Embark on Your Financial Journey** Just as climbers find fulfillment in reaching their mountain summits, we find satisfaction in helping you achieve your financial goals. Trust our expertise and personalized approach to guide you through each step of your financial ascent. Together, we’ll navigate the financial landscape, conquer challenges, and reach the peaks of your dreams, secure in the knowledge that your financial future is in capable hands. Get in touch with us today to begin your climb towards financial success! **Categories:** Uncategorized --- ### [Now accepting clients in Kansas!](https://nvestadvisors.com/now-accepting-clients-in-kansas/) **Published:** October 18, 2023 **Author:** nVest Advisors **Content:** We’re pleased to announce that as of October 12, 2023, nVest Advisors’ registration in the State of Kansas has been approved, expanding our firm beyond its current registrations in Colorado and Texas. We also serve clients in a variety of states under a de minimis exemption and are presently working with the regulators in the State of Utah to become fully registered there, as well. This registration expands our firm’s ability to market to and accept both individual and plan sponsor clients in The Sunflower State, including Kansas families, businesses, and educators through our firm’s specialty in 403(b) programs. We look forward to the opportunity to serve the residents and business community in Kansas for many years to come! Welcome, Kansas! We can’t wait to meet you! **Categories:** Company News **Tags:** announcement, colorado, Kansas, registration, texas, Utah --- ### [Weekly Economic nSight: October 16, 2023](https://nvestadvisors.com/economic-update-10/) **Published:** October 16, 2023 **Author:** nVest Advisors **Content:** **Good morning and happy Monday! The ongoing conflict in the Middle East is causing significant economic damage to the area, but the human toll is the one we should always keep in our hearts and minds. War is hell; we grieve for the many innocent people on both sides who will suffer because of it and we pray that it ends quickly.** Now, let’s get on with economic indicators for last week: Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [CurrentMarketValuations](https://currentmarketvaluations.com), [FRED](https://fred.stlouisfed.org/), [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **nFocus: Inflation** - **Jobs Update** - **Real Estate Update** - **Small Business Update** ## nFocus: Inflation Both the Producer Price Index (PPI) and the Consumer Price Index (CPI) numbers came out last week, surprising many analysts with higher than expected reads, particularly in the CORE (we’ve discussed this in great detail over the past several months), and in Services. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-PPI2310120436-300x243.png "Us ppi2310120436 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-PPI2310120436.png)[![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-PPI-Core-Ex-Trade-Serv2310120436-300x244.png "Us ppi core ex trade serv2310120436 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-PPI-Core-Ex-Trade-Serv2310120436.png)[![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-PPI-Core2310120436-300x244.webp "Us ppi core2310120436 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-PPI-Core2310120436.webp) First, the US PPI came in at 0.5% above the previous month, indicating that prices to manufacture goods and offer services to retail consumers is climbing again. This is the third straight month-over-month increase in prices and gives us concern that inflation is resuming. We will see in a moment that this is a common occurrence during historical inflationary cycles after massive government spending – inflation tends to run in waves over and over again before they’re finally beaten either by extreme monetary and fiscal changes, or a recession does the work for the government. The CORE PPI (those most-often recurring expenses that companies have to pay in order to do the work they do for consumers), increased again, as well, passing experts’ guesses by half. This means that the inflation is not temporary or that only part of their prices are going up; inflation is affecting business costs across the board. CORE PPI excluding trade services also showed an increase, meaning that it’s not just other companies passing on price increases to their customers; it is the cost of raw materials and other supplies doing the work, as well. All of this eventually gets passed down to the consumer – you and me – and can be measured by the CONSUMER Price Index (CPI), which came out a day after the PPI for the month of September. The CPI shows the same issues as PPI – that prices are increasing again on both businesses and consumers. The CPI for September shot up an alarming 0.4% in September, and CORE inflation ( the stuff we can’t do without each month) was up 0.3% over the month before. What is concerning is that though the trend is down, Wall Street investors and economists sincerely believed they had beaten it and were pricing in a stock market rally as a result.[![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-CPI2310130438-300x241.webp "Us cpi2310130438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-CPI2310130438.webp)[![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-CPI-Core-Services2310130438-300x243.webp "Us cpi core services2310130438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-CPI-Core-Services2310130438.webp)[![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-CPI-Core2310130438-300x252.webp "Us cpi core2310130438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-CPI-Core2310130438.webp) Perhaps the biggest surprise was the Services CPI, which came in the highest in over six months, meaning all of the non-product things we pay for (subscription services, health care, airline tickets, etc. are where a lot of inflation is presently happening. One thing I’d like to point out is how inflation cycles operate in history, and though history never repeats itself exactly, it can often run very similarly to what it’s done before. Analysts love saying, “this time is different,” but in terms of what moves an economy, it seldom is. The graph below shows the last three long-term inflationary cycles in the U.S. economy, the 1940s in blue, the 1970s in black, and our current cycle in red. As you can see, in both previous cycles, inflation went up, dropped off (and gave the false impression that it was finished), and then rose again to cause greater problems. You can see the number of months along the bottom axis of the graph. What we are experiencing is EXACTLY what an inflationary wave cycle would do. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-A-FOMC-Reaccelleration2310120436.webp "Us a fomc reaccelleration2310120436 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-A-FOMC-Reaccelleration2310120436.webp) We are watching this closely, but we do not believe inflation is finished, and it may mean that the Federal Reserve will have to do much more in terms of high interest rates and quantitative tightening in order to actually fix this problem. ## Jobs Update Jobs numbers are something we get weekly from the Bureau of Labor Statistics, and monthly from other sources like ADP. I am now officially leery of the BLS statistics for a variety of reasons, and so are many economists who cannot reconcile the wide disparity between what the GOVERNMENT says hiring is doing, and what COMPANIES themselves are saying. However, the official BLS numbers for last week show us that employment is still tight but have started to tick up noticeably in the past week: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims2310130438.webp "Us claims2310130438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims2310130438.webp) Because hiring is seasonal, it’s helpful to look at the same week of the year vs. the average of that same week in previous years, to see if there is an outlier. What this tells us is that initial claims have been marginally higher than the last 3 “normal” years in the same week, for almost all of 2023. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-22310130438.webp "Us claims 22310130438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-22310130438.webp) But as I’ve said many times, it is the CONTINUING claims that we need to pay more attention to, because these are people who have lost their jobs, have worked through whatever severance package they were given, and now still cannot find another job. Continuing claims, while still low at the moment, have moved up across the graph of several previous years over the last decade, and are now about middle-of-the road. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont2310130438.webp "Us claims cont2310130438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont2310130438.webp) When you compare the continuing claims to the last three “normal” years, however, we can see a strong trend toward more ongoing joblessness ahead: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont-22310130438.webp "Us claims cont 22310130438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-Cont-22310130438.webp) ### What this means for you We continue to watch employment carefully but it is a lagging indicator in terms of predicting a recession. Hiring typically stays strong right up to the start of a recession, because laying people off is the very last thing most companies want to do (or even have to do). However, once sales drop off and hours have been reduced, job cuts always follow. We anticipate a sudden spike in layoff announcements as the recession gets underway. Indeed, companies with more than 100 employees who are required to give 60-day advance notice of a layoff jumped massively this month: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-claims-v-WARN-notices2310110440.webp "Us claims v warn notices2310110440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-claims-v-WARN-notices2310110440.webp) This tells us that higher unemployment numbers are imminent. If past recessions are any indication of what is very likely ahead, look at how fast unemployment claims shot up in each of the last 7 recessions: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-after-yield-curve-inversion2310100445.png "Us claims after yield curve inversion2310100445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-Claims-after-yield-curve-inversion2310100445.png) ## Real Estate Update We read a statistic this week that [60,000 realtors have exited the industry so far in 2023](https://www.axios.com/2023/05/26/realtor-nar-real-estate-jobs), and that there are still currently 2 realtors for every 1 home on the market. Real estate, particularly commercial real estate, has long been where we believed a significant amount of economic harm would be felt, and we are starting to see that happen now. The average interest rate on a new 30-year mortgage climbed to 8% last week. This is simply crushing demand for home purchases and refinances. We will have much more about real estate next week:[![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-MBA2310120436.webp "Us mba2310120436 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-MBA2310120436.webp) Compared to the last 7 years average, by week, we can see that this year has been absolutely terrible for the mortgage business: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-MBA22310120436.png "Us mba22310120436 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-MBA22310120436.png) ### What this means for you We continue to believe home prices will come down long before interest rates do. This is good news for home buyers but bad news for current homeowners. We recommend that you keep your debts minimal, clean up your credit score, and try to save as much as possible. If you are dealing with a high-interest mortgage that you though you could refinance by now, you may have to adjust your budget, as we anticipate that it will be another 1-2 years before you can refinance your home at a lower rate, and even longer if you have less than 15% equity in your home (because you may be “underwater” in terms of home equity). ## Small Business Update Because they create as many as 75% of all jobs in our economy, keeping an eye on small business health is vital to any economic study. As has been the case for many months now, Small Businesses continue to report difficult conditions, though some have reported seeing a light at the end of the tunnel. We believe this may be premature and was largely related to cooling inflation over the summer, which has sadly, now reversed. [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-NFIB2310110440.webp "Us nfib2310110440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-NFIB2310110440.webp) The biggest challenge small businesses are reporting is that it is getting harder and harder to find a loan and they are paying MUCH more interest to get the ones they can. Banks are tightening up their lending requirements on small businesses because during recessions, many small businesses aren’t able to endure 12-36 months of lower revenue, and therefore default on debts at a higher rate than larger businesses: [![](https://nvestadvisors.com/wp-content/uploads/2023/10/US-NFIB-Credit2310110440.webp "Us nfib credit2310110440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/10/US-NFIB-Credit2310110440.webp) ### What this means for you We see nothing to change our view of the worsening economic trajectory we’ve talked about many times in this space. Small businesses are the lifeblood of American jobs, and this is where we fear the layoffs that are NOT required to be pre-announced (see the Jobs Update above) will surprise market analysts. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. No one knows exactly when a recession will be declared, but we believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past spring, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: # [Schedule a Free Q&A Call with Jeremy Now](https://calendly.com/nvestadvisors/prospect30) Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. This article may include forward-looking statements as defined in our general disclosures. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [ANNOUNCEMENT: UPDATED CLIENT AGREEMENTS ARE ON THE WAY](https://nvestadvisors.com/announcement-updated-client-agreements-are-on-the-way/) **Published:** October 5, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO & Senior Advisor **Hello nVest Advisors clients:** We thank you for your continued faith and trust as we navigate the current economic challenges and prepare for great days ahead! For sure, there have been a lot of changes around the economy, the markets, and the financial industry in particular, over the past year or two. Our firm is no different: - Since 2022, our investment models have changed substantially enough from the “old” way that we worked with your money, we felt it was necessary to add additional information for clients in our Agreements about how our Discretionary Model system worked. - We are adding two new financial advisors in the next six to eight weeks! One is based in South Texas, and the other will support the company’s efforts here in Colorado. Our company has also been affected by some of the changes at other companies: - **Our primary custodian for several years, TD Ameritrade, recently completed its merger with Charles Schwab. This has rendered our older client service Agreements that mentioned TD Ameritrade by name, or your TD Ameritrade account number(s) in particular, invalid going forward. We will need to have you re-sign a new Agreement that mentions only Charles Schwab and/or your new Charles Schwab account numbers.** - **Another of our custodians, Betterment, recently added cryptocurrency trading capabilities to the client platform. Although we’d previously updated our agreement for Betterment accounts to include this new language, not all of our Betterment clients adopted the new Agreement on the Betterment website.** Additionally, over the summer, we’ve worked with regulators in Texas and Kansas to actively serve clients in those states, and they’ve had recommendations for our current client agreements that would update and refine the language of our offerings. So, we have done so. In the coming few days, each of our clients will be sent a new **UNIFIED INVESTMENT ADVISORY AGREEMENT** that, in plain English, provides updated service terms and features of working with nVest Advisors for your investing needs. ***The terms contained in this new Agreement are effective as of the date you sign it, and the updated fee schedules for our custodians are effective as of October 1, 2023.*** This Agreement updates and simplifies what we do for our investment advisory clients and how we assemble your investment strategy now (versus our previous history). The Agreement also provides you with updated information about all three of the custodians we use to help us manage individual client accounts (ASPire Retirement Services, Betterment Institutional, and Charles Schwab). The Unified Investment Advisory Agreement comes in two parts: the main body of the Agreement contains all of the information that is universal for our investment advisory clients, regardless of where your account might be custodied. The second part of the Unified Agreement is a series of Appendices that we can update in the future without having to make you re-sign an entirely new Client Agreement. Each Appendix describes the particular features, fees, and terms of our account custodians. In the future, should another merger or change happen at one of our custodians, or if we add, remove, or change a custodian option for our clients, we can simply issue a new Appendix that will provide you with the most up-to-date information, without voiding our original Agreement. As a part of clarifying and simplifying our custodial relationships, we’ve taken the opportunity to simplify the Fees we assess for your account management, and those new fee schedules are included for each of our three custodians. These fee schedules better reflect the evolving nature of our business and the size of the accounts that our clients are bringing us. *Because no actual billing will happen for at least another month at any custodian, and because in no instance is a client fee going UP, we are making the new fee schedules effective as of October 1, 2023.* I encourage each of you to read this Agreement thoroughly (we’ve made it as easy to read as possible) and let us know of any questions or concerns. Then, please sign the Agreement and Appendices at your earliest convenience (but not later than October 15 if at all possible). We will send you gentle reminders that we need this new Agreement signed promptly. We’ve spent a great deal of time this past year rebranding and “growing up” nVest Advisors, and preparing for it to grow with the addition of new members of our team. There are even more internal changes that should make your experience better, more efficient, and more friendly to your needs. **Please look for your new Unified Investment Advisory Agreement in your email soon!** **Categories:** Client News, Company News, From our CEO, Individuals and Families, Mailchimp --- ### [Company Update | Other-Than-Annual Disclosure Notice | September 2023](https://nvestadvisors.com/company-update-required-annual-disclosure-notice-2-2/) **Published:** September 28, 2023 **Author:** nVest Advisors **Content:** ## Hello nVest Clients: Once per year, or more often if there is a material change in the company, we are required to provide our clients access to the most recent versions of our public disclosure documents. We are required to update these forms and notify you of a material change in our company: > **Our office address changed to 118 N. Tejon St., Ste. 305, Colorado Springs, CO 80903We have made significant revisions to our Brochure to reflect changes in our company offerings, prices, fees, and Agreements. These changes will affect our relationship with our current clients beginning on October 1. Please take the time to review these items carefully and reach out to us if you have any questions or concerns.** You can always access the most recent versions of these reports on our Disclosures page at any time, but we invite you to look at them here. Please let us know if you have any questions; - ## [FORM ADV-2A General Disclosure Brochure](https://drive.google.com/open?id=1G_n8q2T_1YtbBBsqklVeGPqn8bzODect&usp=drive_fs) - ## [FORM ADV-2B Advisor Disclosure Brochure](https://drive.google.com/open?id=1EU2U2uDBuL2K4EXWjBNF8-lnd0HxFJjT&usp=drive_fs) - ## [FORM CRS – Client Relationship Summary](https://drive.google.com/open?id=14Ilh6jS35zs4gp2aESESqCghC7kyH4tN&usp=drive_fs) - ## [Our PRIVACY POLICY](https://drive.google.com/open?id=14OMn8saWSTf8KNa-UHEB_DFnuPcZ1w3Y&usp=drive_fs) We appreciate the trust and faith you place in us, and we look forward to serving you for many years to come! **Categories:** Business Stories, Client News, Client Service, From our CEO, Individuals and Families, Mailchimp, Press Releases, public **Tags:** announcement, FORM ADV, FORM CRS, PRIVACY POLICY --- ### [Company Update - Other-Than-Annual Disclosure Notice](https://nvestadvisors.com/company-update-required-annual-disclosure-notice-2/) **Published:** September 21, 2022 **Author:** nVest Advisors **Content:** ## Hello nVest Clients: Once per year, or more often if there is a material change in the company, we are required to provide our clients access to the most recent versions of our public disclosure documents. We are required to update these forms and notify you of a material change in our company: > ### **Our office address changed to 2020 N. Academy Blvd. Suite 282, Colorado Springs, CO 80909** You can always access the most recent versions of these reports on our Disclosures page at any time, but we invite you to look at them here. Please let us know if you have any questions; - ## [FORM ADV-2A General Disclosure Brochure](https://drive.google.com/open?id=11VFnk654KmYul5rfSle1ZRi9CZy1wYs8&usp=drive_fs) - ## [FORM ADV-2B Advisor Disclosure Brochure](https://drive.google.com/open?id=14QA2mBlVwMAjJgCXYH11H5K5WvIsoj7S&usp=drive_fs) - ## [FORM CRS – Client Relationship Summary](https://drive.google.com/open?id=14Ilh6jS35zs4gp2aESESqCghC7kyH4tN&usp=drive_fs) - ## [Our PRIVACY POLICY](https://drive.google.com/open?id=14OMn8saWSTf8KNa-UHEB_DFnuPcZ1w3Y&usp=drive_fs) We appreciate the trust and faith you place in us, and we look forward to serving you for many years to come! **Categories:** Business Stories, Client News, Client Service, From our CEO, Individuals and Families, Mailchimp, Press Releases, public **Tags:** announcement, FORM ADV, FORM CRS, PRIVACY POLICY --- ### [Company Update - Required Annual Disclosure Notice](https://nvestadvisors.com/company-update-required-annual-disclosure-notice/) **Published:** April 21, 2023 **Author:** nVest Advisors **Content:** ## Hello nVest Clients: Once per year, or more often if there is a material change in the company, we are required to provide our clients access to the most recent versions of our public disclosure documents. You can always access the most recent versions of these reports on our Disclosures page at any time, but we invite you to look at them here. Please let us know if you have any questions; - ## [FORM ADV-2A General Disclosure Brochure](https://drive.google.com/open?id=11VFnk654KmYul5rfSle1ZRi9CZy1wYs8&usp=drive_fs) - ## [FORM ADV-2B Advisor Disclosure Brochure](https://drive.google.com/open?id=14QA2mBlVwMAjJgCXYH11H5K5WvIsoj7S&usp=drive_fs) - ## [FORM CRS – Client Relationship Summary](https://drive.google.com/open?id=14Ilh6jS35zs4gp2aESESqCghC7kyH4tN&usp=drive_fs) - ## [Our PRIVACY POLICY](https://drive.google.com/open?id=14OMn8saWSTf8KNa-UHEB_DFnuPcZ1w3Y&usp=drive_fs) We appreciate the trust and faith you place in us, and we look forward to serving you for many years to come! **Categories:** Business Stories, Client News, Client Service, From our CEO, Individuals and Families, Mailchimp, Press Releases, public **Tags:** announcement, FORM ADV, FORM CRS, PRIVACY POLICY --- ### [Weekly Economic nSight: September 18, 2023](https://nvestadvisors.com/economic-update-8/) **Published:** September 18, 2023 **Author:** nVest Advisors **Content:** **Good morning and happy Monday! We had a busy week of economic information last week, so there is a lot to discuss.** **We also want to let you know of some changes in this blog’s format starting in October. As the economy worsens, it is important for investors to look not only at economic data (most of which lag behind by 1 to 3 months because they are summaries and estimates of what has already happened), but how the markets are responding to that data. This is a second component to how we create and modify the investment models we use for our client portfolios.** The first new bit of data we are adding to the information mix is called the **Buffet Indicator**. Created by famed investor and CEO of Berkshire Hathaway, Warren Buffet, the Buffet Indicator compares stock prices directly to the economic output of the United States, to determine if stock prices are within a reasonable range based on the actual productivity of the economy, or if they are under- or over-priced in comparison. The indicator, which has a very good but not perfect track record of predicting market tops and bottoms, tells us when stocks are overbought or underbought relative to the productive capacity of the economy at that time. We will post the most recent Buffet Indicator each week with our economic report, but you can always track this yourself at [currentmarketvaluation.com](https://currentmarketvaluation.com/models/buffett-indicator.php?utm_source=substack&utm_medium=email). This week the Buffet Indicator continues to show that stocks are OVERBOUGHT (too high to justify based on economic conditions):[![](https://nvestadvisors.com/wp-content/uploads/2023/09/buffett-indicator-standa.png "Buffett indicator standa nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/buffett-indicator-standa.png) Now, let’s get on with economic indicators for last week: Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [CurrentMarketValuations](https://currentmarketvaluations.com), [FRED](https://fred.stlouisfed.org/), [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **nFocus: CPI and PPI came in high** - **Housing Update** - **Jobs update** - **Small Business Update** - **Manufacturing Update** - **Consumer Update** ## nFocus: CPI and PPI came in high Last week we received the always highly anticipated CPI (consumer price index) and PPI (producer price index) data for August. As expected, both showed an uptick in prices as inflation began to climb again, bolstered by high energy prices and $1.5 Trillion in new government deficit spending since June. When an inflationary cycle gets underway, inflation tends to run in successively bigger waves over time until monetary policy changes by the central bank are sufficiently restrictive. Let’s look first at CPI. Remember that there are many ways to parse the CPI data, but the two most common measures are the HEADLINE and the CORE numbers. Headline inflation is what you see commonly reported (hence, “headline”). It includes pretty much everything you *might* have spent money on last month. Core inflation is those regularly-recurring household expenses like gasoline, rent, energy bills, groceries, etc. The Federal Reserve is more concerned with Core inflation than it is Headline inflation. Headline CPI heated up more than expected last month with higher energy prices making up the bulk of the cost increase for consumers (we’ll see this again in the data about consumers): [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-Detail2309140446.png "Us cpi detail2309140446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-Detail2309140446.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-MS-FOrecast-gasoline2309120447.png "Us cpi ms forecast gasoline2309120447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-MS-FOrecast-gasoline2309120447.png) Core inflation, as opposed to headline, also came in hotter than expected for the third month in a row, definitely reversing the previous trend downward from earlier in the year: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-Core-Services2309140446.png "Us cpi core services2309140446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-Core-Services2309140446.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-Core2309140446.png "Us cpi core2309140446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-Core2309140446.png) Here you can see the composition of the SUPERCORE CPI (an even tighter look at regularly occurring household expenses but with housing removed. Transportation services were the biggest contributor: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-Core-Supercore2309140446.png "Us cpi core supercore2309140446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CPI-Core-Supercore2309140446.png) Now let’s turn our attention to the PPI (producer price index). This is a very important “sister” data set for CPI because the prices that producers (businesses) pay to make the goods and services they provide to us, will affect both the prices they later charge for their finished products, and also gives us a hint as to their profit margins. PPI came in higher than expected, as well, indicating that consumer prices will be rising in the coming weeks and months: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-PPI2309150442.png "Us ppi2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-PPI2309150442.png) This was due in large part to a huge spike in energy costs: ![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-PPI-EN2309150442.png "Us ppi en2309150442 nvest advisors") Just as there is a Core CPI, there is also a Core PPI, which again is the basket of the most regularly occurring expenses for a business. That also rose slightly Month Over Month in August: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-PPI-Core2309150442.png "Us ppi core2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-PPI-Core2309150442.png) ### What this means for you Despite a lot of media hype and political spin, inflation is not finished yet. We’ve been warning our clients in this space for many weeks now, that we felt that energy prices had a lot of room to climb again, and the price of energy tends to drag everything else up with it. We say here at nVest: “Where energy goes, everything else follows”. The biggest takeaway from rising prices is that the work of the Federal Reserve to tighten the money supply sufficiently enough to tamp down demand, is not yet finished. We expect at least one more interest rate hike from the Fed before they pause and allow the full effect of 18 months of rate hikes to impact the economy. However, if inflation continues to ramp upward, you must be prepared for even more significant action by the Fed that can only end in a harsher and longer recession than we are currently slated for. ## Housing Update We talk a lot about housing each week, and the industry itself is little changed. It is a trite phrase in economics to say that we are in an “unprecedented” situation, but in the case of this housing market, it truly is unique in the history of the U.S. This past week, we can see the mortgage applications (new purchase and refinance) are at the lowest point since the end of the Great Recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-MBA2309140446.png "Us mba2309140446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-MBA2309140446.png) And as a result, “rate locks” (applications that actually look to be moving toward a closing date) are also at multiyear lows: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-MBA-Rate-lock-count2309140446.png "Us mba rate lock count2309140446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-MBA-Rate-lock-count2309140446.png) This is due to two factors happening concurrently: home prices have never been higher, and interest rates for a home loan have gone up 250% in the last two years. For the housing market to return to anything that even remotely looks like normal, one of these two factors must come down significantly (or both must come down moderately). [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-MBA-Mortgage-rates-remain-above-7pc2309140446.png "Us mba mortgage rates remain above 7pc2309140446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-MBA-Mortgage-rates-remain-above-7pc2309140446.png) ### What this means for you Home prices remain stubbornly high – for now. But something must break, and it will be house prices before it is interest rates. Housing is being heralded by many market analysts (and the real estate industry writ large) as a sign of resiliency, and we hear a lot of realtors and mortgage brokers trying very hard to convince homebuyers to make a purchase now. Don’t fall for it – you’ll have a much more competitive housing market on the other side of the coming recession. We strongly believe we are headed for a significant housing market decline in the coming months that will begin in commercial real estate and then spread into residential as more and more “AirBnB” homes go back on the market, followed (sadly) by homes lost due to families’ inability to sustain the mortgage payment as the recession worsens. Clients who are interested in buying a home or a second home may very well have the opportunity to do so at dramatically better prices in the next 18-24 months, but other clients who are interested in selling property may have a long time to wait for those home prices to return. Our macro models are not invested in either real estate or mortgage/property finance at this time. ## Jobs Updates We look at jobs regularly, and the current trajectory remains unchanged. Initial claims, while still low, are trending higher, and continuing claims remain my most persistent worry. This week’s initial jobless claims came in slightly below expectations, though trending against historical trends. This week, we have a couple of other significant bits of data that sheds better light on where we’re headed. First, initial claims for unemployment were lower than expected but this was largely due to a huge number of claimants being rejected in – of all places – Ohio. More than 100,000 applications for unemployment were rejected nationwide due to reported cases of fraud, so the numbers this week are skewed downward slightly. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims2309150442.png "Us claims2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims2309150442.png) Even with that revision, we can see that compared to the last three normal employment years, our initial jobless claims remains elevated: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims22309150442.png "Us claims22309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims22309150442.png) There is a strong indication that layoffs are about to ramp up, however, as this survey of CEOs indicates layoffs are becoming more of a priority for companies as they prepare for a harsher economic downturn: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CEOs-prepare-for-job-cuts2309150442.png "Us ceos prepare for job cuts2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-CEOs-prepare-for-job-cuts2309150442.png) As I’ve mentioned many times in this space, initial claims are important (though they tend to be revised a LOT), but it is the continuing claims number that we must keep the closest watch on. Losing a job is one thing; not being able to find another one after weeks of looking is another thing entirely. Continuing claims continues to be the most important number to follow, and though it looks fairly stable in this graph… [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims-Cont2309150442.png "Us claims cont2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims-Cont2309150442.png) … the trend versus typical years is NOT good: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims-Cont22309150442.png "Us claims cont22309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims-Cont22309150442.png) One interesting bit of data that I hadn’t seen in a long time that may be pertinent as we try to predict the coming jobs situation is the satisfaction employees report in their jobs, which has dropped significantly in the past couple of years. What is noteworthy about this graph is that employees are increasingly unhappy at their jobs, but the “Quit Rate” has plummeted in recent months. That means that though employees are largely dissatisfied with their work, no one is leaving for other opportunities anymore. It is an anecdotal but relevant data point that an unhappy employee is no longer finding anything better out there in the job market. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/VTW-AAAA-Employee-statisfaction-score2309120447.png "Vtw aaaa employee statisfaction score2309120447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/VTW-AAAA-Employee-statisfaction-score2309120447.png) ### What this means to you The job market is usually the last place to show a recession. There is usually a gradual slowdown, followed by a sudden, surprise, major uptick in layoffs all at once as the recession’s impact is finally felt. While employment remains relatively strong right now, it is showing much more obvious signs of strain. Sadly this will get worse as we head into a recession – that’s an economic certainty and one the Federal Reserve is actually trying to achieve without ***too*** many job losses. We urge our clients to reduce their debt load, increase their personal savings, and keep investments conservatively positioned for now. A recession doesn’t mean the end of the world, but it does mean seeing our unemployment rate climb from its current 3.5% to maybe 5.5% or perhaps 6.5% in a very steep recession. That means, sadly, a lot of lost jobs and financial hardship for many families, so please take the risk of job insecurity seriously. ## Small Business Update Once monthly, we get significant survey results from small business owners, as published by the NFIB, a small business advocacy group (think AARP but for small companies). Small business surveys are important because contrary to conventional wisdom, small businesses provide roughly 75% of all of the jobs in the United States. The August survey results showed Small Businesses are feeling the pinch of inflation again, and are concerned about their sales going forward. First, the overall optimism for small business remains significantly depressed and the August number turned down again after a little bit of improvement over the summer: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB2309130444.png "Us nfib2309130444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB2309130444.png) August sales were down significantly vs. expectations: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB-Sales2309130444.png "Us nfib sales2309130444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB-Sales2309130444.png) As a result, businesses cut jobs and do not intend to add more jobs in the coming months (2 graphs): [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB-Jobs2309130444.png "Us nfib jobs2309130444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB-Jobs2309130444.png) Overall compensation packages to employees were down, as well, but interestingly, the cost of compensation plans spiked significantly. This would indicate that the cost of benefits for employees jumped, as did a number of payroll-related taxes. Here in Colorado, for instance, taxes began for a state-run family leave policy that takes effect in January 2024. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB-Comp2309130444.png "Us nfib comp2309130444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB-Comp2309130444.png) This had the effect of seeing small business start to increase their prices again (chart 1) with even bigger price increases coming on the months ahead (chart 2): [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB-Price-plans2309130444.png "Us nfib price plans2309130444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFIB-Price-plans2309130444.png) ### What this means for you Despite the mega-corporations constantly making the headlines in our national media, small business accounts for nearly every job in America. The health of the small business will give us a clear indication as to the direction of the economy. We wish we could report better numbers for our clients and readers, but the indicators very clearly point to higher prices and a slower economy in the months ahead. ## Manufacturing Update We got the Empire State (NY area) manufacturing numbers this past week, and I grow increasingly skeptical as to the importance of each number due to the growing wide swings month-to-month in this data (look at the data from before the Covid pandemic compared to the jagged “sawtooth” afterward). There is just too much discrepancy month-to-month in the Empire numbers to make them useful tools at this time. So we will take ALL of the nation’s data in total and present a more balanced picture of this information until the Empire numbers stabilize. That said, manufacturing in the NY area appeared to spike up to just above recessionary area this past month (though look at how it slams pretty violently up and down since the end of 2020): [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Empire2309180444.png "Us empire2309180444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Empire2309180444.png) As we’ve seen already with CPI, PPI and the small business surveys, prices in the New York area are moving up, with even higher prices expected in the coming months. Inflation is NOT finished: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Empire-More-Firms-are-boosting-prices2309180444.png "Us empire more firms are boosting prices2309180444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Empire-More-Firms-are-boosting-prices2309180444.png) This chart is why I am VERY leery of the manufacturing strength reported this past month: hiring is down. That doesn’t match. So we will go with the hiring as a better sign of real manufacturing activity than what was reported in the headline survey (the first graph in this section). We believe manufacturing in the New York area is as it is everywhere else in the United States: declining. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Empire-Empl2309180444.png "Us empire empl2309180444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Empire-Empl2309180444.png) ### What this means to you This is just one month of data from one part of the U.S, but it confirms that inflation is showing up again pretty much everywhere, and with hiring slowing down, it appears companies are also preparing for a drop in revenue in the coming months as a recession gets underway. ## Consumer Update Finally, we have a collection of data to give us insight into how our families are holding up. The first thing to note is that there was a major difference in how consumers in different age ranges spent their disposable incomes this past summer. Baby boomers and Gen Xers kept their spending on travel, recreation and dining out pretty modest, but Millennials and Gen Zers went wild in a kind of “YOLO” spending spree on activities. Does this mean that they are not feeling the pinch of what’s coming? Not likely. More likely, they haven’t experienced a recession personally yet (though there is much research to show that Millennials were deeply affected watching their own parents struggle through the Great Recession). [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Which-industries-will-be-hurt-by-the-resumption-of-student-loan-paymentsQ2309180444.png "Us which industries will be hurt by the resumption of student loan paymentsq2309180444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Which-industries-will-be-hurt-by-the-resumption-of-student-loan-paymentsQ2309180444.png) My personal theory is that the younger generation is most likely to have student loans that must be repaid, and as these come due in just two weeks, we will see this kind of spending drop significantly. It is possible that the Gen Z and Millennials who spent like crazy this summer were rationalizing those purchases because they knew with the return of their loan payments, they would not get nearly as many opportunities in the months ahead. I believe this was a “party before the bad stuff starts” kind of surge that will not repeat. As a result of this spending spree by the younger generations, retail sales saw a bump up over the summer: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Ret-Sales-Headline2309150442.png "Us ret sales headline2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Ret-Sales-Headline2309150442.png) But let’s not get too excited about consumer discretionary stocks, since the vast majority of the increase in spending was just the high cost of filling our gas tanks: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Ret-Gaso2309150442.png "Us ret gaso2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Ret-Gaso2309150442.png) In fact, as we break up the retail sales figure into smaller pieces, we can see that gasoline stations – by a mile – saw the biggest increase in purchases. What suffered? The things we can do without during a recession. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Ret-by-sector2309150442.png "Us ret by sector2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Ret-by-sector2309150442.png) We cannot stress enough the effects of this long-term inflation on the budgets of American families. We are not consuming nearly as much as we were a few years ago, but we are paying substantially more for the items we do buy. We’ve shown this chart many times before but it bears mention every time we see it updated. The Black line is the retail sales as reported in today’s inflated costs, but the blue line is the actual goods and servings being bought with inflation removed. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-ret-sales-real2309150442.png "Us ret sales real2309150442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-ret-sales-real2309150442.png) ### What this means for you Despite statements to the contrary from various market pundits, we see a significant slowdown in consumer spending well underway already, and that will only get worse as student loans return this month. The slow-down can be seen at every point in the supply chain, all the way back to U.S. manufacturers and overseas exporters. We firmly believe a recession is already here, but will not be officially acknowledged for at least 3 more months. We remain conservatively invested and allow the economy to direct our decisions, not market sentiment and herd bias. The data clearly shows, from nearly every angle we can find, a deteriorating economic environment, and our clients are correctly positioned for protection against, and even the possibility to gain from, the coming downturn. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past spring, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** \[/fusion\_text\]\[/fusion\_builder\_column\]\[/fusion\_builder\_row\]\[/fusion\_builder\_container\] Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Shopping your 401k plan for success](https://nvestadvisors.com/small-business-401k-fiduciary/) **Published:** September 13, 2023 **Author:** nVest Advisors **Content:** Small business owners wear many hats, from managing day-to-day operations to making critical financial decisions. Among these responsibilities, overseeing a 401(k) retirement plan for employees often takes a back seat. However, a 401(k) plan is a crucial component of a competitive benefits package that can help attract and retain top talent. As a small business owner, you may not realize that regularly shopping your retirement plan is essential to maintain its competitiveness in the marketplace and ensure it remains compliant, cost-effective, and fairly implemented. Today, we’ll delve into the fiduciary role of a plan sponsor and why shopping your 401(k) plan is not only a best practice but also a legal obligation. We’ll also explore the benefits of competitive bids and provide valuable insights and resources to help you navigate the process effectively. ## Section 1: The Fiduciary Role of a Plan Sponsor Before we dive into the importance of shopping your 401(k) plan, it’s crucial to understand the fiduciary role you play as a plan sponsor. The Employee Retirement Income Security Act (ERISA) imposes fiduciary duties on those responsible for managing retirement plans. These duties include: 1. **Prudent Management**: Fiduciaries must act with prudence, which means making informed and careful decisions in the best interests of plan participants. 2. **Diversification**: Fiduciaries should ensure that plan investments are diversified to minimize risk. 3. **Following Plan Documents**: Fiduciaries must follow the terms of the plan documents and act in accordance with the plan’s provisions. 4. **Minimizing Costs**: Fiduciaries are responsible for minimizing plan costs, ensuring that fees paid by participants are reasonable. 5. **Monitoring and Review**: Fiduciaries must regularly monitor plan investments and make necessary adjustments. 6. **Acting Solely in the Interest of Participants**: Fiduciaries must act solely in the interest of plan participants and beneficiaries, without regard to their own interests. 7. **Prudent Selection of Service Providers**: Fiduciaries should carefully select and monitor service providers to ensure they are qualified and cost-effective. ## Section 2: The Importance of Regularly Shopping Your Retirement Plan Now that we’ve established your fiduciary responsibilities let’s explore why regularly shopping your 401(k) plan is crucial. ### **1. Compliance with Changing Regulations** The retirement plan landscape is constantly evolving with new regulations and laws. Failing to keep your plan up-to-date can result in non-compliance issues and potential legal repercussions. Regularly shopping your plan allows you to identify and address any compliance concerns promptly. **Resource**: [U.S. Department of Labor – Compliance Assistance for Small Employers](https://www.dol.gov/agencies/ebsa/employers-and-advisers/compliance-assistance/compliance-assistance-small-employers) ### **2. Cost-Effectiveness** High fees can erode retirement savings over time. Shopping your plan can help you identify lower-cost investment options and administrative services, ensuring that your employees’ retirement savings go further. **Resource**: [401(k) Fee Benchmarking Guide](https://www.investmentnews.com/401k-fee-benchmarking-guide-186937) ### **3. Investment Performance** Regularly evaluating your plan’s investment options can help you replace underperforming funds with better alternatives, ultimately benefiting plan participants. **Resource**: [Morningstar – How to Evaluate Your 401(k) Plan](https://www.morningstar.com/articles/962084/how-to-evaluate-your-401k-plan) ### **4. Enhancing Employee Benefits** A competitive retirement plan can attract and retain top talent. By shopping your plan, you can ensure it remains an appealing benefit for your employees, helping you maintain a skilled and motivated workforce. **Resource**: [SHRM – 401(k) Plans: A Competitive Recruiting Tool](https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/401k-plans-competitive-recruiting-tool.aspx) ### **5. Fiduciary Liability Mitigation** Regularly shopping your plan demonstrates a commitment to fulfilling your fiduciary duties. It can also help mitigate the risk of fiduciary liability by showing that you are actively seeking the best options for your participants. **Resource**: [Plan Sponsor – Managing Fiduciary Liability Through Plan Reviews](https://www.plansponsor.com/Managing-Fiduciary-Liability-Through-Plan-Reviews/) ## Section 3: How to Shop Your 401(k) Plan Effectively Now that you understand the importance of regularly shopping your retirement plan, let’s discuss how to do it effectively. ### **1. Establish a Review Schedule** Set up a regular review schedule, ideally at least annually, to assess the plan’s performance and compliance. This ensures that you stay on top of any necessary changes. ### **2. Benchmark Plan Costs** Benchmark your plan’s costs against industry standards to determine if you are getting a competitive deal. Keep an eye on fees charged by service providers, fund expenses, and administrative costs. **Resource**: [BrightScope – 401k Plan Ratings and Investment Data](https://www.brightscope.com/) ### **3. Evaluate Investment Options** Review the plan’s investment options in comparison to similar funds in the market. Ensure that participants have access to a diversified selection of quality investments. ### **4. Solicit Competitive Bids** Engage with multiple service providers and investment managers to solicit competitive bids. This will help you identify potential cost savings and superior services. **Resource**: [PlanAdviser – Tips for Requesting Proposals from Retirement Plan Providers](https://www.planadviser.com/requesting-proposals-from-retirement-plan-providers/) ### **5. Document Your Process** Document all your actions and decisions related to the plan review. This documentation serves as evidence of your prudent fiduciary process and can be invaluable in case of an audit or legal challenge. **Resource**: [401(k) Help Center – The Importance of Documentation for Fiduciaries](https://www.401khelpcenter.com/401k_education/importance_of_documentation.html) ### **6. Communicate Changes to Participants** After making any changes to the plan, communicate these updates to participants clearly. Transparency helps build trust and ensures employees are aware of the improvements to their retirement benefits. **Resource**: [SHRM – Communicating 401(k) Plan Changes to Employees](https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/communicating-401k-plan-changes-to-employees.aspx) ## The Bottom Line Regularly shopping your 401(k) plan is not just a best practice; it’s a fiduciary responsibility that can have a significant impact on your employees’ financial well-being and your business’s success. By staying vigilant and proactive, you can ensure your plan remains compliant, cost-effective, and fairly implemented, ultimately benefiting both you and your valued employees. Remember that this guide is not exhaustive, and the retirement plan landscape can be complex. Consult with a qualified retirement plan advisor (we know one!) or legal counsel to navigate this process effectively and ensure you’re meeting your fiduciary obligations. By committing to regular plan reviews and staying informed about industry best practices, you can build a strong, competitive retirement plan that contributes to the long-term financial security of your employees and the success of your small business. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to 3(21) or 3(38) fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. If your company would like to receive professional planning and investment assistance, a competitive bid from us for your current company retirement plan, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, Colorado Secure Savings, commercial paper, custodian, economic, economy, empowerment, ERISA, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, Secure Savings, SEP, SIMPLE, SIPC, small business, state-run IRA, state-sponsored IRA, sustainable, trends --- ### [Demystifying the Stock Market: Origins, Mechanics & Common Misconceptions](https://nvestadvisors.com/stock-market-origins-misconceptions/) **Published:** September 15, 2023 **Author:** nVest Advisors **Content:** One of the many questions we get from clients and prospective clients is, how does the stock market work? The stock market is a complex and fascinating ecosystem that plays a crucial role in our modern economy. For many, it’s a symbol of wealth, power, and opportunity, and if you have any kind of workplace retirement plan, you’re already a stock investor and might not have known it. Yet, it remains an enigmatic entity to a significant portion of the population. Let’s start the discussion about what the stock market is (and isn’t) by quicking exploring the history and mechanics, and unraveling common misconceptions surrounding the stock market. ## **Part 1: The Birth of the Stock Market** ### *The Beginnings of Stock Trading* The origins of the stock market can be traced back to the late 16th century in Antwerp, Belgium. Merchants used to gather in coffee houses to conduct business, including trading shares of the various voyages they were financing. These early gatherings laid the foundation for organized trading. ### *The Dutch East India Company* The Dutch East India Company, formed in 1602, is often credited with pioneering the concept of the modern stock market. It issued the first publicly traded company shares, allowing investors to buy and sell ownership stakes. This development paved the way for the Amsterdam Stock Exchange, which was officially established in 1602. ## **Part 2: How the Stock Market Works** ### *Stock Exchanges: The Epicenters of Trading* Today, stock exchanges serve as the primary venues for buying and selling stocks. Prominent examples include the New York Stock Exchange (NYSE) and the Nasdaq. These exchanges provide a centralized marketplace where buyers and sellers meet to execute trades. ### *Stocks: Ownership in Companies* A stock represents ownership in a company. When you own shares of a company’s stock, you are a shareholder and have a claim on the company’s assets and earnings. Stocks can be classified into two main types: common and preferred. Common shareholders have voting rights in the company, while preferred shareholders typically don’t have voting rights but have a higher claim on assets and earnings. ### *The Role of Brokers* Individual investors typically do not interact directly with stock exchanges. Instead, they use brokerage firms as intermediaries. Brokers facilitate the buying and selling of stocks on behalf of investors. Online brokerages have made it easier for individuals to access the stock market and trade stocks from the comfort of their homes. It is important here to note that brokers and agents are not the same thing, nor are they collectively the same as a financial professional who works for you as a fiduciary investment manager, as we do here at nVest Advisors. To be as brief as possible: **Brokers** work as intermediaries between the buyer and the seller of a security. They are paid a commission or transaction fee and do not have much of a fiduciary responsibility to either party once the transaction is completed. **Agents** (sometimes called sales representatives) work for a company and sell that company’s products to a consumer. They are paid a salary, commission, or some combination of both. The agent may maintain a relationship with his or her customers long-term, but many do not, and once the product is sold, service needs are commonly carried out by the company itself. The commissions and trading fees that pay brokers and agents are indirectly paid by the customer through sales charges built into the trades or products sold to the customer, so you need to be sure what you are paying for and how much a product actually costs. The sales activity of brokers and agents in the securities industry are generally governed by rules set forth by **FINRA**, a self-regulating industry organization. **Fiduciary financial advisors** (also called **fee-only** or fee-based advisors, **registered investment advisors**, or **investment advisor representatives**) work exclusively and directly for their client and receive their compensation for financial planning and investment advice from the client by invoicing the client and transparently calculating the agreed-upon fee. Fiduciary advisors are usually employees of, or partners of a registered investment advisory firm (RIA firm, like nVest Advisors), and are regulated by the government. RIA firms are registered in each state in which they have 5 or more clients, or at the national level through the **SEC** if their firms are large enough. There are financial advisors who can work in both a broker/agent capacity and as a fiduciary financial advisor. We call those advisors “dually-registered”. Most people who are simply placing a stock trade (and not requiring active management of that investment) will use a broker or agent for the purchase. ### *Market Orders vs. Limit Orders* Investors can place different types of orders when trading stocks. **Market orders** are executed immediately at the current market price, while **limit orders** are placed at a specific price and are executed only when the market reaches that price. Understanding these order types is crucial for successful stock trading. ### *Being Long vs. Short a Stock* If you purchase shares of a stock and hold them in your brokerage account, you are said to be **Long** in your position. It doesn’t mean that you intend to hold your shares for any specified length of time; just that you are the actual owner of shares of stock that are registered in your name. Generally, people are long in a stock position because they are optimistic about the share price moving up in the future, and so are trying to buy the stock when its price is lower, and sell when the price is higher. Your risk of loss in a long position is limited only to the initial amount invested – your investment cannot go below $0.00. **Shorting** a stock is a fairly complicated stock trade that requires a level of sophistication as well as a line of credit (called a “margin”) on your investment brokerage account. The reason for these requirements is that there is literally an unlimited downside risk related to short-selling. More on that in a moment. Selling a stock short means that you are actually selling the stock ***before*** you buy it. The way this works is that your investment broker will allow you to borrow the stock held long by another customer (or the firm’s own portfolio), to sell it immediately. You would then have a specific number of days to buy the stock and return it to its rightful owner. Why would anyone do this? Because they anticipate the stock’s price dropping quickly from today’s price, and so they want to sell it while the price is high, and then buy the stock at a lower price and give it back to its owner. If it works, the short seller gets to keep the difference between the sale and the repurchase, and the long investor still owns their shares. The risk is, if a stock’s price goes up instead of down as expected, the short seller of the stock must replace the borrowed shares at whatever price the stock is trading for before the stocks must be returned. If the stock doubles or triples in price, you must still buy back the number of shares you borrowed to return them to their actual owner. As a result, your potential for investment loss is unlimited because stock prices have no practical upper limit. Short selling has had catastrophic consequences for some large investment managers in the recent past. [A good (albeit extreme) example of short selling gone wrong can be found here](https://www.ft.com/content/a8e93c07-d084-4396-9aa9-76515686e3be). ## **Part 3: Common Misconceptions About the Stock Market** ### *Misconception 1: The Stock Market Is Just Like Gambling* One of the most pervasive misconceptions is that investing in the stock market is akin to gambling. While there is an element of risk involved, unlike gambling, investing in the stock market is based on the principles of fundamental and technical analysis. Investors assess a company’s financial health, growth potential, and industry trends before making informed decisions. Also, at nVest Advisors, we like to teach our clients ***the difference between trading and investing.*** If I want to **invest** in a company, it means that I have confidence in the company and its prospects, and want to put some of my money into the company, and if it does well, everyone benefits: customers are happy, employees have jobs, the company grows its sales and market share, and as a part owner I am entitled to my share of the profits. And, because anyone can become an investor in a public-traded company, no one is shut out from potential profits if they invest into a successful company. Everybody wins. **Trading** is different than investing in many ways. Most traders are looking only for relatively fast changes in the price of the stock, and are little concerned with the long-term potential of the company (and often, have little regard for which company the stock price refers to). Traders are looking to capitalize on short-term movements in market sentiment about a stock’s price. This is often done by a trader creating a specific system or methodology to screen the stock market and look for price opportunities they believe others are missing out on. So a trader is trying to maximize his or her own knowledge and skillset against lesser-skilled traders, resulting in a win-lose situation. At nVest Advisors, we employ some trading in our firm’s and our team’s personal accounts, but at present, we do not trade in client accounts. Rather, our practice is to invest client funds in ways that have a positive overall impact on our clients, the companies they invest in, and the broader economy. ### *Misconception 2: Timing the Market Is the Key to Success* Many individuals believe that successfully predicting market trends and timing their investments is the path to riches. In reality, market timing is extremely difficult, even for seasoned professionals. A more prudent approach is to focus on long-term investing, also known as “time in the market” rather than “timing the market.” ### *Misconception 3: You Need a Lot of Money to Invest* Contrary to popular belief, you don’t need a vast fortune to start investing in the stock market. Many brokerage platforms allow individuals to open accounts with minimal initial deposits. Additionally, although not every brokerage firm offers them, fractional shares enable investors to buy a portion of a stock, making it accessible to those with limited funds. The rise of **mutual funds** as one of the most common ways for smaller investors to participate in the markets is in part because mutual funds can be bought in exact dollar amounts (meaning, you can buy fractional shares of a mutual fund). This allows investors with even very modest amounts of money to invest, an opportunity to participate. ### *Misconception 4: Stocks Are Always Risky Investments* While it’s true that stocks carry a degree of risk, they have historically delivered substantial returns over the long term. And it must be said here that it is not just stocks that carry risk; literally all forms of investment, and even cash itself, has inherent strengths and risks associated with them; they are just different kinds of risk, but equally important to consider. For instance, one may argue that cash held in a savings account at the bank is “safe”, and if they mean safe from daily fluctuations in value (like stocks can be), they would be correct. But if we look at the rate of inflation slowly (or in recent years, rather quickly) eroding the value of those “safe” bank dollars over ten or twenty years, you see a new kind of risk emerge: the risk of running out of money in your old age, because your dollars didn’t keep up with inflation, and now buy much less than they did 20 years ago. This is called inflation risk, and it isn’t a risk common to stocks but is common for many so-called “safe” investments. So how to we handle risk? We can never eliminate it (and RUN from any advisor, agent or broker who says otherwise), but we can manage and mitigate risk in a number of ways. Diversifying your investment portfolio across various asset classes, including stocks, is one common way to help manage risk. Risk tolerance, financial goals, and time horizon should also inform your investment choices. ### *Misconception 5: You Must Be an Expert to Invest in Stocks* Investing in stocks doesn’t require a Ph.D. in finance. With the abundance of educational resources available today, anyone can learn the basics of stock investing. Furthermore, many investors seek guidance from financial advisors or rely on robo-advisors for professional assistance. *Misconception 6: A Bull Market Will Last Forever* Bull markets, characterized by rising stock prices, can create a sense of euphoria and invincibility among investors. However, markets are cyclical, and bull markets are inevitably followed by bear markets (periods of declining prices). Being prepared for market downturns and having a well-thought-out investment strategy is crucial. ## The Bottom Line The stock market is a multifaceted institution with a rich history, complex mechanics, and its fair share of misconceptions. By understanding its origins, how it functions, and dispelling common myths, you can embark on your investment journey with confidence and make informed decisions that align with your financial goals. Investing in stocks can be a powerful tool for wealth accumulation, but it requires patience, knowledge, and a long-term perspective to navigate the ever-evolving world of finance. Remember, we’re here to support you every step of the way. ### [Are you financially fit? Take our free assessment here](https://app.precisefp.com/w/tqku3v). nVest Advisors specializes in helping working-age, professional families and small businesses start their financial journey, grow every step of the way, anticipate and correct setbacks, and celebrate with you when we reach the top together. Your success is all we care about, and helping you overcome the perils along the journey to financial freedom, including the times when you may be your own worst enemy, is how we spend our day. It’s genuinely a privilege to help families and small businesses who want tomorrow to be better than today. Reach out to us for a totally free, totally no-risk portfolio checkup today if you’re concerned about where your finances sit for the coming recession, particularly if you are at or approaching retirement age. A review of your current risk in relation to your tolerance will be a key part of it. We’re delighted to offer you our thoughts. You can schedule that time with us below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client Service, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Individuals and Families, Investing General, LifeCycle, Mailchimp, Media, public **Tags:** advisor, agent, background, behavior, behavioral finance, bias, cognitive bias, colorado, finance, financial, insurance, invest, investing, investing success, investment, job, job loss, Kansas, New Mexico, nVest, Oklahoma, planner, recession, regulator, regulatory, RIA firm, risk, risk management, risk tolerance, rules, small business, survival, texas, Utah, Wyoming --- ### [NEWS UPDATE: Colorado Springs Office is temporarily closed](https://nvestadvisors.com/news-update-colorado-springs-office-is-temporarily-closed/) **Published:** September 11, 2023 **Author:** nVest Advisors **Content:** ### **[A major underground fire in downtown Colorado Springs](https://www.kktv.com/video/2023/09/11/watch-underground-fire-downtown-colorado-springs-3/) has affected our operations this morning and we are operating remotely in accordance with our disaster recovery policies.** [At approximately 2:30 this morning, a large fire broke out in the underground utility corridor in the block adjacent to our office location](https://www.kktv.com/video/2023/09/11/watch-underground-fire-downtown-colorado-springs-3/), which resulted in the loss of internet and electricity to buildings in the immediate area, and the evacuation of other nearby buildings due to unacceptably high carbon monoxide levels from the fire. **Our physical building was unaffected except for the loss of utilities at this location, and no client data is physically stored at our office location.** Normally, we would not report an interruption of electricity or internet service to our clients, but this was a major infrastructure event for the city, and there is not yet an estimated time for the repairs to be completed. As a result, we may be on remote operations for one or more business days. Client trades and withdrawal requests are unaffected by this situation, except for slightly slower responses to emails and telephone calls/messages. We hope to resume normal operations tomorrow, September 12, but this is an evolving situation. We will continue remote operations until we receive word that our utilities have been restored. **Categories:** Company News, From our CEO, Individuals and Families, Mailchimp, Media, Press Releases, public --- ### [Weekly Economic nSight: September 11, 2023](https://nvestadvisors.com/economic-update-7-2/) **Published:** September 11, 2023 **Author:** nVest Advisors **Content:** **Good morning and happy Monday! We remember those whose lives were lost 22 years ago today in the horrific September 11 terrorist attacks. World relations were reset that day and the effects still resonate.** Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **Housing Update** - **Jobs update[](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-Cred2308080439.png)** - **Manufacturers show prices are rising again** - **GDP and GDI estimates have diverged** - **Consumer Update** ## Housing Update The 30-year mortgage rate continues to climb, which is continuing to batter the mortgage and housing markets. We believe this trend will continue. Current pending home sales deteriorated in August in a typically seasonal fashion, albeit with the lowest number of sales in the last decade: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-pending2308310444.png "Us pending2308310444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-pending2308310444.png) Actual closed home sales in August are way off from the trend over the last decade: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing2308230536-1.png "Us existing2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing2308230536-1.png) Because home sales tend to be seasonal, it’s important to see how this July looks compared to an average July. As you can see, we have had 7 consecutive months of home sales that have been 6% -15% below their monthly average, and the trend continues to worsen: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing-v-avg2308230536-1.png "Us existing v avg2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing-v-avg2308230536-1.png) We don’t see reason for optimism in the near future, either, as mortgage applications typically lock about 30 days ahead of the home closing date. In this case, the drop in mortgage applications declined, but at a more moderate clip. This is easily the slowest mortgage lending market since the Great Recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-MBA2308310444.png "Us mba2308310444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-MBA2308310444.png) Here is another look at the connection between mortgage applications and pending home sales. Whenever mortgages drop, housing sales follow in short order. There is some discrepancy between these numbers because refinances do not create a home sale, so times of high refinance activity will pull away from the home sales line. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Pending-v-MBA2308310444.png "Us pending v mba2308310444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Pending-v-MBA2308310444.png) The total YTD home sales in the U.S. is at a 10-year low and the gap between a “normal” trend and this year is widening as we head into the last part of the year: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing-YTD2308230536-1.png "Us existing ytd2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing-YTD2308230536-1.png) The only thing keeping prices up at this point is the total lack of inventory. Because 75% of all home loans are at 5% or lower interest rates, there is little incentive to sell a house (even at these inflated prices) because the seller cannot replace the good rate and terms on their current mortgage. We very much do expect to see house prices come down 15% or more over the next two or so years (more in specific markets), but it will be, unfortunately, the loss of rental properties and homes due to the economic slowdown that will cause most of it. As rates drop later in the Fed’s policy cycle, you may also see a glut of inventory return to the market, which should lower prices a little further. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing-Inv2308230536-1.png "Us existing inv2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing-Inv2308230536-1.png) That lack of inventory, as I mentioned above, is the only thing holding up home prices so far: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing-price2308230536-1.png "Us existing price2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Existing-price2308230536-1.png) ### What this means for you Housing is being heralded by many market analysts (and the real estate industry writ large) of a sign of resiliency. We believe nothing could be further from the truth. I believe we are headed for a significant housing market decline in the coming months. Clients who are interested in buying a home or a second home may very well have the opportunity to do so at dramatically better prices in the next 18-24 months, but other clients who are interested in selling property may have a long time to wait for those home prices to return. Our macro models are not invested in either real estate or mortgage/property finance at this time. ## Jobs Updates We look at jobs regularly, and the current trajectory remains unchanged. Initial claims, while still low, are trending higher, and continuing claims remain my most persistent worry. This week’s initial jobless claims came in slightly below expectations, though trending against historical trends. This week, we have a couple of other significant bits of data that sheds better light on where we’re headed. First, initial claims for unemployment were lower these past two weeks but I am leery about the accuracy of the data, because ever time we saw a significant drop in initial claims this summer, it was due to one state removing a huge number of claims at once, claiming it was removing “fraudulent” claims. To remove them from INITIAL filings instead of continuing filings doesn’t make sense to me. Did hundreds of thousands of fraud cases show up in the same week? No, or we would have seen major spikes in initial claims which we have not seen. Initial jobless claims trended down in a pretty typical seasonal pattern, but this number has been so wildly revised in later weeks that it’s hard to give a lot of credence to the first print. Much more accuracy tends to follow in the later revisions. As of now, however, it looks like workers did not file for too many first-time unemployment claims the last two weeks: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims2309010543.png "Us claims2309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims2309010543.png) However, the number we have told our clients and readers for months to pay much more attention to are the continuing claims. In a strong economy, there are always some layoffs happening, but it is usually very easy to find another job if this unfortunate event happens to you. In this case, continuing claims, which started off 2023 at the lowest rate in a decade, have slowly climbed into the middle of the pack, and continue to buck against trends. The fact that continuing claims remain persistently high tells us that it is becoming increasingly difficult to find a new job if you lose one. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims-Cont2309010543.png "Us claims cont2309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims-Cont2309010543.png) The weekly trend for 2023 (comparing the average of the last three “normal” hiring years) shows clearly that layoffs, once they happen, are much more lasting events in a person’s finances than they used to, and the trend is slowly getting worse: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims-Cont22309010543.png "Us claims cont22309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Claims-Cont22309010543.png) Additionally, after a sharp drop in layoff announcements earlier this year, the number of companies that have announced layoffs spiked sharply last month. If you ignore the chaos of the Covid pandemic, it is very rare to see layoff announcements this high in the last 15 years. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Job-cuts2309010543.png "Us job cuts2309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Job-cuts2309010543.png) It’s also interesting to see where jobs are being gained and lost. Layoffs in manufacturing, which has been happening all year, increased sharply in August, but the real surprise came in transportation and shipping (second chart). This makes sense from an economic point of view, because we had seen retail inventories shrink due to stores not purchasing at the same levels from their wholesalers, and the inventory levels at those wholesalers were climbing sharply all summer. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFP-z-Logisitcs2309050445.png "Us nfp z logisitcs2309050445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFP-z-Logisitcs2309050445.png) Of note also is the significant drop in the hiring of temporary workers. This has been going on for the last 18 months, but the drop in temp worker hiring is accelerating: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFP-Temp2309050445.png "Us nfp temp2309050445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-NFP-Temp2309050445.png) ### What this means to you The job market is usually the last place to show a recession. There is usually a gradual slowdown, followed by a sudden, surprise, major uptick in layoffs all at once as the recession’s impact is finally felt. While employment remains relatively strong right now, it is showing much more obvious signs of strain. Sadly this will get worse as we head into a recession – that’s an economic certainty and one the Federal Reserve is actually trying to achieve without ***too*** many job losses. We urge our clients to reduce their debt load and increase their personal savings, and keep investments conservatively positioned for now. A recession doesn’t mean the end of the world, but it does mean seeing our unemployment rate climb from its current 3.5% to maybe 5.5% or 6.5%. That means, sadly, a lot of lost jobs and financial hardship for many families, so please take the risk of job insecurity seriously. ## Manufacturers report inflation is rising again. Just as we highlighted in our last nSight report two weeks ago, the manufacturing sector continues to report slower output, but the concerning part is that both current and expected prices are climbing sharply again. Now more Fed sectors have reported in, confirming the same price spikes as we showed you two weeks ago. First, the Philly Fed shows sales slowed but prices (both paid out to their own suppliers and what they expect to charge customers) spiked sharply last month: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Philly2308230536-1.png "Us philly2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Philly2308230536-1.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Philly-prices2308230536-1.png "Us philly prices2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Philly-prices2308230536-1.png) [, ![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Philly-Manuf-prices2308230536-1.png "Us philly manuf prices2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Philly-Manuf-prices2308230536-1.png) The Richmond, VA Fed district reported a similar spike in prices, including a dramatically higher spike in expected wages: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Richmond-prices-expected2308230536-1.png "Us richmond prices expected2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Richmond-prices-expected2308230536-1.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Richmond-Manuf-Wages2308230536-1.png "Us richmond manuf wages2308230536 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Richmond-Manuf-Wages2308230536-1.png) The economic condition where you have declining (or stagnant) productive output, combined with increasing prices is called STAGFLATION. It can be argued that stagflation is the worst of all economic conditions. It may be too early yet to determine of inflation truly is returning for another ugly rise, but if it is, it is happening even though demand for products and services is slowing down. This would be the definition of a stagflationary environment. ### What this means for you We are 100% certain that a recession is imminent. We’ve said this for many months now. We believe we are on the cusp now, and as the data bits below regarding consumer financial health will indicate, we are very likely about to see significant reversals in several of the investment markets. Our clients remain very conservatively invested in our defensive, macroeconomic data-dependent models, and we are watching for opportunities to improve safety and increase yields on a weekly basis. ## GDP and GDI have diverged – which one is correct? There are several measures of economic output in the United States, the most commonly referenced being the GDP report (gross domestic product). But there is another – GDI – gross domestic income, that typically runs in lock-step with GDP and has diverged only slightly over the last several years, as you can see below. The divergence between GDP and GDI today, however, is dramatic and in terms of recent history, unprecedented: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-GDP-v-GDI32308310444.png "Us gdp v gdi32308310444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-GDP-v-GDI32308310444.png) Why does this matter? It raises the question of which trajectory for the economy is correct. As we can see in the graph below, in the graph to the left, we see the reported GDP number in black, and the GDI number in red. While they were close until the third quarter of 2023 (exactly a year ago), they suddenly diverged in a meaningful way, and one economists must take serious note of. GDP has been reported to be strong (2-ish % growth each quarter for a year), but GDI is showing a recession may have actually started a year ago. And while GDI is trending better, GDP is worsening. In the graph on the right, we can see that there has never been as sharp of a difference between GDP and GDI in more than 75 years: ### [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-GDP-v-GDI22308310444.png "Us gdp v gdi22308310444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-GDP-v-GDI22308310444.png) What this means to you One of these two numbers is either wrong, or GDI is leading GDP by as much as 9-12 months, and we may see a recession declared by Q4 of this year. I actually believe we will see a recession declared as having started in Q2 of 2023 once history looks back at this time period (recessions are always at least 6 months underway before they are officially declared, and some recessions have fully recovered before they are finally confirmed by the data). What this means, though, is there is NOT good data on the state of the economy and this is why you can find optimism in some analysts and extreme pessimism in others. We remain data-dependent, however, and the overwhelming bulk of economic data points to not only a recession being imminent, but it may be a potentially serious one. We maintain very defensive positions for most of the accounts we manage for our clients. ## Consumer Update Finally, we have a smattering of diverse “hints” around consumer spending and bank credit to give us a better picture of where we are headed. Remember that 70% of our entire economy depends on private consumption – that is, you and I spending our paychecks. If the consumer is not in a place able to buy products and services, because of job insecurity, high taxes, or inflation, the economy will suffer. The first graph explores the changes in consumption from this year to next year. As we’ve mentioned several times already, it is expected that student loans returning this month will have a substantial drag on the economy that was not there prior: [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-real-consumption-QoQ2309010543.png "Us real consumption qoq2309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-real-consumption-QoQ2309010543.png) Speaking of student loans, consumers are reporting that the return of this payment will be difficult if not impossible to absorb into a family budget, depending on the household income. Fully 51% of people earning less than $50,000 annually report not being able to pay all of their student loan payments, with another 29% saying it will seriously impact other spending. That number actually increases in the higher income ranges, in which case 44% of people earning $50,000-$100,000 and 38% of people making more than $100,000 say the student loan payments will cause them to spend less in other places. This one factor is what we believe will take us from an economy barely hanging on, into a full-fledged recession in short order. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-real-consumption-QoQ-Student-loans2309010543.png "Us real consumption qoq student loans2309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-real-consumption-QoQ-Student-loans2309010543.png) This comes as consumers also report that all of the excess savings from the Covid-19 stimulus have finally evaporated (multiple charts): [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Pers-Sav2309010543.png "Us pers sav2309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Pers-Sav2309010543.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Pers-Sav-Income-v-Spend2309010543.png "Us pers sav income v spend2309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Pers-Sav-Income-v-Spend2309010543.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Pers-Sav22309010543.png "Us pers sav22309010543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Pers-Sav22309010543.png) The slowing of spending has been happening for a while, but we believe that will get much worse shortly. This graph shows the inventory levels of U.S. retailers over the last many years. The black line is massive, but that is because it shows the value of the retail inventory using currently inflated high prices. The blue line is a more accurate look at the inventory levels at retailers, and as you can see, retail inventories are climbing quickly. Because we know that most retailers have slowed their purchases and trucking has suffered a massive slowdown, this rise in inventory levels is NOT related to purchases stores are making, bur rather they are because stores are seeing fewer customers and lower sales. The inventory is stacking up on the retailers, who have, in turn, slowed their purchases from their suppliers. Indeed, China reported in July that their exports were down almost 15% from the year before. [![](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Retail-inventories2308310444.png "Us retail inventories2308310444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/09/US-Retail-inventories2308310444.png) ### What this means for you Despite statements to the contrary from various market pundits, we see a significant slowdown in consumer spending well underway already, and that will only get worse as student loans return this month. The slow-down can be seen at every point in the supply chain, all the way back to U.S. manufacturers and overseas exporters. We firmly believe a recession is already here, but will not be officially acknowledged for at least 3 more months. We remain conservatively invested and allow the economy to direct our decisions, not market sentiment and herd bias. The data clearly shows, from nearly every angle we can find, a deteriorating economic environment, and our clients are correctly positioned for protection against, and even the possibility to gain from, the coming downturn. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past spring, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic nSight: August 28, 2023](https://nvestadvisors.com/economic-update-7/) **Published:** August 28, 2023 **Author:** nVest Advisors **Content:** **Good morning and happy Monday!** A quick administrative note: the Economic nSight report will not be published next week, Monday, September 4 in observance of Labor Day. Let’s look at this past week’s major data points: Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **At the Top: Jackson Hole and the state of inflation** - **Housing update** - **Jobs update[](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-Cred2308080439.png)** - **Manufacturing update: Stagflation** - **Consumer & credit update** ## At the Top: ### Jackson Hole & the state of inflation The Federal Reserve Board met for their annual conference in Jackson Hole, WY last week, and everyone was waiting to hear from Chairman Jerome Powell on where he thinks interest rates will peak. Powell, correctly in our view, noted that inflationary pressures continue to mount and inflation looks to be trying to move upward again. He stressed the Fed’s commitment to getting core inflation to 2% (it’s more than double that right now), which likely means more interest rate hikes. One thing to note here is that there is a significant lag between a change in the Fed Funds rate (the shortest-term rate in the country’s economy) and its broader economic impact. Most economists believe it’s a 9-12 month delay before each rate hike will really show its impact. With that in mind, we are experiencing an economy that hasn’t yet been impacted by even half of the rate hikes we’ve experienced since March of 2022. We expect to see the economy begin to rapidly slow down in the coming weeks.\\, and are already seeing some of this in housing, jobs, and manufacturing. This week, however, even the service sector, which has been pretty resilient so far, is rapidly slowing down. ### What this means to you All roads point to a recession. I wish there was better news to deliver, but we are 100% convinced, based on objective economic data, that the economy remains on a course toward a slow-down, and that market participants are, at best, being obstinate in the face of a reality they don’t want to accept. With the reintroduction of student loan payments next month, I believe that consumers will finally be fully “tapped out” and we will, unfortunately, see collapsing spending on discretionary goods and services (those things you can live without if you have to), and rising credit card and loan delinquencies (we’re seeing some of this already – see below). Student loans returning just as inflation begins to climb again (causing more rate hikes) will crush what’s left of private consumption, and the recession will begin in earnest. Things happen slowly in economics until they don’t. We’ve been warning our clients and positioning our investment models for this for over a year now because the economy gives off lots of warning signs that something is wrong. You either heed those warnings, or you become one of the masses of people who will be saying in the coming weeks that the “sudden downturn” was “unexpected”. It was never unexpected – it was just in the way of the herd’s strong desire for it not to be true. As you’ll hear me say often if you are a client – the data is the data – it doesn’t care about politics or fads – it just IS. And investors will find out once again, as they do every single time a recession arrives: you can only pretend gravity doesn’t exist for so long. ## Housing Update Other than jobs, I don’t think we get more frequent updates on a particular part of the economy more often than housing. Every week it seems, we have updated insight on this most important sector. Interestingly, I’ve noticed a stark uptick this past week in the number of social media posts about housing and the lack of affordability for Millennials and Gen Z. They are absolutely correct: the surge in house prices the past few years, which we’ve documented extensively in previous reports, is in an unsustainable bubble, and like all bubbles, this one will also “pop”. First, let’s look at mortgage applications as the leading indicator of where housing is ultimately headed (you can’t just keep making houses forever if no one is buying them). Mortgage applications are deeply below all previous years in the last decade. Mortgages are seasonal – people move mostly during the summer months, so it’s common to see mortgages and home sales peak May- August and crash out during the winter. This year is following a seasonal trend but is well below previous years. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-MBA2308240531.png "Us mba2308240531 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-MBA2308240531.png) The reason for that is the combination of interest rates being so high as the Fed fights inflation, plus the preposterous spike in home prices since about 2019. A family buying the average home in 2013 at current interest rates would have a $577 monthly payment. In 2020 it nearly doubled to $977. However, just 3 years later, it climbed a whopping 73% to $2,322. This is obviously unsustainable, and one of two things MUST happen – either interest rates collapse so that home payments are affordable, or home PRICES must collapse. We believe, with a recession looming, it will be home PRICES before it is interest rates. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Affordability2308230536.png "Us affordability2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Affordability2308230536.png) Yet despite the fact that no one is obtaining a mortgage at least right now, home builders continue to crank out new houses. This is, again, not sustainable. The market is building homes it cannot sell (at least to individual families – investors in real estate are a major reason house prices have spiked so significantly – more on that in a moment): [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-New-v-MBA2308240531.png "Us new v mba2308240531 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-New-v-MBA2308240531.png) New home inventory is near decade highs – meaning, we’ve built too many. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-New-Inv2308240531.png "Us new inv2308240531 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-New-Inv2308240531.png) There is usually a tight correlation between mortgage applications and how many new homes are built (obviously). But since last year, that has gone wildly askew. It cannot be sustained. There cannot be houses built indefinitely if no one can qualify for a loan to buy them. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Resi-construction-downside-risks2308220445.png "Us resi construction downside risks2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Resi-construction-downside-risks2308220445.png) They’re doing this, however, because the inventory of EXISTING homes for sale is at all-time lows. This has to do with the historically low interest rates we experienced during Covid. Many homeowners refinanced their home loans or purchased bigger homes (including my wife and I), locking in interest rates as low as 2.5%. Those people cannot replace their current home loan with anything close to what they had before, so even though home prices have soared since Covid (our new home has almost doubled in value in just 3 years), there is little incentive to cash out and sell these homes for two reasons: no one can afford the mortgage payment on the home you’re selling, and your next home will be similarly inflated in price but with a MUCH higher interest rate to go with that new loan. So, sellers aren’t putting their homes up for sale. Not yet. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing-Inv2308230536.png "Us existing inv2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing-Inv2308230536.png) That lack of supply is one of the few things keeping home prices up right now. Demand has utterly collapsed because of the combination of high prices and high borrowing rates. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing2308230536.png "Us existing2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing2308230536.png) But the lack of sellers has kept prices up. For now. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing-price2308230536.png "Us existing price2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing-price2308230536.png) Another look confirming existing home sales are at decade lows (and the gap is widening): [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing-YTD2308230536.png "Us existing ytd2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing-YTD2308230536.png) Compared to the average for August of the last 6 “normal” years (2020 excluded), we’re 15% off of existing home sales, and it’s getting worse. This is a collapse in the real estate and mortgage industries. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing-v-avg2308230536.png "Us existing v avg2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Existing-v-avg2308230536.png) Here is the other major reason for the spike in home prices to begin with: families didn’t buy them all – INVESTORS are almost 25% of the buyers of American homes. Bought to be used as income sources from either long-term tenants or as AirBnB-type rentals, and sometimes even just to “flip” them in this unsustainable housing bubble, the inventory of homes was made artificially small due to so many investors who were not going to ever occupy the home as its residents. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-The-share-of-home-purchases-made-by-investors-remains-elevated2308220445.png "Us the share of home purchases made by investors remains elevated2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-The-share-of-home-purchases-made-by-investors-remains-elevated2308220445.png) Unfortunately, that means people who would otherwise buy a home of their own are forced to rent for now. This graph shows that the high demand for homes to rent has also kept rent rates up at all-time highs (and it accelerated again in the past few months). Even though the rate of increase in rent is slowing (black line), it still means rents are rising [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Rents-are-down-on-a-year-over-year-basis-but-rising2308220445.png "Us rents are down on a year over year basis but rising2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Rents-are-down-on-a-year-over-year-basis-but-rising2308220445.png) Thankfully, as home prices do come down (and they will), rent inflation will follow. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-HPA2308220445.png "Us hpa2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-HPA2308220445.png) ### What this means for you The housing market is currently in a bubble far worse than we experienced in the last recession, which was almost entirely caused by housing/mortgage shenanigans. I believe we are headed for a significant housing market decline in the coming months. Clients who are interested in buying a home or a second home may very well have the opportunity to do so at dramatically better prices in the next 18-24 months, but other clients who are interested in selling property may have a long time to wait for those home prices to return. Our macro models are not invested in either real estate or mortgage/property finance at this time. ## Jobs Updates We look at jobs regularly, and the current trajectory remains unchanged. Initial claims, while still low, are trending higher, and continuing claims remain my most persistent worry. This week’s initial jobless claims came in slightly below expectations, though trending against historical trends. This week, we have a couple of other significant bits of data that sheds better light on where we’re headed. First, initial claims for unemployment were lower these past two weeks but I am leery about the accuracy of the data, because ever time we saw a significant drop in initial claims this summer, it was due to one state removing a huge number of claims at once, claiming it was removing “fraudulent” claims. To remove them from INITIAL filings instead of continuing filings doesn’t make sense to me. Did hundreds of thousands of fraud cases show up in the same week? No, or we would have seen major spikes in initial claims which we have not seen. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims2308250540.png "Us claims2308250540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims2308250540.png) As we’ve said many times, however, it is the CONTINUING claims that matter most to our analysis. It’s one thing to lose a job, but if you lose one can cannot find a new one quickly, that says much more about the state of the economy. Continuing claims, while still low, are trending against seasonal norms: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims-cont2308250540.png "Us claims cont2308250540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims-cont2308250540.png) And when we look at the continuing claims vs. an average of the same week in the last 3 “normal” hiring years, we can see the trend is uncomfortably up and headed in the wrong direction: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims-cont22308250540.png "Us claims cont22308250540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims-cont22308250540.png) There is another way to see whether the numbers are being skewed by unusually strong hiring but only in some states. If we look at the number of STATES with rising cases of unemployment (instead of a total headcount nationwide), we can see a much more concerning trend. The black line is the percentage of states with rising unemployment claims. The blue line is the average of this same statistic from all recessions going back to 1990. This tells us a number of things. ***All things being the same, we are very likely at or within weeks of actually entering a recession.*** It also shows that unemployment doesn’t just meander up and back down again – it surges. Unemployment, if it follows the historical trends into this next recession, will suddenly spike up across the states much more evenly, plateau off for as much as a year, and then surge back down again as things pick up. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims-cont-recession2308250540.png "Us claims cont recession2308250540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims-cont-recession2308250540.png) We can also see from published job openings (which has been rapidly dropping this summer) that employment opportunities are quickly drying up: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Active-jobs-index-AAA2308240531.png "Us active jobs index aaa2308240531 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Active-jobs-index-AAA2308240531.png) This past week, we also got revisions to previous jobs numbers. Revised job estimates were about 300,000 lower than previously reported. This is common, as you can see from the graph that it is much more likely to have had initial jobs numbers be overly optimistic than not (revisions tend to be downward). Take note of the area between 2007-2011, which was our last recession. Jobs numbers were revised down by nearly 1,000,000 in 2009, but we are right at where the jobs numbers were first revised down in 2007. In fact, 2006-2007 looks VERY similar to 2022 and 20223 so far. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Payrolls-revision2308240531.png "Us payrolls revision2308240531 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Payrolls-revision2308240531.png) Also of note, in those 300,000 jobs that were over-reported and needed to be revised down, all of them were in the private sector, with both manufacturing and service jobs being affected pretty evenly. The one that hired more than anyone thought? The government. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Payrolls-revision32308240531.png "Us payrolls revision32308240531 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Payrolls-revision32308240531.png) ### What this means to you The job market is showing much more obvious signs of strain. Sadly this will get worse as we head into a recession – that’s an economic certainty and one the Federal Reserve is actually trying to achieve without ***too*** many job losses. We urge our clients to reduce their debt load and increase their personal savings, and keep investments conservatively positioned for now. A recession doesn’t mean the end of the world, but it does mean seeing our unemployment rate climb from its current 3.5% to maybe 5.5% or 6.5%. That means, sadly, a lot of lost jobs and financial hardship for many families, so please take the risk of job insecurity seriously. ## Manufacturing Outlook: Stagflation The S&P Global (meaning: all of the United States) PMI reports for July showed a downturn again in both Manufacturing and Services. Manufacturing has been in recessionary territory since the middle of 2022: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-PMI-Manuf2308240531.png "Us pmi manuf2308240531 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-PMI-Manuf2308240531.png) …while Services has held on for the most part. It looked like Services was rebounding after bottoming last year, but has been turning down again for the last quarter: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-PMI-Serv2308240531.png "Us pmi serv2308240531 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-PMI-Serv2308240531.png) In addition to assessing what’s already happened (PMI reports are always backward-looking), it is also important to look at current indications of economic activity. We are also seeing a decline in the tonnage for freight shipping as the year progresses, also. Here we see tonnage, while still relatively strong, is trending lower and is the fifth-lowest out of 10 years so far. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Truck-tonnage2308230536.png "Us truck tonnage2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Truck-tonnage2308230536.png) What is most concerning to me as an analyst of these manufacturing reports is the nearly universal indication that inflation is returning in a pretty rapid and aggressive fashion. Chart after chart from companies across the nation indicates that prices are rising on their raw materials and wages. Companies are expecting to pay more, and to charge more: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Richmond-Manuf-Wages2308230536.png "Us richmond manuf wages2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Richmond-Manuf-Wages2308230536.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Richmond-prices-expected2308230536.png "Us richmond prices expected2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Richmond-prices-expected2308230536.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Philly-Manuf-prices2308230536.png "Us philly manuf prices2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Philly-Manuf-prices2308230536.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Philly-prices2308230536.png "Us philly prices2308230536 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Philly-prices2308230536.png) The economic condition where you have declining (or stagnant) productive output, combined with increasing prices is called STAGFLATION. It can be argued that stagflation is the worst of all economic conditions. It may be too early yet to determine of inflation truly is returning for another ugly rise, but if it is, it is happening even though demand for products and services is slowing down. This would be the definition of a stagflationary environment. ### What this means for you We are 100% certain that a recession is imminent. We’ve said this for many months now. We believe we are on the cusp now, and as the data bits below regarding consumer financial health will indicate, we are very likely about to see significant reversals in several of the investment markets. Our clients remain very conservatively invested in our defensive, macroeconomic data-dependent models, and we are watching for opportunities to improve safety and increase yields on a weely basis. ## Consumer & Credit Update Finally, we have a smattering of diverse “hints” around consumer spending and bank credit to give us a better picture of where we are headed. Remember that 70% of our entire economy depends on private consumption – that is, you and I spending our paychecks. If the consumer is not in a place able to buy products and services, because of job insecurity, high taxes, or inflation, the economy will suffer. First up: credit cards becoming delinquent. While still below the worst of the 2008-2011 recession, our credit card delinquency rates have now climbed to the same level as the early days of that recession, and well above the financial challenges related to Covid: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CC-delinq2308280543.png "Us cc delinq2308280543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CC-delinq2308280543.png) By far, the banks most affected by the climbing delinquency rates on credit cards are the smaller community banks. The gray shaded area is the difference between the delinquency rates at small banks vs. delinquencies at large ones.[![](https://nvestadvisors.com/wp-content/uploads/2023/08/CR-CC-delinq-small-v-large-banks2308220445.png "Cr cc delinq small v large banks2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/CR-CC-delinq-small-v-large-banks2308220445.png) This is happening just as student loan payments resume in October. Consumers enjoyed higher savings rates during and shortly after the Covid pandemic because of all of the stimulus spending (and nothing was open to go spend it), but those savings have largely been depleted now. Most estimates are that the excess savings from Covid fiscal policies were finally exhausted in July. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Excess-savings2308220445.png "Us excess savings2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Excess-savings2308220445.png) The sudden downturn in so many economic indicators has turned the Economic Surprise Index on a downward trajectory: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Citi2308280543.png "Us citi2308280543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Citi2308280543.png) And consumer sentiment, which had seen a couple of months of recovery as inflation eased, reversed and came in below expectations (2 charts): [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Mich2308280543.png "Us mich2308280543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Mich2308280543.png) As I mentioned, the consumer has a very large impact on the overall economy, so as consumers have less and less extra money to spend, things crash for business very quickly: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Consumption-as-share-of-GDP2308250540.png "Us consumption as share of gdp2308250540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Consumption-as-share-of-GDP2308250540.png) And so, unsurprisingly, when consumers pull back, business confidence drops. This can become a bit of a self-fulfilling prophesy because as business sentiment drops, any plans for expansion and hiring will also slow down, which may increase the negative sentiment of the workers. This feedback look can itself turn into a recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-SMI-Bus-conf2308220445.png "Us smi bus conf2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-SMI-Bus-conf2308220445.png) As a result, durable goods orders dropped unexpectedly: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-dura2308250540.png "Us dura2308250540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-dura2308250540.png) Indeed, it looks like business orders have peaked. What is interesting to note is how much inflation has affected spending for businesses, too: the black line, which is flat all year, shows how much companies have spend on capital goods orders, but that includes the elevated prices due to inflation. The blue line shows what companies have actually bought. So we’re buying much less than we were a few years ago, we’re just paying MUCH more for it. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-dura-cap-goods-real2308250540.png "Us dura cap goods real2308250540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-dura-cap-goods-real2308250540.png) We’re also watching business bankruptcies very closely because we’ve seen a big uptick in them in the past few months. A surprise this month was the high number of large healthcare companies that filed for bankruptcy protection, more than double the number since Covid. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/CR-HC-bankruptcies2308220445.png "Cr hc bankruptcies2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/CR-HC-bankruptcies2308220445.png) And we are seeing signs of bank stress. This chart shows the borrowing banks are doing from the Federal Reserve in order to meet their reserve requirements. A bank that cannot meet its reserve needs is considered insolvent and would be taken over by the FDIC. Since the spring of this year, when the Federal Reserve opened an emergency line of credit for banks (the green bars), the use of this program has skyrocketed, and concerningly, is actually increasing each week now: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/CR-Bank-Term-Funding-Program-usage-keeps-rising-suggesting2308220445.png "Cr bank term funding program usage keeps rising suggesting2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/CR-Bank-Term-Funding-Program-usage-keeps-rising-suggesting2308220445.png) And for clients who wonder why we are still so defensively invested in our models, I present this chart, that shows the low of money into and out of different funds. Here you can clearly see what we call “herd mentality” in full force. Massive amounts of money is flowing into the technology sector, exclusively. Because the NASDAQ and S&P 500 have so many tech companies in their indexes, these indexes have looked to be healthy for most of 2023. However, a closer inspection shows deterioration across the entire economy… EXCEPT tech stocks. We believe this rally is unsustaniable and not realistic because tech stocks operate in the same economic environment as the remaining 10 sectors, and that this bubble, like all bubbles, will finally burst. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-DB-Tech-fund-flows-remain-string2308220445.png "Us db tech fund flows remain string2308220445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-DB-Tech-fund-flows-remain-string2308220445.png) ### What this means for you We remain conservatively invested and allow the economy to direct our decisions, not market sentiment and herd bias. The data clearly shows, from nearly every angle we can find, a deteriorating economic environment, and our clients are correctly positioned for protection against, and even the possibility to gain from, the coming downturn. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past spring, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [August Client Alerts](https://nvestadvisors.com/august-client-alerts/) **Published:** August 28, 2023 **Author:** nVest Advisors **Content:** ## Happy (almost) Autumn! **We hope you’re enjoying these final summer days! As we head toward the end of August, clients and 401k plan participants, please note the following alerts and notifications:** ### Service Hours U.S. investment markets, banks, and government offices are closed on Monday, September 4 in observance of Labor Day. Our office is also closed in observance starting Saturday, September 2 through Monday, September 5. We will resume normal office hours on Tuesday, September 5. ### Charles Schwab / TD Ameritrade Merger [![](https://nvestadvisors.com/wp-content/uploads/2023/08/CS_TDA_Buyout-300x225.jpg "Cs_tda_buyout nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/CS_TDA_Buyout.jpg)The final merger of Charles Schwab and TD Ameritrade will be THIS WEEKEND, September 2-4. Here is what is taking place: 1. We’ve already entered the blackout period where no new account administrative tasks can be performed on your accounts at TD Ameritrade until after the merger. 2. All client accounts currently at TD Ameritrade will be moved over the Labor Day weekend to Charles Schwab. During this time, your account(s) may become un-viewable on either website. This is anticipated and expected and does not mean anything is wrong. 3. As of Tuesday, September 5, your accounts will be set up to be viewed on the Charles Schwab website. TD Ameritrade’s website will be shut down and re-routed to Schwab. 4. Our client portal for our Schwab / TDA clients will be unaffected and there should be no interruption in your data. **Please reach out to our office if you have any questions or difficulty accessing your accounts next week.** We limited the appointment calendar next week to give us extra service hours to manage any difficulties with the merger, and will of course alert our clients to any broadly-occurring issues (we don’t expect any). ## That’s all for now! Enjoy your long weekend! ***Jeremy, Austen and the team at nVest Advisors*** **Categories:** Business Stories, Client News, Client Service, Company News, From our CEO, Individuals and Families, Mailchimp, public --- ### [7 economic indicators you should know as a small business owner](https://nvestadvisors.com/7-economic-indicators-small-business/) **Published:** August 23, 2023 **Author:** nVest Advisors **Content:** As a dedicated small business owner, it’s vital to keep your finger on the pulse of the economy. Economic indicators offer valuable insights into the current (and upcoming) economic landscape, helping you steer your business in the right direction and avoid costly mistakes like trying to expand just as the economy recedes, or missing out on growth opportunities because you weren’t ready when customers were more able to spend. In today’s post for business owners, we will walk you through what we consider the seven essential economic indicators you should watch closely. You’ll learn what each indicator means and how it impacts your business’s growth and strategies. To keep this post timely and provide real-time data, no matter when you find it, we’ve embedded a real-time measure of each indicator from a terrific free source, [TradingEconomics](https://tradingeconomics.com/). These graphs indicate the economic data for the United States, but [TradingEconomics](https://tradingeconomics.com/) covers nearly every country in the world. For those indicators that we could not embed a live look, we linked you to the data. **A note about these graphs –** the most recent data point is interesting, but it’s not always correct and certainly doesn’t tell the whole picture. Trend and trajectory matter much more than one recent data point, which is often revised later when more information is available. Economists combine this data, and that of many other indicators, to derive a better overall picture of the health of the economy. At nVest Advisors, we do that research on behalf of our clients, and to help us guide your investments, on a weekly basis that [you can read in our Weekly Economic nSight posts here in our blog.](https://nvestadvisors.com/category/mailchimp/rssecon/) ### Gross Domestic Product (GDP) source: [tradingeconomics.com](https://tradingeconomics.com/united-states/gdp-growth) Gross Domestic Product (GDP) serves as a compass for the economy’s overall health. It measures the total value of goods and services produced within a country. GDP varies widely between developed nations and those we call “emerging markets”. Here in the United States, when GDP is rising between 2% and 3%, this indicates a flourishing economy, consumer confidence, and potential increased demand for your products or services. Conversely, if GDP drops below 1%, it could signal a struggling economy with reduced consumer spending. ### Unemployment Rate source: [tradingeconomics.com](https://tradingeconomics.com/united-states/unemployment-rate) The Unemployment Rate gauges the percentage of job seekers who can’t find work. An unemployment rate below 5% is a positive sign, suggesting a thriving job market and increased consumer spending power. It may also indicate that finding new team members may be a challenge and that higher wages and benefits may be necessary to lure them away from competitors, which is one of the earliest indications that inflation may become a problem down the road. An unemployment rate exceeding 7% might indicate an economy in trouble, potentially leading to a decrease in consumer demand. ### Consumer Price Index (CPI) source: [tradingeconomics.com](https://tradingeconomics.com/united-states/inflation-cpi) The Consumer Price Index (CPI) tracks price changes for a basket of goods. If CPI increases within a 1-2% range, it signifies stable inflation rates. This can be beneficial, as it implies consumers have steady purchasing power. However, if CPI climbs beyond 3%, it could point to rising prices that might affect your costs and margins negatively and the consumer’s ability to spend. Inflation tends to come in waves after excessive changes in the money supply (like what recently happened during the Covid-19 pandemic), and it must be fought aggressively by a nation’s central bank through reversals in loose monetary policies. Inflation that becomes entrenched over longer periods of time can be very difficult to undo, resulting in permanent price and wage hikes and permanent changes in consumer spending patterns (this is called “demand destruction”). In short, we want just a little inflation, as it indicates a growing economy, but too much becomes a major problem. Fighting inflation is one of the two mandates we gave to the Federal Reserve Bank when it was founded in 1913. ### Retail Sales source: [tradingeconomics.com](https://tradingeconomics.com/united-states/retail-sales-annual) Retail Sales are a barometer of consumer confidence and spending. A monthly growth of 1-2% shows consumer optimism and a potential sales boost for your business. On the flip side, declining retail sales of more than 2% could suggest a cautious consumer attitude, which might require adjustments to your marketing strategies. ### Business Confidence Index [OECD Chart: Business confidence index (BCI), Amplitude adjusted, Long-term average = 100, Monthly, Jan-2008 – Aug-2023](https://data.oecd.org/chart/7aiB) [The Business Confidence Index](https://tradingeconomics.com/united-states/business-confidence) reveals entrepreneurs’ economic outlook. An index value above 100 indicates heightened optimism, which might lead to more business investments and potential growth opportunities for you. Should the index dip below 100, it could signify economic uncertainty, prompting you to reassess your business strategies. ### Interest Rates source: [tradingeconomics.com](https://tradingeconomics.com/united-states/interest-rate) Interest rates set by central banks impact borrowing costs. Lower rates often stimulate economic activity, so when rates hover between 0-2%, it can be an ideal environment for business expansion and consumer spending. Conversely, higher rates of 4% or more could discourage borrowing and spending, potentially impacting your sales. As we mentioned during the discussion of the CPI number, inflation is often controlled in large part by the availability (and cheapness) of money, so one of the primary tools our Federal Reserve bank has to tame runaway price inflation is to raise interest rates and reduce the money supply (a monetary policy called quantitative tightening), and when the economy is in bad shape, the Fed can lower rates and do other stimulus activities (a policy called quantitative easing). ### Housing Starts source: [tradingeconomics.com](https://tradingeconomics.com/united-states/housing-starts) Housing Starts reflect new residential construction projects. If starts are between 1-2% or higher, this suggests a healthy housing market, indirectly benefiting sectors like home improvement. However, a decrease in housing starts by more than 2% might signal caution, as it can affect related industries and consumer spending. ## The Bottom Line By keeping an eye on these key economic indicators, you can gain insights into the broader economic environment and make more informed decisions for your small business. Understanding how these indicators impact your industry and customer base can help you anticipate trends, adjust strategies, and ensure your business thrives in varying economic conditions. As your financial advisor, our goal is to equip you with the knowledge you need to navigate the economic landscape effectively and guide your small business toward lasting success. We encourage you to leverage these indicators as tools to key points of insight into the larger business climate to help you make key business decisions. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to 3(21) or 3(38) fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. If your company would like to receive professional planning and investment assistance, a competitive bid from us for your current company retirement plan, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, Colorado Secure Savings, commercial paper, custodian, economic, economy, empowerment, ERISA, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, Secure Savings, SEP, SIMPLE, SIPC, small business, state-run IRA, state-sponsored IRA, sustainable, trends --- ### [Weekly Economic nSight: August 21, 2023](https://nvestadvisors.com/economic-update-6/) **Published:** August 21, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **At the Top: China’s Economy Tumbles** - **Housing update** - **Leading Indicators update** - **Jobs update[](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-Cred2308080439.png)** ## At the Top: ### China’s Economy Tumbles We seldom talk about other national economies in this space because our clients are entirely U.S. citizens. However, our largest trading partner and nation with whom the United States has a love/hate relationship, China, is experiencing a broad, systemic economic challenge that deserves mention. Given the increasingly interconnected economies in the world, the fear of one country’s economic problems spreading like a contagion into other economies is a real one. The news coming from China is indeed pointing to something like a 2008-style of financial crisis for the nation. China is a unique country in many ways: it is a strange blend of free market capitalism and strict, command-style control by the communist political regime. And because of that dual system, it is often difficult to trust all of the data figures coming out of China, and when Chinese economic challenges arise, it’s often unexpected and much worse than investors were guessing. The past few weeks have seen some very seriously challenging data points come officially from China, making us believe things are actually much worse than they appear: - China’s economy is significantly focused on cheap exports – about 21% of their economy, in fact. China’s exports (mostly to the U.S. and Europe) dropped 14.5% over the prior year. This tells us much about the state of U.S. consumption, as well. - China’s (official) unemployment rate for younger workers under 30 is around 25%. That figure may be much higher, however, as China opted not to release the figures for July at all. - About 70% of Chinese household wealth is stored in real estate, and real estate development companies in China are a massive part of their overall economy, producing as much as 30% of their total GDP. With the collapse in the Chinese real estate industry, we’re also seeing the largest drop in mortgage lending in China’s history. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/CHINA-Mortg-lending2308160441.png "China mortg lending2308160441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/CHINA-Mortg-lending2308160441.png) - This past week, [Evergrande, the second-largest Chinese real estate development and holding company, filed for Chapter 15 bankruptcy in New York after missing several interest payments on its bonds](https://www.reuters.com/world/china/china-evergrande-files-protection-us-court-part-32-bln-debt-overhaul-2023-08-18/). About another dozen Chinese real estate companies have also recently missed or been late on bond interest payments. The Evergrande bankruptcy filing here in the U.S. was due to its inability to pay U.S.-based creditors as it reorganizes. [Chapter 15 is a type of bankruptcy filing when foreign companies are going through bankruptcy proceedings in their home country and need relief against claims coming from U.S. investors or creditors at the same time.](https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-15-bankruptcy-basics) - In an effort to hold up the collapsing real estate market, the Chinese Central Bank has been cutting lending interest rates and the CCP (the government authority) has been “encouraging” Chinese banks to lend more and to use reserves to buy Chinese stocks in order to hold their equity markets up. - The Yen is collapsing in value compared to the dollar. This will help Chinese product prices come down here in the U.S. (aiding our inflation outlook in the short-term), and may spur some investment in China by U.S. companies, but it also comes from a lack of faith in the central planning of the Chinese government to alleviate the current economic challenges. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/CH-CNY-Interventions-are-not-working2308210457.png "Ch cny interventions are not working2308210457 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/CH-CNY-Interventions-are-not-working2308210457.png) ### What this means to you China is the world’s second-largest economy and one of the primary trading partners with the U.S. and several other large nations. It is also a place of much investment by both U.S. companies (for manufacturing and service parts of their supply chain) and investment markets looking to capitalize on the decades of massive growth in China. If the Chinese economy continues to fall as hard as its current trajectory predicts, it will most certainly affect the economies of other countries. I am particularly concerned about the interconnectedness between many of the larger U.S. banks and Chinese real estate debt. We’ve financed a lot of what is now collapsing. Banks here have had more than two years to deleverage and disinvest from that space since the first serious signs of problems with Evergrande and other real estate companies came to light – did they? Time will tell. ## Housing Update We continue to remain watchful of a downturn in residential real estate, but we won’t see housing fall uniformly across the entire process of building out a new property. Permits and plans have to be completed first, then financing must be obtained, and finally the house gets started, finished, and ultimately turned over to the buyer. Housing STARTS held up okay last month, which makes sense since we had a few months of slightly lower mortgage rates (around 6%). [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Starts-above-20222308170440.png "Us starts above 20222308170440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Starts-above-20222308170440.png) However, as rates have climbed back up again, reaching peaks not seen since 2002… [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Mortg-Rate2308160441.png "Us mortg rate2308160441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Mortg-Rate2308160441.png) …new loans and building permits have come down sharply: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Starts-permits2308170440.png "Us starts permits2308170440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Starts-permits2308170440.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-MBA2308170440.png "Us mba2308170440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-MBA2308170440.png) ### What this means for you As long as interest rates remain high – which the Federal Reserve’s FOMC has stated will likely be the case for much longer than the markets have priced in – expect to see a weaker and weaker housing market. Clients who are interested in buying a home or a second home may very well have the opportunity to do so at dramatically better prices in the next 18-24 months, but other clients who are interested in selling property may have a long time to wait for those home prices to return. Our macro models are not invested in either real estate or mortgage/property finance at this time. ## Jobs Updates We look at jobs regularly, and the current trajectory remains unchanged. Initial claims, while still low, are trending higher, and continuing claims remain my most persistent worry. This week’s initial jobless claims came in slightly below expectations, though trending against historical trends.. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-claims2308180507.png "Us claims2308180507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-claims2308180507.png) We continue to see jobless claims come in higher each week over the same week in the average of the last three “normal” employment years. This means we definitely have a cooling off of employment compared to before and just after the Covid-19 pandemic. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-claims22308180507.png "Us claims22308180507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-claims22308180507.png) But as I’ve said many times, the continuing claims are where we need to focus a lot of attention. Continuing claims mean that, which overall employment is still okay, it is becoming harder and harder to find a job once one is lost. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-claims-cont2308180507.png "Us claims cont2308180507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-claims-cont2308180507.png) ### What this means to you The job market will get worse as we head into a recession – that’s an economic certainty and one the Federal Reserve is actually trying to achieve without ***too*** many job losses. We urge our clients to reduce their debt load and increase their personal savings, and keep investments conservatively positioned for now. A recession doesn’t mean the end of the world, but it does mean seeing our unemployment rate climb from its current 3.5% to maybe 5.5% or 6.5%. That means, sadly, a lot of lost jobs and financial hardship for many families, so please take the risk of job insecurity seriously. ## Leading Indicators Outlook We received an updated Leading Indicators report from the Conference Board this past week. This report composites a number of factors together to give us a good indication of where the economy is headed. For sure, we are trending toward a recession. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Leading2308180507.png "Us leading2308180507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Leading2308180507.png) It’s interesting to look at what makes up the LEI and which ones are pulling the economy up or down. Stock prices are the major factor holding the LEI up to even where it is today (and the markets have corrected about 2% downward since this survey was taken). The only other positive contributor is jobless claims (discussed above). [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Leading-Detail2308180507.png "Us leading detail2308180507 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Leading-Detail2308180507.png) ### What this means for you No one knows the future for sure, but the LEI has been a consistent predictor of economic slowdowns. It’s important to remember that most of what we look at each week are LAGGING indicators – looks backward at events that have come and gone already. LEADING indicators are telling us what is queueing up. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past spring, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [A dozen ways to survive a potential job loss](https://nvestadvisors.com/recession-job-loss-survive/) **Published:** August 16, 2023 **Author:** nVest Advisors **Content:** In times of economic uncertainty, facing unemployment can be a daunting challenge. However, it’s important to remember that every challenge presents an opportunity for growth and resilience. As a trusted financial advisor for families for over 15 years, we’re here to guide you through this journey and provide you with a hopeful way to handle unemployment as a result of a recession. By adopting a positive mindset and strategic approach, you can not only weather the storm but also come out stronger on the other side. ### **Assess Your Financial Landscape** Take stock of your financial situation. Calculate your available savings, emergency fund, and any severance packages. Having a clear understanding of your resources will help you plan effectively. ### **Create a Lean Budget** Adjust your budget to match your new financial reality. Cut non-essential expenses and prioritize necessities. This budgeting exercise will give you a sense of control and direction. ### **Leverage Unemployment Benefits** Familiarize yourself with the unemployment benefits available in your area. Apply promptly and make sure you’re receiving the assistance you’re entitled to. ### **Explore Alternative Income Streams** Consider freelance work, gig opportunities, or remote part-time jobs that can provide a source of income while you search for a more permanent position. ### **Invest in Skill Enhancement** Use this time to invest in upgrading your skills and knowledge. Online courses, workshops, and certifications can make you more competitive in the job market. ### **Networking and Professional Development** Engage with professional networks, attend virtual conferences, and connect with industry peers. Networking can open doors to potential job opportunities. ### **Resume and LinkedIn Profile Revamp** Polish your resume and LinkedIn profile to showcase your skills, experience, and accomplishments. Highlight your adaptability and willingness to embrace challenges. ### **Volunteer and Community Engagement** Volunteering can not only provide a sense of purpose but also help you expand your network and gain new experiences. ### **Maintain a Positive Routine** Stick to a daily routine to stay focused and productive. This routine should include job searching, skill-building, and time for self-care. ### **Focus on Mental and Emotional Well-being** Dealing with unemployment can be emotionally taxing. Practice mindfulness, engage in physical activity, and seek support from friends, family, or professionals. ### **Stay Informed and Adapt** Keep yourself updated on industry trends, economic shifts, and job market conditions. Adapt your strategy accordingly and remain flexible. ### **Set Realistic Goals** Break down your job search and financial goals into manageable steps. Celebrate small victories along the way to maintain a positive outlook. ## The Bottom Line Facing unemployment during a recession is undoubtedly challenging, but it’s also an opportunity for growth and transformation. By embracing a positive mindset, staying proactive, and utilizing the resources available to you, you can navigate this phase with hope and resilience. Remember, we’re here to support you every step of the way. Together, we’ll pave a path toward a brighter financial future, even in the face of adversity and events beyond your control. ### [Are you financially fit? Take our free assessment here](https://app.precisefp.com/w/tqku3v). nVest Advisors specializes in helping working-age, professional families and small businesses start their financial journey, grow every step of the way, anticipate and correct setbacks, and celebrate with you when we reach the top together. Your success is all we care about, and helping you overcome the perils along the journey to financial freedom, including the times when you may be your own worst enemy, is how we spend our day. It’s genuinely a privilege to help families and small businesses who want tomorrow to be better than today. Reach out to us for a totally free, totally no-risk portfolio checkup today if you’re concerned about where your finances sit for the coming recession, particularly if you are at or approaching retirement age. A review of your current risk in relation to your tolerance will be a key part of it. We’re delighted to offer you our thoughts. You can schedule that time with us below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client Service, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Individuals and Families, Investing General, LifeCycle, Mailchimp, Media, public **Tags:** advisor, agent, background, behavior, behavioral finance, bias, cognitive bias, colorado, finance, financial, insurance, invest, investing, investing success, investment, job, job loss, Kansas, New Mexico, nVest, Oklahoma, planner, recession, regulator, regulatory, RIA firm, risk, risk management, risk tolerance, rules, small business, survival, texas, Utah, Wyoming --- ### [Weekly Economic nSight: August 14, 2023](https://nvestadvisors.com/economic-update-5/) **Published:** August 14, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. - **At the Top: Inflation concerns persist** - **Housing update** - **Jobs update** - **Small Business Update** - **How is the consumer holding up?[](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-Cred2308080439.png)** ## At the Top: ### Inflation concerns persist We received an update to the official CPI numbers (reflecting prices into July), and for the first time in many months, inflation ticked upward. This is something we have been concerned about for some time now. Even more concerning is that the data for the CPI report was gathered before a significant upward move in energy prices that we believe will continue into the winter months. We’ve discussed that concern for many months (that energy prices were held artificially low by the Biden Administration’s draining of the Strategic Petroleum Reserve in 2022). We’ve also talked many times about headline inflation vs. core inflation, and that core inflation is the primary concern for the Federal Reserve in its battle against inflation because the components of core inflation are those items that families will have to spend the majority of their budget on, the majority of the time. First, headline inflation came in as increasing Month-Over-Month again, with prices rising 0.2% higher than they were in June. You can see that the rate of inflation, while slowing, is still climbing: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CPI2308110540.png "Us cpi2308110540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CPI2308110540.png) The CORE inflation similarly rose 0.2% over June, and remains persistently high at about 4.8% annual increases. This is the third year in a row for inflation to be climbing, and Core Inflation tends to be much more “sticky” than the Federal Reserve wants it to be. The goal for the Fed is to have Core inflation at 2% annually, and it remains stubbornly 2.5 times higher than that despite the fastest rate hiking cycle in history. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CPI-Core2308110540.png "Us cpi core2308110540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CPI-Core2308110540.png) Services CPI by itself also showed remarkably stubborn inflation, as service prices rose 0.4% over June, a reversal from previous trends. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CPI-Core-Services2308110540.png "Us cpi core services2308110540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CPI-Core-Services2308110540.png) What we are concerned with inflation is that it tends to ride in waves as central bankers take their foot off of the economy’s “brake” too soon (out of fear of causing a more serious economic downturn), and as a result, inflation resumes an upward trajectory. The most recent inflationary cycle we can compare the current trend to ran from 1966 to 1982. Initially sparked by spending on the Vietnam war and the passing of Civil Rights legislation that dramatically increased entitlement spending, the blue line below shows that inflation rose in three successively larger waves until finally being “broken” by then-Fed Chairman Paul Volcker in 1980-1982. Volcker was forced to raise interest rates above 18% for a period of time, and effectively force the economy into a hard-landing recession, to finally bring inflation back down. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CPI-reacceleration2308110540.png "Us cpi reacceleration2308110540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-CPI-reacceleration2308110540.png) We see already how closely the current inflationary cycle (overlaid with the 1966-1982 cycle in orange), is tracking with the previous cycle, and how the waves are nearly identical both in scale and duration. We remain very concerned that despite most of the market sentiment that inflation has been beaten, this is not the case, and inflationary pressures persist: - Energy prices are climbing again and there is less and less supply. Where energy prices go, so goes the price of everything else, because it takes energy to manufacture, transport, store, and deliver pretty much everything in our economy. Add to this the fact that the U.S. government must refill the strategic petroleum reserves at a time when production by OPEC+ nations are scaling back production, and the number of active oil rigs in the U.S. is rapidly declining. Energy stocks have risen over 12% since the last CPI data was taken. - The U.S. Government simply cannot stop spending. Since the debt ceiling was raised in June, the government has added another $1.6 trillion to the national debt, far more than any other year except the Covid-19 shutdowns. When you match this with the higher interest rates they must pay due to the Federal Reserve’s rate hikes trying to tame inflation, we will have more than $1 Trillion – just on interest payments on our debt – for the first time in our nation’s history. All of that had to be newly printed by the Federal Reserve. You cannot tame inflation if the amount of money circulating in the economy keeps expanding – that is literally what “inflation” means. - Housing prices rebounded in July and don’t accurately reflect the current CPI numbers. Housing is a significant portion of Core CPI, and home prices remain stubbornly high (for now). - Food prices are climbing again. Some of the increase is related to weather or crop issues, but many are rising simply due to broad inflationary pressures. ### What this means to you Obviously, there is a lot of work still to do to get inflation under control. This will mean even higher interest rates, held high for even longer than many people expect. The recent stock market rally, particularly in tech and real estate stocks, was based on the (in our opinion, errant) notion that rates would soon be coming back down. If that does not happen, we may see an even more serious recession than most analysts have predicted, and certainly more than the markets have priced in. The reality that inflation is not beaten has started to finally dawn upon many market participants who until a week ago, were cheering for new highs in the markets before the end of the year. The market turned negative last week, and we believe that trend will continue. Our clients remain invested based on the reality of the macroeconomy and the expectation of a recession, perhaps as soon as Q4 of this year (especially when student loan payments resume in 45 days – more on that below). ## Housing Update We continue to remain watchful of a downturn in residential real estate. So far, house prices have held up pretty well, though a recession will cause a number of job losses which will sadly translate into lost homes, as well. We are growing more and more concerned by this possibility as the totality of household debt is now at record levels due to consumer spending combined with a rapid climb in variable interest rates. At the peak of the 2006-2007 housing bubble, homebuyers’ debt-to-income ration reached an unsustainable 39.1%. Today, it’s at 40% and climbing: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Debt-to-income2308100442.png "Us debt to income2308100442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Debt-to-income2308100442.png) Mortgage rates remain near multi-decade highs: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Mortg-Rate2308100442.png "Us mortg rate2308100442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Mortg-Rate2308100442.png) And banks are starting to tighten their lending standards, rejecting more loan applications. You can see here that even those with better than 760 credit scores are no longer getting morgtages: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-mortg-originations-by-credit-score2308100442.png "Us mortg originations by credit score2308100442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-mortg-originations-by-credit-score2308100442.png) Total mortgage applications remain at decade lows and are trending lower: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-MBA2308100442.png "Us mba2308100442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-MBA2308100442.png) I want to reiterate another concern that came to light last week, that may indicate much worse systemic problems in the residential housing market, related in many ways to what we expect to see in commercial real estate. [The Philly branch of the Federal Reserve published a report that is worth the read for those who are interested.](https://www.philadelphiafed.org/consumer-finance/mortgage-markets/owner-occupancy-fraud-mortgage-performance) In it, they note that there appears to be widespread fraud by real estate investors who falsely claimed that the homes they were buying for either long-term rentals or short-term “AirBnB”-type rentals, were actually primary residences. This would have allowed many of them to be purchased with 30-year residential mortgages instead of 10-year adjustable-rate business loans: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/F23egRnaIAAHgx9.jpg "F23egrnaiaahgx9 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/F23egRnaIAAHgx9.jpg) If there is widespread misrepresentation underway (and indeed the Fed report says this is “ongoing”), it caused, by the Fed’s own estimate, a false impression of a home buyer’s market that may be 50% larger than it really is. This is a huge number and would indicate that home values are far too high for actual market demand and that a large number of homes that were bought by investors – but falsely called primary residences – have created an asset bubble in residential real estate of comparable size to the one that exacerbated the Great Financial Crisis of 2008. ### What this means for you Housing looks strong – but we are now seriously concerned that this is a false indicator. Clients who are interested in buying a home or a second home may very well have the opportunity to do so at dramatically better prices in the next 18-24 months, but other clients who are interested in selling property may have a long time to wait for those home prices to return. Our macro models are not invested in either real estate or mortgage/property finance at this time. ## Jobs Updates We look at jobs regularly, and the current trajectory remains unchanged. Initial claims, while still low, are trending higher, and continuing claims remains my most persistent worry. Total nonfarm payrolls came in lower than expected, continuing to follow the same downward trend since January 2022. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP2308070443-1.png "Us nfp2308070443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP2308070443-1.png) However, this week, I wanted to highlight that long before companies lay off employees, they will do other things first, including not filling vacancies, offering early retirement buyouts, reducing the use of temp help, and finally, reducing hours for all employees more or less evenly. We are now definitely seeing the hours at the lowest since Covid: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP-Hours2308070443-1.png "Us nfp hours2308070443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP-Hours2308070443-1.png) Also, it’s interesting to look at anecdotal evidence for confirmation of a trend, and often to get more recent information than a government report. In this case, let’s look at LinkedIn, which tallies new jobs being added to their user profiles. The standard mean of 1.0 means hiring is constant, but anything below 1.0 means more people losing jobs than getting jobs. But the current month (dotted line) and the 3-month average are showing layoffs are increasing:[![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-LinkedIn-hiring-index2308100442.png "Us linkedin hiring index2308100442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-LinkedIn-hiring-index2308100442.png) ### What this means to you The job market is about to get worse as we head into a recession. We urge our clients to reduce their debt load and increase their personal savings, and keep investments conservatively positioned for now. A recession doesn’t mean the end of the world, but it does mean seeing our unemployment rate climb from its current 3.5% to maybe 5.5% or 6.5%. That means, sadly, a lot of lost jobs and financial hardship for many families, so please take the risk of job insecurity seriously. ## Small Business Outlook The NFIB is a political action group for small businesses, which as you can see by their membership, consist of many very small companies: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFIB-company-size2308090446.png "Us nfib company size2308090446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFIB-company-size2308090446.png) Each month, the NFIB surveys its members and asks how business conditions are for the smallest of U.S. companies (where interestingly, over 70% of all U.S. jobs are found). Small businesses depend on credit to survive between payments of contracts and to expand their operations. When banks begin tightening their lending standards as we head toward recession, small businesses will feel it first. We’re not in recessionary territory yet for lending outlook, but the trend is definitely lower: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFIB-credit-outlook2308090446.png "Us nfib credit outlook2308090446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFIB-credit-outlook2308090446.png) Small business is seeing a significant slowing of sales, down 13% from a year ago: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFIB-Sales2308090446.png "Us nfib sales2308090446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFIB-Sales2308090446.png) And optimism is bouncing up and down at a multi-year bottom: ![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFIB2308090446.png "Us nfib2308090446 nvest advisors") ### What this means for you The economy is continuing to slow and small businesses will feel it first and hardest. We watch the NFIB surveys closely because they are a leading indicator for the larger economy, and also a good precursor for where employment trends will be headed. ## How is the consumer holding up? There is a lot of speculation by investors looking only at company stock prices, and listening to earnings calls, that the consumer is doing okay. Are they? Let’s do a bit of a deep dive on the health of the American consumer as of August. First, our spending on credit DID in fact, go up in June (the most recent number), higher than expected:**[![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-Cred2308080439.png "Us cons cred2308080439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-Cred2308080439.png)** However, for the first time in two years, spending on credit cards actually went down. This may be because credit limits are being reached, and interest rates went much higher. **[![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-Rev2308080439.png "Us cons cred rev2308080439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-Rev2308080439.png)** The credit card balance vs. consumer disposable income is far below where they were in 2000 and 2008 when they last recessions occurred, however: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-cred-cardas-a-share-of-disposable-inc2308080439.png "Us cons cred cred cardas a share of disposable inc2308080439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-cred-cardas-a-share-of-disposable-inc2308080439.png) Where we see a big squeeze is in monthly auto loan payment: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-car-loans-as-a-share-of-disposable-inc2308080439.png "Us cons cred car loans as a share of disposable inc2308080439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-car-loans-as-a-share-of-disposable-inc2308080439.png) And when you add them all up, and add in higher interest rates, you can see the alarming trend in the debt load for the average American family: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-costs2308080439.png "Us cons cred costs2308080439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-costs2308080439.png) What concerns me greatly is how much inflation is impacting what you are getting for your spending. The black line shows consumer credit card usage, which shows us at all-time highs, but when you remove the effects of inflation (the blue line) you can see that the consumer isn’t getting more “stuff” with their cards – they’re just paying a lot more for them: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-Cred-CC2308080439.png "Us cons cred cc2308080439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-Cred-CC2308080439.png) And perhaps the most alarming thing to me is the Student Loan situation, which is about to come like a wrecking ball back into our economy. This is the total amount of student loans owned (and securitized – meaning – made into bonds for investors to buy). We have nearly $2 TRILLION of student loan debt in America. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-student-loans2308080439.png "Us cons cred student loans2308080439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Cons-cred-student-loans2308080439.png) With payments scheduled to resume in October, there is growing concern among economists that the consumer is not able to make those payments. We’ve addressed this issue for months here in our blog. After three years of no payments, most people with student loans long stopped budgeting for those loan payments and just absorbed the debt back into their monthly spending. Now that those payments are becoming necessary again, a large number of borrowers report that they won’t be able to keep the payments up. 80% of people making $50k or less, and fully 65% of people earning $100k or more, will either not be able to make their loan payments, or will have to cut back spending in other areas. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-here-come-student-loan-defaults2308080439.png "Us here come student loan defaults2308080439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-here-come-student-loan-defaults2308080439.png) ### What this means for you The consumer debt situation was untenable already, but the reintroduction of student loan payments, in our opinion, will be the catalyst that sends our economy from any possibility of a “soft landing” into a full-force recession. We remain strongly convicted to keep our investment models significantly protective and exposed only to the sectors of the economy that you must spend money on during hard times. This remains our conviction. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Navigating the emotional maze as an investor](https://nvestadvisors.com/behavioral-finance-investor-maze/) **Published:** August 11, 2023 **Author:** nVest Advisors **Content:** Investing can be a rewarding journey toward financial growth and security, but it’s not without its challenges. One of the most significant obstacles investors face is the influence of cognitive biases. These biases, which are often hardwired into our brains, can lead to irrational decisions that negatively impact our investment outcomes. Over the years, we’ve witnessed the many ways that investors subconsciously sabotage their own relationship with money, and a large part of our job as your financial coach and guide is to help you avoid these all-too-human pitfalls. In this blog post, we will delve into five of the most common cognitive biases that can hinder investors and explore strategies to overcome them (which is often easier said than done without the help of a seasoned financial fiduciary): ### **Confirmation Bias: Seeking Validation** Confirmation bias occurs when investors actively seek out information that confirms their existing beliefs while ignoring or downplaying contradictory evidence. This bias can lead to overconfidence, allows you to unintentionally end up in a and prevent investors from making well-informed decisions. By far, this is the most common bias we encounter every day in our presently polarized, tribal political world, but it’s also true in other areas of our lives. Do you find yourself watching only one news channel, because you agree with its political slant? Do you automatically dismiss someone simply because you disagree with them on a particular issue? Have you unfriended or unfollowed people online because of political differences? Confirmation Bias affects investors in significant ways, too. Are you strongly convicted one way or the other about cryptocurrencies? Gold? Do you believe stocks are headed up in the next six months, or down in the next six months? We all seek out validation for what we already believe to be true and automatically dismiss information and opinions that challenge our worldview. ***Solution:*** To combat confirmation bias, investors should actively seek out diverse viewpoints and engage in rigorous research. Maintain a healthy skepticism towards your own assumptions and regularly challenge your investment thesis. Consider forming an investment committee or seeking advice from trusted sources to ensure a well-rounded perspective. ### **Loss Aversion: Fear of Regret** Loss aversion refers to the tendency to strongly prefer avoiding losses over acquiring gains of equal value. This bias can lead investors to hold onto losing investments longer than they should, missing out on better opportunities. It can also make you wait far too long to get into a rising market because you’ve had a bad experience previously. ***Solution:*** To counter loss aversion, establish clear investment criteria and exit strategies before entering a position. When we work with clients, we do this as part of what is called creating your *Personal nVestment Policy*. Then, regularly review your portfolio with a focus on the fundamental reasons behind each investment. Embrace the mantra “cut your losses, let your winners run,” and be prepared to make difficult decisions when necessary. ### **Anchoring Bias: Fixation on Past Information** Anchoring bias occurs when investors rely too heavily on the first piece of information they encounter when making decisions. This can lead to underestimating or overestimating the true value of an investment. This is very similar to **Recency Bias**, in which far too much emphasis is placed on the most recent event, information, or announcement, without stepping back and taking all of the information into account. ***Solution:*** Avoid anchoring bias by conducting thorough research and basing your investment decisions on a variety of relevant and up-to-date information sources. Be open to adjusting your valuation estimates based on changing market conditions and new insights. ### **Overconfidence Bias: Illusion of Control** Overconfidence bias leads investors to overestimate their ability to predict future market movements or make successful investment choices. This can result in excessive trading, poor diversification, and unnecessary risk-taking. It’s what creates the emotional roller coaster that commonly causes investors to “buy high and sell low”, which is the exact opposite of what they should be doing: [![](https://nvestadvisors.com/wp-content/uploads/2016/02/cycle_of_market_emotions_page_1.jpg "Cycle_of_market_emotions_page_1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2016/02/cycle_of_market_emotions_page_1.jpg)The Cycle of Market Emotions ***Solution:*** Maintain a realistic assessment of your investment skills and acknowledge that market outcomes are inherently uncertain. Focus on building a well-diversified portfolio that aligns with your risk tolerance and long-term goals. Regularly review and adjust your portfolio to ensure it remains aligned with your investment strategy. ### **Herding Behavior: Safety in Numbers** Herding behavior refers to the tendency to follow the actions of a larger group, often driven by the fear of missing out or the assumption that the crowd must be right. This bias can lead to buying at market peaks and selling at troughs. Herding behavior is probably the second-most common bias we see when working with clients. When your friends are all talking about a particular investment, you’ll want to join in, even if that investment falls completely outside your risk tolerance or investing goals. Herding often leads to another bias that can really harm your investing success: Fear Of Missing Out (FOMO). Fearful that everyone is getting a piece of something and there will be nothing left for you, it’s common to see investors chase returns by investing in something that’s already experienced its full measure of gain That’s not to say that simply being contrarian for its own sake is a viable solution, either. *Deliberately* going against the herd tends to be a form of Overconfidence Bias. There needs to be a delicate balance of first acknowledging that humans do tend to “move in herds”, and that doing so can affect markets one way or the other if there is sufficient conviction in the group’s sentiment, but the herd’s primary motivation is emotional, not rational response to facts. ***Solution:*** Counter herding behavior by developing a disciplined investment plan that is grounded in your individual financial objectives and risk tolerance. Surround yourself with a network of knowledgeable and experienced investors – and a seasoned professional – who can provide valuable insights and support your decision-making process. ## The Bottom Line Recognizing and overcoming cognitive biases is an essential skill for successful investing. By understanding the impact of biases such as confirmation bias, loss aversion, anchoring bias, overconfidence bias, and herding behavior, you can make more rational and informed decisions. Through disciplined research, objective analysis, and a focus on long-term goals (and yes, the help of a trained, seasoned professional who is well-versed in behavioral finance and the damage that our biases can do to our journey), you can learn to navigate the complex world of finance with greater confidence and achieve their desired financial outcomes. Remember, the key to successful investing lies in maintaining a clear and rational mindset while staying true to your unique investment strategy. ### [Want to know your Risk Tolerance? Take our FREE 15-question quiz today.](https://app.precisefp.com/w/qsaxs0) nVest Advisors specializes in helping working-age, professional families and small businesses start their financial journey, grow every step of the way, anticipate and correct setbacks, and celebrate with you when we reach the top together. Your success is all we care about, and helping you overcome the perils along the journey to financial freedom, including the times when you may be your own worst enemy, is how we spend our day. It’s genuinely a privilege to help families and small businesses who want tomorrow to be better than today. Reach out to us for a totally free, totally no-risk portfolio checkup today if you’re concerned about where your finances sit for the coming recession, particularly if you are at or approaching retirement age. A review of your current risk in relation to your tolerance will be a key part of it. We’re delighted to offer you our thoughts. You can schedule that time with us below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client Service, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Individuals and Families, Investing General, LifeCycle, Mailchimp, Media, public **Tags:** advisor, agent, background, behavior, behavioral finance, bias, cognitive bias, colorado, finance, financial, insurance, invest, investing, investing success, investment, Kansas, New Mexico, nVest, Oklahoma, planner, regulator, regulatory, RIA firm, risk, risk management, risk tolerance, rules, small business, texas, Utah, Wyoming --- ### [Navigating Troubled Waters: Early Warning Signs of Financial Strain on a Small Business](https://nvestadvisors.com/financial-warning-signs-small-biz/) **Published:** August 9, 2023 **Author:** nVest Advisors **Content:** In the bustling landscape of entrepreneurship, small businesses often stand as pillars of innovation and local economic growth. However, like any venture, they are not impervious to the challenges and uncertainties that come their way. One of the most formidable challenges a small business can face is financial strain. This invisible force can sneak up unexpectedly and wreak havoc on even the most promising enterprises. As the economy grinds into what we all hope will be a mild recession (though the economic data does not currently support a “soft landing” scenario), we’ll briefly delve into the early warning signs of financial strain on a small business, so that entrepreneurs can recognize these signals before they escalate into larger crises. ### Irregular Cash Flow Cash flow is the lifeblood of any business, and for small enterprises, it’s even more critical. An irregular cash flow, where the inflows and outflows don’t align, can be a clear sign of impending financial trouble. If you find yourself struggling to pay bills, meet payroll, or invest in growth opportunities due to inconsistent cash flow, it’s time to assess the situation. **Solution:** Maintain a meticulous record of your cash flow and create projections to anticipate lean periods. Consider offering discounts for early payments from clients or implementing strategies to encourage consistent payments. ### Decline in Profit Margins Healthy profit margins are indicative of a successful business. When these margins begin to shrink, it’s a sign that your business might be in financial distress. Diminished profits could result from increased costs, decreased sales, or inefficiencies in operations. **Solution:** Regularly review your profit and loss statements to track changes in margins. Identify cost-cutting opportunities, explore pricing strategies, and seek ways to enhance operational efficiency. ### Increasing Debt Levels While debt can be a useful tool for growth, excessive debt can quickly spiral out of control. If your business is taking on more debt than it can handle or struggling to make timely debt payments, it’s a red flag. **Solution:** Audit your current debt load and interest rates. Develop a plan to manage and reduce debt over time, and explore renegotiating terms with creditors if necessary. ### Deteriorating Vendor Relationships When you notice vendors becoming less accommodating or even cutting off credit lines, it could be a sign that your financial health is causing concern in the business community. A strained relationship with suppliers can disrupt your supply chain and impact your ability to deliver products or services. **Solution:** Open lines of communication with your vendors, explain your challenges and explore ways to rebuild trust. Negotiate mutually beneficial terms and consider diversifying your supplier base to reduce dependency. ### Decreased Customer Demand A sudden drop in customer demand can catch any business off guard. If you’re experiencing lower sales or declining customer interest, it’s time to investigate the reasons behind this shift. **Solution:** Conduct market research to understand changing customer preferences and adapt your offerings accordingly. Implement marketing strategies to rekindle interest and attract new customers. ### Employee Dissatisfaction Your employees are valuable assets, and their morale can be a barometer of your business’s financial health. If you notice increased turnover, decreased productivity, or widespread dissatisfaction among your team, it could be a sign that financial strain is affecting your ability to provide adequate compensation or resources. **Solution:** Engage with your employees to understand their concerns and communicate transparently about the business’s challenges. Prioritize employee well-being and consider creative incentives or benefits to boost morale. ### Delayed or Missed Payments Failing to meet financial obligations, such as paying suppliers, lenders, or taxes, is a telltale sign of financial strain. Delays or missed payments can result in penalties, damaged relationships, and even legal repercussions. **Solution:** Develop a strict schedule for payments and prioritize fulfilling obligations on time. If necessary, seek professional advice to negotiate with creditors or set up manageable repayment plans. ### Over-reliance on Short-Term Solutions Relying solely on short-term solutions to address financial challenges, such as using credit cards or borrowing from friends and family, can lead to a cycle of mounting debt and temporary relief. **Solution:** Create a comprehensive long-term financial strategy that includes sustainable revenue generation, cost management, and a clear path to resolving outstanding debts. ## The Bottom Line In the unpredictable world of business, recognizing the early warning signs of financial strain is paramount to ensuring the survival and success of your small enterprise. By remaining vigilant and proactive, you can navigate these challenges with resilience and steer your business toward a stable and prosperous future. Remember, seeking professional financial advice and support when needed is a sign of strength, not weakness, and can make all the difference in safeguarding your business’s financial health. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to 3(21) or 3(38) fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. If your company would like to receive professional planning and investment assistance, a competitive bid from us for your current company retirement plan, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, Colorado Secure Savings, commercial paper, custodian, economic, economy, empowerment, ERISA, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, Secure Savings, SEP, SIMPLE, SIPC, small business, state-run IRA, state-sponsored IRA, sustainable, trends --- ### [Weekly Economic nSight: August 7, 2023](https://nvestadvisors.com/economic-update-4/) **Published:** August 7, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are typically written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** After a week off to relocate our company to [our new downtown Colorado Springs office](https://nvestadvisors.com/2023/08/07/new-office-location/), we’re back with a quick look at the economic data over the past two weeks, and how they are impacting the investing strategies we use for our clients. Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. Also, though it’s been spotty so far, I want to blog a daily journal of economic activity as we head into this recession, which will shortly include daily market and trading activity. Sadly this has taken a back seat in recent weeks to massive (and great) changes happening here at nVest Advisors, but we’ll be back in the routine in August. You can find those at my personal finance blog (undergoing a complete rebrand this summer): [“Think Like A Rich Guy”):](https://thinklikearichguy.com) - **At the Top: The U.S. credit rating was lowered** - **Housing update** - **Manufacturing and Service Update** - **Jobs update** ## At the Top: ### The U.S. credit rating was lowered from AAA to AA+ by Fitch The markets reacted to the lowering of the credit rating for bonds issued by the United States Treasury last week, as the reality of higher interest rates and the impact on government spending starts to take effect. Fitch is one of two major credit-scoring companies for corporate and government debt in the U.S. (the other being Moody’s), and just like you and I receive a credit score from the three major consumer credit reporting agencies, companies and governments have the same kind of rating system (typically a wild mix of letter grades instead of a number like consumers get). The lowering of the credit rating of the United States government wasn’t completely unexpected but it was not good news, either. In recent years, the United States has added tremendous amounts of debt to its books. This started in earnest during the Covid pandemic but has continued at a rapid pace, the most recent being the addition of over $1.6 Trillion (that’s 1.6 million million dollars – $1,600,000,000,000) just in June of this year after [Congress approved a new, higher debt ceiling](https://abcnews.go.com/Politics/senate-passes-debt-ceiling-deal/story?id=99758031). The difficulty isn’t just the debt load, which is substantial. It’s that interest rates are rising on the repayment of that and all previous debt, and tax revenues are declining for the United States as the economy slows. Although the Federal Reserve Bank typically buys the bonds created to sustain government spending, those bonds pay a higher interest rate than in years past. The U.S. government also has bonds maturing (coming due) all the time from earlier points in the past that must be refinanced today at higher interest rates. This has caused the interest payments on government debt to spike substantially in recent months, to become the largest single thing the government spends money on. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/VTC-US-federal-government-interest-payments2308020441.png "Vtc us federal government interest payments2308020441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/VTC-US-federal-government-interest-payments2308020441.png) We are now in a situation where the government is on a trajectory to spend more each year to pay for its past expenditures (that it had no money for) than it will on current-year defense, infrastructure, Medicare and Social Security demands. It’s been climbing with our very high spending since the Great Recession of 2008, but it’s accelerating quickly. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/VTC-US-federal-governmentQs-net-interest-expense-projection2308020441.png "Vtc us federal governmentqs net interest expense projection2308020441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/VTC-US-federal-governmentQs-net-interest-expense-projection2308020441.png) It is for this reason, plus the fact that the government does not seem able to pull back its spending in any meaningful way, that Fitch lowered the credit rating of the U.S. The impact of the credit rating drop will mean that fewer investors may have a desire to hold U.S. Treasuries long-term. Although AA+ is only one notch below AAA (the highest rating), it lowers the U.S. as a whole in terms of perceived safety and a risk-free place to hold money. ### What this means to you Obviously, this credit rating drop does not mean major changes for the United States government, but our increasingly deep budget deficits cannot be sustained for any length of time. Austerity measures will eventually be necessary, which means politicians not able to spend freely to garner votes. They’ll probably continue to make campaign pledges promising various spending that is politically expedient (just this past weekend, President Biden’s Twitter account started talking about giving school teachers more money), but with failed promises in student loan forgiveness and green energy spending, they can’t keep kicking the can down the road for too much longer. The solution is to move the country toward solvency, and no one will want to be the political leader who has to come out and say so after decades of the U.S. government acting like Santa Claus all over the world. Foreign aid, social spending, and even military budgets will need to be pared back, and taxes will likely need to increase. It is no wonder that, even though the “bill is due” for decades of rampant previous spending, no politician wants to step up and tell us the ugly truth. It will happen eventually, but not yet. We are already in a precarious situation because we’ve depleted much of our weaponry and projectile arsenal supporting Ukraine (plus about $100 billion in borrowed money), but the Biden Administration also substantially depleted our Strategic Petroleum Reserves over the last 18 months to try to contain energy prices. Biden believed the U.S. would re-stock those reserves after oil fell below $60 per barrel, but OPEC nations cut back production significantly since May, which is sending oil prices back into the $80+ range this summer (we expected that and wrote about it extensively). We anticipate that the United States will be forced to reduce its governmental spending and raise taxes in the coming years (likely after the 2024 election cycle). This will occur during a recession we remain adamant is approaching quickly. While we are always optimistic about the future of America (because We the People are “America”, not our political leaders), the next few years will be challenging. We remain invested to take advantage of higher energy and utility prices but otherwise remain largely outside the stock market, which we believe is seriously over-bought. The bottom line is: we cannot continue to spend money we do not have. No family can do this, no company can do this, and no government can do this long-term. ## Housing Update We continue to remain watchful of a downturn in residential real estate. So far, housing has held up pretty well, though there are signs of decaying home valuations, largely in the Northeast and along the West Coast as far inland as Denver, CO. Mortgage applications are slowing down a little sharper than seasonal trends (it’s very normal for home buying to cool off going into fall and winter). It’s still the slowest year in a decade for the mortgage industry… [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-MBA2308030438.png "Us mba2308030438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-MBA2308030438.png) … and as interest rates on 30-year mortgages have started climbing again, we expect this trend to continue: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Mortg-rate2308030438.png "Us mortg rate2308030438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Mortg-rate2308030438.png) Of note is how many rental vacancies there are vs. homeowner vacancies. Rental vacancies are trending back up again after a decade-long decline, but homeowner vacancies are at a historic low. This means that homeowners are not leaving, and as a result, very few homes are available for sale right now. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-redfin-inventories2308010541.png "Us redfin inventories2308010541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-redfin-inventories2308010541.png) This single factor is what is keeping up home prices … for now. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Rental-vacancies-are-up-this-year-but-homeowner-vacancies-hit-a-record-low2308030438.png "Us rental vacancies are up this year but homeowner vacancies hit a record low2308030438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Rental-vacancies-are-up-this-year-but-homeowner-vacancies-hit-a-record-low2308030438.png) But we are concerned about a couple of things. First, as the economy slows down, additional homes will be vacated involuntarily as, frustratingly, jobs are lost and small businesses close their doors. We do not believe we are witnessing a housing drop as bad as 2007-2011, but we do expect to see home prices fall 20% or better from their 2021 highs before it’s over. We are already seeing an uptick in current homeowners “interested” in putting their house up for sale in the near future: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Homeowners-considering-a-sale-when-mortgage-rates-drop2308010541.png "Us homeowners considering a sale when mortgage rates drop2308010541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Homeowners-considering-a-sale-when-mortgage-rates-drop2308010541.png) The other concern came to light last week but may indicate much worse systemic problems in the residential housing market, related in many ways to what we expect to see in commercial real estate. [The Philly branch of the Federal Reserve published a report that is worth the read for those who are interested.](https://www.philadelphiafed.org/consumer-finance/mortgage-markets/owner-occupancy-fraud-mortgage-performance) In it, they note that there appears to be widespread fraud by real estate investors who falsely claimed that the homes they were buying for either long-term rentals or short-term “AirBnB”-type rentals, were actually primary residences. This would have allowed many of them to be purchased with 30-year residential mortgages instead of 10-year adjustable-rate business loans: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/F23egRnaIAAHgx9.jpg "F23egrnaiaahgx9 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/F23egRnaIAAHgx9.jpg) If there is widespread misrepresentation underway (and indeed the Fed report says this is “ongoing”), it caused, by the Fed’s own estimate, a false estimate of a home buyer’s market that may be 50% larger than it really is. This is a huge number and would indicate that home values are far too high for actual market demand and that a large number of homes that were bought by investors – but falsely called primary residences – have created an asset bubble in residential real estate of comparable size to the one that exacerbated the Great Financial Crisis of 2008. ### What this means for you Housing looks strong – but we are now seriously concerned that this is a false indicator. Clients who are interested in buying a home or a second home may very well have the opportunity to do so at dramatically better prices in the next 18-24 months, but other clients who are interested in selling property may have a long time to wait for those home prices to return. Our macro models are not invested in either real estate or mortgages/property finance at this time. ## Jobs Updates There is a growing disconnect between the two major jobs reports (ADP and the BLS’ “JOLTS” figures), which we will discuss in more detail next week. There is also a disconnect between the first “print” of the numbers and later revisions. It’s important to note that there isn’t an actual count of new jobs being created anywhere in America. Instead, we receive an estimate based on computer modeling that tends to be revised downward – often significantly – after the initial estimate is created. Weekly jobs numbers showed, as has been the norm for a while now, a robust, though definitely slowing, job market. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP2308070443.png "Us nfp2308070443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP2308070443.png) However, we are now starting to see “cracks” in this narrative. The number of job openings in the US is cooling off rapidly as employers leave open positions unfilled and hiring slows. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-JOLT2308020441.png "Us jolt2308020441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-JOLT2308020441.png) The hiring of temporary workers has also slowed further. This is the sixth month of negative temporary hires, and the worst number of the year so far. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP-Temp2308070443.png "Us nfp temp2308070443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP-Temp2308070443.png) The number of hours in the average workweek is also slowing (this indicates slowing production at the company, as well): [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP-Hours2308070443.png "Us nfp hours2308070443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP-Hours2308070443.png) And average pay is rapidly cooling off, as well: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP-Wages2308070443.png "Us nfp wages2308070443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-NFP-Wages2308070443.png) A neat way to watch and verify job openings in the US is to watch the amount of income tax that is reported by the IRS. There is obviously a slight lag (2-4 weeks) between a newly hired (or fired) employee and the impact on income tax receipts, but we can see in this chart that personal income tax receipts are far below the reported job openings already. This would indicate to us that the number of job openings is either too high (the computer model missed it), or they are about to be dramatically lowered: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-job-openings-vs-personal-income-tax-receipts2308010541.png "Us job openings vs personal income tax receipts2308010541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-job-openings-vs-personal-income-tax-receipts2308010541.png) Remember, too that there is a lag between losing one’s job and filing for unemployment benefits. Current initial claims continue to look good overall: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims2308040440.png "Us claims2308040440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims2308040440.png) Except that we have had 20 weeks of higher claims than the same period of time over the last three “normal” years:[![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims22308040440.png "Us claims22308040440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims22308040440.png) But as I’ve said for weeks now, it is the CONTINUING jobless claims that is telling us the most accurate picture. Continuing claims are notching up slightly but have risen strongly relative to the preceding decade. The second chart shows how significate the continuing claims are compared to history. This tells us that once laid off, it is becoming very difficult for a worker to find a new job. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims-Cont2308040440.png "Us claims cont2308040440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Claims-Cont2308040440.png) ### What this means to you The job market is about to get much worse as we head into a recession. We urge our clients to reduce their debt load and increase their personal savings, and keep investments conservatively positioned for now. A recession doesn’t mean the end of the world, but it does mean seeing our unemployment rate climb from its current 3.5% to maybe 5.5% or 6.5%. That means, sadly, a lot of lost jobs and financial hardship for many families, so please take the risk of job insecurity seriously. ## Manufacturing Updates A quick look at some of the manufacturing data we’ve received the past two weeks. There has been no change in the trends downward. First, Dallas: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Dallas2308010541.png "Us dallas2308010541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Dallas2308010541.png) Chicago is also struggling: ![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-Chicago-PMI2308010541.png "Us chicago pmi2308010541 nvest advisors") And this is confirmed by the national survey: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-ISM2308020441.png "Us ism2308020441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-ISM2308020441.png) Without question, factories across the U.S. are now shedding jobs: ![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-ISM-Empl2308020441.png "Us ism empl2308020441 nvest advisors") The services sector is still treading water but the trend is into recessionary area, also: [![](https://nvestadvisors.com/wp-content/uploads/2023/08/US-ISM-PMI2308040440.png "Us ism pmi2308040440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/US-ISM-PMI2308040440.png) ### What this means for you The economy is continuing to slow and the pace of economic deceleration is increasing. We remain committed to our defensive positions as shown in our Macroeconomic modeling. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [New Office Location](https://nvestadvisors.com/new-office-location/) **Published:** August 7, 2023 **Author:** nVest Advisors **Content:** We’re pleased to announce that as of August 1, we’ve moved to new office facilities in [the historic DeGraff building in downtown Colorado Springs, CO](https://en.wikipedia.org/wiki/DeGraff_Building). Built during the gold rush into the area in 1897, the building has seen service both as office and retail and as apartments immediately following World War 2. We occupy the front right corner of the building overlooking Tejon Street below. ## Our new physical address is 118 N. Tejon Street, Suite 305, Colorado Springs, CO 80903. [![](https://nvestadvisors.com/wp-content/uploads/2023/08/D34_04RVUAEMmz--600x469.jpg "D34_04rvuaemmz nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/D34_04RVUAEMmz-.jpg) [![](https://nvestadvisors.com/wp-content/uploads/2023/08/5b3631a6a6a70.image_.jpg "5b3631a6a6a70 Image nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/08/5b3631a6a6a70.image_.jpg) While we continue to serve most of our client needs in a virtual experience (we’ve done that since 2017), our new office will house more in-office personnel as our company continues to grow! We’ll be welcoming two new financial advisors in September (one in Texas and one in Denver), and plan on having support staff return full-time to the office in 2024. Our clients will be receiving a formal announcement of our new address in an upcoming email, in which we also update our public disclosure documents. **Categories:** Business Stories, Client News, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Press Releases, public **Tags:** 118 N Tejon, announcement, colorado, colorado springs, new office, office location, relocation, Tejon St --- ### [Weekly Economic nSight: July 24, 2023](https://nvestadvisors.com/economic-update-3/) **Published:** July 24, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** After a week off to host our company’s [CLIENT TOWN HALL MEETING last week (now available as a replay)](https://nvestadvisors.com/2023/07/17/quarterly-client-town-hall-meeting-july-12-2023-2-2/) we’re back with a quick look at the economic data over the past two weeks, and how they are impacting the investing strategies we use for our clients. Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. Also, though it’s been spotty so far, I want to blog a daily journal of economic activity as we head into this recession, which will shortly include daily market and trading activity. Sadly this has taken a back seat in recent weeks to massive (and great) changes happening here at nVest Advisors, but we’ll be back in the routine in August. You can find those at my personal finance blog (undergoing a complete rebrand this summer): [“Think Like A Rich Guy”):](https://thinklikearichguy.com) - **At the Top: Let’s discuss inflation** - **Housing update** - **Jobs update** ## At the Top: ### Let’s discuss inflation There has been much celebrating over the last few months about the decline in both Producer Prices (the cost to make the product that companies endure) and Consumer Prices (what you pay at the store for the finished, marketed product). And indeed, a reprieve in prices of some basic goods and services is a good thing for our families and small business budgets. But we remain concerned about inflation coming back, for a number of reasons I wanted to discuss today. I’ll try to keep things simple but lay out our premise that inflation has strong upward momentum. First, let’s remember that there are multiple layers to inflation data. The two that get the most media attention are HEADLINE and CORE data. Headline inflation is a look at an entire basket of goods and services and comparing today’s price to some point in the past, but headline inflation data includes items that we don’t buy all that often (airplane tickets and a new TV set, for instance). CORE inflation consists of those regularly-occurring parts of our budget like rent, groceries, gasoline, subscription media services, etc. The HEADLINE inflation number has come down pretty forcefully over the past 9 months or so… source: [tradingeconomics.com](https://tradingeconomics.com/united-states/inflation-cpi) …but the CORE inflation figure remains largely “stuck” at around a 5% year-over-year increase: source: [tradingeconomics.com](https://tradingeconomics.com/united-states/core-inflation-rate) There is also the problem of hearing the news report that “Inflation is coming down” without understanding that in no way does that mean prices are dropping. Prices are still increasing, month-over-month and year-over-year for the last four years now (rapidly inflating after the stimulus activity around the Covid-19 shutdowns that began in earnest under President Trump and continued under President Biden). So even though the rate of increase is slowing, prices are still going up: source: [tradingeconomics.com](https://tradingeconomics.com/united-states/consumer-price-index-cpi) It is the cumulative effect of inflation, not the current monthly or quarterly change in the rate of increase, that is hurting so many families, and this is what the Federal Reserve is working to slow so that wages can catch back up with the new level of prices. It is highly unlikely (unless we have a significant recession that results in price DEflation), that prices will drop from today’s levels; the Fed just wants to slow it down to below the rate of increase on your wages for a while. The biggest problem with inflation data is that they are backward-looking. This is important in some regards – we do need to know what has actually occurred. However, looking backward all the time means we may miss the pothole directly in front of us. We believe there are indeed ways to show where inflation may be headed in the months ahead, and those are the factors we use when it’s time to make investment decisions for our clients. Here are some of the ways we assess future inflationary pressure: 1. Oil prices. Energy costs affect the prices of nearly everything else in the economy. Every product needs to be manufactured, shipped to a store, placed on a shelf in a lighted and climate-controlled store for you to buy, or must be delivered to your doorstep. Every step in the supply chain depends on energy, so where energy prices go, the prices of everything else follow. 2. Commodities prices. Inflation numbers look at the prices of things that have come and gone; things already consumed. But commodities are traded on the open market months in advance by an instrument called a futures contract. For example, a coffee manufacturer will want to secure enough coffee beans to meet their production demands for the coming six months, so they may purchase contracts to buy coffee beans at pre-determined prices during that period. That makes sure they have enough product, and that the price of that product is correctly and accurately budgeted for. 3. Personal savings rates. This is how much of our take-home pay is actually still hanging around after our bills are paid each month and are put in savings. Although personal savings rates are not entirely connected to consumer prices (some of the savings rate has to do with tax refunds, wage increases, and interest rates on personal debt), the fluctuation in personal savings rate definitely gives us an idea of how family budgets are being squeezed (or relaxed) based on the costs of living. 4. The strength of the dollar relative to other currencies. This makes sense when you think about it. If the dollar is relatively “strong”, it will exchange for more of other currencies when we are importing and exporting products and services abroad. A strong dollar means it will buy more “stuff”, and a weak dollar means it will buy less. During periods of a strong dollar, it would make sense to see inflationary pressure ease up, but during periods of a weak dollar, it would mean There are other factors, as well, but these four will give our clients a good idea of how we determine where inflation may be headed (instead of looking only at where inflation has been). So while the market has been celebrating the recent decline in inflation (mostly HEADLINE inflation), does that mean the trajectory on inflation is a sure thing? Let’s look at each of the four leading indicators and assess: 1. Energy Prices. Energy prices did decline since the summer of 2022, largely due to a slowing economy and the use of strategic petroleum reserves to cheapen gasoline for consumers by about 20 cents a gallon. That trend has reversed in the past couple of months, as OPEC nations (upon which we are heavily dependent) announced production cuts of millions of barrels of oil per day as these nations anticipate a global economic slowdown. Energy prices have climbed significantly in the last month alone, with Crude oil rising 7.29%: 2\. Basic commodities, particularly in several food items, have also spiked. Some of this is weather-related, but there are global shortages in a number of staples, which will rise prices again. Only sugar, corn, and corn-derived ethanol are down over the last 30 days. All other agricultural commodities are up, some significantly: 3\. The personal savings rate soared during the stimulus-fueled feeding frenzy of Covid-19, and has been dropping since inflation began in earnest in 2021. Despite the recent drop in inflation rates, personal savings continue to decline. Projections are that consumers will be out of the excess savings from Covid by as early as next month. At best, the estimates are that the excess savings will be gone by June of next year (11 months from now). [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-When-excess-savings2307050441.png "Us when excess savings2307050441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-When-excess-savings2307050441.png) 4\. The dollar rose to historic strength against most of the world’s major currencies in the fall of 2022. This coincided with the drop in the inflation rate (which matched our theory). Since then, the dollar has been dropping in relative strength and appears to have reached a bottom earlier this month. It has been falling alongside HEADLINE inflation, but remember, CORE inflation remained very sticky, only falling slightly over the last six months. We believe the strength of the dollar is more strongly correlated to CORE inflation than headline inflation. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/DXY_2023-07-24_06-37-48.png "Dxy_2023 07 24_06 37 48 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/DXY_2023-07-24_06-37-48.png) If the dollar rallies to higher places again in the coming months, we believe this will put further downward pressure on core inflation, but at current levels, the dollar is weak enough that it is no longer helping to cool prices off. If the Federal Reserve bank eases off of its Quantitative Tightening (QT) activities too quickly in response to changes in the headline CPI, it can cause the dollar to weaken further, which would send prices back up again. There is precedent for this. The last time we dealt with sustained inflationary pressure was in the 1970s, in which inflation came in three successively higher waves until 1981, when then Fed Chairman Paul Volcker implemented what is now known as the Volcker Shock, and raised interest rates to over 18% at one point. It was only then that inflation was finally beaten after more than 10 years of false hope. We run that risk again if we do not allow the Federal Reserve to finish the job on inflation. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/fred_us_cpi_graph_1965_to_1985_1.jpg "Fred_us_cpi_graph_1965_to_1985_1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/fred_us_cpi_graph_1965_to_1985_1.jpg) ### What this means to you We remain hopeful that inflationary pressure continues to ease, but recent changes in energy and commodities prices give us concern that inflation is starting to strengthen again. This is exacerbated by the recent stock market rally, which we’ve always maintained was not based on actual economic strength and was instead speculative and bias-driven (and would eventually come back down). We remain steadfast that the worst of this economic cycle is directly ahead of us, and our clients are invested with that conviction firmly in mind. We strongly believe we are correct that the markets are missing the actual impact of rising prices on consumers, as they interpret increased consumer spending recently to be a good sign for the economy. This is nonsense. It is true that consumers are spending more each month than just a few months ago, but we maintain that this is the result of price increases, not more confidence about the coming year in the economy: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Inflation-adjusted-HH-spending2307210548.png "Us inflation adjusted hh spending2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Inflation-adjusted-HH-spending2307210548.png) And we can clearly show that consumers ARE spending more; they’re just getting less because inflation has driven prices up significantly. This chart shows spending in dollars (the black line), but the actual amount of product that those dollars are buying now (the blue line). Consumers are buying LESS than they were a year or two ago. They’re just having to pay much more for it. This shows us that the slowdown in the economy is just getting underway, made much worse by the return of student loan payments in October that were furloughed since 2020. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Ret-Sales-Real2307190442.png "Us ret sales real2307190442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Ret-Sales-Real2307190442.png) Plus, an alarming amount of this spending has shifted from actual cash sources to credit cards: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Cons-Cred-Cards-HHs-relying-on2307110442.png "Us cons cred cards hhs relying on2307110442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Cons-Cred-Cards-HHs-relying-on2307110442.png) ## Housing Update We often discuss actual activity in housing (homes sold, mortgage loan rates locked, etc.) but permits and new starts tell us where the sector is headed. Today’s update on housing looks at what is coming up. Remember that some housing is seasonal – more people move in the summer and far fewer around the winter holidays, so comparing year-t0-year for the same week’s activity really helps us to see what is happening. First, building permits for multifamily units (apartments, condos/townhomes, duplexes, etc.) is coming down pretty sharply but remain above historical averages. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Starts-Permits-5-Unit-SAAR-2m-MA2307200443.png "Us starts permits 5 unit saar 2m ma2307200443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Starts-Permits-5-Unit-SAAR-2m-MA2307200443.png) Larger unit permits dropped last month and the year-long trend of lower highs and lower lows defies the trend over the last 8 years. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Starts-Permits-5-Unit2307200443.png "Us starts permits 5 unit2307200443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Starts-Permits-5-Unit2307200443.png) Overall building permits are following seasonal trends after a pretty strong start to 2023. Remember that a permit is not a finished building. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Starts-Permits2307200443.png "Us starts permits2307200443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Starts-Permits2307200443.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Starts2307200443.png "Us starts2307200443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Starts2307200443.png) What’s kept home prices up as much as they have so far is simply that no one is putting homes up for sale. Current existing home inventory is the lowest – by far – in the last 8 years. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-Inv2307210548.png "Us existing inv2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-Inv2307210548.png) This is despite the fact that the housing affordability index is the worst in history. A mortgage bought today will take more than 40% of a family’s monthly budget. This makes most homes unaffordable to buyers (they won’t qualify for a mortgage loan), so the tentative equilibrium of no eligible buyers and no inventory is all that is holding up the real estate market prices for now. If a recession causes a sudden surge in homes for sale, house prices will drop substantially. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-affordability2307210548.png "Us existing affordability2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-affordability2307210548.png) Existing home sales are the slowest in the last decade: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing2307210548.png "Us existing2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing2307210548.png) ### What this means for you Housing permitting and starts remain fairly strong but as mortgage rates remain elevated, we expect that to cool off significantly in the coming months. We are particularly concerned with Commercial Real Estate, which could face a serious correction. We remain optimistic for our clients who are looking to buy an affordable home that they will have the opportunity in the next 12 to 24 months. ## Jobs Updates We’ve been predicting the jobs market to surprise analysts negatively for the last few weeks, and it appears this is starting to show up now in the data. First, the huge spike in wage growth we saw after Covid has moderated. This means employers are able to find workers easier than they did a year ago, and have to offer less pay and benefits to fill their open positions. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Growth-in-wages-advertised-in-Indeed-US-job-postings-have-been-moderating2307210548.png "Us growth in wages advertised in indeed us job postings have been moderating2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Growth-in-wages-advertised-in-Indeed-US-job-postings-have-been-moderating2307210548.png) The initial jobless claims came in a little higher than the previous weeks but did not spike seasonally, as is typical during the month of July. What will be interesting, and a tell-tale sign for us of coming jobs concerns, is if the 2023 line remains flat and crosses above most of the last decade’s seasonal trend of lower jobless claims for the next three months. We expect to see jobless numbers take off from here. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims2307210548.png "Us claims2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims2307210548.png) This is anecdotal, but we are seeing a surge in Google searches for “unemployment benefits”. Normally the Google search for this term is almost completely correlated with the actual claims for unemployment (see January 17-Covid in 2020). Since last year, however, the number of searches is above the actual filings, but we believe this is a leading indicator of coming jobless claims. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims-v-Google2307210548.png "Us claims v google2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims-v-Google2307210548.png) It is the CONTINUING claims that are much more important to our economic analysis than the initial claims. Initial claims mean someone has lost their job and no longer has a severance pay package, but those typically drop off quickly as people find new work. If the CONTINUING claims increase, it means there are no new jobs out there. We have watched the continuing claims remain low but persistent all year (no longer following seasonal trends). The spike last week in continuing claims was unexpected for most analysts but we’ve been predicting it for the past several weeks. If this trend continues, we can be near certain that a recession is imminent. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims-Cont2307210548.png "Us claims cont2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims-Cont2307210548.png) [](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-Inv2307210548.png) And here is a strong indicator that we are correct. This chart compares the number of job openings as reported by the NFIB (small business advocacy group) compared with the duration of unemployment benefits. It’s perfectly logical that the fewer jobs are out there, the longer someone will remain unemployed. The red line (which is inverted) shows the number of job postings by small businesses (where 80% of the jobs in the U.S. are located); the higher the red line, the FEWER jobs are out there. The blue line, which lags behind the red line by several weeks, is the current number of continuing unemployment claims. Typically they are very closely correlated, so it appears there will be a significant rise in continuing unemployment claims in the coming weeks. (The shaded gray areas are where recessions occurred – we are WELL into recessionary territory for available jobs already). [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Duration-of-unemployment-about-to-rise2307210548.png "Us duration of unemployment about to rise2307210548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Duration-of-unemployment-about-to-rise2307210548.png) ### What this means to you The job market is about to get much worse as we head into a recession. We urge our clients to reduce their debt load and increase their personal savings, and keep investments conservatively positioned for now. A recession doesn’t mean the end of the world, but it does mean seeing our unemployment rate climb from its current 3.5% to maybe 5.5% or 6.5%. That means, sadly, a lot of lost jobs and financial hardship for many families, so please take the risk of job insecurity seriously. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Quarterly Client Town Hall Meeting - July 18, 2023](https://nvestadvisors.com/quarterly-client-town-hall-meeting-july-12-2023-2-2/) **Published:** July 17, 2023 **Author:** nVest Advisors **Content:** ## [![](https://nvestadvisors.com/wp-content/uploads/2023/06/Q1-2023.png "Q1 2023 nvest advisors")](https://www.canva.com/design/DAFfGnBr2io/U24s8QJRGs48xIkb3gOaFw/view?utm_content=DAFfGnBr2io&utm_campaign=designshare&utm_medium=link&utm_source=recording_view) ## [Please click here or on the image above to watch our Q3 CLIENT TOWN HALL MEETING!](https://www.canva.com/design/DAFfGnBr2io/U24s8QJRGs48xIkb3gOaFw/view?utm_content=DAFfGnBr2io&utm_campaign=designshare&utm_medium=link&utm_source=recording_view) The markets are getting choppier ahead of what we strongly believe will be a significant recession in the U.S. and many other parts of the world. Although [we keep you informed every week with a macroeconomic update](https://nvestadvisors.com/category/mailchimp/rssecon/) and are adjusting our investment models carefully in response to developments, we want to start the tradition of giving our clients and prospective clients the opportunity every three months to hear about what’s going on and how we are responding to it, answer your general questions, and even have a guest speaker. **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Media, Podcasts, Press Releases, public, Small Business, Webinars **Tags:** 401k, 403b, client service, client town hall, colorado, economy, family, fiduciary, finance, market, nVest Advisors, retirement, small business, texas, update --- ### [RESCHEDULED: Quarterly Client Town Hall Meeting - July 18, 2023](https://nvestadvisors.com/quarterly-client-town-hall-meeting-july-12-2023-2/) **Published:** July 13, 2023 **Author:** nVest Advisors **Content:** ## [![](https://nvestadvisors.com/wp-content/uploads/2023/06/Q1-2023.png "Q1 2023 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/Q1-2023.png) ## Our original meeting (July 12) was postponed due to illness, but please plan to watch our QUARTERLY CLIENT TOWN HALL on July 18! The markets are getting choppier ahead of what we strongly believe will be a significant recession in the U.S. and many other parts of the world. Although [we keep you informed every week with a macroeconomic update](https://nvestadvisors.com/category/mailchimp/rssecon/) and are adjusting our investment models carefully in response to developments, we want to start the tradition of giving our clients and prospective clients the opportunity every three months to hear about what’s going on and how we are responding to it, answer your general questions, and even have a guest speaker. ### All clients will be sent a meeting link on July 18 to watch this event at your convenience. **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Media, Podcasts, Press Releases, public, Small Business, Webinars **Tags:** 401k, 403b, client service, client town hall, colorado, economy, family, fiduciary, finance, market, nVest Advisors, retirement, small business, texas, update --- ### [Weekly Economic nSight: July 10, 2023](https://nvestadvisors.com/economic-update-2/) **Published:** July 10, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** After a week off to celebrate Independence Day, we’re back with a quick look at the economic data over the past two weeks, and how they are impacting the investing strategies we use for our clients. Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). Though we use several more, these are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. Also, though it’s spotty so far, I want to blog a daily journal of economic activity as we head into this recession, which will shortly include daily market and trading activity. Sadly this has take a back seat in recent weeks to massive (and great) changes happening here at nVest Advisors, but we’ll be back in the routine for the rest of the summer. You can find those at my personal finance blog (undergoing a complete rebrand this summer): [“Think Like A Rich Guy”):](https://thinklikearichguy.com) - **At the Top: JOBS UPDATE: Labor demand remains impossibly high** - **Housing update** - **Manufacturing and Service Sector Updates** ## At the Top: ### Labor demand remains impossibly high The biggest issue I see in the past two weeks is that there is a pervasive and growing disconnect between what should be connected elements of the economy. Take, for example, the different looks at labor statistics. Labor is a major issue right now because the Federal Reserve is trying to lower the upward pressure on wages to lower the resulting effect on prices of the goods and services that labor produces. As long as there remains a strong demand for labor, prices will remain stubbornly high. So we need to weaken the labor market specifically to lower overall inflation. However, there is a wide range of assessments of just how strong the labor market is. For example, the BLS reports that there are still 1.6 jobs out there for every available worker without a job. Layoff announcements have also supposedly slowed significantly in the last month. BUT, the initial jobless claim number actually increased at the same time: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims2307070545.png "Us claims2307070545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims2307070545.png) And this is the 19th week in a row that jobless claims were higher than the same week in the average of the last 3 “normal” labor years: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims22307070545.png "Us claims22307070545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims22307070545.png) And where the jobs actually are: in the manufacturing and service sectors of the economy, hiring has been slow for most of the last 12 or 15 months, with many months negative (layoffs): [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-ISM-Empl2307050441.png "Us ism empl2307050441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-ISM-Empl2307050441.png) We continue to stress that while initial claims are important, the CONTINUING claims are much more important. It’s one thing for a company to lay off workers and have them quickly find new work, but another if that worker can’t pick up a new job. Continuing claims are trending up all year, and we continue to see that as the most important sign of the weakness of the labor market. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims-Cont2307070545.png "Us claims cont2307070545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Claims-Cont2307070545.png) ### What this means to you We believe there will be “surprise” revisions downward in labor reports in the coming weeks, because we cannot have both a robust job market and a weakening economy (see the Manufacturing and Service reports, below). But until it does, the Federal Reserve Bank is relying on these mainstream labor market reports to determine where our interest rates should peak. Making the wrong guess on where labor actually is, or failing to accurately predict the trajectory and velocity of labor market changes, will most likely crash the economy harder than the Fed intends to. We have to also remember that we aren’t looking for massive negative changes in jobs numbers to confirm our recession prediction. Recessions don’t mean absolute devastation to companies and jobs, they mean our unemployment rate climbs from 3.5% today to maybe 5% or 6% – still a major impact on consumer spending and therefore, economic output, but it doesn’t mean the end of the world. However, that said, the most important thing you can do to prepare, particularly if your job is at risk in any way, is to make sure your monthly expenses are minimal and you have sufficient emergency savings. We can help you with both of those goals. ## Housing Update The other major “upside” surprise over the last two weeks was the information on the housing market, which we discussed in detail in our last update on June 26. Interest rates on mortgage loans dipped for a few weeks this past spring, and the markets were constantly bombarded by biased announcements from people with interests in the real estate and mortgage industry, and the investment markets in general, about the inevitable “Fed pivot”. We believe homebuyers may have jumped too early and locked a loan payment that they thought they could quickly refinance. As a result, there was a couple of months of increasing activity in the housing and mortgage sector. Existing home sales spiked in a way that is typical for the early summer. It is still the slowest housing market in the last 8 years except for the 2020 Covid-related shutdowns”. Year-to-date sales, however, as still the lowest of all 8 years (second chart): [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing2306260534.png "Us existing2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing2306260534.png) It was also late spring. Most families move to a new home during the summer break from school, so much of this uptick was seasonal and expected. However, interest rates on 30-year mortgages have once again climbed north of 7.25% nationally, which will cool off the mortgage market substantially. If the Federal Reserve raises interest rates again this month, as expected, rates will only move higher. Home prices have cooled somewhat; less than we think is coming overall, but also less than a market this slow would indicate. YTD change in home prices are now down 3.1% from 2022. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-Price2306260534.png "Us existing price2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-Price2306260534.png) Mortgage rates are so high, most families cannot afford to qualify for a home loan at these prices, so the answer to why prices haven’t fallen further (and more quickly) is the current lack of inventory available for sale. We believe this will increase quickly this fall as both student loan payments resume, and the economy continues to cool off. Sadly, this will mean a stream of homes lost to job losses and impossibly high payments that home buyers in 2021 and 2022 thought they could refinance for a lower rate by now. There will also be a dearth of houses bought as investment properties that we believe will re-enter the market as people who bought houses to rent out or AirBnB have their business loans (real estate investors don’t get 30-year fixed mortgages) remain high or go even higher due to prolonged interest rate hikes. [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-Inv2306260534.png "Us existing inv2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Existing-Inv2306260534.png) ### What this means for you We remain convinced that there will be a significant correction in real estate over the next 2-3 years, starting first in commercial real estate and then extending into residential markets. Despite the rally in real estate related stocks this year (which we do not believe was sustainable or wise), our investment models continue to avoid the real estate sector for now. ## Manufacturing and Service Sector Updates After we got the Philly and Chicago reports two weeks ago, we had several more regions of the US economy report their results in the interim. All point to a significant slowdown in economic activity which is broadly spread across the nation, confirming month after month, and all of which points to slower hiring demand (which defies some of the labor numbers we receive, as we discussed above). Let’s start with the S&P Global MARKIT (national) survey. Manufacturing is decisively in recessionary territory and getting worse. It’s also coming in lower than expected repeatedly: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Markit-Manuf2306260534.png "Us markit manuf2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Markit-Manuf2306260534.png) Services have remained stronger nationally, but also dropped lower than expected. The services sector will follow the manufacturing sector into recession, but it’s possible that services will see less of an impact overall: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Markit-Serv2306260534.png "Us markit serv2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Markit-Serv2306260534.png) This S&P data is confirmed by the info coming out of the Dallas Region: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Dallas2306270512.png "Us dallas2306270512 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Dallas2306270512.png) And the Richmond, VA region (largely defense and nautical industries): [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Richmond2306280454.png "Us richmond2306280454 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-Richmond2306280454.png) And the Chicago surprised to the downside, as well: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-MNI2307030548.png "Us mni2307030548 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-MNI2307030548.png) Nationally, we see the same kind of confirmation from the ISM survey that we saw in the S&P, and that the sector is down in all parts of its supply cycle. Literally every part of manufacturing – every step in the production and selling process – has slowed: [![](https://nvestadvisors.com/wp-content/uploads/2023/07/US-ISM-Detail2307050441.png "Us ism detail2307050441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/07/US-ISM-Detail2307050441.png) ### What this means to you Forget what the market is doing – this is what companies themselves are telling you is going on. Both the Manufacturing and Service sectors, here in the US and abroad, are pointing to a rapid slow-down in their business prospects. We need to make sure we are properly protected against the slow-down in sales which will sadly include job losses and even some business failures. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Quarterly Client Town Hall Meeting - July 12, 2023](https://nvestadvisors.com/quarterly-client-town-hall-meeting-july-12-2023/) **Published:** June 26, 2023 **Author:** nVest Advisors **Content:** ## [![](https://nvestadvisors.com/wp-content/uploads/2023/06/Q1-2023.png "Q1 2023 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/Q1-2023.png) ## Please plan to attend our QUARTERLY CLIENT TOWN HALL on July 12! The markets are getting choppier ahead of what we strongly believe will be a significant recession in the U.S. and many other parts of the world. Although [we keep you informed every week with a macroeconomic update](https://nvestadvisors.com/category/mailchimp/rssecon/) and are adjusting our investment models carefully in response to developments, we want to start the tradition of giving our clients and prospective clients the opportunity every three months to hear about what’s going on and how we are responding to it, answer your general questions, and even have a guest speaker. ### Please mark your calendars and plan to attend! (Meeting link will be sent to our clients ahead of the event.) **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Media, Podcasts, Press Releases, public, Small Business, Webinars **Tags:** 401k, 403b, client service, client town hall, colorado, economy, family, fiduciary, finance, market, nVest Advisors, retirement, small business, texas, update --- ### [Upcoming Summer Events & Office Hours](https://nvestadvisors.com/upcoming-summer-events-office-hours-2/) **Published:** June 26, 2023 **Author:** nVest Advisors **Content:** ## **[![](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-12-300x251.png "Fb posts 12 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-12.png)We’re all getting super-excited for summer to finally get here and we hope you will take some much-deserved time to rest and relax.** ## **We have a federal market holiday and company activities coming up in July, and we wanted to make sure our clients were aware of changes to our normal office activities and appointment availability.** ## **Please reach out to our office if you have questions.** ## **Have a GREAT start to your summer!** - #### **July 2-9, 2023:** No appointment times are available. Regular trading and account service will continue. Please expect up to a 24-hour delay in non-urgent communications. Our Weekly Economic Update for July 3 will be unaffected. - #### **July 4, 2023:** US Markets, Banks, and Government offices are closed on July 4 for **INDEPENDENCE DAY**. Our office will be formally closed that day. - **Wednesday, July 12, 2023: we will hold our second LIVE / RECORDED CLIENT TOWN HALL at 7pm Mountain Time. We will cover company news, give our clients an economic and market update, and introduce you to SORA Financial, our debt optimization partner. All clients are able to use SORA’s services completely free of charge and we’ll show you what they do and how you can benefit! Please mark your calendar and plan to attend.** - **In August, in anticipation of two new advisors joining nVest by September, we will be moving into a new, bigger office in downtown Colorado Springs! There will be no interruption in service or appointment availability, but we may have mail delays for about a week.** - **As our primary custodian, TD Ameritrade, completes its merger with Charles Schwab in August, we anticipate a possible service slow-down in the last two weeks of August as both companies work to ensure the transfer of client assets and accounts into the Schwab platform will be smooth and seamless. There will be much more about this merger in our upcoming CLIENT TOWN HALL meeting in mid-July.** **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, Individuals and Families, Mailchimp **Tags:** announcement, appointments, Calendar, client news, holiday hours, independence day, july, june, juneteenth, may, memorial day, news, office hours, schedule, service, summer, vacation --- ### [Weekly Economic nSight: June 26, 2023](https://nvestadvisors.com/economic-update/) **Published:** June 26, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday! Hard to believe this is our last Monday in June!** We had a fairly light week in economic news but this coming week is significant, so there will be lots to share with you right before the July 4 Holiday. Be sure to subscribe so you don’t miss an update. Keeping up with global economic data is a monumental task. With a financial planning and investment management firm to run, that is committed to doing our own independent research, we are forever grateful to the many excellent Economic aggregation resources that take the work out of gathering this data for us each day. They don’t give us analysis – that’s our job – but just compiling this information can be a full-time job. We want to give a big shout-out (and a thank you) to [MacroMicro](https://en.macromicro.me), [TradingEconomics](https://tradingeconomics.com), and [The Daily Shot](https://thedailyshot.com). These are three of our favorite places to see a daily aggregation of economic data, and you’ll often see their charts used here. Also, though it’s spotty so far, I want to blog a daily journal of economic activity as we head into this recession, which will shortly include daily market and trading activity. You can find those at my personal finance blog (undergoing a complete rebrand this summer): [“Think Like A Rich Guy”):](https://thinklikearichguy.com) - **At the Top: Volatility and the Markets** - **Jobs Update** - **Housing update** - **Leading Indicators** - **Manufacturing and Service Sector Updates** ## At the Top: ### Volatility and the Markets It’s been fascinating to watch the investment markets surge this year, especially from the perspective of a macroeconomist. All of our data (presented here with a realistic and objective analysis) points to a slowing economy and perhaps even a steep recession. There is a multitude of objective data sources that show this slowdown clearly, and there are even economic indicators that are wildly – even historically – out of “whack”. Yet, still, the markets are trying too hard to rally. Last week, that wild optimism finally reversed, as the reality of the Federal Reserve actually having the resolve to combat inflation, coupled with the reality that inflationary pressures are nowhere finished (as we’ve said here for many weeks now), grabbed the market’s attention. We currently live in an economy that doesn’t know where it is headed – take jobs, for instance. Hiring remains elevated, but so does the number of new and continuing unemployment claims. Both of these cannot be right. The same thing with housing. Housing starts surprised to the upside in May, as you will read below, but mortgage rates have spiked, mortgage applications have collapsed, and home prices are falling. Which is correct? Nearly 20 years in this business have taught me a few things that are universal truths: despite all the training I got early on to believe that markets are efficient and rational, they are in no way either one. Markets are often referred to as a “random walk” day-to-day. It’s a matter of how many buyers vs. sellers wild casinos on a daily basis, fraught with cognitive bias and herd mentality. They are rarely efficient in the short term. They are emotional basket cases; if you could date “The Market”, you’d probably not ask for a second date once you saw the emotional volatility. Also, most market participants are not long-term investors. They are there to trade for short-term gains. Market traders make a living riding the roller coaster. I could go on further about the implied lack of ethics in market trading (in which there must be a winner and a loser in every trade), and how it contrasts with actual investing (in which someone with capital sees a company with potential and wants to invest in its future success), but I digress. What we know about the economy is this: nearly every data point we can track points to a coming slow-down, and the current trajectory of the Federal Reserve’s FOMC cannot do anything else except slow the economy. We know there is a lag effect of several months from some of these decisions before they show up in the broader economy. We also know that no economic number moves in a totally straight line – there will be mini-peaks even along a longer-term downward trend. Yet, the market rallies, in our opinion foolishly, as we head over the economic cliff. This is also a normal occurrence, sadly. In many recessions, markets move up and even speed up, right before the collapse that everyone always later calls a “surprise” or “unexpected”. That’s nonsense. The economy is waving red flags all over the place. We remain strongly convinced that a recession is inevitable. Here are just a few of the reasons we don’t often share with our clients and readers as to ancillary data that wholeheartedly supports our thesis. First, the Yield Curve of U.S. Treasuries. When short-term treasury bonds have higher yields than long-term bonds, we call this the Yield Curve “inverting”. It is an almost perfect indicator of a recession in the next year or so. The curve inverted in the late spring of 2022, and as of today, that inversion has never been worse. Every time the curve inverted by even a small amount, a recession immediately followed. Look where it is today: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/RA-Almost-90pc-of-the-Treasury-curve-is-inverted22306260534.png "Ra almost 90pc of the treasury curve is inverted22306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/RA-Almost-90pc-of-the-Treasury-curve-is-inverted22306260534.png) Looking at it through the lens of a diffusion index, we see the very same conclusion: we are at the peak of a yield curve inversion that has only ever, in the past, led to a recession. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/RA-Almost-90pc-of-the-Treasury-curve-is-inverted2306260534.png "Ra almost 90pc of the treasury curve is inverted2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/RA-Almost-90pc-of-the-Treasury-curve-is-inverted2306260534.png) Yet the markets are wildly bullish; in our opinion, foolishly so. The red line is the current sentiment among retail investors (that’s you and me). Why the optimism? Surely not because of what’s ahead of us. Quite the opposite, actually: investors are optimistic about the future because of the last six months of rally that are already in the rear-view mirror. Forward optimism is often the result of a backward-looking response to market movement. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Retail-sentiment2306220442.png "Eq retail sentiment2306220442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Retail-sentiment2306220442.png) Here’s the kicker, though: the smart money – the institutions – know the game is up, and are positioning for the inevitable drawdown. Below is a comparison of how often the VIX (often called the FEAR INDEX) matches the movement of the S&P 500. Because the S&P are the stocks of companies, upward movement in the S&P would indicate optimism and increased investment. When the VIX moves up, however, that indicates growing uncertainty and fear. So in theory, the S&P and the VIX should move in opposite directions (negatively correlated), and you can see that for the most part, they do. Right now, however, they are moving in the same direction, historically so. That means that for all the wild optimism, there are smart, often institutional investors positioned to have the floor fall out from under all of this celebration. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-VIX-SPX-correl2306260534.png "Eq vix spx correl2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-VIX-SPX-correl2306260534.png) We can see this blind optimism a little more clearly in the sentiment indicator below: markets are FAR too optimistic at the moment and like a rubber band that gets stretched too far up from what is realistic, it will eventually need to “snap back”. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-GS-positioning-indicator-stretched2306220442.png "Eq gs positioning indicator stretched2306220442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-GS-positioning-indicator-stretched2306220442.png) One very simple reason why this is not sustainable? Companies are finding it harder and harder to obtain credit right now. That will automatically mean less investment in their companies, fewer capital expenditures, lower payroll, and overhead expenses, etc. The economy is not doing well, it’s warning us all over the place. The smart investor will heed the warning. Despite how ornately the market wants to decorate its house, the economy is the foundation, and it doesn’t matter how pretty the house is if the foundation is rotted beneath it – it WILL come down. ![](https://nvestadvisors.com/wp-content/uploads/2023/06/CR-Bus-loans2306200427.png "Cr bus loans2306200427 nvest advisors") ## Jobs Update The weekly jobs numbers showed an uptick in initial claims for the week, kind of in line with seasonal norms but also rising significantly since the start of the year. This is the sixteenth week in a row of jobless claims coming in higher than the average of the last 4 “normal” years: 2017, 2018, 2019, and 2022. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims2306260534.png "Us claims2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims2306260534.png) As I’ve said for the past few weeks, though, it is the CONTINUING claims that give us the more clear picture. Continuing claims have continued to increase relative to previous years, and while still not anywhere near the highs of 2014, 2020, and 2021, they have moved from the lowest in a decade to the middle of the pack in just a few weeks. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-cont2306260534.png "Us claims cont2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-cont2306260534.png) So are jobs looking to rebound anytime soon? Not according to many parts of the economy. Here is just one example, from data reported by the Kansas City Federal Reserve this past week (more on them below): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-KC-Empl2306260534.png "Us kc empl2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-KC-Empl2306260534.png) ### What this means to you Layoffs have been happening all year so far, but until now, most of those who lost their jobs were able to quickly find a new one, often before their severance packages ran out, and so they never had to file for unemployment benefits. That has definitely changed. New filings are up, which indicates that people can’t find new work before their severance packages run out, and continuing claims are now the highest (excluding Covid) since the start of the last significant recession. Sadly, we anticipate much worse labor conditions in the coming months as business conditions worsen, particularly in the small business sector. Recessions don’t mean a huge number of people will lose their jobs. It might mean our unemployment rate climbing from 3.5% today to maybe 5% or 6% – still a major impact on consumer spending and therefore, economic output, but it doesn’t mean the end of the world. However, that said, the most important thing you can do to prepare, particularly if your job is at risk in any way, is to make sure your monthly expenses are minimal and you have sufficient emergency savings. We can help you with both of those goals. ## Housing Update We got a deep-dive into the housing market this past week, with a lot of data that shows optimism from builders (mainly because the raw materials costs for housing is finally lower), but the mortgage data shows consumers are just not buying. So we have an issue with builders building, but no one being able to afford the homes they’re making. We believe this, along with the downturn in the economy later this year, will cause a bit of a “glut” in housing that isn’t being seen yet, but might cause a good buying opportunity in 2024 and perhaps 2025. First, homebuilder sentiment jumped higher than expected, as their anticipated sales also climbed. We believe this survey was taken before the very strong announcements by the Federal Reserve to expect higher interest rates for longer last week, and this sentiment will reverse in the coming months. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NAHB2306200427.png "Us nahb2306200427 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NAHB2306200427.png) But that didn’t stop home builders from jumping on lower building costs to start a lot of new housing projects: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts2306210442.png "Us starts2306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts2306210442.png) Building permits are not at the same highs, so there may be some cooling off already built into the drop in sentiment that we anticipate, but still looked good: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-Permits2306210442.png "Us starts permits2306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-Permits2306210442.png) There was a spike in single-family houses starting construction: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-1-Unit2306210442.png "Us starts 1 unit2306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-1-Unit2306210442.png) That was slightly tempered by the survey by our central bank, which showed an actual cool-down. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-Under-construction22306210442.png "Us starts under construction22306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-Under-construction22306210442.png) Where real activity is moving is in the multi-family housing, spiking to a decade-high, perhaps in anticipation of home prices and interest rates remaining elevated and keeping many families from being able to buy their own homes: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-52306210442.png "Us starts 52306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-52306210442.png) This time, the Fed’s data confirmed the spike in housing units for multiple families: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-Under-construction2306210442.png "Us starts under construction2306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-Under-construction2306210442.png) However, mortgage purchases are still at a decade low and continue to down-trend… [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA2306220442.png "Us mba2306220442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA2306220442.png) … and rate locks, which means a home sale is imminent, are also at years-long lows: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Rate-lock2306220442.png "Us mba rate lock2306220442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Rate-lock2306220442.png) So now, we have an impossible mix of data: mortgage applications collapsing, but homebuilder sentiment soaring. Normally these two, for totally obvious reasons, go together very closely. We believe the current conditions are ripe for a surprise collapse and sudden surge in the inventory of new homes later this year and for much of 2024, leading to a sizeable drop in home prices. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NAHB-v-Mortg-Apps2306200427.png "Us nahb v mortg apps2306200427 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NAHB-v-Mortg-Apps2306200427.png) Mortgage rates have peaked again and do not appear to have any reason in the coming weeks to abate: ![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Mortg-Rate-ST2306200427.png "Us mortg rate st2306200427 nvest advisors") So why would builders be moving to build so many homes, if they are so difficult to acquire for most families? It may be because the price to build a home has become much less expensive, so builders may anticipate being able to offer greater price reductions if conditions do not improve, and still be able to book a profit on each home: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-PPI2306210442.png "Us starts ppi2306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Starts-PPI2306210442.png) The only thing keeping up the prices of existing homes as much as they have so far (though the average home price is down about 4% from last year’s highs so far) is that so few homes are on the market at the moment. We do not believe that will continue as the recession worsens and this glut of new homes finishes completion. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Redfin-Number-of-homes-for-sale2306220442.png "Us redfin number of homes for sale2306220442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Redfin-Number-of-homes-for-sale2306220442.png) ### What this means for you The housing market is now at a crossroads – buyers are few but builders are optimistic and building anyway. Logically, this will create an economic surplus, which should drive home prices lower over the next couple of years. ## Leading Indicators We cannot stress again the significance of the Conference Board’s Leading Indicators Index (going forward six months). This index merges a variety of forward-looking economic indicators together into a single view of the coming economic conditions for the country. Anytime in the past, going all the way back to the index’s creation in the 1960s, when the indicator was this low, a recession was imminent. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Leading-6m2306260534.png "Us leading 6m2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Leading-6m2306260534.png) And as I say often in this blog, it’s all about trajectory and velocity, not the most recent number. So how is this leading index faring on a month-to-month basis? Is it improving its trajectory, or continuing to decline? The answer is shown below: ![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Leading2306260534.png "Us leading2306260534 nvest advisors") ### What this means to you We cannot stress this enough: literally every indicator showing a coming recession is flashing red. Do not let complacency (or impatience) get you back into an investment market before the bottom has been reached. The investment markets will bottom out before the economy does, but we are nowhere near the market bottom, in our opinion. ## Manufacturing and Service Sector Updates: Confirming the slowdown being predicted by the Leading Indicators (above), we got manufacturing and service updates from the Philly and Kansas City Fed this past week, as well as some combined national and global statistics. First, Kansas City Manufacturing came in MUCH lower than expected, and deeply in recessionary territory: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-KC-Fed-Manuf2306260534.png "Us kc fed manuf2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-KC-Fed-Manuf2306260534.png) And as we showed you above in the Jobs update, manufacturing in this region has started layoffs in significant numbers: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-KC-Empl2306260534-1.png "Us kc empl2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-KC-Empl2306260534-1.png) Similarly, in the Philly region, the services info came in this past week, showing a marked decline in the Services sector, also: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Philly-Services2306210442.png "Us philly services2306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Philly-Services2306210442.png) This also showed a significant downward revision in employment for both full and part-time permanent workers, as well as temporary hires: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Philly-Services-Empl2306210442.png "Us philly services empl2306210442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Philly-Services-Empl2306210442.png) Also, the S&P global production indexes were released, confirming that the slow-down is not limited to specific parts of the U.S. or even the United States as a whole. Global manufacturing shows in recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Markit-Manuf2306260534.png "Us markit manuf2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Markit-Manuf2306260534.png) However, Global Services are still treading water for now, though both their input and output prices are plummeting. This is a good thing for consumers eventually, but it means that demand for their services is dropping rapidly: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Markit-Serv2306260534.png "Us markit serv2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Markit-Serv2306260534.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Markit-Manuf-Prices2306260534.png "Us markit manuf prices2306260534 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Markit-Manuf-Prices2306260534.png) ### What this means to you Forget what the market is doing – this is what companies themselves are telling you is going on. Both the Manufacturing and Service sectors, here in the US and abroad, are pointing to a rapid slow-down in their business prospects. We need to make sure we are properly protected against the slow-down in sales which will sadly include job losses and even some business failures. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic nSight: 06-19-2023](https://nvestadvisors.com/weekly-economic-update-06-19-2023/) **Published:** June 19, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Juneteenth holiday! Our office (and all U.S. government, bank, and financial institutions) are closed in observance of the holiday**. The past week produced a combination of familiar and pretty uncommon numbers. Because we address some of them so often (housing, for instance), we’re going to focus this week on some less-than-usual data streams to assess where the economy is headed. We believe as the summer continues, the numbers will begin to surprise, and then panic, Wall Street, and we will be needing to update more than once per week. Check out Jeremy’s (almost)[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **At the Top: The Fed paused, but strongly implied more hikes are coming** - **Jobs update** - **Consumer spending and sentiment** - **Inflation update: CPI and PPI** - **Housing continues to cool** ## At the Top: ### The Fed paused, but strongly implied more hikes are coming. As expected, the Federal Reserve’s FOMC announced a pause in rate hikes until their July meeting, to allow an assessment of incoming financial data, particularly core inflation and employment. Chairman Powell, however, strongly urged the markets not to assume the Fed was finished with rate hikes, and forcefully reminded market participants that a 2% inflation target was the Fed’s dominating objective; other things will be allowed to “break” in order to meet this objective. Core inflation, as we will touch on today, is very “sticky” compared to the Fed’s previous projections, and remains so even today. It’s made the Fed look pretty inaccurate in their previous projections so far, remaining much higher than they’ve expected (and ticking back up again). This has caused the Fed to have to revise its inflation expectations at every meeting for about the last two years. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Fed-Inflation-forecasts2306190502.png "Us fed inflation forecasts2306190502 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Fed-Inflation-forecasts2306190502.png) ## Jobs Update The weekly jobs numbers continue to puzzle me somewhat. On the one hand, hiring still looks strong, but both initial and continuing claims say the exact opposite. It’s true that we don’t have mass layoffs happening at the moment, but those who are laid off are having a harder and harder time finding another job. Initial claims for unemployment benefits ticked up and are now starting to climb in a comparison chart of the last 10 years (but still below the average): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims2306160540.png "Us claims2306160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims2306160540.png) Jobless claims are significantly higher every week now, than the average of the last 3 “normal” years (the craziness around Covid removed): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims22306160540.png "Us claims22306160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims22306160540.png) And when we look back at just the year prior (how much has changed since the same month last year), a much clearer picture emerges. We are definitely seeing a cooling off of the labor market and many people are starting to lose jobs. Already, the labor market has deteriorated in a single year at the fastest pace since the last Great Recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-YoY2306160540.png "Us claims yoy2306160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-YoY2306160540.png) But as I’ve said for several weeks now, it’s the CONTINUING claims that I believe, are giving me the clearest picture of a recession coming. At first glance, compared to the other years in a side-by-side comparison, continuing claims don’t look to be too bad (though the trend is against the seasonal norms and we’ve gone from the lowest in the decade to now only the fourth-lowest in just the last few weeks):[![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-Cont2306160540.png "Us claims cont2306160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-Cont2306160540.png) It’s when you look closely at the change from June of last year, that a true and clear trajectory emerges. Except in serious economic challenges (2008-2011 and Covid), the continuing jobless claims are typically VERY tightly connected with the previous year (because a lot of hiring surges and layoffs are seasonal, so a June looks like a June, which looks like a June). It is only when serious economic problems emerge that you see a wild swing away from the seasonal norms. And now, we definitely have one, in that our continuing jobless claims have spiked up dramatically since the start of 2023, and are now 30.1% higher than June of last year. That trend looks more like the spike in 2008 than anything else. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-Cont-YoY2306160540.png "Us claims cont yoy2306160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-Cont-YoY2306160540.png) Looked at another way, there has NEVER been a continuing claims rate this high that did not accurately predict a recession. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-Percent-of-states2306120444.png "Us claims percent of states2306120444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-Percent-of-states2306120444.png) So will this trend continue, or will it reverse? In the near term, we strongly believe that hiring conditions will continue to worsen, especially in the small business sector, where about 70% of all U.S. jobs are actually found. Here are some surveys of business conditions for small businesses. First, retail sales have fallen off a cliff already the past year or so, but that is expected to significantly worsen as banks offer less and less credit to consumers: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Ret-Tighter-credit-conditions-will-be-a-headiwnd-for-retail-slaes-going-forward2306160540.png "Us ret tighter credit conditions will be a headiwnd for retail slaes going forward2306160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Ret-Tighter-credit-conditions-will-be-a-headiwnd-for-retail-slaes-going-forward2306160540.png) We’re already seeing retail sales crash compared to the year prior: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Ret-Johnson2306160540.png "Us ret johnson2306160540 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Ret-Johnson2306160540.png) And similar to the pullback in loans to consumers, banks are also tightening their lending standards for small businesses. The dark blue line is the current availability of loans and lines of credit for small businesses. Hiring/layoff trends lag behind a little, but closely follow this credit availability (or lack of it). [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Tight-credit-poses-risks-for-the-labor-market2306120444.png "Us tight credit poses risks for the labor market2306120444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Tight-credit-poses-risks-for-the-labor-market2306120444.png) And already, we are seeing companies hiring less and complaining about the tight labor market much less than they were even a couple of months ago. Here are the number of times companies mentioned labor shortages in their corporate earning conference calls: ![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-GS-Mentions-of-labor-shortages2306120444.png "Us gs mentions of labor shortages2306120444 nvest advisors") And the number of job openings, in all authoritative surveys, is declining rapidly: ![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-GS-JPLT-v-other2306120444.png "Us gs jplt v other2306120444 nvest advisors") ### What this means to you Layoffs have been happening all year so far, but until now, most of those who lost their jobs were able to quickly find a new one, often before their severance packages ran out, and so they never had to file for unemployment benefits. That has definitely changed. New filings are up, which indicates that people can’t find new work before their severance packages run out, and continuing claims are now the highest (excluding Covid) since the start of the last significant recession. Sadly, we anticipate much worse labor conditions in the coming months as business conditions worsen, particularly in the small business sector. Recessions don’t mean a huge number of people will lose their jobs. It might mean our unemployment rate climbing from 3.5% today to maybe 5% or 6% – still a major impact on consumer spending and therefore, economic output, but it doesn’t mean the end of the world. However, that said, the most important thing you can do to prepare, particularly if your job is at risk in any way, is to make sure your monthly expenses are minimal and you have sufficient emergency savings. We can help you with both of those goals. ## Consumer spending and sentiment With jobs and businesses feeling the squeeze, it would make sense that consumers would start reacting to protect their savings and “batten down the hatches” for potential job insecurity. The most recent University of Michigan sentiment survey shows that consumers have been a little more hopeful since inflation started moving down last year (and the stock market rallied up a bit, in our opinion: unsustainably and right before the recession begins): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Mich2306190502.png "Us mich2306190502 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Mich2306190502.png) But when asked how things are now versus 5 years ago, the story isn’t a happy one: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Mich-Curr-fin-sit2306190502.png "Us mich curr fin sit2306190502 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Mich-Curr-fin-sit2306190502.png) Consumers are also telling surveyors that they intend to pull back on all of their spending that isn’t absolutely necessary (we call this “discretionary spending”): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Discret-spend2306130543.png "Us discret spend2306130543 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Discret-spend2306130543.png) We are already seeing (thankfully!) consumers spending less on credit cards in the last few months, and believe this trend will continue: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-spending-MAy2306060435-1.png "Us cc spending may2306060435 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-spending-MAy2306060435-1.png) One thing I’m particularly concerned with right now is the delinquency rates on credit cards, as we can see here. They are spiking up in every income bracket, but much more so in the lower 60% of incomes. These are the consumers most negatively impacted by inflation anyway, so I’m afraid many of them have been using the credit cards to make ends meet each month, and were putting even gas and groceries on their cards. As interest rates have climbed over the last year, so have the rates on those cards. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-delinq2306060435-1.png "Us cc delinq2306060435 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-delinq2306060435-1.png) One of the questions I am often challenged with by impatient clients and market “bulls” online is: “where is this recession you’re been warning us about”? A fair question. The data tells us that the trajectory is NOT wrong, but it took longer to drain out all of the excessive government giveaways that happened during the Covid pandemic than many economists expected. If anything, the assessment we’re making of a recession was just early, but we are 100% convinced we are correct in where this is all headed, and this is why we’ve been so protective with our client funds over the past year. When will the recession really get here? By some measures (Manufacturing and now Service ISMs, for instance), it’s already here. But since consumer spending makes up about 70% of our total economic activity, it will hit as consumer spending slows, and bottom out somewhat after consumers are out of money. Nearly every major bank and investment firm, in addition to government bodies, are tracking this closely. Though their paths hit “ZERO” and go negative for consumer spending at slightly different speeds, the assessments are universal. Let’s examine a few. First, researchers at Morgan Stanley show spending crashing from a peak at the beginning of this year and reaching a bottom in the third quarter of 2023, with a VERY slow recovery out of it and well below historical averages in consumer spending: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MS-Only-one-negative-quarter-Consumer-spending2306060435.png "Us ms only one negative quarter consumer spending2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MS-Only-one-negative-quarter-Consumer-spending2306060435.png) Next, we have Deutsch Bank, which is projecting consumers to be out of cash right at the start of 2024. ![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Excess-savings32306060435.png "Us excess savings32306060435 nvest advisors") Wells Fargo analysts predict a rapid drop in personal savings all year, with it bottoming out sometime in 2024: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Excess-savings2306060435-1.png "Us excess savings2306060435 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Excess-savings2306060435-1.png) The government’s own estimates puts consumers out of excess savings in mid 2024: ![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Consumer-resilient2306060435-1.png "Us consumer resilient2306060435 1 nvest advisors") And another analysis breaks it down two ways: first, do we spend and save “like normal”, using a more conservative spending rate from 2016 to 2019 (the green lines), or do we spend like we did in 2019 (much more aggressively) – the blue line? In a more aggressive scenario, consumers are out of cash in just 4 months. If they are more thrifty, it’s just a year later. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-When-will-savings-run-outQ2306060435-1.png "Us when will savings run outq2306060435 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-When-will-savings-run-outQ2306060435-1.png) > ### ***Student Loans: the one thing everyone keeps forgetting*** > > ***The one thing that makes me believe we will see consumer spending drop much faster and much harder – by August of this year, even – is the fact that Student Loan Payments will resume in October. Student loan forbearance meant that almost two TRILLION dollars of debt that there was no interest and no payments being made on since early 2020 (and which consumers have long ago stopped setting money aside for) became the money that kept the economy humming along since Covid.*** > > ***THIS ONE SINGLE FACTOR is one of the primary reasons we had the jump in spending, and has propped up the economy for the last three years. The student loan forbearance, the stimulus checks and the PPP business loans, all created the inflationary problems we’re facing today.*** > > ***That is coming to an end in just four months, and notices are already being sent to student loan holders of what their payments will be.*** > > ***People with student loans, and there are a LOT of them, have to now reinstate those loan payments back into their monthly budgets. The AVERAGE student loan payment is between $621vper month for a bachelor’s degree, but this varies wildly by the level of education and income level (since repayment plans can be income-based):*** > > ***[![](https://nvestadvisors.com/wp-content/uploads/2023/06/average-student-loan-payment.png "Average student loan payment nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/average-student-loan-payment.png)*** > > Those monthly bills are coming due this October once again, which will radically alter post-Covid spending habits. > > ***I believe the slowdown in spending for these consumers will be immediate and will impact nearly all of the summer’s nondiscretionary spending, as these borrowers start to readjust their budgets for the resumption of those loan payments. It will be quite a shock to many family budgets that got used to spending the loan payment on other things. I truly believe this may be the “wrecking ball” that sends us from what might have been a soft-landing type of recession, into a much more serious one. We’ve been preparing our clients’ funds for this for a year now.*** ### What this means for you I cannot stress enough the importance of budgeting your family for a slowdown in economic activity and doing the same – to a greater degree – for your small business. If you need help with this, particularly with debt payments as interest rates rise and budgets get even tighter, please reach out to us for a free financial audit. ## Inflation Update: CPI and PPI Inflation presents some good and bad news for us this past week. First, PPI (the Producer’s Price Index), the prices companies pay on raw materials, shipping, energy and labor, continue to drop significantly. This is a good long-term trend: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PPI2306150439.png "Us ppi2306150439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PPI2306150439.png) But a lot of this was due to what is called Cyclical inflation and Supply Inflation. During Covid, it was often difficult to get raw materials, and so costs climbed until the supply chains were fixed. They are definitely fixed now, with trucking and shipping actually below normal capacity by quite a bit as of last week. However, CORE PPI (the stuff companies pay for regardless of supply conditions or economic activity, remains “sticky”: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PPI-Core2306150439.png "Us ppi core2306150439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PPI-Core2306150439.png) So while the trend is good, there is still work to be done to bring prices down sustainably. Now after the product is made and delivered to the store, the price change becomes CPI (consumer price index), which we can see is down from the overall peaks, but still hanging on stubbornly, and the trend the past 3 months is that it is starting to tick up again month-over-month (top chart). However, CORE CPI (again, the stuff you buy most often) remains very stubborn (bottom chart): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CPI-Core-goods-and-Services2306140443.png "Us cpi core goods and services2306140443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CPI-Core-goods-and-Services2306140443.png) When we look year-over-year instead of month-over month, we can see a better trend in making progress on CPI (top chart) but CORE CPI (bottom chart) remains very difficult to pull down: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CPI-YoY2306140443.png "Us cpi yoy2306140443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CPI-YoY2306140443.png) Is inflation really trending back down, though? One of the things we have to watch, in addition to the backward-looking (we call them “lagging” reports like the ones above, are the current prices of commodities (the raw materials and staples that make up the CORE). Last week, inflationary pressures resumed in most of the areas that make up CORE inflation: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/inflation.png "Inflation nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/inflation.png) ### What this means to you We strongly believe inflation is not finished, and if the Federal Reserve lets off the “gas” on its quantitative tightening process too quickly, inflation will resume upward. In fact, we can already see commodities rising again this past week. Anecdotally, I’ve personally seen gasoline at our closest convenience store rise from about $3.29 a gallon to over $3.70 a gallon just this past week. We believe there is much more work to be done on inflation before the Fed can finally pivot and start the healing process. ## Housing Update Finally, a quick update on mortgage applications, which gives an overall look into the health of the credit market. We’ve previously documented our concerns about the real estate market going into this recession, especially the potentially devastating impact on commercial real estate. But we do believe that because so many residential homes were purchased as investments, we will see the residential marketplace impacted more significantly than many other analysts as interest rates on business loans rise (Remember – if you buy homes to rent out or to AirBnB, you don’t get a 30-year home loan for that property. Often you only get a 10-year business loan, many of which have fluctuating interest rates.) As interest rates have started to climb again, mortgage applications have dropped. Remember, we are at the peak of the mortgage market for the year (June is when most families move), and it will worsen from here for the rest of 2023. We are already at the worst mortgage market in the past decade: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Mortgage-applications-continue-to-run-well-below-2014-levels2306150439.png "Us mba mortgage applications continue to run well below 2014 levels2306150439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Mortgage-applications-continue-to-run-well-below-2014-levels2306150439.png) Similarly, rate locks (loans that appear to be headed to a successful closing within 30-45 days) have also diminished significantly: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Rate-lock-count2306150439.png "Us mba rate lock count2306150439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Rate-lock-count2306150439.png) ### What this means to you Our estimated trajectory for the housing and mortgage industry – into a housing recession – remains on track. It is not a good time to sell your home, but it’s better to sell now than it will be a year from now. Conversely, if you are looking to buy, be patient and get your credit and debt situation optimized, because we believe there will be strong buying opportunities in 2024 and 2025. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic nSight: 06-12-2023](https://nvestadvisors.com/weekly-economic-update-06-12-2023/) **Published:** June 11, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our Economic nSight articles are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday! We’re in the Great State of Texas to start the week, visiting in-person with our clients in the South Texas area**. The past week produced a combination of familiar and pretty uncommon numbers. Because we address some of them so often (housing, for instance), we’re going to focus this week on some less-than-usual data streams to assess where the economy is headed. We believe as the summer continues, the numbers will begin to surprise, and then panic, Wall Street, and we will be needing to update more than once per week. Check out Jeremy’s (almost)[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **At the Top: We’re on the knife’s edge** - **Jobs update: something is broken** - **I repeat: the current stock rally is unsustainable** - **The service industry is now slowing down noticeably** - **What do CEO’s see coming?** ## At the Top: ### We’re on the knife’s edge of recession. Morgan Stanley maintains an economic cycle indicator that shows the four stages of the economic cycle by different color codes. Their indicator just flashed red for this cycle, indicating that the downturn is confirmed and has begun: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MS-First-signs-of-downturnQ2306080433.png "Us ms first signs of downturnq2306080433 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MS-First-signs-of-downturnQ2306080433.png) ## Jobs Update We got a little more information on the jobs front from the controversial report we told you about a week ago. Officially, US jobs reported another slight uptick in hiring last month (in the official survey – the household survey, as we discussed last week, is wildly off from this official government report): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP2306050508.png "Us nfp2306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP2306050508.png) However, when households themselves were surveyed, they reported a substantially worse situation – about 390,000 job LOSSES in May: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-HH-Survey2306050508.png "Us nfp hh survey2306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-HH-Survey2306050508.png) There is a growing gap between the jobs numbers the government provides us, and private surveys of households. This has really never happened in the past, until the early part of 2021, when the government report showed a nice, steady increase in jobs but households told us a very different story. The gap between the two is widening, and I stress again, is unprecedented. One of these two reports is not the truth. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-HH-Survey42306050508.png "Us nfp hh survey42306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-HH-Survey42306050508.png) The government’s reports have also been wildly out of alignment with economists’ private estimates, surprising the professionals an astounding 14 straight months in a row with better-than-expected payroll news. Again, unprecedented, and I fear, likely untrue. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Beanting-forecast-again2306050508.png "Us nfp beanting forecast again2306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Beanting-forecast-again2306050508.png) We found out where a lot of the government’s jobs number came from. Since 2020, they have reported people starting a side gig as a new job, and about 700,000 of them have left their self-employment prospects behind since the peak in 2021. I’d argue that if it’s considered a job by the government on the way in, it should be counted as a job loss on the way out, but the government doesn’t do that. They keep a count of “new jobs” but these people ceasing to work for themselves a few months later don’t file for unemployment benefits, so they aren’t counted as either an unemployment claim or a job loss. I believe this factor alone is skewing jobs numbers in the official government reports heavily to favor the impression of a stronger-than-reality economy: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-HH-Survey22306050508.png "Us nfp hh survey22306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-HH-Survey22306050508.png) Other aspects of employment are also showing signs of a slowdown. The average weekly work week has dropped lower than expected, to 34.3 hours per week. Before layoffs begin, companies first stop hiring new (and temp workers), then they will reduce overall hours, then they might offer early retirement packages, and then they lay off or furlough. Right now, we can see a drop in the average workweek since its peak in early 2021: Areas below the shaded green line are confirmed recessions. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Hours2306050508.png "Us nfp hours2306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Hours2306050508.png) The average hourly wage, while still elevated above historical trends, is also dropping off its peak in 2021: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Wage-growth-wdgwd-lower2306050508.png "Us nfp wage growth wdgwd lower2306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Wage-growth-wdgwd-lower2306050508.png) It also appears to be harder to replace a lost job. This chart shows the number of people who were unemployed last month who find a job this month. A higher red line is a good thing, the lower the red line drops, the harder it is to find a replacement job. We can see that post-Covid, we have seen a dropoff in the number of people who are able to find work a month after being laid off. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Job-finding-rate2306050508.png "Us nfp job finding rate2306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Job-finding-rate2306050508.png) Also, the number of people who are permanently severed from employment (rather than being furloughed) is spiking and is already well within the range of the start of previous recessions (gray areas): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Permanent-job-losers2306050508.png "Us nfp permanent job losers2306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-NFP-Permanent-job-losers2306050508.png) ### What this means to you Something is “off” about the official government job numbers. It is becoming impossible to explain the number of positive surprises in the numbers we are getting from the Bureau of Labor Statistics, especially when we see so much dropping off in other areas. I would approach the current jobs numbers with a high degree of skepticism and expect to see a massive correction in those numbers come in to surprise the markets at some point this summer. ## Stocks are defying reality and it cannot hold up Once again, the stock market rallied strongly for the week, with many on Wall Street and in the media declaring a new “bull market”. This is rubbish and we will explain why in this section. Here’s how the S&P did compared to the various sectors of the economy. You can see that the riskiest and prone to failure during both recessions and high inflation did the best last week, while the best sectors for safety during a recession: consumer staples, utilities, and energy, underperformed. This is our first clue that the markets are not operating rationally: why, as the economy worsens, would Wall Street bet ON the investments that will do the worst during a recession? [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-W-Sectors2306050508.png "Eq w sectors2306050508 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-W-Sectors2306050508.png) It’s nearly all in Technology, too: one of the worst-performing sectors of the economy in every recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-DB-Sector-flows2306060435.png "Eq db sector flows2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-DB-Sector-flows2306060435.png) Also, is it a broad rally, supporting all 500 companies in the S&P? Not by a mile. In fact, if we just look at the 5 biggest companies in the S&P 500 index, we can see that the rally has been almost entirely in just those 5 companies. That’s 1% of the S&P index dragging up the entire index. The other 99% of companies are either flat or down still for the year. This is NOT a sustainable (or even realistic) rally. In fact, I’d say, in the case of these 5 companies, it’s another bubble in the making. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Top-52306070439.png "Eq top 52306070439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Top-52306070439.png) Wall Street is also pumping stocks again at a massive pace, pushing the “Fear and Greed Index” to the “Extreme Greed” category. This indicates the markets are overbought, and a downward correction is inevitable. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Nasdaq-fear-greed-CNN2306070439.png "Eq nasdaq fear greed cnn2306070439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Nasdaq-fear-greed-CNN2306070439.png) The same is true for the NASDAQ “Fear and Greed Indicator”. You can see that during periods of extreme greed (or fear), a rapid and inevitable snap-back always follows: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Nasdaq-fear-greed2306070439.png "Eq nasdaq fear greed2306070439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Nasdaq-fear-greed2306070439.png) Another measure of fear on Wall Street is the VIX (Volatility Index). This is a measure of how many optimistic vs. pessimistic options traders are out there each day. The higher the VIX, the more fearful the market participants s are becoming. This chart compares the VIX to the projected future earnings of companies in the S&P 500 index. Whenever the VIX drops very low, as it is today, we can actually see when investors are getting lazy about doing their research and may just be buying stocks because everyone else is. We have a definite climb in lazy, complacent investing right now: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Fwd-PE-v-VIX2306060435.png "Eq fwd pe v vix2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Fwd-PE-v-VIX2306060435.png) The price of our stocks since 2020 has risen far too fast for our country’s economic output to keep up with. A similar event happened in the latter part of the “tech bubble” in the late 1990s. That also resulted in a significant correction. This “bubble” is actually far worse than 1999’s. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/Bubble.png "Bubble nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/Bubble.png) A healthy stock market relies on a healthy economy, and 70+% of our economic output is the result of you and I spending our paychecks each month. So how is the consumer doing right now? Let’s look at a few key areas: credit use and the trend in the prices of the things we buy. First, consumer credit card usage has climbed back up since Covid. That can have two causes: we are doing really well and feel it’s okay to take on more debt, or we are having trouble making ends meet, and are starting to use credit cards to pick up the slack in our living expenses. Which is it? We’ll see in a minute. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-debt-Disposable-Income2306080433.png "Us cc debt disposable income2306080433 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-debt-Disposable-Income2306080433.png) One of the major problems with inflation is that while consumer credit spending might look like it’s trending up for healthy reasons, the effect of massive price hikes on basic items can skew the view quite a bit. The black line is what consumer credit card usage looks like with today’s prices. But if you strip away the price changes of the past few years, you get the blue line. So we are actually buying less with our credit cards; it just costs much more than it did before. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-Level2306080433.png "Us cc level2306080433 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-Level2306080433.png) Another major problem with credit cards is that most of them have adjustable interest rates, and as the Federal Reserve has hiked interest rates to help stop inflation, it’s caused credit card interest payments to jump up. This graph shows how much of our income is being take up by interest rate charges. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-Interest-payments2306080433.png "Us cc interest payments2306080433 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-Interest-payments2306080433.png) So while consumers are actually spending a lot on credit cards, they are purchasing less and less, but paying more and more for it. We are definitely slowing down our purchases, however. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-spending-MAy2306060435.png "Us cc spending may2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-spending-MAy2306060435.png) Plus, we can now see a definite jump in credit card delinquency rates, across all ages: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-delinq2306060435.png "Us cc delinq2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CC-delinq2306060435.png) And finally, we can see that our personal savings rate is actually declining rapidly since Covid. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Excess-savings2306060435.png "Us excess savings2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Excess-savings2306060435.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Consumer-resilient2306060435.png "Us consumer resilient2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Consumer-resilient2306060435.png) Depending on which measure of savings rate we use (pre- or post-Covid), analysts expect the personal savings rate to turn negative sometime between October of this year to October of 2024. Because student loan payments must resume this fall, I strongly believe it will be sooner rather than later. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-When-will-savings-run-outQ2306060435.png "Us when will savings run outq2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-When-will-savings-run-outQ2306060435.png) All of this is giving analysts every likelihood of a recession late this year. How long and how deep this recession will be is still up for much debate, but most analysts agree that the recession will begin in the next 3 or 4 months, at the latest: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Excess-savings-3A2306060435.png "Us excess savings 3a2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Excess-savings-3A2306060435.png) ### What this means for you The current stock market rally is limited to a few companies, is completely based on herd mentality, is devoid of a logical or economic basis, and CANNOT be sustained into a recession, though it is common for markets to rally right up to the start of one. Our clients are already invested for a recession in a very defensive macroeconomic-directed model, but your 401k or other outside investment accounts may not be. It’s time, in our opinion, to lock in those gains and shift into a defensive strategy until the stock market bottoms out. ## Service sector finally shows signs of a slow-down After holding on above the recessionary target for a few months, the national service sector (basically all companies that don’t manufacture a product) hit the recession trigger last week: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Services2306060435.png "Us ism services2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Services2306060435.png) With the reduced output, service managers also reported a slowdown in employment – layoffs are now happening in the service sector just like they have been for six months in the manufacturing sector: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Empl2306060435.png "Us ism empl2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Empl2306060435.png) Whatever backlog of orders service companies were working on after Covid has now been totally depleted, indicating a massive slow-down in the service sector is about to begin: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Supplier-here-is-the-backlog-of-orders2306060435.png "Us ism supplier here is the backlog of orders2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Supplier-here-is-the-backlog-of-orders2306060435.png) Of note, and a bit of positive news, is that the prices service companies were paying for their own raw materials and supplies continue to drop. This typically has a very slow, but positive effect, on the inflation consumers feel when paying for the final product or service these companies produce: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Prices2306060435.png "Us ism prices2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Prices2306060435.png)[![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Prices-v-CPI2306060435.png "Us ism prices v cpi2306060435 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Prices-v-CPI2306060435.png) ### What this means to you Both major parts of the economy: the manufacturing and service sectors, are now at or in recession. We remain uninvested in most of the U.S. economy at the moment, focusing our client’s money on sectors of the economy most able to withstand a protracted downturn (in small amounts). We believe this will get much worse before we find a bottom. ## What do CEOs think is coming? U.S. company CEOs are surveyed for their views on the economy from the vantage point of running their companies. Here’s the takeaway: First, their economic outlook isn’t completely gloomy, but it is fairly pessimistic (and trending lower): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CEO-sentiment2306080433.png "Us ceo sentiment2306080433 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CEO-sentiment2306080433.png) As a result of a deteriorating economy and pessimism setting in, it’s logical to see companies begin to “batten down the hatches” and reduce costs. Hiring is one of the major places we will see companies pull back on, and we are. CEOs report much lower outlook for employment in the coming months: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CEO-sentiment-Empl2306080433.png "Us ceo sentiment empl2306080433 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CEO-sentiment-Empl2306080433.png) ### What this means to you So much of the economic cycle is due to sentiment making us do the very things we fear will happen. When consumers are fearful, they stop spending. When companies are fearful, they stop hiring. All of these feedback on the general narrative and shape the economy we’re in. Things are worsening, and now sentiment is following. This doesn’t mean the end of the world; just that we will have a period of months to a year or two where economic output is lower than we’re used to, and sadly, this means that some companies may not survive and that some jobs are lost. Our job as your financial planner and investment manager is to get your household budget ready for these rough times and to make sure your investment portfolio rides through it with minimal impact. We’re hard at work doing exactly that while we watch the economic numbers come in daily. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic Update: 06-05-2023](https://nvestadvisors.com/weekly-economic-update-06-05-2023/) **Published:** June 5, 2023 **Author:** nVest Advisors **Content:** Jeremy Torgerson, CEO, CIO & Senior Advisor #### *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* #### *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* #### *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday! After taking a week off to celebrate Memorial Day, we have two weeks’ worth of data to go through, so this update will likely be a lengthy one**. It’s also interesting to watch the stock market rally (in our opinion, foolishly) based on some of these numbers, which clearly are indicating that the economy is slowing down, even if there is some robustness (and disparity) in the labor statistics. I’ll address the current market sentiment head-on and demonstrate why we believe this is neither realistic nor sustainable. We believe as the summer continues, the numbers will begin to surprise, and then panic, Wall Street, and we will be needing to update more than once per week. Check out Jeremy’s (almost)[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **June 4 OPEC Announcement & a deep dive into Energy** - **Jobs update** - **Stocks are inflated in an unsustainable way** - **Production slows but service holds on** - **Inflationary pressures persist** - **Mortgage and housing update** - **Miscellaneous** ## June 4 OPEC Announcement (& a deep dive into Energy) On June 4, the OPEC nations announced that the production cuts announced in April would continue through the rest of the year, and Saudi Arabia announced that they were voluntarily cutting another million barrels per day starting in July. This caused oil prices to spike in futures trading ahead of the market opening today. Watching energy prices is a critical part of the work we do at nVest Advisors because energy prices generally direct the prices of so many other goods and services we rely on. With our central bank fighting inflation right now, even sending us into a recession to do so, having energy prices climb again will cause even more pressure on the Fed to continue to keep rates higher for longer than our investment markets have anticipated. Oil production cuts won’t dramatically impact inflation only if demand drops faster than the supply, which a serious recession might do. At the moment, we are convinced a recession is coming in just a few months, how deep and painful the recession will be is still up for a lot of debate. We tend to believe it will be more significant than many in the market are expecting. The problems energy is causing are two-fold: 1\) We don’t have supply inventories where we need them, and haven’t since 2021. Current inventory of gasoline: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-US-Gaso-Inv-Days2305250443.png "En us gaso inv days2305250443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-US-Gaso-Inv-Days2305250443.png) And although we currently show a surplus of energy, most of that was due to the draining of our strategic petroleum reserves since the middle of last year: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-Less-oversupplied2305220448.png "En less oversupplied2305220448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-Less-oversupplied2305220448.png) Current crude inventory in the U.S. is dropping rapidly: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-US-Oil-Inv-WoW2305250443.png "En us oil inv wow2305250443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-US-Oil-Inv-WoW2305250443.png) And our operating capacity is growing while our refined output is declining. This means we have the ability to make more gasoline, diesel, and other distillates, but don’t have the supply. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-Less-oversupplied22305220448.png "En less oversupplied22305220448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-Less-oversupplied22305220448.png) A simple solution would be for us to drill and produce more of our own oil, but sadly this is not what the current political environment is permitting. Oil and gas frac operations are dropping… [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-US-Rig-Frac2305220448.png "En us rig frac2305220448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-US-Rig-Frac2305220448.png) Just like our current crude oil rig counts: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-US-Rig-Count2305220448.png "En us rig count2305220448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EN-US-Rig-Count2305220448.png) 2\) The second major issue is the need to refill the petroleum reserves after draining them for over a year, in an effort to keep gasoline prices lower by about 15 cents per gallon. The U.S. will need to replenish its supplies at a higher price than they originally thought, and cannot rely on more output from U.S. companies to do so, as the number of rigs and active wells is dropping. This need to refill the reserves will require the U.S. to compete in the open oil markets for prices, all of which are now climbing due to production cuts in the middle east. ### What this means for you This is a tenuous situation for energy prices, which will make energy companies’ stocks climb again, as well as start to raise the price of production and shipping for many other goods and services. We remain invested in energy companies and broad basket commodities, even though both have declined in recent months based on speculation of a recession, precisely because of the intermediate-term supply problems, the need for the U.S. government to refill its reserves, and the need for many nations to store up reserves for the coming autumn and winter. A recession will decrease the demand for oil because of production declines, but for the summer at least, we anticipate oil prices rising again. ## Jobs update The trend in jobs is largely unchanged from recent weeks, with the exception that May reports showed extremely strong hiring, but nearly all of that was in restaurant and hospitality jobs (seasonal jobs). Tech, manufacturing, and finance in particular saw significant layoff activity. Initial jobless claims are very low compared to the previous decade, but following seasonal trends: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims2306020541.png "Us claims2306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims2306020541.png) But this is the 14th week in a row where initial jobless claims climbed compared to the average of the last 3 “normal” job years, 2018, 2019, and 2022. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims22306020541.png "Us claims22306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims22306020541.png) The bigger story for us is the number of continuing jobless claims. It’s one thing to be laid off, but if it becomes increasingly difficult to replace that job, and you have to stay on unemployment for longer, this is where we can finally get a sign of how the economy is actually working. Continuing claims continue to be low, but the trend is concerning. We started 2023 with the lowest continuing claims, by far, and have now climbed past 2018, 2019, and 2022 in terms of the number of people needing to stay on unemployment benefits week-to-week. 28.2% of unemployment claims continue week to week now, which is the highest percent – by far- since the end of the Great Recession of 2008-2011 (chart 2): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-Cont2306020541-1.png "Us claims cont2306020541 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Claims-Cont2306020541-1.png) Also, the reason for the job cuts must be taken into consideration. The number of job cuts being reported to state unemployment offices because the business is closing is again significant and is now higher than during the absolute peak of the Covid-19 pandemic. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Job-cut-announcements-increased-in-May22306020541.png "Us job cut announcements increased in may22306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Job-cut-announcements-increased-in-May22306020541.png) Will employment get better or worse? One way to know is to look at Job Cut announcements because there is a lag effect between a company making a layoff announcement and the worker filing for unemployment. Most companies give a 60-day notice for a mass layoff situation, and many offer severance packages to affected workers, so there may be a 3 to 6-month lag between a job loss announcement and the filing for unemployment. Current job cut announcements are climbing, but still below both Covid and the great financial crisis, for now: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Job-cut-announcements-increased-in-May2306020541.png "Us job cut announcements increased in may2306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Job-cut-announcements-increased-in-May2306020541.png) ### What this means to you The job market remains strong but most of the jobs being filled now are low-skill, low-wage jobs. Many of the jobs being touted by our political leaders are actually part-time second- and third jobs for many people, as well as self-employment “gig” work like being a part-time Uber or Lyft driver. As the economy worsens, we strongly believe job losses will accelerate, with the layoffs already announced showing up in the unemployment numbers by late summer. ## Stocks are inflated in an unsustainable way One of the marvels we’ve watched this year is the sentiment of stock market investors as the economic data comes in. Bad news, it seems for many traders, was actually seen as a reason to invest, because many on Wall Street believe the Federal Reserve will “pivot” from their current process of raising interest rates and reducing the money supply in their fight against inflation. If the markets are wrong (and we firmly believe they are), all of these gains can be wiped out in a matter of days or even hours. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Rate-cut-cooler-inflation2305310541.png "Eq rate cut cooler inflation2305310541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Rate-cut-cooler-inflation2305310541.png) I’ve also been amazed (and frankly, disgusted) by Wall Street’s pushing of the “shiny new object”, artificial intelligence. Just like cryptocurrencies, SPAC investments, nonfungible tokens, green energy, and others before it, Wall Street loves to fixate on what it perceives to be the new and disruptive thing, zealously over-investing in anything that looks like it might be the newest trend to try to get ahead. This is where asset bubbles come from, and sadly, since the start of 2023, it’s happened again with “AI”. First, let’s remember that all sectors of our economy are still trading lower than their highs in November 2021: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Sector-drawdown-from-prior-highs2306020541.png "Eq sector drawdown from prior highs2306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Sector-drawdown-from-prior-highs2306020541.png) But the recent craze related to “A.I.” has caused massive inflows of investment money into companies simply because they announced they were going to begin experimenting with A.I., or even just because their company leaders mentioned “A.I.” in their earnings conference calls last quarter. This massive flow of money into tech stocks has never been seen before, even during the run-up to the 1999 tech bubble burst that caused a significant recession from 2000 to 2002: ![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Flow-Tech2306020541.png "Eq flow tech2306020541 nvest advisors") I want to make it clear to our clients and readers that this investment frenzy is speculative at best, wild “FOMO” (fear of missing out) gambling at worst, and it cannot sustain itself. Look at the performance of the S&P 500 compared to the index that tracks companies that make semiconductors (needed for AI neural nets): ![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Semicond2305300442.png "Eq semicond2305300442 nvest advisors") Another way to see it, is how retail investors are following the craze and buying up AI company stocks in preposterous numbers: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Retail-investors-are-not-chasing-the-AI-fuelled-rally2305260447.png "Eq retail investors are not chasing the ai fuelled rally2305260447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Retail-investors-are-not-chasing-the-AI-fuelled-rally2305260447.png) This is causing a phenomenon where just a few companies are pulling up the entire index all by itself. All of the major indexes you’re familiar with (the Dow Jones, the S&P, Nasdaq, etc.) are lists of companies but each company is weighted to impact the index price more or less depending on its market share, company size, etc. This can cause just a few companies to move the index, giving you a false impression that ALL of the companies in the index are doing well. This is patently false. If you equally weighted all 100 companies in the NASDAQ 100 (pink line), instead of using the weighted matrix they actually use (blue line), you can see how much just a few companies are outperforming all of the others in the index, dragging up the entire index: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Equal-weight-NDX2305260447.png "Eq equal weight ndx2305260447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Equal-weight-NDX2305260447.png) The S&P 500 is even worse. Only 10 companies in the S&P 500 are actually up for the year. The other 490 company stocks are down since the middle of last year. If you were weigh each of the 500 companies equally, you’d have the performance of the pink like for the S&P, but because the big 10 companies’ stocks have rallied so hard on A.I. promises, the index is positive for the year. 10 companies outperforming is only 2% of the companies that make up the S&P. That means 98% of the companies are flat or down based on their earnings. This is not a healthy market to be invested in, as these 10 companies are now grossly over-bought and will correct. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Equal-weight-SPX2305260447.png "Eq equal weight spx2305260447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Equal-weight-SPX2305260447.png) You can see it here, clearly: the earnings for the top 10 companies in the S&P are far outpacing the other 490 companies in the index, but their run-up in investor speculation has pulled the entire index higher. This is not sustainable, realistic, or frankly, believable. It’s certainly not a reason to go running back into a stock market on the knife’s edge of a recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-2023-earnings-estimates-have-been-robust-for-the-top-10-stocks-but-not-the-rest-of-the-index2305240521.png "Eq 2023 earnings estimates have been robust for the top 10 stocks but not the rest of the index2305240521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-2023-earnings-estimates-have-been-robust-for-the-top-10-stocks-but-not-the-rest-of-the-index2305240521.png) Let’s go even one step further, to prove my point. Below is a chart showing the stock price of Nvidia (NVDA) which is a major part of the Nasdaq index. NVDA reported fairly strong earnings at its recent conference call, but most importantly, it announced an intention to become involved in artificial intelligence. The stock price rocketed in a vertical line afterward. This is not a normal or sustainable stock movement based purely on what NVDA MIGHT do in the future, or what success it MIGHT have. But because investors were itching for the newest, “shiny object”, money flowed into the stock in unsustainable momentum. And because NVDA is such a large part of the Nasdaq index, the index rose significantly just on this one company’s stock price jump. And all of it is based on the speculation of A.I. and the future use of it at NVDA. Nothing real has happened yet. This is not sustainable. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-NVDA2305250443.png "Eq nvda2305250443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-NVDA2305250443.png) ### What this means for you Our investment models remain VERY skeptical of the current stock market valuations. We believe the recent rally is speculative, overly optimistic, and as we’ve proven, has only been because of a very small percentage of the underlying companies outperforming in their stock prices (and all of it because they are touting a commitment to artificial intelligence). This is not a healthy equity market, and our Macro model remains defensively and minimally exposed to only four sectors (tech is not one of them). Let’s be clear: the markets are being run up not based on improved profits or better economic conditions. They are being pulled up by wild speculation in just a few companies that are promising to venture into artificial intelligence. Here are the actual sale and profit performance results for the different sectors of the economy, and all of them are trending down: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Profit-margin-forward-estimates-by-sector2305240521.png "Eq profit margin forward estimates by sector2305240521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Profit-margin-forward-estimates-by-sector2305240521.png) Corporate bankruptcies this year are the highest since Covid and the trend is worsening: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/CR-Retail-sector-bankruptcies2305240521.png "Cr retail sector bankruptcies2305240521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/CR-Retail-sector-bankruptcies2305240521.png) And finally, much of the rally has not been new money coming back into these companies’ stocks. Investment flows are actually very weak right now. The difference is largely the use of highly speculative stock options contracts and day trading, neither of which is “real” or sustainable: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-SPX-stronger-than-flows2305240521.png "Eq spx stronger than flows2305240521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-SPX-stronger-than-flows2305240521.png) ## Production slows but service hangs on We got a number of reports from different parts of the country, all of which show that our manufacturing sector remains in a worsening recession. Our service industry is showing some resiliency, but still far off from the highs of the previous couple of years. Let’s start with Chicago, which if you can see from this first graph, is very tightly correlated with the national average: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Chicago-PMI-v-ISM2306010544.png "Us chicago pmi v ism2306010544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Chicago-PMI-v-ISM2306010544.png) Chicago’s manufacturing index came in far below expectations, landing very solidly in the recessionary territory: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Chicago-PMI2306010544.png "Us chicago pmi2306010544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Chicago-PMI2306010544.png) Next, we have the Dallas region’s manufacturing report, massively below expectations and also deeply in recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Dallas2305310541-1.png "Us dallas2305310541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Dallas2305310541-1.png) Followed up by the Richmond, Virginia report, almost twice as bad as expectations, and deeply in recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Richmond2305240521.png "Us richmond2305240521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Richmond2305240521.png) When we composite all of the regions together, we can see that the United States manufacturing sector is now in recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM2306020541.png "Us ism2306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM2306020541.png) This is true also for all U.S. companies, even with operations overseas: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PMI-Manuf2305240521.png "Us pmi manuf2305240521 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PMI-Manuf2305240521.png) Additionally, orders for manufactured goods have slowed way down. Companies no longer have a backlog of orders to work through (the lowest since the Great Recession): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Backlog2306020541.png "Us ism backlog2306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Backlog2306020541.png) And new orders, which will give factories work for the next few months, are also deeply in recessionary territory: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Orders2306020541.png "Us ism orders2306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-ISM-Orders2306020541.png) And here is where Wall Street will often get it wrong. If you look at Capital Goods Orders (the black line), you might see a really strong environment, but this is ignoring the effect of inflation on the sales being reported. The blue line shows what is called the REAL (adjusted for inflation) total. Although some companies may be reporting higher sales than last year, they are actually making fewer and fewer products – they’re just selling them for much more than they did a year or two ago. But the actual number of items being made and distributed out of U.S. factories is definitely in decline. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Dur-Cap-Real2305300442.png "Us dur cap real2305300442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Dur-Cap-Real2305300442.png) ### What this means to you The U.S. Manufacturing sector is in recession. Services are not far behind, even though in the past couple of months, service industries have shown a little bit stronger resiliency. With recessions come layoffs and business closures, which we’ve demonstrated is starting to occur in the Jobs research above. We remain uninvested in most of the U.S. economy at the moment, focusing our client’s money on sectors of the economy most able to withstand a protracted downturn (in small amounts). We believe this will get much worse before we find a bottom. ## Inflationary pressures persist The U.S. Personal Consumption Expenditures (PCE) was released last week, as well. Frustratingly, but not surprisingly for readers of our economic reports, this key measure of inflation came in higher than expected. Core PCE (meaning those things we tend to purchase regularly, like gasoline and groceries) is one of the Federal Reserve’s preferred inflation measures, and this report shows that inflation is “sticky” and risks becoming entrenched into the economy unless the Fed continues to tighten the money supply. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PCE2305300442.png "Us pce2305300442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PCE2305300442.png) This is a major concern, as inflation is now holding up much higher than the Fed’s own forecasts. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PCE-v-FOMC2305300442-1.png "Us pce v fomc2305300442 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-PCE-v-FOMC2305300442-1.png) The (mistaken) belief that inflation was beaten and that the Fed would soon be able to change course (or “pivot”, as you’ll hear a lot in financial news) is what caused the stock market to rally since January. But inflation isn’t coming down – it’s remaining stubbornly high, as we’ve been concerned about for months now. This is why our investment models did not jump back into a majority of stock investments – we don’t believe this rally is sustainable because it was based on assumptions that haven’t come true. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Rate-cut-cooler-inflation22305310541.png "Eq rate cut cooler inflation22305310541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/EQ-Rate-cut-cooler-inflation22305310541.png) The other inflation index (CPI – Consumer Price Index) is also showing a slight drop in overall inflation, but CORE CPI is also remaining very sticky. The black line shows Core / Structural inflation and the gold line shows inflation that is cyclical (what’s affected by the business cycle). Almost all of our price drops so far have come from cyclical factors; core inflation remains very persistent. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CPI-decline-driven-by-cyclical-components-structural-is-sticky2305220448-1.png "Us cpi decline driven by cyclical components structural is sticky2305220448 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-CPI-decline-driven-by-cyclical-components-structural-is-sticky2305220448-1.png) One of the primary reasons that core inflation remains so difficult to dismantle is labor costs for companies. Ever since Covid, you can see that the cost to make a product or provide a service in the United States has jumped 11%. Companies simply had to increase their prices, because labor costs climbed so much faster than the traditional line. Killing this upward spike in labor costs is what the Federal Reserve is now trying to do, but the only way to do it is to eliminate the demand for more workers (recession). [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Unit-Labor-costs22306020541-1.png "Us unit labor costs22306020541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Unit-Labor-costs22306020541-1.png) Is there good news on this front? Kind of. Expectations for prices in the supply chain for the next six months (dark blue line) are predicting a sharp drop in prices as the U.S. and much of the world drops into recession late this year. That remains to be seen, but it would indicate that price increases will finally halt by the end of the year (in a recession). But so far, we are at the light blue line, not the dark one. We’ll have to see if the expectations hold up. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Supply-chain-v-CPI2305220448.png "Us supply chain v cpi2305220448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Supply-chain-v-CPI2305220448.png) But for now, the cumulative effect of inflation remaining high – and climbing – is what we’re facing: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-BBG-Core-PCE2305220448-1.png "Us bbg core pce2305220448 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-BBG-Core-PCE2305220448-1.png) ### What this means to you We do believe there is hope in the fight against inflation, but it will require more work and for much longer than anyone is currently pricing in. In this way, we are a contrarian compared to much of Wall Street, for reasons I hope our readers can appreciate. Whether we are right will only be a matter of time, but all of the data, taken together, give us strong reasons to remain defensive and to avoid much of the chaotic feeding frenzy we’re seeing currently in the equity markets. Inflation is stubbornly high, and it is impacting company profits and families’ budgets in ways that can only harm long-term economic growth. The solution – quantitative tightening and higher interest rates – inevitably ends in recession. Despite so much “greed is good” happening again on Wall Street right now, we remain absolutely convinced that the worst is ahead of us, and our clients have invested accordingly. ## Mortgage and housing update Most mortgage information is released weekly, so this section is well-known to most of our readers. Once again, we see that despite better new home sales in April, the mortgage and real estate markets are some of the most impacted so far in this recessionary cycle. First, a look at the current 30-year mortgage interest rates, climbing up close to 7%, and near all-time highs for well over a decade: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Mortg2306010544.png "Us mba mortg2306010544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Mortg2306010544.png) Government backed loans are seeing the same rising rates: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Mortg2305260447.png "Us mortg2305260447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Mortg2305260447.png) And as expected, rate locks (mortgage applications that are pre-approved and anticipating a home sale within 30 or so days) are dropping again (black line). Mortgages and home sales had a couple of months of (slight) momentum while interest rates were closer to 6%, but now that they are back up nearly 7%, this is cooling off completely. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Rate-locks2305250443.png "Us mba rate locks2305250443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA-Rate-locks2305250443.png) When mortgage rates dipped a little back toward 6% a few months ago, we got a spurt of quick mortgage applications and home closings, but higher rates price most people out of the housing market, so we expect to see mortgage purchases and home sales drop further in the weeks ahead. Keep in mind that the real estate market peaks each year in June, and hits bottom in December. Mortgage purchases are at decade lows, trending down over the last few weeks. This is kind of in line with seasonal trends, though VERY soft overall: [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA2306010544.png "Us mba2306010544 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-MBA2306010544.png) Pending home sales notched past 2020 (an extreme outlier due to Covid lockdowns), but are well, well below the average of the last decade. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Pending2305260447.png "Us pending2305260447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Pending2305260447.png) And finally, we are very concerned with commercial real estate and believe the biggest part of the coming real estate problems will revolve around it. These are the current vacancy rates in the major business districts of our major cities (and it’s getting worse): ![](https://nvestadvisors.com/wp-content/uploads/2023/06/CR-Office-vacancy-rates-have-been-climbing2305250443.png "Cr office vacancy rates have been climbing2305250443 nvest advisors") These vacancies are caused by multiple factors: higher taxes in the major cities, rising crime rates, inflation raising rent costs, and the ability and desire of many workers to work from home since Covid, but also the faltering economy is causing this. This will get much worse before things stabilize, leaving many downtown areas feeling deserted. ### What this means to you Housing is going to be more affordable for home buyers, especially as we see the unfortunate effects of home foreclosures that always spike with recessions. Sellers should either sell right now, or wait for the housing market to stabilize. Homeowners should expect to see a decline in property values of up to 30%, depending on where they live, which will slowly rebound after the recession is over. Buyers – this is your time to shine. You’ll soon get the opportunity to buy a property at a much lower cost (though your initial loan interest rate will be uncomfortably high – you can always refinance this later). Our investment models are right now completely divested from the real estate and mortgage industries. ## Miscellaneous Consumer sentiment came down from the month before (chart 1). Expectations for the future dropped, also (chart 2). [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Conf2305310541.png "Us conf2305310541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-Conf2305310541.png) It’s very important to watch consumer sentiment because about 70% of our country’s GDP (economic output) comes from you and I spending our paychecks. If we feel confident about the future, we’ll spend more and take on more debt, but if we are fearful, we pull back on unnecessary purchases. Whenever consumer confidence drops to certain levels, recessions have ALWAYS followed. You can see that we are well below the threshold where recessions have typically happened (shaded gray areas): [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-COnf-Expectations-Present2305310541.png "Us conf expectations present2305310541 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-COnf-Expectations-Present2305310541.png) And finally, what happens to jobs and GDP during a recession? It depends on how hard the landing is. Most economists believe we are headed for a “soft landing”, though we believe it will be much more likely that we experience a “somewhat of a hard landing”. A “crash landing” is the worst kind of recession, and I don’t see that happening yet. Let’s look at what normally happens during typical recessions: A soft landing (right side of the chart) will see unemployment climb by as much as 3% and GDP basically flat to down less than 1%. Hard landings have typically created negative GDP of around -2% and unemployment climbing to around 4.5%. Crash landings have caused GDP to plummet by as much as 10%, and unemployment spiking by the same amount. [![](https://nvestadvisors.com/wp-content/uploads/2023/06/US-The-market-expects-a-soft-landing2305220448.png "Us the market expects a soft landing2305220448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/06/US-The-market-expects-a-soft-landing2305220448.png) ### What this means to you So it’s not the “end of the world” that we are predicting and investing our clients around. But it is a harder landing than the industry is currently expecting (and therefore, hasn’t priced in yet). Our experience after almost 20 years is that Wall Street works in extremes nearly all the time – extreme greed, or extreme fear. I hope we’ve made the case earlier in this post, and in many economic posts in recent weeks, that we believe extreme greed is currently running the investment markets. That can switch in an instant, however, as it typically does, and Wall Street will tell you it was a “surprise” or “unexpected” data point that moves the markets wildly from euphoria to panic. Our job is to stay focused on your long-term goals and to be as realistic as we can possibly be about the condition of the world around us. It’s also important that you know that we are not just focused on the U.S., though that’s what our economic updates are primarily focused on. Economies around the world are interconnected now, so we will begin to give you perhaps monthly updates as to the conditions faced by other nations that will have an indirect impact on us here in the U.S. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convinced that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to be a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [5 reasons a small business needs a financial advisor](https://nvestadvisors.com/5-reasons-small-business-hire-advisor/) **Published:** May 31, 2023 **Author:** nVest Advisors **Content:** Running a small business involves numerous challenges, including managing finances effectively. While some small business owners may prefer to handle their finances independently, there are compelling reasons why having a financial advisor can be invaluable. A financial advisor brings expertise, experience, and a fresh perspective to the table, helping small businesses navigate complex financial matters. Here are the top five reasons why a small business should consider engaging a financial advisor. ### Expertise and Financial Planning One of the primary advantages of hiring a financial advisor for a small business is gaining access to their expertise and knowledge in financial planning. Financial advisors are well-versed in various aspects of finance, such as budgeting, forecasting, cash flow management, tax planning, and investment strategies. They can assess the financial health of a business, identify potential areas of improvement, and develop comprehensive financial plans tailored to specific business goals. A financial advisor can help in creating realistic budgets, setting achievable financial targets, and developing strategies to meet them. By providing a structured approach to financial planning, they can guide small businesses toward long-term success and sustainability. ### Risk Management and Insurance Small businesses face a range of risks that can impact their financial stability and growth. These risks can include legal liabilities, market fluctuations, natural disasters, or even unexpected events like the current COVID-19 pandemic. A financial advisor can assist in identifying potential risks and implementing appropriate risk management strategies. Moreover, financial advisors can help small businesses determine the appropriate insurance coverage needed to protect against potential losses. They can assess the business’s specific risks and recommend insurance policies that provide adequate coverage. This helps small businesses mitigate potential financial setbacks and maintain continuity during challenging times. ### Tax Planning and Compliance Navigating the complex landscape of tax regulations is a daunting task for many small business owners. A financial advisor with expertise in tax planning can be instrumental in maximizing tax benefits while ensuring compliance with applicable laws and regulations. Financial advisors can offer guidance on tax deductions, credits, and incentives that can significantly impact a small business’s bottom line. They can help identify opportunities for tax savings and devise strategies to minimize tax liabilities. Additionally, they can provide ongoing support in tax compliance, ensuring that the business meets all filing requirements and deadlines, reducing the risk of penalties or audits. ### Business Financing and Investment Decisions Access to capital is often critical for small businesses to expand, invest in new equipment, or meet operational needs. However, securing financing can be challenging, especially for newer businesses or those with limited credit history. A financial advisor can assist in navigating the financing landscape, identifying suitable options, and developing a compelling business case for lenders or investors. Financial advisors can also provide valuable insights into investment decisions. Whether it’s assessing the viability of expanding into a new market, evaluating potential acquisitions, or considering investment opportunities, their expertise can help small businesses make informed decisions. By conducting thorough financial analyses and risk assessments, financial advisors can guide businesses toward sound investment strategies that align with their goals and risk appetite. ### Time and Resource Optimization Running a small business demands significant time and effort, often leaving little room for financial management. By engaging a financial advisor, small business owners can offload complex financial tasks, allowing them to focus on core business activities. Financial advisors bring efficiency to financial operations, implementing systems and processes that streamline record-keeping, financial reporting, and analysis. They can also provide regular financial updates and reports, enabling small business owners to make timely and informed decisions. Furthermore, financial advisors can offer guidance on optimizing cash flow, managing working capital, and implementing cost-saving measures, helping small businesses operate more efficiently and sustainably. ## The Bottom Line In today’s competitive business landscape, small businesses need all the advantages they can get to thrive and grow, especially during times of economic uncertainty during which business boom and bust cycles are common. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to 3(21) or 3(38) fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. If your company would like to receive professional planning and investment assistance, a competitive bid from us for your current company retirement plan, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, Colorado Secure Savings, commercial paper, custodian, economic, economy, empowerment, ERISA, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, Secure Savings, SEP, SIMPLE, SIPC, small business, state-run IRA, state-sponsored IRA, sustainable, trends --- ### [Weekly Economic Update: 05-22-2023](https://nvestadvisors.com/weekly-economic-update-05-22-2023/) **Published:** May 22, 2023 **Author:** nVest Advisors **Content:** *[![](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-13-300x251.png "Fb posts 13 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-13.png)Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** This past week, we got an update on several numbers. With a planned vacation for our CEO Jeremy Torgerson this week to celebrate some graduations in his family, today’s post will be abbreviated. Check out Jeremy’s (almost)[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **Jobs update** - **Inflation is not going away** - **Leading index points strongly to recession** ## Jobs update Jobs broadly continue along the same trajectory, with tech and manufacturing shedding workers and a weakening labor demand elsewhere. The weekly initial claims looked better, however, this was mostly due to the state of Massachusets eliminating a large number of fraudulent unemployment claims off of its books: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims22305190545-1.png "Us claims22305190545 1 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims22305190545-1.png) You can see that the initial claims are remaining largely consistent over the last several weeks. However, we started 2023 with the lowest unemployment claims in a decade and are now solidly above 2017, 2018, 2019, and 2022 (the last four “normal” years). This will continue to worsen in the months co come. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims2305190545.png "Us claims2305190545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims2305190545.png) It is the continuing claims we are most interested in. Losing a job is bad, but not being able to find another one is something entirely different in economic terms. As we can see, the trend line for continuing claims is holding steady, slightly following the seasonal trends of lower unemployment into the summer. But it is very unusual to have nearly 30% of unemployment claims continue for weeks on end. You can see in the second graph the Covid pandemic, which was obviously an outlier, but the rest of that line hovers around 0, and was actually negative for much of the last 7 years. To have 30% of people who are unemployed continue on benefits and unable to find new jobs is a serious concern. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont2305190545.png "Us claims cont2305190545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont2305190545.png) That high percentage of unemployment claims that persist week after week is well past the point where it has indicated recessions in previous cycles (the dotted blue line). If we see a sharp uptick in new filings in the coming weeks (and layoff announcements indicate that we will), this number will spike quickly as it did in prior recessions, since so many people who are currently unemployed are finding it very difficult to find another job already. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont-States2305190545.png "Us claims cont states2305190545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont-States2305190545.png) ### What this means to you Labor remains tight but jobs are becoming harder to replace if you do leave one. There is a definite, if slow, trend toward labor force reduction. This will gradually become worse as the economy worsens. Maintain a low debt load, and try to increase your emergency savings if you have a job that can be affected by a recession (most can be). We’ve created an e-book for you about how to recession-proof your finances, which you can have for free, at the bottom of this update. ## Inflation is going nowhere soon A deeper dive into our current inflation statistics (CPI and PCE) show that we might have reached a bottom of inflation for now. This is of great concern to the Federal Reserve because they are trying to lower inflation back to the 2% target rate that inflation has been since roughly 1995. We have definitely seen a cooling of inflation since its peak last year, but structural inflation (the part of inflation that is directly related to money supply and broad changes in the availability of goods and services) remains stubbornly high, and in fact, cyclical inflation (the price of things moving naturally with the economic cycle and are affected by employment, wage increases, ec.) is all that’s really moved so far. You can see this in the chart below. The gold like is cyclical inflation, where the black is what is structural. You can see that nearly all of the inflation decrease over the last year has been cyclical, and structural remains stubbornly high. If you look back at the black trendline, you can see that structural inflation only rises, and remains high, during periods of economic recession: 1980-1982, 1990, 2000, 2008, and today.[![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-CPI-decline-driven-by-cyclical-components-structural-is-sticky2305220448.png "Us cpi decline driven by cyclical components structural is sticky2305220448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-CPI-decline-driven-by-cyclical-components-structural-is-sticky2305220448.png) Because of this stubborn inflation, economists are now revising upward their expectations for our core inflation. This means that even though inflation overall might look lower, there will be much pressure to lower the Core (Structural) inflation from this point forward without a recession. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-BBG-Core-PCE2305220448.png "Us bbg core pce2305220448 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-BBG-Core-PCE2305220448.png) ### What this means to you The Federal Reserve’s job is not done yet on inflation. In fact, inflation might make another run upward, as it did three times from 1965-1980. Inflation tends to come in waves because as the Federal Reserve increases rates and slows the economy down, inflation will cool, but if they stop that process too early out of fear of a recession, inflation resumes its upward climb. What we are looking for now is a Fed that will stay tough on inflation for much longer than any of the markets have priced in, and the likelihood of a deeper and longer recession than many expect is the likely outcome of this effort. ## The Leading Index points strongly to recession We’ve looked at the Conference Board’s Leading Economic Index indicator closely several times in the past. Our most recent numbers confirm the trajectory of the economy is solidly toward recession. Remember that there are three broad kinds of economic indicators in terms of timing: lagging indicators look backward at real results. Current indicators can go either way but show us the most recent number only, and leading indicators give a strong indication of where we are heading. You need to look at all three to determine both your trajectory and the velocity of the economy. We’ve been concerned about a recession since August of 2021 and have invested our clients for a recession for over a year. The economy is cooling off much more slowly than we first anticipated, but it is definitely trending toward recession. The conference board’s most recent numbers of LEADING indicators, confirm our hypothesis. For almost 18 months straight, this indicator is weakening month-over-month: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Leading2305190545.png "Us leading2305190545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Leading2305190545.png) Recessions are about slowing productive output, which means fewer jobs. The Conference Board’s report indicates this is absolutely the trajectory we are on. The blue line is the current number of average weekly jobs, and the dotted red line is the Leading Indicator on the economy. You can see that throughout time, they are very closely correlated to each other. The red line is a LEADING indicator, where the blue line is a CURRENT one. If the correlation holds, as it has for more than 60 years, there are serious job cuts directly ahead: [](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Leading-v-Wages2305190545.png)![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Leading-v-Wages2305190545.png "Us leading v wages2305190545 nvest advisors") This same “leading” number (the red line) also closely predicts the country’s output (black line). So here again, we can confirm not only that the economy will be cooling off, but because of that, jobs will necessarily be reduced (the graph above). [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Leading-6m-v-GDP2305190545.png "Us leading 6m v gdp2305190545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Leading-6m-v-GDP2305190545.png) And finally, let’s remind you that the Conference board has a highly accurate rate of predicting recessions going all the way back to the Korean War. We have never had a contraction in the Leading Economic Indicators index this pronounced, without a recession. We maintain that one is imminent, and advise our clients to prepare. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Leading-6m2305190545.png "Us leading 6m2305190545 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Leading-6m2305190545.png) ### What this means to you The economy is slowing but the huge amount of stimulus money infused into the world during the Covid-19 pandemic must be drained out before we can really get this recessionary cycle behind us. What remains in its place, for now, is a period of stagflation: steady or rising prices with a slowing economy. Stagflation is considered the worst possible outcome of an inflationary cycle because it can last for many years. We have high confidence that the Federal Reserve knows this, and will remain stubbornly focused on lowering inflation, even if it means a hard landing for the economy. It’s also important to remember that it’s not just the United States that is struggling with its economy post-Covid. Many other countries in the world are doing so, as well. We will take a deep dive into the major world economies in the next two weeks on my blog, [“Think Like A Rich Guy”](https://thinklikearichguy.com). Stay tuned. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convicted that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market allows itself to.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to have been a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [FINAL REMINDER: South Texas In-Person Appointments | June 8-12, 2023](https://nvestadvisors.com/texas_client_appointments_june_2023-2/) **Published:** May 26, 2023 **Author:** nVest Advisors **Content:** ## [![](https://nvestadvisors.com/wp-content/uploads/2023/02/Copy-of-Instagram-Posts-5-1-300x300.png "Copy of instagram posts 5 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/02/Copy-of-Instagram-Posts-5-1.png)A FINAL REMINDER TO OUR TEXAS CLIENTS: #### In-person appointments for South Texas are coming up soon and spaces are limited. If you want to visit with us in person, please schedule your appointment now! We have the following itinerary: - **Austin / San Antonio – June 8 (afternoon / evening)** - **Rio Grande Valley (Harlingen location) – June 9-11 (all day)** - **Corpus Christi and San Antonio – June 12 (all day)** - **Austin – June 13 (morning)** Unless you request a different time, each meeting will be 45 minutes in length to allow for a maximum number of meetings in the time allotted. Most of the meeting times are during the weekend, and will also have evening appointments, to accommodate our clients’ busy work and family commitments. Please book your meeting now, as these time slots tend to fill up quickly! You can do so using the calendar below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client News, Client Service, Company News, Early nVestors, Early nVestors, Emerging nVestors, Individuals and Families, Mailchimp, Media, Press Releases, public **Tags:** advisor, agent, appointments, California, cash, colorado, criminal, Crypto, finance, financial, Gen X, Gen Y, Gen Z, high yield, hoax, insurance, invest, investment, Kansas, low cost, Millennial, New York, nVest, planner, regulator, regulatory, rules, savings, self-directed, texas, Utah --- ### [Upcoming Summer Events & Office Hours](https://nvestadvisors.com/upcoming-summer-events-office-hours/) **Published:** May 18, 2023 **Author:** nVest Advisors **Content:** ### **[![](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-12-300x251.png "Fb posts 12 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-12.png)We’re all getting super-excited for summer to finally get here and we hope you will take some much-deserved time to rest and relax.** ### **We have several federal market holidays and company activities coming up in the next few months and we wanted to make sure our clients were aware of changes to our normal office activities and appointment availability.** ### **Please reach out to our office if you have questions.** ### **Have a GREAT start to your summer!** - #### **May 22-26, 2023:** No appointment times are available. Regular trading and account service will continue. Please expect up to a 24-hour delay in non-urgent communications. Our Weekly Economic Update for May 22 will be unaffected. - #### **May 27-29, 2023:** US Markets, Banks and Government offices are closed on May 29 for **MEMORIAL DAY**. Our office will be closed for the entire extended weekend, reopening at 7:30am Mountain Time on May 30. Our Weekly Economic Update for May 29 will be published on May 30. - #### **June 8-12, 2023:** We will be in Texas providing in-person appointments to Texas clients who want one. No other appointments are available. Regular trading and account service will continue. Our Weekly Economic Update for June 11 will be unaffected. - #### **June 19, 2023:** US Markets, Banks and Government offices are closed on May 29 for the **JUNETEENTH HOLIDAY**. Our office will be closed for the entire extended weekend, reopening at 7:30am Mountain Time on June 20. Our Weekly Economic Update for June 19 will be unaffected. - #### **July 2-9, 2023:** No appointment times are available. Regular trading and account service will continue. Please expect up to a 24-hour delay in non-urgent communications. Our Weekly Economic Update for July 3 will be unaffected. - #### **July 4, 2023:** US Markets, Banks and Government offices are closed on May 29 for **INDEPENDENCE DAY**. Our office will be closed that day. **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, Individuals and Families, Mailchimp **Tags:** announcement, appointments, Calendar, client news, holiday hours, independence day, july, june, juneteenth, may, memorial day, news, office hours, schedule, service, summer, vacation --- ### [Weekly Economic Update: 05-15-2023](https://nvestadvisors.com/weekly-economic-update-05-15-2023/) **Published:** May 15, 2023 **Author:** nVest Advisors **Content:** *[![](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-11-400x335.png "Fb posts 11 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-11.png)Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** This past week, we got an update on Producer Prices, Credit Conditions, and Jobs. We see that inflation appears to be cooling (so far) but hiring is still a major headwind for any change in the Federal Reserve’s policy to hike rates. Check out my (almost)[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **Jobs update** - **Credit continues to tighten** ## Jobs update We get jobs updates in two different main reports. One is a monthly survey of the ADP US Nonfarm Payrolls, and the other is called the weekly JOLTS report, showing actual initial and continuing unemployment claims. JOLTS updates more frequently and is looking at employment terminations, whereas the ADP report is looking specifically at net hiring. We’ll examine both today. First, the Non-Farm payroll number for April came in higher than expected, but still trending down over a 6-12 month average: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-NFP-A2305080542.png "Us nfp a2305080542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-NFP-A2305080542.png) Average hourly earnings also increased last might, by a healthy amount: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-NFP-Wages2305080542.png "Us nfp wages2305080542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-NFP-Wages2305080542.png) On the surface, these appear to be good news for average families. Unfortunately, this means that the demand for workers remains high and the Federal Reserve must do more to cool off the economy’s constant demand for more and more workers (since there aren’t any), and stop the bidding war between companies for the few available workers that are out there. You can see that our employment overall is at a near all-time high, with the number of unemployed now well below what is considered the “natural rate of unemployment”: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-NFP-U3-v-nairu2305080542.png "Us nfp u3 v nairu2305080542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-NFP-U3-v-nairu2305080542.png) We also have some concerns about the accuracy of this report, as it appears to have now reported numbers much higher than analyst expectations for over 12 months in a row, which has never happened before. Either the analysts have it WAY off, or the report might be producing inflated figures that will later need to be corrected. Indeed, last year at this time, the report DID have to be corrected for April, May and June 2022, in which it estimated over 1,000,000 new jobs had been created. The revision brought that number all the way down to just 10,500 jobs for the three months. You can see here that the number of months that this report has surprised analysts has never happened before, and looks more and more suspiciously out-of-whack: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-NFP-v-Consensus2305080542.png "Us nfp v consensus2305080542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-NFP-v-Consensus2305080542.png) It’s also starting to run afoul of the weekly JOLTS unemployment statistics. Initial jobless claims have been low but consistently climbing over the last many weeks now. Here is 2023 so far comparted to the last decade. Since unemployment tends to be seasonal, this is a good way to see if we are in line with previous years, or trending differently: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims2305120444.png "Us claims2305120444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims2305120444.png) In fact, there are now many more unemployment claims per week than in the past three (normal) years, and the trend is moving higher: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims22305120444.png "Us claims22305120444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims22305120444.png) Being laid off, however, doesn’t necessarily mean you won’t be able to move very quickly to another open position. Currently, there are 1.6 jobs available for everyone looking for work, so the upward pressure on wages continues to be a problem. However, though continuing claims remain near decade lows, the trend is bucking against the seasonal trends. It IS getting harder to find a new job if you lose one. We believe this will continue and worsen in the coming months. Right now, we have the highest number of continuing claims since 2008, just before the worst of the Great Recession (second chart): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont2305120444.png "Us claims cont2305120444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont2305120444.png) ### What this means to you Labor remains tight and jobs are (so far) still relatively easy to find. This will change, however, as the economy grinds down into recession later this year. Expect to see more layoff announcements, hiring freezes, and a reduction of hours in the months ahead. ## Credit Conditions As the economy continues to slow down and some of our regional banks have experienced serious financial issues related to their long-term bond portfolios, we are seeing banks rapidly tighten the standards to borrow money, and reduce the maximum loan sizes they will underwrite. Right now, approximately 50% of banks have tightened their lending requirements for small companies… [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-Bus-loans2305090446.png "Us sloos bus loans2305090446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-Bus-loans2305090446.png) And even 45% of banks have tightened them for medium and large firms (generally considered a much safer loan from the banks’ perspective): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-Bus-loans22305090446.png "Us sloos bus loans22305090446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-Bus-loans22305090446.png) Excluding the wild uncertainty around Covid-19, these are by far the strictest lending standards since the Great Recession of 2007-2010. We’ve also got the largest number of banks limiting the size of auto loans in the last many years, even surpassing the sharp change during Covid. This is due to the rising risk of default on auto loans that banks anticipate as the economy worsens: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-Autos-max2305120444.png "Us sloos autos max2305120444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-Autos-max2305120444.png) Lending matters because so many company operations depend on having access to credit during periods of their production and payment cycles. You can see that when credit is available (the purple line, inverted), manufacturing soars with it (black line). But when credit tightens significantly, so does manufacturing. Right now, we are seeing more downside for manufacturing, much of which is already in recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-v-ISM2305090446.png "Us sloos v ism2305090446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-v-ISM2305090446.png) Remember also that there is a delay between higher interest rates and tougher lending requirements, and the effect on the economy. Stricter loan standards (the black line) are well ahead of payrolls (the red line), but payrolls tend to follow lending. We anticipate more serious layoffs in the months to come. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-v-GDP2305090446.png "Us sloos v gdp2305090446 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-SLOOS-v-GDP2305090446.png) Interestingly, the ever-optimistic Wall Street points to consumer credit card use last month as a sign that things are still okay (and reason for another market rally). [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Cons-Credit2305080542.png "Us cons credit2305080542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Cons-Credit2305080542.png) We emphatically state that things are NOT okay. Higher credit card usage doesn’t always mean optimism. Sometimes it means there is no other place to go for some people to pay their bills. We can see that even though credit card purchases APPEAR to be soaring, it has to do with the cost of goods now versus before inflation began. The black line is the one Wall Street likes to celebrate, but the blue line is the actual purchases on credit cards if we take inflationary prices out. People are SPENDING more on credit cards but BUYING less – the difference is just the much higher prices things have climbed to over the last three years. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Cons-CC2305080542-1.png "Us cons cc2305080542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Cons-CC2305080542-1.png) Interestingly, we are seeing that credit card use is dropping more among high-earners than it is with the rest of the economy. This means low- and middle-income families are using their cards more than people with more monthly income. All income brackets are seeing drop in wages right now (after taxes), but the highest-income earners are seeing their spending power decline much more quickly. They are also slowing their purchases and now are using LESS credit than lower income groups for the first time (second graph): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Wage-growth-slowdown-among-higher-income-households-and-discret-spend2305120444-1.png "Us wage growth slowdown among higher income households and discret spend2305120444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Wage-growth-slowdown-among-higher-income-households-and-discret-spend2305120444-1.png) ### What this means to you The slowing economy is definitely having an impact. Banks are slowing their lending and raising their interest rates, which appears to be affecting higher-income earners (small business owners and company executives) at a faster pace right now than other earners. We will see this trickle down into the other income brackets in the months ahead. Companies without access to credit, or credit that costs too much, will likely see operations slow down or even terminate. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convicted that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market has been focused on a week’s work of earnings reports.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to have been a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Re-Up: New Features for our clients investing at Betterment](https://nvestadvisors.com/new-betterment-investing-features-client-alert-2/) **Published:** May 19, 2023 **Author:** nVest Advisors **Content:** ## **At A Glance** - **New Self-Directed Account Service for Do-It-Yourselfers.** - **FREE Checking and High Yield Savings accounts are available for all of our clients. The current savings account interest rate is 4.0%!** - **Cryptocurrency trading is now permitted for clients at Betterment. Please read our updated account service agreement for Betterment.** - **New Advisory Agreement for all clients with managed accounts at Betterment.** We are pleased to announce three major improvements to the services our clients receive when they custody their investment accounts at [Betterment.](https://wwws.betterment.com/nvest-advisors/app/signup/?advisor_token=SjlNaO7an_w) All of these features are effective immediately and are reflected in our new Client Service Agreement for investment management services for accounts held and traded at Betterment. ## **Advisor-Guided, Self-Managed Account Services** Some people, particularly younger investors who are sensitive to fees affecting starter-account balances, and want more control over the day-to-day investing decisions of their account (but who still might want to check in periodically with a professional financial advisor to make sure they’re on track) now have the option of working with nVest Advisors on a limited-engagement basis for a much lower advisory fee. We have always been proud to offer professional, fully fiduciary, discretionary investment management services for every family and small business, regardless of your account size, for extremely competitive advisory fees, and were one of the first financial advisors in the country to adopt robo advisor technology and progressive custodians such as Betterment. In fact, we’ve proudly provided Betterment as a custodian option for our clients, particularly our younger “nVestors”, all the way back to 2015. **Now, we’ve added a new way to work with us:** Most of our clients want professional money management for peace of mind, and to take one more item off of their busy schedule. However, for those true do-it-yourself-ers at heart who want to control the day-to-day decision-making in their accounts at Betterment, but who also want to be able to have their account professionally set up, their risk tolerance and investment strategy professionally determined, an initial investment strategy professionally recommended, and want occasional access to a financial advisor for feedback and coaching, can now do so at a much lower total advisory cost than if we handle everything for you. We call this new level of service **Client-Managed Account Service**, and it’s now available at substantial savings over our already very low advisory fees for our Advisor-Managed Account Services. And, as always here at nVest Advisors, there is no minimum amount you need to get started. Clients who want to self-direct their accounts (with our initial setup help, and limited ongoing guidance) will have access to a wide variety of trading strategies to choose from, including the full array of proprietary nVest Advisors Core+ nVestor, Principled nVestor, and our rules-based Macro nVestor models, built exclusively for the Betterment platform. #### Need more information about this new program? [Reach out to us for a quick Q&A](https://calendly.com/nvestadvisors/web15) to see if this solution is a good fit for you. #### Ready to begin? [Open your nVest Advisors Client-Managed Account today.](https://wwws.betterment.com/nvest-advisors/app/signup/?advisor_token=SjlNaO7an_w) ## Eliminate bank fees entirely, and earn 4.0% APY (as of 3/10/2023) on your savings with a totally free (we mean it – totally free) checking and savings account. Our clients with investment accounts at Betterment also have the option of adding online checking and high-yield savings accounts to their Betterment / nVest Advisors client experience, totally free of charge. The **Betterment Checking** solution offers the convenience of a totally online bank, with all of the features our clients look for in a banking solution, including: - **No minimum balance.** - **No transaction or overdraft fees.** - **Cash back on purchases at thousands of participating retailers like Costco, Adidas, and Aeropostale.** - **Online statements.** - **Free ATM / Debit Card.** - **ATM fees are automatically refunded worldwide.** - **Transfer funds instantly between your checking, savings, and nVest Advisors-managed investment accounts.** - **See your checking and savings account, investment, and even other outside accounts all in one place on the Betterment portal for our clients.** Betterment and nVest Advisors also proudly offer our clients individual and joint **high-yield Cash Reserve savings accounts**, FDIC insured up to $250,000 per account and currently yielding approximately 12 TIMES the national average bank rate: 4.0% APY! These accounts are available to nVest Advisors’ clients totally free – no platform or advisory fees of any kind! #### [**Reach out to us if you’d like more information on the Betterment Checking and Cash Reserve solutions for nVest Advisors clients.**](https://calendly.com/nvestadvisors/web15) ## Now offering optional cryptocurrency trading for nVest Advisors clients with accounts at Betterment. Although nVest Advisors does not utilize cryptocurrencies or any digital asset such as non-fungible tokens (NFTs) in any of our client models, we know many of our clients have wanted to speculate with a small (and we mean SMALL) portion of their portfolio for a couple of years now. We’re happy to now be able to offer this additional service feature for our clients who use Betterment as their account custodian. Betterment has partnered with Gemini Trust Company, LLC, a New York-based cryptocurrency trust, to offer a solution for nVest Advsiors’ clients seeking to diversify their holdings by using crypto. **As a general rule, we do not recommend cryptocurrencies for our clients, and our proprietary models do not employ the use of any digital asset classes.** We do not anticipate changing that policy until the crypto space becomes more regulated and our clients’ assets are better protected in the crypto space. However, we also want to allow our clients who wish to voluntarily add some cryptocurrency exposure to their investments, the opportunity to do so. We have therefore amended our current Client Service Agreement for Betterment accounts to include significant information about the cryptocurrency investing program now available to all of our clients at Betterment. Adding this asset class carries significant additional risks not associated with most conventional investment asset classes, so before you open your cryptocurrency trading account at Betterment, you will be asked to sign a new client service agreement to include the changes for the cryptocurrency trading function. #### If you are interested in opening a cryptocurrency trading account as part of your nVest Advisors investing experience, please let us know by [scheduling a 15-minute meeting with us](https://calendly.com/nvestadvisors/web15), so we can review how the crypto trading account differs from your current nVest Advisors-managed investment accounts and get your properly set up. ## New Client Service Agreement for all clients at Betterment will go into effect on June 1, 2023. To bring all of our client service agreements into compliance with all of the new products and services offered by the nVest Advisors / Betterment partnership, it will be necessary to have all of our clients using Betterment as a custodian update their previous Client Service Agreements with the new 2023 Client Service Agreement for accounts held at Betterment. **The formal announcement of the change in our service agreement will be emailed to each affected client on or before May 1, 2023, and the new Agreement will replace all existing client service agreements at Betterment on June 1, 2023.** Please watch your email for more information! ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client News, Client Service, Company News, Cryptocurrency, Early nVestors, Early nVestors, Emerging nVestors, From our CEO, Individuals and Families, Investing General, Investment, LifeCycle, Mailchimp, Media, Press Releases, public **Tags:** advisor, agent, background, Betterment, Bitcoin, cash, cash reserve, checking, colorado, criminal, Crypto, finance, financial, Gen X, Gen Y, Gen Z, high yield, hoax, insurance, invest, investment, low cost, Millennial, nVest, planner, ponzi, regulator, regulatory, rules, savings, scam, self-directed, self-managed, texas --- ### [11 kinds of investment risk you need to know](https://nvestadvisors.com/risk-tolerance-management-investing/) **Published:** May 15, 2023 **Author:** nVest Advisors **Content:** At nVest Advisors, risk management is a primary focus when managing your long-term savings, and we work hard to get to know you and your goals so that we are adding on appropriate amounts of risk to meet your investment objectives in the time you have to reach them. There are three major factors when it comes to understanding your risk tolerance: your overall psychological ability to remain focused on goals when your investments temporarily decline (this is called volatility tolerance or general risk tolerance), the amount of time you have from today until your financial goal must be met (this is often called the time horizon), and the current macroeconomic environment you will be investing into (different investments and asset classes respond in certain ways during upward-growing economies, but may behave very differently as things “cool off”). Because an economic cycle typically lasts 7-10 years, the broader economy must be taken into account in long-range investment planning. Your unique risk tolerance then becomes the basis for constructing a strategy. It also lets us determine what has been realistic, historical investment returns for someone in your general risk category. This is important to understand because each type of investment and asset class carries a unique set of risks. Even cash, sitting in a safe somewhere, carries what is called inflation and monetary risk, at minimum. The correct way to create a portfolio is to create the right mix of investment risks, in the right proportions, to meet your goals, without adding even more risk than is necessary. ### [Want to know your Risk Tolerance? Take our FREE 15-question quiz today.](https://app.precisefp.com/w/qsaxs0) **Investment risk refers to the possibility of losing money on an investment.** Every investment comes with some level of risk, and understanding the different types of investment risk is crucial for making informed investment decisions. Here are eleven of the most common kinds of investment risk. ### Market Risk Market risk, also known as systematic risk, refers to the risk that the overall market will decline, causing all investments to lose value. Market risk is beyond the control of individual investors and is caused by events such as changes in economic conditions, political instability, and natural disasters. Even a diversified portfolio of stocks and bonds can be affected by market risk. ### Credit Risk Credit risk, also known as default risk, is the risk that an issuer of a bond or other fixed-income security will fail to make interest or principal payments on time, or at all. Credit risk can also apply to corporate bonds and is typically higher for lower-rated bonds that are issued by companies with weaker financials. ### Inflation Risk Inflation risk refers to the risk that the purchasing power of an investment will decline over time due to inflation. Inflation is the rate at which prices for goods and services increase over time. If the rate of inflation is higher than the rate of return on an investment, the investor’s purchasing power will be eroded, and the investment will lose value in real terms. ### Interest Rate Risk Interest rate risk is the risk that changes in interest rates will affect the value of an investment. As interest rates rise, bond prices generally fall, and as interest rates fall, bond prices generally rise. Therefore, investors who hold fixed-income securities face the risk of capital losses if interest rates rise. ### Liquidity Risk Liquidity risk refers to the risk that an investor will not be able to sell an investment quickly enough to prevent a loss. This risk is higher for investments that are not traded frequently or that are in markets with low trading volumes. ### Currency Risk Currency risk, also known as exchange rate risk, is the risk that the value of an investment will be affected by changes in exchange rates. For example, if an investor buys a foreign stock or bond denominated in a foreign currency, changes in the exchange rate between the investor’s home currency and the foreign currency can affect the value of the investment. ### Political Risk Political risk refers to the risk that political events or instability will affect the value of an investment. Political risk can arise from factors such as changes in government policies, nationalization of assets, and war or civil unrest. ### Concentration Risk Concentration risk refers to the risk of holding too many assets in one particular sector or asset class. For example, if an investor holds all of their assets in a single stock, the performance of that stock will have a significant impact on the overall value of the portfolio. Diversification can help reduce concentration risk. ### Reinvestment Risk Reinvestment risk refers to the risk that an investor will be unable to reinvest cash flows at the same rate of return as their original investment. This risk is particularly relevant for investors who hold fixed-income securities that pay interest or dividends. ### Volatility Risk Volatility risk refers to the risk that the price of an investment will fluctuate significantly over a short period. This risk is particularly relevant for investors who hold assets that are subject to significant price swings, such as stocks or commodities. ### Event Risk Event risk refers to the risk that a specific event will occur that will cause an investment to lose value. Event risk can be caused by a wide range of factors, such as natural disasters, terrorist attacks, or changes in government policies. ## The Bottom Line Knowing your risk tolerance, and then also knowing the different ways even relative “safe” investments can carry risk, is a vital part of constructing a serious, long-term portfolio strategy. At nVest Advisors, risk management is a crucial part of our process; so much so that we even offer free comprehensive financial planning to our investment clients, because knowing as much about your financial situation and goals makes the job of managing your assets that much easier. If we know what the money needs to do for your overall plan, huge numbers of investment options and styles can be automatically removed if they don’t have the inherent risk/return characteristics that your plan requires. ### [Want to know your Risk Tolerance? Take our FREE 15-question quiz today.](https://app.precisefp.com/w/qsaxs0) nVest Advisors specializes in helping working-age, professional families and small businesses start their financial journey, grow every step of the way, anticipate and correct setbacks, and celebrate with you when we reach the top together. Your success is all we care about, and helping you overcome the perils along the journey to financial freedom, including the times when you may be your own worst enemy, is how we spend our day. It’s genuinely a privilege to help families and small businesses who want tomorrow to be better than today. Reach out to us for a totally free, totally no-risk portfolio checkup today if you’re concerned about where your finances sit for the coming recession, particularly if you are at or approaching retirement age. A review of your current risk in relation to your tolerance will be a key part of it. We’re delighted to offer you our thoughts. You can schedule that time with us below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client Service, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Investing General, LifeCycle, Mailchimp, Media **Tags:** advisor, agent, background, colorado, finance, financial, insurance, invest, investment, Kansas, New Mexico, nVest, Oklahoma, planner, regulator, regulatory, RIA firm, risk, risk management, risk tolerance, rules, small business, texas, Utah, Wyoming --- ### [How the economic cycle impacts your small business](https://nvestadvisors.com/economy-economic-business-cycle/) **Published:** May 10, 2023 **Author:** nVest Advisors **Content:** The economy is a complex system that is influenced by a multitude of factors, such as government policies, market forces, and global events. These factors can contribute to economic cycles, which are patterns of growth and contraction in the economy that affect businesses of all sizes, including small businesses. If you’re a small business owner, it’s not enough to just experience the economy as it happens, and try to react. You need to plan ahead and fully accept the reality that just like the economy moves in predictable patterns, so will your business. You cannot, and therefore should not, expect to be immune from the greater economic forces at work. A rising tide lifts all boats, but the tide going out will do the opposite. **There are four typical economic cycles: expansion, peak, contraction, and trough.** Let’s explore each of these cycles and their impact on small businesses. ### Expansion The expansion phase is characterized by an increase in economic activity, such as rising employment rates, GDP growth, and consumer spending. During this phase, small businesses typically experience increased demand for their products and services, as consumers have more disposable income and are willing to spend more. As a result, small businesses may experience increased revenue, higher profits, and opportunities for expansion. However, this increased demand can also lead to increased competition, which can make it more difficult for small businesses to stand out in a crowded market. ### Peak The peak phase is the point at which the economy has reached its maximum level of growth and begins to slow down. During this phase, small businesses may experience a slowdown in demand, as consumers become more cautious with their spending and businesses cut back on investments. As a result, small businesses may face decreased revenue, reduced profits, and increased pressure to cut costs. They may also find it more difficult to obtain financing, as lenders become more risk-averse during this phase. ### Contraction The contraction phase, also known as a recession, is characterized by a decline in economic activity, such as falling employment rates, GDP contraction, and consumer spending reduction. During this phase, small businesses may experience a significant decline in demand for their products and services, as consumers become more frugal and cut back on spending. As a result, small businesses may experience reduced revenue, lower profits, and may be forced to reduce their workforce or even close their doors. During this phase, small businesses may also struggle to obtain financing, as lenders become more cautious and risk-averse. ### Trough The trough phase is the point at which the economy has hit its lowest point and begins to recover. During this phase, small businesses may experience increased demand as consumers begin to spend more again and businesses resume investments. As a result, small businesses may experience increased revenue, higher profits, and opportunities for expansion. However, it may take some time for small businesses to fully recover from the impact of the recession. ## Impact on Small Businesses [![](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-2.png "Fb posts 2 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-2.png)The impact of economic cycles on small businesses can vary depending on the industry, location, and other factors. However, there are some general trends that are worth exploring. During the **expansion** phase, small businesses may experience increased demand and opportunities for growth. However, this growth can be challenging to manage, and small businesses may need to invest in additional resources, such as staff, equipment, and inventory, to keep up with demand. During the **peak** phase, small businesses may need to adjust their strategies to cope with a slowdown in demand. This may involve cutting costs, reducing staff, or diversifying their product offerings. During the **contraction** phase, small businesses may face significant challenges as demand for their products and services declines. Small businesses may need to focus on reducing costs and preserving cash flow, as well as exploring alternative revenue streams. During the **trough** phase, small businesses may have the opportunity to take advantage of the recovery and grow their businesses. This may involve investing in marketing and advertising, expanding their product offerings, or exploring new markets. Although the information presented above is most definitely “evergreen”, meaning that it’s good for long-term thinking and planning purposes, this article is being written in early May 2023. For small businesses looking for answers to our current economic environment, our own in-house analysis puts the United States economy in the early stages of the contraction phase, with real estate, manufacturing, and smaller tech companies facing the worst of the situation at the moment. The rest of the economy will definitely follow. If you want to keep current on changes in the macroeconomy and learn how they may impact your business and personal financial situation, we strongly recommend following our Weekly Economic Updates by subscribing to our blog posts here. **If it is true that contraction is underway, your business needs to slow down or even temporarily terminate expansion efforts. Reduce expenses and stockpile cash reserves. Real estate, labor, and many of the commodities you’ll need to do business will become less expensive in the coming months, but purchases today may deflate in value in the days ahead.** During the trough phase, if you have been savvy enough to seriously cut costs and pile up the savings, expansion efforts may give your company a very strong advantage as the economy turns the corner and heads back into expansion. Please keep in mind that this entire cycle can take, typically, 8 to 10 years to complete, but major movements in investment prices and shifts in economic indicators often happen extremely quickly. Nothing can happen for years, and then years of changes can happen in a week or two. The key is to understand that after years of good times, the economy will necessarily correct and contract. This is a normal, fairly predictable, and inescapable occurrence. The smart business owner accepts this reality, watches for broader issues in the economy very closely, and makes strategic – not emotional – decisions once armed with that foreknowledge. ## The Bottom Line Economic cycles can have a significant impact on small businesses, as they can experience periods of growth and contraction that can affect their revenue, profitability, and ability to obtain financing. By understanding the typical economic cycles and their impact on small businesses, entrepreneurs can develop strategies to manage these challenges and take advantage of opportunities for growth ***when it is economically smart to do so**.* There is little reason to fight upstream against a down-turning economy. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to 3(21) or 3(38) fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. If your company would like to receive professional planning and investment assistance, a competitive bid from us for your current company retirement plan, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, Colorado Secure Savings, commercial paper, custodian, economic, economy, empowerment, ERISA, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, Secure Savings, SEP, SIMPLE, SIPC, small business, state-run IRA, state-sponsored IRA, sustainable, trends --- ### [Weekly Economic Update: 05-08-2023](https://nvestadvisors.com/weekly-economic-update-05-08-2023/) **Published:** May 8, 2023 **Author:** nVest Advisors **Content:** *[![](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-10-400x335.png "Fb posts 10 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/FB-POSTS-10.png)Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** This past week, we got two different confirmations that inflation is not contained the way the Federal Reserve needs in order to pause interest rate hikes, and additional news that while the economy is definitely cooling, upward pressure on wages persists. Check out my[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **Fed Raises Rates Again** - Economic Output Update - Jobs Data is all over the place - Has inflation actually peaked? - Real Estate Update ## Fed Raises Rates Again As expected, the Federal Reserves’ Open Market Committee voted to raise the base interest rate (the “Fed Funds” rate) another 0.25% (25 basis points) this past Wednesday. This was fully expected and priced in to market conditions before the meeting. What the markets pay much more attention to is the language in the formal statement released by the Fed. Because the Fed continually modifies their formal statement, and you can see the exact changes in words and phrases from meeting to meeting, it’s often called the “Red Line Statement”. So while interest rates were increased to above 5% last week, marking the highest Fed Funds rate since just before the Great Recession in 2007: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Hike2305040539.png "Us hike2305040539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Hike2305040539.png) …investors do not believe the Fed will be able to maintain interest rates this high for very long, and have been pricing in more aggressive and frequent rate cuts in the coming quarters: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Hike-WIRP22305040539.png "Us hike wirp22305040539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Hike-WIRP22305040539.png) A lot of the market’s conviction is due to history. The typical Fed rate hike plateaus for only an average of 5 months before the Fed must start lowering rates due to collateral economic damage, the notable exception being in 2004, when the Fed held rates high for over about a year and a half and finally started cutting in 2007 as a bank credit crisis began. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Hike-v-previous-cycles2305040539.png "Us hike v previous cycles2305040539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Hike-v-previous-cycles2305040539.png) The challenge for us as economists is, there really is no recent example of a Fed rate cycle that correlates to the conditions we are currently experiencing. My professional opinion is that we are closer to 2004-2007 in terms of the problems with asset bubbles in real estate and other equities, but we have an inflation problem due to unprecedented fiscal spending during the Covid-19 pandemic to go along with it. Inflation in the 1970s rode up in three successively larger waves throughout the entire decade due to rate cuts that happened too quickly, and was only finally beaten in 1981 by then-Fed chairman Paul Volcker working with newly-elected President Ronald Reagan to sharply reduce the money supply in what is now called the “Volcker Shock”. Volcker raised rates upwards of 20% for a period of time, while Reagan pushed for reduced government spending (so fewer dollars would make it back into the economy). The combination of the very high rates plus the pullback in government spending sent the U.S. into a sharp but brief recession and finally ended the inflationary cycle. This chart shows the historical range of Fed Funds Rates, with Volcker’s rates being the obvious massive spike above 20% (the shaded areas are confirmed recessions): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/fed-funds-rate-historical-chart.png "Fed funds rate historical chart nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/fed-funds-rate-historical-chart.png) It’s not easy to overlay these two stats in a single chart, but you can also see how inflation was impacted by the Fed Funds rate changes during the 1970s. In the chart below, we can see the shaded area from 1965-1982 as a period of “Great Inflation” that started due to massive government spending on the Vietnam War war and social programs in the 1960s (President Johnson’s “Great Society” programs). Note that there are three successive waves of inflation during this time. If history were to repeat itself, we are only on the first wave of this cycle. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/great_inflation_2.jpg "30a chart 1 inflation as measured by cpi 600x600 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/great_inflation_2.jpg) It was during this era that a now largely disputed form of economics, called Keynesian Economics, was in full force. Keynesian Economic Theory was that government spending was necessary to maintain economic growth. We saw that on full display during the Covid-19 pandemic, as well, which is why I believe inflation will follow a 1970s-like track unless the Fed is more aggressive than the markets hope. If you look back and forth at these two charts, you can see the Fed’s dilemma. They started raising rates to combat inflation but caused a recession each time. So, they backed off on the interest rates to help stimulate the economy, only to have inflation roar back to life. This means they had to start raising rates again. The cycle repeated three times, with inflation getting worse each time, until the extreme work of Volcker and Reagan in the early 1980s, which finally broke that cycle. We believe the Fed is facing a similar situation now, and to avoid having to do this several times and finally end up in a Volcker-style situation, they must simply hold interest rates high for a prolonged period of time, even as economic hardship worsens until they have inflation back at the target rate of 2%. Either that, or they must give up on trying to get inflation under control at all. But the Fed has another problem to deal with this time: since the Great Recession of 2007-2010, the country enjoyed pretty much a 15-year Fed response to that economic crisis, as the Fed maintained artificially low interest rates and massive amounts of quantitative easing (relaxing of the money supply) from 2007-2018 and again from 2020 until 2022. This allowed asset price bubbles in stocks, real estate, and even now cryptocurrencies to balloon to much higher price levels than were seen either in the 1999 Tech Bubble or the 2007 Mortgage Bubble and now we have both (only much bigger bubbles in each) at the same time. So the Fed is fighting a Tech Bubble, a Housing Bubble, and 1970s-style inflation, all at once. ### What this means to you This is a difficult time for the Fed, with many very hard decisions to make. So far, Wall Street is betting that the Fed lacks the nerve to actually carry out this drastic task. Fed Chairman Jerome Powell, and many other voting members of the FOMC, have stressed over and over that they intend to hold rates higher for longer than the markets have priced in for precisely the reasons I described above. Who will win: the market or the Fed? In putting together our economic-focused investment models for our clients, we are siding with the Fed. It is, in our opinion, foolish and counterproductive to try to outsmart or second-guess the Federal Reserve on this issue. They have been crystal clear that returning inflation to a 2% target is their only focus, and we elect to take them at their word. ## Economic Output Update Last week, we got consolidated numbers for the country on Manufacturing and Service output. These are crucial to give us a look forward to the current GDP for this quarter, which won’t be released until July. Let’s look at manufacturing first. The combined U.S. manufacturing sector came in slightly better than the survey but is still well within recessionary ranges: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM2305020444.png "Us ism2305020444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM2305020444.png) However, new orders (for upcoming months) continued to show even greater weakness. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-New-Orders2305020444.png "Us ism new orders2305020444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-New-Orders2305020444.png) The survey believes that much of the weakness in the sector is because the end customers of manufacturers are starting to see a backlog in inventory themselves, indicating that retail purchases of finished manufactured products is slowing significantly. This “Customers’ Inventories” read is the highest since 2016. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-cus-inv2305020444.png "Us ism cus inv2305020444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-cus-inv2305020444.png) And indeed, when companies are asked if they intend to spend money on capital improvements (mostly manufactured goods) in the coming 6 months, that estimate is dropping rapidly: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-CapEx-plans2305030443.png "Us capex plans2305030443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-CapEx-plans2305030443.png) One other thing that concerns me, especially in light of the inflation / Fed Funds discussion above: prices paid in manufacturing actually increased significantly last month. This tells me that inflation is not finished, and that despite recent price drops in the raw materials to make most products, the labor costs involved actually climbed again. The Federal Reserve must crush the demand for higher wages if it ever hopes to crush overall inflation. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-Prices2305020444.png "Us ism prices2305020444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-Prices2305020444.png) And as we’ve shown our readers before many times, when you take out the increased prices of the past few years and look at the actual number of products sold, you can see a pretty significant drop in manufacturing output overall. In the second graph below, the black line indicates reported manufacturing activity AT TODAY’S INFLATED PRICES. But if you take out the inflation and compare manufacturing output item-to-item, you get the BLUE line. There is a substantial drop in actual (often called “real”) output, but wildly inflated prices have made it look much better than it actually is. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Dur2305030443.png "Us dur2305030443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Dur2305030443.png) And finally, let’s look at the services portion of our economy. Services ticked up just slightly above the estimate and is still very slightly above the recessionary line (the blue dotted line), but the trend and trajectory are still very much headed toward recession. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-Services2305040539.png "Us ism services2305040539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-Services2305040539.png) In Services, we see a different inflationary expectation, with the prices paid to make their service (almost all labor costs) dropping significantly compared to manufacturers. This is an indicator that layoffs and labor cuts have been more effective so far in the services sector, and inflation on service-related activity may be legitimately slowing in the short term. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-Services-Prices-v-CPI2305040539.png "Us ism services prices v cpi2305040539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ISM-Services-Prices-v-CPI2305040539.png) ### What this means to you Services and manufacturing are both in a downtrend but have different challenges. Manufacturing costs are rising slightly again, while service costs are dropping. Indeed, most of the layoffs so far have been in service jobs (primarily tech and finance), and manufacturing layoffs are lagging behind but are definitely starting to tick up. As we discuss jobs below, this will make more sense. We firmly believe that as the Fed continues its work to slow the economy, output and jobs will drop in both sectors of output. ## Jobs Update The only real surprise of the week came in the ADP jobs report, which came in at almost twice the number of expected new jobs as previous surveys, and much stronger than competing surveys. Because the ADP figure was so much stronger than expected, there is much speculation that this figure will be dramatically revised downward as ADP had to do several times over the last year. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ADP2305040539.png "Us adp2305040539 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-ADP2305040539.png) Additionally, ADP reported that labor costs jumped significantly over the previous quarter. This is very bad news for an investor market that hopes the Federal Reserve will be able to start lowering interest rates in the next few months. If labor costs are still climbing, the prices of goods and services those workers create won’t be far behind. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Labor-Unit-costs2305050547.png "Us labor unit costs2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Labor-Unit-costs2305050547.png) We can see this connection clearly in the chart below. The dotted line is employment costs, and you can see that where employment costs go, inflation (the black line) generally follow. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Wage-growth-INfl2305050547.png "Us wage growth infl2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Wage-growth-INfl2305050547.png) However, going forward, we can see that hiring may indeed be ready to slow down. The first is a survey by the NFIB (a small business advocacy organization), that bankruptcies in small businesses are sadly starting to turn upward: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Small-bus-bankruptcies-to-rise2305050547.png "Us small bus bankruptcies to rise2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Small-bus-bankruptcies-to-rise2305050547.png) And when surveyed, small businesses are planning much less spending on expansion and hiring in the months ahead: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Small-bus-investment-and-hiring2305050547.png "Us small bus investment and hiring2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Small-bus-investment-and-hiring2305050547.png) Interestingly, the number of workers voluntarily quitting their jobs has also slowed dramatically, so workers aren’t so comfortable that there are better opportunities out there in the job market than the one they have right now: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Quits-rate-back2305050547.png "Us quits rate back2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Quits-rate-back2305050547.png) Meanwhile, companies continue to announce more and more job cuts in the coming months: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-v-layoffs2305050547.png "Us claims v layoffs2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-v-layoffs2305050547.png) One of the reasons the ADP report looks so sketchy is that it kind of supports but also kind of contradicts the JOLTS weekly report of initial and continuing jobless claims for unemployment benefits. We can see that initial claims for last week are largely in the seasonal trend, and still on the lower side of claims figures over the last decade: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims2305050547.png "Us claims2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims2305050547.png) But where ADP shows jobs jumped by almost double what was expected, JOLTS showed jobless claims are increasing week-to-week and have for the past two months (compared to the last three “normal” work years): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims22305050547.png "Us claims22305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims22305050547.png) But where ADP and JOLTS differs greatly is in continuing claims. It does appear that it’s getting harder to find a new job if you lose your current one. The continuing unemployment claims are bucking the seasonal trend right now and remaining very stable. Employment typically gets easier in the summer and right before the winter holidays. This year, it appears to not be so easy to find a summer job: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont2305050547.png "Us claims cont2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont2305050547.png) And when we look year-over-year at these claims, we can see that things are definitely NOT well. Continuing claims, while not in a massive spike like in 2008, are starting a much sharper climb than 2008 and are now increasing weekly: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont-YoY2305050547.png "Us claims cont yoy2305050547 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-Cont-YoY2305050547.png) ### What this means to you The job market is hanging on so far but layoffs and bankruptcy announcements are climbing, indicating the start of the recession may in fact be very close. We continue to monitor these numbers weekly. ## Housing Update And finally, a look again at another sector of the economy giving us mixed signals: housing and construction, this time on the retail side of view. These three charts are provided monthly by Redfin, a retail home-selling application that gathers data on its customers and the real estate market in general. Active listings for homes for sale are up 7% over the previous year. Is this a good thing? Possibly, except the trendline is definitely failing to move with the seasonal trend (more people move into new homes in the summer months). Right now, we are above 2022, but have fallen below 2021 and are WAY below 2020. This means that the housing market is slowing down. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Redfin-Active-listings2305020444.png "Us redfin active listings2305020444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Redfin-Active-listings2305020444.png) There are definitely fewer buyers showing up with interest rates so high, but the slowdown also appears to be a shart reduction in the number of homes being listed. We are now 22% below the number of homes for sale as we had last year: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Redfin-Active-New-listings2305020444.png "Us redfin active new listings2305020444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Redfin-Active-New-listings2305020444.png) This is, in our opinion, the ONLY thing keeping home prices up at all. As the recession worsens, we’ll see a much steeper drop in home prices as foreclosures and landlord/AirBnB buyers walk away from investment properties now underwater. Another factor in the slowing inventory of homes for sale is that many people refinanced their homes in 2020 and 2021 when rates were so low, and will not move. House prices are currently just about 3% lower than last year. We estimate they will be 10-15% down within a year, and perhaps another 5%-10% down the year after. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Redfin-Median-price2305020444.png "Us redfin median price2305020444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Redfin-Median-price2305020444.png) ### What this means to you If you are waiting to buy a home, the market is slowing starting to favor you, but there is a long way to go still. Our advice is to wait for the recession to get fully underway, and many more houses, at much lower prices, will be available. The real estate price bubble is almost 3x what it was in 2008, but the lack of inventory won’t allow a total collapse in price like last time. Still, a 25% or so reduction from the 2020 peaks is not out of the question, especially in certain markets. San Francisco, for instance, is already 10% below the peak and the rate of decrease is accelerating. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We remain convicted that a recession is imminent, even as the market fights back hard against it. Do not let the current market rally fool you – there is no sustainable way to grow profits (and therefore a supportable stock price) in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market has been focused on a week’s work of earnings reports.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to have been a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Understanding the Fiduciary Roles in ERISA Retirement Plans](https://nvestadvisors.com/erisa-retirement-plan-401k-fiduciary/) **Published:** May 3, 2023 **Author:** nVest Advisors **Content:** The Employee Retirement Income Security Act (ERISA) is a federal law that establishes minimum standards for retirement and health benefit plans in the private sector. One important aspect of ERISA is the requirement for plan sponsors to appoint fiduciaries to manage the plan’s assets and ensure that it operates in the best interests of participants. ERISA recognizes three different types of fiduciary roles: 3(16), 3(21), and 3(38). Not every plan requires all, or even some, of these professionals, but many do. This is especially true of plan sponsors who want to shift the regulatory and civil liability away from the company for how the retirement plan is run. Let’s explore the differences between these three fiduciary roles. ### ERISA 3(16) Fiduciary The ERISA 3(16) fiduciary is often referred to as the “third party administrator” or simply the “plan administrator” because this role involves managing many of the day-to-day administrative tasks associated with running a retirement plan. These tasks may include recordkeeping, preparing and filing Form 5500, distributing required notices to plan participants, and ensuring that the plan operates in compliance with ERISA and other applicable laws. The 3(16) fiduciary assumes significant responsibilities and liability associated with administering the plan. This fiduciary has discretion and control over plan assets, and is responsible for ensuring that the plan operates in compliance with ERISA and other applicable laws. As such, the 3(16) fiduciary is a co-fiduciary with the plan sponsor and any other fiduciaries. As 401k and other ERISA plans have become more competitive in the past few years, we often see 3(16) plan administrator functions being offered as an included benefit by the vendor of your plan, but you can also outsource these responsibilities to a third party (hence the term). ### ERISA 3(21) Fiduciary The ERISA 3(21) fiduciary is often referred to as the “investment advisor” because this role involves providing investment advice to the plan sponsor. The 3(21) fiduciary does not have discretion or control over plan assets but provides investment recommendations to the plan sponsor, who retains the ultimate decision-making authority. The 3(21) fiduciary is responsible for prudently selecting and monitoring investment options available to the plan participants. This fiduciary assumes responsibility and liability for the investment recommendations made to the plan sponsor. If the plan sponsor follows the investment advice provided by the 3(21) fiduciary and suffers a loss as a result, the 3(21) fiduciary may be held liable for that loss. nVest Advisors can partner with your retirement plan as either a 3(21) plan investment advisor or a 3(38) investment plan manager (see below), depending on the services offered by the plan’s vendor (some assume 3(38) duties automatically), and the extent of the role you want your company’s management to play in overseeing the plan’s investment options. ### ERISA 3(38) Fiduciary The ERISA 3(38) fiduciary is often referred to as the “investment manager” because this role involves assuming complete discretion and control over plan assets. The 3(38) fiduciary has the authority to make all investment decisions on behalf of the plan, including selecting and monitoring investment options and making changes to the investment lineup as necessary. The 3(38) fiduciary assumes significant responsibility and liability for investment decisions made on behalf of the plan. As such, this fiduciary may be sued if the plan suffers a loss due to a decision made by the 3(38) fiduciary. The plan sponsor may also be held liable for any losses resulting from the 3(38) fiduciary’s actions. ### Key Differences The key differences between the three fiduciary roles are related to the level of control, responsibility, and liability assumed by each fiduciary. The 3(16) fiduciary assumes the most control over plan assets, while the 3(21) fiduciary assumes less control and provides investment advice to the plan sponsor. The 3(38) fiduciary assumes complete discretion and control over plan assets, and as such, assumes the most responsibility and liability. Because of the additional tasks and fiduciary liability, your plan will often pay slightly more for a 3(38) fiduciary than a 3(21) fiduciary. ## The Bottom Line In summary, ERISA recognizes three different types of fiduciary roles: 3(16), 3(21), and 3(38). Each fiduciary role has different levels of control, responsibility, and liability associated with it. While you cannot fully outsource all of your fiduciary responsibility as the plan sponsor, you can outsource the vast majority, particularly the parts that expose your company and its management to the worst civil and regulatory liability. That fact alone is reason to seriously consider whether your plan needs a fiduciary, or if you currently have one, that individual is an effective one. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to 3(21) or 3(38) fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. And being a small company ourselves, we’re small enough to develop a close working relationship with your company and have the resources and investment partners to handle even the largest 401(k) needs. If your company would like to receive a competitive bid from us for your current programs, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, Colorado Secure Savings, commercial paper, custodian, economic, economy, empowerment, ERISA, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, Secure Savings, SEP, SIMPLE, SIPC, small business, state-run IRA, state-sponsored IRA, sustainable, trends --- ### [Weekly Economic Update: 05-01-2023](https://nvestadvisors.com/weekly-economic-update-05-01-2023/) **Published:** May 1, 2023 **Author:** nVest Advisors **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** This past week, we got two different confirmations that inflation is not contained the way the Federal Reserve needs in order to pause interest rate hikes, and additional news that while the economy is definitely cooling, upward pressure on wages persists. Check out my[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **Summary of analysis** - **GDP cools off** - **Housing Update – Deep Dive** - **Jobs Update** - **Consumer confidence sours** ## Summary of Analysis Because the economic data comes at us at a furious pace, and we need to analyze them both in isolation and in how they are interconnected, it’s important to stop every so often and just give an update on the major parts of the economy; to get “the lay of the land”. We’ll do this every 3 or 4 months for now, and likely with increasing frequency as the economy deteriorates. Let’s assess what we are focused on here at nVest: ### GDP **GDP** (gross domestic product) is the grand total of our country’s economic output, so it’s a major number. We can get a breakdown of what makes up GDP by looking at the different subsets of the economy individually, such as Manufacturing, Services, Housing, Energy production, etc. Consumption is a big part of GDP (we have to sell the things we make), as are exports. You can see us look carefully at these components (often called Manufacturing and Service Indexes) as those numbers are released from different parts of the country once per month. **GNP** (gross national product) is closely related to GDP, but here’s the difference: GDP measures the production inside the physical boundaries of the United States, from any source (including foreign companies with a presence here), whereas GNP (gross national product) measures only the economic activity of the residents of the United States. Both GDP and GNP are officially updated only quarterly, and both are frequently revised upward or downward later after original estimates are released. This lag effect, and unreliability of the original number, means we need to try to see GDP/GNP in the context of more frequent numbers. GDP remains positive, though as you will see in today’s update, it’s dropped almost in half from the last read, and came in far below original estimates. This is not a surprise to us at all, because we watch so many of the components of GDP very closely. ### Inflation Inflation (typically determined through a combination of results of the **PPI** (producer price index), **CPI** (consumer price index) and **PCE** (personal consumption expenditure) remains elevated, though it has cooled somewhat year-to-year from peaks in 2022. Unlike many economists, we include a look at the dollar’s relative strength versus the currencies of our major trading partners, as well, because a strong dollar will buy more goods (price deflation in dollars), and a weak dollar will buy less (price inflation in dollars). Prices rose after the Covid-19 pandemic government spending sprees (stimulus checks and PPP loans) because upwards of $6 TRILLION (that’s $6,000,000,000,000) was created as debt instead of being productively produced through industry, and just dropped into the economy. Lots more dollars available suddenly chasing the same (or even fewer) goods made prices soar. This made the economy roar back from the Covid lockdowns, but also wildly ramped up the demand for workers. As wage demand soared, so did the final cost of making the goods and services in our economy. This interconnectedness of wages and prices of finished products and services is called a “wage-price spiral”. The Federal Reserve’s actions since last year (interest rate hikes and a process of pulling money back into the Fed’s coffers through quantitative tightening) is helping, but we have a lot further to go. And our concern is, as the dollar falls in value compared to the wild historical highs it reached against the Chinese Yuan, the Euro, and other currencies last fall (not surprisingly, that’s when inflation started to look like it was easing off), inflation will start to push upward again, which it is doing now. We believe this means the Federal Reserve must continue to raise interest rates one or two times more, and then pause and hold those rates high for a much longer period of time than the current investment markets are expecting. This means a deeper and more serious recession than most are expecting, is likely to begin in the next few months. ### Employment Labor statistics are released frequently – some monthly and some weekly. Obviously, we want to look at these numbers to get a feel for where hiring and wage pressures are for both a look at both GDP and possible spending patterns. Private consumption (that’s a fancy way of saying you and I spending our paychecks on the goods and services we want and need) makes up about 70% of our country’s total GDP. When we don’t spend money, the economy falters. Watching the employment and wage statistics helps us to see the current and forward trend of spending. Currently, labor remains the strongest part of our economy. It’s literally holding up the rest. We are seeing demand for workers cooling off, and layoff announcements are accelerating. It will take weeks or even months for some of those layoffs to show up in official unemployment insurance claims, however, due to severance packages and the fact that there are still jobs out there. But we are finally seeing wage pressures subside as the unfortunate result of job losses and slowing hiring takes effect. ### Real Estate Real estate is an interesting sector of the economy because it impacts so many others. Most real estate has to be bought with a loan, and mortgage and business loans is the majority of the income for our banking sector. So, watching mortgage applications, new housing starts, existing home purchases, etc. will tell us about the demand for lumber and skilled trade labor, bank and mortgage company profit, etc. Your home is also usually the most significant part of your expenses and the biggest investment most people will ever make, so watching for the affordability in the market will give us insights into how consumers are doing in other parts of their budgets. Real estate prices went absolutely bonkers during and after the Covid-19 pandemic into what we believe is an unsustainable “bubble” that must now be “popped”. We believe there will be a substantial drop in real estate prices as consumers stop buying overpriced homes at very high interest rates, more distressed mortgages show up as the economy worsens and people lose their jobs and small businesses, and real estate investors who now owe more on those properties than they are worth simply cut their losses and walk away. The real estate market is definitely slowing, and commercial real estate is in an outright freefall in many cities with vacancy rates reaching 20% or more in many places, but there is still much more pain coming in this market. The upside is, many millennials and even some Gen Z families who are trying to afford their first home, will have the opportunity to do so in the next 12-18 months. ## GDP cooled in Q4 2022 and Q1 2023 The economy cooled significantly in Q1 of this year and also in Q4 of 2022, as the new GDP number, and a revised number for the previous quarter were reported late last week. The estimate of a 1.9 GDP reading for the first quarter of the year came in at 1.1%, and that was a drop from 2.5% in Q4 of 2022 (which itself was revised down about 10bps a few weeks ago). The graph below shows which parts of the economy are holding up, and which parts are dragging us down. Significantly, inventory levels (the gold color) are stacking up at both wholesalers and retailers and as such, are now the biggest drag on the economy. Only consumer spending (the gray color) was actually strong in the last read – all others were significantly worse than the previous quarters. It makes sense that as businesses try to work down their existing inventory, they’d drop prices on those goods, which would have stimulated more consumer spending since we were able to pick up a good price on a desired product or service. In our own household, we purchased a new big-screen TV and made a car purchase simply because prices had come down significantly on both; it makes sense that other families did the same, but this won’t hold up as the recession ensues. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-GDP2304280542.png "Us gdp2304280542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-GDP2304280542.png) You can see that excess inventory numbers are up here – almost 3x the amount expected. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Inventories-retail2304270443.png "Us inventories retail2304270443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Inventories-retail2304270443.png) Inventories are now well above the Covid-19 pandemic levels (blue line). Want an interesting look at how inflation has impacted our prices? The black line shows the exact same inventory’s value at elevated prices since Covid. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Inventories-retail-real2304270443.png "Us inventories retail real2304270443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Inventories-retail-real2304270443.png) Another concern is about upcoming orders for new goods, which we can see here, is rapidly deteriorating. As with the graph above, the ACTUAL orders for new capital goods (called the “real” number) is the blue line below. The black line indicates the same orders but with the post-Covid inflationary prices added to it. We’re selling much less of everything. Only high prices make company profits look okay, for now. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Dur-Real2304270443.png "Us dur real2304270443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Dur-Real2304270443.png) As we discussed at the top of today’s update, GDP can be looked at by sector, geographic region, by the type of buyer, etc. We look at these factors from around the country on a regular basis. Last week, the Richmond, VA Fed chimed in with its monthly read on the manufacturing sector, showing continued deterioration in the space, well into recession in that part of the country: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Richmond2304270443.png "Us richmond2304270443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Richmond2304270443.png) The Kansas City Fed reported in also, with a more dramatic drop in manufacturing being reported for the middle of the country. As with the broader GDP figures and confirmed by several other recent Fed District manufacturing and service reports, new orders are collapsing repaidly (second graph): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-KC2304280542.png "Us kc2304280542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-KC2304280542.png) The Kansas City report also showed, for the first time since Covid, employment in manufacturers in the region was now negative. Layoffs are starting to take place. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-KC-Empl2304280542.png "Us kc empl2304280542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-KC-Empl2304280542.png) This is yet another confirmation of a slowing economy. The concerns about the economy and the risk of government debt ceilings worked together to send the bond yield curve to the worst point in recent history: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-1-Curve2304260445.png "Us 1 curve2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-1-Curve2304260445.png) This yield curve inversion is the worst I’ve ever seen in my entire career – and that includes the Great Recession of 2008-2010. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-1-Curve22304260445.png "Us 1 curve22304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-1-Curve22304260445.png) Yield curve inversions have been strong, almost infallible indicators of imminent recessions. Our current yield curve inversion far surpasses Covid, the Great Recession, the tech bubble burst of the 1990s, etc. In fact, you’d have to go back to the significant, inflation-fueled recession of 1980-1984 to find the curve more inverted than it is today. ***This is a very strong indicator of a major recession in the works. In fact, never before have we had a yield curve inverted this badly for this long without a serious, multi-year recession.*** [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Recession-Prob2304260445.png "Us recession prob2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Recession-Prob2304260445.png) ## Housing Update – Deep Dive Last week, we got updates on new construction, existing home sales, mortgage application activity, and much more. All are important because they give us backward, current, and forward looks at the housing sector of the economy, a significant contributor to our GDP. First, and not something the Fed wanted to see, is that home prices in the 20 largest markets (top graph) and nationally (second graph) actually ROSE in March. This is another indication that inflationary pressures may be resuming again. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-HPA2304260445.png "Us hpa2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-HPA2304260445.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-HPA22304260445.png "Us hpa22304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-HPA22304260445.png) Realtors will tell you when confronted with deteriorating conditions for home sellers, that “all real estate is local”, and to some degree, they are correct. When we look closely at the major markets, we can see that most of the price drops in houses were focused on the west coast of the US, moving east until the Denver area. Most of the eastern half of the U.S. saw the increases, with the southern cities of Miami, Tampa, and Atlanta making the top three. There appears to be migration out of the West coast states and more toward the East, especially to Florida and Georgia. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-HPA-by-metro-YoY2304260445.png "Us hpa by metro yoy2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-HPA-by-metro-YoY2304260445.png) Climbing house prices with rising interest rates is a worst-of-all-cases scenario because they combine to create a massive asset bubble that most people simply cannot afford. This graph shows the average price of a house (purple line) compared to people’s incomes (red line) over time. Whenever the purple line rises significantly above the red one, housing prices are not affordable for most people – an “asset price bubble” has formed. These are never sustainable, and as you can see by the earlier points on the graph, the last time this occurred, the Great Recession immediately followed, and house prices dropped enough to become a real bargain to most families by 2012. Alarmingly, you can also see just how much bigger we allowed the housing bubble to swell this time. We believe a MAJOR housing price adjustment is coming as this recession gets underway. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-HPA-v-Wages2304260445.png "Us hpa v wages2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-HPA-v-Wages2304260445.png) There’s been a recent uptick in new home sales, mostly because interest rates dropped for a couple of months in early 2023 (that has now reversed). But MBA (mortgage applications) are once again far fewer than recent home sales figures, indicating that a slow-down in home sales will resume. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-New-v-MBA2304260445.png "Us new v mba2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-New-v-MBA2304260445.png) Indeed, while pending home sales have trended up (as they seasonally do approaching summer), we are still at the lowest point in the last 8 years: ![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Pending2304280542.png "Us pending2304280542 nvest advisors") And mortgage applications that have “locked the rate” (meaning a home sale is likely within the next 30 days), have rapidly deteriorated: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-MBA-Rate-lock2304270443.png "Us mba rate lock2304270443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-MBA-Rate-lock2304270443.png) One of the things that often gets overlooked in these discussions is the impact on employment in the real estate and mortgage industries. Almost all of these people are paid based on commissions from completed home sales. As you can see from the regular “chop” of the chart, realtors and mortgage brokers are traditionally an “in and out” kind of industry. They peaked, however, ahead of the major subprime housing crisis in 2007-2010, then dropped off dramatically in the aftermath of that recession, and are now back at the same levels they were when the housing asset bubble burst the last time. We fear there will be major layoffs and business failures ahead for real estate and housing sectors (which mainly earn pay based on commissions for sales generated): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Layoffs-are-coming-in-the-real-estate-brokerage-business2304270443.png "Us layoffs are coming in the real estate brokerage business2304270443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Layoffs-are-coming-in-the-real-estate-brokerage-business2304270443.png) ### What this means to you We continue to observe the housing market from afar. None of our Macroeconomic investment models are invested in the housing or finance sectors at this time while we wait for these sectors to bottom out. This may not be for a year or more, but we strongly believe housing will begin to rapidly decline in the coming months. Remember that real estate is one of the most sensitive sectors of the economy to both interest rate changes and to drops in economic output: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Leading-Index-v-commercial-building-activity2304210440.png "Us leading index v commercial building activity2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Leading-Index-v-commercial-building-activity2304210440.png) ## Jobs Update As we mentioned above, one of the primary factors keeping prices elevated is the strong demand for workers ever since the Covid-19 pandemic. There are presently 1.6 jobs available for every job seeker, so the pressure is still on companies to compete for those workers. This causes an elevation in wages, which in turn, causes an elevation in the final prices of the products and services those companies make. This “dance” between wage pressure and price pressure is what the Federal Reserve is now trying to eliminate, and the only way to do it is to slow the economy enough to kill the need for those extra workers. That’s called a recession. We get weekly jobs data, and while there wasn’t a major change last week from the week before, some more nuanced data gives us even better insight, so I thought we’d look at those data points today. First, initial jobless claims continued the trend of elevated unemployment compared to the seasonal average (hiring picks up in the summer and again near the holidays): ![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-claims2304280542.png "Us claims2304280542 nvest advisors") But it’s the continuing numbers that are most important for us in terms of where the economy is headed. Once again, the continuing claims, while slightly following the seasonal trends, is a flat line where it should be a downward slope: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-cont2304280542.png "Us claims cont2304280542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-cont2304280542.png) This means it’s getting harder and harder to find a replacement job once you are laid off. You can see this easier if we look just at the number of continuing jobless claims compared to the year prior. Excluding Covid, we haven’t been anywhere near this level of continuing unemployment claims since early in the Great Recession, and our trend is sharply upward: [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-cont-YoY2304280542.png "Us claims cont yoy2304280542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-cont-YoY2304280542.png) Also, a new statistic for us this week is the number of U.S. states that have seen an increase of more than 20% in jobless claims compared to the same period a year ago. You can see that we are now increasing rapidly in this metric, which means the job losses are more widespread and systemic (as opposed to the layoffs being limited to a specific part of the country). Anytime we’ve gotten to 35 or more states with higher unemployment numbers than the year before, we’ve been in recession, but ANY significant spike of 10 or more states with this situation is very unusual and always indicates economic stress. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-states2304280542.png "Us claims states2304280542 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Claims-states2304280542.png) ### What this means to you The job market is finally starting to soften in a meaningful way, but we have a way to go to ease off of wage pressure. This will come in two ways, which the Fed is counting on. First, the economy must be slowed down enough that the demand for workers drops substantially (we are seeing the beginnings of that trend now). Second, prices and cost of living will remain elevated long enough to force many of these former workers back into the job market. The problem is, many of the people who exited the job market after Covid were near or at retirement age already, so most won’t be coming back. The only solution, then, is to slow down the economy. ## Consumer Confidence sours The new consumer confidence figures from the Conference Board shows a continuing drop in our faith in the current economy. This is relevant because when we are unsure about our economic prospects, we tend to save more and spend less. So in effect, a confidence number becomes a bit of a self-fulfilling prophesy on the overall economy. The confidence index dropped last month more than expected, mostly because our expectations going forward are much worse than the way we feel today (take all 3 graphs together for a clear picture): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Conf2304260445.png "Us conf2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Conf2304260445.png) What’s worrying consumers the most? Pretty much everything except that they currently have a job. Literally every other metric is negative. If the job market begins to rapidly decline, as we believe it is now poised to, this will drop precipitously. [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Conf-Contrib2304260445.png "Us conf contrib2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Conf-Contrib2304260445.png) Again, you may ask, “So what? This is just an emotional sentiment and a guess of what’s coming.” While that may be true, the reality is, as expectations for the future grow progressively more and more negative compared to the current situation, consumers rapidly stop spending. As sentiment goes, so goes spending (consumption): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Conf-v-Cons-Spend2304260445.png "Us conf v cons spend2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Conf-v-Cons-Spend2304260445.png) You can see a strong correlation between dropping sentiment and recessions in the past, and we are well below where sentiment was at the start of the Great Recession already (and down close to the tech bubble burst and September 11 economy): [![](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Conf-Recession2304260445.png "Us conf recession2304260445 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/05/US-Conf-Recession2304260445.png) ### What this means to you We are absolutely convinced that a deeper and more protracted recession than many are predicting, and certainly worse than the investment markets have priced in, is imminent. That’s a bold statement but we believe one that is backed up by the lagging, current, and leading economic data and trends. It is imperative that you take steps to protect your invested capital (including your workplace 401k). The data and news will come fast and furious in the weeks ahead, so we strongly urge you to follow my daily economic journal, if having a daily look at the changing economy is vital for your investments or business activities. [You can do so by visiting Think Like A Rich Guy.](https://thinklikearichguy.com) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. ***We are at the economic tipping point. Do not let the current market rally fool you – there is no sustainable way to grow in an economy that is rapidly losing steam. Corporate profit reports are backward-looking and economic projections are forward-looking. Do not be lulled into complacency just because the stock market has been focused on a week’s work of earnings reports.*** We’ve been alerting our clients for nearly two years now that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to have been a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that runs counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Update on the TD Ameritrade / Charles Schwab merger](https://nvestadvisors.com/tdameritrade-schwab-may-15/) **Published:** April 26, 2023 **Author:** nVest Advisors **Content:** nVest Advisors has employed the services of TD Ameritrade as one of our client account custodians for several years. In the fall of 2019, Charles Schwab acquired TD Ameritrade, and since then, the two custodians have operated independently while their management teams have labored behind the scenes to seamlessly combine the companies into a much larger Charles Schwab. After a thorough custodian review in late 2022, nVest Advisors has established its custodial relationship with Charles Schwab in preparation for this transition. The current time frame for a final merger, in which our client accounts at TD Ameritrade will convert via positive consent to Charles Schwab, and TD Ameritrade will formally cease to exist as a separate entity, is Labor Day weekend of this year, roughly 4 months from this posting. **To help facilitate a smoother transition for our operations from one custodian to the other, to ease the learning curve of new incoming clients, and to provide consistency for our existing clients whose accounts are currently at TD Ameritrade, nVest Advisors is implementing the following procedural changes related to our use of each of these custodians as the final merger approaches:** ## New Clients Effective May 15, 2023, all new retail clients who would normally utilize TD Ameritrade for our investment management services will instead have their accounts opened at Charles Schwab. This will allow our new clients to need to become familiar with only one custodian, instead of spending a few weeks at one custodian, only to be transitioned very quickly to another. ## New ERISA Workplace Retirement Plans Effective May 1, 2023, any new workplace retirement plans that would have previously been placed at TD Ameritrade will instead be opened at Charles Schwab. ## Existing Clients using TD Ameritrade Existing clients whose accounts are at TD Ameritrade will continue to fully utilize TD Ameritrade until the date of conversion (on or about September 4, 2023). Any additional new account needs for our existing clients will continue to be opened at TD Ameritrade until August 18, 2023. This will ensure that all of our clients’ household accounts transition at the same time. Effective August 18, 2023, we will no longer be able to open new accounts at TD Ameritrade, so we will also honor that blackout period in our own operations and will delay the opening of any needed new accounts for TD Ameritrade-held households until after the full conversion to Charles Schwab. #### TD Ameritrade clients will soon receive a Schwab Merger Opt-Out Notice In the next few days, our clients whose accounts are currently held at TD Ameritrade will receive a mandatory **Negative Consent Notice**. This is a formal announcement of the specifics of the merger and a schedule of dates related to your accounts moving to Charles Schwab. There is nothing our clients need to do regarding this notification – your accounts will be automatically transfered to Charles Schwab on September 1, 2023 unless you opt-out. > We are committed to your total satisfaction as an nVest Advisors client, and are excited by the new features and services this combined, much larger custodian will provide. [Charles Schwab has created a website to answer your questions about the merger, and is updating it regularly](https://welcome.schwab.com/alliance), but if you have specific questions or concerns about this merger, please do not hesitate to reach out to us! **Categories:** Business Stories, Client News, From our CEO, Individuals and Families, Mailchimp, Press Releases **Tags:** announcement, Charles Schwab, company news, merger, news, Schwab, TD Ameritrade --- ### [Weekly Economic Update: 04-24-2023](https://nvestadvisors.com/weekly-economic-update-04-24-2023/) **Published:** April 24, 2023 **Author:** nVest Advisors **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** This past week, we got new housing and jobs info, as well as manufacturing data from the east coast. We’ll also take a deeper dive into the leading economic indicators, and how close to a recession we most likely are. Check out my[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **Housing Update** - **Jobs Update** - **Manufacturing Activity & Leading Indicators** ## Housing Update Last week, we got updates on new construction, existing home sales, and mortgage application activity. All are important because they give us backward, current, and forward looks at the housing sector of the economy, a significant contributor to our GDP. First, let’s look at new construction, which showed strength both in new starts as well as permit activity. We believe this is largely due to the decrease in commodity prices and a recent decline in mortgage rates back into the 6% range (which, frustratingly, has already reversed). The Home Builder Sentiment index (just a survey of how builders feel about the business right now) showed some improvement, but still far below recent and historical trends: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NAHB2304180438.png "Us nahb2304180438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NAHB2304180438.png) Traffic of potential home buyers remained flat in the last survey, though up from the bottoms of December and January. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NAHB-Traffic2304180438.png "Us nahb traffic2304180438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NAHB-Traffic2304180438.png) However, we believe this slight reprieve will be only temporary, as the increase in traffic and sentiment coincided with the drop in mortgage interest rates during the same time period. That has now reversed as loan rates are trending higher again, and lending standards tighten: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-mortg-rate2304200444.png "Us mba mortg rate2304200444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-mortg-rate2304200444.png) We believe this uptick in housing is temporary. Part of it is seasonal activity, part of it is the drop in the prices of lumber and other building supplies, and part was misplaced optimism about interest rates declining in the near-term. In fact, the leading economic indicators show that housing faces more headwinds in the coming months as mortgage rates climb again: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NAHB-v-MBA2304180438.png "Us nahb v mba2304180438 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NAHB-v-MBA2304180438.png) Indeed, the number of mortgages issued dropped after trending slightly upward, which is a seasonal trend (though still far below previous years in the last decade): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA2304200444.png "Us mba2304200444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA2304200444.png) And even those who obtain rate locks aren’t always completing the home purchase. An increasing number of home purchase deals are failing to close: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-Pending-out-of-contract2304200444.png "Us mba pending out of contract2304200444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-Pending-out-of-contract2304200444.png) As for existing home sales, we can see that there is a more significant drag here than on new home sales at the moment. Existing sales are trending with the historical seasonal upswing (more people move during the summer), but still at the bottom of the previous 10 years of activity, with a slowing trajectory going into the year (second chart): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Existing2304210440.png "Us existing2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Existing2304210440.png) This is despite the fact that for the first time in more than 10 years, existing home prices have finally dropped (ever so slightly) over the previous year. We believe this downward price trend is going to continue for the next year or more. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Existing-Price2304210440.png "Us existing price2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Existing-Price2304210440.png) We’ve said for a full year now that rising rates into the most expensive housing bubble in our nation’s history would mean only one thing: housing prices MUST moderate. If a family can barely afford to qualify for a 3% mortgage in January of 2022 on a $600,000 home, they’ll never qualify for one at 6.5% or 7.5% interest. In that case, the only way to get that buyer into a home is to lower its asking price, possibly substantially. That is happening now: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-Median-sale-price2304200444.png "Us mba median sale price2304200444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-Median-sale-price2304200444.png) Despite many in the real estate industry claiming the housing market is robust and (I believe, dishonestly) trying to encourage home sellers that it’s a good time to enter the market, house prices have collapsed and they continue to follow a downward trajectory. We believe housing has much further to fall as the real effects of the recession, which is sadly a loss of jobs, failure of companies, and home foreclosures (particularly in houses owned as investments and not primary residences) ramps up later this year. One obvious and totally predictable change in housing is the behavior of sellers: instead of taking less for their homes, people who can wait to sell, are doing so, as fewer and fewer homes are being listed going into summer (this is completely counter to the historical trend): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-Listings2304200444.png "Us mba listings2304200444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-Listings2304200444.png) We believe fewer homes on the market will help to keep prices stable for the next few months, though downward price pressure will definitely resume as the recession settles into the broader economy. This will reverse and pick up speed as additional homes are dropped, often involuntarily, into the open housing market due to foreclosures, “fire sales”, and relocations. ### What this means to you We continue to observe the housing market from afar. None of our Macroeconomic investment models are invested in the housing or finance sectors at this time while we wait for these sectors to bottom out. This may not be for a year or more, but we strongly believe housing will begin to rapidly decline in the coming months. Remember that real estate is one of the most sensitive secotrs of the economy to both interest rate changes and to drops in economic output: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Leading-Index-v-commercial-building-activity2304210440.png "Us leading index v commercial building activity2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Leading-Index-v-commercial-building-activity2304210440.png) ## Jobs Update As we mentioned above, one of the primary factors keeping prices elevated is the strong demand for workers ever since the Covid-19 pandemic. There are presently 1.6 jobs available for every job seeker, so the pressure is still on companies to compete for those workers. This causes an elevation in wages, which in turn, causes an elevation in the final prices of the products and services those companies make. This “dance” between wage pressure and price pressure is what the Federal Reserve is now trying to eliminate, and the only way to do it is to slow the economy enough to kill the need for those extra workers. That’s called a recession. We get weekly jobs data, and while there wasn’t a major change last week from the week before, some more nuanced data gives us even better insight, so I thought we’d look at those data points today. First, initial jobless claims continued the trend toward more newly unemployed each week and were higher than the previous two weeks: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims22304210440-1.png "Us claims22304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims22304210440-1.png) On the surface, this doesn’t appear alarming when looking back over the last decade, as these initial claims fall well within historical trends. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims2304210440.png "Us claims2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims2304210440.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont-YoY2304210440.png "Us claims cont yoy2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont-YoY2304210440.png) Instead, the number of continuing claims is what is more concerning. The trend there is basically flat, but because employment is cyclical (more people take jobs in the summer months and then hiring slows into winter), a continuing claim number that is now trending upward when all of the last 10 years (the insanity of the 2020 Covid crisis excluded), shows it is getting harder for a laid off person to find another job. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont2304210440.png "Us claims cont2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont2304210440.png) The trajectory, however, is what we need to be concerned with. Comparing jobless claims with the previous year can give us a much clearer picture of what’s happening in the workforce. You can see that from 2011-2022, continuing claims were historically similar (and remarkably stable). Only Covid (which most of us in economics now ignore as a wild outlier that was government-mandated, not market-driven) and the Great Recession of 2008-2011 bucked this historically very stable trendline. We are now seeing an increase in continuing joblessness that, while currently still relatively low, is rapidly picking up speed: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont-YoY2304210440-1.png "Us claims cont yoy2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont-YoY2304210440-1.png) ### What this means to you The job market is finally starting to soften in a meaningful way, but we have a LONG way to go to ease off of wage pressure. This will come in two ways, which the Fed is counting on. First, the economy must be slowed down enough that the demand for workers drops substantially (we are seeing the beginnings of that trend now). Second, prices and cost of living will remain elevated long enough to force many of these former workers back into the job market. The problem is, many of the people who exited the job market after Covid were near or at retirement age already, so most won’t be coming back. The only solution, then, is to slow down the economy. ## Manufacturing & Leading Indicators Update We got really strong numbers out of New York this past week on manufacturing, which most economists believe were aberrations, so we won’t spend much time on those this week. If we see a second really strong result in them next month, we will be more interested. Remember that the most recent number isn’t more important than the collective set of numbers or the trajectory they point to. Recency bias is a real problem for many investors and economists, believing that the most recent number has more importance than the collective total of the numbers. At nVest, we always follow “trend and trajectory”, not individual data points. The manufacturing number did NOT match the services sector in the same survey, which is much more in line with recent trends and national averages: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NY-Fed-services2304190523.png "Us ny fed services2304190523 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NY-Fed-services2304190523.png) We also believe the manufacturing data was an aberration because the same Fed Bank now points to a strong probability of a recession in the coming months. In fact, this projection is significantly higher than what was reached for most of the recessions in the last 60 years: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NY-Fed-Recession-Prob2304190523.png "Us ny fed recession prob2304190523 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NY-Fed-Recession-Prob2304190523.png) The Philly Fed’s manufacturing data, in stark contrast to the New York data but in line with both the Philly, previous New York, and all of the National trends and trajectories, however, showed a huge drop in manufacturing activity, alarming in both its severity and trendline. At this point, the Philly area data may fall farther than the worst parts of the Great Recession before this current recession even gets started. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Philly2304210440.png "Us philly2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Philly2304210440.png) It’s interesting and informative to match up lagging data (like these PMI reports showing prior activity) with both current and even forward-looking data. Looking backward shows us where we’ve been. Current data shows us where we are. Forward data isn’t 100% accurate (though often, neither is current or lagging info), but it gives us a look at the trajectory. Forward data is also very important because much of it tends to be a self-fulfilling prophesy: what we believe is coming, we prepare for, thus often making our economic projections true. Currently, we can see that manufacturing has slowed, because the trucks that move those goods across the nation are lighter and lighter on each trip. This lets us know that we’re shipping fewer products. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Truck-tonnage-index2304210440.png "Us truck tonnage index2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Truck-tonnage-index2304210440.png) Not every economic indicator flashes “recession” at once, however, and this is why there is broad disagreement between economists over where we actually are in the economic cycle. For instance, right now, only two of six indicators is telling us a recession is here: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Recession-signals2304190523.png "Us recession signals2304190523 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Recession-signals2304190523.png) But again, trends and trajectory matter. Look at the light blue diamonds in each bar chart, above. This was where each economic indicator was six months ago. The dark blue diamond is where it is today. Though only two indicators are flashing “recession” right now. three others are rapidly dropping into a recessionary zone. The only one still strongly counter to it is labor, and that is a challenge for the Fed, which must crush wage pressures in order to finally crush inflation. This is why, despite lots of warnings from market participants and economists that they must slow down or even stop their rate hikes, the Fed is backed into a corner. If they relent and back off of their current pressure, wage pressure continues, which means inflation remains. If they stay the course, the economy itself will suffer greatly but inflation might finally get under control. Now a look at forward indicators, specifically the Conference Board’s LEI (Leading Economic Indicators) report As you can see, the leading indicators came in much lower than expected month-over-month: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Leading-Index2304210440.png "Us leading index2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Leading-Index2304210440.png) Looking back over a 6-month change instead of monthly, we can see this decline more clearly: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Leading-Index-6m-The-leading-index-has-never-declined-this-much-in-six-months-without-a-recession2304210440.png "Us leading index 6m the leading index has never declined this much in six months without a recession2304210440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Leading-Index-6m-The-leading-index-has-never-declined-this-much-in-six-months-without-a-recession2304210440.png) Which has largely coincided with the actual declines in manufacturing and service output in the country. Fund managers have also changed their forward-looking sentiment, which will affect their investment decisions (exactly as we do here at nVest Advisors). Though we’ve been concerned with stagflation (a period of declining output with increasing prices – kind of a “worst case scenario” for the economy) since late 2021, most fund managers came around to the same conclusion in the last several months. *As an aside: look at the percentage of money managers who thought in the early months of 2022 that an “Economic Boom” was coming (the dark blue line). If that was your advisor, flee!* [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-FMS-Investors-expect-stagflation2304200444.png "Us fms investors expect stagflation2304200444 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-FMS-Investors-expect-stagflation2304200444.png) You’ll start hearing more and more about recession signals in the coming months on the news, but we’ve been on this for a year and a half. Recessionary signals (the first graph) popped up in the last few months and are now substantially in line with previous recessions. However (the second graph) shows that only half of the factors considered when calling a recession have been triggered so far. The other half are close but still in positive enough territory. But remember, trend and trajectory – we’re headed into a recession we’ve long been forecasting. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NY-Fed-Recession-Prob22304190523.png "Us ny fed recession prob22304190523 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NY-Fed-Recession-Prob22304190523.png) ### What this means to you We are absolutely convinced that a deeper and more protracted recession than many are predicting, and certainly worse than the investment markets have priced in, is imminent. That’s a bold statement but we believe one that is backed up by the lagging, current, and leading economic data and trends. It is imperative that you take steps to protect your invested capital (including your workplace 401k). The data and news will come fast and furious in the weeks ahead, so we strongly urge you to follow my daily economic journal, if having a daily look at the changing economy is vital for your investments or business activities. [You can do so by visiting Think Like A Rich Guy.](https://thinklikearichguy.com) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We are at the economic tipping point. We’ve been alerting our clients for over a year and a half that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to have been a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that run counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stagflation, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic Update: 04-17-2023](https://nvestadvisors.com/weekly-economic-update-04-17-2023/) **Published:** April 17, 2023 **Author:** nVest Advisors **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** This past week, we got new inflation data (the CPI and the PPI), as well as a good look at bank lending and specifically, commercial real estate troubles. Check out my[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **CPI and PPI Update** - **Jobs Update** - **It’s getting harder to get a loan** - **Commercial Real Estate is in trouble** ## CPI and PPI Update Last week, we got updates to both the Consumer Price Index (CPI) and Producer Price Index (PPI). These are the look of prices for both the makers of goods and services (PPI) and the end-buyer of those good and services (CPI). PPI tends to lead CPI by several months, though it’s not a perfect correlation for several reasons. This is because producers are hesitant to raise prices in response to their own cost increases (because higher prices will make you less competitive, at least initially). And then, after consumers are used to higher prices, producers tend to leave their prices elevated for as long as possible (until their competitors start dropping theirs), to maximize profit margins. So here’s what we see for the CPI and PPI reads for the first quarter of 2023. Let’s start with producers. PPI came down dramatically and continues that trend, giving me hope that inflation is truly headed down in a meaningful way (though there are definite headwinds – energy prices resuming their upward trend is a significant concern): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PPI2304140441.png "Us ppi2304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PPI2304140441.png) This was a surprise drop for most economists, largely driven by the drops in energy costs. However, when we strip out incidental purchases and focus more closely on the core goods and services companies regularly spend capital on, we saw the same kind of surprise drop in prices, this time, seeing the first decline in prices for producers in over two years (top chart). The trend on producer prices is definitely lower year-over-year (second chart). [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PPI-Core2304140441.png "Us ppi core2304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PPI-Core2304140441.png) Now if we dig a little deeper into both the topline and core figures, we can see exactly what prices are trending up and down for companies right now. Headline PPI contributors show that really only two major production cost factors declined (service providers that companies use like health care, accounting, insurance, tax prep, etc.), and Energy. All other factors were basically flat. We’ve talked several times about the upswing in energy price pressure over the last few weeks, so it remains to be seen whether this trend will continue. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PPI-Detail2304140441.png "Us ppi detail2304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PPI-Detail2304140441.png) The PPI indicates that prices are indeed cooling for manufacturers and service companies, which is a good thing as demand softens and much of the world teeters on a recession. And even with the lag effect that PPI has on the final purchase price for consumers, we got a slightly positive surprise on CPI for March, as well, as it came in 10 basis points below expectations: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-CPI2304130440.png "Us cpi2304130440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-CPI2304130440.png) However, that drop for consumers is also almost entirely energy prices. Stripping that away and looking at what we spend money on each month instead, we see the Core CPI is still very elevated (though slightly lower than in recent months, to be sure). [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-CPI-Core2304130440.png "Us cpi core2304130440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-CPI-Core2304130440.png) And breaking out the physical goods we buy so we can just look at the services we pay for (internet, phone, subscriptions, deliver fees, etc.), we can see some relief but still very elevated month-to-month: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-CPI-CORE-SERVICES2304130440.png "Us cpi core services2304130440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-CPI-CORE-SERVICES2304130440.png) Again, we can break down the larger number and see which parts of our budget are getting more affordable, and which remain elevated. The only factor that dropped inflation for us last month was energy. All others were elevated or flat. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-CPI-detail2304130440.png "Us cpi detail2304130440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-CPI-detail2304130440.png)[](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Mich-v-5y2304030552.png) ### What this means to you It appears that inflation, in general, is off of its peak, but we remain cautious that inflationary pressures may resume, particularly with the recent oil production cuts from OPEC. While we are cautiously optimistic that inflationary factors are cooling off, the persistent demand for more workers means that even if the prices of commodities like energy, lumber, iron and other production costs drop due to the slowing economy, the strong demand for workers will add significant costs to companies that they will push down to the purchasers of their final product or service. Combining rising energy and labor costs means, in our view, that inflation may not be as well-tamed as it appears at the moment. Time will tell, but we remain cautious that inflation is going to be stubborn and persistent, requiring more action by the Federal Reserve than the investment markets have factored in just yet. In fact, we can see this clearly in a recent Fed “dot plot” graph, in which the voting members of the Federal Reserve Open Market Committee (FOMC) vote on where they believe interest rates will be in the coming quarters. Each “dot” is a survey opinion (not a binding vote – they vote at each meeting, not in advance) of a member of the Fed, with the red line indicating the mean of the Fed’s members’ estimate: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-AAA-Dots2304130440.png "Us aaa dots2304130440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-AAA-Dots2304130440.png) The blue line, way below the Fed dots, is where the MARKET believes interest rates will be. So the question is, do we second-guess the Fed, or go with their guidance? Wall Street is betting that the Fed will “pivot” and lower rates sooner than the Fed themselves are expecting, and has therefore rallied on the basis that the Fed lacks the willpower to keep rates higher for longer. In effect, Wall Street is playing a game of “chicken” with the Fed at the moment. We think that’s silly. Our firm is taking the Fed at its word and is investing accordingly. ## Jobs Update As we mentioned above, one of the primary factors keeping prices elevated is the strong demand for workers ever since the Covid-19 pandemic. There are presently 1.6 jobs available for every job seeker, so the pressure is still on companies to compete for those workers. This causes an elevation in wages, which in turn, causes an elevation in the final prices of the products and services those companies make. This “dance” between wage pressure and price pressure is what the Federal Reserve is now trying to eliminate, and the only way to do it is to slow the economy enough to kill the need for those extra workers. That’s called a recession. We get weekly jobs data, and while there wasn’t a major change last week from the week before, some more nuanced data gives us even better insight, so I thought we’d look at those data points today. First, initial jobless claims remain above the average of the last few years (excluding the wild ride of 2020 and the unnaturally strong return to work in 2021), and are higher than the average of the last few (sane) years for the seventh week in a row. This tells us that layoffs are definitely happening now, and started months ago but there was a delay in those layoffs showing up in unemployment claims due to severance packages, especially in the tech sector: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims22304140441.png "Us claims22304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims22304140441.png) But here’s where it gets interesting. CONTINUING jobless claims have spiked dramatically in the last few weeks. This tells us that yes, companies are laying people off right now, but unlike a month or two ago, those laid-off workers are having a MUCH harder time finding a new job. As you can see, excluding the insanity around the Covid-19 economic shut-downs, the last time we had continuing jobless claims this high was back in 2009: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont-YoY2304140441.png "Us claims cont yoy2304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont-YoY2304140441.png) And looking back even further, we can see that any time continuing jobless claims were this “sticky” (again, ignoring the nonsense that happened in 2020), we had a recession. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont-STates2304140441.png "Us claims cont states2304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont-STates2304140441.png) This is happening despite the fact that our labor participation rate remains below the trend pre-Covid, so there are still a number of workers who stopped seeking work after the pandemic (which is what caused the massive hiring and wage battles that followed, significantly adding to inflationary pressures over the last two years): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NFP-Particip2304100447.png "Us nfp particip2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NFP-Particip2304100447.png) And therein lies the problem – there are fewer people returning to work after Covid, causing us to be fully employed as a country – the people in the job market now all have jobs. Without either more workers coming back in, or businesses slowing down enough to no longer need more workers, we are stuck in this wage-price spiral I described above. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NFP-Unempl2304100447.png "Us nfp unempl2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NFP-Unempl2304100447.png) ### What this means to you We continue to see the job market soften slightly, but we have a LONG way to go to ease off of wage pressure. This will come in two ways, which the Fed is counting on. First, the economy must be slowed down enough that the demand for workers drops substantially. Second, prices and cost of living will remain elevated long enough to force many of these former workers back into the job market. The problem is, many of the people who exited the job market after Covid were near or at retirement age already, so most won’t be coming back. The only solution, then, is to slow down the economy. ## It’s getting harder to obtain a loan Like most of the world’s economies, the United States operates on something called a fractional reserve monetary system. It’s complicated to explain in a brief blog post, but basically it means that money is created by our banks lending it out, businesses and individuals using it productively, and paying it back to the bank, plus interest. Banks are allowed to lend money they don’t have based on the deposits their customers put in the bank. Essentially, banks just invent money out of thin air each time they lend. More money in the system means prices go up, because there are more dollars out there to spend on the same number of goods and services (or in an ideal economy, the number of products and services are growing, too, because businesses borrowed the money to go into business, expand their operations, etc.). But when you have gobs of new money and no productive output, inflation soars. This is precisely what happened during Covid, when the government, through banks, lent huge sums of money – almost $6 trillion – and gave us stimulus checks and Paycheck Protection (PPP) loans to businesses that they immediately forgave. So all of that money is now floating out there in the economy with the same (and in many cases, fewer) products and services to spend it on. Thus, prices went nuts and you and I are living with the economic mess that resulted. The Fed is trying to reverse that overflow of money through a process called quantitative tightening. They are raising interest rates to make loans less affordable (so you’ll borrow less), make your savings account pay you better (so you’ll save more and take that money out of the economy for now), and they themselves are drawing money back into the Federal Reserve System to reduce the amount out there. All of this strengthens the dollar in terms of buying power, which will lower the asking price of many items. The side effect of all of this monetary action is, borrowing slows, investing slows, and production slows: a recession. In that sense, a recession isn’t a good thing, but it’s a necessary thing, to drain excess liquidity out of economies that get “too hot” for too long. We are starting to see the effects of the quantitative tightening really take effect now. It’s becoming much more difficult to obtain credit for businesses and consumers: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Harder-to-obtain-than-one-year-ago2304110447.png "Us harder to obtain than one year ago2304110447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Harder-to-obtain-than-one-year-ago2304110447.png) There are two reasons for this. The first is, depositors have been scared away from saving money in banks, particularly smaller banks since the failures of Silicon Valley Bank, Signature Bank, and others a few weeks ago. Depositors have moved a huge amount of money out of banks and into money market funds for now: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Foreign-domestic2304100447.png "Cr foreign domestic2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Foreign-domestic2304100447.png) Without deposits, banks are restricted on how much they can lend. And we can see a massive drop-off in new loans issued in the past few weeks: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Loans2304100447.png "Cr loans2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Loans2304100447.png) Banks are also dropping their investments in mortgage-backed securities at the moment. It had been trending down for all of last year, but fell off a cliff last week: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-MBS-held-by-banks2304100447.png "Cr mbs held by banks2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-MBS-held-by-banks2304100447.png) To help offset the drop in bank lending for real estate especially, the Federal Home Loan Bank has issued a massive amount of new bonds to guarantee bank loans for property purchases in the coming months. This means banks are less and less willing to assume the risk of a mortgage loan without a government agency guarantee. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-FHLB-Issuance-providing-financing-to-slmaller-banks2304100447.png "Cr fhlb issuance providing financing to slmaller banks2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-FHLB-Issuance-providing-financing-to-slmaller-banks2304100447.png) You can clearly see the banks’ sudden disinterest in funding real estate projects, especially commercial real estate (which I believe will see an almost catastrophic decline – see below): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-MBS-COnstruction-Loans2304100447.png "Cr mbs construction loans2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-MBS-COnstruction-Loans2304100447.png) The banks have tightened so much already that we are at or near typical levels felt during recessions: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-A-sharp-contraction-in-business-lending-ahead2304100447.png "Cr a sharp contraction in business lending ahead2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-A-sharp-contraction-in-business-lending-ahead2304100447.png) Consumers are also lowering the bank’s lending simply by buying less on credit. As interest rates on their credit cards soared over the last year, many consumers have slowed their use of credit automatically (though I’m concerned seeing consumers putting a lot more of their service purchases on credit – does this mean medical bills, airline flights, vacations, and even things like restaurant dining might be now going on a credit card)? [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Card-spending22304140441.png "Us card spending22304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Card-spending22304140441.png) Banks and consumers are right to be concerned. Bankruptcy filings are climbing rapidly, and loan delinquencies are soaring: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-US-bankruptcies-have-accelerated2304110447.png "Cr us bankruptcies have accelerated2304110447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-US-bankruptcies-have-accelerated2304110447.png) ### What this means to you Higher interest rates will be good for your cash savings, but bad for borrowing. This is the intention of the interest rate hikes, because they incentivize people to slow down their risk-taking and borrowing, and instead put their cash on the sidelines. We believe these lending stats prove we are on the cusp of the economic slowdown we’ve long predicted. ## Commercial Real Estate has serious problems ahead We believe all of real estate will suffer a significant recession, but the worst hit will be commercial real estate, already struggling with high vacancy rates following the “work from home” mania brought on by Covid. As companies reduce their floor space as many workers take up a home office for all or part of their daily work activities, we believe this trend will worsen until there is a serious correction in office and commercial property. The office vacancy rate is already higher than it was at the peak of the 2008-2010 recession: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Office-vacancy-rate2304140441.png "Cr office vacancy rate2304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Office-vacancy-rate2304140441.png) With offices in downtown areas at the highest vacancy rate recorded since the Great Depression: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-CMBS-Vacancy-rates2304100447.png "Cr cmbs vacancy rates2304100447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-CMBS-Vacancy-rates2304100447.png) And spaces listed for rent have soared. We believe this will eventually lead to significantly lower rent rates for commercial real estate, and unfortunately, the failure of a number of commercial real estate ventures as demand simply won’t be back to pre-Covid levels for years (if ever): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Office-available-for-lease2304140441.png "Cr office available for lease2304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Office-available-for-lease2304140441.png) There are fewer investors interested in financing commercial real estate ventures, also, as the number of Commercial Mortgage-Backed Securities collapsed so far in 2023. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-CMBS-issuance2304140441.png "Cr cmbs issuance2304140441 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-CMBS-issuance2304140441.png) This has forced many commercial developments to seek financing directly from banks, with smaller local and regional banks picking up the slack (black portion of the bar): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Small-banks-commercial-re-lending2304110447.png "Cr small banks commercial re lending2304110447 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/CR-Small-banks-commercial-re-lending2304110447.png) We believe this continues to add to the woes of the smaller banks, which are the ones who have had such noteworthy failures in the last few weeks. We believe this will continue. ### What this means to you The fact that commercial real estate will fall significantly isn’t a surprise to our readers. We’ve said real estate as a whole was going to suffer a substantial retraction this year from the preposterously high valuations of the last few years. What is a greater concern now is the over-reliance on small and regional banks that real estate has made over the last several years. If there are substantial failures of real estate lending (foreclosures, bankruptcies, etc.), these smaller banks will be seriously affected. Our advice is to make sure you are using FDIC insurance guidelines and never keep more than $250k in any bank account. Use money markets and brokerage accounts and money market funds for larger balances. We also believe this will be a good time to renegotiate rent for our small business customers, and consider relocating and locking in longer leases as conditions in this sector worsen. We strongly urge you to follow the daily updates if having a daily look at the changing economy is vital for your investments or business activities. [You can do so by visiting Think Like A Rich Guy.](https://thinklikearichguy.com) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We are at the economic tipping point. We’ve been alerting our clients for over a year and a half that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to have been a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [The Colorado Secure Savings Program: What you need to know](https://nvestadvisors.com/colorado-secure-savings-program/) **Published:** April 12, 2023 **Author:** nVest Advisors **Content:** The Colorado Secure Savings Program is a state-facilitated retirement savings plan designed to help Colorado workers save for their future retirement. The program was established by the Colorado General Assembly in 2019 and is set to launch in phases starting in 2021. The program will help workers without access to employer-sponsored retirement plans save for their retirement through a payroll deduction system. The Colorado Secure Savings Program requires eligible employers to automatically enroll their employees in the program unless they choose to opt out. The program aims to provide a simple, affordable, and low-cost retirement savings option for employees who work for employers that don’t offer retirement plans. The goal of the program is to help employees accumulate savings for their retirement years and reduce the likelihood of them relying solely on Social Security benefits. Under the Colorado Secure Savings Program, employers with at least five employees who have been in operation for at least two years are required to either offer an employer-sponsored retirement plan or participate in the state-facilitated program. Employers who already offer an employer-sponsored retirement plan are exempt from the program requirements. **Employers who participate in the Colorado Secure Savings Program will need to facilitate the program by:** 1. **Registering for the program:** Employers will need to register for the program online through the Colorado Secure Savings Program website. 2. **Providing employee information:** Employers will need to provide employee information such as name, social security number, and contact information to the program. This information will be used to set up employee accounts. 3. **Setting up payroll deductions:** Employers will need to set up payroll deductions for employees who have enrolled in the program. The payroll deductions will be sent to the program on behalf of the employee and invested according to the employee’s chosen investment option. The Colorado Secure Savings Program has been rolled out in phases starting from July 2021. The initial phase of the program is voluntary, and employers who wish to participate can do so voluntarily until December 31, 2022. After December 31, 2022, employers who meet the program requirements will be required to offer the program to their employees. The Colorado Secure Savings Program offers employees two investment options: a target-date fund or a fixed interest account. Employees who don’t make a choice will be automatically enrolled in the target-date fund. Employees can also choose to opt-out of the program or change their investment option at any time. The program’s fees are capped at 0.5% of assets annually, making it a low-cost retirement savings option for employees. Employers who participate in the program will not be responsible for the program’s administrative or investment fees. In conclusion, the Colorado Secure Savings Program is a state-facilitated retirement savings plan designed to help Colorado workers save for their retirement. Employers who meet the program requirements are required to offer the program to their employees, and employees will be automatically enrolled in the program unless they choose to opt-out. The program offers employees low-cost investment options, and the fees are capped at 0.5% of assets annually. The program’s phased implementation is set to be fully implemented by January 1, 2024. ## Colorado SecureSavings deadlines & details The Colorado Secure Savings Program ([Senate Bill 20-200](https://leg.colorado.gov/sites/default/files/2020a_200_signed.pdf)) was signed into law by Governor Jared Polis in July 2020. All eligible employers in Colorado are required by law to facilitate the program by the following dates if they don’t offer a retirement plan: - **Employers with 50+ employees:** March 15, 2023 - **Employers with 15-49 employees:** May 15, 2023 - **Employers with 5-14 employees:** June 30, 2023 The program will impact every private-sector business with five or more employees that have been in business for at least two years. If you[ offer a 401(k)](https://humaninterest.com/learn/guides/starting-a-small-business-401k/) or another qualified retirement plan, you’re exempt from having to offer the Colorado Secure Savings Program to eligible employees ([certify your exemption here](https://coloradosecuresavings.vestwell.com/register/exempt)). Additionally, there are exemptions for employers who have sponsored the following during the last two years: - A qualified retirement plan under Internal Revenue Code Section 401(a), [401(k)](https://humaninterest.com/401k-for-small-businesses/) or 403(a) - A 403(b) tax-sheltered annuity plan - A 457(b) deferred compensation plan - A simplified employee pension ([SEP](https://humaninterest.com/learn/articles/401k-vs-sep-ira-for-small-business/)) plan - A savings incentive match plan for employees ([SIMPLE 401(k)](https://humaninterest.com/learn/articles/retirement-plan-comparison-401k-vs-solo-401k-vs-simple-ira-vs-sep-ira/) or[ IRA](https://humaninterest.com/learn/articles/401k-versus-ira-how-to-decide/) plan) ## Penalties for businesses found in non-compliance **Employers found to be non-compliant will be fined up to $100 per eligible employee per year,** not to exceed an aggregate amount of $5,000 in a calendar year. Enforcement of fines will not begin until at least one year after the program is established or one year after an employer is scheduled to enter the program, whichever is later. ## Why your company should skip the state-run plan and start its own retirement program So the question comes down: should small and micro-business employers in Colorado just accept the state-run plan, or should you now take the opportunity to create your own, competitive and customized retirement plan? **There are some definite advantages for companies to start their own retirement plan instead of participating in the Colorado Secure Savings Program:** - **Flexibility in Plan Design:** One of the main advantages of starting their own retirement plan is that employers have the flexibility to design a plan that meets their specific needs and the needs of their employees. This includes choosing investment options, setting contribution limits, and determining vesting schedules. - **Investment Options and Professional Support for Employees:** Colorado offers two options for employees – a target-date fund (a mix of investments generally suitable for the employee based on their age), or a fixed-interest account. In this era of market volatility and sticky inflation, the target-date funds will just passively rise and fall with market conditions, and fixed-interest accounts won’t keep up with the rate of inflation. Providing a plan managed by a professional firm, like nVest Advisors, will offer your employees many more investment options, plus the ability to work with a financial advisor as market conditions change. - **IRAs have limits that other employer plans do not:** The Secure Savings program places your employee’s money in an IRA account. This makes it subject to the same rules and limits as standard IRA accounts. For example, IRA contribution limits are the lowest of any retirement plan – just $6,500 in 2023 for most workers ($1,000 more if you’re over age 50). Contrast that with the 401(k), which allows for $22,500 in contributions for each worker, with an extra $7,500 if you’re over age 50. SIMPLE IRA plans allow up to $15,500 per year, plus $3,500 more for people over 50. The Colorado plan also does not offer loan features – the only option for employees if they need to withdraw funds in a financial emergency, they must do so by paying income taxes (and an early withdrawal penalty). - **Employer Contribution Options:** An employer-sponsored retirement plan can allow employers to contribute to their employees’ retirement savings. Employer contributions can be a powerful tool for attracting and retaining talent, and they can also help employees accumulate savings more quickly. - **Tax Benefits:** Employer-sponsored retirement plans offer tax benefits for both the employer and the employee. Contributions made to the plan are tax-deductible for the employer, and contributions made by the employee are made with pre-tax dollars, which can lower their taxable income. - **Better Retirement Outcomes:** Studies have shown that employer-sponsored retirement plans can lead to better retirement outcomes for employees. These plans typically offer higher contribution limits than individual retirement accounts (IRAs), and they often provide access to professional investment management. - **Employee Engagement:** Offering an employer-sponsored retirement plan can increase employee engagement and satisfaction. Employees appreciate when their employer invests in their long-term financial security, and it can improve employee loyalty and retention. ## The state government is picking winners and losers Perhaps this is a bit of bias on our part, but we feel it is fundamentally wrong for the state to mandate participation in a plan like the Secure Savings plan, but then also pick which companies will benefit from that new mandate. In the Colorado plan, only a few investment firms were selected to implement this program, in which 1,000,000 Colorado employees will be now forced to save money. This fundamentally created a conflict of interest between the state regulators and the investment companies selected. The state also selected an extremely limited selection of investment options for the affected workers, completely eliminating the vast majority of investment assets (and no way at all to create a customized portfolio or move between strategies as market conditions change). We believe you as the employer should have the right to decide what plan features, types and professionals will best meet the retirement savings needs of you and your employees, not a state bureaucrat. ## Employer tax benefits for offering a retirement benefit plan (and foregoing the state plan) The state plans to establish grants to help defray costs and encourage small businesses—only those with five to 25 employees—to implement retirement savings plans. Grants will not exceed $300 for a single employer. In contrast, the tax benefits available to eligible employers for [starting a 401(k)](https://humaninterest.com/401k-for-small-businesses/) or other qualified retirement plan are higher. The [SECURE Act 2.0](https://www.congress.gov/bill/117th-congress/house-bill/2954/text#toc-HFA92ED45B7E74055BF5E3AE83A0FE7DA) expanded tax credits to cover the following: - **A tax credit for starting up a retirement plan:** Businesses with up to 50 employees may be eligible for a tax credit to cover 100% of plan start-up costs (up from 50%), capped annually at $5,000 for three years (a total of $15,000). Eligible businesses with 51-100 employees may be eligible for a tax credit to cover 50% of plan start-up costs, capped annually at $5,000 for three years. - **A tax credit for offering employer contributions:** Businesses with up to 50 employees are eligible to receive a new tax credit based on a percentage of employer contributions, up to $1,000/employee for those making less than $100,000. Additionally, employers with 51-100 employees qualify for a phase-in credit ([click here to learn more](https://humaninterest.com/learn/articles/secure-act-2-understanding-proposed-legislation-securing-a-strong-retirement-act/#Expanded_SECURE_Act_small_business_tax_incentives)). - **A tax credit for auto-enrolling employees:** $1,500 total, or $500 per year for three years. ## The bottom line Small businesses not only can have an affordable, personalized, and professionally-managed retirement plan, they should do so. The state-run plan has a purpose, but it places unnecessary limits on workers’ retirement funds and is ripe with conflicts of interest. Your company CAN have a retirement plan, even if you are a single-person company, a family business, or has only a few employees. Let us show you the options. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. And being a small company ourselves, we’re small enough to develop a close working relationship with your company and have the resources and investment partners to handle even the largest 401(k) needs. If your company would like to receive a competitive bid from us for your current programs, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, Colorado Secure Savings, commercial paper, custodian, economic, economy, empowerment, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, Secure Savings, SEP, SIMPLE, SIPC, small business, state-run IRA, state-sponsored IRA, sustainable, trends --- ### [Weekly Economic Update: 04-10-2023](https://nvestadvisors.com/weekly-economic-update-04-10-2023/) **Published:** April 10, 2023 **Author:** nVest Advisors **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** I hope you had a great Passover and Easter Holiday. Last week was another important one in terms of economic information. Remember that you can get daily updates instead of this weekly digest by checking out my[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **PCE softened slightly as consumers pull back on spending** - **US manufacturing continues to show retraction** - **S&P’s returns are being largely held up by only 3 stocks** - **OPEC’s production cut spiked energy prices** - **Jobs report surprises to the downside** - **Housing market update** ## PCE softened slightly The Personal Consumption Index is a second measure of inflationary pressure in the economy, and is closely watched by the Federal Reserve. While still elevated, indicating upward pressure on prices overall, the PCE indicator softened slightly last month on both the Headline and the Core measures: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PCE-MOM2304030552.png "Us pce mom2304030552 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PCE-MOM2304030552.png) Seeing Month-over-Month figures as a bar graph can give a distorted picture of the inflationary environment overall. Here is the same data presented as a Year-over-Year line graph, showing that, though there has been some cooling off of inflation from the peaks, prices remain elevated well above the Fed’s typical target (more than doubly so): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PCE-Core-YoY2304030552.png "Us pce core yoy2304030552 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-PCE-Core-YoY2304030552.png) Prices are based on supply and demand. As demand deteriorates into the coming recession, we should see price increases moderate. Indeed, the current Consumer Sentiment index by the University of Michigan shows a continuing weak sentiment overall (though off the lows from the start of the Russian-Ukrainian conflict a year ago): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Mich2304030552.png "Us mich2304030552 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Mich2304030552.png) One question of particular interest for politicians as we finish 2023 and move into 2024 is consumer sentiment about their current situation today versus the recent past. During the 1980 election cycle, Ronald Reagan famously asked the American voters if they were better off than they were four years earlier. America was in the throes of an energy crisis, had just come out of the Watergate scandal, had hostages held for over a year in Iran, and were facing the third and largest wave of inflation in a decade. Reagan won overwhelmingly. Because recency bias is such a strong psychological influence, if this assessment (“how are you today vs. 5 years ago”) remains this sharply depressed, it may provide impetus for voters to change direction in upcoming elections at the local, state and national levels.: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Mich-v-5y2304030552.png "Us mich v 5y2304030552 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Mich-v-5y2304030552.png) ### What this means to you It appears that inflation, in general, is off of its peak, but we remain cautious that inflationary pressures may resume, particularly with the recent oil production cuts from OPEC. Also, with the recent and largely unsustainable rallies in the equity markets, there remains much (too much) liquidity in our system. When stocks can rally 10% or more while the economy teeters on the brink of a serious recession, there is too much money left in the system. We are hopeful that the worst in inflation is behind us, but believe it is going to be more difficult than most investors think for the Fed to get prices down permanently. We believe this will mean the Fed will be forced to hold interest rates up higher than expected for longer than anyone has priced in, creating a much weaker economy in the near-term than most investors have prepared for. Be vigilant and keep your head about you – things are NOT getting better in the economy. ## US manufacturing continues to show weakness The updated ISM Manufacturing and Service data continues to show retraction in our country’s major industries. Manufacturing itself remains in recessionary territory, continuing to decline in largely a straight line: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM2304040443.png "Us ism2304040443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM2304040443.png) While the Services sector surprised with a sharp downward revision from the month prior. Services remain barely above the recessionary marker of 50, but are sharply down from the historical average, and well off the largely unnatural highs following the stimulus spending of the Covid pandemic. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM2304060439.png "Us ism2304060439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM2304060439.png) A deeper dive into the manufacturing numbers shows declining inventory levels as producers have slowed their factory output and allowed their inventories to be sold off: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM-Manufacturers-are-now-cutting-their-inventories2304040443.png "Us ism manufacturers are now cutting their inventories2304040443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM-Manufacturers-are-now-cutting-their-inventories2304040443.png) Employment has also slowed significantly. Also, new orders to those factories have dropped. ![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM-Empl2304040443.png "Us ism empl2304040443 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM-Orders2304040443.png "Us ism orders2304040443 nvest advisors") [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM2304040443.png "Us ism2304040443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ISM2304040443.png) The combination of lower Services and Manufacturing output across the nation has caused the Atlanta Federal Reserve Bank to lower its GDP estimate for the previous quarter (they did so twice last week). The current estimated GDP is now about 1.5%. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Citi-GDPNOW2304060439.png "Us citi gdpnow2304060439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Citi-GDPNOW2304060439.png) ## S&P’s rally has largely been the result of just three stocks One of the things investors must take into account when they see large moves in an investment index is whether the majority of the companies in the index are moving together, or whether the index is “skewed” by large movements in only a few of the companies. The former indicates a likely sustained, organic trend. The latter indicates irrational speculative behavior and you should use caution. We see that recent movements in the S&P (and the NASDAQ, to be clear) have been the result of large moves in just a few companies (mainly Apple, Microsoft and Nvidia), pulling the whole index higher: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/EQ-Q1-SPX-attribution-AAA2304040443.png "Eq q1 spx attribution aaa2304040443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/EQ-Q1-SPX-attribution-AAA2304040443.png) ### What this means to you The good fortune of (or activist investors supporting) one company doesn’t indicate a trend in a sector or the economy overall. Be very careful not to misinterpret irrational rally (or selloff) behavior in a couple of companies to indicate a broader market trend. ## OPEC production cuts spikes energy prices As expected, the announced cuts to oil production by the OPEC+ nations a week ago has spiked energy prices: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/EN-Brent2304040443.png "En brent2304040443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/EN-Brent2304040443.png) We provided a fairly exhaustive explanation of the serious changes in energy that resulted from this announcement last week, so we won’t repeat that info here. However, we believe that generally, where oil prices go, the prices of much of the rest of the economy will follow. This change by OPEC is going to have significant political and economic impact, driving gasoline and diesel prices higher in the short term, and making the Fed’s job of getting price inflation under control much more difficult. ## U.S. Jobless Claims rise again and hiring surprised to the downside The jobless claims in the U.S. increased for the sixth week in a row… ![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims22304070440.png "Us claims22304070440 nvest advisors")\\While the ADP jobs report surprised to the downside, showing that the U.S. only produced 145,000 jobs last month, well below expectations and well below the amount needed to maintain full employment (between 250,000 and 300,000 jobs a month):[:](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ADP2304060439.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ADP2304060439.png "Us adp2304060439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-ADP2304060439.png) Initial jobless claims remains fairly low (for now – keep reading), coming in near the bottom of decade-long averages. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims2304070440.png "Us claims2304070440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims2304070440.png) However, it looks more and more like those who ARE laid off, are having a difficult time finding new work, as the continuing jobless claims week-to-week have flatlined and are bucking the seasonal trends of the last decade. The second graph shows that we are now, ever-so-slightly, growing the ongoing jobless number: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont2304070440.png "Us claims cont2304070440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont2304070440.png) But like most of the numbers we examine, those are lagging indicators (meaning, past data). To get a sense of trajectory, we need to look at CURRENT and LEADING indicators, as well. Here are a couple of them related to jobs. First, we have the announced job cuts by week, showing that while there aren’t that many applying for unemployment benefits at the moment, there are many more in the queue for layoffs: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Layoff-announcements-remain-elevated2304070440.png "Us layoff announcements remain elevated2304070440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Layoff-announcements-remain-elevated2304070440.png) Also, the NFIB (a small business advocacy organization) surveyed its members and found that their hiring plans are continuing their sharp downward trend that started shortly after Covid. 80% of the jobs in the United States come from small businesses. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NFIB-Hiring2304070440.png "Us nfib hiring2304070440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-NFIB-Hiring2304070440.png) ### What this means to you The jobs statistics are showing we are hitting the brakes on hiring, albeit slowly for now. This will change in coming weeks as the economy continues to slow down. We might even see a drop in the continuing claims as inflationary pressures resume (we believe they will, in very short order), and household budgets require unemployed or under-employed people to pick up work to help make ends meet. There has been much interest in our weekly Macro updates, and information is coming faster than ever as our economy winds down into a recession we’ve long been forecasting. Readers of the nVest Advisors Weekly Macro Update can now get more current information each morning by following CEO Jeremy Torgerson on his separate personal finance blog, “Think Like A Rich Guy”. These daily journal entries will be then consolidated into the weekly macro update you are reading here. We strongly urge you to follow the daily updates if having a daily look at the changing economy is vital for your investments or business activities. [You can do so by visiting Think Like A Rich Guy.](https://thinklikearichguy.com) ## Housing market update And finally, here’s a quick look at changes in the housing market. Actually, let me preface this section with a quick discussion on Commercial Real Estate, which I believe will suffer a major recession during the coming few years. This is due in part to company downsizing of office space following the “work from home” changes brought on by the Covid pandemic. Many employees found that they prefer working from home, and many employers agreed and decided to reduce their overhead expenses and pare down their offices. But more than that, as industry grinds down, we believe we will end up with a glut of commercial property (both sales and rental) that there will simply be very little demand for. Obviously, just like with residential housing, the impacts of this slow-down will be felt differently in each real estate market, but overall, we believe commercial property is headed for the worst of the housing correction. We are already starting to see that show up, as commercial real estate prices, while still elevated, have dropped 15% in a year already: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Commercial-Property2304040443.png "Us commercial property2304040443 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Commercial-Property2304040443.png) [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-HPA2304060439-1.png "Us hpa2304060439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-HPA2304060439-1.png) New mortgages continue to come in very week on residential real estate, also: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA2304060439.png "Us mba2304060439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA2304060439.png) As actual closed deals struggle under the weight of persistently high interest rates. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-Rate-locks2304060439.png "Us mba rate locks2304060439 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-MBA-Rate-locks2304060439.png) It’s important to note that this housing price collapse isn’t just happening in the United States. In fact, much of the world has already seen more deterioration than we have. Some may argue that this means the U.S. housing market won’t fall as much as other places (and that may in part be true), but we tend to feel that the U.S. is simply lagging behind many of the other developed nations, and our trend will likely follow theirs. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-HPA-outperforming-ROW2304070440.png "Us hpa outperforming row2304070440 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-HPA-outperforming-ROW2304070440.png) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We are at the economic tipping point. We’ve been alerting our clients for over a year and a half that inflation was going to cause significant problems and our central banks would have to take progressively stronger actions to combat it. That appears to have been a correct call. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this past month, I published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Quarterly Client Town Hall Meeting - April 4, 2023](https://nvestadvisors.com/quarterly-client-town-hall-meeting-april-4-2023/) **Published:** April 4, 2023 **Author:** nVest Advisors **Content:** ## We’re proud to announce our first QUARTERLY CLIENT TOWN HALL of 2023! The markets are getting choppier ahead of what we strongly believe will be a significant recession in the U.S. and many other parts of the world. Although [we keep you informed every week with a macroeconomic update](https://nvestadvisors.com/category/mailchimp/rssecon/) and are adjusting our investment models carefully in response to developments, we want to start the tradition of giving our clients and prospective clients the opportunity every three months to hear about what’s going on and how we are responding to it, answer your general questions, and even have a guest speaker or two! ### [You can watch the Town Hall Meeting on demand, by clicking here!](https://www.loom.com/share/55b2dbdbcd4846729e954cbe922e47bf) [![](https://nvestadvisors.com/wp-content/uploads/2023/03/Q1-2023-1024x576.png "Q1 2023 nvest advisors")](https://www.loom.com/share/55b2dbdbcd4846729e954cbe922e47bf) **Categories:** Business Stories, Client News, Client Service, Company News, Economic Updates, From our CEO, Individuals and Families, Mailchimp, Media, Podcasts, Press Releases, public, Small Business, Webinars **Tags:** 401k, 403b, client service, client town hall, colorado, economy, family, fiduciary, finance, market, nVest Advisors, retirement, small business, texas, update --- ### [Weekly Economic Update: 04-03-2023](https://nvestadvisors.com/weekly-economic-update-04-03-2023/) **Published:** April 3, 2023 **Author:** nVest Advisors **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** Investment markets ended last week with modest gains after digesting a growing concern of bank liquidity stress and inflation that appears to be stubbornly hanging on. Here’s what we’re talking about this week (partially compiled from my[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **Oil Update: OPEC+cuts production, Japan breaks the Russian price cap, Dealing without the Dollar** - **GDP revised downward due to drastically lower consumer spending** - **Small Business sentiment improves slightly** ## Oil Update: ### OPEC+ nations unexpectedly cut production By far, the biggest macroeconomic event of the previous week happened just yesterday morning, when the OPEC+ nations announced a “surprise” cut in oil production of more than 1.6 million barrels per day (bpd), starting May 1. The announcement said this would continue for all of 2023. The breakdown of the cuts by nation includes: Russia (500k) bpd, Saudi Arabia (500k), Iraq (211k), the UAE (144k), Kuwait (128k), Kazakhstan (78k), Algeria (48k), and Oman (40k). This move is one of several over the last few weeks that have placed serious strain between the United States and Middle- and Far-East relations. What is most striking are some of the comments that accompany these surprise geopolitical and economic developments that seem to indicate a political and economic realignment taking place right before our eyes. The White House issued a statement saying OPEC+ should not make production cuts at this time, which was completely ignored. Obviously, a cut in production is very bad news for oil prices, and indeed, as this is being written, oil futures have spiked over 10% on the news of the production cuts: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/oil432023.png "Oil432023 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/oil432023.png)Source: Google Finance This also comes as the United States was preparing to refill its strategic petroleum reserves, which the Biden administration dramatically depleted over the last few months to lower the price of gasoline at the pump for American voters. [Biden has so far drained the reserves to their lowest level since 1984.](https://www.statesman.com/story/news/politics/politifact/2023/01/20/fact-check-us-emergency-oil-reserve-lowest-level-since-1984/69796688007/) [![](https://nvestadvisors.com/wp-content/uploads/2023/04/oil2.png "Oil2 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/oil2.png) The administration intended to refill the reserves at a price point of $70 or less per barrel, but now either must do so at much higher prices, or delay replenishing the critically important reserves. We’ve always believed the draining of the reserves themselves, which were meant to be used only for serious national emergencies, was profoundly ill-advised because the U.S. government does not dictate the price of oil and would always have to endure market pricing to refill the reserves. It must now pay much more than expected, and compete with its own people’s demand for oil while it does so. ### Japan breaks with the West and pays Russia above the price cap for oil Another development that drew significant attention was that Japan, a long-standing U.S. ally and trading partner, [broke with the West’s moratorium and price cap for Russian oil purchases, and negotiated with Moscow for oil at prices higher than the agreed-upon maximum price per barrel.](https://www.wsj.com/articles/japan-breaks-with-u-s-allies-buys-russian-oil-at-prices-above-cap-1395accb) This is concerning on two fronts: first, because it shows a lack of political resolve among the current U.S. allies to go “all the way” with the Biden administration in their efforts to economically choke-hold Russia over its invasion of Ukraine, and second because such a significant and important ally and trading partner “went rogue”, it shows a dramatically reduced U.S. influence abroad in terms of foreign policy, diplomacy, and economic might. ### Dealing without the Dollar Japan’s move comes after other significant developments in just the last couple of weeks from Middle and Far-East nations to erode the paradigm of the United States Dollar being the primary global reserve currency. Repeated statements and new trade agreements by China, Russia, Egypt, Saudi Arabia, Brazil and many others, are displacing the dollar as the trading currency, and are primarily moving toward the Chinese Yuan as the new preferred currency for commerce. We do not believe this is an immediate and sudden end of the Dollar as the dominant currency in the world, be we do believe the trend has started. Indeed, the dollar currently sits near historic highs in currency valuations, mostly due to Federal Reserve efforts to reduce the available money supply in the hopes of crushing inflation. However, in recent months, the dollar is fading in strength versus a significant number of the world’s major currencies. This graph shows the strength of those currencies vs. the dollar (so if we were looking at the dollar’s strength against these currencies, we’d see this graph upside-down): [![](https://nvestadvisors.com/wp-content/uploads/2023/04/euro.png "Euro nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/euro.png)Source: Google Finance So again, we don’t believe the dollar’s decline as the world reserve currency is imminent. But we do believe the trend has begun. What makes it especially dangerous for the U.S., in our opinion, is that the dollar’s value has largely been held up by oil-producing nations since President Nixon took the nation off the gold standard in 1971. This is far too much of a history lesson to delve into in this update, but [here is a good explanation of the Petrodollar and why Middle East politics has been such a major part of our lives as Americans in the last 50 years](https://www.investopedia.com/terms/p/petrodollars.asp). ### What this means to you We are not alarmists here at nVest; just realists trying to assess how specific macro events will affect the decisions of companies and families here in the U.S. (micro). In fact, our Macro model has remained invested in both the energy sector and in broad-basket commodities precisely because we expected oil prices to climb again as we go into the summer, and have been concerned that inflation would remain stubbornly resilient. These changes are actually good news for U.S. energy producers in the short term, who will see their product rise in price per barrel and will likely have more of an opportunity to supply more to fill the void, but production can’t be ramped up overnight, and transporting oil overseas is a complicated logistical process. We remain bullish on energy companies for now, but higher energy costs will push up the prices of many other products and services further exacerbating the Fed’s efforts to curb inflation and more quickly weakening the economy as consumers face even higher energy bills and gasoline prices in the coming months. It’s generally true that where energy goes, so goes everything else. We are also growing more concerned that there is a concerted effort by these countries to stymie or even replace the dollar as the world’s dominant reserve currency. It won’t happen overnight or without at least a figurative fight from the West, but there does seem to be a new economic bloc forming in the Middle East, Africa, and Asia (sort of an expanded BRIC). ## US GDP revised downward due to a sharp cut in consumer spending We got a revision to the Q4 2022 GDP number for the U.S. last week (these can be common as newer data arrives). The new data showed that previous projections of consumer spending during the last part of 2022 was pretty far off the mark and far too optimistic. As actual consumer spending data came in, the country’s economic output looked worse at the end of 2022 than originally estimated. In the economies of most developed nations consumer spending accounts for roughly 70% of the total country’s economic output, so seeing what you and I are doing with our paychecks is critically important to economists, business strategists, etc. And that makes sense: if spending is way down, is it such a good time to expand a factory or introduce a new product line? Is it the best time to raise prices? Likely not. Although the Q4 2022 GDP is still a positive number, the number was revised down by almost 25 bps due to this new look at consumer spending: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-GDP-revisions2303310522.png "Us gdp revisions2303310522 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-GDP-revisions2303310522.png) Consumer spending can have a major impact on the economy. When consumers have lots of money to spend, we soar (and inflation rises quickly). We can see this after the stimulus checks and PPP loans during Covid: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-GDP-Consumer2303310522.png "Us gdp consumer2303310522 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-GDP-Consumer2303310522.png) However, as prices soared, consumers felt the “pinch” in their budgets and began making adjustments to their spending habits. This has created a backlog of inventories at many manufacturers and import distributors, who all ramped up production following the Covid-fueled spending spree of late 2020 and early 2021. That demand is now gone. Here’s a good example of where you can see this – in the demand for trucking of goods across the country. For a while in 2020 and 2021, you could hardly find an available truck to ship your products to the store shelves. That has now completely reversed, and many trucking companies are aggressively looking for customers: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Truckload-rates-continue-to-full-signaling-deteiorating-demand-for-shipping2303310522.png "Us truckload rates continue to full signaling deteiorating demand for shipping2303310522 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Truckload-rates-continue-to-full-signaling-deteiorating-demand-for-shipping2303310522.png) We’ve also discussed the manufacturing indexes in recent updates, showing that factory production is also slowing dramatically as new orders slow down and inventories climb. Some third-party analysts are predicting further slowdowns are looming. In this case, Moody’s is predicting further erosion in consumer spending: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Cons-Spend2303310522.png "Us cons spend2303310522 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Cons-Spend2303310522.png) U.S. Jobless Claims rise The jobless claims in the U.S. increased for the fifth week in a row, signaling that there is softer employment out there. It also means that many of the earlier layoffs reported weeks and months ago may finally be working their way through severance packages and are now having difficulty finding work elsewhere: [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims22303310522.png "Us claims22303310522 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims22303310522.png) To be sure, our labor market is still incredibly tight, at or near multi-year lows in terms of unemployment claims. However, the trend is now toward the middle of the pack in terms of new weekly claims figures… [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims2303310522.png "Us claims2303310522 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims2303310522.png) …while continuing claims remains very steady (though, as you can see for all years except the Covid pandemic in 2020, the trend going into spring and summer is for continuing claims to drop pretty dramatically. This year is an outlier in that regard as it runs a straight line where every year previous to this saw pretty significant declines in continuing joblessness by now. [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont2303310522.png "Us claims cont2303310522 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Claims-Cont2303310522.png) We still have a significant number of vacant positions, so it appears at least some of our continuing jobless claims are people who are not actively seeking work or refuse to take some of the open positions. This will change as the number of available jobs dwindles in the coming weeks and months (in our opinion). [![](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Job-postings-v-vacancies2303310522.png "Us job postings v vacancies2303310522 nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2023/04/US-Job-postings-v-vacancies2303310522.png) ### What this means to you The jobs statistics are showing we are hitting the brakes on hiring, albeit slowly for now. This will change in coming weeks as the economy continues to slow down. We might even see a drop in the continuing claims in inflationary pressures resume (we believe they will, in very short order), and household budgets require unemployed or under-employed people to pick up work to help make ends meet. There has been much interest in our weekly Macro updates, and information is coming faster than ever as our economy winds down into a recession we’ve long been forecasting. Readers of the nVest Advisors Weekly Macro Update can now get more current information each morning by following CEO Jeremy Torgerson on his separate personal finance blog, “Think Like A Rich Guy”. These daily journal entries will be then consolidated into the weekly macro update you are reading here. We strongly urge you to follow the daily updates if having a daily look at the changing economy is vital for your investments or business activities. [You can do so by visiting Think Like A Rich Guy.](https://thinklikearichguy.com) ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We are at the economic tipping point. We’ve been shouting warnings for over a year. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this week, I’ve published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free, just for the asking. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic Update: 03-27-2023](https://nvestadvisors.com/weekly-economic-update-03-27-2023/) **Published:** March 27, 2023 **Author:** Jeremy Torgerson **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models. It is copyrighted and may not be republished in whole or in part without written permission.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** Investment markets ended last week with modest gains after digesting a growing concern of bank liquidity stress and inflation that appears to be stubbornly hanging on. Here’s what we’re talking about this week (partially compiled from my[ daily economy journal that you can read and subscribe to at “Think Like A Rich Guy”):](https://thinklikearichguy.com) - **Mortgage and housing update** - **Manufacturing activity continues to slow** - **Small Business sentiment improves slightly** ## Mortgage and Housing Update ### Mortgages & Housing Starts The most recent data shows that existing home sales in February were slightly better than expected, even though house prices themselves have stalled and new mortgage applications weakened. So, a mixed bag. For example, while existing home sales did improve slightly, they were already at decade-lows and haven’t increased in a meaningful way. Our opinion on this quick uptick in home sales is due largely to the brief period in January and early February when mortgage interest rates fell back below 7% and buyers were able to lock in lower rates, but this period is over and mortgage rates have climbed back up. I do not anticipate that existing home sales have the momentum to continue upward. ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Existing2303220443.png "nvest advisors") Indeed, the number of mortgage applications in the queue now has dropped again now that rates have climbed back above 7% nationally for a 30-year fixed mortgage. As you can see, there is very close correlation between a mortgage application and a home sale. I would expect March numbers to come in lower. ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Existing-v-Mortg2303220443.png "Expert 6 nvest advisors") One of the arguments I’ve made for a year or so is that the housing market must crash significantly, even though there is high demand for housing, and the reason is simple: if you can’t afford the house payment, it doesn’t matter if you need or want the house. Demand means nothing if the buyer can’t qualify for the home loan. And because we anticipate interest rates will stay much higher for longer than many market analysts believe, the only way to get a buyer into your home is to lower the asking price. And in fact, that’s what we are seeing now with growing regularity. The green line was the median home price throughout 2022 and the bold blue line is the year so far in 2023. You can see that the asking price of a house peaked in summer of 2022, and has been declining ever since (the second graph is just a long continuing line of the changes from the same month a year ago): ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Existing-Price2303220443-510x1024.png "nvest advisors") Another reason to believe the housing market is particularly vulnerable during this economic downturn is how much the mortgage payment consumes of a person’s income now. This shows that it’s virtually impossible for a single person to now qualify for a mortgage since probably early 2021 (mortgage companies typically allow a home loan payment to take up only 30-35% of your income – since 2022, the average mortgage payment has been nearly double that). ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Mortgage-costs-for-recent-home-buyers-represent-a-significant-portion-of-their-incomes2303220443.png "Expert 4 nvest advisors") This is the very definition of an asset bubble. It makes homeownership far too expensive right now for the average family. It’s eerily similar to what we saw a lot of leading up to the Great Financial Crisis of 2007-2009, when people were placed into homes they could not ever hope to afford, in sketchy loan configurations that often blew up on them 5 or so years down the road. We don’t have a lot of those gimmicky (I’ll call it criminal) loans anymore – most were outlawed after the collapse of the real estate market in 2008 – but the combination of ridiculously elevated home prices over the last few years and the interest rates being higher than many anticipated, will likely cause a collapse just like the last one. I belief is, current home buyers are expecting (aka being told by realtors and mortgage brokers) that interest rates will come back down soon, so “date the loan and marry the home”. The hope for many of these buyers is that interest rates will drop significantly within a year or so, and they will be able to refinance their mortgages and drop the monthly payment. Rates will come down eventually, but I believe it will be much later than many of these homeowners were expecting. Couple that with a deteriorating economy and job market and high prices on the other household goods and services due to inflation, and we may see homeowners being forced to sell or walk away from homes with declining equity because they simply cannot continue to pay this much for a home. We may also see residential investors who use these houses for rental income (being a landlord or an AirBnB owner – a big part of why house prices climbed significantly in the first place) simply walk away from investment properties that go “underwater” (house value drops below their potential to make revenue), as we did in 2008. There was a period of time back then when I could not find a bank willing to lend to a client who wanted to buy a beach condo in Texas because so many condo owners had simply bailed on the property when things got really tough. ### What this means to you Analysis is always part speculation, so no one (myself included) is going to get everything 100% right. For instance, I strongly believed the economy would have weakened faster than it has and we would actually have been in recession by the fall of last year. So we may never get the timing or the specific degree of impact correct, but macroeconomic analysis can almost certainly allow us to get the *theme* right. And our theme is this: In no way are we in a health economy. It is deteriorating rapidly and always craters after something significant “breaks”, causing investor panic and a wild rush to safety. Serious money is lost – and made – during economic downturns, and the theme of this blog is to help you start to win the money game like a Rich Guy does. The first thing you need to do is be acutely aware of the real situation around you, because that’s where your own strengths and weaknesses and the external opportunities and threats can be found. I hate that I have to matter-of-factly bring negative news to my readers at this time, but it is not bearishness that makes me do so – it is economic reality. We either face it and participate in its opportunities, or we delude ourselves like many others always do, to their peril. There has been much interest in our weekly Macro updates, and information is coming faster than ever as our economy winds down into a recession we’ve long been forecasting. Readers of the nVest Advisors Weekly Macro Update can now get more current information each morning by following CEO Jeremy Torgerson on his separate personal finance blog, “Think Like A Rich Guy”. These daily journal entries will be then consolidated into the weekly macro update you are reading here. We strongly urge you to follow the daily updates if having a daily look at the changing economy is vital for your investments or business activities. [You can do so by visiting Think Like A Rich Guy.](https://thinklikearichguy.com) ## Manufacturing activity continues to slow We got two sets of manufacturing data yesterday, from the Empire State (NY Trade Area) and the Philly (“rust belt” trade area). Both show significant declines in manufacturing activity in recent months that appears to be accelerating. First, Empire State numbers. Actual output (-24.6) came in WAY below expectations (-7.9). Upcoming orders also fell sharply: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Empire-The-first-March-manufacturing-indicator-does-not-look-promising2303210441.png "nvest advisors") When factories stop getting orders, they have to cut hours and, eventually, employees. We see both now happening at an accelerating rate: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Empire-Empl2303210441.png "nvest advisors") The same is true in Philly manufacturing. Orders are down sharply… ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Philly2303210441.png "nvest advisors")And future orders are faring even worse: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Philly-Orders2303210441.png "nvest advisors") Which is having a marked impact on jobs in this sector: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Philly-Empl2303210441.png "nvest advisors") I believe the U.S. is already in a recession. The frustrating thing is, recessions are always declared retroactively months after they begin because we need the actual data from previous months in order to make the determination. Typically, a recession is described as two (proven) consecutive quarters of declining output, jobs, and a general deterioration of economic conditions. That means we never call a recession until we’re in one for at least six months. So recessions, or at least the declaration of one, are what are called lagging indicators (because we’re essentially looking in the rear-view mirror as we make the assessment). However, there are also current and leading indicators, which I take strongly into account. The CURRENT financial conditions index also shows we are under water in terms of economic activity: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Fin-Cond2303210441.png "nvest advisors") There will be much discussion in these updates about the Federal Reserve’s current activity, all meant to crush inflation that started after the unnecessary and needlessly costly lockdowns during the Covid-19 pandemic, and the wild spending the governments of the world did to hold things up (stimulus checks, PPP loans, etc.). You can’t drop $6 TRILLION into the economy, out of thin air, and not expect prices to skyrocket. They did, and now the Federal Reserve must enact a series of interest rate hikes and reducing the money supply in order to break it. Currently, the primary factor keeping inflation stubbornly sticky is the demand for workers. When you have a guy with a resume and two or three companies competing for him, the companies will keep upping the ante to get the available worker on their team. This constant upward pressure on wages and benefits is what is currently forcing inflation up, because if a company’s labor costs climb, the prices they must charge for their products and services must also climb. So the Fed wants to reverse the situation, by instead, having one available *job* and two or three guys with resumes competing for the job. Having work less available will mean workers will accept a job at a lower wage, allowing companies to being to ease off on their price increases. Thankfully, we are seeing wage pressures easing off as the economy begins to slog into recession. The faster this happens, the quicker this can be over. The Atlanta Federal Reserve Bank reported a sharp decline in wage offers for a job switcher versus someone who stays at their current company, so it looks like the financial incentive to move to another company is slowing WAY down. ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Job-Stayer2303210441.png "nvest advisors") Also, it looks like the pressure companies felt to try to hang on to their workers also seems to be easing: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/US-Job-Stayer22303210441.png "nvest advisors") We have a long way to go, but we are seeing an impact on the economy as the recession begins. How fast employment can slow down is how long the Fed has to keep raising interest rates. The longer they do that, the deeper and more difficult the recession will go. ### What this means to you **[![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Inflationary pressures are not subsiding.** This is a major concern because it means that despite the bank failures in the last two weeks, the Federal Reserve must continue its current course. The Fed already slowed the rate that they were increasing interest rates back in December, but since then, inflation, particularly CORE inflation, has trended the wrong way. It is highly likely we will see at least two more rate increases, potentially even higher ones than the last two, before the Fed can pause its program. The longer this continues, the deeper the coming recession will be, and the longer it will take to recover. We’ve been telling our readers in this space for a year or more that we believe a recession was almost certain. The data is now beginning to reflect that reality. Sadly, recessions always mean some companies fail (see the two big banks, above, for proof of that), and some people will lose their jobs. Having an emergency fund set up before these natural dips in the business cycle is critical. If you have one, we’ll expect you’ll be needing to use it during a layoff situation. Thankfully, all employers pay unemployment insurance in the states they have employees, and those benefits will help, but we have a tough road ahead for many families. Shoring up your investments to avoid unnecessary losses during the coming market volatility, reducing your expenses to bare minimums, and avoiding adding ANY more debt to your situation, is vital. **Because we’re expecting a significant recession ahead, I’ve published just this week an e-book on the Top 7 things you need to do to prepare for a recession. It’s yours for the asking. Just click on the book image to get your copy:** ## Bank liquidity problems will tighten lending and slow the economy The most concerning news of the week is definitely this excellent compilation of bank lending information by The Daily Shot (a shameless plug for this great subscription-based macroeconomic data compiler). TDS is one of several sources I use each day to get a quick read of the day’s most important economic data from around the globe. Today, we see that the banking crisis, particularly in smaller regional banks, is pretty widespread. There is simply no denying the mad scramble by these banks to grab up the emergency money (the Fed calls it a “credit facility”, but it means low-cost loans to banks that need to shore up their reserve requirements) over the past two weeks. The first look is at the normal Fed “Discount Window”, which is sort of a “loan of last resort” for banks that need typically just an overnight loan to maintain their government-mandated reserve requirements. At the end of each business day, a bank must balance its books and meet specific cash reserve thresholds. If they are above their thresholds, they can offer their surplus out to other banks in the form of overnight loans (usually at next-to-nothing interest rates). This allows a bank that might have had an unusual number of deposits and falls short of its reserve requirements for the day, to borrow that money overnight to maintain its required liquidity. When banks needing this help cannot borrow from another bank, the Fed Discount Window is the last resort that a bank can go to for this short-term lending need. As you can clearly see in the last two weeks, something significant has happened to bank liquidity. The Discount Window activity jumped exponentially: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/CR-Fed-Discount-Window2303240538.png "nvest advisors") Additionally, [on March 13 2023, the Fed announced the creation of a second line of credit](https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm) to help banks beyond the traditional Discount Window lending. This is specifically for banks struggling with liquidity problems related to recent tightening of Federal Reserve monetary supply (quantitative tightening and interest rate hikes), as well as banks seeing larger default levels on the loans they’ve given out to businesses and individuals. This facility jumped into existence in a major way the past two weeks: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/CR-Fed-Discount-Window22303240538.png "nvest advisors") When recessions get underway, businesses will start to struggle to pay their bills, including payments on loans they’ve received from their local bank. Banks know this. They also know that as money gets tight for individuals and businesses, the amounts held in checking and savings accounts will drop. This makes perfect sense if you think about it in terms of MICROeconomics (the study of the money decisions of individuals and companies). Right now, individuals have less money and are currently having to spend more of it due to higher prices, and businesses are seeing a slowdown in their sales, meaning less profit), so their own bank balances will decline. Eventually, some businesses will fail outright, others will downsize, some consumers will be laid off, and so the money sitting idly in banks (that banks use to lend and invest) will also decline. All if this is known to banks (or at least SHOULD be), and so as the economy begins to wind down, banks will move to protect more of the cash on hand by giving depositors more incentive to save at the bank (notice how interest rates on your savings, money market and CDs are climbing?), while also tightening the standards for who they will lend to, and for how long. They will also match the interest rates on their loans to keep up with the rising rates it’s cost them to get the money to loan out in the first place. We can now see that banks are indeed tightening their lending standards (the blue line), and borrowing like crazy from the Fed (the black line). In fact, banks borrowed more last week from the Fed than ANY week of the Great Recession (2007-2010). They have not yet tightened their lending standards as much, but it’s definitely coming fast. ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/CR-Fed-Discount-Window-v-tight-standards2303240538.png "nvest advisors") In fact, a look at the number of loans banks plan on granting in the next few years shows it will be significantly tougher for a homebuyer or a business to obtain a loan. More down payment and higher credit scores will most definitely be required: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/CR-MS-forecast-for-loan-growth2303240538.png "nvest advisors") This will definitely impact the growth rate of the economy, particularly for small businesses and startups, who get most of their loans from smaller banks. Small business is typically the hardest to get funded because they are (logically) the most likely to fail, especially when economic conditions get nasty on them. We are already seeing loan default rates climb for corporate debt, the highest default rate since the Great Recession (and we’re just getting started). As you can see by the blue portion of each bar, the US is in far worse shape in terms of corporate default than other parts of the world already. A lot of that has to do with how flippantly our banks toss money at any idea during good times, and it always tends to blow up on us as conditions tighten: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/CR-Corp-Defaults-through-Feb2303240538.png "nvest advisors") ### What this means to you What does this mean? Two things. First, banks are in worse shape than it looks at the moment, and second, the Federal Reserve, in propping up the banking system yet again, has reversed much of the work it’s done on inflation in the last year. Small businesses are going to see significant tightening in the lending standards of their normal money sources, especially smaller banks. They will also see rising interest rates on their floating debt (many businesses have essentially a credit card-style revolving line of credit available to them to meet cash flow needs – these revolving lines of credit almost always have a variable interest rate). This will be especially true in commercial real estate, where I expect to see substantial losses in the coming months. We will definitely see declines in residential housing prices, but this current bank liquidity crisis, combined with the downsizing of commercial real estate already underway since so many companies adopted remote work during Covid, may very well cause a collapse in commercial real estate values. ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/CR-Commercial-property-lending-is-on-the-verge-of-a-substantial-downturn2303240538.png "nvest advisors") Regarding inflation, we expect to see inflationary pressure resume due to the Fed’s emergency lending. This is due to what is called the velocity of money. For any of the money banks borrow from the Fed that ultimately ends up in the hands of a bank customer or in a new loan, it will cause inflation. And what the Fed just did (and continues to do) cannot be overstated. In just the last two weeks, the Fed reversed MORE THAN HALF of the quantitative tightening (reducing the money supply) that they’ve done since March of 2022: ![](https://thinklikearichguy.com/wp-content/uploads/2023/03/CR-Fed-Discount-Window-Fed-BS2303240538.png "nvest advisors") We believe this will add to the already-swelling pressure on inflation. The Fed was able to pull inflation down slightly by reducing the money supply for most of last year (that should be obvious by the chart above), but inflationary pressures were already starting to pop again last month when most of the “core” inflation came in slightly higher than expected. This huge infusion of new money back into the banking sector can cause a massive reinflation in prices again, if much of it gets lent back out or used for customer withdrawals (which is its purpose). Letting $400,000,000,000 of new money loose into the economy – again – is a massive monetary mistake, but one the banks forced on the Fed due to lax lending all throughout the last decade, and will likely cause a surge in inflation once again. The Fed believes that the economy will now erode quickly enough to eliminate this inflationary pressure and that their interest rate hikes and keeping those rates higher for longer than the markets expect will do the trick. Time will tell, but so far, the Fed has been wrong about inflation the entire time it’s been surging since 2020. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We are at the economic tipping point. We’ve been shouting warnings for over a year. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this week, I’ve published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free, just for the asking. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [The benefits your employees want most](https://nvestadvisors.com/workplace-benefits/) **Published:** March 22, 2023 **Author:** nVest Advisors **Content:** Employers are constantly looking for ways to attract and retain the best talent, and offering employee benefits is a key strategy in achieving this goal. Employee benefits are non-wage compensations provided to employees in addition to their salaries. These benefits can include things like health insurance, retirement plans, paid time off, and other perks that can improve the quality of life of employees. Let’s explore some of the most important benefits employers can offer, and how they can help attract and retain top talent. ### Health Insurance Health insurance is one of the most important benefits that an employer can offer to its employees. In the United States, where healthcare costs are notoriously high, health insurance is not only a valuable benefit but a necessity for many people. Providing health insurance can also help to reduce absenteeism and improve productivity, as employees who have access to healthcare are less likely to miss work due to illness or injury. Employers can offer a range of health insurance plans to their employees, including HMOs, PPOs, and high-deductible plans. ### Retirement Plans Retirement plans, such as 401(k)s, are another important benefit that employers can offer to their employees. These plans allow employees to save for their retirement and provide a valuable source of income in their later years. By offering a retirement plan, employers can demonstrate their commitment to their employees’ long-term financial security, which can help to improve employee morale and reduce turnover. Employers can also offer matching contributions to employees’ retirement plans, which can further incentivize employees to participate. Many small employers have steered clear of offering retirement benefits because they feared they were too expensive or burdensome to administer. Thankfully, there are an amazing range of retirement plan options available, some of which have no employer responsibility (other than setting the plan itself up and letting employees contribute through payroll). Many plan costs can be either passed on to the plan’s participants, and some plans are completely free for the employer. ### Paid Time Off Paid time off is another benefit that can be highly valued by employees. This can include vacation days, sick days, and personal days, as well as holidays. By offering paid time off, employers can help to reduce burnout and improve work-life balance for their employees. This, in turn, can lead to increased productivity and employee satisfaction. Employers can also offer other types of leave, such as parental leave, which can be especially valuable to employees with families. ### Flexible Schedules Flexible schedules are becoming increasingly popular among employees, as they allow for a better work-life balance. This can include things like telecommuting, part-time work, and flexible hours. By offering flexible schedules, employers can attract employees who value work-life balance and may be willing to trade a higher salary for more flexibility. Flexible schedules can also help to reduce absenteeism and improve productivity, as employees are able to better manage their personal and professional responsibilities. ### Professional Development Opportunities Employees value opportunities for professional development, as they can help to advance their careers and increase their earning potential. Employers can offer a range of professional development opportunities, including training programs, mentoring, and tuition reimbursement. By investing in their employees’ professional development, employers can demonstrate their commitment to their employees’ future professional skillset. It shows an employee that you value their contribution, see great potential in them, and want to help them achieve that they are capable of. ## The bottom line Small businesses often feel at a competitive disadvantage because they simply cannot afford to offer the same level of benefits packages as larger competitors. However, this is either not accurate (particularly in the area of retirement plans), or adding benefits can be included in a company’s short-term planning. Involving key employees in the decision-making process about which benefits matter most to them may produce surprising answers that would cost the employer far less than you might think. (And besides, simply using the opportunity to really listen to your employees and hear what they need from you as an employer may yield far more benefit in terms of employee relations than you realize.) As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. And being a small company ourselves, we’re small enough to develop a close working relationship with your company and have the resources and investment partners to handle even the largest 401(k) needs. If your company would like to receive a competitive bid from us for your current programs, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, benefits, bills, CDs, commercial paper, custodian, economic, economy, empowerment, fiduciary, flexible schedule, health insurance, IRA, life insurance, liquid assets, liquidity, money market, notes, paid time off, plan, professional development, PTO, retirement, SEP, SIMPLE, SIPC, small business, sustainable, trends --- ### [Weekly Economic Update: 03-20-2023](https://nvestadvisors.com/weekly-economic-update-03-20-23/) **Published:** March 20, 2023 **Author:** Jeremy Torgerson **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** Investment markets are still pricing in both the risk of systemic liquidity problems at many regional banks after the failures of several in the U.S. and Europe over the last two weeks, as well as the growing risk of a recession. Our Macro Model is undergoing revisions this week, as well, to adjust for the rapidly changing environment. - **Get our Macro updates daily** - **Core Inflation spiked upward** - **Federal Reserve rescues struggling banks at the expense of inflation** - **Small Business sentiment improves slightly** ## Get our Macro updates daily There has been much interest in our weekly Macro updates, and information is coming faster than ever as our economy winds down into a recession we’ve long been forecasting. Readers of the nVest Advisors Weekly Macro Update can now get more current information each morning by following CEO Jeremy Torgerson on his separate personal finance blog, “Think Like A Rich Guy”. These daily journal entries will be then consolidated into the weekly macro update you are reading here. We strongly urge you to follow the daily updates if having a daily look at the changing economy is vital for your investments or business activities. [You can do so by visiting Think Like A Rich Guy.](https://thinklikearichguy.com) ## Core Inflation spiked upward Despite the recent declines in inflation-related investments (like commodities), we got news this past week that inflation, particularly core inflation, spiked upward unexpectedly last month. This is significant because of actions taken by the Federal Reserve Bank to help shore up public confidence in several regional banks that failed and/or are struggling with poor investing decisions in the past few years that is culminating in bank failures now. We will address the connection between this inflation surprise, and our growing concern about inflation due to Fed action, throughout this week’s macro entry: Let’s start with the overall numbers. Month-over-month inflation came in slightly higher than expectations last month, with a print of 0.4%, which was is in line with expectations, and certainly down from last year’s peaks. However, it’s a hotter read than several in the last six months. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-CPI2303150435.png "Us cpi2303150435 nvest advisors") However, CORE Inflation, meaning, items most impactful on a family’s budget on an ongoing basis, spiked upwards unexpectedly, for the fourth month in a row: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-CPI-core2303150435.png "Us cpi core2303150435 nvest advisors") This is significant, because it means that inflationary pressures are rearing up again in ways that impact personal spending in the U.S. You and I spending our paychecks accounts for more than 70% of our country’s total economic activity, and if we have no money left each month after our basic needs are met, huge amounts of the economy will suffer serious declines in activity. If you break down the individual components of what adds up to the inflation figure (rent, cars, gasoline, food, etc.), you can see better where prices are dropping and where they are rising. Notice, too the difference between HEADLINE inflation and CORE inflation. Headline inflation is basically everything in the economy, but Core inflation is what affects our personal spending the most. In the case of Headline Inflation, only used car prices and natural gas prices dropped last month. The rest increased. In Core inflation, used cars showed up again as a strong downward price influence, but that was basically all. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-CPI-Detail2303150435.png "Us cpi detail2303150435 nvest advisors") So it appears that really only one component of our inflation problem, specifically the retail prices of used cars and trucks, is declining month-over-month, which if we look at just that portion in isolation, we can clearly see: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-CPI-Used-Cars2303150435.png "Us cpi used cars2303150435 nvest advisors") However, the primary mover upward is still rent, which climbed again for both the landlord: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-CPI-Rent-OER2303150435.png "Us cpi rent oer2303150435 nvest advisors") And the renter: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-CPI-Rent2303150435.png "Us cpi rent2303150435 nvest advisors") Besides manufactured goods and commodities like food and gasoline, we spend a lot on services (health care, tax preparers, tech and media subscriptions, etc.). The price inflation on services, particularly those the Federal Reserve calls CORE services, remains elevated and is trending upward: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-CPI-Supercore22303150435.png "Us cpi supercore22303150435 nvest advisors") This does not look to be trending in the right direction for the Federal Reserve to begin slowing down the rate increases. Looking forward a few months, the expectations are for this trend to continue, with major contributors being the cost of utility services and gas/vehicle expenses. Recreation also is spiking, though that’s one part of our budget we can and likely will reduce as things continue to be tight for the family’s cash flow. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-CPI-Supercore2303150435.png "Us cpi supercore2303150435 nvest advisors") #### What this means to you: **[![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Inflationary pressures are not subsiding.** This is a major concern because it means that despite the bank failures in the last two weeks, the Federal Reserve must continue its current course. The Fed already slowed the rate that they were increasing interest rates back in December, but since then, inflation, particularly CORE inflation, has trended the wrong way. It is highly likely we will see at least two more rate increases, potentially even higher ones than the last two, before the Fed can pause its program. The longer this continues, the deeper the coming recession will be, and the longer it will take to recover. We’ve been telling our readers in this space for a year or more that we believe a recession was almost certain. The data is now beginning to reflect that reality. Sadly, recessions always mean some companies fail (see the two big banks, above, for proof of that), and some people will lose their jobs. Having an emergency fund set up before these natural dips in the business cycle is critical. If you have one, we’ll expect you’ll be needing to use it during a layoff situation. Thankfully, all employers pay unemployment insurance in the states they have employees, and those benefits will help, but we have a tough road ahead for many families. Shoring up your investments to avoid unnecessary losses during the coming market volatility, reducing your expenses to bare minimums, and avoiding adding ANY more debt to your situation, is vital. **Because we’re expecting a significant recession ahead, I’ve published just this week an e-book on the Top 7 things you need to do to prepare for a recession. It’s yours for the asking. Just click on the book image to get your copy:** ## The Fed rescues the banks at the expense of inflation. Consider this Part 2 of the discussion above. As we reported last week, several regional banks, mostly tied to the tech industry and cryptocurrencies, were shuttered and their assets are currently being sold off to other banks. Part of that rescue was that the Federal Reserve, the FDIC and the US Treasury had to step in to protect bank customers, the vast majority of which in these banks had deposit balances well above the $250,000 FDIC insurance limits. If the government did not step in and guarantee those bank account balances, thousands of small tech companies would likely have collapsed in a matter of days or weeks. The problem is, the Federal Reserve had been in the process of reducing our available money supply as part of its efforts to reduce inflation. It’s a process called Quantitative Tightening, which is the opposite of what they had been doing far too much of (quantitative easing) since the last financial crisis in 2008. In a nutshell, Quantitative Tightening (QT) is the Federal Reserve selling its bond holdings (it buys a LOT of our government’s debt) to the public. When the public buys those bonds, the Federal Reserve takes that cash and removes it from the money supply. (Quantitative Easing – QE – is the opposite). So after months of QT and seeing inflationary pressures start to subside as a result, the Fed added $2 Trillion back to the money supply last week in order to shore up these struggling banks. This is a direct reversal – an “about-face” – on their efforts to stamp inflation down, which we can see in the following chart: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-1-Reserves2303170533.png "Us 1 reserves2303170533 nvest advisors") The action was even bigger than any single move the Fed made during the Covid pandemic and by far, the biggest move since the last crisis in 2008. And banks snapped up that money in record amounts: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-1-Fed-Discount-Window2303170533.png "Us 1 fed discount window2303170533 nvest advisors") So after months of successfully reducing its balance sheet, the Fed, in a single move, brought the money supply back up to the same place it was in November of 2022: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-1-The-Fed-reverses-4-months-of-QT2303170533.png "Us 1 the fed reverses 4 months of qt2303170533 nvest advisors") #### What this means to you: **The Fed’s actions have made inflation much more likely in the short term.** Adding money to the economy, particularly money we didn’t earn through industry and production, makes inflation worse because more dollars chasing the same number of goods and services MUST mean prices will rise. This is a major error, in our view, and will likely see inflationary pressure rise again just as the country is headed into a recession. Expect prices of goods and services to rise in the weeks ahead due to this quantitative easing. It also means that the Fed must continue to raise interest rates. Any hope of a pause or pivot is now, in our view, very premature. ## Small business sentiment improves slightly. Small business owners felt a little more optimistic in February, but we believe this will reverse again, because the survey was taken before the recent banking problems. The survey showed that at least in February, employers were feeling a little better about the coming months, though most were still planning on reducing staff and cutting production: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-NFIB2303150435.png "Us nfib2303150435 nvest advisors") The trend channel is still pessimistic for the longer term, however (the chart is currently making lower highs and lower lows). Interestingly, small businesses are more pessimistic than consumers at the moment:![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-NFIB-Diverged-from-consumer-sentiment2303150435.png "Us nfib diverged from consumer sentiment2303150435 nvest advisors") ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We are at the economic tipping point. We’ve been shouting warnings for over a year. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this week, I’ve published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free, just for the asking. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Managing FDIC insurance limits for your small business' liquidity needs](https://nvestadvisors.com/cash-fdic-banking-silvergate-silicon-signature/) **Published:** March 15, 2023 **Author:** nVest Advisors **Content:** The collapse of three banks in the United States this week: Silvergate, Silicon Valley Bank, and Signature Bank exposed many problems in the U.S. banking system that are a combination of poor risk management, failure to understand and respond to economic conditions, and companies and other banks flagrantly violating the maximum insurance protections afforded to all U.S. bank customers through the FDIC (Federal Depositor’s Insurance Corporation). **At nVest Advisors, we’ve been warning about inflation and an imminent recession for over a year now.** [We publish a weekly Macroeconomic Update every Monday](https://nvestadvisors.com/category/mailchimp/rssecon/) and have been keeping our clients informed and actively protecting their investment assets against this inevitable recession since January 2022 by using data-dependent macroeconomic investing strategy, diversifying their holdings, eliminating their exposure to the sectors of the economy that always underperform during periods like this, and maximizing the insurance protections available for their accounts. Sadly, not every financial advisor, company CFO, and bank risk manager was doing the same, as we discovered that over 85% of the deposit accounts at these failed banks had balances far in excess of the $250,000 in insurance protection the FDIC gives every depositor. The bank failures panicked Wall Street because it became evident that many hundreds or even thousands of mostly tech companies would not have access to their operating capital without the government stepping in. The result was emergency actions taken by the U.S. Treasury, the FDIC, and the Federal Reserve Bank to shore up faith and confidence in the U.S. banking system by guaranteeing the entire amount of deposited funds in these banks, but we’re now seeing that there are still problems accessing funds for many people, even people who did not directly have money in any of these failed institutions, but their banks did. **As a small business owner, you need to protect what you’ve built.** You already have to invest heavily in your company, so in some ways, your own investments are heavily focused on the success or failure of one company (this is already the opposite of being a diversified investor). Please don’t make the same mistake with your company’s assets. When running a small business, it’s important to have some liquid assets to meet immediate needs or to invest in growth opportunities. FDIC-insured bank accounts are wonderful, and we use them as well at nVest Advisors, but you must know the maximum protections afforded to you in each account, bank or custodian, and follow those limits. Thankfully there are great strategies available to help you do that, from using investment custodians like Charles Schwab or Betterment (two of our primary investment custodians) that offer FDIC insurance and SIPC insurance for balances over $1,000,000 is just one strategy that we discuss below. But there are other forms of liquidity besides cash that can offer you even better diversification for your company’s cash needs. **Think of cash as just one form of liquidity. There are many others.** Liquid investments are simply those that can be easily converted into cash without significant loss of value. Here is a brief look at some of the most liquid investments available to small businesses. ### Money Market Accounts A money market account is a type of savings account that pays interest based on current market interest rates. These accounts are FDIC-insured up to $250,000 per depositor, per account type, per insured bank. Money market accounts typically offer higher interest rates than traditional savings accounts, making them a popular choice for small businesses looking to earn interest on their cash while maintaining liquidity. ### Certificates of Deposit (CDs) A certificate of deposit (CD) is a savings account that requires a fixed amount of money to be deposited for a fixed period of time, typically ranging from three months to five years. CDs offer a fixed interest rate that is higher than traditional savings accounts, making them an attractive option for businesses looking for a safe, predictable return on their investment. CDs are also FDIC-insured up to $250,000 per depositor, per account type, per insured bank. ### Treasury Bills Treasury bills (T-bills) are short-term debt instruments issued by the US government to finance its operations. T-bills are considered to be one of the safest investments available because they are backed by the full faith and credit of the US government. They are also highly liquid and can be bought and sold easily in the secondary market. T-bills are issued in maturities ranging from four weeks to one year and are sold at a discount to their face value, meaning that investors earn interest by buying them at a discount and then receiving the full face value at maturity. ### Commercial Paper Commercial paper is a short-term debt instrument issued by corporations to fund their day-to-day operations. It is typically issued with maturities ranging from one to 270 days and is backed by the creditworthiness of the issuing company. Because commercial paper is typically issued by large, financially stable companies, it is considered to be a relatively safe investment. Commercial paper is also highly liquid and can be bought and sold easily in the secondary market. ### Money Market Funds A money market fund is a type of mutual fund that invests in low-risk, short-term debt securities such as government bonds and commercial paper. Money market funds are designed to maintain a stable net asset value (NAV) of $1 per share, making them a relatively safe and predictable investment. They are also highly liquid and can be bought and sold easily, making them a popular choice for businesses looking for a combination of safety, liquidity, and yield. ### Corporate Bonds Corporate bonds are debt securities issued by corporations to fund their operations or expansion. They typically have maturities ranging from one to 30 years and pay a fixed or variable rate of interest. Corporate bonds are considered to be riskier than government bonds because they are backed by the creditworthiness of the issuing company rather than the full faith and credit of the US government. However, they can offer higher yields than government bonds, making them a popular choice for investors looking for income. Corporate bonds are also highly liquid and can be bought and sold easily in the secondary market. ## A way to put it all together that is safer than the bank #### Use your investment custodian to increase your insurance protections and a fiduciary financial advisor to act as your company’s risk manager for those assets. Only a few of the strategies we discussed above are available in your local bank or credit union. But all of them, and even a few others, can be done in an investment account, under the guidance of a fiduciary financial advisor. This affords you several additional advantages: - **You can have FDIC insured cash balances, treasury /agency bonds, money market funds, commercial paper, and more, all in the same account. This makes reconciling and tracking easy, you’ll have one person (your advisor) to speak to, liquidity is easy because ACH and wire transfers are always available, and your account(s) have both expanded FIDC insurance for true cash balances and additional SIPC insurance on the invested portions. The custodians we use offer more than $1,000,000 in both FDIC and SIPC insurance for our clients.** - **You have another set of eyes – a trained fiduciary – on both the investments and the safety of the custodian.** **Notice that we said you need a *fiduciary* financial advisor for this role.** We cannot stress that enough. Most investment managers and financial advisors work on commission, and while there are good, honest, and trustworthy advisors who earn their pay making sales, there is a strong incentive to use expensive products (that often are less liquid or come with deferred sales or “surrender” charges) if you need to sell them quickly, and none of them are legally held to a true fiduciary standard. In contrast, a fiduciary advisor, like nVest Advisors, is legally obligated to operate entirely in your best interests and care for your money with the same due diligence we give our own. ## The bottom line Small businesses looking for liquid investments have a variety of options to choose from. Money market accounts, CDs, T-bills, commercial paper, money market funds, and corporate bonds are all highly liquid investments that can be easily converted into cash without significant loss of value. However, it’s important to consider the risks and potential returns associated with each investment and to consult with a fiduciary financial advisor before making any investment decisions or deciding where to house your liquid assets. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. And being a small company ourselves, we’re small enough to develop a close working relationship with your company and have the resources and investment partners to handle even the largest 401(k) needs. If your company is looking for solutions to today’s banking crisis, or would like a competitive bid for your current programs, or if you need to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, Betterment, bills, CDs, Charles Schwab, commercial paper, custodian, economic, economy, empowerment, ESG, FDIC, fed, Federal Reserve, fiduciary, IRA, liquid assets, liquidity, money market, notes, SEP, signature, signature bank, silicon valley bank, silvergate, SIMPLE, SIPC, sivb, small business, sustainable, Treasury, trends, Wells Fargo --- ### [Weekly Economic Update: 03-13-2023](https://nvestadvisors.com/weekly-economic-update-03-13-2023/) **Published:** March 13, 2023 **Author:** Jeremy Torgerson **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** We had a really significant week of changes in the direction of some data, followed by the failures of two banks over the weekend- Silicon Valley Bank in California and Signature Bank in New York. **Respectively, these were the second- and third-largest bank failures in U.S. history.** The U.S. Treasury, Federal Reserve, and the FDIC stepped in with emergency measures to support the depositors of those banks, but the economic alarm bells are now ringing loudly now that there are systemic problems affecting the financial sector. - **The Failures of Silicon Valley Bank and Signature Bank** - **Unemployment “unexpectedly” ticks up as employment expectations drop** - **Volatility is quickly becoming extreme as the market second-guesses the Fed** ## The Failures of Silicon Valley Bank and Signature Bank We are monitoring this situation closely and will be following up with a special mid-week article about these two failures as more information becomes available, but here’s what we know as of Monday morning: - Both banks were heavily involved in the technology sector. Silicon Valley Bank invested heavily in technology startup companies, and Signature Bank was a major supporter of cryptocurrencies. - Both banks were FDIC insured, which means up to $250k is insured against a bank failure for every depositor. However, in both cases upwards of 90% of their massive amounts of cash on hand were account balances that far exceeded that FDIC insurance cap. This means that many hundreds or thousands of bank customers in both banks were potentially going to lose huge amounts of their deposited money. What panicked Wall Street all weekend was the number of tech companies that would have lost access to enough cash to even meet their expenses this coming week. - The FDIC, Federal Reserve and the US Treasury stepped in with emergency powers to announce that all depositors in both banks would be fully guaranteed for their bank balances at the time of the bank seizures, but stockholders and unsecured bondholders in the banks would not be bailed out. The banks will be liquidated and their assets sold off, and whatever remains from those assets will go first to pay for the depositors’ funds, then to secured creditors of the bank. - The US taxpayer won’t pay for these extra depositor protections, at least directly. The FDIC charges all U.S. banks a premium in order to receive the mandated insurance for their deposits, and will increase the premiums on U.S. banks to cover the extra losses. Banks will most likely just raise their service fees to cover that new expense, however, so expect to see some banking fees increase. - The stated reasons for the banks’ failures are also similar: - In Silicon’s case, it appears the bank decided over the last few years to park most of its cash reserves in longer-term U.S. treasury bonds. That doesn’t sound terribly risky, except that the Federal Reserve started raising interest rates very quickly last year, which caused the prices of those existing bonds to drop (because new bonds pay more interest than older ones do). When that happens, the prices of old bonds falls, and the longer the bond has to go until it matures, the bigger the drop. The bank apparently also had no stop-loss measures in place, like rate-swaps, options contracts, etc. In short, very little (if any) risk management. - In Signature’s case, many of the details are still forthcoming, but it appears the bank suffered heavy losses related to its investment in the crypto space, as well as having nearly 25% of its deposits coming from cryptocurrency. - There may have been some criminal negligence involved, at least at Silicon Valley Bank. Their former CEO[ Greg Becker (removed on Friday), was also the Chief Financial Officer at Lehman Brothers in 2008,](https://economictimes.indiatimes.com/news/international/business/who-is-greg-becker-the-head-of-failed-silicon-valley-bank/articleshow/98554857.cms?from=mdr) when that bank collapsed and caused catastrophic liquidity and solvency problems at the height of the Great Recession. That he was at Lehman and oversaw that bank’s collapse is not in itself criminal, but we’ve since learned that while CEO of Silicon Valley Bank, Becker did not fill a required position (Chief Risk Officer) for almost all of last year. The one he did install only this past January ended up spending most of her time overseeing the bank’s Diversity and Equity projects. And finally, three of the bank’s officers, including Becker, sold large amounts of the company’s stock in the two weeks before the bank collapsed. We will have to see, in the fallout, whether there are criminal charges coming for Becker or any other officers at either bank. Becker was also, until Friday, on the board of the San Francisco Federal Reserve Bank, and was quietly removed from that position over the weekend. - The fear from investors and regulators is contagion: banks deposit and invest heavily in each other, so if one bank fails, it may cut off access to deposit money at another, or else affect that bank’s solvency if a portion of the bank’s investment portfolio falls to $0. - There are reports this morning that three other banks are facing serious solvency issues, as well: First Republic Bank, Pacific Western, and Western Alliance. The shares of all three are trading down significantly this moring. First Republic, for instance, as I write this, is trading down in pre-market over 65%. #### What this means to you: We will have much more to say about the current bank problems in the coming days. Stay tuned. For now, though, the fear of a bank failure is one of the more serious market risks in the United States, as it can become a self-fulfilling prophecy. Like in the movie “It’s a Wonderful Life”, scared bank depositors can cause a “run” on the bank when enough of them all demand their cash back at the same time. Because our banking system uses what is called a fractional reserve system (most of the money in your account is actually being used in loans and other bank investments), a run on the bank creates a problem where the bank can instantly become insolvent and unable to supply all the cash it needs. Banks need the time to unwind their investments in order to return cash to customers in short order. Normally t’s not a problem, because banks have a good idea of how much actual cash comes and goes from their institutions on a regular day, but in the case of a panic-driven run on the bank, the cash will not be instantly available in sufficient quantities. Because banks have to meet reserve and liquidity requirements at all times, it can cause the bank to become insolvent, and therefore must be shut down, in a matter of hours. The biggest concern at the moment is that all of these banks are what are called “regional banks”, meaning they are fairly small in scope. It may cause bank customers to lose confidence in smaller community and regional banks, and if that happens, we can see further failures of smaller institutions as people flock toward bigger (though not necessarily safer) banks. It’s also causing a huge spike in the price of Bitcoin this morning, which is another subject. Our firm’s general cryptocurrency position is negative – we do not like investments we cannot fairly value at any given time, and in many cases, do not even have basic FDIC or SIPC insurance associated with them. But people spooked by possible bank failures at the moment may turn to crypto, particularly bitcoin, as an imagined “safe haven”. Don’t fall for it. What you should do right now is move any amount in your bank accounts above the FDIC’s $250,000 insurance limit, to another bank or into a money market fund. We have a great solution for our clients, because all of our custodians offer substantially higher insurance limits on their own cash reserve accounts – over $1,000,000 in all cases. Reach out to us today if you have questions or concerns. > #### For nVest Advisors Clients: > > #### There is no reason whatsoever to be concerned about this new banking risk for your own account safety. We’ve been anticipating a recession for over a year, and in all cases, our investment models have already been adjusted for what are always “unexpected” panics as the economy winds down. None of our clients have any significant exposure to either the Tech or Financial sectors at this time (you haven’t for more than a year), and all of our account custodians (Charles Schwab, TD Ameritrade, Betterment, ICON, Empower Retirement, and Aspire Retirement Services) are all solvent and running smoothly. All of our client accounts are SIPC insured, all cash balances are FDIC insured for over $1,000,000, and none of our clients have any direct exposure to cryptocurrency in accounts we manage. ## Unemployment “unexpectedly” ticks up as employment projections drop We have seen what may be the start of recessionary layoffs and unemployment increases. We’ve talked earlier about the massive number of announced layoffs in tech, finance, and retail, and already show layoffs in the manufacturing sector. These had not translated yet into unemployment filings because of severance packages and the availability of other jobs still in the marketplace. That buffer appears to be over now, as unemployment filings “unexpectedly” ticked up last week (second week in a row after a rapidly slowing jobs market at the start of the year): ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Claims22303100443.png "Us claims22303100443 nvest advisors") This sent us up toward more a normal range of unemployment filings, with only 2020-2021 (Covid shutdowns), 2014-2015 (recovery from the Great Recession) being higher over the last decade: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Claims2303100443.png "Us claims2303100443 nvest advisors") Continuing claims also rose, indicating that it is getting harder to replace the job you lost: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Claims-cont2303100443.png "Us claims cont2303100443 nvest advisors") I am confident enough in the stability of the continuing claims to believe we’ve definitely hit bottom and are going to be ticking higher for a measure of time. In a time when we’ve historically started hiring for seasonal jobs, continuing unemployment is running against a decade-long trend at this point. In addition, the number of hours worked has dropped off dramatically. This may have been a reversal of bad data in January, but it’s definitely showing a drop in the hours being worked across the economy in February: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-NFP-hours-worked2303100443.png "Us nfp hours worked2303100443 nvest advisors") So where do we go from here? There are a few ways to look at both historical precedent, and leading indicators, to give us some guidance. First. the leading indicators. This is the use of temporary employees to fill the gaps in labor needs by companies. The hiring of temp workers is closely correlated with actual payroll figures at companies (layoffs, in this case), by a few months: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-NFP-Temp2303100443.png "Us nfp temp2303100443 nvest advisors") Additionally, simply asking companies what their short-term hiring plans are, will certainly give you a good look at the possibility of future employment. You can see the actual employment numbers (the black line) trends within the range of the red line (hiring plans) very well. Hiring plans are VERY negative at the moment (meaning there are plans to reduce the workforce from current levels), so in all likelihood, actual payrolls will soon drop accordingly. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-PAyrolls-v-NFIB2303100443.png "Us payrolls v nfib2303100443 nvest advisors") And finally, in what I consider more than anecdotal macroeconomic evidence, history shows us that rapid hiring sprees have nearly always occurred right before recessions. This makes perfect sense to economists, because recessions are usually caused when the central bank takes actions to “cool off” an economy that was expanding too rapidly to be sustainable. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Empl-growth-before-recessions2303100443.png "Us empl growth before recessions2303100443 nvest advisors") #### What this means to you: **[![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)**We’ve been telling our readers in this space for a year or more that we believe a recession was almost certain. The data is now beginning to reflect that reality. Sadly, recessions always mean some companies fail (see the two big banks, above, for proof of that), and some people will lose their jobs. Having an emergency fund set up before these natural dips in the business cycle is critical. If you have one, we’ll expect you’ll be needing to use it during a layoff situation. Thankfully, all employers pay unemployment insurance in the states they have employees, and those benefits will help, but we have a tough road ahead for many families. Shoring up your investments to avoid unnecessary losses during the coming market volatility, reducing your expenses to bare minimums, and avoiding adding ANY more debt to your situation, is vital. **Because we’re expecting a significant recession ahead, I’ve published just this week an e-book on the Top 7 things you need to do to prepare for a recession. It’s yours for the asking. Just click on the book image to get your copy:** ## Volatility is becoming extreme as the market second-guesses the Fed. One of the biggest ways you know that markets are about to face a prolonged change in direction is when volatility goes wild. We’re seeing those kinds of moves last week and today. To begin with, recent data pointed to the very real possibility that inflation is coming back, and as a result, the market was down most of last week on the concerns that based on this new data, the Federal Reserve will have to raise interest rates higher than the market had been expecting, and holding rates higher for longer than the markets want. This caused most of the stock market drop over the last week, as the markets re-priced in new expecations for the chance of a 0.50% hike at the Fed’s meeting later this month. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-p-50-bps2303080443.png "Us p 50 bps2303080443 nvest advisors") Then the bank failures on Friday happened, and the markets suddenly (and violently) reversed course and now expect less than a 0.25% rate increase this month, with many analysts (nearly always wrong, by the way), now actually predicting that the Fed will pause rate hikes, or even pivot and bring rates down: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-SVB-MArch2303130440.png "Us svb march2303130440 nvest advisors") Two serious problems with this scenario, if it happens: 1. Inflation is heading in the wrong direction for a pivot. If the Fed buckles to market pressure and either pauses rates or pivots and lowers them slightly, inflation will likely roar back in an uncontrolled way. We believe the Fed will continue to remain tightly focused that very significant risk, and maintain their tightening stance, even if it is a 0.25% increase instead of the 0.50% the market was expecting last week. 2. The real pain always follows the pivot. Looking back at 2008, the Fed pivoted from their rate hikes in the middle of 2007. It took a while, but the stock market made most of its drop after the pivot (another 50% decline) and real estate prices fell a further 24%: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/unnamed-1.png "Unnamed 1 nvest advisors") This happens for a number of reasons, but to be brief, the stock market collapse occurs because investors now know that interest rates on bonds have peaked, which means they can now lock in high-interest rates on their “safe” money – for years or even decades – with very little market risk. So, logically, they move money from stocks into long-term bonds. A pivot also means that the economy has shown signs of instability; that it cannot sustain any further tightening/hiking. Something inevitably breaks. Companies start showing lower profits, jobs are cut, and projections are scaled way back. Investors respond by pulling out of stocks they believe will drop in the short term. Also, there is what is called a “lag effect” – it takes 9-12 months for every rate change of the Fed to actually be reflected in the economy. ## Bottom Line: [![](https://nvestadvisors.com/wp-content/uploads/2023/03/bed7bc77-85c8-8b35-03c3-f23318333e4e-902x1024.png "Bed7bc77 85c8 8b35 03c3 f23318333e4e nvest advisors")](https://mailchi.mp/nvestadvisors/dbwjli1adb)Download our brand-new E-Book “7 Hacks To Recession-Proof Your Financial Life” today. We are at the economic tipping point. We’ve been shouting warnings for over a year. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. **Just this week, I’ve published an ebook to help you get your finances ready for the recession directly ahead. It’s yours totally free, just for the asking. Just click on the book image to access and download it.** Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [New Features for our clients investing at Betterment](https://nvestadvisors.com/new-betterment-investing-features-client-alert/) **Published:** February 10, 2023 **Author:** nVest Advisors **Content:** ## **At A Glance** - **New Self-Directed Account Service for Do-It-Yourselfers.** - **FREE Checking and High Yield Savings accounts are available for all of our clients. The current savings account interest rate is 4.0%!** - **Cryptocurrency trading is now permitted for clients at Betterment. Please read our updated account service agreement for Betterment.** - **New Advisory Agreement for all clients with managed accounts at Betterment.** We are pleased to announce three major improvements to the services our clients receive when they custody their investment accounts at [Betterment.](https://wwws.betterment.com/nvest-advisors/app/signup/?advisor_token=SjlNaO7an_w) All of these features are effective immediately and are reflected in our new Client Service Agreement for investment management services for accounts held and traded at Betterment. ## **Advisor-Guided, Self-Managed Account Services** Some people, particularly younger investors who are sensitive to fees affecting starter-account balances, and want more control over the day-to-day investing decisions of their account (but who still might want to check in periodically with a professional financial advisor to make sure they’re on track) now have the option of working with nVest Advisors on a limited-engagement basis for a much lower advisory fee. We have always been proud to offer professional, fully fiduciary, discretionary investment management services for every family and small business, regardless of your account size, for extremely competitive advisory fees, and were one of the first financial advisors in the country to adopt robo advisor technology and progressive custodians such as Betterment. In fact, we’ve proudly provided Betterment as a custodian option for our clients, particularly our younger “nVestors”, all the way back to 2015. **Now, we’ve added a new way to work with us:** Most of our clients want professional money management for peace of mind, and to take one more item off of their busy schedule. However, for those true do-it-yourself-ers at heart who want to control the day-to-day decision-making in their accounts at Betterment, but who also want to be able to have their account professionally set up, their risk tolerance and investment strategy professionally determined, an initial investment strategy professionally recommended, and want occasional access to a financial advisor for feedback and coaching, can now do so at a much lower total advisory cost than if we handle everything for you. We call this new level of service **Client-Managed Account Service**, and it’s now available at substantial savings over our already very low advisory fees for our Advisor-Managed Account Services. And, as always here at nVest Advisors, there is no minimum amount you need to get started. Clients who want to self-direct their accounts (with our initial setup help, and limited ongoing guidance) will have access to a wide variety of trading strategies to choose from, including the full array of proprietary nVest Advisors Core+ nVestor, Principled nVestor, and our rules-based Macro nVestor models, built exclusively for the Betterment platform. #### Need more information about this new program? [Reach out to us for a quick Q&A](https://calendly.com/nvestadvisors/web15) to see if this solution is a good fit for you. #### Ready to begin? [Open your nVest Advisors Client-Managed Account today.](https://wwws.betterment.com/nvest-advisors/app/signup/?advisor_token=SjlNaO7an_w) ## Eliminate bank fees entirely, and earn 4.0% APY (as of 3/10/2023) on your savings with a totally free (we mean it – totally free) checking and savings account. Our clients with investment accounts at Betterment also have the option of adding online checking and high-yield savings accounts to their Betterment / nVest Advisors client experience, totally free of charge. The **Betterment Checking** solution offers the convenience of a totally online bank, with all of the features our clients look for in a banking solution, including: - **No minimum balance.** - **No transaction or overdraft fees.** - **Cash back on purchases at thousands of participating retailers like Costco, Adidas, and Aeropostale.** - **Online statements.** - **Free ATM / Debit Card.** - **ATM fees are automatically refunded worldwide.** - **Transfer funds instantly between your checking, savings, and nVest Advisors-managed investment accounts.** - **See your checking and savings account, investment, and even other outside accounts all in one place on the Betterment portal for our clients.** Betterment and nVest Advisors also proudly offer our clients individual and joint **high-yield Cash Reserve savings accounts**, FDIC insured up to $250,000 per account and currently yielding approximately 12 TIMES the national average bank rate: 4.0% APY! These accounts are available to nVest Advisors’ clients totally free – no platform or advisory fees of any kind! #### [**Reach out to us if you’d like more information on the Betterment Checking and Cash Reserve solutions for nVest Advisors clients.**](https://calendly.com/nvestadvisors/web15) ## Now offering optional cryptocurrency trading for nVest Advisors clients with accounts at Betterment. Although nVest Advisors does not utilize cryptocurrencies or any digital asset such as non-fungible tokens (NFTs) in any of our client models, we know many of our clients have wanted to speculate with a small (and we mean SMALL) portion of their portfolio for a couple of years now. We’re happy to now be able to offer this additional service feature for our clients who use Betterment as their account custodian. Betterment has partnered with Gemini Trust Company, LLC, a New York-based cryptocurrency trust, to offer a solution for nVest Advsiors’ clients seeking to diversify their holdings by using crypto. **As a general rule, we do not recommend cryptocurrencies for our clients, and our proprietary models do not employ the use of any digital asset classes.** We do not anticipate changing that policy until the crypto space becomes more regulated and our clients’ assets are better protected in the crypto space. However, we also want to allow our clients who wish to voluntarily add some cryptocurrency exposure to their investments, the opportunity to do so. We have therefore amended our current Client Service Agreement for Betterment accounts to include significant information about the cryptocurrency investing program now available to all of our clients at Betterment. Adding this asset class carries significant additional risks not associated with most conventional investment asset classes, so before you open your cryptocurrency trading account at Betterment, you will be asked to sign a new client service agreement to include the changes for the cryptocurrency trading function. #### If you are interested in opening a cryptocurrency trading account as part of your nVest Advisors investing experience, please let us know by [scheduling a 15-minute meeting with us](https://calendly.com/nvestadvisors/web15), so we can review how the crypto trading account differs from your current nVest Advisors-managed investment accounts and get your properly set up. ## New Client Service Agreement for all clients at Betterment will go into effect on June 1, 2023. To bring all of our client service agreements into compliance with all of the new products and services offered by the nVest Advisors / Betterment partnership, it will be necessary to have all of our clients using Betterment as a custodian update their previous Client Service Agreements with the new 2023 Client Service Agreement for accounts held at Betterment. **The formal announcement of the change in our service agreement will be emailed to each affected client on or before May 1, 2023, and the new Agreement will replace all existing client service agreements at Betterment on June 1, 2023.** Please watch your email for more information! ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client News, Client Service, Company News, Cryptocurrency, Early nVestors, Early nVestors, Emerging nVestors, From our CEO, Individuals and Families, Investing General, Investment, LifeCycle, Mailchimp, Media, Press Releases, public **Tags:** advisor, agent, background, Betterment, Bitcoin, cash, cash reserve, checking, colorado, criminal, Crypto, finance, financial, Gen X, Gen Y, Gen Z, high yield, hoax, insurance, invest, investment, low cost, Millennial, nVest, planner, ponzi, regulator, regulatory, rules, savings, scam, self-directed, self-managed, texas --- ### [You'll be right at home with a smaller advisory firm](https://nvestadvisors.com/benefits-small-ria-advisor-advisory-firm/) **Published:** March 10, 2023 **Author:** nVest Advisors **Content:** When it comes to managing your finances, there are many options available. Some people choose to manage their finances on their own, while others prefer to work with a financial advisor. If you’re considering working with a financial advisor, you may want to consider working with a smaller firm, for a number of very important reasons. ## Personalized Attention One of the biggest benefits of working with a smaller financial advisor is that you’ll receive more personalized attention. With a smaller firm, you’ll be working with a smaller team of professionals who will be able to get to know you and your financial goals on a deeper level. They’ll be able to provide customized advice and strategies that are tailored to your specific needs. Perhaps even more important than that, though, is your relative importance to a smaller firm. At large companies with many billions of dollars under management, their attention is focused on keeping the biggest revenue-producing clients happy, always at the expense of the clients with smaller accounts (in our industry, we call that “segmentation”). Many larger firms won’t even give a smaller account a human advisor with which to build a relationship. That is completely the opposite experience of working with a smaller firm. You aren’t just an account number at a smaller firm. You’re part of the family. At nVest Advisors, nearly 100% of our clients stay with us for many years and have even become our personal friends. It is very rare for us to have a client leave our firm once they join, and we never take that trust and faith for granted. ## Lower Costs Another benefit of working with a smaller financial advisor is that you may be able to save money on fees. Larger firms often have higher fees, as they have more overhead costs to cover. Smaller firms may be able to offer lower fees, as they have lower overhead costs. This can be particularly beneficial if you have a smaller portfolio, as higher fees can eat into your returns. Way back in the early days of my own career, I worked for a large firm that took more than 60% of my production for “overhead expenses”. Just their contract with AT&T for two landlines (yeah, those were the days) was over $200 a month, and any long-distance calls (still a thing back in 2008) came out of my own pocket. As soon as I left and started my own practice in 2011, we were operating at a very small fraction of the costs that my former firm endured, I took home 90% of my production instead of 37%, and *we were able to lower our clients’ fees.* ## Access to Top Talent A big misunderstanding of many people who are comparing a large firm and a small one for advice is the perceived safety of the larger firm. While smaller firms may not have the same name recognition as larger firms, they may still be able to provide access to top talent, have access to the same large custodians and trading platforms, and use the same stocks, bonds, and mutual funds, etc. For example, here at nVest Advisors, we manage client accounts that are held at a major custodian for safety. Most of our clients have their investment accounts with Charles Schwab, but we also use a few other custodians for special purposes. Those custodians provide the same SIPC insurance protection to our accounts as they do to their own. There is also no difference between the Tesla stock at Merill Lynch and nVest Advisors (except we don’t charge commissions for you to buy or sell it). And since most advisors at large firms are working under stringent production quotas, smaller firm advisors typically have more time to analyze an investment with respect to your personal situation to determine whether it’s proper and fairly priced to be part of your strategy. Finally, most independent financial advisors who now work at smaller firms have worked at larger firms in the past, so the experience and connections at larger firms come with them. We all have access to the same analysis reports, the same research, the same third-party rating systems, and attend the same conferences. Because of that, smaller advisory firms may have developed strong relationships with other professionals in the industry. This can be particularly beneficial when it comes to accessing investment opportunities or other resources that may be harder to come by. Do not assume the reason some advisors choose to venture out and join smaller firms (or start them from scratch) is that they “couldn’t cut it” at a major firm. Far from it – most of the best talent in the industry leaves the huge monolithic corporate machines as soon as they are able because they *know* they can do it better, cheaper, and more ethically once they can control things on their own. (As the CEO of nVest, I can tell you I work harder every day now than the toughest days I was an employee advisor at my first mega-firm.) ## Agility and Flexibility Smaller financial advisors tend to be more agile and flexible than larger firms. They are often able to respond more quickly to changes in the market or to your personal financial situation. This can be particularly beneficial if you need to make changes to your portfolio quickly or if you have a specific financial goal that you need to achieve in a short period of time. For instance, at nVest Advisors, our proprietary investment models and the way we manage money with a focus first on macroeconomics and risk management being a top priority means your money is being much more actively managed than at major firms as world conditions change. If you’ve ever worked with a major firm, ask yourself: how often did they actually ever modify your investments when the markets dropped significantly? Very few of you can say your advisor did anything at all, except tell you to “hold on, stay focused on your goals”, which we were all trained to say at larger firms. That’s not money management – that’s product sales. That’s not the case here at nVest. Because we are small, we are also nimble; we can move quickly and respond in real-time to the world as it changes and begins impacting your investment returns. ## Greater Transparency Smaller financial advisors tend to be more transparent than larger firms. They may be more willing to provide detailed information about their fees, investment strategies, and performance. This can help you make more informed decisions about your finances and ensure that you’re getting the best possible advice. Our clients get straight talk from a trusted advisor and friend, not slick talk from a trained salesperson in a suit in Manhattan. ## Better Communication Smaller financial advisors tend to provide better communication than larger firms. They are often able to provide more frequent updates on your portfolio and are more accessible when you have questions or concerns. This can help you feel more confident in your investment decisions and ensure that you’re staying on track to achieve your financial goals. In fact, if we’ve had one problem over the years at nVest, it’s been finding the right balance between enough communication and *too much* communication with our clients. And we communicate with you in a variety of ways. There are no call waiting queues with us – call, email, text, or even use Facebook Messenger or the messenger service on this website. Response time, when not immediate, is always less than 24 hours. You’ll get continuous access to your accounts online, as often as weekly updates on its progress, monthly client newsletters, detailed quarterly performance reports, and reguarly scheduled followup meetings with your advisor. We blog three times a week, share video messages, invite you to Client Town Halls and grant you learning opportunities at nVest Academy. No large firm even comes close to the level of communication smaller firms can provide. ## Local Expertise If you’re working with a smaller financial advisor in your local community, they may have a better understanding of the local market and economy. This can be particularly beneficial if you’re looking to invest in local businesses or real estate. Your financial advisor may be able to provide valuable insights and advice that you wouldn’t be able to get from a larger firm that is based in another part of the country. ## Stronger Relationships We can’t stress this one enough. Smaller financial advisors tend to be more focused on building strong relationships with their clients. They may be more invested in your long-term success and may be more willing to go above and beyond to help you achieve your financial goals. This can help you build a stronger relationship with your financial advisor, which can lead to better outcomes over time. Our clients are family to us here at nVest Advisors, and the more we get to know you, the better job we can do for you. It’s as simple as that. Building strong, lasting relationships with all of our clients, 401k plan sponsors and their employees is the absolute top priority here at nVest. And everyone, from our marketing interns to our CEO, is entirely committed to that cause. ## Holistic Approach Many smaller financial advisors take a more holistic approach to financial planning. They may take into account your entire financial picture, including your goals, lifestyle, and values, when developing a financial plan for you. This can help ensure that your financial plan is aligned with your overall life goals and can help you achieve a sense of financial well-being. This is not always true in larger firms, particularly where their “advisors” are actually licensed sales agents who cannot legally receive pay to provide financial advice. What those agents provide sort of looks like financial planning but is often called a “Needs Analysis”, and the premise is simple: can we find a financial need for one of the products we are hoping to sell you? That’s what a “needs analysis” is all about – looking for gaps in your situation that a life insurance policy, annuity, or mutual fund can fill. That’s not financial planning. Financial planning looks at your entire life, from debt and budgets to short-term savings, to long-term goals, all the way to retirement income, Medicare selection, long-term nursing care, and even wills, trusts, and other estate concerns. It must also adapt and adjust as your life circumstances change, so the right way to do financial planning is to partner with your advisor for a long-term relationship (otherwise, you have to start over every few years when life throws something unexpected your way). nVest Advisors offers financial planning as a stand-alone service separate from investment management, or in combination with investment management services. And while most actual financial plans will cost you $2.000 or more, our program is – at most – $39 a month while we work with you to implement our recommendations over time (it’s even cheaper or even free if you use us to invest). ## Independence Finally, working with a smaller financial advisor can manage your investments independently of a parent firm grants the advisor the ability to be objective and focused on you, not what the parent company wants to be sold. In my early years at a major firm, we had what were called “preferred” mutual fund families that the firm strongly urged us to use in our client portfolios. It wasn’t until a year or so later that I learned why: those firms had signed revenue-sharing agreements with the parent company that gave them another 0.5% or so in what I can only call “kick-back money” if we used them. So, we only got training about those firms, only heard from those companies’ reps at our meetings, got wined and dined by only those companies, etc. (And if you’re thinking that 0.5% isn’t a lot of money imagine Blackrock, which currently manages $10 Trillion, with something like this in place. That would mean $50 BILLION dollars – a year – in free money, just for putting you in one fund family over another. How can that *not* be a serious conflict of interest?) That revenue-sharing agreement, by the way, was not shared with the advisors. The company just pocketed that money directly. You don’t have those conflicts of interest at a smaller, fiduciary, fee-only firm like nVest. For instance, we only use investment options that do not have commissions or hidden marketing / “kickback” costs built into them. This eliminates a huge (but for my former firm, a wildly lucrative) conflict of interest in the way we manage your money. Smaller RIA firms also have the freedom to manage money in ways advisors at larger firms simply are not trained to. For example, our firm maintains almost a dozen proprietary investment models that we can use in our client accounts when appropriate, that are continuously monitored and adjusted based on real-world economic conditions. That’s what we would call actual “money management”. Putting a client in a static investment strategy back in 2015, and then leaving it untouched through recent world events is not – it’s product sales. But that’s what the vast majority of clients with smaller accounts experience when they work with larger firms. Advisors at larger firms may be handling a thousand accounts at one time – there is no way to manage each account through the ups and downs of the economy. Using our twelve models, which completely satisfy the investing needs of nearly all of our clients, means we only have to manage twelve strategies, no matter how many accounts we have. It also means that even small accounts will be properly managed on a regular basis because the model is being adjusted and in doing so, even our smallest accounts are given the same care and expertise as the larger ones. (And if you’re wondering if you can still have a customized strategy here at nVest – yes, you can. We use our models when it makes sense to, but if we need to do a customized strategy, we will absolutely do so.), ## In Summary The “safety” of a larger firm is only a perception since we all use the same large custodians to hold and insure your account. Smaller firms have the same trading costs as larger firms (almost none now in 2023), and the Apple Computer or BP Oil stock you own with us is exactly the same as at any other firm. We just have lower overhead costs, simpler systems, and more time to spend with our clients. Small firms are for people who want a genuine relationship with the people who manage their savings and lead them on the path to financial indepdenence. If that sort of relationship appeals to you, don’t wait. As I write this, the economy in early 2023 is deteriorating rapidly, and I promise you: your large-firm advisor is not proactively reaching out with solutions to the recession immediately ahead. At nVest, our defensive Macroeconomic investment model is continuously adjusted for real events, and we have a path forward for our clients even as the economy crumbles. nVest Advisors specializes in helping working-age, professional families and small businesses start their financial journey, grow every step of the way, anticipate and correct setbacks, and celebrate with you when we reach the top together. Your success is all we care about, and helping you overcome the perils along the journey to financial freedom, including the times when you may be your own worst enemy, is how we spend our day. It’s genuinely a privilege to help families and small businesses who want tomorrow to be better than today. Reach out to us for a totally free, totally no-risk portfolio checkup today if you’re concerned about where your finances sit for the coming recession, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client Service, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Investing General, LifeCycle, Mailchimp, Media **Tags:** advisor, agent, background, colorado, finance, financial, insurance, invest, investment, Kansas, New Mexico, nVest, Oklahoma, planner, regulator, regulatory, RIA firm, rules, small business, texas, Utah, Wyoming --- ### [Your Employee's Retirement Plan is well served by a smaller advisor](https://nvestadvisors.com/employee-retirement-plan-401k-small-ria-advisor/) **Published:** March 8, 2023 **Author:** nVest Advisors **Content:** A 401k plan is a vital tool for saving for retirement, but choosing the right investment advisor to manage your 401k plan can be a daunting task. The right advisor can make a significant difference in the success of your retirement savings. Let’s discuss just a few of the benefits of working with a small Registered Investment Advisor (RIA) for your 401k, 403b, 457, SEP IRA, SIMPLE IRA, or other workplace retirement plan. ## What is a Registered Investment Advisor (RIA)? A Registered Investment Advisor (RIA) is an investment advisor who is registered with the Securities and Exchange Commission (SEC) or state securities regulators. RIAs are fiduciaries, meaning they have a legal obligation to act in their clients’ best interests. RIAs are required to disclose all conflicts of interest and operate under a “no commission” business model. ## Benefits of working with a small RIA advisor for your 401k ### Personalized attention One of the most significant benefits of working with a small RIA advisor is the personalized attention you will receive. Small RIAs often have fewer clients, which means they can dedicate more time to each client. This allows for a more personalized approach to managing your 401k plan. The advisor can take the time to understand your unique financial situation, goals, and risk tolerance, and tailor your investment strategy accordingly. ### Fiduciary duty As mentioned earlier, RIAs are fiduciaries, meaning they have a legal obligation to act in their clients’ best interests. This is a critical factor when choosing an investment advisor for your 401k plan. A small RIA advisor is more likely to be an independent firm, which means they are not tied to any particular financial institution or investment product. This independence allows them to provide unbiased advice and make investment decisions based solely on what is best for their clients. ### No conflicts of interest Small RIAs often operate under a “no commission” business model, which means they do not receive any commission for recommending particular investment products. This eliminates conflicts of interest that may arise when advisors receive commissions for recommending certain investment products. Instead, small RIAs charge a fee for their services, which is typically a percentage of the assets under management. This fee structure aligns the advisor’s interests with those of their clients, as the advisor’s compensation is directly tied to the success of their clients’ investments. ### Transparency Small RIA advisors are typically more transparent than larger firms. They often provide detailed reports that show their clients exactly how their investments are performing and what fees they are paying. This level of transparency allows clients to make informed decisions about their investments and ensures that the advisor is held accountable for their actions. ### Flexibility Small RIA advisors are typically more flexible than larger firms. They can often accommodate specific investment strategies or investment products that larger firms may not offer. This flexibility allows clients to tailor their investment strategy to their unique needs and goals. ### Local expertise Small RIA advisors often have a deep understanding of their local market. They may have expertise in specific industries or sectors that are prevalent in their area. This local knowledge can be a significant advantage when selecting investments and can help to maximize returns. ### Lower fees Small RIA advisors often charge lower fees than larger firms. This is because they have lower overhead costs and can pass those savings on to their clients. Lower fees mean more money in your pocket, which can significantly impact your retirement savings over time. ![Macro Investing](https://nvestadvisors.com/wp-content/uploads/2022/11/Copy-of-Untitled-Design-300x300.png "Macroeconomy nvest advisors") > Working with a small RIA advisor for your 401k plan can provide significant benefits. Personalized attention, fiduciary duty, lack of conflicts of interest, transparency, flexibility, local expertise, and lower fees are all advantages that can help you achieve your retirement goals. When selecting an investment advisor for your 401k plan, it is essential to consider these benefits carefully. ### nVest Advisors is the perfect financial partner for your small business. Running a 401k plan is a significant responsibility for employers. Employers must ensure that they are complying with regulations, acting in the best interests of plan participants, and providing education and information to help participants make informed decisions about their retirement savings. Employers may choose to hire a plan administrator to help with many of the administrative tasks associated with running a 401k plan, and a plan advisor (that’s us) to handle most of the rest of those duties, such as due diligence on the investment options, educating employees, and ensuring the plan is compliant. But ultimately, the employer remains responsible for ensuring that the plan is properly designed and administered. By fulfilling their responsibilities, employers can help their employees save for a secure retirement. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefits options, we strive to be an integral part of your team’s financial well-being. And being a small company ourselves, we’re small enough to develop a close working relationship with your company and have the resources and investment partners to handle even the largest 401(k) needs. If your company is looking for a competitive bid for your current programs or needs to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, economic, economy, empowerment, ESG, IRA, SEP, SIMPLE, small business, sustainable, trends --- ### [Weekly Economic Update: 03-06-2023](https://nvestadvisors.com/weekly-economic-update-03-06-2023/) **Published:** March 6, 2023 **Author:** Jeremy Torgerson **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** The first week of March saw Wall Street doing the usual dance of bulls and bears, but economic data continues to suggest the economy is trending quickly toward recession, the key metrics that the Federal Reserve needs to “break” in order to bring inflation back down, remain strong. This means that the Federal Reserve will, in all likelihood, have to keep interest rates higher for much longer than Wall Street had anticipated, which is exactly what we’ve been telling our clients for months now. Inflationary pressures are not down significantly, and appear to be trying to push higher again as the economy fights back against the Fed’s rate-hiking actions. The likelihood of a deeper and longer recession is growing. ## At-a-Glance: - **Fed Regions report slowing economy** - **Mortgage and Housing update** - **Consumer confidence drops again** ## Fed Regions report slowing economy We got updates from several Federal Reserve districts about the current state of manufacturing activity in their areas. All are showing a consistent downtrend. First, let’s show the individual stats and then do a “roll up” analysis. Up first, the Dallas Fed statistics. The Dallas Fed Manufacturing Index declined again and remains deep in a contractionary range: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Dallas-Fed2302280434.png "Us dallas fed2302280434 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Dallas-Company-Outlook2302280434.png "Us dallas company outlook2302280434 nvest advisors") And for the first time since the Covid pandemic, the number of employees declined 1%: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Dallas-Empl2302280434.png "Us dallas empl2302280434 nvest advisors") Interestingly, and confirming our concerns that inflationary pressures tend to come in waves and can give economists false hope several times over, the Dallas Fed also reported that the costs to manufacture, or what is called the “Input Prices” (raw materials, labor, utilities, etc.) reversed their recent downward trend after three months of stagnation, and started heading back up again. This is very bad news and means the Federal Reserve must do more to stamp inflation back down. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Dallas-Prices2302280434.png "Us dallas prices2302280434 nvest advisors") We should never discount the effect of higher prices when looking at economic numbers, because high prices can give a totally false impression of actual economic strength. This graph gives a terrific example of the false hope that inflation can cause. The black line is what is called a NOMINAL number (just current figures at current prices), and shows very strong Capital Goods orders for companies over the last few years. However, the blue line is called the REAL number, meaning that the price increases due to inflation are removed. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Dur-Real2302280434.png "Us dur real2302280434 nvest advisors") You can see that once the inflationary prices are removed from the capital goods orders, our companies have actually been buying fewer and fewer actual products; they’re just paying a lot more for what they do purchase. You can also see in this graph where the nominal and real purchases became “detached”, meaning that inflationary pressures actually started back in 2018, and only rapidly accelerated after the stimulus spending in 2020 and 2021. The Dallas Fed numbers closely matched those coming in from the Chicago area, as well: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Chicago-PMI2303010536.png "Us chicago pmi2303010536 nvest advisors") Then, the Richmond, Virginia Fed reported in with very similar data: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Richmond2303010536.png "Us richmond2303010536 nvest advisors") Richmond also showed a decline in employees that was actually worse than the Dallas area: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Richmond-Empl2303010536.png "Us richmond empl2303010536 nvest advisors") When you average together all of the regional Fed reports with a national composite PMI reading, you can see first that the regional reporting very closely matches the rolled-up national numbers. This means that the slowdowns we’re seeing regionally are, in fact, nationwide. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Richmond-v-ISM2303010536.png "Us richmond v ism2303010536 nvest advisors") One of the more important national numbers is the Outlook Index, meaning what the companies of the country, and their regional Fed district analysts, predict business conditions will be in the coming six months or so. This index shows that we are trending into a fairly deep trough of economic activity, which in the past has always indicated a recession. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Richmond-RSM2303010536.png "Us richmond rsm2303010536 nvest advisors") One more note: any time the manufacturing numbers have fallen this badly, equity valuations (i.e. stock prices) have sharply corrected downward. Either the manufacturing sector must climb quickly back up, or much lower stock performance is inevitable: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/EQ-Either-US-manufactuing-activity-rebounds-or-stocks-underperform-bonds2302280434-1.png "Eq either us manufactuing activity rebounds or stocks underperform bonds2302280434 nvest advisors") #### What this means to you: Despite the rhetoric on financial channels like CNBC or Fox Business, and the daily slug-fest between buyers and sellers on Wall Street right now, a recession is imminent. We believe it will be a deeper and longer recession than a lot of other analysts, and our client investment models have been adjusted to expect this event, and hold our clients steady through what may be a further 30% or so decline in the U.S. equity markets. You have very little time left to make adjustments to your 401k, 403b, or self-directed accounts ahead of this gathering economic storm. ## Mortgage and Housing Update We are always keeping an eye on housing, not only because many of our clients are homeowners already, but because many are saving up for that first major home purchase. We also watch the housing sector of the economy for two other more academic reasons: because so many other sectors of the economy from raw materials manufacturing to banking/finance depend on a robust housing market, and also because housing is the most interest-rate-sensitive sector of the economy. Watching housing’s reaction to the current Fed decisions will give us a forward glimpse of how the rest of the economy may fare in the months ahead. As we’ve reported for over a year now, all is not well in housing, and it’s far worse than your local realtor or mortgage broker will admit. After the wild excesses of the last few years, rising interest rates combined with sky-high home prices have now crashed the housing market, and sadly, the trend continues to worsen. Because home sales are so closely tied to interest rates, every time the Federal Reserve has hiked rates in the past, we’ve seen a dip in existing home sales. However, this decline is the steepest in the last 30 years: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Existing-home-sales-v-other-cycles2302280434.png "Us existing home sales v other cycles2302280434 nvest advisors") High interest rates means it’s hard for families to afford the mortgage payment on a home purchase, so the only way to continue to sell homes in a high interest-rate environment is to drop the price of the home. We can see this happening in New home sales for the first time since just before the Covid pandemic: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-New-Price-YoY2302280434.png "Us new price yoy2302280434 nvest advisors") And even that is not getting homebuyers off the fence, as the supply of new homes in the U.S. is now the highest in the last decade: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-New-Invent2302280434.png "Us new invent2302280434 nvest advisors") Your friendly local realtor or mortgage broker may still be telling you the housing market is strong, but they are looking backward. We did have a slight uptick in new home sales in January, but these were mainly homes that had started construction months earlier and were just finally completed (the black line). The blue line, however, is the number of new mortgages that have been applied for, indicating that home sales are about to slump much lower. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-New-v-MBA2302280434.png "Us new v mba2302280434 nvest advisors") #### What this means to you: The mortgage and housing industry is facing a significant recession this year. There is a lot of argument that home prices will not see major declines simply because there is so much demand for homes, but the simple fact is, if you cannot qualify for a higher-rate mortgage, you will not be able to afford a home at today’s prices. ***It really doesn’t matter how much demand there is for homes if no one can afford the mortgage payment.*** One of two things must collapse in order to restore enough qualified buyers to the real estate market – either house prices must fall significantly, or mortgage rates must drop by more than half. And since interest rates will not decline until the Federal Reserve’s goals on inflation are met, the only thing that can happen is the home value *must* fall. When you factor in the unfortunate loss of jobs and the resulting home foreclosures that typically follow, we strongly believe house prices will correct by 25% or more from their 2021 peak. If you are in the market to buy a home, be patient. Buying conditions are getting better, but we have a long way to go. Timing your home purchase for the next 12-24 months will give you a much better opportunity to find a lower-priced home, but you must let the economy work itself out first. ## Consumer Confidence drops again. And finally this week, let’s look at new consumer confidence numbers. There are two major surveys of consumer confidence/sentiment in the United States – one conducted by the Conference Board, and the other by the University of Michigan. They ask different questions and assess sentiment levels in different ways, but they are often very closely aligned. Last week, the Conference Board reported their most recent survey findings, and consumer confidence dipped lower last month, though in an upward trend for most of the last six months. This seemed to be mostly an indication that consumers felt a little better about their current situation in February, as gas prices were lower and many consumers got annual wage increases (plus a significant cost of living boost in social security went into effect). However, in graph 3, you can see that their expectations going forward are not as optimistic: ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Conf2303010536.png "Us conf2303010536 nvest advisors") When we overlay the Univ. of Michigan sentiment survey, we have a different look at consumer confidence. While both have recently trended up somewhat (so the direction is consistent, the Michigan survey detached from the Conference Board in 2021 and has become increasingly non-correlated. This is not a normal event, and it says that true consumer confidence is likely somewhere between these two measures. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Conf-f-Mich2303010536.png "Us conf f mich2303010536 nvest advisors") Consumer sentiment matters because our private purchasing and spending accounts for over 70% of the total US economic output. When consumers are more fearful about their personal financial well-being in the months ahead, they quite logically begin to save more money, use less credit, and make fewer unnecessary purchases. In this way, consumer confidence can act as somewhat of a self-fulfilling prophesy: if consumers feel less certain about the economy ahead, they will pull back on purchases. When they pull back on purchases, the economy slows. You can see this in the chart below, in which every time consumer confidence fell substantially, a recession was immediately ahead. ![](https://nvestadvisors.com/wp-content/uploads/2023/03/US-Conf-Exp-Current-cond2303010536.png "Us conf exp current cond2303010536 nvest advisors") ## Bottom Line: No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Jobs Report** - **Service Sector Update** - **Commodities** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Keeping your cool during market volatility](https://nvestadvisors.com/market_volatility_emotion_behavioral/) **Published:** March 3, 2023 **Author:** nVest Advisors **Content:** Market volatility can trigger intense emotions in investors, ranging from fear to greed, excitement to despair. It’s not uncommon for people to make rash decisions during periods of volatility, either selling their assets out of panic or buying in a frenzy of excitement. However, emotional responses to market movements can be counterproductive, leading to missed opportunities and financial losses. Since science tells us that[ the fear of loss is more than twice as powerful a motivator than the good feelings that may come from a gain,](https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/loss-aversion/#:~:text=Loss%20aversion%20is%20an%20important,as%20the%20pleasure%20of%20gaining.) we typically see some emotional mistakes occur near the very top of investment market cycles (greed and FOMO – “fear of missing out”), but many more during market declines. A devastating financial loss due to emotional mistakes will often make you very hesitant to ever re-enter the markets, locking in and making permanent what might have only been a temporary setback. We want to acknowledge that the feelings you have during market volatility are real, even if the financial impact of a drawdown is actually only theoretical (that is, until you actually sell those sagging investments and convert them back into cash). But we also know that giving in to those feelings are, very often, the worst thing you can do. Here are a few ideas to help you manage the stress of investment volatility: ### Keeping your feelings in check The first step to controlling your emotions during market volatility is to recognize that your emotions are natural and normal responses to perceived threats or opportunities. It’s literal biology: humans are hardwired to react emotionally to danger, and financial markets can trigger the same kinds of primal responses as physical threats. However, just because emotions are normal doesn’t mean they’re helpful. In fact, emotions can often cloud our judgment and lead us to make decisions that are not in our best interests. Therefore, the key is to acknowledge your emotions without letting them control your behavior. One effective strategy for managing emotions during market volatility is to establish a plan in advance. Having a pre-determined plan can help you stay focused on your long-term goals and avoid making impulsive decisions based on short-term fluctuations. Your plan should include guidelines for when to buy or sell assets, how much risk to take on, and what your overall investment strategy is. By sticking to your plan, you can avoid making decisions based on fear or greed and instead make rational choices that are grounded in your overall investment strategy. ### Practice mindfulness before it gets overwhelming Another useful technique for controlling your emotions during market volatility is to practice mindfulness. Mindfulness is a state of awareness in which you are fully present and engaged in the present moment, without judgment or distraction. Mindfulness can help you stay calm and centered during times of stress, allowing you to make more rational decisions. To practice mindfulness, you can try techniques like deep breathing, meditation, or yoga. By focusing your attention on your breath or your body, you can tune out the noise of the market and stay focused on your goals. ### This, too, shall pass. It’s also important to recognize that volatility is a normal and expected part of investing. Market fluctuations are an inherent part of the stock market, and even the most successful investors experience ups and downs. By accepting that volatility is a normal part of the investing process, you can avoid getting swept up in panic or excitement when the market moves. Instead, you can focus on your long-term goals and stay committed to your investment strategy. ### Take the long view Finally, it’s important to maintain a long-term perspective when investing. Investing is a marathon, not a sprint, and success in the stock market is often measured over years or decades, not days or weeks. By maintaining a long-term perspective, you can avoid getting caught up in short-term fluctuations and instead focus on the bigger picture. Remember that investing is a journey, and there will be ups and downs along the way. By staying committed to your long-term goals and staying focused on your investment strategy, you can weather the storms of market volatility and emerge stronger in the end. ### Seek out the help of a fiduciary financial advisor Ultimately, despite your best efforts, you may find your emotions running things, and if you do, it is vitally important for your long-term investment goals that you reach out for help. A professional fiduciary (ALWAYS insist on a full fiduciary) financial advisor can provide valuable perspective and guidance during periods of market volatility without the conflicts of interest that are so common when advisors work on commission. Your fiduciary advisor is trained to help you stay focused on your long-term goals and avoid making impulsive decisions or is legally required to always offer only the advice that is in your best interests. A good financial advisor will work with you to develop a plan that is tailored to your individual needs and goals and will help you navigate the ups and downs of the market with confidence. ## In Summary Managing emotions during market volatility is essential to long-term investing success. By acknowledging your emotions without letting them control your behavior, establishing a plan in advance, practicing mindfulness, seeking out the advice of a financial advisor, and maintaining a long-term perspective, you can stay focused on your goals and make rational decisions based on solid financial principles and with your future goals as a priority, not on the wild emotional roller coaster that will affect most of Wall Street during moments of uncertainty. nVest Advisors specializes in helping working-age, professional families and small businesses start their financial journey, grow every step of the way, anticipate and correct setbacks, and celebrate with you when we reach the top together. Your success is all we care about, and helping you overcome the perils along the journey to financial freedom, including the times when you may be your own worst enemy, is how we spend our day. It’s genuinely a privilege to help families and small businesses who want tomorrow to be better than today. Reach out to us for a totally free, totally no-risk portfolio checkup today if you’re concerned about where your finances sit for the coming recession, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client Service, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Investing General, LifeCycle, Mailchimp, Media **Tags:** advisor, agent, background, Bitcoin, colorado, criminal, Crypto, finance, financial, hoax, insurance, invest, investment, nVest, planner, ponzi, regulator, regulatory, rules, scam, texas --- ### [Weekly Economic Update: 02-27-2023](https://nvestadvisors.com/weekly-economic-update-02-27-2023/) **Published:** February 27, 2023 **Author:** Jeremy Torgerson **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *We should note that while we conduct much more extensive economic surveys and monitor dozens of data points on a weekly basis, these updates highlight only those factors we believe most directly and significantly impact the clients and preferred prospective clients of nVest Advisors: individual working families and small businesses.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** We took last week off as the U.S. celebrated President’s Day and all investment houses, banks, and government offices were closed in observance. However, the last two weeks were significant for both the economic indicators and the U.S. investment markets as the stark realization that inflation might have reversed its previous downward trajectory means the Federal Reserve must do much more for longer to resolve this continuing issue with high prices. The chances of a “soft landing” of our economy, touted often in the past few months by stock analysts as the reason for the recent stock market rally, are greatly diminished. We have much to discuss. ## At-a-Glance: - **Inflation reverses and heads higher** - **Housing continues its free-fall** - **Ongoing jobless numbers started climbing** ## Inflation reverses and heads higher We got updates to both major inflation measurements over the last two weeks: the Consumer Price Index (CPI) and the Private Consumption Expenditure (PCE). PCI is data that comes directly from consumer sources, while PCE includes data from businesses in its calculation, as well. For example, PCI might catch rising medical expense costs consumers are seeing, but PCE will also catch the cost of your employer’s match. These are different ways to measure the price pressures in the economy, and the Federal Reserve Bank pays close attention to each one. Having two different ways to measure allows for one to “check” the other; there is room to argue among economists when one number is up and another is down, for instance. But when both move in the same way, particularly in a surprise change in direction, the Fed must take notice, and they did. First, after several months of the rate of increase slowing (note: a slowing rate of increase is still an increase – prices are not falling), the month-over-month CPI suddenly reversed and started rising again in the most recent reading: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-CPI-Core2302150528.png "Us cpi core2302150528 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-CPI2302150528.png "Us cpi2302150528 nvest advisors") This was reinforced a few days later with the survey of the PCE, which showed an even greater increase in monthly prices when business costs were included: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-PCE2302270440.png "Us pce2302270440 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-PCE-Core2302270440.png "Us pce core2302270440 nvest advisors") …which was even further reinforced by the most recent read of the US Producer Price Index (think CPI but only for business expenses – the cost of raw materials, transportation, rent, utilities, and the services businesses use to operate like accounting, legal, etc.): ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-PPI2302170441.png "Us ppi2302170441 nvest advisors") What makes PPI so important is that PPI tends to lead and somewhat predict CPI in the coming months. Producers (companies) must pass on their price increases to the consumer in the final product, and while not all of the PPI increases show up in the store price of a can of spinach or a new television, a lot of it will. So we watch PPI to see where CPI will likely trend in the coming months. **We’ve argued for many weeks now that the recent declines in inflation were largely the effect of the US Dollar’s amazingly fast climb in strength compared to other world currencies in the last half of 2022.** It’s a bit much to delve into in these brief updates, but as soon as the dollar started really gaining purchasing power late last year, price increases started cooling off. And it makes perfect sense: a strong dollar buys more “stuff”, and a weak dollar buys less. Our thesis was that as the dollar’s historic strength reversed in January, we would see price pressure start to climb again, and we did. This means much of the rallying the market did over the last two months, believing the worst was behind us, must also reverse. Wall Street was giving everyone a “high-five” since the middle of December, and very prematurely claiming the inflation monster had been slain. Grinning ear-to-ear, Wall Street began predicting the Federal Reserve would quickly declare victory and start lowering interest rates again. We said that was nonsense; that inflation is affected by many factors, and the one being overlooked by most of the analysts was the fact that inflation only fell while the dollar was historically strong and that if the dollar fell back to normal valuations, inflationary pressures would resume. So far, that appears to be what’s happening. #### What this means to you: As we’ve argued since August of 2001, and have reiterated over and over again in our weekly updates, inflation remains the single most significant challenge in our economy because of the damage it will do to the budgets of regular people, who make up 70% of our economy. We’ve said for months now that the Federal Reserve must do more than many on Wall Street are expecting, to return inflation to a stable 2% annual rate. Even though something like a 0.5% monthly CPI number or a 0.6% monthly PCE number is a one-off reading, if these numbers were annualized (meaning these became the trend for a year instead of the recent downward path of both numbers), we’re talking about a 6% yearly CPI and a 7.2% PCE for 2023. This would be on top of two previous years of about 6% and 8% CPI inflation we’ve already endured (and there is a lot of room to argue whether inflation was actually that low – our contention is inflation is much worse in real life than either the CPI or the PCE capture). The sudden reversal in every major index we use to track prices in the United States is very negative news. It means the Federal Reserve has not done enough so far to fix inflationary pressures in our economy, and must continue to increase interest rates and reduce the available money supply even further, and for longer than many had expected. The chance of a “soft landing” for our economy got much smaller with these readings. ## Housing Market Update We are always keeping an eye on housing, not only because many of our clients are homeowners already, but because many are saving up for that first major home purchase. We also watch the housing sector of the economy for two other more academic reasons: because so many other sectors of the economy from raw materials manufacturing to banking/finance depend on a robust housing market, and also because housing is the most interest-rate-sensitive sector of the economy. Watching housing’s reaction to the current Fed decisions will give us a forward glimpse of how the rest of the economy may fare in the months ahead. As we’ve reported for over a year now, all is not well in housing, and it’s far worse than your local realtor or mortgage broker will admit. After the wild excesses of the last few years, rising interest rates combined with sky-high home prices have now crashed the housing market, and sadly, the trend continues to worsen. The most recent data shows that Year-Over-Year Housing is significantly depressed, approaching the devastating levels of 2007-2009. What concerns us is, the Federal Reserve isn’t even finished yet, so the full impact on housing hasn’t even been felt. First, construction is slow. Housing starts in general are showing up near the middle of the last 8 years of production… ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Starts2302170441.png "Us starts2302170441 nvest advisors") But if you take out multi-family construction (duplexes, apartments, condos, etc.), the number is much worse: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Starts-1-Unit2302170441.png "Us starts 1 unit2302170441 nvest advisors") Building permits, however, are much lower, so the houses that were started in January reflected purchase activity from months before. Permits need to be pulled months before a new house construction begins, and we can see that permits are down well into the area of the last Housing Crisis during the Great Recession: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Starts-Permits-1-Unit-YoY2302170441.png "Us starts permits 1 unit yoy2302170441 nvest advisors") Much of this has to do with how unaffordable houses are right now when you combine house prices and the current mortgage interest rates, which have started climbing again since late January: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Mortg-Rate2302170441.png "Us mortg rate2302170441 nvest advisors") This has led to an absolute collapse of mortgage applications, by far the worst mortgage market in the last eight years: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-MBA2302230428.png "Us mba2302230428 nvest advisors") #### What this means to you: The mortgage and housing industry is facing an extreme recession this year. There is a lot of argument that home prices will not see significant declines simply because there is so much demand for homes, but the simple fact is, if you cannot qualify for a higher-rate mortgage, you cannot afford a home at today’s prices. It really doesn’t matter how much demand for homes there is if no one can buy one based on the mortgage payment. One of two things must collapse in order to restore enough qualified buyers to the real estate market – either house prices must fall significantly, or mortgage rates must drop by more than half. And since interest rates will not decline until the Federal Reserve’s goals on inflation are met, the only thing that can happen is the home value *must* fall. When you factor in the unfortunate loss of jobs and the resulting home foreclosures that typically follow, we strongly believe house prices will correct by 25% or more from their 2021 peak. If you are in the market to buy a home, be patient. Buying conditions are getting better, but we have a long way to go. Timing your home purchase for the next 12-24 months will give you a much better opportunity to find a lower-priced home, but you must let the economy work itself out first. ## Ongoing jobless numbers are ticking up. We remain in a strong job market, with approximately 1.9 jobs available for every unemployed worker, and initial jobless claims remain low (for now): ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Claims2302170441.png "Us claims2302170441 nvest advisors") I add the condition “for now” because we know that layoff announcements are increasing and more and more employees, particularly in tech and finance jobs, are being let go. We believe we are not yet seeing this reflected in initial jobless claims for two reasons. First, many of these employees are being offered significant severance packages, and there is a recent federal law that requires at least a 60-day pre-announcement of layoffs for most larger employers. The advance notice and hefty payouts are giving people the time to find a new job before they need to file for unemployment benefits. This is a good thing. However, it appears that once you need to file for unemployment, it is getting harder to find a job. Continuing unemployment claims have reversed trend and are starting to tick upward: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Claims-Continuing-claims-are-starting-to-show-an-upward-trend2302170441-1.png "Us claims continuing claims are starting to show an upward trend2302170441 1 nvest advisors") #### What this means for you: Companies lay off people as a last resort in most cases. They resist this because it is very difficult to find replacements for those employees once economic conditions return to normal. Plus, the costs of recruiting and training new employees is very high, particularly in the first few months of a new hire’s tenure. So businesses resist laying off until the last moment. They will first stop hiring for open positions, and then reduce hours for current employees, and then offer early retirement or other voluntary departure incentives, before finally, laying off workers becomes the more final solution to reduce labor costs. That we are seeing some difficulty in unemployed workers to return to a job indicates that many companies may have halted hiring for their open positions, or are being far more selective than they were able to be in the past few years. It is another indicator that a recession is likely on the near horizon. ## Bottom Line: No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks and into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Later Today: Fed speakers, Consumer Inflation Expectations** - **Tuesday: NFIB Business Optimism Index, Official Consumer Price Index and January Inflation Figures** - **Wednesday: Mortgage and Housing, Retail Sales, Small Business, Oil and Gas production reports** - **Thursday: Jobs, Producer Prices, Manufacturing Indexes,** - **Friday: Exports and Import data, Jobs** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [South Texas In-Person Appointments | June 8-12, 2023](https://nvestadvisors.com/texas_client_appointments_june_2023/) **Published:** April 25, 2023 **Author:** nVest Advisors **Content:** We’re pleased to offer our Texas clients in-person appointments coming up in early June! We have the following itinerary: - **Austin / San Antonio – June 8 (afternoon / evening)** - **Rio Grande Valley (Harlingen location) – June 9-11 (all day) and June 12 (morning)** - **Corpus Christi and San Antonio – June 12 (afternoon / evening)** - **Austin – June 13 (morning)** Unless you request a different time, each meeting will be 45 minutes in length to allow for a maximum number of meetings in the time allotted. Most of the meeting times are during the weekend, and will also have evening appointments, to accommodate our clients’ busy work and family commitments. Please book your meeting now, as these time slots tend to fill up quickly! You can do so using the calendar below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client News, Client Service, Company News, Early nVestors, Early nVestors, Emerging nVestors, Individuals and Families, Mailchimp, Media, Press Releases, public **Tags:** advisor, agent, appointments, California, cash, colorado, criminal, Crypto, finance, financial, Gen X, Gen Y, Gen Z, high yield, hoax, insurance, invest, investment, Kansas, low cost, Millennial, New York, nVest, planner, regulator, regulatory, rules, savings, self-directed, texas, Utah --- ### [10 responsibilities employers have for your company's retirement plan](https://nvestadvisors.com/employer-responsibilities-retirement-plan/) **Published:** February 22, 2023 **Author:** nVest Advisors **Content:** A 401k plan is a popular retirement savings plan offered by many employers in the United States. It is a defined contribution plan where employees can contribute a portion of their pre-tax income, and employers may also contribute a matching amount or a fixed amount. The contributions grow tax-deferred until they are withdrawn in retirement. As an employer, it’s important to understand the responsibilities you have in running a 401k plan and ensure that you are fulfilling them. ## Plan Design and Documentation Employers must design their 401k plan to comply with IRS and Department of Labor regulations. The plan document should outline the rules for eligibility, contribution limits, vesting schedules, and distributions. It is essential to review the plan document periodically and update it as needed to ensure compliance with changing regulations. ## Fiduciary Responsibility Employers who sponsor a 401k plan are fiduciaries, meaning that they have a legal obligation to act in the best interests of the plan participants. This includes selecting and monitoring investment options, ensuring that fees are reasonable, and providing education and information to participants. ## Investment Options and Fees Employers must select and monitor investment options offered in the plan. The investment options must be diversified and appropriate for the plan participants. Employers must also ensure that fees for investment options are reasonable and that participants are not paying excessive fees. ## Employee Education Employers have a responsibility to provide education and information to plan participants to help them make informed decisions about their investments. This includes providing information on investment options, fees, and the importance of saving for retirement. ## Compliance Testing 401k plans are subject to annual compliance testing to ensure that they do not discriminate in favor of highly compensated employees. Employers must work with their plan administrator to perform these tests and make necessary corrections if the plan fails the test. ## Plan Administration Employers must ensure that their 401k plan is properly administered, which includes monitoring contributions, coordinating with the plan administrator, and ensuring that participant accounts are accurate. Employers must also ensure that they are complying with reporting requirements, such as filing Form 5500 annually. ## Employee Contributions and Matching Employers must ensure that employee contributions are being deducted correctly and that any employer-matching contributions are made on time. Employers must also ensure that contribution limits are not exceeded and that vesting schedules are correctly applied. ## Plan Termination If an employer decides to terminate a 401k plan, they must ensure that all participants are notified and that assets are distributed according to the plan document. Employers must also ensure that any outstanding loans are repaid or rolled over to another qualified plan. ## Hiring a Plan Administrator Employers may choose to hire a plan administrator to handle many of the administrative tasks associated with running a 401k plan. The plan administrator can help with investment selection and monitoring, compliance testing, employee education, and plan administration. Employers must ensure that the plan administrator is qualified and that their fees are reasonable. ## Employee Privacy Employers must protect the privacy of plan participants’ personal and financial information. This includes ensuring that participant data is secure and confidential and that only authorized individuals have access to the information. ### nVest Advisors is the perfect financial partner for your small business. Running a 401k plan is a significant responsibility for employers. Employers must ensure that they are complying with regulations, acting in the best interests of plan participants, and providing education and information to help participants make informed decisions about their retirement savings. Employers may choose to hire a plan administrator to help with many of the administrative tasks associated with running a 401k plan, and a plan advisor (that’s us) to handle most of the rest of those duties, such as due diligence on the investment options, educating employees, and ensuring the plan is compliant. But ultimately, the employer remains responsible for ensuring that the plan is properly designed and administered. By fulfilling their responsibilities, employers can help their employees save for a secure retirement. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business to fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans, and other benefit options, we strive to be an integral part of your team’s financial well-being. And being a small company ourselves, we’re small enough to develop a close working relationship with your company and have the resources and investment partners to handle even the largest 401(k) needs. If your company is looking for a competitive bid for your current programs or needs to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, economic, economy, empowerment, ESG, IRA, SEP, SIMPLE, small business, sustainable, trends --- ### [5 Reasons why a Robo-Advisor isn't a perfect solution](https://nvestadvisors.com/investors-robo-advisors/) **Published:** February 20, 2023 **Author:** nVest Advisors **Content:** Here at nVest Advisors, we’re very excited for the future of technology in our industry, and for good reason. As a very early adopter of a variety of tech solutions, nVest has been able to streamline and reduce costs on our back-office operations, provided more and easier ways for clients to work with us, and maintained a “lean and mean” business structure while never compromising on client service. Our use of technology, including robo advisors to handle some of the day-to-day account monitoring and trading activities, goes back to at least 2015. Clients will benefit from the use of tech in financial services, in several important ways. First, your costs will be (or at least, should be) lower than if you are paying a human advisor or team to manage your assets in real-time. Ours are: clients who utilize our investment models have a lower fee schedule than clients who want customized strategies and individual account attention. There are only so many hours in the day, and human advisors are limited in ways that AI isn’t (robo advisors don’t take a lunch break, for instance). The more time a particular client or account requires of our work day, the more that account will likely pay in management fees. That’s not to say that tech makes it less likely that you’ll spend time with your advisor. In fact, we’ve found the opposite to be true. Having more of the daily behind-the-scenes task list done automatically actually frees up *more* time to spend with you. Using robo technology also helps us better implement several regulatory requirements as a legal fiduciary. One of those requirements is known as best execution, which means we must try to provide fairness among all of our clients when we are making changes to investments. Let’s say a public company issues very bad news and its stock price is collapsing. We want to get our clients out of that particular investment. Which of our clients do we attend to first? In the old days, we had to go account-by-account and place sell orders individually. But that means we’ll get some clients out early, while the stock price is higher, and others will get a worse price. Advisors naturally tried to salvage the accounts that provided the most revenue first, leaving smaller accounts to suffer. Best execution says we can’t “play favorites” (or at least, advisors are not *supposed* to). Using technology and a standard set of managed investment models instead of always customized and human-run asset management means we are never have to pick and choose which client accounts get the most attention and whose concerns are addressed first. Using automated functions for rebalancing, tax loss harvesting, and making wholesale changes to our investment models allow us to provide a consistent level of service for every client simultaneously, regardless of your account size. In short, robo technology makes us faster, fairer, more consistent, on-duty 24/7, less expensive, and have more time to spend face-to-face with our clients. It lets us add clients without diluting service standards. It makes small firms like ours competitive with the behemoths. And it blesses your experience as a client. Some clients, especially younger ones who are correctly more fee-sensitive, have felt the allure to bypass a relationship with an actual advisor and just invest directly with a robo solution. In very uncomplicated situations, and in generally positive market and economic conditions, this might be a workable strategy for investors who are geniune DIYers. But when times get tough, insight and experience matters, and investors need real answers to complext questions. During these times, we’ve seen that robo advisors typically lose clients. In fact, for the first time since the robo-advisor concept was introduced over 10 years ago, [2022 marked the first time that the robo service industry is seeing a decline in customers](https://www.investmentnews.com/robo-advisers-struggling-retain-investors-in-2022-research-finds-227476). The problem is, in our opinon, that robo advisors are a useful tool, but they are not a complete solution. We think these are the top five reasons why: ## Lack of Personalization One of the biggest criticisms of robo-advisors is that they lack the personal touch that many investors are looking for. While algorithms can be effective in creating a diversified portfolio based on a user’s risk tolerance and financial goals, they cannot provide the level of personalization that human advisors can. Human advisors, simply put, can get to know you, hear your concerns, and draw professional inferences from those discussions. The robo advisor doesn’t know how to address your unique biases, preferences, hopes and fears into its system. A human advisor does. ## Limited Scope of Services Robo-advisors are primarily designed to provide generic investment advice and manage typical risk-based portfolios, but they do not offer comprehensive financial planning services that many investors need. For example, they may not be able to help with estate planning, tax planning, or retirement planning, which are important components of a holistic financial plan. Human advisors can do these important tasks and leave the AI to do with it does best: watch the markets, make appropriate trades based on rules the human advisor has given it, and alert us to trends. ## Inability to Handle Complex Financial Situations Robo-advisors are great for people who have simple investment needs, but they may not be equipped to handle more complex financial situations. For example, if you have multiple sources of income, own a business, or have a large inheritance, you may need more sophisticated financial planning that a robo-advisor cannot provide. If you have complex planning or investing situations, it is vitally important not to “step over a dollar to pick up a dime”. ## Limited Human Interaction Some investors may prefer to work with a human advisor because they value the personal relationship and the ability to talk to someone face-to-face. While some robo-advisors offer access to human advisors (almost always for an additioanl fee), the level of interaction may be limited or impersonal, which can be a turn-off for some investors. We believe the advisor/client relationship is supposed to last for many years, so that we can truly get to know you and your individual preferences and concerns, and make adjustments to the work we’re doing for you as your life’s conditions change. There is simply no way to accomplish that with a computer algorithm. ## Concerns about Security While robo-advisors have robust security measures in place to protect investors’ data and assets, some investors may still be concerned about the safety of their personal and financial information when using a digital platform. This concern is particularly relevant in the wake of high-profile data breaches and cyber attacks that have affected financial institutions and other companies, though it does not take a breach to find your information broadly disseminated. Many robo advisor and planning services sell or trade your information, which is one of the ways they can offer you their initial services at what looks like an amazingly low cost. ## The best of both worlds At nVest Advisors, we believe the best overall solution falls somewhere between traditional “all-human, all-day” investing and planning services, and a cheap, all-purpose automated solution. It’s not an either-or proposition. We’ve found that the best service model we can provide is to combine human- and robo-managed services in a way that streamlines our operations, scales our business, lowers your costs, and provides us more time to work personally with you on other matters that are important to you. The human relationship matters to an enormous degree, but the daily robo functions are equally important. It is a partnership between the two, not a binary choice of one over the other, that is the best overall solution for the majority of investors. If you’d like to explore exactly how we integrate a deeply personal relationship with a human advisor with a high-tech, even 100% virtual experience, we’d love to show you. Feel free to schedule a complimentary 30-minute Q&A (with a human advisor), on the calendar below! ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Company News, Debt, Early nVestors, Early nVestors, Economy, Emerging nVestors, Established nVestors, From our CEO, Individuals and Families, Investing General, Investment, Mailchimp, Media, Press Releases, public, Small Business **Tags:** advisor, agent, background, Betterment, Bitcoin, cash, cash reserve, checking, colorado, criminal, Crypto, finance, financial, Gen X, Gen Y, Gen Z, high yield, hoax, human advisor, insurance, invest, investment, low cost, Millennial, nVest, planner, ponzi, regulator, regulatory, robo, robo advisor, rules, savings, scam, self-directed, self-managed, service, texas --- ### [Small business trends in 2023](https://nvestadvisors.com/small-business-trends-in-2023/) **Published:** February 17, 2023 **Author:** nVest Advisors **Content:** Small businesses play a vital role in driving the economy and creating jobs. In 2023, there will be several key trends that are likely to shape the small business landscape. Here are some of the most important trends that small business owners should be aware of: ## Increased Focus on E-commerce The rise of e-commerce has been one of the most significant trends in recent years, and this trend is expected to continue in 2023. With the increasing use of smartphones and the internet, customers are now able to shop online from anywhere, at any time. As a result, many small businesses are turning to e-commerce as a way to reach a wider audience and expand their customer base. In 2023, small businesses will need to invest in their online presence, including their website and social media platforms, to keep up with the competition. ## Growing Importance of Technology Technology has already transformed the way small businesses operate, and this trend is expected to continue in 2023. From cloud computing and data analytics to artificial intelligence and the Internet of Things (IoT), technology is changing the way small businesses approach various aspects of their operations, including marketing, sales, customer service, and more. In 2023, small businesses that want to stay ahead of the competition will need to invest in the latest technology and make sure they have the necessary skills and resources to effectively implement it. ## Increased Emphasis on Sustainability Sustainability has become an increasingly important issue in recent years, and this trend is expected to continue in 2023. Consumers are becoming more environmentally conscious, and they are looking for businesses that align with their values. As a result, small businesses will need to focus on reducing their carbon footprint and adopting more sustainable practices. This can include initiatives like reducing waste, using renewable energy sources, and incorporating eco-friendly products and services into their offerings. ## The Gig Economy The gig economy has been growing rapidly in recent years, and this trend is expected to continue in 2023. This refers to a labor market characterized by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs. In 2023, small businesses are likely to continue relying on gig workers and independent contractors as a way to access talent, reduce costs, and remain flexible. However, small business owners will need to stay informed about the legal implications of using gig workers and ensure they are in compliance with all relevant regulations. ## Empowerment of Small Business Owners Small business owners are becoming increasingly empowered, and this trend is expected to continue in 2023. This is due to the availability of new tools and resources, such as online marketplaces, mobile apps, and cloud computing, that make it easier for small business owners to start and grow their businesses. In 2023, small business owners can expect to have more control over their businesses and greater access to resources and support. These are just a few of the small business trends that are likely to shape the landscape in 2023. Small business owners who want to stay ahead of the competition and ensure their businesses remain successful will need to stay informed about these trends and take advantage of the opportunities they present. By doing so, they can not only survive but also thrive in an increasingly competitive and dynamic business environment. ### nVest Advisors is the perfect financial partner for your small business. As a small business ourselves, nVest Advisors is deeply committed to helping small businesses and their teams thrive and prosper. From financial planning for both the owners and employees of the business, to fiduciary management of your SEP IRA, SIMPLE IRA, 401(k), 403(b), HSA, college savings plans and other benefit options, we strive to be an integral part of your team’s financial well-being. And being a small company ourselves, we’re small enough to develop a close working relationship with your company, and have the resources and investment partners to handle even the largest 401(k) needs. If you company is looking for a competitive bid for your current programs, or needs to start a new benefits plan from scratch, we’d love to partner with you. [Feel free to schedule a complimentary one-hour due diligence meeting with CEO Jeremy Torgerson, to discuss your needs.](https://calendly.com/nvestadvisors/60sponsor) **Categories:** Business Stories, Client Service, From our CEO, Mailchimp, Press Releases, public, Small Business **Tags:** 2023, 401k, 403b, economic, economy, empowerment, ESG, IRA, SEP, SIMPLE, small business, sustainable, trends --- ### [Weekly Economic Update: 02-13-2023](https://nvestadvisors.com/weekly-economic-update-02-13-2023/) **Published:** February 13, 2023 **Author:** Jeremy Torgerson **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* **Good morning and happy Monday!** A surprise jobs number last week that partially revised itself already was the primary force for the equity market’s slide the last several days. This week is a big week for economic numbers, with the headline being the newest Consumer Price Index (CPI) due on Thursday. Also, there are lots of companies reporting their previous quarter’s earnings this week, so a look at how the current economic climate is impacting company revenues will be seen. It was a week of contradictory data, depending on the source. The divergence in the data is showing us here at nVest Advisors that a change in direction in some economic conditions. Like boat sails begin to flap and flutter as the winds start to change direction, we’re starting to see disagreement among surveyors as to actual conditions out there. ## At-a-Glance: - **U.S. Labor Market: is it really strong or not?** - **Housing Market Update** - **Business investment cools** - **The US Treasury Yield Curve Inversion is extreme** ## U.S. Labor Market: is it really strong or not? [As we mentioned last week, the U.S. labor market’s report of 517,000 jobs creating in January seemed impossibly high.](https://nvestadvisors.com/2023/02/06/weekly-economic-update-02-06-2023/) We believe it was such a surprise, in part, because Wall Street analysts spend their working hours constantly pouring over the internal data from actual companies trading on the stock exchanges. These analysts get to know companies, industries, and regional and national data very well, and collectively, these analysts simply do not see that kind of hiring activity in the companies they investigate. So it was totally unsurprising to us that the same week as the BLS shocker, we saw a different jobs survey (one from the UBS Evidence Lab) that strongly disagrees with the “official” BLS “Jolts” numbers. Normally these two reports run very close to each other, but in the past few months, they’ve widely diverged. In fact, this report seems to be less and less connected to the official numbers as we go: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Job-openings-should-ease-going-forward2302100442.png "Us job openings should ease going forward2302100442 nvest advisors") We stress again that the BLS has a recent history of downward revisions to their numbers months later, and in the face of increasing job cut announcements, we argue that, even if the number is true and holds after subsequent revisions, it’s at best an aberration and a lagging indicator (a look backward) that doesn’t have much bearing on the coming months. This appears to be the case, as jobless claims and additional labor information released late last week seem to back up the UBS Evidence Lab findings and strongly contradict the official BLS statistic. First, we reiterate the jobs cut announcements as of Feb. 2: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Job-cuts-exceeded-100k-in-January2302030440.png "Us job cuts exceeded 100k in january2302030440 nvest advisors") These layoffs won’t immediately be reflected in the jobs number, because a number of affected employees will receive severance packages that they must work through before filing for unemployment benefits. Also, with the economy still having 1.9 jobs available for every available worker, many of these laid-off employees will be able to find a new job quickly. But layoff announcements, while still very low compared to recent history, are now trending higher and bucking against seasonal trends, both for initial jobless claims: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Claims2302100442.png "Us claims2302100442 nvest advisors") … and for ongoing claims: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Claims-Cont2302100442.png "Us claims cont2302100442 nvest advisors") Although we are far from a “recession” in terms of the jobs market, the trend is noticeable. We believe we are currently at the very beginning of a deteriorating job market that, frustratingly, is almost always part of economic recessionary cycles. #### What this means to you: Though the jobs data is contradictory and most current trends point to a softening labor market, if you want a job today, the odds are still very good that you’ll be able to find one. This one indicator – the strength in job demand – is the major factor keeping the United States out of recession in the short term, but that won’t last. However, the strong jobs market is a major factor in the decisions the Federal Reserve will make about how high to raise interest rates, and how long to hold the rates higher. As long as jobs continue to look this strong, there is little incentive for the Federal Reserve to change from its current course. ## Housing Market Update We got a little more data on the housing market last week, as the mortgage industry reported recent results. First, housing affordability remains impossibly restrictive for many prospective buyers. This is mostly the result of the increased interest rates from a year ago, but prices themselves also remain a factor: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-HPA-Drivers-of-affordability2302090436.png "Us hpa drivers of affordability2302090436 nvest advisors") Mortgage applications for 2023 have had a very slow start in 2023 as a result, though it is following seasonal trends so far: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-MBA2302090436.png "Us mba2302090436 nvest advisors") The crusher to the mortgage industry right now is the combination of sky-high prices that housing climbed to over the past decade as a result of reduced inventory as investors bought up available properties for rental and AirBnB-style income, very low interest rates allowed buyers to afford higher-priced homes, and banks maintained fairly loose lending requirements. In fact, the collapse in the housing market over the last year has not been because banks are tightening up who they will lend to (it is very common in periods of economic recessions for banks to become much choosier about who they lend to, as they become concerned about the average borrower’s future ability to repay the loan). So far, though, mortgage applications have collapsed even before banks have started tightening up their lending requirements to any significant degree: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-HPA-Banks-are-not-tightenings-standards-for-mortg2302090436.png "Us hpa banks are not tightenings standards for mortg2302090436 nvest advisors") So it must be a combination of two things: smart home buyers know that the housing market will be much more affordable in a year or two after a recession has taken place and, sadly, many people have lost homes. This will force down home prices in major markets and give them a much better buying opportunity if they just wait. It also means that current interest rates, combined with high home prices, are simply out of the range of affordability for most potential home buyers. As the real estate industry cools off, it is having an effect on home prices: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-HPA-Freddie-4p12302090436.png "Us hpa freddie 4p12302090436 nvest advisors") But remember that this current graph shows that housing prices are still averaging up year-over-year, just at a much slower pace. Below the dark line is actual home price declines. Home prices are, therefore, slowing down, but not retreating. Not yet. But as interest rates continue to rise and the economy responds by dropping into a recession this year, home prices, we believe, will fall 15-20% before it’s over. #### What this means to you: If you are in the market to buy a home, be patient. Buying conditions are getting better, but we have a long way to go. Timing your home purchase for the next 12-24 months will give you a much better opportunity to find a lower-priced home, but you must let the economy work itself out first. ## U.S. business investment looks to be slowing. Businesses reported that they intend to slow down on their own investment in the coming quarters. This is, again, totally expected for those people who understand economic cycles. As consumers become more and more “tapped out” due to continuing high prices, and pay raises that are not keeping up, 70% of our economy is negatively affected. You and I spending our paychecks is what keeps almost 3/4 of the economy running, and when that slows down, so does everything else. Businesses investing in their own capacities (expanding office space, building a new factory, adding new equipment to increase production, etc.) account for an additional 15% or so of the economy. So while not as impactful as a slowdown in consumer spending will be, business spending is both a sign of additional weakness. If a company feels like its sales will be slow for an extended period of time (like a recession), it will slow down on its own expenditures in order to “ride out” the coming months of slowing sales and profits. It appears that business investment is now slowing. While the current output (the black line) still appears to be holding up well, the future orders (the red line) show a significant drop in the coming months. A note on this graph: anything below the horizontal black line is considered a retraction (recessionary). ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-CapEx-risk2302090436.png "Us capex risk2302090436 nvest advisors") #### What this means for you: We believe the manufacturing sector is readying itself for a recession. This will include reducing labor costs as well as cuts to planned spending on upgrades and expansion efforts. Leading indicators are not perfect but they do give us a fairly good look at what’s coming based on the sentiment of company CEOs and purchasing managers. It is another indicator that a recession is likely on the near horizon. ## The U.S. Treasury Yield Curve Inversion is extreme. [We’ve talked before about the importance of the U.S. Treasury Bond Yield Curve](https://nvestadvisors.com/2023/01/23/weekly-economic-update-2/) (a graphical look at how much holding government bonds pays you over a period of time frames), so we won’t revisit that information here, but if you need a good primer on the Yield Curve and its importance in assessing the current economic environment, check out this article from our good friends at Investopedia. Whenever the yield curve inverts (meaning, investors can actually get a better return holding very short-term bonds than holding long-term ones), this is a very serious economic warning signal. An inverted yield curve is rare but is strongly suggestive of a severe economic slowdown. Historically, [the impact of an inverted yield curve](https://www.investopedia.com/articles/basics/06/invertedyieldcurve.asp) has been to warn that a recession is coming. This economic cycle has been an unusual one in that the Yield Curve inverted for the first time over 10 months ago, and has remained inverted, with an ever-increasing inversion, ever since. This is not a 100% perfect indicator of a recession but historically, it is ***almost*** 100% correct. Let’s take a look at yield curve inversions over time, to see how accurate the prediction is up until 2019: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/Inverted-Yield-Curve-Recession-History-1.jpg "Inverted yield curve recession history 1 nvest advisors") Whenever the yellow line drops below the horizontal black line, the yield curve is inverted. The shaded grey areas are periods of confirmed recession. Although since 1983, the yield curve gave us two false signals, it has accurately predicted every recession for the last 40 years. In other words, there has not been a recession without the yield curve inverting first. And the two false signals were very minor inversions that quickly corrected themselves. ***So while not every yield curve inversion has indicated a recession, every recession has been preceded by a yield curve inversion. And the longer and deeper a yield curve inversion happens, the longer and deeper the recession has been.*** Now, here’s a look at the current yield curve inversion, which is currently the deepest inversion since at least 1980: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Curve2302090436.png "Us curve2302090436 nvest advisors") We believe that, while history does not repeat itself exactly, in economic terms, history does rhyme a lot with the past. This yield curve, combined with all of the other data we gather and review, strongly points to a much weaker and more negatively impactful economy in the coming months than most of Wall Street is prepared for, and certainly, investments have not priced in. We strongly urge our clients to remain conservatively invested for now, ignore the market chatter and false-hope rallies, and remain firmly embedded in your goals and in the economic reality all of this data continues to represent. ## Bottom Line: No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We predicted the beginning of a turn in the current market rally last week, and we reiterate that sentiment now. There will always be market movement that moves counter to the economic data because markets are much more short-term focused, and let’s face it: until fear takes hold, greed is the prevailing emotional state of most market participants. We do believe, however, that the recent rally has fully run its course, and there will soon be a strong shift from stocks and into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free is becoming a more and more attractive option for investors concerned about the coming economic uncertainty. Once there is consensus that either the economy is earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Later Today: Fed speakers, Consumer Inflation Expectations** - **Tuesday: NFIB Business Optimism Index, Official Consumer Price Index and January Inflation Figures** - **Wednesday: Mortgage and Housing, Retail Sales, Small Business, Oil and Gas production reports** - **Thursday: Jobs, Producer Prices, Manufacturing Indexes,** - **Friday: Exports and Import data, Jobs** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Fiduciary Responsibility in 401(k) Plans](https://nvestadvisors.com/fiduciary-responsibility-in-401k-plans/) **Published:** February 7, 2023 **Author:** nVest Advisors **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2023/02/Copy-of-Facebook-Posts-13-300x251.png "Copy of facebook posts 13 nvest advisors") **401(k) plans are a popular and convenient way for employees to save for retirement.** These plans allow workers to contribute a portion of their salary into a tax-advantaged investment account, with the option to choose from a range of investment options. With this flexibility and convenience comes a certain level of responsibility, however, particularly for those individuals who act as fiduciaries for the plan. A fiduciary is a person who has a legal obligation to act in the best interests of plan participants and beneficiaries. This includes a variety of people in different roles. In the context of 401(k) plans, fiduciaries include plan sponsors (typically, the employer), plan administrators, and investment advisors. Each of these individuals must put the interests of plan participants ahead of their own and must exercise their duties with the care, skill, prudence, and diligence that a prudent person would use. While it is not a requirement to use the services of a plan administrator or plan advisor, it is almost always in the employer’s best interest to do so. Ultimately, the plan sponsor is responsible for the successful compliance of the plan, and hiring out those services allows the employer to shift most (but not all) of the fiduciary duties to professionals who are skilled at this work, and willing to assume many of these crucial functions for you. In this article, we will discuss the key responsibilities of 401(k) plan fiduciaries, including the duty to act prudently, the duty to diversify plan investments, the duty to monitor plan investments, and the duty to provide information to plan participants. ## Duty to Act Prudently One of the most important responsibilities of 401(k) plan fiduciaries is to act prudently when making decisions related to the plan. This means that they must exercise the same level of care, skill, prudence, and diligence that a “prudent person” would use in similar circumstances. For example, a prudent person would research and compare different investment options (and vendors), consider the risks and benefits of each option, and make an informed decision. In the same vein, plan fiduciaries must research and compare different investment options, vendors, and even the types of plans themselves, and make an informed decision that is in the best interests of plan participants. In addition to acting prudently, 401(k) plan fiduciaries must also be impartial and act solely in the interest of plan participants. They cannot use their position as fiduciaries to further their own interests, such as by investing in a company in which they have a financial interest or arranging the plan to suit their needs ahead of the other participants. Doing so could result in a conflict of interest that would compromise the fiduciary’s ability to act in the best interests of plan participants. ## Duty to Diversify Plan Investments Another important responsibility of 401(k) plan fiduciaries is to diversify plan investments. This means that they must invest the plan’s assets in a way that minimizes the risk of large losses, while also ensuring that the plan’s investments are well-diversified across different asset classes. For example, a well-diversified 401(k) plan might include investments in stocks and bonds, eal estate. Diversifying plan investments is important because it helps to reduce the risk of large losses in the event that one particular asset class performs poorly. This, in turn, helps to ensure that plan participants have a more stable and secure retirement. ## Duty to Monitor Plan Investments & Custodians In addition to acting prudently and diversifying plan investments, 401(k) plan fiduciaries also have a duty to monitor plan investments. This means that they must periodically review the plan’s investments to ensure that they are still in line with the plan’s investment objectives and that they continue to be in the best interests of plan participants. This duty to monitor plan investments also includes the responsibility to remove underperforming investments and replace them with more suitable options. For example, if a particular investment has underperformed for an extended period of time, the fiduciary might consider removing it from the plan and replacing it with a more suitable option. They must also do a periodic review of the plan itself, including all components of the plan such as the custodian or vendor and their underlying services, costs and changes to their own public disclosures. Do you know, for instance, if your 401(k) custodian has recently had a lawsuit or a regulatory event? Acting as your participants’ fiduciary to perform due diligence on the custodian of their retirement assets is a crucial function many employers many not feel qualified to do. A fiduciary plan advisor does this work on your behalf. ## Duty to Provide Information to Plan Participants Finally, 401(k) plan fiduciaries must provide regular, accurate and timely information and disclosures to both plan participants and regulating government agencies on a recurring basis. Again, this is a function that plan sponsors can undertake on their own if they have the trained personnel to do so, but it is often best left to a plan advisor and administrator to ensure compliance with the various (and changing) laws and regulations. Plan sponsors are also expected to provide their participants with educational opportunities to learn more about money management concepts and investing basics. This is most often performed by a plan advisor, and for good reason: the more a company involves itself in the financial lives of their employees, the more fiduciary responsibilities they legally assume. ## The best solution for 401(k) plan governance is a professional partnership with a fiduciary plan advisor Many employers, eager to provide a retirement plan as part of their benefits package to attract and retain their talented teams, find that working closely with a trusted team of experts to create, review, implement and administer the company’s 401(k) plan is not only a matter of efficiency, it’s often a matter of lowered civil and legal liability that makes financial sense for the company. If your company currently has a 401(k) that has not been reviewed in the past 3 or so years, or if you are unhappy with your current plan or plan advisor, or if you’ve never had a [401(k), SEP or SIMPLE IRA, or other retirement plans for your team (and there are a lot to choose from](https://nvestadvisors.com/2023/01/11/your-employees-want-and-need-a-retirement-plan-heres-how/)), partnering with an experienced, fully fiduciary, fee-only plan advisor may be in your best interest. nVest Advisors stands ready to partner with and support your company’s ERISA (and non-ERISA) retirement program. The first step is a due diligence meeting where we can both gather the information we need to make an informed decision on the options you have (and how previous plan choices are working for your company). If your company would benefit from this free fact-finding consultation, please don’t hesitate to reach out to us. ### Give us a call at 888-852-0702 today, or **[schedule a phone or video appointment now](https://calendly.com/nvestadvisors/60sponsor).** **Categories:** Business Stories, Client News, Client Service, Investing General, Mailchimp, Media, Retirement, Small Business **Tags:** 401k, 403b, 457, advisor, agent, annuities, annuity, bonds, commissions, Department of Labor, DOL, Employer-Sponsored Plan, ERISA, fees, fiduciary, fiduciary rule, insurance, investment, investments, mutual funds, non-ERISA, nVest, rep, RIA, SEC, stocks --- ### [Weekly Economic Update: 02-06-2023](https://nvestadvisors.com/weekly-economic-update-02-06-2023/) **Published:** February 6, 2023 **Author:** Jeremy Torgerson **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ![](https://nvestadvisors.com/wp-content/uploads/2023/02/Copy-of-Facebook-Posts-12-300x251.png "Copy of facebook posts 12 nvest advisors") **Good morning and happy Monday!** This market reacted to a huge mixed bag of economic data last week, with a big mid-week rally followed by significant declines on Friday. Today’s market appears to be opening lower, also, as investors digest not only the new data received last week, but the logical course of that data through the economy. There is increasing talk of a “soft landing” or even an outright avoidance of a recession this year by many analysts. We wholeheartedly disagree and believe this has much to do with recency bias (the cognitive bias that makes us think the most recent number in isolation is somehow more important or impactful than the previous numbers, or the entire group of numbers taken in total). The economy is a massive collection of individual actions and reactions and events already in motion. It cannot turn on a dime, so often when we see new numbers that fall far outside of the previous trend, we cannot assume there’s been a change in direction unless we can see that number verified with follow-up readings. Many times, numbers showing up far outside the trendline, good or bad, are the result of one-off events, or outright human error that is later corrected. ## At-a-Glance: - **U.S. Labor Market in January was impossibly strong.** - **The Fed raises rates and Wall Street parses every word of Chairman Powell** - **US Housing and Auto Sales picked up slightly as interest rates cooled briefly** - **Is the Market wrong about the economy?** ## U.S. Labor Market numbers came in (impossibly) strong. Perhaps the biggest surprise of the week, and one that frankly doesn’t seem accurate (and is definitely not going to repeat or sustain) is that the U.S. reported a whopping 517,000 jobs in January, outpacing the long-term trend by more than 300% month-over-month. There is much to question, (and even to be skeptical) about this number. Hiring trends are actually trending down in nearly every other measurement, like the manufacturing and services indexes released a week earlier: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Job-cuts-exceeded-100k-in-January2302030440.png "Us job cuts exceeded 100k in january2302030440 nvest advisors") [… and layoff announcements are continuing to grow.](https://intellizence.com/insights/layoff-downsizing/major-companies-that-announced-mass-layoffs/) **It is highly likely that this number will be revised downward in the coming months**, just like what happened a few weeks ago to jobs figures from the summer of 2022. In that case, [jobs were over-reported by over 1,000,000 in just three months](https://nypost.com/2022/12/22/biden-administration-overstated-q2-job-growth-by-1-million-philadelphia-fed/). What looked initially like strong hiring during the summer of 2022 turned out to in fact, be flat to slightly down. Assuming this figure is correct, however, what does it tell us about the economy? It appears that a huge number of people might have picked up a second, part-time job immediately after the holidays. In any event, this report gives further fuel for the Federal Reserve to do more to combat inflation, as it at least appears that the jobs market remains wildly robust. #### What this means to you: We frankly don’t believe this most recent jobs number. It is so far out of line with the longstanding trend that we believe it will be found to need significant revision in coming months. In any event, Wall Street is responding two ways: one, by acknowledging that a super-strong jobs report will likely allow the Federal Reserve to hold interest rates higher for longer than the market thought was likely (a negative event), but also that the economy seems to be handling the Fed’s actions remarkably well so far (a positive event). The jury is definitely out on how much credence to give this recent jobs number. We’re largely ignoring it in light of other jobs data that shows the trend in employment is decidedly lower. ## The Fed raises rates and Wall Street parses every word of Chairman Powell. The Federal Reserve, as expected, raised the nation’s base rate (called the Fed Funds Rate) by 0.25% (25 basis points) last Wednesday. This was a largely anticipated move, and Wall Street was not taken by surprise. ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-FOMC2302020536.png "Us fomc2302020536 nvest advisors") The current rate is now considered by many to finally be sufficiently restrictive on economic growth to begin to bring inflation under control. The new target Fed Funds rate is 4.5%-4.75%, which finally crept slightly above the current core inflation rate: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-FOMC-v-PCE2302020536.png "Us fomc v pce2302020536 nvest advisors") There is no direct correlation between interest rates and inflation (meaning, having a Fed Funds rate higher than inflation doesn’t automatically mean that inflation will be tamed), but Wall Street seems pleased with the trending direction of both implying better control over inflationary pressures. Time will tell. However, we do not believe there is sufficient evidence to prove that inflation will just continue downward unabated; with the recent re-opening of China and talk by OPEC of further reducing oil production, we think this is a premature assumption. Chairman Powell stressed this concern himself in his comments last week, in which he indicated that they were pleased with the current trends in inflation and that employment seems to remain strong, he warned that the Fed still has much work to do, and that pausing rate hikes, or lowering them too soon, could see inflation roar back with a vengeance like it did repeatedly during the 1970s and early 1980s. Powell stressed that they anticipate further rate hikes (plural) and that rates would stay high for as long as it took to fully contain inflationary pressures. But Wall Street, eager to find any possible hint of good news to spur a rally, focused much more on the “progress is good so far” comments of the Fed Chairman while largely ignoring the “more work to do” comments, of which there were far more. We believe this caused a couple of days when investors added to the unsustainable market rally we saw in January, only to have the market reverse on Friday. #### What this means to you: Economic downturns don’t travel in a straight line toward a predictable bottom. There are always market and economic forces fighting back against a recession. No one wants a business to struggle or for a family to lose a source of income in a layoff, so we instinctively look for any reasonable hint of optimism, and respond disproportionately to that. We do not believe the current market rally is sustainable in the face of a deteriorating economy, and that these recent market movements, particularly in the technology and real estate sectors, are the slightest bit sustainable. ## U.S. housing and auto sales enjoyed a brief respite as interest rates cooled temporarily. Part of the market’s sudden surge in optimism came because mortgage interest rates dropped slightly in January (a seasonal norm): source: [tradingeconomics.com](https://tradingeconomics.com/united-states/mortgage-rate) And it resulted in a slight uptick in house sales and refinances. Also, auto sales climbed slightly as the prices on new and used cars continue to decline from historical highs in 2021 and 2022. Interest rates on mortgages did decline slightly in January, but that trend has already reversed this week, rising today to just below 7% here in our home state of Colorado: ![](https://nvestadvisors.com/wp-content/uploads/2023/02/mtgrates.png "Mtgrates nvest advisors") Even with the recent rate drop, mortgage rates are still more than double what they were a year ago, so we see no change in our forecast of a serious and prolonged decline in the housing sector (and those sectors that support it, such as financials, lumber, trade labor, etc.). #### What this means for you: We believe interest rates on major household purchases (home and autos) will continue to weigh on the prices of both over the coming months. This makes it a bad time to sell a home but a very good opportunity to buy one in the coming 12-24 months. Auto prices should continue to decline over the next months, as well. ## Is the market wrong about the economy? One of the biggest challenges in our business is reading what are often backward-looking economic results, and then projecting the consequences of those numbers forward. It’s one of the reasons you’ve seen your 401k slam up and down since last year: investors and analysts simply don’t know what is coming with any degree of certainty, and so are responding to each economic report in real-time. Interestingly, because Wall Street doesn’t like the Federal Reserve turning off the “easy money” faucet by raising rates and reducing the money supply (absolutely crucial things they must do to control the crushing price inflation so many families are struggling with right now), it seems that any economic news that looks like the economy is slowing is actually making Wall Street respond positively and sends stocks soaring, and anything that shows the economy is weathering the storm okay is sending the stock market down. So right now, for most of Wall Street, [bad news is actually “good news”, and good news is being treated as “bad news”.](https://www.morganstanley.com/ideas/economic-slowdown-2023-investor-sentiment) In my cynical view, and because nVest Advisors exists to support regular people on Main Street and not rich guys on Wall Street, this seems like Wall Street is actually betting against you and your family, and wants to see more economic pain quicker, only because they want the Federal Reserve to turn their cheap money supplies back on sooner. As a result, Wall Street seems to be looking for literally any opportunity to second-guess the Federal Reserve’s resolve to restore inflation to its 2% target rate, and is celebrating anytime they see signs that things are bad for your family. Surely, they theorize, seeing pain on Main Street will make the Federal Reserve lose its nerve and “pivot” from its current restrictive policies sooner than later. We think that is a patently stupid approach to investment strategy for our clients. Your life savings is not a game, and so we’re not going to gamble with the rest of the day traders and CNBC gurus ([most of whom have always been profoundly and repeatedly wrong in their guesses](https://gizmodo.com/wall-street-analysts-are-embarrassingly-bad-at-predicti-1821960754)). We’re going to let the economy, the ultimate force of gravity in the investment world, dictate our strategy. Thankfully, the economy has no ego, no political agenda, and no reason to lie to us. Economic numbers just *are*. Also, there is a longstanding problem of excessive optimism every time a country goes into recession. Analysts have routinely overestimated the economic strength of the country whenever hardship strikes. ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Forecasters-tend-to-overestimate-US-economic-growth-in-recessions2302030440.png "Us forecasters tend to overestimate us economic growth in recessions2302030440 nvest advisors") This is largely a problem of confirmation bias: we sincerely want to believe things are better than they are, and so we tend to assume the best in most situations. This is obviously more healthy long-term than going through life expecting the worst all the time, but it creates blind spots that people who manage the money of other people cannot afford to go unchallenged. For example, Wall Street people are in a fairly protective bubble of their peers most of the time, so while the advisors in the room might be feeling more optimistic, the survey of consumers themselves (that’s your family and mine) says things are not going well, right now, or our expectations for the next year. ![](https://nvestadvisors.com/wp-content/uploads/2023/02/US-Conf-cons-conf2302010538-1.png "Us conf cons conf2302010538 1 nvest advisors") And since our spending accounts for more than 70% of America’s total economy, if we don’t feel okay spending money, we will bring about the very recession we are worried about. Wall Street believes that the economy can “walk between the raindrops” when economic reality has caught our money experts off-guard over and over (and over)again. We’re not alone in this opinion. In fact, [a handful of financial and media sources are trying to sound the same alarm bells we are](https://www.npr.org/2023/02/04/1152516637/wall-street-stocks-rally-federal-reserve-inflation-recession). Ultimately, at the end of the day, all we can control are the investment choices we make for our clients’ models, and let the rest of the industry chatter, posture, strut around proudly for a few days at a time, and then alternately take their frequent Walks of Shame. To us, your investment success is a long-term endeavor, and reducing your losses is the first thing we are focused on as our economy grinds down into a recession. ## Bottom Line: We firmly believe the United States and much of the rest of the developed world will endure a recession in 2023 and we reaffirm that this week. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We do believe this week is consequential to the stock and bond markets. We believe the recent rally has fully run its course, and there will soon be a strong shift from stocks and into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free, is no longer impossible. Once there is consensus that either the economy is now earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Thursday, we will get updated news on the current inflation rate in the U.S.** - **Friday, we will learn the new consumer sentiment numbers from the University of Michigan.** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Advisor warning signs every investor should take seriously.](https://nvestadvisors.com/investors-should-demand-transparency-and-verify-before-ever-handing-over-money/) **Published:** February 3, 2023 **Author:** nVest Advisors **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2019/02/Copy-of-Instagram-Posts-3-400x400.png "Copy of instagram posts 3 nvest advisors")In the fifteen years that I’ve been an investment and financial advisor, I’ve had the misfortune of seeing a lot of unethical and even illegal activity up close. It grieves me that our industry seems to, like many others, attract people to it who come to do harm, let alone fail to act in a client’s best interests. This is far worse on social media, with completely unregistered and sometimes even anonymous (and therefore, unaccountable) people spewing the most outrageous claims and giving absolutely horrific investment advice. Although we decided as a firm to step into that arena to try to call these people out and try to correct all of this misinformation, the old adage remains your best line of defense: #### *Caveat emptor. Let the buyer beware.* Inside the industry itself, there is a flood of continual papers and publications from the SEC and state regulators that are full of stories about investors swindled out of money not only by unscrupulous characters within our industry but also by outright imposters. [For example, here is the Texas State Securities Board 2018 Report on the disciplinary actions it engaged in just that single year](https://www.ssb.texas.gov/sites/default/files/YEAR_IN_ENF_2018_post.pdf). But Texas is not alone; every regulatory agency in the country has public records and lists of prosecuted illegal activity, disciplinary actions, and license information (or lack thereof) that you, as a consumer, need to know about. **At nVest Advisors, we have a policy of “aggressive honesty”.** It doesn’t just mean being transparent in a regulatory sense, although that’s a significant part of it. As a legal fiduciary and fee-only firm, we are required to disclose abundant information to our clients about our firm, our practices, our fees, and any disciplinary, legal, civil, or financial issues we’ve had in the past (spoiler alert: there aren’t any). But aggressive honesty means more than just complying with required disclosures. It’s about respecting our clients enough to always tell you what you need to hear, not just what you want to hear. It’s about using simple, plain-language descriptions of what we do and how we do it, in our interactions with you, rather than filling the pages of our agreements and our client meetings with industry and legal jargon. It’s about keeping your planning and investing as simple, straightforward, and conflict-free as humanly possible. And it’s about doing only what’s right, even if the right thing to do is not even bringing you on as a client. I write this to give you a heads-up that even in otherwise generally reputable firms, there is a continual conflict between the constant pressure on agents and advisors to produce more and more revenue for the firm, and the regulators trying to keep them honest on your behalf. I was personally coached early in my career that you sometimes have to sell a client what they *want* before you can sell them what they *need,* but also coached that the way to boost my production (and make my job more secure), was to keep tinkering with the accounts I had already set up, for the added commissions. In that environment, the sale was king, and getting the account was all that mattered. Doing the right thing was not so admired if it interfered with production quotas. But I digress. We’ve written about [sketchy sales practices before](https://nvestadvisors.com/beware-these-sketchy-sales-practices/), and [warned you about the dangers of going blindly into an investment or financial situation](https://nvestadvisors.com/this-is-why-we-dont-play-with-your-money/) without due diligence and a healthy bit of skepticism. But because these kinds of things keep coming up, let me go over a short list of things to be watchful for, things that should make you run away, and things that just can’t be true. ### The “Life-Insurance-Is-My-Bank” / “All-Up, No-Down” Fixed Annuity Salespitch One that always sticks in my craw, and I see it all the time, is an insurance salesperson claiming to have a product that allows you to “bank on yourself”, or who claims to have a product that gives you “market returns with no risk”. What they’re peddling is either an expensive life insurance policy with a cash value component (and lots and lots of built-in fees and commissions), or an insurance product called an Equity Indexed Annuity. I could go into great detail about how much nonsense insurance agents are allowed to get away with. So much of it is the sales training and lack of real regulatory oversight the insurance industry enjoys. Insurance agents are trained to portray their company’s product line as a fit for every conceivable financial woe – the “pill for every ill”. Yet I’ve also never seen any single financial product more prone to misrepresentation, sales fraud, outright lies, and subtle lies of omission than insurance products. Bar none, unethical insurance agents are #1 on my industry-peer sh\*t list. Although there are of course perfectly valid reasons to include these kinds of products in some client portfolios, they are so egregiously misrepresented by the salesperson, so often, you should run away from anyone selling one – especially if they have a creative reason to buy it that is totally unrelated to the real nature of the product. Life insurance should be bought to protect the income of the person who is insured, create an instant estate, help manage tax burdens on trust funds and larger family holdings, etc. Annuities are bought to exchange (for a hefty fee) the risk of running out of money at a later date for a guaranteed amount of monthly money from the insurance company. Neither product is a replacement for banks, investments, a financial plan, or tax-qualified retirement savings. ### Anything, and I mean ANYTHING, “Crypto” I’ll probably make a lot of younger investors scoff with this, but the last thing you should ever invest in is something you or your advisor do not fully understand. I’ve been in the business for more than a decade, and this is my day job, and I cannot still grasp all the nuances of what makes a cryptocurrency a viable investment asset. You hear a lot of buzzwords about blockchains and coins and mining, but it’s all nebulous. If you ask simple questions such as what a cryptocoin’s utility is in a portfolio, or how to assess the current fair market value of a coin, you’re basically called a “boomer” by crypto enthusiasts and never get an answer. Although crypto markets are starting to fall under government scrutiny and regulation after a full year of collapsing Ponzi schemes, defunct exchanges, and ruined lives, it is still very much the “wild west” in which no one should risk vital savings. And let’s be honest: any investment that has to be pressure-sold and hyped endlessly online by exchanges, fervent followers, and even bot accounts, is giving off enormous red flags that something is very wrong. Either an investment has inherent value on its own, or it has to be hyped up to have value. One will sustain, the other collapses the minute there is no interest anymore. We have consistently said that taken in totality, the crypto space is still a horrible, horrible idea for money you can’t afford to lose. One of the problems we have in this virtual world is that “building a personal brand” has become a full-time vocation for people. Many companies exist for no other reason than to show the world that they exist. Anyone with a computer can have a beautiful, professional website online within an hour. Cropped and filtered photos litter our Facebook and Instagram feeds, and people brag about those fleeting “greatest hits” moments in their lives, often hiding real problems underneath the facade. And everyone on the planet is in the game of being a “coach” showing you their amazing system that will solve whatever problems we think we have. The same is true of many investment opportunities. Sometimes a great-looking company is just a couple of guys with a website, working from a Starbucks. One recent example of a company run completely wrong happened just this week when a [Canadian crypto-currency “bank” declared bankruptcy because their CEO died unexpectedly and no one knows the password to his personal laptop, where the “bank” was actually run from](https://abcnews.go.com/Business/company-loses-190-million-cryptocurrency-ceo-dies-sole/story?id=60851760). Investors are out $190 MILLION because the “crypto-bro” didn’t leave his password anywhere. [(There’s even suspicion that this guy faked his death and took off with the money.)](https://futurism.com/growing-suspicion-crypto-ceo-faked-death) Cryptocurrencies are, in this firm’s official opinion, a fad at best and a scam at worst. None of our clients are invested in any cryptocurrency as part of an account we manage, and we don’t see that changing any time soon. If we cannot understand every little detail of the investment, then there is simply no way we can recommend it to you other than to gamble with a small amount of play money that you can lose 100% of. **The bottom line is: if you don’t completely understand an investment, including its risks, possible returns, liquidity, and who regulates it (and who is watching the watchers), do not, under any circumstances, invest in it.** ### The “I can always beat the market” braggart There have been so many studies done on this, I won’t belabor this point too much, but suffice it to say, [not a single investment manager has ever outperformed the broad market over an extended period of time](http://www.aei.org/publication/more-evidence-that-its-very-hard-to-beat-the-market-over-time-95-of-financial-professionals-cant-do-it/). They may get lucky for a few months or years at a time, and then often use that in advertisements (which will usually run afoul of SEC and FINRA rules), but none of them have ever been able to beat the market for the length of time most people invest. And when you add in high management and marketing fees of most mutual funds, there is no way to beat an index fund long-term. [Read here why we don’t advertise investment returns.](https://nvestadvisors.com/why-we-dont-advertise-investment-performance/) If you’ve got a salesperson touting some kind of inside market knowledge, a secret trading formula, a preposterously amazing track record of stock-picking, or other such nonsense, be *extremely* cautious. You’ve either got a runaway ego cherry-picking a few successes out of a huge pile of losses, or a con artist. It’s as simple as that. ### Unlisted, non-traded, or other un-watchable investment “opportunities” There may be times when an advisor recommends something called an “unlisted” or “non-traded” investment option to you. Be very cautious if you do. Obviously most of them are not scams, but there are always reasons they are not traded on the open markets. Many, for instance, have specific time periods where your money cannot be withdrawn. Others have exorbitant fees if you do so. And most pay your advisor far more commission than a similar investment traded on an open exchange. If you read the Texas report linked above, most of the 2018 enforcement actions involved people pitching sketchy, unverifiable, “ground floor” types of investments. I personally knew an advisor in Colorado who, years after we lost contact, got caught offering bonds in his own investment firm promising 24% return, and ended up going to prison for four years for running a Ponzi scheme and wire fraud (and this was after serious regulatory discipline a few years before in which he was misappropriating client funds to hide investment losses). If even I was totally caught off-guard by what this man had been doing, how much chance did his clients have to see through his facade? What they should have caught, however, was an impossibly high return being promised on their money. Even if an investment like this isn’t a scam, and most aren’t, there is an inherent danger in investing in products that require you to lose control of your money for any length of time (called liquidity risk), or in investments that aren’t tracked by outside analysts or traded on public exchanges where information about those investments and their performance is required by law. We’d never use anything like that for a client portfolio under our care. Don’t let another advisor do that to you, either. ### Anyone who asks you to write the check to them There ARE firms who legitimately and completely legally take what is called “custody” of client money, but those firms have very strict regulations for accountability and transparency that have to be followed. Honestly, though, very few investors need a firm or advisor who takes physical custody of your assets. Even legitimate ones can get into trouble, but nearly every Ponzi scheme I’ve ever studied involved the client personally signing over money to the con artist (Bernie Madoff comes immediately to mind). A best practice would be to **never do business with anyone who ever asks you to put your money in their name**. At nVest Advisors, all of our client money is held outside our firm with third-party custodians such as TD Ameritrade. Your account statements will come from them, not from us, so you have the assurance of the third-party of what your account value is and what actually is going on while the money is there. ## Other warning signs Even when an advisor or sales rep doesn’t cross the line overtly into unethical or illegal behavior, there are a lot of warning signs of possible future problems, and even those can usually be spotted before you sign on as a client: - **An advisor with a personal history of financial problems**, for instance, is an advisor who generally isn’t practicing what they preach. Or worse, they are advisors who, while generally ethical, can have lapses if their own personal financial situation gets too dire. (Besides, why would you entrust your money to someone who obviously can’t manage their own?) - **Reps with previously dissatisfied customers or disciplinary action by their employers are also big, waving red flags.** Yes, sometimes bad things happen to good people, and sometimes that customer complaint was frivolous or vindictive, but advisors with complaints or discipline on their record, especially repeat offenders, are serious question marks. - **Advisors who do lots of job-hopping.** Working in the industry for 20 years might sound impressive, but having 15-20 different jobs at different companies is a definite problem. There is definitely a way of having a career that is 20 years long but only “an inch deep”. The financial services industry loves and caters to the employees who produce and have not caused HR problems. They also generally make it very difficult for an advisor who is producing to leave, even if the advisor wants to. When you see an advisor jumping from job to job, company to company, there’s almost always something wrong: either they are failing to meet production quotas, or have been in trouble in ways that don’t legally rise to the level that the employer has to disclose publicly. - **Advisors who want to play with your money instead of creating a sound, reason-driven portfolio strategy.** There shouldn’t be “dabbling” with money you can’t afford to lose. If you have an advisor who is always eager to delve into IPOs or is always talking about the next “hot stock”, please be careful. I’ve seen many more advisors who talk a great game, than those who actually deliver on it. - **Any advisor who cannot explain their strategy or investment recommendations simply and easily.** This means they either don’t understand the product or fund well themselves or else they really don’t want to give you the details. - **An advisor who later becomes really hard to get in contact with.** Especially if they earn their pay through commissions, many times you’ll see the advisor a lot as you first become a client, and then almost never afterward. Except, of course, when they call and want you to buy something different a year or two later (that’s exactly what my first job suggested that we do). If you notice, especially in tough markets like the past year, that your advisor is not actively reaching out to calm your concerns, or worse, is actually not returning your calls, it’s time to find someone new. ### **The good news is, you can (and should) check for problems before you invest.** An advisor’s or agent’s professional history and that of their firm are always available online. **If the advisor is able to work with actual investments, they will be securities licensed and will have a public record, complete with 10 years of prior employment history, financial and disciplinary warnings, and more, on two different websites.** - If they work in any capacity on commission, they will be found at the **[FINRA Broker Check website.](https://brokercheck.finra.org/)** - If they work in any capacity as a fee-only advisor, they will be found at the **[SEC’s IARD Lookup site.](https://www.adviserinfo.sec.gov/IAPD/default.aspx)** - ***If they claim to be an advisor but they can’t be found in either database, then they are either only an insurance agent or are scamming you.*** For full disclosure and to give you an example, **[here’s my own file at FINRA](https://brokercheck.finra.org/individual/summary/5546264)** (I had both commission and fee capability until I gave up the commission license in 2015, which is why it says “Previously Registered Broker” and current Investment Advisor), and **[my SEC IARD file](https://www.adviserinfo.sec.gov/IAPD/IAPDIndvlSummary.aspx?INDVL_PK=5546264)** (where the most current info is). For registered investment advisor firms, you also always have the right to read our disclosure brochures, which our clients get at least once per year. [Our firm’s most current disclosures are always located on our website for your inspection.](https://nvestadvisors.com/general-disclosures/) I’m also insurance licensed in Texas and Colorado, but you can only see that info by going to each state’s Department or Division of Insurance and finding the Agent Lookup in each state. Also, insurance agents’ disciplinary actions are seldom linked to their profile page – you may have to search a separate database for “Disciplinary Actions” on the state websites. ## In Summary This post may come across as either cynical or a slap at other advisors, and that’s definitely not my intention. The vast majority of us in this industry are honest and most genuinely want to do right by their clients. While I’d argue that *wanting* to do right and ***voluntarily requiring*** yourself to do right by becoming a legal fiduciary are two completely different levels of commitment, I’ll grant that most advisors are not wanting to con you or rip you off. But I’d also say that you should never blindly trust any of us. Even generally ethical advisors are human beings, and can mess up. The best thing you can do is spend the time to understand your investing needs, work with an advisor to create your plan, and stay an active and alert (and slightly skeptical) participant in your own financial affairs. [I wrote a blog post a year or so ago on the 9 ways you can be a great client](https://nvestadvisors.com/9-ways-to-be-a-great-client/) – that really goes a long way to not only keeping alert about your advisor and your investments, but makes you a great partner for any advisor to work with. Is it time for a fresh start? If you are currently with an advisor who meets some of the cautionary criteria we’ve mentioned here, or even if the past year’s market turmoil seems to have left your advisor speechless and without any answers for you, it may be time to look at switching. We do a lot of things differently than our industry contemporaries, and would love the opportunity to sit with you, listen to your concerns and needs, and determine together whether we’d be a good fit for you. If we decide to move forward, we’ll go at your pace. If not, we’ll part ways amicably and you’ll have some additional insight and a fresh set of eyes on what’s happening with your investments. **[If you do need help, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with the right clients. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ###### *The views and opinions expressed in this article are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Client Service, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Investing General, LifeCycle, Mailchimp, Media **Tags:** advisor, agent, background, Bitcoin, colorado, criminal, Crypto, finance, financial, hoax, insurance, invest, investment, nVest, planner, ponzi, regulator, regulatory, rules, scam, texas --- ### [5 challenges for your small business during a recession](https://nvestadvisors.com/5-ways-small-business-survive-recessuion/) **Published:** February 2, 2023 **Author:** nVest Advisors **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2023/02/Copy-of-Facebook-Posts-1-300x251.png "Copy of facebook posts 1 nvest advisors")A recession is a period of economic decline characterized by a decrease in gross domestic product (GDP), increased unemployment, and a decline in consumer spending. Recessions can be caused by a variety of factors, including natural disasters, economic mismanagement, and shifts in global economic conditions. Small businesses, in particular, are often particularly vulnerable to the effects of a recession, as they often lack the resources and stability of larger companies. In this article, we will explore some of the key challenges facing small businesses during a recession and offer suggestions for how they can overcome these challenges. ## Decreased consumer spending. One of the primary effects of a recession is a decline in consumer spending. As people become more uncertain about the future and their own financial stability, they are less likely to spend money on non-essential items, such as dining out, entertainment, and luxury goods. This decline in consumer spending can have a significant impact on small businesses, as they often rely on consumer spending for the majority of their revenue. To overcome this challenge, small businesses must find ways to attract and retain customers, such as offering discounts, promotions, and special deals. Additionally, small businesses may need to pivot their focus to more essential goods and services that are less affected by changes in consumer spending. ## Access to capital. Another significant challenge facing small businesses during a recession is access to capital. As banks and other lending institutions become more cautious in their lending practices, it can become more difficult for small businesses to secure the financing they need to grow and expand. To overcome this challenge, small businesses must look for alternative sources of financing, such as crowdfunding, grants, and venture capital. Additionally, they may need to focus on improving their financial management practices, such as reducing expenses, increasing efficiency, and maximizing profits, in order to make themselves more attractive to potential lenders. ## Increased competition. During a recession, many businesses struggle, and some may even go out of business. As a result, the market becomes more competitive, as remaining businesses compete for a smaller pool of customers. To overcome this challenge, small businesses must find ways to differentiate themselves from their competitors, such as offering unique products or services, providing excellent customer service, or leveraging technology to streamline their operations. Additionally, small businesses may need to focus on building strong relationships with their customers, suppliers, and other stakeholders in order to create a loyal customer base and establish a strong reputation in the market. ## Hiring and retaining talent. One of the biggest challenges facing small businesses during a recession is hiring and retaining talented employees. With increased unemployment, there is more competition for talented workers, and small businesses may struggle to attract and retain the best employees. To overcome this challenge, small businesses must focus on creating a positive work environment that encourages employee engagement and fosters a strong sense of community. Additionally, they may need to offer competitive salaries and benefits, as well as opportunities for professional development and career advancement. ## Staying current with technology. Finally, one of the biggest challenges facing small businesses during a recession is staying current with technology. As technology continues to evolve, small businesses must keep pace in order to remain competitive and meet the needs of their customers. To overcome this challenge, small businesses must invest in training and development programs to ensure that their employees have the skills they need to effectively use new technology. Additionally, they may need to seek out partnerships and collaborations with technology companies and experts in order to stay up-to-date with the latest trends and innovations. ## Conclusion Recessions can be challenging for small businesses, as they often lack the resources and stability of larger companies. However, by focusing on their customers, streamlining their operations, and leveraging technology, small businesses can successfully weather the economic storm and emerge leaner, more competitive, and ready to capture more market share. Recessions are normal parts of the economic cycle, and every small business should always have contingency plans ready in the event of both unexpected and cyclical changes in the business environment. At nVest Advisors, we help small businesses like yours manage your retirement, HSA and other asset-linked benefits plans for the benefit of your employees. But we also help small business owners manage the complexities of maximizing the utility of both your personal and business assets to make you and your company financially secure for years to come. If it’s time for a fresh start with a new advisor, or if you’ve never worked with an advisor before, we’re happy to discuss what we can do for both your personal and your business needs. Feel free to schedule a complimentary consultation and audit today. Let’s see if we’ll align well with your personal and business goals. ### Give us a call at 888-852-0702 today, or **[schedule a phone or video appointment now](https://calendly.com/nvestadvisors/60sponsor).** **Categories:** Business Stories, Client News, Client Service, Investing General, Mailchimp, Media, Retirement, Small Business **Tags:** 401k, 403b, 457, advisor, agent, annuities, annuity, bonds, commissions, Department of Labor, DOL, Employer-Sponsored Plan, ERISA, fees, fiduciary, fiduciary rule, insurance, investment, investments, mutual funds, non-ERISA, nVest, rep, RIA, SEC, stocks --- ### [Weekly Economic Update: 01-30-23](https://nvestadvisors.com/weekly-economic-update-01-30-23/) **Published:** January 30, 2023 **Author:** Jeremy Torgerson **Content:** *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ![](https://nvestadvisors.com/wp-content/uploads/2023/01/Copy-of-Facebook-Posts-11-300x251.png "Copy of facebook posts 11 nvest advisors") **Good morning and happy Monday!** This week is a consequential one for the direction of the markets and may end up being a turning point into a sustained market downtrend. More on that below. Global markets are starting the week down on concerns that inflation is not contained. The Spanish CPI came in above consensus earlier today. The economy gave up mixed signs last week. First, GDP, wages, and home prices remain stubbornly strong, though were are signs of weakening in several places that we will highlight below. But manufacturing data in particular seems to indicate that the US manufacturing sector (basically anything that isn’t strictly a service business) is now solidly in contraction territory. We’re also seeing an uptick again in energy prices, particularly gasoline, which started this inflation spiral off in the first place back in early 2021. So we are cautious that inflation may in fact have bottomed for now and upward pressures may be mounting again. ## At-a-Glance: - **U.S. Manufacturing recession now seems obvious** - **What is the Beige Book and what is it telling us today?** - **Leading indicators have never contracted this much without a recession** - **An update on the jobs market** - **Housing is in free-fall.** - **What the heck is the Phillips Curve?** ## U.S. Manufacturing recession now seems obvious, and Services are weakening. Additional data from the Empire State and Philly Manufacturing and Service Indexes for December were released last week. Both now show a significant contraction in production output and workers’ hours, indicating that our manufacturing sector’s slowdown is sustained, and widespread. The New York Service Index also reported a sharp contraction. It will be telling when we see the other regions’ reports later this month if it is fully nationwide, or just restricted to the northeast for now. First, the Philly numbers: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Philly2301230432.png "Us philly2301230432 nvest advisors") Despite a slight uptick in new orders and output, both remain deeply in contraction. It is normal to see some “jagged” movements in these numbers, because an order placed on the last day of one month will be shown as output during the next. Also, we are finally seeing indication that in the Philly manufacturing region, the expected number of employees is dropping. Again this is totally expected: if your factory’s orders slow, there will be a lot of standing around by employees staffed for full capacity. So, sadly, hours and even jobs must be cut to reflect the slower output. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Philly-Expected-Empl2301230432.png "Us philly expected empl2301230432 nvest advisors") Interestingly, the New York Fed released the Services Business Activity report last week, as well. This shows the continuing decline in the services sector (basically any work that does not create a physical product for a store shelf): ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NY-Fed-Services2301230432.png "Us ny fed services2301230432 nvest advisors") Larger companies can typically weather these economic storms better than small ones, so one of the indicators we would be looking for to see how the economy is affecting smaller businesses (roughly 80% of the companies in our economy) is factory/store closures. That report was also received last week: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Business-closings2301240441.png "Us business closings2301240441 nvest advisors") The number of announced business closings jumped in December and January (and January was only reporting the first 22 days of the month). Sales Managers around the country are surveyed as part of this data collection, and their responses are reported separately. It is generally assumed that company sales managers have the best actual understanding of current business conditions, even before CEOs and other executives might know. So sales manager reports are often considered leading indicators (advance notice of what is coming). Sales managers are reporting declines in nearly every area now, which should start to show up in company earnings reports, stock prices, and later economic activity reports: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-SMI2301240441.png "Us smi2301240441 nvest advisors") #### What this means to you: Recessions generally mean reduced economic output and are typically felt broadly across most parts of our economy. You can have output declines that are specific to one sector of the economy (housing, for instance) but a recession is declared when total output in the U.S. declines. Reduced output sadly means that workers’ hours cannot be sustained at current levels. We would expect to now see a further reduction in the average weekly hours workers put in, followed by hiring freezes, then furloughs, and finally, if new orders for products remain low, layoffs and even business closures. We are now seeing all of these in parts of the country, and it is spreading. ## What is the Beige Book, and what is it telling us today? [The Beige Book is a summary of economic activity that is gathered through surveys with all of the Federal Reserve Banks in the country](https://www.federalreserve.gov/monetarypolicy/publications/beige-book-default.htm), combined and then reported once every six weeks (eight times a year). There are twelve Federal Reserve Bank districts in the country, so the reporting of the consolidated data in the Beige Book gives us a look at the entire country at a glance. Unlike regional reports like the Dallas, Philly, or Empire State reports we look at regularly, the Beige Book reports economic and financial activity for the entire country as a whole. The current Beige Book reports show a significant slowing of economic activity throughout 2022, which continued into January: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Beige-Book-activity-index2301230432.png "Us beige book activity index2301230432 nvest advisors") You can see areas of confirmed recession in the shaded gray areas going back to the 1970s in this chart. We are not yet at the point of a national recession, but we are definitely close to it. Graphs like this are why there is disagreement among economists about whether we are in a recession now, or if one is imminent (we believe it is), and how deep and prolonged it may be. No one can know for sure. Analysts love parsing the actual words of the Beige Book reports because they believe seeing the overall themes the Fed is talking about may give us insight into what actions the Fed may be taking next. Wall Street is begging for the Fed to stop raising interest rates, and the recent market rally is justified by market participants because they believe the Fed will have to lower rates sooner than they are now indicating. However, the Fed’s task is to reduce inflation to a target rate of 2% per year. That means the place heavy emphasis on prices and wages in their decision-making. If there is still upward pressure on either wagers or prices, there is consequent pressure on the other. So the Fed must break both with their rate hikes and quantitative tightening (basically, make money harder and more expensive to borrow). The Beige Book in January most definitely shows that prices inflation in particular, seems to be concerning the Fed: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Beige-Book-sentiment2301230432.png "Us beige book sentiment2301230432 nvest advisors") This coincides with our own analysis and previous warnings that inflationary pressures may not, in fact, be subsiding. We got a surprisingly high inflation indicator out of Spain just today, which again is confirming that we might have gotten a few months’ reprieve from high prices, but the rising cost of gasoline again here in the U.S. (along with significantly colder weather patterns recently) may push prices back up in the near-term as the government stopped draining our Strategic Oil Reserves. Remember that they must now replace all of that oil, effectively having to compete with consumers for oil in the coming months: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Gaso-MoM2301230432.png "Us gaso mom2301230432 nvest advisors") #### What this means to you: The Beige Book shows a slowing economy, but not one that is in a recession yet. The fact that prices remain a strong concern, coupled with rising energy prices again, and a rip-roaring stock market over the last month, and that jobs are hanging in there for now (more on that below) are more signs to the Fed that inflationary pressures are not reined in yet. We think this will mean the Fed will announce this week another rate increase of somewhere between 25bps and 50bps, and likely tell investors that their work is not yet done. This may move the markets lower, which the Fed would honestly like to see in the short term. Wild optimism on the basis of a Fed rate pause (or even a pivot) that has not happened and likely will not happen for months, is giving investors false hope. ## Leading indicators have never contracted this much without a recession. A group of business and economic experts called the Conference Board meets regularly, to survey the economic output of the country, and to compile a large number of what are known as leading indicators (advance best-guesses), into their own report. The Conference Board’s six-month projections have never contracted as much as they are now, without a recession later being declared. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Leading22301240441.png "Us leading22301240441 nvest advisors") We can see that this Leading Index has continued to slide each month for most of 2022, and so far in 2023: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Leading2301240441.png "Us leading2301240441 nvest advisors") This is relevant because the actual GDP figures are lagging indicators in the extreme and are terrible predictors of how things are actually doing at this exact moment. The most recent GDP estimates only look at October, November, and December of 2022. The one we are all familiar with right now indicates conditions in July, August, and September of 2022: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-GDP-Level22301270503.png "Us gdp level22301270503 nvest advisors") #### What this means to you: This report is one indication that the U.S. may in fact already be in recession, since recessions are based on negative GDP reports that are always LAG the economy by three months. But the leading indicators are showing activity six months from now, so our assumption here at nVest Advisors is that somewhere between now and mid-summer, the U.S. will finally be in a definite economic contraction. ## A look at the jobs environment. Jobs are a decidedly mixed bag right now in the United States. Some sectors of our economy are definitely shedding workers, like tech and finance right now. Yet other sectors showed strength in hiring in December: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Tech-layoffs-rotation2301240441.png "Us tech layoffs rotation2301240441 nvest advisors") Layoff announcements continue to climb, and manufacturing showed its first contraction in workers this month, so we expect to see the job market worsen in the coming months. But for now, the jobs data looks stagnant at worst, and the Federal Reserve will take that into account as they announce interest rate decisions this week. #### What this means for you: The job market IS slowing, but not very quickly. Layoff announcements are increasing, and we are seeing even business closures increase over the last two months. We expect to see a rapid acceleration of layoff announcements going into the summer months. If your job is at risk, it’s vital to have emergency savings built to offset any lost income until a new job can be obtained. ## Housing is in free-fall. One of the recurring themes of our economic analysis for months has been our conviction that the housing market will face a significant correction over the next few years. Record-high house prices due in large part to extremely inexpensive borrowing rates created a “bubble” in which even burned-out shells of homes in places like Denver were selling for $500,000. Obviously, to the consternation of your local realtor and mortgage broker, that kind of irrational nonsense was not sustainable. Now that interest rates have more than doubled since last year (though there has been a slight and temporary drop in rates for the past six weeks or so), home sales have fallen off a cliff. We have said many times that the housing industry is the most sensitive to interest rate changes, so any major economic repercussions to the Fed’s current policies would be seen first in housing. For us, housing is a good leading indicator to see what’s coming for the rest of the economy. New housing data last week shows the market for existing homes is in literal free-fall: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Existing-YoY2301230432.png "Us existing yoy2301230432 nvest advisors") When you compare monthly sales lines to previous years (so you can observe seasonal changes in the market), it’s still terrible: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Existing2301230432.png "Us existing2301230432 nvest advisors") Inventories of homes are starting to climb: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Existing-Inv-Months2301230432.png "Us existing inv months2301230432 nvest advisors") This means home sellers are finally seeing a drop in the final asking price of the homes that do go on the market: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Redfin-Price-v-Lisiting2301230432.png "Us redfin price v lisiting2301230432 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Exisitng-Price2301230432.png "Us exisitng price2301230432 nvest advisors") Not every seller is willing to take a price reduction on their property (yet), so this is starting to reduce the number of homes on the market in the first place: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Existing-Inv-Realtor-listings2301230432.png "Us existing inv realtor listings2301230432 nvest advisors") #### What this means for you: The next year or two will be a terrible time to sell a home. Motivated sellers, real estate investors dumping properties that have lost value or decide to get out of the vacation rental business as declines in bookings hit AirBnB and other short-term rentals due to a weakening economy (who vacations during a recession with high inflation?), and sadly, foreclosures due to coming job losses, all will combine to further weaken the prices of existing homes. Don’t let your realtor lie to you: the next year or two will be a ***terrible*** time to sell your home. However, for buyers, especially first-time buyers, get ready: this may be the best time in a generation to pick up your home at a much better market price. It will take a while for interest rates to come back down, so you’ll need to be able to afford a higher mortgage payment in the short-term, but once rates are back down, you can always refinance your home and save thousands. We actually watch the mortgage market for our clients and let you know when there are better rates and terms for your home loan, auto loan, student and personal loans, and more, and help you apply for and close on better loan options as they come. ## What the heck is the Phillips Curve? And finally, a macroeconomic lesson that gives us one more clue as to where our economy is headed. The Phillips Curve is a economic “rule” that says that inflation and unemployment have a stable but inverse (opposite) relationship with each other. Basically, whenever there is good economic growth in our economy, inflation is natural and should rise, and employment should go up with it. A Phillips Curve in every econ textbook looks something like this, courtesy of [WallStreeMoJo](https://www.wallstreetmojo.com/phillips-curve/): ![](https://nvestadvisors.com/wp-content/uploads/2023/01/Phillips-Curve.jpg "Phillips curve nvest advisors") When inflation is high, employment should follow. When inflation is low (or perhaps deflation is occurring), unemployment rises. The Phillips Curve indicates that high prices are good for company profits, which is good for workers. Typically, the curve has extremes at each end, and occasionally a reading will stray from the line when the relationship between inflation and employment isn’t working correctly (like times of stagflation – high prices and slow economic activity). The current Phillips Curve reached its absolute peak of this economic cycle, indicating that we have likely seen the very top of the economy for the near future. The curve will likely begin to swing down and to the right as GDP drops and unemployment rises. This indicator, while not flawless, will show the Federal Reserve that the economy has reached is zenith for this cycle and that it is inevitable that it will begin the swing back the othe way. This may give the Federal Reserve room to “pause” after this week’s rate hike, to see how much the economy will move back along this curve on its own after the last year of Fed action. Remember that a pause in rate hikes does not mean the Fed is ultimately finished, nor is it the famed “pivot” Wall Street is clamoring for. It just means that, like a pendulum, we’ve reached the outer limits of the up-swing, and now gravity must do its part. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI-The-Phillips-Curve-kink-is-back2301240441.png "Us cpi the phillips curve kink is back2301240441 nvest advisors") ## Bottom Line: We firmly believe the United States and much of the rest of the developed world will endure a recession in 2023 and we re-affirm that this week. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. We do believe this week is consequential to the stock and bond markets. We believe the recent rally has fully run its course, and there will soon be a strong shift from stocks and into safer investment options such as corporate and government bonds. With interest rates this high, getting a 5% or better yield, risk-free, is no longer impossible. Once there is consensus that either the economy is now earnestly deteriorating, or the Fed announces the end of rate hikes, the move from stocks to bonds will accelerate. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Thursday, we will get updated news on the current inflation rate in the U.S.** - **Friday, we will learn the new consumer sentiment numbers from the University of Michigan.** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, Conference Board, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, Leading Indicators, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, Phillips Curve, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [The DOL Fiduciary Rule: What it means to your company retirement plan.](https://nvestadvisors.com/the-dol-fiduciary-rule-1-2023/) **Published:** January 25, 2023 **Author:** nVest Advisors **Content:** > # Fiduciary > > *An individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another’s benefit.* > > (Source: http://legal-dictionary.thefreedictionary.com/fiduciary) ![](https://nvestadvisors.com/wp-content/uploads/2017/04/Copy-of-Facebook-Posts-10-300x251.png "Copy of facebook posts 10 nvest advisors")There’s a tremendous amount of debate in the financial industry about the US Department of Labor’s final Fiduciary Rule, but very few clients understand what’s changed, and what their advisor (whether they be a personal or ERISA-plan advisor) are required to disclose regarding the management of retirement plan assets. Here’s what the rule is about, in plain English, and why we fully support it (and also why we voluntarily chose to act as a Fiduciary for every client, from your first invested dollar): ## **What is this rule all about?** The Fiduciary Rule was originally proposed in the language od the [Dodd-Frank Act of 2010](http://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp). This act was placed into law following the deep economic and market recession that began in late 2007 and reached its bottom in March of 2009. It is intended to require the companies and agents who manage your retirement accounts to act as your fiduciary (that is, essentially, to manage your money with the same care and concern as if it were their own). ## **What specifically does the rule require?** The current Rule language is over 1,000 pages long, but it boils down to three basic requirements of any advisor, agent, or investment firm that manages retirement accounts in the U.S.: ### 1. To clearly and transparently tell you, the client, all of the costs and fees related to the investments or insurance products you buy in a retirement account. They need to do so in plain English and using actual dollars. For example, many retail mutual funds carry a variety of expenses, including front- or back-end (“surrender”) charges, annual management and trading costs, and marketing (12b-1) fees. All of these costs are paid for either directly by your account or are deducted from the investment returns of the fund. The total fund fees can be very low, like 0.10%, or very high, as much as 3% or more. Plus, many annuities have those same fund fees plus an additional 1.5% – 2.5% yearly in administrative charges. Over many years, those excessive fees can cost an investor tens if not hundreds of thousands of dollars. Let’s say you have $25,000 in your 401k, are contributing $1000 per month, and have 20 years until you retire. Let’s say your investment strategy earns an average of 7.5% per year before any fees. Without fees, your investment would grow to $665,251, but adding just 1% in fees (and therefore earning a net return of 6.5%), would cost you $83,419 of your potential return over 20 years. Having 2% total fees (dropping your net return to 5.5%) would cost you $154,708 in lost investment return! Of course, every investment has fees and expenses associated with it, but many times, those costs aren’t clearly explained to you. The new DOL Rule requires firms and agents to do so, in plain language and in actual dollars. ### 2) To clearly and in plain English inform you of any conflicts of interest your advisor or investment firm has in any of the products or investments they recommend that you buy. For example, many firms use their own [proprietary mutual funds](http://www.investopedia.com/articles/mutualfund/08/proprietary-mutual-funds.asp) in client accounts but also charge you up-front sales charges or investment advisory fees, effectively “double dipping” on your account fees. You may not know that your company is, in effect, earning money twice on the same investment products; the rule requires them to inform you. Another example is that your investment firm may have exclusive [revenue-sharing agreements](http://www.erisafiduciaryadministrators.com/index.php/revenue-sharing/) with some of the investments they recommend, or your advisor or agent may be compensated more for selling one product over another. Although there may be nothing wrong with the product or investment itself, the fact that the investment company or your advisor may make more money selling you one product over another is a conflict of interest, because there is a financial incentive to put clients into one product over another. The Department of Labor Fiduciary Rule does not force agents or companies to eliminate their conflicts of interest, but simply requires them to tell you about them before you buy what they are offering. ### 3) To always place your best interests ahead of theirs. This is, surprisingly, the part many insurance companies and investment firms have the biggest problem with. Right now, most insurance agents and investment representatives are paid a commission when you buy or sell an investment product. They are, essentially, paid only to *move* money. They are not paid to grow it or manage it per se, just when they can trigger a transaction of some sort. And because it’s simply a transaction they are being paid for, not ongoing service, the ethical standard these reps are held to is called the “[Suitability Standard](https://www.forbes.com/sites/peterlazaroff/2016/04/06/the-difference-between-fiduciary-and-suitability-standards/#38475c302556)“. This standard simply tells them that the product they sell you must be generally suitable to someone of your age, income, and risk tolerance. It does NOT have to be a product that actually serves your best interests, just that it’s typically okay for someone like you. The standard the DOL Rule implemented requires these same agents and firms to instead act as your fiduciary – your “stand-in” and advocate. The Fiduciary standard is a much higher ethical standard of care. It’s what we at nVest Advisors, and all other fee-only investment advisory firms volunteered to be held to as part of our business model. The insurance and investment world at large, however, is fighting it. They do not want to be fiduciaries. ***Think about that: in opposing the DOL Rule, to the point of lawsuits, the insurance and investment industries strenuously do not want to be forced to place your best interests ahead of their own.*** And why not? Well, because placing your interests first would mean companies would have to either be prepared to justify high-commission products or else use less expensive investments (like index funds or ETFs in retirement accounts instead of full-price mutual funds). Using lower-cost products hurts profits. It would also mean your agent would have to be able to prove that making frequent investment changes in your account – that generate new commissions for him or her – was always in your best interest. It would mean that your agent and their firm would have to treat your money like they do their own at all times – with great care and diligence, being sensitive to fees and expenses, and actively managing it for market conditions It’s just not something most of the industry is equipped to do. The entire investment and insurance industry was built on the commission-per-transaction model. Growing the account balance is nice, but it doesn’t help this month’s production quota. No, the only thing that keeps the commission rep in a job is finding another pile of money to move around. ## **Is my agent or advisor a fiduciary?** All firms that take a fee directly from you or your account to provide investment and financial planning are required by law to act as a fiduciaries. Agents or reps who sell you a product, like a stock or bond, mutual fund, insurance policy or annuity, are most likely NOT fiduciaries. A few reps carry both designations (these are called Hybrid Advisors in the industry), and can earn either a fee or a commission. When you aren’t sure, ask them. Ask if they and their firm are fiduciaries (not in spirit, but in the regulatory definition). If you get a hesitant or obscure answer, ask for it in writing. ## **Is nVest Advisors a fiduciary?** Yes, 100%. For every client, from your first dollar invested on your first day, we are full fiduciaries of our client accounts. ## **So, if my advisor earns a commission, they can’t be fiduciaries?** Not necessarily. There are many good reps and agents out there who work on commission, and who really do their best to put their client’s best interests first. What we’re saying is that if there are commissions involved, the industry regulators don’t yet *require* that they act as fiduciaries. The DOL Rule is attempting to correct that, at least with retirement accounts. We don’t take issue with individual reps or try to judge the hearts of any other advisors when we take a strong stand in favor of the fiduciary rule. We do take issue, however, with the financial services industry itself, which for generations has structured the products they sell you, and the compensation and production requirements of their agents, in ways that consistently benefit the industry over the investor. ## **Which companies are fighting this Rule?** Nearly all commission-based investment firms have come out against the changes proposed by the Fiduciary Rule, but only a few are trying to directly stop the rule’s implementation, for obvious reasons. No firm wants its name to be publicized as going to court to stop it from being forced to put its customer’s interests first. But these companies join and fund several associations and trade groups, like the US Chamber of Commerce, and t[hose umbrella groups are suing the Department of Labor in court to stop the new rule](http://www.investopedia.com/articles/financial-advisor/080116/lawsuits-aim-overturn-dols-fiduciary-rule.asp), and are lobbying Congress to pass laws either muting the rule or eliminating it entirely. We believe this is foolish. Times are changing. Investment costs are coming down, investors have many more options to put their money in (including many very low-cost automated services), and we have access to investment markets and research like never before in history. So the firms that stand opposed to the fiduciary rule may win a few battles along the way, but *they will lose the war*. The industry has been trending toward lower cost, more responsible and ethical management of client money for the past 20 or so years, and we believe the move toward a fiduciary standard for all investment accounts is not far away. The DOL Rule isn’t perfect; no human endeavor ever is. But it is a significant step in the right direction. ## **Where does the rule stand now?** The Department of Labor[ issued a final version of the rule just a few months ago](https://www.dol.gov/newsroom/releases/ebsa/ebsa20221122). It took over 5 years to implement due in large part to pressure coming from the investment and insurance industry lobbyists. ## **Will you keep me informed of this rule?** Absolutely! [**Join our mailing list**](http://eepurl.com/ciW8ir) and we’ll keep you up-to-date on this and many other investment and financial topics. ## **I’d to talk to someone at nVest about my company’s retirement plan.** We’d be happy to. With no sales pressure or obligations. We promise. Give us a call at 888-852-0702 today, or **[schedule a phone or video appointment now](https://calendly.com/nvestadvisors/60sponsor).** **Categories:** Business Stories, Client News, Client Service, Investing General, Mailchimp, Media, Retirement, Small Business **Tags:** 401k, 403b, 457, advisor, agent, annuities, annuity, bonds, commissions, Department of Labor, DOL, Employer-Sponsored Plan, ERISA, fees, fiduciary, fiduciary rule, insurance, investment, investments, mutual funds, non-ERISA, nVest, rep, RIA, SEC, stocks --- ### [Weekly Economic Update: 01-23-23](https://nvestadvisors.com/weekly-economic-update-2/) **Published:** January 23, 2023 **Author:** Jeremy Torgerson **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2023/01/Copy-of-Facebook-Posts-9-300x251.png "Copy of facebook posts 9 nvest advisors") ## At-a-Glance: - **U.S. Manufacturing is now in recession.** - **The Yield Curve inverted the most in modern history.** - **Weak Retail Sales throughout the holiday season.** - **The market has not priced in additional rate hikes.** > *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* > > *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* > > *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ### U.S. Manufacturing is now in recession. The Empire State and Philly Manufacturing Indexes for December were released last week. Both showed continued slowing in manufacturing activity in their regions. Sustained declines in output, combined with worsening new orders for new products and a decline in workers’ hours, all point to a recession reaching the U.S. manufacturing sector in December. Analysts expected a 0.1% decline from November, but the actual figure came in sharply lower. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-IP2301190539-1.png "Us ip2301190539 1 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-IP-Index2301190539.png "Us ip index2301190539 nvest advisors") Additionally, the Conference Board Survey of Leading Economic Indicators (output, new orders, new job listings, new housing permits, etc.) is negative for the 10th straight monthly decline (the longest in decades) and is pointing to a sharp downturn in economic activity in the near-term, signaling that we have either are beginning a recession or are in one already. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/2023-01-23_07-02-13.jpg "2023 01 23_07 02 13 nvest advisors")Source: ZeroHedge ![](https://nvestadvisors.com/wp-content/uploads/2023/01/2023-01-23_07-08-09.jpg "2023 01 23_07 08 09 nvest advisors")Source: ZeroHedge #### What this means to you: Recessions generally mean reduced economic output and are typically felt broadly across most parts of our economy. You can have output declines that are specific to one sector of the economy (housing, for instance) but a recession is declared when total output in the U.S. declines. Reduced output sadly means that workers’ hours cannot be sustained at current levels. We would expect to now see a further reduction in the average weekly hours workers put in, followed by hiring freezes, then furloughs, and finally, if new orders for products remain low, layoffs and even factory closures. ### The Yield Curve inverted the most in modern history. The [Yield Curve](https://investinganswers.com/dictionary/n/normal-yield-curve) is simply a graph showing the different investment returns investors can get by purchasing and holding Treasury bonds until they mature. All interest rates in the country, whether they are for a corporate bond or a mortgage for your home, closely follow these prime rates. Normally (and perfectly logically), the longer someone is asking to borrow your money, the more interest you should receive. So normally, a 30-year treasury bond should pay more than a 20-year, 10-year, or 5-year bond, and if someone borrows money for just a few days, the interest payment should be minimal. In normal conditions then, if you plotted a graph of the interest you’d get loaning for your money to the government, the longer you lent them money, the more interest you’d receive. This perfectly logical arrangement normally produces a yield curve graph that looks like the blue line below. Source: Encyclopedia Britannica Things can go awry, however, and this can cause yield curves to go flat (the green line), or even invert (the red line). An inverted yield curve indicates that the exact opposite of normal conditions is happening with government debt – investors can get more return if they lend their money for very short-term debts than they can if they lend for longer periods of time. [An inverted yield curve is a significant financial event when it happens.](https://www.gurufocus.com/yield_curve.php) It has, with almost perfect accuracy, predicted a coming economic recession and a stock market decline of at least 10% (though more normally 20% or more). In the United States, our Yield Curve inverted last spring and has been inverted for almost a year. Our current Yield Curve is one of the most substantial inversions in history: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/2023-yield-curve.png "2023 yield curve nvest advisors") #### What this means to you: As our Federal Reserve Bank takes action to fight inflation, they’ve raised interest rates at the fastest rate in history. They do this by raising what is called the Fed Funds Rate – the rate that banks can borrow money overnight from the country’s central bank. In healthy economies, this change in rates would rapidly affect the rest of the curve, shifting all of it in the same direction as the change in the Fed Funds rate. However, in this case, the rate hikes at the short end of the graph spiked the yield on those short-term loans significantly, but the rest of the yield curve hasn’t kept up with it. It’s the most substantial yield curve inversion since 1981 when the economy was pushed into a deep recession. This is what investors are starting to take in, and a large part of why the U.S. stock markets declined last week. ### Weak retail sales throughout the 2022 holiday shopping season. Retail sales were down in December, signaling a weak holiday shopping season and likely, lower earnings for company stocks in the retail sector this quarter. Remember when looking at these graphs, these sales figures include the increases in prices due to inflation over the last two years. In-store sales declined 3%, and online orders declined 5%. These were substantially lower than in December of 2021 and continue the declines seen very consistently throughout 2022. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Retail-sales-softened-in-December-according-to-the-Earnest-Analytics-Spend-Index2301170259.png "Us retail sales softened in december according to the earnest analytics spend index2301170259 nvest advisors") #### What this means for you: Retail sales are one of the primary places we can see how the economy is impacting the consumer. This matters so much because over 70% of our entire economic output (called our GDP or gross domestic product) is you and me spending our paychecks. It appears that consumers are now very “strapped” financially, and did not even increase spending during the traditional gift-giving season when retailers always report the majority of their annual sales. This is a very strong signal of impending recession and further slowing of factory output and workers’ hours. ### Investors are not pricing in additional rate hikes. One of the reasons you see these wild swings in the stock markets each day right now is that investors are digesting different economic news and corporate earnings reports as they come in, and are trying to place bets for the coming months based on their extrapolation of that information. Often, people focused only on stock prices and current reports suffer from a combination of what is called **recency bias** and **confirmation bias**. These are two very common behavioral mistakes investors make with money. Our money management principles seek to factor out these common human biases (and there are others, like our preference for round numbers, meaning people place more importance on the S&P reaching 4,000 than it will on the index reaching 3,999). **Recency bias** is the notion that the newest news about something is somehow more important than older news or a continuing trend. That’s why the markets moving up today, even if it dissolves tomorrow, is such a headline. Most financial and economic indicators wobble up and down on their way to a trend. If you focus only on the most recent number, and don’t take the overall trend into account, you can make a significant investing mistake by “seeing the trees, but not the forest”. **Confirmation bias** is universal in people. It states that what we believe in, we also believe to be absolutely true. So we often go seeking other opinions or data that confirm what we believe already to be true, and quickly discount any evidence or opinion that challenges our worldview. (Confirmation bias in politics, for instance, will have us wanting to vilify a politician on the “other side” who does something unethical, while looking to find ways to excuse the same behavior in “our guy”. It’s one reason out of many that nVest Advisors is completely apolitical in the work we do for you- your IRA doesn’t care who the President is or who you voted for). Another bias that we see a lot of in investing is called herd mentality. It’s a survival instinct. If the majority of people are doing something, we tend to do it, too, to protect our interests. You’ll see this in a flock of birds or a school of fish evading a predator, and we do the same thing. If you look and point at something, other people will look to see what you’re pointing at. Combine these three biases alone and you have the daily struggle between bulls (optimists) and bears (pessimists) on Wall Street. We believe the economic indicators continue to point to a steep and prolonged recession, longer and harsher than many of our peers believe. We believe in taking the members of the Federal Reserve Board at their word about what they will do and which indicators are providing them guidance. Right now, the Fed says they are singularly focused on reducing inflation back to its 2% target rate. Doing so will mean deliberately weakening the economy, and especially the job market, until the upward pressure on wages and prices is definitely reversed. However, there are a lot of contrarians in the market, second-guessing the Fed’s resolve. And because of herd mentality, stock prices tend to follow the most recent trend (recency bias), drawing the bulls and bears into competing camps (confirmation bias). Right now, and for the last six months or so, the bulls’ view has been the prevailing one. It’s not one we agree with based only on the data and how recessions historically start and play out. For example, as financial news comes in that shows the economy is deteriorating, investors are betting that the Federal Reserve will be forced to lower interest rates faster than they are currently projecting. The purple line was where Wall Street thought the trajectory of the Fed Funds rate would go over the coming months. The blue line is where they are betting it will be now. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Terminal2301180439.png "Us terminal2301180439 nvest advisors") Are they right? No one knows, but the Fed is pretty transparent about their thinking. For example, the Fed’s board members create what they call a “dot plot” of where each voting member of the Fed believes interest rates will be by the end of each year. One dot equals one vote of the Fed’s board: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Terminal-Dots2301180439.png "Us terminal dots2301180439 nvest advisors") It makes sense to follow their guidance in making interest rate expectations, doesn’t it? But investors have placed yields on the purple line, not the red line (the median of all of the votes). The bottom line is the market is betting the Fed “flinches” early and lowers rates significantly below where the Fed itself says rates will likely be. Is it wise to second-guess the Fed? So far in this economic cycle, no. The Fed *was* slow to respond to rising inflation in 2020 and 2021, believing most of it was related to supply problems from Covid shutdowns, not to the massive money dumps the governments of the world did to keep their economies moving during those (our opinion: completely unnecessary) shutdowns. However, since making their turn in early 2022 and announcing their resolve to bring inflation back down to the target rate of 2% per year, they have done everything they said they would do. There have been no surprises by the Fed, and its members (especially Fed Chairman Jerome Powell), have been extraordinarily transparent as to their objectives and their strategies. We believe it is foolish to place investment positions months to years ahead of time based only on the notion that the Fed will panic and pivot to rate reductions earlier than they themselves are projecting. #### What this means for you: Right now, the investment markets have not fully priced in either a recession or prolonged higher interest rates. This means, if the Fed is to be believed and the economy does enter recession as nearly all of the leading data indicates, there is still substantial downside risk in the investment markets. You must have your portfolios properly positioned for an additional 20-30% declines in stock prices in the coming weeks and months, in our opinion. Our Macroeconomic investment principles made these changes a year ago for most of our clients, and are revised every 4-6 weeks as new data comes to us. If your investment manager is not doing this work, it’s urgent that you seek out a second opinion. Most account losses will eventually come back, but it make take 4-6 years or longer. ## Bottom Line: We firmly believe the United States and much of the rest of the developed world will endure a recession in 2023. No one knows exactly when a recession will be declared, but we firmly believe most of the larger economies of the world are right at the door of one now. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Thursday, we will get updated news on the current inflation rate in the U.S.** - **Friday, we will learn the new consumer sentiment numbers from the University of Michigan.** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Getting help to launch or manage your company plan.](https://nvestadvisors.com/401k-advisor-fiduciary/) **Published:** January 18, 2023 **Author:** nVest Advisors **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2023/01/Copy-of-Instagram-Posts-2-300x300.png "Copy of instagram posts 2 nvest advisors")If you sponsor a retirement plan for your employees (or want to), you are aware of the potential risks your company assumes, because you are being entrusted with your employees’ contributions, and you’re limiting their retirement options, features, benefits, and investment choices to only those you as the employer chooses. This makes you a financial fiduciary for your plan participants, and with that legal expectation comes regulatory, legal and even civil consequences if you fail to perform several vital tasks in the administration of your plan. For instance: employer-sponsored retirement plans are now commonly the focus of class-action litigation because the plans themselves have become outdated, expensive, and poorly managed, and the long-term investment results for employees are sub-standard. **As a plan sponsor and fiduciary, it is your obligation to make sure your plan remains competitive in terms of features and costs, is meeting the needs of your plan participants, and is being fairly offered and implemented:** - You need to select a plan vendor (custodian) who is (and remains) financially solvent and who has the trading and custody capabilities to meet the investing needs of your employees. - Your participants should be able to access their plan account information at any time, receive timely statements of account values and transactions, easily and quickly make changes in their investment selections, receive educational opportunities to learn more about their financial concerns (and ways to manage them), and have convenient access to professionals for information or questions. - Your plan rules for participation must be lawful and fairly implemented. Employees need to be given adequate and frequent opportunities to participate if they are eligible. - The plan itself should be free of excessive expenses and mitigate any conflicts of interest the custodian may have in offering to hold your 401k plan assets (such as loading your investment options with proprietary funds they own or funds they receive revenue-sharing compensation from). - Your investment selections should be able to accommodate a variety of investment objectives and risk tolerances, be performing comparably to their peers or appropriate benchmarks, and be competitive in terms of internal trading and management expenses. You should be reviewing and modifying this list of fund options periodically over the life of your retirement plan. - You also need to have safeguards in place to assume your participants won’t take an active role in their investment management, leaving their accounts too conservatively invested in their early years, or too aggressively invested later on. Your default investment selection should be appropriate to every employee regardless of age and time to retirement. - Your company needs to keep track of contributions, matches, loans, rollovers, and more to make sure the rules of the plan are fairly implemented and compliant with evolving laws and regulations. - Your plan should be reviewed on a regular basis for compliance, recordkeeping, conformity to plan objectives, successful implementation, vendor and investment quality, and more. You need to maintain records and do compliance testing and reporting (depending on the type of plan) to prove that your plan was fairly implemented and no employees were unlawfully excluded. **![](https://nvestadvisors.com/wp-content/uploads/2023/01/Just-help-me-get-started..-1-300x300.png "Just help me get started 1 nvest advisors")This sounds like a lot of work, and it is.** Some companies have the size and talent to manage many of these expectations internally with a benefits department and specially-trained personnel, but most companies do not. Plus, even if you ***could*** perform most of these tasks yourself, ***should*** you? For every task you choose to undertake in-house, you add to the fiduciary burden of your company, putting it at greater and greater risk of failing to perform those required duties (and that wasn’t even a complete list). Most companies who want to implement a workplace retirement plan want it to be easy to administer, meet the needs of their employees, satisfy the requirements of ERISA and other regulations and reasonably protect them from litigation due to unforeseen (but avoidable) lapses in fiduciary responsibilities. [We’ve previously covered the wide range of common workplace retirement plans in an earlier article.](https://nvestadvisors.com/2023/01/11/your-employees-want-and-need-a-retirement-plan-heres-how/) Some plans, like a Payroll-deducted IRA, SEP IRA, or SIMPLE IRA, are easy and inexpensive to start, shift much of the investing responsibility to the employee, and have very few obligations for the employer other than withholding employee contributions and making sure they are deposited into the retirement accounts. Others plan types such as a 401(k), 457, or 403(b) have many additional benefits for employees but added burdens for the employer. Most, but not all, of the burdens of the plan sponsor can be shifted away from the company and into the hands of qualified plan professionals: a PLAN ADVISOR, and a PLAN ADMINISTRATOR. Not every plan type needs a Plan Administrator or Plan Advisor, but if you need or want to hire this help, we highly recommend you hire only those professionals who agree to assume full legal fiduciary responsibilities. The Department of Labor’s [ERISA laws have created three levels of fiduciary duty for hired plan professionals](https://humaninterest.com/learn/articles/316-338-321-fiduciary-what-does-it-really-mean/), depending on the work and level of responsibility they will take on for your company. We’ll explain each of these below as we explain what each professional does and why you may want to bring one (or both) into your plan’s management: ## The Plan Administrator Plan Administrators (often called Third-Party Administrators) perform a number of tasks to keep the daily operation of the plan flowing smoothly. They maintain records of new hires and terminations, approve employee loans, rollovers, and withdrawals, and often in conjunction with the investment company holding your plan assets, maintain compliant records on the flow of funds, balances, and transactions in the plan that federal regulators may require on an annual basis (and in the event of a plan audit). Fines and penalties for non-compliance with these aspects of a 401k plan can be very costly, and the plan can even be disallowed if it’s not maintained; the plan administrator assumes these duties and responsibilities for the plan sponsor. Plan Administrators can do their work one of two ways: they can perform the basic tasks and leave the final fiduciary responsibilities with your company (this is cheaper on the plan and probably ideal for very small companies), or they can assume an ERISA-defined fiduciary role as they perform the tasks for you. [**This level of service is called an ERISA Section 3(16) Fiduciary**](https://www.futureplan.com/resources/news-articles/3-16-fiduciary-services-what-s-all-the-hype-about/). One difference between simple plan administration and hiring a full 3(16) Fiduciary is who signs and personally guarantees the accuracy of the plan review information to the government. If the Plan Administrator is a full 3(16) fiduciary, they will sign it and assume full responsibility if their work is found to be in error. If the Plan Administrator is ***not*** acting in a fiduciary capacity for the company, an executive of the company must personally sign and guarantee the accuracy of the reporting. Every plan’s needs are different, so as a Fiduciary Plan Advisor often tasked with helping to set up or convert a plan, and helping to screen and hire this Administrator, we don’t have a blanket recommendation on whether your company will need a Plan Administrator, a full-fleged 3(16) fiduciary administator, or neither. That decision is a major part of the process of selecting, designing, and implementing a plan. ## The Plan Advisor Where Plan Administrators handle most of the daily tasks of running a retirement plan, the Plan Advisor handles many tasks for both the Plan Sponsor and the Plan Participants. Reporting directly to the Plan Sponsor, Plan Advisors can be hired at the earliest stages of designing and implementing a plan or brought in to review and revise an existing plan that isn’t working well. Plan Advisors are the central hub of the workplace plan, acting in a fiduciary capacity for both the employer and the employees. They are financial and investment experts so the employer doesn’t have to be. At a top level, Plan Advisors work with the employer to set up the governing rules for the plan itself, perform initial and ongoing due diligence reviews of the potential vendors the plan might use, and recommend and coordinate all needed additional services (like a Plan Administrator) if needed. Working with the owner or executive team, Plan Advisors help you make the right choices in terms of plan type, custodian, plan options, and investment selections for your employees. As your plan takes off, the Plan Advisor is there to work directly with your management team on needed changes and refinements, making sure participants are properly informed and educated on financial matters and assisting them with investment selections and suitability questions. The Plan Advisor performs and documents the mandated periodic plan reviews, and often acts as a single point of contact between your company and the plan administrator and custodian. As with the Plan Administrator, there are Plan Advisors who do their work without assuming much of a fiduciary role, and others who expressly assume that function. If the Advisor is going to act for your company in a fiduciary capacity, ERISA has created two different levels for Plan Advisors: the [**Section 3(21) Plan Advisor**, and the **Section 3(38) Plan Manager**](https://www.asppa.org/news/browse-topics/considerations-engaging-321-or-338-fiduciary). These two levels differ in the degree of authority the Plan Advisor will have over making changes to your plan. For purposes of simplicity, it’s easiest to think of a **Section 3(21) Plan Fiduciary** as someone who performs research and reporting listed above, but the final decisions about changes to the plan’s investment selection, choice of custodian and support, and other plan specifics are always left for the company to execute. In basic terms, a 3(21) advisor can ***recommend***, but they cannot ***implement***. For example, the 3(21) advisor monitors the investment selections your employees have to choose from, and may recommend replacing one fund with another, but you as the plan sponsor will always have to make that approval personally. A **Section 3(38) Plan Fiduciary**, on the other hand, has much more responsibility and discretion to do what is necessary for the plan, without having to involve company management for every decision. In this case, think of the 3(38) fiduciary as the plan’s manager more than just its advisor. A 3(38) advisor can not only recommend changes to the plan investments, but they can go ahead and make the changes they deem necessary acting as the plan’s fiduciary manager, without your company’s involvement. For a company that really wants to be hands-off to the implementation of a plan, 3(38) Fiduciaries can make decisions such as who the Plan Administrator and Custodian are, and negotiate on behalf of the company for specific terms when performing due diligence reviews down the road. ## Partnering with nVest Advisors as your Plan’s Fiduciary Advisor At nVest Advisors, we perform Plan Advisor services for nearly every type of workplace retirement account. Whether your company has just one employee or hundreds, we can help you determine which plan type will fit your needs, help you select a custodian and an investment strategy, and work alongside you as a full, legal fiduciary throughout the life of your Plan. You can work with us as either a 3(21) or a 3(38) fiduciary partner, and our experience, commitment to service excellence, and flexibility as a small firm, are ideal for many small businesses and their retirement needs. If your company is looking to start a plan, or if you currently have one and want a complimentary Plan Audit and a competitive bid for Plan Advisory services, let’s talk. Book your initial Plan Sponsor Q&A meeting today! **Categories:** Business Stories, Client Service, From our CEO, Investment, Mailchimp, Media, Press Releases, Retirement, Small Business **Tags:** 401k, 403b, 457, advisor, California, colorado, Defined Benefit, Defined Contribution, Employer-Sponsored Plan, ERISA, fiduciary, financial, invest, investing, IRA, Kansas, New York, non-ERISA, nVest, nVest Advisors, retirement, Retirement Plan, SEP, service, SIMPLE, texas, Utah --- ### [Weekly Economic Update: 01-16-23](https://nvestadvisors.com/weekly-economic-update/) **Published:** January 16, 2023 **Author:** Jeremy Torgerson **Content:** > ![](https://nvestadvisors.com/wp-content/uploads/2023/01/Copy-of-Facebook-Posts-8-300x251.png "Copy of facebook posts 8 nvest advisors") > > *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* > > *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* > > *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ## At-a-Glance: - **A look at December’s inflation numbers.** - **Job Market stays resilient.** - **Small Business is feeling the pain.** - **Credit Card use and interest rates spike.** **Happy MLK Jr. Day!** It was a fairly significant week for economic reports, so let’s dive right in. ### A look at December’s inflation numbers. The December CPI (Consumer Price Index) report was released last Thursday, after a lot of speculation about whether it would come in surprisingly low, as many analysts expected (we did not assume this). Instead, it was essentially exactly in line with estimates, showing a year-over-year increase in inflation at 6.5% (The source for all charts for this section is The Daily Shot): ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI-YoY2301130437.png "Us cpi yoy2301130437 nvest advisors")United States CPI YoY \| Source: The Daily Shot Inflation did moderate slightly from November to December, as you can see in the month-over-month survey: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI2301130437.png "Us cpi2301130437 nvest advisors")United States CPI MoM \| Source: The Daily Shot These CPI numbers are often called the “headline inflation” numbers because they are the ones most commonly reported by media and the consumers are most familiar with, but there are a number of other ways to look at the data, including examing core inflation, or looking at each part of the inflation calculation (like energy, groceries, and rent) separately. If you remove food and fuel entirely from the Headline Inflation figure, you get what economists call Core Inflation. Core Inflation is often more telling of an indicator because food and fuel prices tend to fluctuate a lot on their own and therefore make it harder to see higher and higher prices taking hold in the economy at large. The Core Inflation index shows us parts of your budget that can’t really change radically month-to-month like gas prices (or today, the cost of eggs) can. The December Core inflation shows us that inflation on everything but food and fuel are still up higher than the Federal Reserve would like to see them, off their peaks slightly year-over year: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI-YoY-Core2301130437.png "Us cpi yoy core2301130437 nvest advisors")United States Core CPI YoY \| Source: The Daily Shot …while month-over-month core inflation continued to climb slightly, but the highest bump up in 3 months. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI-Core2301130437.png "Us cpi core2301130437 nvest advisors")United States Core CPI MoM \| Source: The Daily Shot CPI is a calculation of various goods and services the normal household has to budget for in a given year, so those two major categories, physical goods (like groceries, cars, and clothing) and services (everything from air travel to hospitals to cable TV and cell phone bills), can be broken apart and looked at separately. While the prices of goods are trending down noticeably… ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI-core-goods2301130437.png "Us cpi core goods2301130437 nvest advisors")United States CPI Core Goods MoM \| Source: The Daily Shot …inflation in services is still a major factor in the high prices we feel in our monthly budgets: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI-Core-Services2301130437.png "Us cpi core services2301130437 nvest advisors")United States CPI Core Services MoM \| Source: The Daily Shot Far and away, the most significant upward contributor to services CPI was hospital services, followed by increasing rent costs. Hospital services won’t account for a significant amount of most families’ monthly budget, however, so this cost is not a significant part of the overall CPI calculation: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI-hospital-servuces2301130437.png "Us cpi hospital servuces2301130437 nvest advisors")United States CPI: Hospital Services MoM \| Source: The Daily Shot Rent continues to be a major factor, as well, though there is currently conflicting analysis on how much inflation in rent has subsided already that may not be factored into the current inflation calculation. Typically, the Federal Reserve uses about a 9-month lag on rent prices in their calculation because unless we are living under a month-to-month covenant, we won’t feel changes in rent in our budgets until the next time we sign a lease. Other research, like that provided by online residential company [Zillow](https://zillow.com), tracks rent in real-time as new leases are signed, and they report that rent inflation is down significantly over the last six months that the Fed hasn’t taken into account yet. If true, inflation estimates may come down sharply in the coming months, reflecting this “Zillow factor” by summer. We hope the Zillow figures are true, because as the graph below shows, rent costs far exceeded our wage increases last year: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-CPI-Shelter-v-wages2301130437.png "Us cpi shelter v wages2301130437 nvest advisors")CPI Shelter vs. Average Hourly Earnings \| Source: The Daily Shot #### What this means to you: Although inflation does show signs of finally moderating, this softening is very mild and does show the Federal Reserve that there is still more work to be done to slow down the economy and get prices on a definite path back down. Service prices are still climbing significantly, even if we’ve felt some relief in food and energy costs (that we fear may only be temporary). Also, remember that the year-over-year CPI means the increase in prices in 2022 above what they went up in 2021. December 2021 inflation was 7.0%, so adding 2022’s number to it means families felt a 13.5% increase in their basic costs over the last two years. Many families take issue with the entire CPI calculation, as they know their budgets have been squeezed by more than 13.5% in reality. **Remember also, that *a slowing rate of increase does not mean a decline*.** Wall Street loves to tell you that 6.5% inflation is very good news, and they’re attempting to rally the markets on this flawed premise, simply because it’s not as bad as 8.5% was a few months ago. If your car was speeding out of control down the highway at 85 miles per hour, you might be relieved somewhat that it slowed to 65 miles per hour, but you still haven’t gotten control of your car. Prices are still going up at a pretty good pace, even if we are off the peaks of the rate of increase. The Fed has more work to do. To use the car analogy, since the Federal Reserve’s target inflation rate is 2.0%, let’s say the Fed wants the car to be going 20 mph through a school zone. Right now, it’s going 65 mph past the playground. The bottom line is: there are some signs of relief, but we are nowhere near where we’ve historically been in terms of rising prices. There is still a long way to go. Also, **one thing we are watching closely is for a possible reversal and resurgence in inflationary pressures because the US Dollar has been rapidly dropping in value over the past few weeks.** We’ll keep you posted. ### The Job Market stays resilient. One of the unfortunate consequences of the Federal Reserve’s battle to lower prices is that it must impact jobs and wages, as well. So, many economists are watching the labor figures closely for changes in the job market as a sign that the policies of the Fed have had their intended effect. They look for this in the hopes that the Federal Reserve will be able to ease off of their restrictive policies and let the economy heal. However, we don’t see significant deterioration in the labor market yet. There are signs things are slowing, but the lack of workers overall is going to keep upward pressure on wages and benefits as companies have to aggressively compete for every available job applicant. However, last week the unemployment rate came in 20bps below expectations, indicating a very strong job market overall: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFP-U32301090539.png "Us nfp u32301090539 nvest advisors") This has a lot to do with the participation rate (number of people who can work and are actively looking for a job). Interestingly, this graph shows there has been a massive disconnect between eligible workers aged 16-25 and workers aged 25-64. Where these age groups used to seek and find work in very similar ways prior to Covid-19, they completely disconnected after the pandemic: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFP-Particip2301090539.png "Us nfp particip2301090539 nvest advisors") Younger people (age 16-24) just stopped looking for work after covid. This has caused employers to clamor to offer higher and higher wages for even entry-level positions because there are just not enough workers seeking employment to fill everything that is available. The Federal Reserve must fix that employment disparity and will do so by slowing the economy down enough that it will eliminate all of those excess jobs. Sadly that means company downsizing, layoffs, closed factories and businesses: a significant and prolonged recession in our view. There are signs that the labor market is starting to feel the early effects of the Fed’s actions. For instance, the average workweek for employees in manufacturing sector jobs is slowing. Average hours is now back to December 2020 levels, and overtime pay is down to November 2019 levels: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFP-Overtime-manuf-hours22301090539.png "Us nfp overtime manuf hours22301090539 nvest advisors") And overall pay is decreasing (which is NOT a good thing for families during periods of very high inflation): ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFP-Wages-revisions2301090539.png "Us nfp wages revisions2301090539 nvest advisors") Also, the demand for temporary workers has significantly decreased; we are now seeing the most monthly declines in temp positions since the Great Financial Crisis of 2007-2010. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFP-Temp-trend2301090539.png "Us nfp temp trend2301090539 nvest advisors") #### What this means to you: The job market will be one of the major factors in the Federal Reserve’s decision-making about how high to hike interest rates, and for how long they will remain elevated. Right now, we are starting to see the very first signs of softening labor demand, but there is still a long way to go to correct the issue. ### Small Business is feeling the pain. It makes perfect sense that families who earn less will feel the impacts of an economic downturn before wealthier families do. In that same vein, it makes sense that we would be able to see the effects of the economy’s cycles faster and more easily if we look at small businesses. The NFIB (National Federation of Independent Business) is an advocacy alliance of small business owners across America. Among their many activities supporting small businesses, the NFIB gathers and publishes important insights on the current sentiment and climate for small businesses in the United States. NFIB’s most recent report came out last week. How are small businesses doing at this point in our inflationary/recessionary cycle? Let’s look. First, small business owners were asked what their optimism level was currently and for the coming months. The sentiment survey came in below expectations: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFIB2301110435.png "Us nfib2301110435 nvest advisors") That lack of optimism is now reflected in their business decisions. For instance, small business owners intend to do less hiring… ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFIB-Hiring2301110435.png "Us nfib hiring2301110435 nvest advisors") … and do fewer expansion activities. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFIB-CapEx2301110435.png "Us nfib capex2301110435 nvest advisors") Jobs are still harder to fill than normal for the small business owner, but they report that it is becoming less difficult than it has been in the past two years: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFIB-Job-openings-hard2301110435.png "Us nfib job openings hard2301110435 nvest advisors") And some good news: small businesses don’t plan to do much in terms of raising their prices abnormally any further this year. This is likely because the cost to make and market their products and services is also stabilizing. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-NFIB-pric33-plans2301110435.png "Us nfib pric33 plans2301110435 nvest advisors") #### What this means to you: Although we imagine that everyone in America works for a major corporation, the exact opposite is true. In fact, almost 80% of all of the jobs in the United States are found in small companies. As small business goes, so goes the broader economy. Small companies are feeling the strain of the economic conditions and are already planning to slow down their production and hiring in the year ahead. This is an important leading indicator of worsening economic conditions that may see company closures and layoffs in the next six to twelve months. ### Credit Card use and interest rates spike. And finally today, we have a chance to see how the American family is holding up through all of this. Several savings and debt statistics came out last week that give us a picture into how our households are meeting our budget needs. Are we saving or going into debt right now? Let’s look: Consumers’ use of credit cards has continued to climb since the Covid-19 pandemic, trending up to a peak in early 2022. December came in $3 billion more in credit card debt than was expected: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Cred-cons-MoM2301100434.png "Us cred cons mom2301100434 nvest advisors") Now in 2023, households are starting to feel the economic effects in ways they can’t gloss over anymore. Over the last 18 months, more and more families are starting to rely on credit cards, borrowing from families, and depleting their savings for everyday purchases: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Credit-card-usage-for-spending-needs-has-been-rising2301100434.png "Us credit card usage for spending needs has been rising2301100434 nvest advisors") Of note: the “borrow from friends and family” and “taking from savings” portions are declining now, but that’s not a positive sign. It means your friends and family don’t have any more to lend you, and your savings accounts are starting to run low on funds. We know this is true because as the others drop, credit card use spiked. We got a short reprieve from credit card use during the Covid-19 pandemic when many families got stimulus checks and doing things like going on vacation were difficult if not impossible, but we have now reversed that brief pause, and are actually trending above the historical trend for credit card use: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Cred-total-cons-cred2301100434.png "Us cred total cons cred2301100434 nvest advisors") This is not good for families because as interest rates have climbed, using a credit card has never been more expensive. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Cred-CC-rate2301100434.png "Us cred cc rate2301100434 nvest advisors") … and because of price increases over the last two years, those credit card purchases and high balances bought less and less: ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Cred-card-balance-real2301100434.png "Us cred card balance real2301100434 nvest advisors") Where is this credit card debt starting to pile up? Which households are going deeply into debt to maintain their lifestyles? Far and away, the households in the lowest three quartiles of income. The top 1% of households, as you can see, almost never use debt to buy products. ![](https://nvestadvisors.com/wp-content/uploads/2023/01/US-Credit-by-income2301100434.png "Us credit by income2301100434 nvest advisors") #### What this means for you: American families are starting to feel real economic strain that they can no longer just shrug off and hope is very temporary. Rising credit card balances, combined with record-high credit card interest rates will cause havoc on many household budgets in the coming months. This has the potential to create a recession on its own: we will have to make painful choices that result in permanent changes to our spending: a concept called [demand destruction](https://www.investopedia.com/demand-destruction-5222107). When even back things like a tank of gas for the car, or a week’s worth of groceries are going onto a credit card, families are in a dire financial situation. You and I spending our paychecks makes up 70% of the total economy in the United States. If we cannot make basic purchases because debt payments are taking up more and more of our monthly budget, it often results in an inevitable spiral toward bankruptcy the loss of a home, etc. At some point, we reach the limits of our credit and can’t add another purchase to that card, and when we stop spending, 70% of the economy no longer has support: the reduction in our spending can crash-land an economy into a recession without any help from the Federal Reserve. ## Bottom Line: We firmly believe the United States, and indeed, much of the rest of the world will endure a recession in 2023. No one knows exactly when a recession will be declared (because it’s a subjective process), but we firmly believe most of the larger economies of the world are on a solid trajectory to experience one this year. Recessions can take years to recover from, which is why we believe it is vitally important to get your family and business finances ready to weather through such a storm. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Thursday, we will get updated news on the current inflation rate in the U.S.** - **Friday, we will learn the new consumer sentiment numbers from the University of Michigan.** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, consumer, CORE CPI, CPI, credit card, Crypto, debt, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, interest rates, invest, investing, labor, Layoffs, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, NFIB, oil, OPEC, participation rate, PCE, PMI, ponzi, ponzi scheme, portfolio, professional, recession, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [4 ways our approach is radically different](https://nvestadvisors.com/our-investing-approach-is-different/) **Published:** November 16, 2022 **Author:** Jeremy Torgerson **Content:** > ***“Every money manager has an investing philosophy that was built for good times, but that’s easy; a rising tide lifts every boat. Times like now are when advisors are forced to defend that philosophy, and sadly, many won’t be able to.”** – Jeremy Torgerson, nVest Advisors CEO \| May 8, 2022* Because of the economic and market challenges we’ve all experienced in 2022, investors are understandably worried about the security of their portfolios, and many looking for a new financial advisor relationship. This is common during periods of economic and market turmoil, as many clients find that the strategies their advisors chose for them ultimately didn’t work, and as your account value dropped, your advisor had no clear answer of what to do. As our account values fall for weeks or months, we’re often told by our advisor to “stay the course”, reminded that, “it’s a marathon, not a sprint,” and assured that, “time *in* the market is better than tim*ing* the market.” While partially true, these kinds of platitudes tend to gloss over real concerns you may have about the direction of your investments, how your money is positioned for broad changes in economic conditions, how this market decline will affect your long-term goals, and ultimately, how your money is being managed. **So after getting no concrete answers and losing confidence, you go shopping for a new advisor, only to find that many of them merely have different ways to sell you the same strategy all over again.** At nVest Advisors, we take a completely different approach; one worth learning about and paying attention to as other advisors struggle to explain why your allegedly “safe” 50/50 or 60/40 portfolio fell almost as much as an account 100% invested in stocks did. ## We build your investment portfolio based on today’s economy, not yesterday’s strategies. We used to do it the way your advisor probably still does: we’d figure out your risk tolerance and put you in the right mix of stocks and bonds for someone your age and temperament. And then we’d tell you to “stay the course” and let your investments work over a long period of time. There is some merit to traditional “buy and hold” strategies, mainly because it helps to eliminate common emotional mistakes investors (and their advisors) make with money. However, as many people painfully learned this year, “buy and hold” strategies and traditional risk models don’t always work. We began to change our investment philosophy back in 2018 and fully converted our money management style in January 2022. Instead of traditional investment models placing you in the “appropriate” mix of asset classes and just letting the markets do their thing, we decided to focus first on what is happening in the real-world economy and making sure our clients are appropriately positioned for actual economic events as they happen. Our new investing style is what we call **data-dependent macroeconomic modeling**. That sounds fancy, but what is means to you is that your investment portfolio is constantly evolving as the world’s economic conditions change. As your investment manager, we accept that there will always be some parts of the economy that are trending up and other parts that are trending down, and we shift your portfolio in real-time – in appropriate amounts – to capitalize on those fluctuations. We do this while actually lowering your daily volatility. We believe the results speak for themselves. As of November 11, here is the actual performance of the **nVest Advisors Macro Model** (for clients with accounts custodied at TD Ameritrade) performing against the S&P 500 and a “safe” portfolio of 50% stocks and 50% bonds, over a one-year period: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/chart-26-800x239.png "Chart 26 nvest advisors")nVest Advisors proprietary model performance chart (Nov 12, 2021 – Nov 11, 2022). Analysis performed by: Kwanti Analytics ## We exclusively offer fiduciary and fee-only services, for every client. Perhaps you’ve seen television commercials for Fisher Investments, a large registered investment advisory firm, that touts investment management services that do not pay commissions to your advisor, and that acts as a full legal fiduciary for their clients. We applaud Fisher’s basic approach and send a robust, “Hear, hear!” to our comrades in arms, taking on a deeply conflicted, and entrenched, industry. We are also fully fiduciary and work with clients exclusively on a fee-only basis. This means we are motivated and aligned with you to grow your account, not to sell you products. And when your account goes down, our fee goes down. Working with you on an assets-under-management fee structure was, in our opinion, the most ethical way to do business with you. And in 2015, that’s exactly what we did. The SEC and various state investment regulators want you to know about the [Fiduciary Standard of Care](https://www.investopedia.com/articles/professionaleducation/11/suitability-fiduciary-standards.asp) companies like ours are voluntarily held to. These standards are much higher than the traditional “suitability standard” most financial adviors are held to. We encourage you to learn the difference, and then, always ask any investment advisor you’re talking to whether or not they are a full legal fiduciary, and will they put that in writing? (We will.) ## Young or old, wealthy or not yet wealthy, savvy or novice, we love all of our “nVestors”. *Un*like Fisher Investments, we don’t have a $500,000 minimum account size to work with us. In fact, we have no minimum account size at all, and have specifically designed programs to match your investment savvy and needed outcomes. If you’re just getting started and want to begin a ROTH IRA with your first $100, we can help you! If you’ve worked and saved for a lifetime, inherited a fortune, or sold your business and have many millions of dollars to invest for tax and estate considerations, we can do that, too. (We can even manage your company’s 401k, but that’s another story.) ## We’re 100% virtual. We were doing video meetings with our clients years before Covid made it necessary. At nVest Advisors, we value your time as much as we value your business, so we’ve structured our company to work with you; to come alongside your busy schedule and support you with virtual meetings you don’t have to leave work or home to attend, paperless account openings and e-signatures on everything. We even do business with you through text messaging and video email. Our job is to be available for you when you need us, not to make you become available for us. ### Are you looking for a new advisor right now, or perhaps looking for your very first financial pro? Let’s talk! We’re happy to spend some time seeing if we’d be a good fit for your needs. Schedule a free visit and audit of your current investments today: **Categories:** Client News, Client Service, Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Investing General, Investment, Investment Markets, Mailchimp, public --- ### [A whole new approach: introducing the "new" nVest Advisors](https://nvestadvisors.com/a-whole-new-approach-introducing-the-new-nvest-advisors/) **Published:** October 10, 2022 **Author:** Jeremy Torgerson **Content:** Over the past six months, we’ve been working hard behind the scenes with a team of marketing talent to update, refine, and repurpose nVest Advisors for the new and challenging economic world we’re facing today. We sincerely hope you’re enjoying the new website, logo, technology and features at nVest Advisors, but we’ve changed much more than just our image and “brand” over the last two years. For example: over a year ago, our firm switched from managing your money using traditional investment models focused only on a long-term strategy and mixing together investments to meet your risk tolerance and time horizon (you’ll see these very commonly at our competitors as strategic, “% of stocks / % of fixed income”, portfolios). Managing client accounts through the Covid-19 pandemic made us realize that there are better strategies, that are usually reserved for high net worth and institutional clients, that intervened when things become volatile. This means that the “big guys” are protected while most of the rest of us just suffered through watching our nest eggs and savings massively underperform, sometimes for years. We decided that enough was enough: if the large investors can manage money to mitigate the risk (and even take advantage of) market and economic turmoil, then so can we. Our clients deserved nothing less than that. So we made a fundatmental switch away from the way 99% of advisors manage money, and switched our approach to take into account the macroeconomic events in our world today. We now follow very specific investment rules that don’t ignore what’s going on around us, but in fact positions ahead of time for it (our strategy is now technically called “data-dependent macroeconomic” modeling). What this means for our clients is this: instead of just investing in the textbook-defined “right mix” of things that generally do well together over 10 or 20 years but may not offer you much short-term protection during sustained market downturns (like what we are experiencing today), we’re adjusting your investments to match real-world economic events as they happen. There is always something trending up and always something trending down in the world markets, and our strategy is to have you appropriately invested for your risk preferences to capitalize on what the world is actually experiencing, in real-time. This means we are making model changes much more often than in the past and focused as much on minimizing your short-term losses as we are working toward your long-term gains. This change is just one of dozens we’ll highlight in upcoming blog posts, but another change that relates directly to this is that starting October 17, 2022, we will be starting each week with a macroeconomic outlook post and video for our clients. You will find it posted here, on our blog, and then shared more widely through our various social media channels. Keeping you informed both of what’s going on in the world, as well as how it’s affecting our analysis and investment strategies is just another way we hope to be truly and aggressively transparent for our clients. We hope you’ll tune in! **Categories:** Client News, Client Service, Company News, From our CEO, Investing General, Investment, Investment Markets, Mailchimp, Press Releases, public **Tags:** bonds, financial, invest, investing, investor, macro, macroeconomics, markets, money, nVest, planning, stocks, strategy, update, wealth, yields --- ### [What to do with your old company's retirement plan](https://nvestadvisors.com/rolling-over-your-employer-retirement-plan/) **Published:** December 2, 2022 **Author:** Jeremy Torgerson **Content:** > *![](https://nvestadvisors.com/wp-content/uploads/2019/12/Copy-of-Instagram-Posts-300x300.png "Copy of instagram posts nvest advisors")Leaving or changing jobs can be stressful, especially if your job change wasn’t your choice, but was the result of an economic or industry slow-down, you’ve been laid off, or you had to relocate for other reasons. You need to do something with your old workplace retirement plan(s), but you need to do it in the right way or you could face significant tax consequences.* > > *nVest Advisors specializes in helping you transition your old ERISA and non-ERISA employer-sponsored retirement plan (with names like 401(a), 401(k), 403(b), 457, SEP / SIMPLE IRA, and others) into a professionally managed, fully fiduciary Individual Retirement Account (IRA or ROTH IRA). We’ve done it hundreds and hundreds of times, and it’s often the reason our clients first reach out to us.* > > *We have no account minimums and extremely competitive management fees (and absolutely no product sales or commissions involved).* > > *If you’re not sure what your options are regarding an old employer plan account, here’s some information to help guide you:* # One of the most common questions we get asked from prospective clients is, “I’ve left my job. What should I do with my old 401k?” If you’re leaving (or have left) an old employer, and have a 401a, 401k, 403b, 457, SEP or SIMPLE IRA account from your previous job, **you have three basic options available to you: leave it where it is, cash it out, or “roll it over” to another retirement account.** There are definite pros and cons to those three basic options, and important factors to consider for each one. Although every situation is unique, and you are best served by talking with an advisor and your tax professional before you make a final decision, let’s review your options in general terms: ### Option 1: Leave it where it is. Most employer plans allow you to simply leave the balance in your account in the old plan, but some do not. An employer who sponsors a retirement plan for their employees has certain specific legal responsibilities to the plan and to your account (called fiduciary duties). Some of those responsibilities include doing their best to make sure you are obtaining good financial advice and are properly invested for your age and risk tolerance, which is impossible to do for former employees who will never again be at a benefits meeting. Plus, because of the push from state and federal regulators for more fiduciary responsibilities on employers in recent years, we are starting to see an uptick in the number of employer plans who ask their departing employees to take their retirement accounts with them. If you can leave it in the old plan, and choose to, consider: - **You can not contribute to this account ever again.** - **Your investment options will be forever limited to those the employer approves.** Whereas there are tens of thousands of available investment options for an IRA account, a typical 401k or 403b account may have only a few dozen to choose from. - If the plan’s costs are paid for by the participants (which is an option the employer can choose when they set the plan up), **your account will be hit with recordkeeping, third-party administration and financial advisor fees in addition to any fees from the investment funds themselves.** For these reasons, we generally don’t advise our clients to leave old accounts with their former employer. So what are your two other basic options? You can cash out the account, or you can “roll it over”. ### Option 2: Cash it out. This is possibly the worst option of the three in most cases, because of the potentially significant taxes you will pay in doing so. Unless you contributed after-tax money to your account (this is called a ROTH contribution), the money you added to your employer retirement plan was deducted from your taxable income in the years you made the contributions. This lowered your taxable income for the year, which is one of the biggest perks of saving money for retirement using a retirement account or employer-sponsored retirement plan. The idea is, you receive a tax break now to save for future needs. The money is essentially removed from your income before your income is taxed. Also, while the money remains sheltered in the retirement account, it grows tax-deferred. This offers a much greater opportunity for long-term gains over accounts that are taxed as profits and interest are earned. (If you are taxed 20% on capital gains and interest in a standard brokerage account, let’s say, the difference over 20 or 30 years may be many tens or even hundreds of thousands of dollars more by saving in a retirement account.) Once you retire and begin to use the money to offset your expenses in your later years, the money coming back out of your retirement account is included as income, and you pay income tax on it, hopefully at much lower tax rates than what you would have paid during your working years. (We should note that ROTH contributions are already taxed when they go into the account, and become tax-free when you retire.) ***Cashing out your retirement plan will add all of that money to your income in the tax year you withdraw your retirement funds. This may push you into a higher tax bracket – possibly a MUCH higher tax bracket – for all of the money you earned the whole year, plus the money you withdraw from your retirement account.*** In addition, unless you have a qualifying reason (such as proven hardship, extremely high medical bills, etc.) or are at least 59 1/2 years old when you cash out your retirement account, you will also be hit with an additional 10% tax penalty on the entire balance withdrawn. Even if you have ROTH contributions in your employer plan, the earnings and interest on your contributions will be taxed and penalized for early withdrawal. **There are ways to do partial withdrawals that can minimize these disastrous effects, but you’ll need the help of a financial planner and your tax pro to work out those details.** If you have questions on this option especially, ***please*** [reach out to us for a free 15-minute phone call](https://calendly.com/nvestadvisors/prospect15) to get all of the details you need before making this choice. ### Option 3: Roll it over into another retirement account. Generally, we advise our clients to exercise this option when they have a balance from an old company plan that needs to be dealt with. Doing a “rollover” simply means moving your funds from your old retirement plan account into another retirement plan account (either a personal account or your new employer’s plan). Rollovers are generally the best option because done properly, there is no tax consequence to you and the entire balance will move from one tax-sheltered account into another one. > ***We should caution you here, however: rollovers are one of the biggest sources of income for most financial advisors and insurance agents***. *Even at nVest Advisors, where we are legal fiduciaries for all of our clients and offer many different ways to work with us and pay for our services, many of our investment clients have started their accounts with rollovers from old company plans.* > > ***Be VERY skeptical of any advisor or agent pushing you to roll over funds into an account or annuity** – you may pay up to 10% in commissions in some of the worst products out there, and be locked into long “surrender” periods before you can access those funds. Also, be sure to know – in real dollars – what your initial and annual fees are going to be before you sign or agree to anything. **Any advisor or agent not willing to put their commissions and your fees in writing for you should be immediately disqualified**.* If you’ve decided a rollover is the correct option for you, you have three additional choices to pick from: do you roll it DIRECTLY over into a personal retirement account (IRA or ROTH IRA), roll it over into your new employer plan, or do what is called an INDIRECT rollover. #### Indirect Rollovers are usually the wrong way to go. An indirect rollover means that you are moving your retirement funds, eventually, into a new retirement account, but you first instruct your old employer plan to send the money directly to you. Several things happen and several rules must be followed: - You can only do an indirect rollover once per calendar year. - You will be immediately taxed 20% on the proceeds and must “claw back” those taxes on your return later. - You must complete an indirect rollover within 60 days, or the entire balance will be considered taxable income. This means the balance you received will be added to the income you made all year, potentially pushing you into a higher tax bracket. Additionally, if you are under age 59 1/2 and don’t have an approved reason to withdraw early from a retirement plan (like a disability or extreme financial hardship), ***you will pay an additional 10% tax*** for an early withdrawal. #### Rolling over into your new company plan. Most companies permit rollovers of previous plan balances into your new company plan. You need to make sure, however, that the new plan accepts all of the previous contributions (pre-tax or post-tax). When it is their best interest, we help our financial planning clients with this process. Remember that your funds will again be subject to the same IRS rules for employer-sponsored plans (withdrawals, contribution maximums, etc.), and you will be limited by the choice of investments available in the new plan. Part of the process we do in helping you decide whether it’s best to roll your funds into your new company plan or into your own personal IRA is doing an analysis of the diversification, performance and fees associated with the new workplace plan, and making sure the available investments will be able to fulfill the goals you’ve set for the funds. #### Rolling over into your own personal retirement account. This is common but may not always be what’s best for you. Typically you are able to receive more direct help from a financial advisor with an IRA / ROTH IRA than you can with a company plan, but you also need to make sure the costs are worth the advice / expert handling of your account. You also need to investigate your financial advisor options carefully, as many of us are held to widely different ethical standards, have vastly different levels of training, education and experience, and are compensated in ways that may not always be in your best interests. As full legal fiduciaries who do not make any product sales or earn any commissions, nVest Advisors might be a great choice for your old company rollover. Why not take a few minutes to visit with us and find out? If you’re looking to roll over an old workplace retirement account, spending 30 minutes with us, without cost or commitment, is a great way to see if we’d be a good financial partner for you. Feel free to schedule some time with us at your soonest convenience! **Categories:** Annuities & Insurance, Client News, Early nVestors, Emerging nVestors, Established nVestors, Investing General, LifeCycle, Mailchimp, public, Retirement, Small Business **Tags:** 401a, 401k, 403b, 457, advisor, agent, annuity, colorado, company, company-sponsored, economics, economy, employer-sponsored, ERISA, fees, fired, furlough, invest, investing, investment, IRA, job, laid off, layoff, lost job, macro, models, money, nVest, nVest Advisors, plan, relocate, relocation, retire, retired, retirement, risk, roll over, rollover, ROTH, saving, savings, SEP, SIMPLE, tax, taxes, texas, wealth --- ### [9 reasons to fire your financial advisor](https://nvestadvisors.com/9-reasons-to-fire-your-financial-advisor/) **Published:** December 9, 2022 **Author:** Jeremy Torgerson **Content:** #### ![](https://nvestadvisors.com/wp-content/uploads/2016/08/Copy-of-Instagram-Posts-1-300x300.png "Copy of instagram posts 1 nvest advisors")So you’ve been working with a financial professional for a while, but things just don’t “feel right” anymore. Maybe the advisor is inattentive, or maybe you’re just not seeing the results you’d hoped for. How do you know when it’s okay to overlook some minor issues, and when it’s time to leave? Here are 9 reasons why you should consider firing your financial advisor: > **Quick but important note:** you will see that “my investments are down” is not on this list of reasons to go elsewhere, though it’s one of the most common reasons clients seek out new advisors. Investment markets will fluctuate – there is no getting around it. Just because your portfolio, hopefully crafted to meet your long-term investing needs, is down is ***not*** a sign that your advisor is doing anything wrong. ### If they act like less of a planner and more like a pitch maker. You know the type: big smile, really expensive pen, armed with glossy pie charts, and the new account application still warm from the printer. Being good at selling something is nowhere near the same as being a good client advocate and “coach”. True financial planners and advisors will actually take the time to listen to you so that they develop a very clear understanding of your situation and goals. Then and only then, will they provide advice and guidance that fits your specific needs. Beware of anyone who already has a solution in mind without carefully and fully understanding your situation. ### If you never hear from them. In my experience, a financial advisor has to walk a delicate tightrope between contacting his or her clients regularly, but not ***too*** regularly. And many times, that’s entirely at the whim of the client. So your advisor may not be perfect in this regard, but there’s a difference between a busy advisor and a lazy one. A good financial pro will stay in contact on a regular basis (even if it’s only every 6 months or so), to check up on you and make sure your financial situation has not changed significantly. It is not often that market volatility will force me to make corrections to a client’s financial strategy, but unexpected life events can cause us to make serious changes in a plan or investment portfolio. For that reason, it’s vital that we stay in regular if not frequent contact. ### If they work on commission. Here’s where we differ greatly from much of the financial services industry. We HATE commissions. Commissions are the antithesis of “serving the client’s best interests”, because the client, whether it’s disclosed in a transparent way or not, always gets stuck with the bill. It’s also just common sense that a company or product that must offer a very high commission payout must either be making a mint on every sale or else is something the customer isn’t going to see much inherent value in (and will need a “nudge” by salesperson). The whole thing just reeks of conflicting priorities and questionable agendas. (And you might guess, nVest Advisors does not work on commission.) It’s not that there aren’t many wonderfully ethical and talented advisors and planners who earn commission on financial products they may use in your plan, but the products themselves can be ridiculously costly, come with hidden fees and charges all over the place and can create potential conflicts of interest between the advisor and the client. Advisors who earn commissions are compensated to MOVE money between products, regardless of how they perform, so they tend to move money around often to generate commissions. I’ve seen many instances of an advisor selling expensive A-share mutual funds to a client, just to wait 2-3 years and do it again. (I even was expressly “coached” to do that by a mentor early in my career.) Fee-based compensation means the advisor is paid either a flat fee for the advice, or a fee based on the account value, in which case, the advisor is paid to GROW your money, not MOVE it. That puts a fee-compensated advisor on the same team as the client: we both are money motivated to grow your account. ### If despite good intentions, they seem to always fail to do what they say they will do. This one is simple enough. You are the customer, paying this person based on the claims and promises they make. And yes, even I get behind in returning calls or have an unexpected event disrupt my calendar. But we’re not talking about the occasional slip-up. Advisors who miss meetings, or pledge something will be done and then never does, aren’t respecting you as a client. If you have to overlook too many instances of the planner being “just human”, it’s time for a change. ### If you don’t understand your plan and their explanations only make things worse. It’s easy for us on the inside of the financial industry to forget that we don’t speak English when we’re discussing Sharpe Ratios, Beta, and Standard Deviation. I’ve always made it a mantra to use analogies and stories to get my point across, and I give my clients permission to stop me at any time and ask me to explain something again. I’m also pretty trained to notice when I’ve lost them (that glazed, deer-in-the-headlights stare), or when it’s becoming overwhelming for them (which happens quite often – this is just not a universe most clients spend a lot of time in). When that happens, we downshift and I break out the notepad and make horrific stick-figure drawings of the concept we’re discussing. My point is, every advisor knows a lot of financial info, but a limited few are good at translating that into plain English for our clients. You shouldn’t have to walk out of his or her office more confused than you went in. ### If your instincts are telling you something isn’t right. This is a no-brainer but it’s often discounted. Ask yourself if you’d trust this person alone with your child or grandchild for a weekend. If you wouldn’t, then why are you trusting him or her with your financial future? Even if the advisor is a totally honest and ethical person if you find yourself not wanting to be totally open with him or her, it’s best to move on. Even advisors need to do this with clients and prospective clients. We’re responsible for making sure we know the source of your money, are comfortable that you are who you claim to be, and need to be reasonably sure we can meet your needs and expectations early on. Otherwise, why start the process in the first place? Let me give an example: I once had to turn a prospective client away at our first meeting because they did not want to share with me enough information about their other investments to allow me to do my job. They had an old IRA that they kept pressing me to, “show us what you can do with this.” I told them there were many things we could do, but before I could answer, it was important to know how they were invested elsewhere (to avoid over-concentrating them in something they already owned a lot of, for example). Back and forth we went. I asked for info on how the other accounts were allocated. They said they only wanted to talk about the account they brought to me to look at. Finally, I just pushed their statement back across the table and said I didn’t think the relationship would work. They left, astonished that they had actually just been turned down by the advisor, and even called me two days later to ask again why I had rejected their business, and we finally had the open discussion I had been needing all along. The bottom line is, our gut is amazingly accurate. If something doesn’t feel right, the odds are, it’s not. ### If you simply no longer enjoy the relationship. The client/advisor connection can become a very strong one, forged over many years of working together toward your goals. Very few people in your life will know you in such intimate detail as your financial planner. You ought to look forward to their calls when you see the advisor’s name on your caller ID. You ought to find them informative, personable, and even likable. If you don’t, change. ### If you inherit money, don’t automatically inherit the advisor. Speaking as an advisor who has had clients pass away, this is a tough one. I know I’d like to believe I served your loved one well and could do so for you, the fact is, you are you and you need to work with an advisor who meets all of the above criteria, plus any extra that you feel are critical. Your grandfather’s advisor knew your grandfather, not you. Your needs will be very different, and you need someone who knows and works for YOU. ### The advisor steps down or retires. In this business, the old phrase, “like father, like son” isn’t always the best mantra to follow. The same with the new advisor who got assigned to your account after your first advisor left. Just working for the same firm does not mean they are going to think, invest, or behave the same way. Your relationship is with your financial pro, not the company they work for. There is no need to stay with the FIRM if your advisor leaves. In fact, you might even consider staying with your advisor if they served your needs well. Just ask the questions about new account fees, costs of reinvestment, and any costs the previous firm will charge you to move your accounts. ## Bottom Line: Not every financial advisory relationship that might feel “off” is one you should replace. Most advisors are sincerely interested in your well-being and obviously want to keep your business if they can. But if you feel certain that a change is needed, we’d love to offer you a second opinion on your current strategy and show you how nVest Advisors does it better. You can schedule that totally free Q&A session with us today by using the calendar below: *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Behavioral Finance, Client News, Client Service, Investing General, Investment, Mailchimp, Media, Podcasts, public **Tags:** advisor, bonds, business, change, colorado, commissions, fees, financial, fire your advisor, investments, market, markets, Money n30, planner, podcast, relationship, stocks, strategy, texas, volatility, you're fired --- ### [Risk Management: getting off the wild ride of the investment roller-coaster](https://nvestadvisors.com/risk-management-getting-off-the-wild-ride-of-the-investment-roller-coaster/) **Published:** December 7, 2022 **Author:** Jeremy Torgerson **Content:** **![](https://nvestadvisors.com/wp-content/uploads/2022/12/Copy-of-Instagram-Posts-300x300.png "Copy of instagram posts nvest advisors")It’s pretty much common knowledge that saving and investing always involve risks.** What you may have some confusion about is that “risk” doesn’t always mean just the red and green graphs blaring across the screens of CNBC and Fox Business all day. Yes, daily price volatility is a definite risk, and perhaps the most widely-known risk, but it is not the *only* measure of risk, and it’s not even the primary one we want our clients to focus on. First, let’s define what investment risk is. [According to Investopedia, risk is “the chance that an outcome or investment’s actual gains will differ from an expected outcome or return.”](https://www.investopedia.com/terms/r/risk.asp) Based on this definition, there is much more to “risk” than just what today’s stock market thinks of world events. Using this definition of risk, as being basically anything that causes your investment to not produce the results you intended or needed, we can see that even burying cash in your backyard may not bring you the safety and future security you intended. At nVest Advisors, risk management is a fundamental part of the investment models we use in most of our clients’ investment accounts. In fact, we place risk avoidance as an even higher priority than maximizing your gains. This is because losses hurt your investment account much more than gains help. > Let’s give a quick example. Suppose you start the year with a $10,000 balance in your IRA. The economy sours during the year (sound familiar?) and you end up with only $7,500 in your IRA on December 31, a 25% decline from your starting point a year before. To move from $7,500 back up to $10,000 (which is just your original starting point), it takes a stock market return of 33.3%, not the same 25% it originally fell. We manage risk in a variety of ways, but the first step is always to get to know you and your unique circumstances, as well as the goals you have for the money. Is this account for your retirement 25 years from now, or is it to help a child through college in 5 years? Understanding first what we need the money to do for you, and when – what role it will play in your future financial picture – helps us to see exactly what risks you are really facing, and helps us steer clear of them in your investing strategy. It’s important first to understand and always remember that risk and reward go hand-in-hand. You cannot expect to get a good rate of return without exposing your money to at least some risks. ## So what kinds of risks are out there? We’re going to spell out the top few major risks that will be the biggest challenges for clients like ours, but by no means is this a comprehensive list of risks, nor are they the only ones we are concerned with when we manage your investments. Generally, though, these are the “top 5” for normal investors. **We must caution here that nothing we describe below is intended to be investment advice. These scenarios are hypothetical and very general in nature and one should never use general investment commentary as actionable advice for their own situation. Please consult with your financial and tax advisor before making any investment decisions. If you don’t have an advisor (or are looking for a new one), we’ll happily discuss your situation with you privately. [Click here to schedule a totally complimentary and confidential 30-minute Q&A session](https://calendly.com/nvestadvisors/prospect30).** ### Investment / Custodial Risk There are first the risks inherent with any investment, such as the solvency of the investment or insurance company that has custody of your money. You should always make sure you select a custodian that is large, has publicly-available financial records, doesn’t have any significant complaints, judgments, or administrative actions, and offers some form of insurance for your account if it were to fail. In the United States, for instance, all banks are required to have FDIC insurance for depositors’ money (up to certain limits), and investment firms should have SIPC insurance. Credit unions and insurance companies have similar types of insurance protections. You should also remember that it’s not just the custodian that you need to investigate, it’s your individual financial advisor. Sadly, there are many incidents where your financial advisor, whether deliberately or because of poor business practices, is the cause of financial loss for a client. As financial professionals, we are legally required to make public any financial difficulties we are having, our employment history, and any previous criminal, civil, legal, or administrative issues. We must also let you know about any client complaints or lawsuits, and if we are doing our job full or part-time. There are two places you can find official information about your financial advisor, depending upon how they are licensed and how they earn their income (if they are only insurance agents, you have to look them up at your state insurance department’s website). If your advisor earns commissions for any product sales, you can look them up at the [FINRA BrokerCheck website](https://brokercheck.finra.org/), and if they are fee-only (or fee-based) investment advisors, you can find them at the [Investment Advisors Public Disclosure](https://adviserinfo.sec.gov/) website. Some advisors are what is called “dually registered” and may have records in both places. Then, there are risks associated with your investments themselves, and these can vary widely depending on the type of investment asset, the investing style, and the time frames involved. ### Market Price Volatility Let’s say, for instance, that you are a very conservative investor who needs a regular monthly distribution from your account in order to pay your bills. Because you know you need some money each month, we can’t expose that portion of your portfolio to daily price fluctuations; we can’t know 30 days from now, for instance, what a stock’s market price will be. You would therefore avoid investments with potentially wide variations in price (like small tech companies or many commodities such as wheat or silver), and favor things like a bank CD or a US Treasury bond, because those tend to remain very stable in price day-to-day while providing a small amount of interest income. ### Company or Investment Risk Companies sometimes go out of business. That failure can often bring their stock price to $0. Investors in stocks are part-owners of the company and share the profits, but they also place their investment capital at risk should the company fail. That is also largely true for holders of a company’s debts (called commercial paper or a bond or note), although when you’ve lent your money to a company by buying their bond, you become a creditor (not a partial owner), and so are entitled to be one of the people a bankruptcy trustee would try to compensate if a company were to be liquidated. The way the investing world reduces this risk is a simple concept called diversification – making sure you don’t “put all your eggs in one basket”. ### Interest Rate Risk / Default Risk Being a bond-holder instead of a stock-holder may sound like a safer place to be, and in catastrophic situations like a company failure, it definitely can be. But bondholders have different risks that need to be taken into account, and two of the big ones are called default risk and interest rate risk. It’s easier to explain both of these by giving you a hypothetical example: **Let’s say you bought a 20-year company bond paying 5% interest per year.** The bond is a legal “I.O.U.” which means that you will receive 5% interest (based on your invested amount), annually for the next 20 years, and after 20 years, you get your invested amount back in full. The interest is “guaranteed”, in that the company is obligated to pay this interest and you are the company’s creditor. Think of a bond as the same thing as the documents you sign to buy a car or mortgage your home. After issuing the bond, let’s say the company had a bad year and is struggling to pay all of its bills on time. If the company is late making its bond interest payment, it will have defaulted based on the terms of the bond. So **default risk** for a bond investor is that the company is late giving you the interest it promised. Typically the bond agreement imposes such harsh punishments on a company for missing an interest payment that defaults are very rare and the company’s credit rating, just like ours, is severely damaged. **Interest rate risk** is a little more nuanced. Let’s say that the economy has changed and the country’s central bank has raised the interest rates after your 5% bond has been issued, so new bonds just like yours are now being issued paying 6.5%. Now let’s assume that your neighbor likes your bond and wants to buy one like it. He can buy yours, paying 5% for the next 20 years, or he can buy a new one earning 6.5%. Which one would your neighbor want? The one paying 6.5%. To make your 5% bond attractive to your neighbor, you’ll need to sell it for a lower price to compensate him for losing out on that extra 1.5% interest for the next 20 years. That means that when interest rates are going up in general, the sales price of existing bonds goes down, and when interest rates are dropping, the price of existing bonds goes up. We call that an inverse correlation, but you can remember it as interest rate risk. ### Inflation Risk One of the major dangers of being too conservatively invested for too long is that in general, while your money might be technically “safe” from daily price changes, it may not be keeping up with the increases in prices for the goods and services you will need this money for later. “Inflation” refers to the expanding supply of money in an economy, not because the prices of things are going up, but generally the effect is the same. When you have lots more dollars chasing the same number of new cars, for instance, the price of the new car will go up. And that is true of college tuition, a gallon of gasoline, a house, or a pair of tennis shoes. If the money you set aside to buy those things after you retire in 30 years doesn’t keep pace (or even surpass) the rate that prices are climbing, we call that **Inflation Risk**. There are many good charts and infographics about the impact of inflation over time, like this one in [a great article about inflation by Mint.Com](https://mint.intuit.com/blog/planning/inflation-rate-formula/): [![](https://nvestadvisors.com/wp-content/uploads/2022/12/price-of-a-gallon-of-milk-over-time-because-of-inflation-265x300.webp "Price of a gallon of milk over time because of inflation nvest advisors")](https://mint.intuit.com/blog/planning/inflation-rate-formula/) The risk inflation poses to your investing goals is that the money isn’t growing as rapidly as prices are increasing. This is a very common problem with people who mostly save in cash or in bank checking, savings, or money market accounts, but it can also be a very common problem with many life insurance and annuity products. You need to make sure your money is keeping pace with the prices of goods and services. This not a serious problem if you plan to use the money in a year or so, but is a potentially devastating problem if you are saving for 10 or 20 years from now. ### Your own behavior: the most important risk Any of the major risks we’ve outlined above can post significant challenges to the long-term success of your investing strategy, but the one we’ve seen make the most profound impact is our own ability to make emotional mistakes with money. To unintentionally mishandle our finances is very common; so much so that an entire field of study called Behavioral Finance is devoted to learning how and why we make these mistakes, and how we as financial professionals can help you overcome them. It is very common, for instance, to only watch news and visit websites that confirm our own political, social, and even religious biases. What seeing views that continually reinforce our own may feel comforting, it can also put is into a false “bubble” where we think we must be right (because everyone we interact with agrees with us). It leaves us vulnerable to missing important facts simply because they are emotionally or intellectually unappealing to us. We make overcoming these cognitive and emotional biases a huge part of your experience with us an investor. Part of it is ongoing education and communication, but a significant part of it is how we set the “rules of engagement” at the beginning of our relationship. From having those needed conversations about your goals and fears, to establishing the rules by which your account will be invested, reviewed, and changed, to making sure our models are always rule-based and data-dependent (and not relying on our own gut instincts or intuition), we work to make sure investing is done in a rational, methodical way that sidesteps much of the error we as human beings are so often prone to commit. ## Bottom Line: When you become a client of nVest Advisors, great care is taken to ensure your investment model matches a number of important characteristics specific to you: the goals you have for your money, the time we have to achieve those goals, and your psychological tolerance to risk. These are common elements of creating any portfolio or investment recommendation. However, we take it a step further: we also build our models to account for economic and market risks that are totally out of your control but for which we can take preventive steps to mitigate. These two added steps are usually reserved for hedge funds or wealth managers who work with extremely wealthy, high-net-worth clients, but part of our commitment to helping “regular” families and small businesses achieve greater heights in their finances is to bring those more sophisticated management styles to all of our investment models, at every income level. If you are ready to begin, or if you are already an investor and are looking to step up into an investing experience that is likely radically different than what you’ve experienced before, we stand ready to help. The first step is, let’s look at what you’re doing right now, make sure it’s suitable for your needs, and see if there are improvements we can provide. Schedule your complimentary, no-hassle FREE AUDIT and Q&A SESSION today: *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Annuities & Insurance, Behavioral Finance, Client News, Early nVestors, Early nVestors, Economy, Emerging nVestors, Established nVestors, Insurance, Investment, Investment Markets, LifeCycle, Mailchimp, public, Retirement **Tags:** advisor, behavior, behavioral finance, bonds, client, CNBC, colorado, economics, economy, fiduciary, finance, financial, Fox, inflation, interest rates, investing, investment, IRA, macroeconomics, market, nVest, nVest Advisors, retirement, risk, risk management, stocks, volatile, volatility, wealth --- ### [Manage debt with a plan or expect to fail (Part 1)](https://nvestadvisors.com/manage-debt-with-a-plan-or-expect-to-fail-1/) **Published:** December 15, 2022 **Author:** Jeremy Torgerson **Content:** > ***![](https://nvestadvisors.com/wp-content/uploads/2022/12/Copy-of-Instagram-Posts-2-300x300.png "Copy of instagram posts 2 nvest advisors")Today (and next Wednesday) we are bringing you a two-part series of posts about Debt Management that were originally posted to the personal finance blog of nVest Advisors CEO Jeremy Torgerson, [Think Like A Rich Guy.](https://thinklikearichguy.com) TLRG covers financial, investing, and success mindset issues on a regular basis. This blog post is reprinted here with permission.*** > > ***Part 2 will post next Wednesday, December 21.*** # The Founding Four Financial Principals, Part 4: Debt > This is the fourth part of our new series about how to [get your financial life in order by focusing first on the four most important parts of your financial life](https://thinklikearichguy.com/2019/01/31/top_four_financial_plan/): saving, investing, protecting your income, and managing debt. We’ve discussed saving in detail in parts 2 and 3. Today, we’re going to delve into the main reason most people can’t save more money – DEBT. As I mentioned in the previous article, it’s critically important to your financial future that you can [save for future emergencies or short-term goals](https://thinklikearichguy.com/2019/02/06/the-founding-four-part2-saving/) (and I even shared a few [strategies to make sure your savings is actually growing](https://thinklikearichguy.com/2019/02/12/the-founding-four-part-3-of-9-how-and-where-to-save/), and not just sitting in a bank earning next to nothing). If you remember, the reason we need to save, especially for emergencies, is because when those unexpected things happen in life, we need a source of money to cover them. **Sadly, for most American families, their “emergency money” is a credit card.** When things get really bad, they have to resort to things like pawn shops and payday loans, which are always prominent parts of lower-income neighborhoods. > *A quick aside: one other thing I’ve noticed, working as an advisor in very impoverished parts of south Texas, is the high number of **credit repair agencies** (most of them worthless) that prey on these same unfortunate souls. Someone, somewhere convinced poorer communities that the most important thing they can do financially is getting a better credit score.* > > *I promise to write a lengthy article about credit ratings, how they’re calculated, what they mean, and what scores you should actually try to reach* at *different income levels. Be sure to subscribe for updates when we’ve got something new here on the site, but for now, suffice it to say that unless something is materially inaccurate on your credit report, these companies aren’t going to be able to improve your score. Save your money.* **So let’s explore the world of debt a little.** ## The world runs on debt, sadly. Don’t feel bad if you’re in debt. [Almost no one is completely debt-free](https://www.nerdwallet.com/blog/average-credit-card-debt-household/), and there are times when incurring a debt instead of using a huge sum of your savings might actually make financial sense. [Every nation on earth is in debt](https://tradingeconomics.com/countries) ([our country has over $22 trillion of it](http://usdebtclock.org/)). Every state is in debt. Every city is in debt. Every school district, hospital, airport, road system, corporation, airline, automaker, and nearly every family carries at least some form of debt. ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/pexels-photo-164313-300x146.jpeg "nvest advisors")Used properly, debt isn’t necessarily a bad thing. For Rich Guys, governments and companies, it provides what’s called in the financial world [***leverage***](https://www.investopedia.com/terms/l/leverage.asp). It allows you to utilize more money than you personally have, to free up money for other immediate needs. It allows you to start or expand a business; build another factory, hire additional salespeople, and other useful, productive purposes. Used wisely, debt can be smart for Average Guys, also. It allows you to purchase significant things that you don’t have the funds for right now. Again, in some instances, this makes sense. A 30-year mortgage allows a family to buy a home they’ll eventually own (and that keeps appreciating in value). Prudent student debt allows you to earn a degree, which increases your earning potential for the rest of your working life. The problem comes when we’re going into debt for things we don’t actually need and that depreciate over time, instead of things that provide increasing value. > **So here’s Rule #1 about debt: it’s only “good debt” if what you buy with it will appreciate in value for you later.** A house or a college education might be considered a “good” form of debt, as prohibitive as their repayments may be. But putting a TV or a refrigerator or (heaven forbid) clothing or gas or groceries, or any other items of minor value and that depreciate over time, is a horrible reason to go into debt. Unfortunately, that kind of valueless debt – often called **consumer debt** – is an epidemic in the Western world. [In America, consumer debt topped out at over $4 trillion at the end of 2018, an all-time high.](https://www.lexingtonlaw.com/blog/loans/consumer-debt-statistics-2019.html) (That’s 4,000,000,000,000 dollars – 4 million million dollars.) There is almost $12,000 of consumer debt for every man, woman and child in America. ## Types of indebtedness for Average Guys I’ll skip describing the types of debt governments and corporations undertake (usually called a [**Bond**](https://www.investopedia.com/terms/b/bond.asp) or a **Note**). This series is for Average Guys wanting to become Rich Guys, so we’ll give you a quick review of the different kinds of debt an Average Guy will fall prey to. ### Secured Debt A [**secured debt**](https://www.investopedia.com/terms/s/secureddebt.asp) is a debt that has something of value tied to it (called [***collateral***](https://www.investopedia.com/terms/c/collateral.asp)), that the lender can use to recover the money they lent you. These are generally your big debts in life: your home mortgage, your car loan, and your student loans. Because the lender has something of value they can take away from you if you stop paying the loan, and thereby recoup their money by selling that item (a house, a car), their risk is generally lower than other kinds of debt. If their risk is lower, the interest rate they will charge you is lower. (Student loans aren’t actually collateralized with something tangible, but because the government now backs them, they’ve made them nearly impossible to get rid of or walk away from, even in bankruptcy. You *have* to pay them off. So for this example, I’m calling them a secured debt because their interest rate is usually low and they act more like a secured debt now than in years past.) ### Unsecured Debt Basically, every other form of debt other than what I mentioned above is called [**Unsecured Debt**](https://www.investopedia.com/terms/u/unsecureddebt.asp). Unsecured debt is literally borrowing on your word to pay it back. The term “unsecured debt” covers things like credit cards, personal loans, lines of credit, etc. The lender has nothing of collateral to back up their risk on the loan, so your ability to repay, and your prior history with debt, comes into play significantly in determining how much you’ll pay in interest for this debt. It is unsecured debt that is most greatly affected by a bad credit score, which is perfectly logical when you consider the lender’s risk. **You can also classify debt based on how it’s lent and how it’s paid back.** An [**installment loan**](https://www.investopedia.com/terms/i/installmentdebt.asp) is a debt that starts with a full amount borrowed, and you pay it off with a set payment amount for a specitic amount of time. Eventually, the debt is paid off and the loan is closed. You can’t partially pay down an installment loan and then rack up more debt on it. Once it’s paid off, it’s terminated. Auto loans, student loans, and mortgages are always installment debt, but payday loans and even sketchy loan shark-type loans are brief installment-type transactions. Even when you borrow from your 401k, you pay in installments until the debt is cleared. ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/pexels-photo-259200-300x200.jpeg "nvest advisors")A **revolving loan** (or **revolving line of credit**) is a balance that is offered to you to use at will, over and over, if there’s a balance available to borrow. These are your credit cards, home equity lines of credit, overdraft protection at the bank, etc. Because the revolving loans have a greater opportunity for misuse (you could rack up more debt than you can afford, up to the limit the lender set), and then walk away without providing any collateral, the risk for the lender is highest with kind of debt. As a result, the interest rates you’ll pay are the highest of any other kind of debt. Repayments are also sporadic with revolving debt. Because the balance you owe can change each month, the lender will take your balance on a certain day each month, apply their interest to that balance, and then require a minimum payment (usually just enough to cover that month’s interest, but sometimes even less than that). It is the easy access to more money, the typically very high-interest rate, and the very low minimum payment, that get so many people into trouble with revolving debt. Credit cards make buying things on impulse really easy and, at first glance, very affordable. It’s only when you’ve been paying on your credit card for a decade and not seeing the balance go down that the really nasty aspects of revolving debt finally show up. Sadly, revolving debt is also the most commonly used kind of debt, and is most often used for valueless, depreciating, often frivolous purchases. > **Ask yourself: how smart is it to borrow money at the highest possible interest rates, and then spend it on the lowest value items**? Rich guys ***never*** do that. I’m not saying Rich Guys don’t go into debt. They do, but not to buy a new TV or a couch. They take on debt to expand their earning potential or to acquire an asset that is going to appreciate over time. No Rich Guy would ***ever*** use debt to purchase essentially worthless “stuff” to fill up their houses or impress their friends. And yet, Average Guys do this exact thing all the time, just to impress other Average Guys with a phony show of status. ## Get your head right about debt Next week, we’ll give you a workable plan to begin to manage and ultimately eliminate your debt. It’ll take work, commitment, and more self-discipline than most Average Guys have. Thankfully, discipline is like a muscle that you can exercise and strengthen. For now, as I wrap up this week’s course, I want you to consider how you view debt and how serious you are committed to changing the way you use it. **Commit to yourself the following two basic statements about debt:** 1. **Debt should only be used for leverage: expand my earning potential or to acquire an appreciating asset.** 2. **I will not go a single cent further into debt for something that isn’t leverage.** **And finally, here’s some homework for you before next week:** 1. **Gather all of your most recent statements from every debt you owe. You need a balance due, minimum payment and interest rate for each one.** 2. **Determine how much extra money each month (above and beyond your minimum payments) that you will commit to paying off your debts.** ### Are you struggling to get a grip on your family’s debt? Let’s talk! We’re happy to spend some time seeing if we’d be a good fit for your needs and we have extremely affordable financial planning services to get you on the right track, and keep you there. Schedule a free visit today: **Categories:** Behavioral Finance, Client News, Client Service, Debt, Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, LifeCycle, Mailchimp, public, Retirement **Tags:** advisor, bankruptcy, client, colorado, credit cards, debt, debt consolidation, debt management, debt plan, economics, economy, finance, financial, financial plan, foreclosure, interest, interest rates, leverage, market, mortgage, nVest, nVest Advisors, plan, planner, planning, service, texas --- ### [FTX was throwing up the same red flags as Bernie Madoff](https://nvestadvisors.com/ftx-was-throwing-up-the-same-red-flags-as-bernie-madoff/) **Published:** December 16, 2022 **Author:** Jeremy Torgerson **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2022/12/Copy-of-Instagram-Posts-3-300x300.png "Copy of instagram posts 3 nvest advisors")**In the span of just a few days, cryptocurrency exchange FTX – the world’s third-largest cryptocurrency exchange with more than 1 million users – filed for Chapter 11 bankruptcy.** **A few days later, cryptocurrency lender BlockFi announced that it was “not able to do business as usual” and paused client withdrawals as a result of FTX’s implosion. Then the lending arm of crypto investment bank Genesis Global Trading announced it was pausing new loan originations and redemptions.** **The FTX fiasco is reminiscent of Bernie Madoff, the mastermind of the biggest investment fraud in history after he defrauded more than 40,000 people of over $65 billion. Considered by many to be the archfiend of the financial world, his Ponzi scheme will haunt the financial industry for years – and the FTX debacle is just resurrecting the same fears in the minds of investors.** ## Advisors Regaining Trust The epic Ponzi scheme Madoff ran and the spectacular collapse of FTX both underscore a harsh reality: many folks don’t understand what advisors do or much about finance. Financial advisors must draw sharp contrasts for clients between how they operate and how FTX and Madoff did. For instance, Madoff was the custodian for his clients’ assets, a big red flag. Madoff also generated his own statements for clients, which were major works of fiction. Clients need to be told that their money is with a third-party custodian, who can generate independent statements. And it is vital for advisors to explain this contrast to gain client trust. Most importantly, advisors must lay out what a custodian does and assure clients that we don’t hold or take custody of their money. A crucial way to gain trust is to explain everything that is happening. Not every client understands how markets work and financial matters are daunting to some. But advisors must assure clients that investments “won’t go FTX or Madoff” which is hard to do, especially if we’re showing clients that they are giving up liquidity for a better opportunity. But in today’s post-Madoff and current-FTX era, advisors who counsel their clients about bad investments are doing both their clients and themselves a favor. Someone who buys a flaky asset that falls apart will soon be knocking on an advisor’s door, begging for help. ## Avoiding Another Madoff/FTX So how do you make sure you don’t run into the next Bernie Madoff or FTX? ***One way is to assure that your advisor does not oversee every part of your investing***. Here are four questions to ask your advisor (and the short answers you’ll get at nVest Advisors): > #### 1. Who is selecting my securities? > > (**Our answer:** if you grant us discretionary trading authority, we do as full legal financial fiduciaries, while creating investment models and/or custom portfolios using a rules-based, data-dependent macroeconomic approach as our guiding philosophy, and taking your stated needs, concerns, and risk preferences into account (we call this an nVestment Policy Statement.) > > #### 2. Who is executing my trades? > > (**Our answer:** in all instances, your account custodian executes trades, at the request of nVest Advisors acting as your fiduciary. Some trades are automated based on the account rules we establish with you, such as how often we rebalance, if you need to take a withdrawal, or if we need to harvest tax losses for you.) > > #### 3. Who is keeping custody of my assets? > > (**Our answer:** the investment firm we use for your account. In our case, that might be Charles Schwab / TD Ameritrade, Betterment, Aspire Retirement Services, or Empower Retirement. We never hold your investments or cash, and except to assess, invoice, and deduct your account management fee once per billing cycle, we never take custody of your assets at any time (the deduction of our fee is allowed by our regulators and is described as “constructive custody”). Other than that one moment per billing cycle, your assets are are *always* held and valued daily by the account custodian. > > #### 4. Who is verifying my performance? > > (**Our answer:** the custodian we use for your account is required to verify and update your account values on at least a daily basis. We also use a client portal for some of our clients, and third-party analytic software whenever we are constructing models or looking closely at your account’s performance for comparative or rebalancing concerns.) **Madoff controlled the first 3 exclusively.** And for the 4th, he was able to find a small outside auditor to help him with his scam and sign off on the phony returns. Your advisor might be selecting securities for you, but listen carefully to how they answer the next three questions. ## Do Your Homework Further, check to make sure that your advisor has no adverse actions at the Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA), state securities departments and state insurance commissioners. It is tedious because by some estimates, close to 5% of financial advisors will receive a client complaint in their lifetimes. For perspective, consider that the American Bar Association found that 8% of attorneys receive complaints annually. And the American Medical Association says 5% of doctors are sued each year. For advisors, lawyers and doctors, sometimes these complaints are frivolous. But sometimes they are not. ## Record of Paying Fines A little research would have told clients that Madoff paid thousands of dollars in fines, stemming from a 2005 violation. Details from the Form ADV on the SEC’s website are sketchy, but it appears that his firm withheld required information from the Nasdaq exchange. A Madoff client wanting to buy or sell a stock had filed a limit order, which means that the customer wanted a specific price or better. This information is necessary for bidders to see what the market for the stock is like. And the Madoff client who bid had the right to have that order entered into the market. Oddly, the SEC still maintained a listing for his firm, Bernard Madoff Investment Securities, even though it is defunct. If you just emerged from a coma after Bernie had been in prison for a few years, you might have thought the Madoff outfit still existed. The reason for the continued listing, according to the SEC, is legalistic. Madoff’s firm needs to be registered with the agency so victims can make claims on its assets. As a practical matter you couldn’t invest with the firm if you tried because the firm is out of business and its founder sent to prison for 150 years. Now, he’s no longer alive. ## One More Thing It has been over 10+ years since Madoff went to prison (he has since died) and the recent FTX debacle will surely resurrect more client concerns with respect to their financial advisors. But if any financial advisor balks at your 4 questions or doesn’t want to provide you with their Form ADV, don’t walk away. ***Run.*** ### Do you have questions about cryptocurrencies in an investment strategy, or needing someone to look at your accounts during this market turmoil? Let’s talk! We’re happy to spend some time seeing if we’d be a good fit for your needs and we have extremely affordable financial planning and ficudiary, no-commission investment management services to get you on the right track, and keep you there. Schedule a free visit and financial audit today: **Categories:** Behavioral Finance, Client News, Client Service, Cryptocurrency, Early nVestors, Early nVestors, Economy, Emerging nVestors, Established nVestors, Investment, Investment Markets, Mailchimp, Media, public **Tags:** Alameda Research, Bernie Madoff, corrupt, crook, Crypto, cryptocurrency, custodian, fiduciary, finance, financial, fraud, FTX, hoax, invest, investing, investment management, investment strategy, investor, money, offshore, platform, ponzi, Sam Bankman-Fried, SBF, theft --- ### [Your employees want and need a retirement plan: here's how](https://nvestadvisors.com/your-employees-want-and-need-a-retirement-plan-heres-how/) **Published:** January 11, 2023 **Author:** Jeremy Torgerson **Content:** > *![](https://nvestadvisors.com/wp-content/uploads/2023/01/Copy-of-Facebook-Posts-7-300x251.png "Copy of facebook posts 7 nvest advisors")Every Wednesday, the nVest Advisors blog is devoted to helping your small business succeed and grow. Whether you are a sole proprietor, LLC or partnership, a family company, or a multi-site corporation with 500 employees, and whether you’re making cakes, building the latest in tech, or drilling for oil, helping your business reach its organizational and financial goals is a large part of what we do here at nVest. With over 25 years of small business experience (including being a small business ourselves), we know firsthand how hard you work and how much is at stake for you and your team, and the families who depend on your success. We’re excited to come along side your business and be the financial and, benefits and investment partner you can trust and rely on.* > > *To receive an email of these articles when they are published, feel free to join the Business-Only subscribers’ list here.* # Your employees want and need a retirement plan: here’s how Earlier this year, 401k company Sharebuilder401k, conducted a survey of 500 small businesses across the United States, to ask about the current benefits offered to employees. The results were surprising: a whopping 74% of all small businesses still did not offer any sort of retirement plan to their employees. This puts a small company at a significant disadvantage when trying to recruit and retain talented employees and managers, as benefits packages are heavily preferred by employees and a significant majority of job offers are accepted based on benefits in addition to salary. The primary reasons small business owners gave for not providing a workplace retirement plan were: - **58% didn’t think their company was big enough to sponsor one.** - **32% said they didn’t believe the company could afford to match employee contributions.** - **24% believed a workplace retirement plan was too expensive to set up and manage.** ### Yet when asked, only 16% of employers believe their employees are on any kind of realistic path to retirement. The significant disconnect between the need for a plan, and the lack of one for most employees in the small business space, is a challenge each of us as small business owners must face and overcome. Inaction puts our recruitment and retention efforts at risk, but it also opens the door for additional, often unwanted, government oversight into parts of our business that weren’t there before. For instance, this year, nVest Advisor’s home state of Colorado became the sixteenth state to start a state-mandated IRA plan, forcing employees to contribute to a state-managed IRA account if their employers did not offer a qualifying plan. Those contributions must be deducted from payroll and remitted to the state on the employee’s behalf. So even if you never wanted to deal with payroll deductions and remittances for a retirement plan before, if you’re a company in Colorado or fifteen other states (and counting) you are now required to do so. That kind of government solution solves a small problem of an employee having a place to save for retirement (if by decree), but it does nothing to solve the greater problem of motivating the employee to plan for their future, help them understand the various risks and benefits of investing, set and work toward secondary goals like college savings and debt management, or manage their emotions during downturns in the investment market. It does not provide them with a sufficient selection of investments to choose from to meet their investment objectives, regular opportunities to learn about personal finance and goals-based investing, or give them the ability or skill to manage those assets as they grow. ### If you and your employees could be compelled to contribute to a retirement plan anyway, why not make it a plan that offers genuine benefits and personalized services to assist you and your team along the way? ![](https://nvestadvisors.com/wp-content/uploads/2023/01/1-300x300.png "1 nvest advisors")As small business owners, we already have a lot of work to do each day, and for most of us, managing a company retirement plan is not something we want to add to that list. Thankfully, like many other parts of the financial industry, solutions are becoming far more democratized than in the past. There are now a large number of retirement plan types and service providers (ourselves included) that not only assist but specialize in the small business space, and our goal is to make retirement plans accessible and affordable for even the youngest startup. Modern retirement plans are tech-savvy, inexpensive, loaded with additional services and benefits, and far less expensive than in the past. Depending on the plan types your company qualifies for and plan advisor you work with, ***you can offer a quality retirement plan to your employees that literally costs you nothing to offer, match or maintain.*** And even better for you: plan advisors like nVest also assume a vast majority of the fiduciary responsibilities you have as the plan sponsor. In partnering with a legal plan fiduciary like nVest Advisors, your regulatory and civil risk is vastly diminished. (We will have more to say about plan fiduciary responsibilities in coming articles.) ## There is a solution that is right for your business. This blog post would quickly become a full book if we attempted to give every detail and nuance of retirement plans available to your company, but we can provide some basic information to help you get the discussion started, and we urge you to subscribe to our business-only blog updates, because we will be looking at each of these plans individually in the coming weeks. But your company doesn’t have to wait for that. If you are ready to either start a new plan, or need to review and revise your current one, we’re very happy to come alongside your company’s leadership team to help parse through the various costs and benefits, legal and operational requirements, help you perform due diligence on available plan custodians, and help you implement and roll out your new retirement plan. And as the plan advisor, we’ll work directly with you and your team to make sure it’s successfully implemented for many years to come. The biggest thing you need to remember as the plan sponsor is to choose a plan type your company can easily administer, meets the needs of your team (both now and in the next few years), and that the company can afford. Some plan types cost your company literally nothing to offer to your employees, while others have required matches or nonelective employer contributions and some recordkeeping costs (many custodians now supply those services for free if you establish your plan with them). Some plans require additional tax and DOL paperwork each year, others require nothing additional to be produced. Some plans place a greater burden on you as the plan sponsor to be a fiduciary for your employees (which you can pass on to companies like nVest), whereas others have no fiduciary burden at all. You also need to think about the features and benefits your employees might want. Do they want significant discretion as to how they invest their funds, or should you limit their options to 15 or 20? Should your plan offer them ROTH (after-tax) contributions? What contribution limits do your employees need? Do they need the ability to borrow against their account balances while they work for you, or should they just be forced to take withdrawals (often with additional tax burdens)? Do you want your employees to establish individual relationships with the plan advisor and receive additional financial planning assistance, or do you want the plan to be a basic investment vehicle only? A key feature of all employer-sponsored retirement plans that you must first keep in mind is, the government wants to make sure they are fairly implemented and that all qualified employees (you can determine to some extent which employees will qualify to participate) must have at least free and fair access to the plan and its benefits and at least an annual opportunity to start participating. Whatever the employer sets up for him or herself needs to be available to qualified employees, which is why choosing the correct plan is crucial. Let’s give you just a brief glimpse at the most commonly used plan types for different business situations today, and then we’ll go into detail on each one of these in coming articles. And remember, you don’t have to wait to discuss this with us. Feel free to schedule a completely risk-free consultation with us today to get professional help in selecting your plan and its options. ## The simplest and least expensive workplace retirement plan ### Payroll-Deducted IRA Far and away the simplest and least expensive way to add a retirement plan to your company’s benefits is to offer a payroll-deducted IRA. In this plan, the employees themselves open up an IRA account (usually all at the same custodian for ease of making their contributions), set up their own investment strategy, and tell you how much from their paychecks they want to contribute. Your only obligation as the employer is to send their contribution to their IRA account directly from payroll. Payroll-Deducted IRAs are self-directed (at nVest Advisors, we establish an individual relationship with each employee), and the costs of the IRA are deducted from the IRA in most cases. This means the employer has no cost or reporting requirement at all to offer this plan. Employer matches are not allowed. Just like regular IRAs, contributions are limited to $6,500 per year under age 50, and $7,500 age 50 and older. There are no loan features with this IRA plan, so employees would have to take withdrawals with possible tax consequences. ## **Plans for one-person and family companies** ### SEP IRA Short for **Simplified Employee Pension IRA**, the SEP IRA is an ideal and very easy plan to implement for single-person business, a married couple working together, a family business, or another small company of very key employees working closely with the company owner. Employers can contribute anything from 0% in a year to up to 25% of the employee’s pay or $60,000 (whichever is less), but employees themselves cannot make contributions, which is why this is considered a pension fund. The investment selection in a SEP IRA is limited only by what’s available at the custodian where the SEP IRA is held. There are no reporting requirements and plan costs come directly from the SEP IRA account balances. nVest Advisors manages many SEP IRA plans for small businesses and the custodians we recommend for this plan typically have no additional fees. ### Owner-Only (or Solo) 401k The **Owner-Only 401K (sometimes called a “Solo” or “Individual” 401k)** is just what it sounds like: a 401k plan designed just for one person (or perhaps a married couple in some instances). This is ideal for a company structure in which the owner is listed as an employee (like an S-corp). Both employee and company can make contributions, reducing the payroll tax burden on both sides of the equation: employees can contribute up to 100% of their salary or $23,500 in 2023, and employers can contribute a profit share of up to 25% of the employee’s compensation each year. Employees over age 50 can add an additional $6,500 per year in catch-up contributions. Total yearly contributions from both employer and employee cannot exceed $66,000 (if over age 50, $73,500). Because there are no other employees, there is no reason for additional paperwork filings with the IRS or DOL to prove the plan was fairly implemented until the plan’s assets reach $250,000 (and then it’s an E-Z form), so this is a very simple and easy plan for a single-person company to provide to its owner and sole employee. The year a solo-401k plan terminates, a one-time Form 5500-EZ is required. As with the SEP IRA, withdrawals can be taken but tax consequences are similar to IRA withdrawals. Some Owner-Only 401ks offer ROTH contribution options, and a few offer a loan feature similar to a more typical 401k. ### SIMPLE IRA The **SIMPLE IRA (short for Savings Incentive Match PLan for Employees IRA)** is the first significant step toward a 401k for a small company. Still very easy to start and maintain, the SIMPLE IRA is a definite step up from the Payroll-Deducted IRA while still giving the employees the duty to establish an account and determine their own investing strategy. The contributions limits for participants are higher than the Payroll-Deducted IRA (up to $13,500 per year), and the employer has the option of two ways to provide the match: either a 1% – 3% of pay elective match based on what the employee contributes (this can fluctuate to some degree each year), or a 2% of pay non-elective contribution for every employee, whether they contribute or not. The employee manages their own account (at nVest Advisors, we partner with the employee to provide ongoing investment management on their behalf as fiduciaries), and there are no filing requirements for a SIMPLE IRA. There generally are no ROTH contributions available in this plan, and because it’s an employee’s own account, there are no loan features built into these plans. ## 401k Plans Now we come to the plans most people are familiar with and many small companies feel they cannot afford or have the personnel to manage: the 401k. Far and away the most common retirement plan in most major companies, the 401k is a useful and powerful recruitment and retention benefit because of its enormous flexibility, breadth of possible features, and as time goes by, easier and less expensive implementation. The 401k plans of today are not the same things as even 10 years ago. They are far less expensive and easier to start and implement for you, have many features and benefits added to benefit your employees, and can be tailored significantly to meet the needs of your particular team. All 401k plans have certain things in common: contribution limits, selective criteria to make an employee eligible, loan features, a set selection of investment options (this is one of the services we undertake for you as your 401k plan advisor), reporting and recordkeeping requirements, and more. Nearly all 401ks today allow for both pre-tax and after-tax (ROTH) contributions. Contribution limits for 401ks in 2023 are $22,500 per year under age 50 with the additional $7,500 catch-up contribution for employees age 50 and over. Most 401k plans allow for pre-tax and after-tax (ROTH) contributions. Because there are strict limits on when withdrawals can be taken while the employee is still at the company, all 401k plans offer loans to participants based on their account balances. Employer matches are also a feature and can be highly customized, as well as the time it takes for the employee to be vested in those matches. Companies can also add profit-share and other “add on” features to the 401k, as needed. Some features such as age-weighting or cash-purchase strategies can be added if you have an older management team or the managers are compensated significantly higher than the average employee. But the key to a successful 401k plan is that it is fairly offered to all eligible employees (you aren’t allowed to set up a plan and then only tell certain select employees). You must also be aware that offering a 401k plan places you as the employer in the role of a fiduciary for the assets in that plan. You must make sure the investment options themselves are of sufficient quality and performing at least comparable to their peers, are not too expensive and give the employees sufficient flexibility to meet various investment objectives. You must make sure there are default investments that will perform adequately if the employee doesn’t take control of their own strategy, etc. Every few years, you should assess whether the plan is still competitive and its costs are fair by performing due diligence on your plan and a handful of available replacements. **Ensuring that employee fairness and plan oversight are happening is what the government is looking to verify with annual reports the 401k plan must file, which is why most small companies offering a 401k hire two additional professionals to help them fulfill their fiduciary duties: a plan advisor, and a plan administrator.** Very briefly, a **plan administrator** takes over the responsibilities of daily recordkeeping, approving and administrating employee loans, payroll contributions, rollovers, and other employee-related tasks that would typically burden a small corporate HR or payroll department. A best practice is to make sure your plan administrator also takes on their duties as a legal fiduciary for the plan (called a **Section 3(16) fiduciary**), which means they legally assume the responsibility to make sure their part of the plan administration is compliant with applicable law. 3(16) fiduciary administrators also typically complete all of the annual review and government paperwork filing on your behalf. Their cost is typically much less expensive than if the company hired its own employee to perform these tasks. A **plan advisor** (this is us) acts as both the company’s representative and fiduciary for many of the decisions most small businesses don’t feel capable of doing, or for legal reasons, don’t want to do. Plan advisors help create the plan itself and make sure the available features and options are correctly added to the plan, recommend (or directly manage on an ongoing basis) the investment options in the plan, perform the due diligence of the plan and custodians on your behalf, and ensure employees get financial and investment training and have a resource to reach out to if they have questions or need help. Participants in plans that we manage, for instance, are offered free or very low-cost personal financial planning, ongoing investment education, and other services like debt optimization, help selecting and monitoring their investment performance, etc. Plan advisors can assume two different levels of responsibility for your company 401k: they can act largely in a supportive role, providing guidance and options but always leaving the final decisions up to you (this is called a **Section 3(21) fiduciary**), or they can take an active role in managing those aspects of the plan directly for the benefit of the company and the employees, including locating and hiring a 401k custodian and a 3(16) administrator (this is called a **Section 3(38) fiduciary**). nVest Advisors works with company 401ks in either capacity, as a 3(21) plan advisor (basically making recommendations only) or as a 3(38) plan manager (making and implementing the plan as a fiduciary to the company), depending on which role the company prefers. Most plan sponsors hire us as full 3(38) fiduciaries, for obvious reasons. This all may sound expensive but it’s actually pretty reasonable. Plan Administrators typically charge an annual fee of a few thousand dollars depending on the number of participants, a small cost per employee, or some combination of the two. Plan advisors like nVest Advisors typically assess an annual fee that is a percentage of the total assets in the plan and our level of fiduciary responsibility, and that annualized fee is deducted either monthly or quarterly. (In our case the smallest start-up 401k plans might see an annualized fee of 1.4% per year, and the largest will be something like 0.25% per year. As the plan assets grow, the actual fee percentage we charge drops, as we use what is called a tiered fee schedule). Please ask us for details on these costs in a complimentary Q&A meeting by scheduling it here. The costs of a 401k plan can be paid for in different ways. Many employers offer the plan and fully pay the plan’s administrative costs out of their own budget, but many others have the plan itself absorb the costs by dividing up the plan fees and having the participants share the costs from their 401k accounts. ### One easier option: the SAFE HARBOR 401k For employers who want to offer a 401k but want to reduce their administrative costs, the SAFE HARBOR 401k is a viable option. Whereas a standard 401k has many ways to implement the features and benefits (and doing so inappropriately may make the plan run afoul of fairness, matching, and other requirements), a SAFE HARBOR 401k is a plan with nearly all of the features pre-set to ensure the fairness and administrative criteria the IRS and DOL are looking for is already built into the plan. This provides some peace of mind for the employer that the plan will remain in compliance automatically, but limits your ability to determine certain criteria (like when an employee is eligible). ## For non-profit or governmental organizations There are different options for non-profit and governmental organizations (such as hospitals and school districts) that nVest Advisors also helps create and manage such as **457, 401(a) and 403(b)**, but we’ll save those for a later article. ## Have additional questions? Want to explore your company’s options, or need to review your current plan? ![](https://nvestadvisors.com/wp-content/uploads/2023/01/3-300x300.png "3 nvest advisors")nVest Advisors stands ready and eager to provide information, resources, and support. We’d also love to give you a competitive bid to become your company’s new plan advisor if you’re ready. But that process takes time to do it right. We need to learn much about your current company, its growth prospects in the coming years, the makeup of your team, the features and benefits the company wants to commit to, and much more. Something like a SEP IRA or Solo-401k can be established in just two or three meetings, but a full-featured 401k plan implementation (or a competitive replacement of an existing plan) can take six months or more to complete. We’ll do as much of the work for you as we can, but we’ll need several meetings with your key employees before full implementation is successful. We’ll also need at least one annual review meeting with your key employees to continue to refine and review the plan to maximize its impact for your team. The first step is the easiest but it’s often the one you’ll be most hesitant to do: let’s just talk first. If we’re a good fit for your company’s needs, and our bid is competitive, we can take it from there. If not, you’ll definitely know which direction you want to go after that initial visit. Feel free to schedule a completely confidential and risk-free ***Company Plan Initial Audit and Q&A***with us using the calendar below: **Categories:** Business Stories, Client News, Mailchimp, Media, public, Retirement, Small Business **Tags:** 401a, 401k, 403b, 457, advisor, announcement, benefits, colorado, company plan, economy, employer, ERISA, fiduciary, finance, financial, human resources, Individual, invest, IRA, non-ERISA, Owner-Only, payroll, plan, plan sponsor, planning, retirement, SEP IRA, service, SIMPLE IRA, small business, SOLO, state-sponsored IRA, texas --- ### [Manage debt with a plan or expect to fail (Part 2)](https://nvestadvisors.com/manage-debt-with-a-plan-or-expect-to-fail-2/) **Published:** December 21, 2022 **Author:** Jeremy Torgerson **Content:** > ***![](https://nvestadvisors.com/wp-content/uploads/2022/12/Copy-of-Instagram-Posts-4-300x300.png "Copy of instagram posts 4 nvest advisors")This is the second of a two-part series of posts about Debt Management that were originally posted to the personal finance blog of nVest Advisors CEO Jeremy Torgerson, [Think Like A Rich Guy.](https://thinklikearichguy.com) TLRG covers financial, investing, and success mindset issues on a regular basis. This blog post is reprinted here with permission.*** > > [Part One can be found here.](https://nvestadvisors.com/2022/12/15/manage-debt-with-a-plan-or-expect-to-fail-1/) # The Founding Four, Part 5: The Debt “Snowball” > This is the fifth of a 9-part series called the Founding Four, in which we dig deep about the four most important topics to tackle in your financial life. To get the most of this series, please read them in order. > > [Part 1](https://thinklikearichguy.com/2019/01/31/top_four_financial_plan/) gave you an overview of all four principles and how they fit together. [Part 2](https://thinklikearichguy.com/2019/02/06/the-founding-four-part2-saving/) explained the need to save for short-term needs, including an Emergency Fund. [Part 3](https://thinklikearichguy.com/2019/02/12/the-founding-four-part-3-of-9-how-and-where-to-save/) explained how to save in a way that generated a better rate of return than a typical savings account. In [Part 4](https://thinklikearichguy.com/2019/02/21/the-founding-four-part-4-of-9-debt/), we discussed the various types of consumer debt, and explained briefly the difference between “smart” debt and meaningless, sabotaging debt. As a means of quick review, as a financial planner, I don’t curse all debt as evil, but I don’t believe most of it is necessary, either. There is no such thing as “good” debt, but there is such a thing as “smart” debt. ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/pexels-photo-1842608-1024x631.jpeg "Meditation 17798_1920 nvest advisors")**“Smart” debt is debt that is taken on to either purchase an appreciating asset (such as a mortgage**) **or earns you more money in the long-term (such as a student loan).** You can make bad decisions with otherwise “smart” debt, like taking 6 years to party through college and ending up with a worthless liberal arts degree, but generally, smart debt is something that will ultimately enhance your net worth or income for an extended period of time. That advice is really helpful for someone just getting started in life and doesn’t have a mountain of debt already, but what if you do? What if you already have the proverbial house, two cars, three credit cards, and a student loan? How do you get out of debt in a logical, meaningful way? **This part of our Founding Four will look similar to other financial pros’ advice, but I differ fundamentally from folks like Dave Ramsey on how to structure and pay down your debt.** Whereas Ramsey tells you, essentially, to strip away every luxury, subsist on beans and rice, and plow everything you earn into a debt paydown plan, I respectfully disagree. A draconian plan is a very hard one to stick with, and trying to balance your financial “stool” on just one fat leg doesn’t provide any sort of stability. **I believe you need to work on all of the Founding Four principles at the same time, not obsess about getting out of debt at the expense of building some short-term savings,** **insuring your family adequately against catastrophic loss, and taking advantage of compound interest for long-term investing.** You didn’t get into debt overnight, and you won’t get out of it overnight. And if you don’t save along with paying your debt down, you’ll have nowhere to go in an emergency except back to a credit card. **So to paraphrase the Greek historian Hesiod, let’s do all (four) things in moderation.** ## So how do you get a grip on your debt? Like I said before, my advice is going to be similar to a lot of other gurus in this area, because it works. In fact, when you hear a lot of pros saying the same thing, a Rich Guy will heed their advice, and not try to be contradictory unless he has a very good reason. In my own experience as a planner, it’s always the guy who has virtually nothing that believes he’s an expert in everything. Rich Guys are not ego-led, deluded fools; [they seek out expert advice and consider it carefully](https://www.wealthmanagement.com/blog/ultra-rich-listen-financial-advisors). (Hint: think like a Rich Guy.) **The very first step is to shut off the supply. I** don’t mean to close your accounts, but you must commit, today, that you won’t go one penny further into debt of any kind, until you’ve eliminated what you have already. **Second, you must commit that you will never again take on debt for items that quickly depreciate in value.** That means, no debt for appliances. No debt for clothing. I’m even hesitant to suggest debt for things like cars, which rapidly depreciate from the $40,000 you bought it for to $8,995 in 5 years. Remember, Rich Guys use debt as ***leverage*** – as a means to actually grow their wealth, not as a means to acquire worthless stuff to look good to their friends and neighbors. **And finally, you have to commit to an organized, systematized plan to eliminate debt.** That’s what the rest of this article will show you in detail – how to eliminate debt in one of the most recognized strategies of its kind anywhere: the [“Debt Snowball”](https://en.wikipedia.org/wiki/Debt-snowball_method). ## The Debt Snowball As your virtual financial coach, I want you to work on your debts through a structured paydown plan commonly called the Debt Snowball. I don’t know who coined the phrase, or who first invented the concept, but I’m a huge fan of this method of debt paydown. So are most financial experts. **Why? Because it *works*.** **If you’re unfamiliar with the debt snowball concept, it’s pretty simple:** - *You make minimum payments on all of your debts except one. To that one, you add a certain about of extra. That’s the only debt that gets paid extra.* - *Once that first debt is paid off, you move the entire payment you were making to that debt and add it to the minimum payment due on Debt #2.* As you pay off each debt, and move the entire payment on the previous debt to the next one on the list, the total amount you’re paying each month toward “debt” stays the same, but it rapidly begins to knock your later debts off because the monthly amount you’re paying gets applied more and more to a single debt. And that ever-increasing monthly payment on one debt at a time is where the strategy gets its name – it’s like a snowball that starts very small at the top of a hill, but gathers more snow and grows larger and larger as it rolls downhill. **You can pay off a lot of debt in an astonishingly short amount of time using this strategy.** Let’s see this in action in a hypothetical (but all-too-normal) situation: (And I apologize in advance for the number of tables that are coming, but it’s important to point out specific data points and to watch the payment “snowball” as it pays debts off.) ### Step 1: Gather your data Let’s say we have as new clients a typical family with a 30-year mortgage, two 5-year car loans, a lingering student loan with 15 more years of payments, and three credit cards with balances. If I asked my client to simply list their debts, including the current balance due, the interest rate, and the minimum monthly payment for each, they’d come back with a list like this: ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-1-1024x362.png "nvest advisors")Your garden variety family consumer debtPretty normal: $293,015 in total debt, with minimum monthly payments totally $2,630. ### Step 2: Identify the really bad debt and any “smart” debt. With this info, I would begin to determine in what order you should pay your debts down. You can see I’ve noted the highest interest rate debt with red, and added a column called “Tax Benefit” to note if any of this debt provides a tax deduction for the interest being paid. Most American taxpayers get to deduct the interest paid on the mortgage of their primary residence and their qualified student loans. So even if you have these debts for a long period of time, at least the interest you’re paying comes back to you in the form of a tax write-off (assuming you itemize your deductions). ### Step 3: Rank your debts in the order we want to pay them off Generally speaking, you want to pay off the highest interest-rate debt first, and save the “smart” debt for last. In this case, the credit cards have to go first, no doubt. To pay 20% interest on a debt long-term is insanity. ***At 24%, for instance, your credit card balance will double every three years***, even if you don’t charge any more purchases on it. You *have* to get rid of this high-interest debt as soon as possible, or you’ll be dealing with it for literally *decades*. (By the way, credit card companies know this – that’s why the minimum payment due each month on most revolving credit is so low. There’s a reason the tallest building in every city is owned by a bank or an insurance company.) So, after ranking these debts in the order from highest to lowest interest rate, with the “smart” debt at the bottom, our new paydown plan looks like this: ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-2-1024x361.png "Blockbuster_store_closing_ypsilanti_township_michigan nvest advisors")The debts re ordered into a logical pay down strategy### Step 4: Determine your plan’s “Extra” monthly payment amount Obviously, you can’t get very far with a debt snowball if you don’t have a snowball to start with. You need to have a certain amount per month in addition to your minimum payments to start this process. It can be as little as $25 extra, but the more you can allocate, the faster this strategy takes off. Let’s assume this family isn’t destitute and could cut some expenses or were willing to pick up a few nights working for Uber, and came up with an extra $370 a month. This brings their total amount of debt service from $2,630 a month to $3,000. > (I should also note, as we show you this “snowball” in rapid succession in the following charts, I’m not showing the slowly declining balances of the other debts as you make minimum payments on them. The point is to show you the paydown “snowball” in effect, not to be hyper-accurate with the figures in the scenario.) **Here’s how we start our Debt Snowball:** we make minimum payments on all of our debts except the first one. That debt gets its minimum payment ***plus the extra $370.*** Now our payment schedule looks like this: ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-3-1024x303.png "Hand 697264_1280 nvest advisors")Apply your monthly extra payment money to just the first debt on your payoff listEven at 28%, a $2,650 debt will be gone in approximately 7 months with this high of a monthly payment. (At $65, it would have taken in excess of 10 years to pay it off.) Then, on that glorious month that you pay off your first debt, do you add the $65 a month back into your monthly budget? NO. Instead, you add the entire payment of the first debt (the entire $435) to the minimum payment on the next debt on your list: ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-4-1024x302.png "nvest advisors")One debt down and now it begins to pick up steam very quicklyYour second debt is now getting $475 a month (the original $40 due plus the entire payment from debt #1). With only $1,100 to pay off, this will take you only three months. It’s been only nine months and you’ve already knocked down two debts totaling almost $4,000. And we’re just getting started: ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-5-1024x304.png "nvest advisors")In less than 15 months this family paid off over $7000 in credit card debt by snowballing the paymentsDebt #3 gets $550 a month applied toward it instead of the $75 minimum payment. ***At that pace, even $3,125 is paid off in six months.*** So we’re 15 months into this program and this family is already entirely out of credit card debt. And the best part is, the snowball is about to really pick up the pace on the larger debts still to go. > (I should add here that realistically, especially with installment debt like auto loans, 15 months of minimum payments would have dropped their balances due considerably. Just know this is a demonstration of the basic concept of the debt snowball, not a super-accuate accounting of the payment ammortization.) As we begin to tackle the fourth debt, an auto loan, we add the entire previous payment “snowball” to the minimum monthly car payment of $225. We’re now paying $775 a month on that car. ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-6-1024x308.png "Pexels photo 61136 large nvest advisors")Imagine how fast you could pay off a debt by making 3 payments a month instead of one Thats whats happening to his car loanAt $775 a month, an $8,800 balance is paid off entirely in about 13 months. **You’re barely two years into this plan, and you’ve eliminated almost $20,000 of debt.** But we’re not done yet. Add the $775 from the first car loan to the next one, and we’re paying $1,075 a month on car #2: ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-7-1024x306.png "nvest advisors")Just three to go**It will take just over 16 months to pay this debt off.** Three and a half years into the plan, and all this family has left is a student loan and their mortgage. Now remember, we said the student loan still had 15 years of payments to go, and the mortgage was a typical 30-year loan. By moving the payment “snowball” down to the student loan, we’re now paying $1,350 a month on it instead of $275: ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-8-1024x305.png "nvest advisors")Finally tackling this familys final smart debtAt $1,350 a month, a 15-year loan dwindles down to just about 2.5 years. We’re six years into our plan, and this family has wiped out 3 credit cards, 2 auto loans, and a 15-year student loan. Now, all that’s left is the 30-year mortgage (with 24 years to go): ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/FF5-9-1024x302.png "nvest advisors")And the final debt is now taken down with the full $3000 a monthMaking $3,000 a month payments on the last remaining debt, the home mortgage, changed it from 24 more years of payments down to just about 7 years. I want you to think about that: almost $300,000 in debt, with payments extending out to 30 years for most of it, and it’s all entirely paid off in just under 14 years. This family is debt-free, *including their home*, in 14 years. Just by adding $370 a month, and “snowballing” the payments from one debt to another until everything is gone. In this scenario, which is hypothetical but very typical, they saved **17 years** of mortgage payments and over $100,000 in interest just on the home. ![](http://thinklikearichguy.com/wp-content/uploads/2019/02/pexels-photo-256307.jpeg "nvest advisors") ## Your turn. Would you like to become debt-free? It’s not going to happen magically, and it very rarely happens without a plan. The Debt Snowball is the fastest way I’ve observed for most families to eliminate debt in rapid succession. There are a lot of do-it-yourself methods out there for you to use, including [this great calculator and spreadsheet](https://christianpf.com/free-debt-snowball-calculator/). However, you may find it all a bit overwhelming, or you feel out of your element. I understand that – that’s why I have my day job. **If you’ve had success with the Debt Snowball, or any other debt payoff strategy, I’d love to hear your story! Reply here in the comments, or shoot me a personal email to [jeremy@thinklikearichguy.com.](jeremy@thinklikearichguy.com)** --- ### Are you struggling to get a grip on your family’s debt? Let’s talk! We’re happy to spend some time seeing if we’d be a good fit for your needs and we have extremely affordable financial planning services to get you on the right track, and keep you there. Schedule a free visit today: **Categories:** Behavioral Finance, Client News, Client Service, Debt, Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, LifeCycle, Mailchimp, public, Retirement **Tags:** advisor, bankruptcy, client, colorado, credit cards, debt, debt consolidation, debt management, debt plan, economics, economy, finance, financial, financial plan, foreclosure, interest, interest rates, leverage, market, mortgage, nVest, nVest Advisors, plan, planner, planning, service, texas --- ### [Our investing approach is radically different.](https://nvestadvisors.com/our-investing-approach-is-radically-different-than-your-typical-advisors/) **Published:** January 13, 2023 **Author:** Jeremy Torgerson **Content:** > ### **![](https://nvestadvisors.com/wp-content/uploads/2023/01/Instagram-Posts-300x300.png "Instagram posts nvest advisors")*“Every money manager has an investing philosophy that was built for good times, but that’s easy; a rising tide lifts every boat. Times like now are when advisors have to defend that philosophy, and sadly, many won’t be able to.”*** > > ### *– Jeremy Torgerson, nVest Advisors CEO \| May 8, 2022* Because of the economic and market challenges we experienced in 2022, investors are understandably worried about the security of their portfolios at the start of 2023, and after a year of patience, many looking for a new financial advisor relationship. This is common during periods of economic and market turmoil, as many clients find that the strategies their advisors chose for them ultimately didn’t work, and as their account value dropped, they found out that their advisor had no clear answer of what to do. As our account values fall for weeks or months, we’re often told by our advisor to “stay the course”, “keep our focus on our long-term goals”, reminded that, “it’s a marathon, not a sprint,” and assured that, “time *in* the market is better than tim*ing* the market.” While partially true, these kinds of platitudes tend to gloss over real concerns you may have about the direction of your investments, how your money is positioned for broad changes in economic conditions, how this market decline will affect your long-term goals, and ultimately, how your money is being managed. Particularly if you are ten or fewer years until you retire or need the money for some secondary goal, suffering a 30-40% decline in asset values that may take years to fully recover, amounts to a lost decade of investment opportunity. **So after getting no concrete answers, many frustrated investors start shopping for a new advisor, only to find that most of them merely have different ways of telling you the same things, and are selling you the same strategy all over again.** We don’t mean to indict any individual financial professional. It’s not their fault, per se. It’s actually more of an indictment of our industry as a whole. You see, the average financial advisor is hired by a major brokerage firm with deeply entrenched (and financially lucrative) relationships with a certain number of investment product purveyors. The advisor earns his or her pay largely through commissions and transaction charges. **As the CEO of nVest Advisors, I speak from experience, because like nearly every person in this industry, I started my career at one of these major firms.** I can tell you with absolute certainty that we aren’t taught to manage money at these firms; we are trained to sell the investment products that require minimal oversight later and maximize revenue for our employers. Because those products commonly come with sizeable up-front commissions (often referred to as “loads”), regulators frown at advisors who make changes in a client’s portfolio too often, especially after the client has had to pay significant sales charges. So we must onboard you and then quickly move on to the next new client because we are all placed under significant production quotas in order to keep our jobs. The reality is that when an advisor works on commission, every time they touch your account and make a strategy change, it’s very likely going to cost you more money, so the *less* we actually manage your account, the *more* ethical we actually are in the commission-paid part of the business. This perverse system paints even strongly ethical advisors into a corner. There is enormous pressure for the advisor *not* to touch your account very often to avoid the appearance of [**churning**](https://www.investopedia.com/terms/c/churning.asp) (making investment changes in your account just to generate commissions, which is unlawful). Ironically, an advisor who works on commission could actually be considered ***un***ethical if he or she tried too hard to actively manage your account. At the same time, the advisor’s firm is always pushing for higher and higher revenue from each employee. The only solution for the advisor is to never stop selling new products to new clients, leaving little or no time to actively manage the assets of the clients they’ve already brought on board. ### This paradox is why so many financial advisors employ a “buy and hold” investment strategy. It’s why you never see your money being actively managed for changing circumstances, and you’re always being told to “stay the course” when things go south. Also, because most advisors work on commission, there is no way to avoid the inherent conflict of interest they have in recommending changes to your strategy because selling or buying anything always generates new revenue for the advisor and their firm. The industry typically steers around this by making sure you must first always give your explicit permission before any changes are made. This setup, where they are only technically making suggestions and you must approve each transaction, is called **non-discretionary asset management**. It protects the advisor and their firm from a lot of liability later because technically, you were the one making the actual investment decisions. As a result of this outdated, commission-fueled setup, your account is set up using a mix of costly mutual funds that were generally suitable for someone your age and the advisor doesn’t have to monitor very closely. Then the strategy is left to weather the storms. ### **Frankly, that’s not money management or financial stewardship. It was a product sale. We knew there was a better way to do this, and that meant putting your interests first.** We rejected and completely broke away from this broken system back in 2011 when we became an independent advisory firm: scrapping commission compensation, removing ourselves from the production quota meat grinder, and working directly with, and exclusively for the benefit of, our clients. We’ve further refined our asset management style over the years to become what we are today: a fully fiduciary, fee-only wealth management and financial planning firm that actively manages your money in real time based on world events. ## **![](https://nvestadvisors.com/wp-content/uploads/2023/01/1-300x300.png "1 nvest advisors")So what makes us different and why do we think it’s infinitely better for most people? Let us count the ways:** ### 1) We’re full legal fiduciaries. Because we work for you and not some investment company, we voluntarily chose to assume a full, legal [fiduciary](https://www.investopedia.com/articles/professionaleducation/11/suitability-fiduciary-standards.asp) role for all of our clients, from your first day here to your last. Because we assumed that responsibility for you, the law holds us to a much higher standard of care than a broker or advisor working on commission. Managing your money as a fiduciary means we must give it the same attention and care that we give our own. ### 2) We work on a discretionary basis. Being a legal fiduciary means that we can act on your behalf and make changes to your strategy that are in your best interest, without you having to be hassled every time for approval. This is called [discretionary trading authority](https://www.investopedia.com/terms/d/discretionaryaccount.asp), and nearly all of our clients employ this feature (though you do not have to). Having discretion means we work with you at the beginning of our relationship to learn about your goals, risk preferences, and investing objectives, and create a set of ground rules to govern the trading activity in the account. (For instance, are taxes a concern for you? Are there any religious preferences in your investment choices? How much daily volatility can the account handle? When will money come and go from your account?) This rule-making process ultimately creates what is called an Investment Policy Statement (IPS). Once those rules are established, you can rest comfortably knowing that your money can now be managed professionally in a fiduciary capacity, within the protective framework of your IPS. And your advisor is now able to adjust your investment strategy in real-time as conditions change (and we can make changes as often as needed because no commissions are being generated). ### 3) Your investments will respond to changing real-world conditions. We don’t “buy and hold” here unless that’s specifically what you want (but then, we’d probably not be the right place for you, anyway). Just holding your hand through a significant bear market or an economic recession might be emotion management, but it sure isn’t money management. ![Macro Investing](https://nvestadvisors.com/wp-content/uploads/2022/11/Copy-of-Untitled-Design-300x300.png "Macroeconomy nvest advisors")World events like major disasters, wars, problems with trade, and serious economic challenges can affect your investment returns for months or even years. Our process takes current world and national events into account when we create our investment models, and we systematically review and adjust those models on a regular basis as conditions change based not on our whim or a hunch, but on a set of governing rules we’ve established to guide our choices. In fancy terms, this approach is called a data-dependent, tactical macroeconomic investment style, and it’s available for nearly all of the kinds of accounts we manage for individuals and families. **4) We use investment models to give every client the same amount of attention and care.** Most clients don’t have real specific investment preferences for their long-term assets. You just want to know if the strategy you’re using is appropriate for your goals and risk preferences and has a good chance of doing what you need it to do in the time you have. Not being too preferential on what makes up your portfolio is also crucial to allow us to adapt the strategy to the world as it changes. For instance, we may typically not want a lot of cash or gold in an account seeking aggressive growth, but during specific periods of time, like a deep recession, those may be vitally important parts of an account’s defensive strategy. Not every client is cut from the same cloth, however, so we build and maintain a number of investment models to fit your general risk tolerances, expected outcomes, and time horizons. As an nVest Advisors client, you’ll see some risk-based models (we call these our “Core+ Models”, but also some stylized models such as Faith-Based, Merit-Only, Green-Focused, Socially Speculative, and a 100% pure Macroeconomic model. (Don’t worry – when you come aboard, we work through the selection process with you.) Using models allows us greater scale – it allows us to manage a much larger number of client accounts because we are managing 10 or 12 models each day instead of 200-300 individual portfolios. It also lets us treat each client with the exact same level of priority: when we change a model, it changes all of the accounts of our clients who use that model at the same time. In our business, this is called providing “best execution”, but in simpler terms, it means we don’t favor bigger accounts over smaller ones when it’s time to make changes. And if you still want a customized portfolio, built from scratch, don’t worry: for a slightly higher annual advisory fee, we’ll do that, too. ### 5) You’ll never have to come to our office to work with us. We became a 100% virtual firm back in 2017 when we moved our company from Brownsville, TX to Colorado Springs, CO, so we’ve worked hard at perfecting a virtual experience for our clients. We’ve been using Zoom since before you even heard of it and long before Covid-19 made it a part of everyday business life. We use a paperless onboarding process, meet by phone or video, communicate with you in text messages and video emails, and more. We employ technology to enhance every part of your experience as a client. The great thing we’ve learned is, using technology doesn’t dehumanize your experience as a client at all. In fact, because it saves us so much time and cost on all of our back-office operational activities, allowed us to bring on talented team members from across the world, and even improves our efficiency in our daily tasks, we’ve found that employing technology has given us ***more*** time to spend with you. (However, if you really, really like driving to your advisor’s office and sipping coffee at a conference table, we can do that, too.) We will be adding a new post each week about the nVest Client Experience. We hope, if you’re looking for an advisor for the first time or are shopping for a new relationship, that you may find a lot to like at nVest Advisors. Of course, a bunch of blog posts can never give you a full picture or be absolutely determinative that we’ll be a good fit for you, but we hope it will get you thinking that there are new and better ways to do this, and we’re working hard each day to make our clients’ experience better and better. ## Ready to talk? Not sure? For many of you seeking a new financial advisor, much of what we’ve described will sound very close to your current situation. If you are considering a change, we urge you to investigate a few options before deciding. ***Our advice, at a minimum, is to seek out an advisor who is a legal fiduciary, will provide you with a complete list of your costs in writing, and can clearly and simply explain their investment management style.*** **If you have questions or need to talk to an advisor right away about your situation,** we’ll happily provide you a quick [**30-Minute Q&A Session**](https://calendly.com/nvestadvisors/prospect30), totally free of charge, and with no sales pitch (we promise). You need to get to know us, and we also need to get to know you, before we can decide together if we’d be a good fit. The first step is always to just talk and learn about each other. If we both feel good about moving forward, we can decide that together. **If you’re not yet ready to make a move,** that’s okay, too. Trust takes time. We invite you to stay in touch with us and learn more in the coming weeks and months by subscribing to our mailing list. We’ll inform you whenever we add more to our blog. And when the time is right, we’ll be ready to meet you and learn how we can help. And you can always follow us on [Facebook](https://facebook.com/nvestadvisors), [Twitter](https://twitter.com/nVestAdvisors), and [LinkedIn](https://www.linkedin.com/company/nvest-advisors-llc). Whatever you choose, remember that it’s *your* future and *your* money. Your financial advisor should always keep those two facts in mind, and should always be working diligently on your behalf. 2023 may be a very challenging year for your finances. Don’t wait to change if you know in your heart that a change is needed. **Categories:** Behavioral Finance, Client News, Client Service, Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Individuals and Families, Investing General, Investment, Investment Markets, Mailchimp, public, Retirement **Tags:** advisor, change advisors, client, colorado, discretion, discretionary, economics, economy, fiduciary, finance, financial, fire my advisor, fire your advisor, invest, investing, investment, investments, IRA, macroeconomics, market, money, money management, nVest, nVest Advisors, planner, planning, portfolio, replace, replacement, retirement, service, stocks --- ### [Austen Rubino joins the nVest Advisors Team](https://nvestadvisors.com/austen-rubino-joins-the-nvest-advisors-team/) **Published:** January 12, 2023 **Author:** Jeremy Torgerson **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2023/01/Twitter-Templates-1-1-400x370.png "Twitter templates 1 nvest advisors")nVest Advisors wants to welcome our new team member **Austen Rubino**, to the nVest family! Austen joined us in October 2022, as our new Operations Assistant. He currently manages internal company processes including bookkeeping, compliance, and back-office tech integration, and serves as the leader and primary company contact of our team of marketing interns (basically, Austen makes our virtual firm run smoothly)! In 2023, Austen will also be working directly with our clients, helping you with daily administrative tasks, assuring new clients a fast and easy onboarding, keeping you up to date on company events, and helping to make sure all our clients are happy and excited to be part of the nVest experience. Austen is a 2015 graduate of De La Salle University in Lipa, The Philippines with a degree in Accounting Technology, and comes to us with 5 years of experience as a junior accountant as well as HR, management, and insurance experience. We’re proud to have Austen on our team, and we look forward to many years of successful growth with his enthusiasm, skill, and amazing work ethic. **Categories:** Client News, Client Service, Company News, From our CEO, Mailchimp, Media, Press Releases, public **Tags:** announcement, Austen Rubino, client, nVest, nVest Advisors, service --- ### [Weekly Economic Update: 11-14-2022](https://nvestadvisors.com/weekly-economic-update-11-14-2022/) **Published:** November 14, 2022 **Author:** Jeremy Torgerson **Content:** > *Welcome to the first of our new weekly series of economic updates, provided for the benefit of our clients and business partners. At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns. For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To be receive these economic updates via email when they are published, free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ## At-a-Glance: - **US Housing market is in free-fall.** - **US consumers (that is all of us) are struggling.** ## In-Depth: ### US Housing Market is in free-fall: Of the thirteen generally recognized sectors of the economy, housing is the most sensitive to interest rate changes because the ability to purchase and finance a home is directly related to the current interest rate environment. Mortgage interest rates are affected first by the current rate environment, and then a premium is added to that rate based on factors like the length of the loan, your personal credit rating, how much down payment you included, and even the location of the home itself. Lower interest rates make borrowing much easier, and you can borrow more and still afford the payment. This is true for home buyers, corporations, entities like cities and local school districts, and even national governments. Higher rates have the opposite effect; they make it more and more unaffordable to borrow much money as rates climb. **A little bit of background:** In January 2022, the average 30-year US mortgage rate was just barely over 3%, and housing had enjoyed almost 15 years of artificially low mortgage rates (compared to historical averages) due to the actions of the Federal Reserve following the last Great Financial Crisis of 2008-2009. The Fed held interest rates artificially low following the Great Recession for a decade, to help stimulate the US economy to recover. They began raising rates slightly again in 2018 and 2019, but when the Covid-19 pandemic in 2020 caused world governments to close entire economies, part of the monetary “rescue plan” was to lower rates again, all the way to 0% for the Fed Funds rate (that’s the lowest and shortest-term loan rate in the entire economy – the rate at which banks borrow from the Federal Reserve). This lowered mortgage rates to historical lows in 2020 and 2021 and allowed housing prices to skyrocket, as most home buyers could afford a more expensive home with the borrowing rate so low. To combat the inevitable inflation that would come after too-low rates for too long (plus the massive amount of stimulus money the world governments provided during the Covid shutdowns), this year the Federal Reserve and many other central banks began a series of actions to reduce the supply of available money and make it more expensive to borrow. This would deliberately “cool off” the economy and lower the demand for rising wages and prices. But the first sector of the economy to feel these changes, as we said earlier, and warned our clients as early as March of this year, would be housing. Sadly, this prediction is coming true. The indicators we watch in housing all point to a substantial collapse in housing and mortgage activity. ### US Housing Market: Of the thirteen generally recognized sectors of the economy, housing is the most sensitive to interest rate changes because the ability to purchase and finance a home is directly related to the current interest rate environment. First, a look at what’s happening. The combination of record-high home prices from the last few years, and now the highest mortgage interest rates in over 40 years have created a huge problem for US consumers: buying a home has never been less affordable. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/Econ-1-400x316.png "Econ 1 nvest advisors")Housing Costs to Income Ratio. Source: The Daily Shot This is definitely having an effect on the number of homes being purchased, and price reductions on houses are becoming much more common on currently listed homes for sale. And since the price of other home sales in your neighborhood will affect the going price of your home, this alone will start to cool off some of the housing market. The higher interest rates have made current house prices simply unaffordable for the majority of home buyers. We have already seen the number of mortgage applications fall by 40% from a year ago and are now the lowest since 2014. [Major lenders have already begun laying off much of their mortgage lending staff. Some mortgage companies have gone out of business already:](https://www.thetruthaboutmortgage.com/a-list-of-recent-mortgage-closures-mergers-and-layoffs/) ![](https://nvestadvisors.com/wp-content/uploads/2022/11/Econ-6-400x391.png "Econ 6 nvest advisors")US Mortgage Applications Oct 2022 Source: The Daily Shot **There will be three additional major moves in the housing market that we believe will occur over the next 18-36 months:** - First, home buyers will drastically reduce the sale price on their homes. This is unavoidable as the number of buyers will dry up. A family who could qualify for a home in January (when mortgage rates were 3%) will likely not qualify for that same home when rates are approaching 8%. The only way to get that buyer into the home is to dramatically reduce its asking price. - Second, as recession hits the larger economy, we will sadly see layoffs increase and small business failures. The loss of income for many, coupled with the collapsing value of homes, will cause many people to walk away from the homes they are financing now. We should see an uptick in “fire sales”, “motivated sellers” and other such rhetoric from the real estate market, followed by an unfortunate uptick in repos and foreclosures. - Third, sellers will slow the number of homes going to market, because the conditions won’t be favorable for them to sell as home prices plummet. This, combined with the eventual lowering of interest rates again as the economy deteriorates. This will stabilize house prices near a market bottom.**Bottom Line:** This is quickly becoming a very bad time to sell a house, but that will become a very good time to buy one. Families seeking to buy a home in the next year or two will likely get the opportunity to do so at much lower prices than today. ### The U.S. consumer is “tapped out”. The most obvious impact of the stimulus spending our governments did during the Covid-19 pandemic is that prices skyrocketed on almost everything. [We warned our clients as far back as August 2021 that prices, particularly oil prices, were major factors in a coming economic slowdown](https://mailchi.mp/cf208108967a/your-new-nvest-news-digest-is-here-7996753?e=%5BUNIQID%5D), and started moving our clients out of traditional investment models and into macroeconomic data-dependent models in January of 2022. Consumer prices are important because in most of the developed world, you and I spending our wages – economists call this “consumption” – makes up more than 70% of the economy. When we have lots of money to spend, the economy does well. When we struggle to pay for our basic needs, the economy stagnates or recedes. Needless to say, 2020 through today has been a very hard time for most consumers. With the stimulus money dropped into the economy from the Covid shut-downs, money that wasn’t productively created through industry but instead simply printed and distributed by the treasuries of the world, we had many more dollars floating around to buy things, but the same (or fewer) things to buy. This is what caused prices to soar. The only remedy will be to reduce the money supply over time, which the Federal Reserve and other banks are in the process of doing with a series of actions collectively called quantitative tightening, but this means they must intentionally damage the economy and cause job losses and even company failures to do so. We believe the world governments directly caused this calamity by first locking us down unnecessarily, then doling out too much money to keep things moving through the shutdowns, and then taking far too long to reverse course after the world re-opened for business. If our firm here in Colorado could see inflation as a serious economic problem as early as the summer of 2021, surely the world banks saw the same? But we digress. High prices across the entire economy have a devastating effect on household budgets, particularly with seniors and others living on fixed incomes. This is because wages tend to be “sticky”; they don’t rise as fast or as much as current prices have. How often do you get a raise at work? For most families, it’s once per year, and maybe 2-3% is a normal wage increase (this is because 2-3% has been the average rate of inflation for the last 30 or so years). What we have facing us now are prices that have climbed roughly 15-20% on nearly every item we buy, over the last two years, and our wages have definitely not kept up. Our economic analysis is simple in this regard: the consumers of the world are “tapped out”. We can see this in terms of how much we are saving each month, and also in our credit card usage. Personal savings rates are at record lows after we initially put much of that 2020 stimulus money in the bank: source: [tradingeconomics.com](https://tradingeconomics.com/united-states/personal-savings) Those reserves are now being rapidly depleted to keep up with basic needs, and our credit card usage is soaring (along with delinquency rates on making those payments). Additionally, we are seeing consumers now having to make choices as to where they spend their money, and discretionary purchases like a new car or appliance, other than basic clothing, vacations, travel, and other “discretionary” purchases, are rapidly declining. Economists predict this trend to continue going forward, as energy prices (oil and gas) are poised to increase again in the coming weeks. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/Econ-5-400x363.png "Econ 5 nvest advisors")US Consumer Spending. Source: The Daily Shot **Bottom Line:** We will talk more about the state of the consumer in next week’s economic update, but for now, just understand that we are spending more overall but basically just for things like rent, utilities, groceries, fuel costs, and health care. These basic products and services, which economists call “consumer staples”, are likely to be one of the few parts of the economy that hold up during a coming recession. Ultimately, consumer sentiment (how we all feel about the economy, and how we handle our money accordingly) becomes a self-fulfilling prophecy. When we are not confident about our financial security in the future, we start spending less now. This causes the companies whose products and services we buy to begin to slow down production, which causes layoffs, and the economic cycle turns to recession. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Conf2210260438-400x1010.png "Us conf2210260438 nvest advisors")US Consumer Confidence Indicators. Source: The Daily Shot ## Watching This Week: - **Producer Prices (always a precursor to consumer prices)** - **Retail Sales as we head into the holiday season** - **Labor Market Update** - **Housing Starts** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** CPI, dollar, economics, economy, Eurozone, finance, financial, global economy, housing, inflation, invest, investing, macroeconomics, market, money management, PCE, portfolio, retirement, stocks, US economy, wealth --- ### [Weekly Economic Update: 11-21-2022](https://nvestadvisors.com/weekly-economic-update-11-21-2022/) **Published:** November 21, 2022 **Author:** Jeremy Torgerson **Content:** > *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns. For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To be receive these economic updates via email when they are published, free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ## At-a-Glance: - **Layoff announcements are accelerating** - **Is inflation actually slowing?** - **Crypto concerns accelerate** - **Housing market continues to cool down** - **Businesses are preparing for recession** ### Layoff announcements are accelerating. One of the strongest indicators of coming economic conditions tends to be both consumer and producer sentiment. There is no better way to determine how business conditions are than to ask business owners, and the same is true for consumer spending. Sentiment matters because consumers and businesses are making decisions about their spending now in anticipation of what they see coming in the months ahead. Because of that, sentiment tends to become a self-fulfilling prophecy: if we feel insecure about our finances in the coming months, we will rationally take steps to reduce our costs and “batten down the hatches” until the economic storm passes. What this means for consumers is that we may put off making major purchases or changing our living conditions, and businesses may reduce costs, delay hiring, or even lay off workers. They will certainly not expand their factory capacity, or move into new markets if they expect conditions to worsen. The University of Michigan conducts surveys of both households and businesses, to get a sense of their confidence (or lack thereof) in the current economic environment. Numbers released this month show that consumer confidence is extremely low overall (Chart 1), as well as when the data broken up in terms of our current financial conditions (Chart 2), as well as our expectations for the coming months (Chart 3). (It would be a potentially positive indicator if the current conditions were poor but there was optimism for the year ahead, but in this case, sentiment over both current and future outlooks is poor.) ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Mich2211140439.png "Us mich2211140439 nvest advisors")Source: The Daily Shot This is also showing up in business confidence surveys. This chart shows overall business sentiment one year from now. In short, business confidence about the next year is as low as it was during the Great Financial Crisis and Recession of 2008-2009: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Mich-Expected-Change-in-Bus-Cond2211140439.png "Us mich expected change in bus cond2211140439 nvest advisors")Source: The Daily Shot This is translating into [businesses announcing hiring freezes and layoffs at an accelerating pace](https://www.businessinsider.com/layoffs-sweeping-the-us-these-are-the-companies-making-cuts-2022-5). The expectation of layoffs is growing (the lower the number here, the less confident people are in their job security). ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Mich-Expected-Unempl-Less-More2211140439.png "Us mich expected unempl less more2211140439 nvest advisors")Source: The Daily Shot We believe there will be a significant weakening in the labor markets in the coming months as a recession fully grips the U.S. economy. This is partially intentional; the Federal Reserve’s attack on inflation requires the upward pressure on wages and prices to be reversed, and sadly, that means that **instead of five companies competing for every available worker, there need to be five workers competing for every available job.** Hiring freezes and layoffs are, sadly, part of this inflation reduction process. This begs the next question (and subject for review): ### Is inflation actually slowing? One of the toughest challenges for central bankers is trying to determine exactly what is happening with inflation. Some parts of the inflation calculation can be determined fairly quickly, like gasoline prices or a survey of grocery costs, but others, such as housing and health care, drag out much longer before we can clearly see changes in them (rent, for instance, is often a twelve-month contract, so changes in rent don’t show up right away). There is conflicting information about the actual direction of inflation. While most economists believe we have reached a peak in the current inflationary cycle, at nVest Advisors, we are concerned with two significant forces that work to keep inflation climbing: the value of the dollar, and the current supply of energy. Presently, the current official inflation rate is 7.7% year-over-year. This is a decline from previous readings, and it does appear that inflation, as generally calculated, has peaked: source: [tradingeconomics.com](https://tradingeconomics.com/united-states/inflation-cpi) However, many people (including us) are not confident that inflationary pressures have truly subsided. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Mich-Infl-Exp2211140439.png "Us mich infl exp2211140439 nvest advisors")Source: The Daily Shot One reason that prices appeared better in the last few months was that the United States dollar was at record highs in terms of its value relative to other world currencies. This “strong dollar” means each dollar was buying more “stuff”, effectively lowering the price (in dollars) of those goods. One of the biggest effects of that “strong dollar” was that buying petroleum from overseas was significantly cheaper all summer. Although oil prices declined sharply last week on the assumption of slowing demand, there are still several major supply problems and many nations need to refill their strategic reserves after depleting them throughout 2022 to attempt to lower energy prices domestically. That “strong dollar” trend was broken in the last week, so it will begin to take more dollars to buy goods and services again soon, including oil. It is the oil supply problem, partly due to reduced output from a variety of nations, and exacerbated by the Russian/Ukrainian conflict and the resulting trade embargoes against Russia, that is the second reason we do not believe prices have actually peaked yet. Everything in our economy depends on low-cost fuel to power our cargo ships and trains, to refrigerate our products, to power our factories, etc. Oil prices affect the cost of almost every other product and service in the economy, and so climbing oil prices means climbing prices on everything else. We will continue to watch inflation indicators, but our investment models are currently anticipating inflation to remain high and possibly even climb slightly again, in the coming months. ### The “Cryptocalypse” Continues Cryptocurrencies continued their sharp decline started a year ago last week as the fallout from the failure, and it appears, fraudulent activity, of one of the largest crypto trading platforms, FTX, repeatedly made headlines. For those unfamiliar with FTX or the recent carnage in the crypto space, [here is a good summary of events to review](https://www.investopedia.com/what-went-wrong-with-ftx-6828447). At nVest Advisors, we’ve never included crypto in any of our client portfolios or models for many of the reasons it is collapsing today: it’s a largely unregulated asset class, there are no ways to verify the holdings claimed by many of the major players (and many f[latly refuse to produce any proof of their asset claims](https://beincrypto.com/grayscale-steers-away-from-proof-of-reserves/)), it was rife with fraud, theft and abuse, there is no intrinsic value to these coins (they make nothing, they have no customers, and there are no assets supporting them except the coin itself) and many of the major players in crypto had no previous provable success running any other business. On a more philosophical level, we were always very leery of the constant hyping and shilling in the crypto space; something that only has value if you can convince another investor to get in after you is the literal definition of a Ponzi scheme. [In fact, many actual Ponzi schemes involving crypto have already been uncovered.](https://www.sec.gov/files/ia_virtualcurrencies.pdf) As such, we stayed away from this asset class until it was regulated and our clients could obtain cryptocurrencies in US-based, SIPC-insured custodial accounts (which is still not possible). It appears our long-standing concerns were well founded. All cryptocurrencies, including flagship Bitcoin, have suffered enormous losses this year as one coin after another, followed by one crypto company after another have collapsed. And sadly, the speed and size of failures appear to be accelerating. [Bitcoin itself is down approximately 77% in the last year.](https://g.co/finance/BTC-USD?window=1Y) We urge our clients to remain completely out of the crypto space, whether it is in the coins themselves, in defi, or in stock or other illiquid investments in the companies orbiting this asset class. We do not believe the carnage is done yet, and have no confidence in this asset class as a whole until it can be given proper oversight. ### The housing market continues to cool down. We’ll mention housing a lot in these economic reports for a number of reasons. First, housing is a fundamental human need and is therefore a highly sought and significant part of our lives. Second, a surprising number of other industries rely on a strong housing market to thrive. Also (and hugely important because of the interest rate environment in which we find ourselves), housing is the most sensitive sector of the economy to changes in interest rates. It is a leading indicator of the rest of the economy; where housing is headed, the rest of the economy will soon follow. And housing has totally collapsed: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/housing-3.png "Housing 3 nvest advisors") As we mentioned last week, the housing market in the United States (and in other countries, as well) is essentially in free-fall. More evidence of that was released last week, including existing home sales being significantly lower for this time of year, the lowest read (excluding the brief Covid shut-down in 2020) since 2008. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/housing-1.png "Housing 1 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/11/housing-2.png "Housing 2 nvest advisors")Source: The Daily Shot 2008 was the year our last major recession occurred, and housing was a leading indicator then, as well. The reason for this decline is very easy to understand: home prices ballooned in the last 2.5 years due not so much to increasing demand (though that remains strong), but to the massive infusion of money into our economy from the government spending programs related to Covid-19: in the United States, it was repeated stimulus checks sent to consumers and a massive amount of forgivable business loans (“PPP”). All of that money was printed out of thin air (as opposed to being created through productive industry) and was instantly available in the economy. When you have lots of new dollars chasing the same number of goods and services, including houses, the prices naturally increased. Adding to this perfect storm of too much money, the Federal Reserve lowered interest rates to 0% for banks and the government to borrow during Covid, and kept those rates artificially low all the way to March of this year. This “Fed Funds Rate” is the basis for the entire spectrum (we call it the “yield curve”) of interest rates for all borrowing in the country, including home mortgages. In 2020, we saw the interest rate for 30-year mortgages drop to almost 2%. Combine huge sums of “free” money with record-low interest rates, and the average family could afford a MUCH more expensive house than they could before the pandemic. That is the basis of today’s problem. In response to the inevitable inflation that followed such (in our opinion) foolish “free money” policies of the last few years, the Federal Reserve has now significantly increased the borrowing rates, raising mortgages from approximately 3% in January of 2020, to almost 8% today. If you combine the high home prices sellers are asking for, with the average rate of a new home loan, houses have now become the least affordable at any time in U.S. history. It now takes an income of over $107,000 to afford the average home in the United States: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/housing-4.png "Housing 4 nvest advisors")Source: Redfin We do not believe this is sustainable, and in fact, with the collapse in mortgage applications and new and existing home purchases, it will not be. We see significant declines in the housing market still to come, and as the economy worsens and job losses begin to mount, the addition of foreclosures and “fire sales” will drive home prices down 25-35% from current levels. This is bad news for a home seller but VERY good news for a family looking to buy a home. We believe you will have a very favorable home price market in the coming 12-24 months, so get ready by reducing your other debts, and build your down payment savings now. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning services to help you.](https://nvestadvisors.com/services/)** ### Businesses prepare for a coming recession (you should, too). Despite media claims that inflation has peaked and is trending down, we believe there will be upward pressure on prices for a while longer, and that means we won’t see relief in our pocketbooks for at least another year. The same holds true for businesses. Before we pick up a product on the store shelf and take it home with us (at hugely inflated prices this year), that product must be manufactured, stored, shipped, and delivered to the store shelf. All of those costs (called the “producer prices”) continue to be elevated and, in fact, have actually trended UP for the last four months. While still below its June peak, the Producer Price Index reported its second-highest total in more than 40 years in October, and the trend continues to climb: source: [tradingeconomics.com](https://tradingeconomics.com/united-states/producer-prices) There are several major components to our country’s economic activity (the measure of which is called GDP, or gross domestic product). More than 70% of the entire GDP of most developed nations is consumer spending; that is, you and I shopping and spending our paychecks. Business investment makes up about 10% more of that GDP, with government spending accounting for another 10% (our exports to other countries make up the rest). [As we discussed last week, the consumers are largely “tapped out” and our personal consumption has dropped significantly.](https://nvestadvisors.com/2022/11/14/weekly-economic-update-11-14-2022/) The same is now true for businesses. Companies are seeing declining sales and profit due to our lack of spending, so many are now slowing down their own spending as a result, in preparation for a coming recession. This is what companies are forecasting for their spending in 2023 (a decline in spending of around 2%): ![](https://nvestadvisors.com/wp-content/uploads/2022/11/business-1.png "Business 1 nvest advisors") ## Bottom Line: We are constantly preparing our client portfolios for a continued slowing of the global economy over the next 12-24 months, and we believe investors are wise to do the same. Political advisor to President Bill Clinton James Carville famously said, during the 1996 election cycle, that voters always react to what’s happening to them financially, and we strongly agree. “It’s the economy, stupid,” Carville said during a candid interview on CNN. We build our investment models around this crass but simple statement. There will be lots of speculating in financial media about “soft landings” and “Fed pivots”, but analysts who choose to second-guess economic numbers as they happen, are, in our opinion and to use a tired analogy, staring at the bark of the tree and not seeing the entire forest behind them. The economy will continue to erode and sadly, we will all feel some amount of the financial squeeze that is inevitable. It’s important to keep your emotions in check and take the steps you can to prepare your business and your family’s finances, including your investment portfolios, for what is coming. We do not post “bad news” to depress you; we post it to ***prepare*** you. You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free consultation and portfolio audit today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Retail Sales as we head into the holiday season** - **Labor Market Update** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, consumer, CPI, Crypto, dollar, economics, economy, Eurozone, finance, financial, FTX, GDP, global economy, housing, inflation, invest, investing, macroeconomics, market, money management, mortgage, PCE, ponzi, ponzi scheme, portfolio, retirement, stocks, US economy, wealth --- ### [Weekly Economic Update: 12-5-2022](https://nvestadvisors.com/weekly-economic-update-12-5-2022/) **Published:** December 5, 2022 **Author:** Jeremy Torgerson **Content:** > *![](https://nvestadvisors.com/wp-content/uploads/2022/12/Copy-of-Facebook-Posts-3-300x252.png "Copy of facebook posts 3 nvest advisors")* > > *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns. For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ## At-a-Glance: - **Recession concerns are becoming widespread.** - **Gasoline prices have stopped falling & oil news this week** - **Cracks are forming in the labor market** ### Recession concerns are becoming widespread. We received economic updates from another one of the regional Federal Reserve Banks last week, the Dallas (midwest US) bank, showing a continuing decline in business activity in the area: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-Dallas2211290436.png "Us dallas2211290436 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-Dallas-NEw-ORders2211290436.png "Us dallas new orders2211290436 nvest advisors")Source: The Daily Shot This is consistent with findings from across the country. In fact, when you combine all of the regional Fed Bank results together, we show that the economic slowdown is now being felt across the country, and collectively, points to a contraction (recession) of total economic activity: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-Dallas-Regional2211290436.png "Us dallas regional2211290436 nvest advisors") Several other private banks also monitor economic activity and produce their own reports. These are fully consistent with the findings of the Fed banks: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-DB-Recession2211290436-1.png "Us db recession2211290436 nvest advisors")Source: Deutsche Bank ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-CE-Recession2211290436.png "Us ce recession2211290436 nvest advisors")Source: Capital Economics This tells us that if a recession hasn’t already arrived in the U.S., it is imminent. In fact, Capital Economics, the graph immediately above, estimates a 90% chance of recession within the next six months in the US. Reading just one report and making your investing or business and personal financial decisions isn’t the right way to read this data. Nor should we always give more credence to a report just because it’s newer than the other data we have. But taken collectively, when multiple people analyze the data and all begin reaching the same conclusions, it’s time to take note. At nVest, we’ve been strong believers for over a year that the persistently high inflation would have devastating effects on the economies of the world unless it was addressed. Frustratingly, most of our central banks, challenged with bringing our economies back after the system-shocking Covid-19 lockdowns, followed by the most aggressive stimulus spending in human history, did not take action fast enough in our opinion, and inflation went from being temporary (they call it “transitory”), to being entrenched into our economy. That means it is very difficult to remove the upward pressure on wages and prices, so much more significant action must be taken by the central bank to “break” this cycle. Historically the only way to do this is by forcing a slowdown (recession) in economic activity for long enough that companies have to lay off workers and consumers have so little money left that we stop spending. It’s a horrible prescription but it’s the medicine we must take to set our economy back on the right path. And it shouldn’t have come as a surprise to the financial industry, but, like every recession, they always do. We started alerting our clients to this inevitability in August of 2021, and changed all of our investing models to reflect this eventuality in January of 2022. #### It’s becoming more widespread We are very confident that the U.S. is in for a fairly steep and prolonged recession, but our opinion is that the situation will be much worse in other parts of the world, particularly in Europe and parts of Asia. And indeed, we are seeing this situation realize (source: Trading Economics): - **China Services Manufacturing Index just reported the steepest drop in output in six months.** - **Business bankruptcies are significantly higher than last year in the United States, much of northern Europe, and Hong Kong.** - **Italy’s private sector activity has slowed for the fifth straight month.** - **The Eurozone’s retail sales have dropped to the lowest level in 10 months (and this is immediately before Christmas).** We will have much more information about retail sales next week, which is an extremely good indicator of how the consumer is holding up through this economic cycle. ### Gasoline prices have stopped falling, and oil news to watch this week We’ve all enjoyed the decline in gasoline prices from their peaks earlier this year. There were several reasons for this decline in prices: - **Consumer pullback on energy usage because prices were prohibitively high and economic activity is slowing globally.** - **The draining of the U.S. and many other nations’ strategic energy reserves to help offset the shortage in supply.** - **The dollar was extremely strong relative to other world currencies for much of 2022. (This is a complicated economic concept, but suffice it to say that the rise in the strength of the dollar was because our central bank has been raising the interest rates to borrow money, and reducing the supply of cash out there in the economy through a process called Quantitative Tightening.) Because much of our oil is being imported from the middle east, although we are paying for that oil in dollars, the strength of the dollar caused the prices of oil, other imports, and many of the major commodities like lumber, gold, and wheat to drop in price.** Despite the decline in prices, our investment models continue to remain invested partially in the energy sector, because we do not believe the supply problems have been resolved in any meaningful way. As Europe continues to face a ground war and Russian energy has stopped flowing to the area (especially as winter sets in), supply in Europe is at historic lows. The United States is also still significantly below our average supply: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Oil-Days2212010534.png "En us oil days2212010534 nvest advisors") Despite our own supply being very low, the U.S. energy sector has continued to provide support to Europe, increasing our exports throughout the year: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Oil-Exports2212010534.png "En us oil exports2212010534 nvest advisors") But our capacity is not significant enough to refill our reserves, provide what Europe needs, and supply energy for the U.S. After a reasonably mild autumn for the northern hemisphere, allowing our oil supply to climb slightly, the cold winter months are here, and we are seeing supplies drop again: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Oil-Inv2212010534.png "En us oil inv2212010534 nvest advisors") We believe there will be a reversal of the downward trend in energy prices now and a climb through the winter months across much of the world, but particularly the “West”: North America and Europe. And indeed, we are already seeing the price of gasoline start trending back up this past month: source: [tradingeconomics.com](https://tradingeconomics.com/united-states/gasoline-prices) #### What will OPEC+ do? The other significant factor for oil prices will be whether the OPEC nations will be cutting production at their meeting this week, as they implied they would do. As oil prices have fallen in recent weeks, OPEC nations discussed lowering their output to maintain prices at a higher level. Currently, the discussion is to reduce their contribution to the world oil supply by 1 million barrels per day. If that happens, we see oil going back above $100 per barrel fairly quickly, and remaining there for several months. ### Cracks are forming in the labor market. We get labor information a couple of ways, at a pretty good frequency, unlike much of the economic data that may only come out monthly or quarterly. Unemployment claims are reported each week, and robust employment data from a variety of sources comes out monthly, as well. Because of both the frequency and the immediacy of labor market information, it’s considered to be a good leading indicator of what is happening in the broader economy that doesn’t report as often. The effects of high prices and slowing consumer demand, along with the actions of our Federal Reserve to further slow the economy to reduce inflationary pressures, are now showing up in the labor markets. This is part of the solution we need to crush inflation, but it’s not all of it. To stop the upward pressure for higher wages, we need the economy to retract enough that there is no demand for more workers, and, sadly, even that some jobs are lost. (This is just the ugly truth of what it takes to fix a runaway economy.) We are starting to see jobs and wages slow down significantly in the data we received this past week. First, job openings are off their all-time highs: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-JOLT-openings-to-unempl2212010534.png "Us jolt openings to unempl2212010534 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-JOLT2212010534.png "Us jolt2212010534 nvest advisors") And, although collectively, the economy added approximately 127,000 jobs in November, the trend is definitely down throughout the last 9 months… ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-ADP2212010534.png "Us adp2212010534 nvest advisors") … and nearly all of the hiring was in the hospitality industry (restaurants, hotels, etc.): ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-ADP-Leisure2212010534.png "Us adp leisure2212010534 nvest advisors") This industry was struggling for workers since Covid, but because the jobs in this sector are relatively low-skill (and therefore, low-wage), there was no demand for them as other companies (like in technology, manufacturing, etc.) offered better opportunities. That trend has now fully reversed: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-ADP-Professional-Bus-Serv2212010534.png "Us adp professional bus serv2212010534 nvest advisors")![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-ADP-Manuf2212010534.png "Us adp manuf2212010534 nvest advisors") Additionally, layoff announcements are becoming a more frequent news event. It’s sad and frustrating that so many layoffs happen during the holiday season, but because so many companies make budget cuts immediately ahead of the new year, this is a common occurrence. If a job loss happens to you, it’s going to be extremely important, especially in the current economy, to quickly and properly handle the retirement plan funds from your employer’s retirement plan. You do not want to let the money you’ve worked so hard for, be unmanaged as the economy worsens into recession. [We’ve written a thorough guide for what to do with your 401(k) if you leave your employer](https://nvestadvisors.com/2022/12/02/rolling-over-your-employer-retirement-plan/) that is worth reading, and if you need help with an old 401(k), 403(b), 457, or other kinds of employer retirement accounts, [please reach out to us for a complimentary audit and second opinion](https://calendly.com/nvestadvisors/meet30). ## Bottom Line: The economy continues to confirm our analysis that many of the world’s economies, including our own, will face a recession in 2023. No one knows exactly when a recession will occur, or how long and painful one may be, but we do have most of the indications that we are very close. Our firm’s belief is that we will see some sudden data changes (most likely corporate earnings and some surprise bankruptcies) that will “jolt” the stock markets into accepting the economic reality, and these short-term rallies will cease. You need to have your investment accounts prepared before that happens. Use these economic reports to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Retail Sales during peak holiday shopping season** - **OPEC decision on oil output** - **Federal Reserve Interest Rate decision** - **Labor Market Update** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, consumer, CPI, Crypto, diesel, dollar, economics, economy, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, invest, investing, labor, Layoffs, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, oil, OPEC, PCE, ponzi, ponzi scheme, portfolio, professional, rent, retirement, rollover, service, stocks, US economy, wealth --- ### [Weekly Economic Update: 11-28-2022](https://nvestadvisors.com/weekly-economic-update-11-28-2022/) **Published:** November 28, 2022 **Author:** Jeremy Torgerson **Content:** > *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns. For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates via email when they are published, free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ## At-a-Glance: - **The broader economy is now slowing down** - **How U.S. companies are holding up so far** - **Wages are still high but upward demand is decelerating** - **China’s lockdowns are affecting their GDP capacity** ### The broader economy is now slowing down. The Conference Board is a membership of industry and finance experts from all parts of the economy who gather to assess and make policy recommendations based on the current economic climate, and they regularly produce and update several of their own economic reports for the public. One of the most respected from this organization is the Leading Economic Index or LEI (the dark blue line below). This is a forward-looking view of where the Conference Board projects the economy approximately one year from now based on real-time economic activity today, and the trajectory of that activity. The graph below overlays this assessment with the actual reported US Industrial Production (the light blue line), and we can see that although the indicators are usually aligned very closely, and always trend in the same direction, the LEI sometimes over-estimates at the absolute tops and bottoms of the market cycles. But the trend has never been a “miss” since the indicator started in the 1950s. The Conference Board’s LEI is again in negative territory, the first time since Covid, indicating that the economy is trending toward a recession in 2023. We don’t know exactly how deep or how prolonged this recession will be, but nearly every leading economic index is now pointing to recession in the next 3 to 12 months. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-The-Conference-Boards-leading-indicator-points-to-a-contraction-in-US-industrial-production2211230439.png "Us the conference boards leading indicator points to a contraction in us industrial production2211230439 nvest advisors")Source: BoA Global Research Some of the industry data comes from regional Federal Reserve Banks around the country, and they stagger their reporting of economic activity throughout the month. Last week the Richmond, Virginia Fed reported on manufacturing in that bank’s region, and it confirms that economic slowdown is underway, at least in the Richmond Fed’s trade area: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Richmond2211230439.png "Us richmond2211230439 nvest advisors")Source: The Daily Shot The Richmond Fed also reported, for the first time since Covid, a slight reduction in the workforce in the region: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Richmond-Empl2211230439.png "Us richmond empl2211230439 nvest advisors")Source: The Daily Shot This makes sense considering the fact that factory capacity in the region has also declined. This indicator shows that factories have excess capacity (are not operating at full capacity), which tells us factory orders, at least for companies in this region, are slowing down: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Richmond-Capacity2211230439.png "Us richmond capacity2211230439 nvest advisors")Source: The Daily Shot At nVest Advisors, we concur with the broad opinion of recession in our economy in 2023 (and a much more significant recession in Europe and Asia). However, our belief is that the coming recession will be deeper and last longer than the current majority consensus, and we are adjusting our investment models for that worst-case scenario, as we have been since January of this year. ### How are U.S. companies holding up so far? There is no absolute definition for what a recession is, but the general consensus among economists is that we need to have two consecutive quarters of negative GDP (collective economic output). We’ve already experienced that in the U.S. this year, but a recession did not officially get called because there was still so much demand for labor (meaning companies were still trying to expand), and there was still strong upward pressure on wages. Again, this makes sense: if we are in an economy where multiple companies are competing for every worker, the demand for that worker will push up the wages and benefits offered (which will drive up operating costs, which will drive up the final prices of the products and services produced by those companies). It is this wage/price “spiral” that is causing the continued upward pressure on prices in our economy. In order to fix the sky-high prices of goods and services, the Federal Reserve has to “break” the demand for workers. Instead of five companies competing for every worker, they need five workers to be competing for every job. The way to do that is to force the economy into a recession. So we will look to company profit numbers to see how production is holding up, and if there appears to be pressure on the company to cut costs in the face of declining sales and revenue. Sadly, we need to see hours cut and jobs lost before we may be out of the worst of this inflationary spiral. So far, how a company is holding up depends greatly on how big they were to start with. This chart shows operating margins (the profit) of the U.S. publicly-traded companies, broken up by size: As would make perfect sense, the largest companies have the most room to maneuver during a recession, where the smallest are seeing the lowest margins (and dropping the fastest). This is one of the reasons why investors seeking safer bets during economic uncertainty will generally shift toward larger, more profitable companies (we call them “large capitalization” or “large cap” or “blue chip” stocks). ![](https://nvestadvisors.com/wp-content/uploads/2022/11/EQ-Margins-by-index2211210437.png "Eq margins by index2211210437 nvest advisors") Also, the current earnings per share of common stock of the S&P 500 companies, so far, has held up okay. This is one way we know that, while a recession is imminent, we are not likely in one yet. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/EQ-Long-term-earnings-growth-SPX2211210437.png "Eq long term earnings growth spx2211210437 nvest advisors") Another good “tell” that we are headed toward recession is when you survey the CEOs of major companies and ask them what their views are of the economy and their company’s prospects for the year ahead. The dark blue line is what CEOs are telling us of the future expectations for their companies, overlaid with the official projected earnings per share that the same companies have given to their investors (the red line). ![](https://nvestadvisors.com/wp-content/uploads/2022/11/EQ-CEO-v-EPS-12m2211210437.png "Eq ceo v eps 12m2211210437 nvest advisors") Sentiment is an important indicator because even though it is an emotional and “gut” reading, sentiment tends to become a self-fulfilling prophecy. When we feel optimistic about our prospects, we will generally take more risks: expand to a new market, open a new factory, and hire more employees. But when the opposite is true, we tend to tighten the budgets, reduce spending, pull back on expansion plans, etc. ### Wage pressure is still very high but starting to moderate One of the key factors in how high the Federal Reserve will have to raise interest rates, and for how long, is the market’s pressure for more and more workers, and workers’ demand for higher and higher wages. They watch job numbers very closely, and we get new jobless claim figures once per week. Currently, demand on wages appears to be moderating slightly, but there is still significant upward pressure on wages (understandably so from the workers’ perspective – prices on just about everything has skyrocketed over the last two and a half years). However, we are starting to see that, while initial jobless claims are still historically low, the number of reported layoffs is starting to tick up slightly. The reason this hasn’t changed jobless numbers yet is that there are still so many available jobs in the economy. This is one of the major reasons the Federal Reserve hasn’t yet declared a recession in the US, and one reason we believe the economy will get much worse from here before our central bank can change course. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Layoff-levels-are-not-particularly-high-relative-to-initial-unemployment-claims2211210437.png "Us layoff levels are not particularly high relative to initial unemployment claims2211210437 nvest advisors") And so far, while the current jobs openings are tending down slightly, they are still significantly above the current actual number of workers in the U.S. We believe this number will drop dramatically in the coming months, but so far, companies are still hiring, which means, no end to increased prices in the short-term. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-AAA-JOLT2211210437.png "Us aaa jolt2211210437 nvest advisors") However, we may be nearing a top of that cycle, finally. There is still significant demand for more workers, but the upward pressure on wages appears to have peaked, at least for now: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Wage-v-Wage-survey2211220438.png "Us wage v wage survey2211220438 nvest advisors") This “sticky” demand for more employees at higher wages will mean that the Federal Reserve’s job in reducing the money supply (called “quantitative tightening”) is not finished yet. Many other economics and financial analysts are beginning to conclude the same thing we are: that the Federal Reserve will have to raise rates higher than originally projected, and leave them there for significantly longer than many on Wall Street want, in order to finally bring wages and prices back down. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-1-GS-Fed2211210437.png "Us 1 gs fed2211210437 nvest advisors") The recent rally in the stock market has largely occurred because traders on Wall Street are second-guessing the Fed’s resolve on combatting inflation. Many investors think the Fed will flinch; that it will “pivot” on its current policies, and begin to lower rates fairly soon. We think that is not only unlikely given the constant demand for employees and the still upward pressure on many prices, but utterly foolish to bet that the Federal Reserve cares more about the current trading level of the Dow Jones or the S&P 500, and less about the long-term economic stability of the United States. ### China’s Covid lockdowns are significantly impacting their GDP. China has been one of the world’s more draconian nations on dealing with Covid outbreaks. Originally declaring an end to their “Zero-Covid” policy earlier this year, the world’s second-largest economy has reversed course and is again locking down major cities as their Covid cases spike significantly: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/CH-Covid-cases2211210437.png "Ch covid cases2211210437 nvest advisors") The current lockdowns, including Shanghai and several other major centers of industry, mean that China’s Zero-Covid policies have now shuttered or severely restricted approximately 60% of its GDP. We continue to monitor the economic impact of these and other geopolitical events. ### A quick look at major changes in commodities. And finally, just a quick look at some of the commodities that affect the broader economy. Oil prices have dropped as supply has increased, particularly in Europe. Diesel remains strongly elevated, affecting the prices of retail goods and transportation generally: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/EN-US-Diesel-v-gaso2211210437.png "En us diesel v gaso2211210437 nvest advisors") We do not believe oil supply problems have been fixed, and oil will likely climb again in the coming months. There appears to be a growing consensus that our projection is likely to be correct: ![](https://nvestadvisors.com/wp-content/uploads/2022/11/EN-Oil-market-to-swing-back-into-deficit-in-H22211210437.png "En oil market to swing back into deficit in h22211210437 nvest advisors") Housing price inflation appears to be moderating slightly, as rent inflation appears to be moderating. Note that this doesn’t mean rent prices are dropping; just that the rate of increase is slowing. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Rent-inflation-has-been-moderating2211220438.png "Us rent inflation has been moderating2211220438 nvest advisors") And finally, a quick look at the cost of imports. For several months, the U.S. dollar has been historically strong relative to other world currencies. This has the biggest effect in the import / export markets: before you can buy a product in another country, you first need to swap to their currency. When the dollar is strong against, for example, the Japanese yen, someone in the U.S. buying a Japanese product will first swap their dollars for yen, and then make the purchase. When the dollar is very strong, it will “buy” many more yen. The net effect of this currency exchange rate over the last year has been that products made in the U.S. became more expensive for other nations to buy, and products overseas became less expensive for us in the U.S. As a result, imports to the United States would likely increase, while exports from our companies to overseas buyers would decrease. As the dollar has dropped in value over the last few months, we are starting to import prices climb back toward parity. We still import much more than we export, but the trend is helpful for U.S. companies who compete against international companies in the U.S. market. ![](https://nvestadvisors.com/wp-content/uploads/2022/11/US-Import-Price-Index2211220438.png "Us import price index2211220438 nvest advisors") ## Bottom Line: Although the U.S. economy is holding up better than much of the rest of the world – for now – the storm is most definitely gathering. We firmly believe that the economy will continue to erode and sadly, we will all feel some amount of the financial squeeze that is not only inevitable but frustratingly, necessary to fix the overwhelming supply of money that was dropped into the world economies during the Covid-19 shutdowns. It’s important to keep your emotions in check and take the steps you can to prepare your business and your family’s finances, including your investment portfolios, for what is coming. Use these economic reports to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free consultation and portfolio audit today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Retail Sales as we head into the holiday season** - **Labor Market Update** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, consumer, CPI, Crypto, diesel, dollar, economics, economy, Eurozone, finance, financial, FTX, GDP, global economy, housing, inflation, invest, investing, labor, lockdowns, macroeconomics, market, money management, mortgage, oil, PCE, ponzi, ponzi scheme, portfolio, rent, retirement, stocks, US economy, wealth --- ### [Weekly Economic Update: 12-12-2022](https://nvestadvisors.com/weekly-economic-update-12-12-2022/) **Published:** December 12, 2022 **Author:** Jeremy Torgerson **Content:** > *![](https://nvestadvisors.com/wp-content/uploads/2022/12/Copy-of-Facebook-Posts-4-300x251.png "Copy of facebook posts 4 nvest advisors")* > > *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models over time.* > > *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time. For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ## At-a-Glance: - **All eyes are on the Federal Reserve this week.** - **Energy supplies are dropping as we head into winter.** - **Which parts of the economy are holding up?** ### All eyes are on the Federal Reserve this week. Our Federal Reserve’s FOMC (Federal Open Market Committee, a group of regional Federal Reserve bank presidents and leaders who vote to set interest rate and Federal Reserve asset sales and purchases) meets tomorrow and Wednesday, as they do every six weeks. These meetings are crucial economic events, because the country’s interest rates and basic money supply are decided upon as the FOMC reviews the current data on the economy and the effects of its previous policy decisions. So far in 2022, the FOMC has raised interest rates six times, the last four by .75% each time, which makes it the most aggressive rate hiking cycle since 1980: source: [tradingeconomics.com](https://tradingeconomics.com/united-states/interest-rate) This is impactful on all bank rates, loans, mortgages, and bonds in the economy, but this process of [quantitative tightening](https://www.investopedia.com/quantitative-tightening-6361478) is one of the major tools the Fed has to lower inflation. As we’ve discussed in previous Economic Updates, the Fed’s intention is to raise rates and reduce the available supply of money sufficiently to dampen economic activity enough that the upward spiral on wages and prices (inflation) is broken. In effect, the Fed needs to inflict damage on the economy in order to correct the “supercharge” to the economy that very low interest rates and all of the stimulus spending did during Covid-19. The Fed has indicated that after this very aggressive rate hiking cycle so far in 2022, they will at some point begin to slow the rate of increases until they can pause and let the economic fallout happen. Each rate hike will have an economic impact but except for housing and short-term financing (like credit cards), there is a 6-9 month time lag before each hike really shows up in the actual economic output. Essentially, except for housing and finance and companies that were surviving on cheap loans, we are just now feeling the effects of the first one or two rate hikes on our businesses and family finances. Most analysts believe the Fed may be ready to start slowing the pace of their increases. The consensus is that this week, the Fed will again raise rates but only by 0.50% (commonly described as 50 bps or “basis points”). If the Fed raises by more than 50bps, we should expect a very negative reaction in the stock markets, and if they raise by less than 50, you might see a significant market rally. We tend to ignore the daily market reactions to news events because those can completely reverse in just a few days or even hours as new data arrives. The economic indicators are definitely giving us a group of mixed signals as to what the FOMC may be thinking, but we don’t believe we are what the Fed calls its “terminal rate” yet, and expect at least two more rate hikes (this week and in January) before the FOMC might even consider pausing for a while. #### Labor demand remains (too) strong One of the two major indicators that the FOMC is watching closely is, how strong is the demand for labor. As long as companies are still having to compete vigorously for the available workers, “upping the ante” to try to woo a worker to their company, the inflationary cycle will continue to feel upward pressure. The Fed must slow down the economy enough that there aren’t more job openings than there are workers (hopefully without going too far and causing too many jobs to be eliminated through layoffs and company closings). So far, though, despite the economic headwinds all year, demand for labor remains very strong… ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-NFP-Index2212050535.png "Us nfp index2212050535 nvest advisors") even though the nation is already considered fully employed: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-NFP-Unempl2212050535.png "Us nfp unempl2212050535 nvest advisors") Why are there so few workers out there? Part of it is indeed robust company growth due largely to all of the Covid-19 stimulus spending that happened during 2020 and 2021, but the other part is that since Covid, many people who used to work have voluntarily left the labor market and are no longer actively seeking employment. This is called the Labor Participation Rate, and as you can see from this graph, it shows that our workforce is substantially smaller than it was before the Covid pandemic: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-NFP-Particip2212050535.png "Us nfp particip2212050535 nvest advisors") Fewer people looking for work means companies have to aggressively compete for the ones that remain, offering ever-higher wages and better benefits in order to fill their job openings: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-NFP-Wages2212050535.png "Us nfp wages2212050535 nvest advisors") That sounds wonderful for the individual worker (and it is), but when your labor costs climb substantially, a company must then charge more for the products and services that labor will produce. And there, in a nutshell, is why we have such persistent inflation. The Fed will have to break this cycle, and the rate hikes are part of this strategy. Last week’s numbers (above) tell us that the Fed still has a ways to go with rate hikes before this cycle will finally be trending the other way. ### Energy supplies drop as we head into winter. Energy prices remained volatile last week as news of a leak of the Keystone Pipeline in Kansas forced the shutdown of that major domestic supply of crude oil while the pipe is repaired. We also got the news that OPEC+ nations decided not to change their current supply quota, as we expected and predicted last week. The problem with OPEC+ production estimates is that they have routinely delivered less oil than they pledge, which causes some disruption in the market’s ability to accurately price future oil contracts. Currently, OPEC+ is pledging more oil production than in 2019, but delivering much less: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-OPECplus-production-and-quotas2212090435.png "En opecplus production and quotas2212090435 nvest advisors") We do appear to be making the best use of the available supply as our refinery utilization is at years-long peaks. However, we are still refining well below our current capacity. The biggest issue is supply. With our government limiting the drilling and pumping of our own crude oil since the Biden Administration took over in 2021, we are forced to find much of our supply from outside the United States and wait on its transport before we can refine it. ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Refinery-capacity2212090435.png "En us refinery capacity2212090435 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Refinery-util2212090435.png "En us refinery util2212090435 nvest advisors") It’s important to keep our own energy market in perspective with the broader picture of global energy demand and supply. The northern hemisphere, where most of the world’s population is located and where so much industry occurs, is entering winter. Winter is when energy demand will peak seasonally. When you factor in the current Russian / Ukrainian conflict and the resulting oil embargoes and price cap attempts for Russian oil, combined with the drain on many countries’ strategic energy reserves this year, you can see that the world’s demand for oil will not be abated for at least several more months, and supply is limited. We believe oil prices have upward momentum globally because supply remains limited and demand is increasing. This may be offset partially by the imminent economic slowdowns in many parts of the northern hemisphere, and certainly, a positive outcome of the war in Ukraine will help ease supply constraints, but without either a steep recession or a sudden surge in global supply, we believe energy prices have bottomed and will trend upward again for several months. The data agree with our assessment. First, our own supply of crude oil is at multi-decade lows, with only 25 days of supply in the United States: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Oil-Barrels-Total-36y-low-if-include-the-Strategic-Petroleum-Reserve2212080538.png "En us oil barrels total 36y low if include the strategic petroleum reserve2212080538 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Oil-Barrels-Change2212080538.png "En us oil barrels change2212080538 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Oil-Days2212080538.png "En us oil days2212080538 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-US-Oil-Barrels-FR2212080538.png "En us oil barrels fr2212080538 nvest advisors") And the situation is just as dire, if not worse, in much of Europe. For example, here is the current amount of natural gas that Europe must import. It’s at all-time highs with no end in sight: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EN-EU-LNG-imports2212090435.png "En eu lng imports2212090435 nvest advisors") Another bit of evidence that these recently lower oil prices are not pairing with reality is that they have widely diverged from the revenue reports of actual energy companies. Remember that oil is a commodity that is purchased months in advance using contracts to set the future price of a barrel of oil, but energy companies report their revenue and profit after each quarter is completed. So oil futures are speculative, and energy company revenues are actual results. Oil has been down significantly as a commodity, but oil company profits are doing very well. This disconnect is literally in unprecedented territory, and will likely mean a sharp uptick in oil prices is soon coming, in what we call in economics, “reversion to the mean”: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/Fjx8fYDX0AEAjdt.png "Fjx8fydx0aeajdt nvest advisors") In short, we believe energy prices have ***up***ward pressure and will likely not continue to follow the recent downward trends from the summer and mainly fair and warm autumn months in the northern hemisphere. Our Macro models for all of our account custodians continue to be invested in both energy and broad-basket commodities for now (in appropriate amounts). ### Are some sectors of the economy already in recession? When the GDP figures are released each quarter, we often hear of the “headline” number (the TOTAL GDP), but often the news skips over the break-downs of the individual sectors of the economy and doesn’t look at them one by one. All the parts of an economy don’t fall into recession at the same time and to equal degrees. Each industry has unique factors that will respond differently to economic conditions. For instance, some sectors of the economy are far more sensitive to interest rate hikes (like housing and bank lending), while others need low energy prices in order to thrive (like shipping, on-land transportation of products to stores, and airlines). So as the economy slides toward a recession, which we firmly believe is imminent and unavoidable for much of the developed world, we will see some sectors impacted first (and to a greater degree) before we see the others. Data released last week seems to show that while some parts of the economy are still doing okay, there are others that are sliding quickly into recession: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-ONU-by-sector2212090435.png "Us onu by sector2212090435 nvest advisors") Some of this makes perfect sense if you think it through logically. Health care, for instance, is seeing a climb in business as we enter the winter months, and respiratory virus transmissions are higher. And after a year of significant turmoil, the technology sector seems to be improving again. However, as the consumer is “tapped out” (has no more surplus cash to spend after paying for basic necessities), we can see consumer services reporting declines, as well as basic materials (housing), and especially in financials (loans). At nVest, we watch not just the broad economic indicators, but the activity of each of the major sectors of the economy, too, and invest our clients’ accounts appropriately based on where the world is trending and which sectors of the economy (and which parts of the world) are responding favorably to the actual, real-time conditions. Currently, our Macro model is invested mostly in the United States and only in the four sectors of the economy that have the strongest history of weathering recessions and inflation well. This is not typical of most financial advisory firms, which tend to do what is called “strategic investing” based on a client’s generalized risk preferences and time horizons. All of our models incorporate some element of the macroeconomy into the investment selections, and our nVest Macro Model is 100% driven by real-time, real-world conditions. ## Bottom Line: We said last week that the incoming data continue to confirm our analysis that many of the world’s economies, including our own, will face a recession in 2023. No one knows exactly when a recession will occur, or how long and painful one may be, but we do have most of the indications that we are very close. Our firm’s opinion has not changed. A surprise Fed announcement this week (positive or negative) may be the catalyst for the markets for the rest of 2022, but the economy itself has not changed course and is still trending toward a recession in 2023. What will precipitate a more broad and sustained downward trend in the markets will be, in our opinion, either a 75bps or higher Fed rate hike this week, or short of that, we will see some sudden data changes (most likely corporate earnings and some surprise bankruptcies) that will “jolt” the stock markets into accepting the economic reality, and these short-term rallies will cease. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming soon, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Retail sales will be reporting on Black Friday, Small Business Saturday, and Cyber Monday.** - **Federal Reserve Interest Rate reaction** - **Labor Market Update** - **Real Estate Market Update** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, consumer, CPI, Crypto, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, invest, investing, labor, Layoffs, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, oil, OPEC, participation rate, PCE, ponzi, ponzi scheme, portfolio, professional, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic Update: 12-19-2022](https://nvestadvisors.com/weekly-economic-update-12-19-2022/) **Published:** December 19, 2022 **Author:** Jeremy Torgerson **Content:** > *![](https://nvestadvisors.com/wp-content/uploads/2022/12/Copy-of-Facebook-Posts-5-300x251.png "Copy of facebook posts 5 nvest advisors")* > > *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models over time.* > > *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time. For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ## At-a-Glance: - **The Fed signals higher rates for longer.** - **Conflicting signs on inflation.** - **Lots of signs the economy is slowing.** ### The Fed signals higher rates for longer. The Federal Reserve, as expected, raised our base interest rate another 0.5% (that’s 50 basis points, which is the term more commonly used in financial economic reports). On the face of it, that would indicate good news as it means the Fed is slowing the pace of their rate increases and may be reaching a peak. Many investors are betting that the Fed will “pivot” very soon as the economy quickly worsens, and start lowering rates again in early 2023. However, investors intent on second-guessing the Fed’s resolve to lower inflation through this quantitative tightening and restrictive rate strategy have had the rug pulled out from under them three times so far this year as markets tried rallying on the hope of a pivot, only to have those hopes dashed. Our view is that the Federal Reserve has been very clear about its expectations before any sort of policy reversal will be forthcoming (sustained path of dropping inflation toward a target inflation rate of 2%, for instance). We believe in taking Fed Chairman Powell, and other members of the Fed’s FOMC (Federal Open Markets Committee – the group that votes on interest rate and money supply changes) at their word and not being contrarian in this regard. If the Fed does not do enough to curb inflation, it can rise again like it did in the 1970s, when we had three progressively worse waves of inflation throughout the decade. In fact, so far, our path looks surprisingly similar to those days: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-FOMC-The-Fed-is-afraid-of-this-scenario2212150535.png "Us fomc the fed is afraid of this scenario2212150535 nvest advisors") What the Fed did wrong back then was not making the money supply sufficiently restrictive for long enough. Every time the central bank “took its foot off the brake”, inflation roared back. It was only under the leadership of new Fed Chairman Paul Volcker in 1980-1981 that the U.S. finally broke the inflationary cycle by massively raising rates in a short amount of time, deliberately crashing the economy into recession. Inflation pressure “popped” and the United States had not seen a serious inflationary cycle again until this current one. Last week, Chairman Powell said again in public comments that the Fed has learned much from the past and will not make the 1970s mistakes about underestimating inflation again. He signalled that while the Fed may slow and eventually pause rate increases and other measures, they expect rates to stay higher for longer and there will be no change in direction until the inflationary “bubble” has indeed popped. The other members of the FOMC concur with Powell. Each member projects where rates will be each quarter of the next few years on what is called a “dot plot”. You can see below the voting members’ estimates of where interest rates will be at the end of 2023 and 2024 below. These graphs show you not a rate of increase, but how the Fed voting members have changed their opinions about where the rates would be at the same end-date over time. The Fed now believes the base interest rate will be above 5% at the end of 2023, and above 4% at the end of 2024: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-FOMC-Dots-Hist2212150535.png "Us fomc dots hist2212150535 nvest advisors") Obviously, the investment markets weren’t thrilled with this sentiment, and we had several days of market sell-off last week as a result. #### What does this mean for you? We believe you need to be data-dependent, as the Fed is, in making investment decisions over the next few years. Restrictive money policies typically slow down the economy (sometimes harshly), and this can wreak havoc on corporate profits, jobs, tax revenues, etc. This is why nVest Advisors looks less at market movements (which can change in an instant, as they did last week after weeks of rallying on false hope of a Fed pivot) and instead focuses much more on the general trends in the broader economy. For example, the markets have not fully “priced in” a longer and higher rate scheme, which means that just the chance of higher interest rates for longer, let alone all of the economic damage it will bring, still needs to be included in investment price valuations. The purple line shows the estimated interest rates over time, based on the FOMC’s voting members. The black line shows how the investment markets have assumed interest rates would be. ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-FOMC-Dots2212150535.png "Us fomc dots2212150535 nvest advisors") Rather than second-guessing the economy like so many of our peers do, all of our models include some element of economic research into their holdings, which we adjust regularly. Our Macro Model is 100% driven by real-time, real-world conditions. ### Conflicting signs on inflation So is inflation finally trending down? While the headlines and many Wall Street analysts say, “yes”, our view is, “maybe” but we believe inflationary pressures still exist, particularly as the dollar’s value declines after an historically strong summer and early autumn, and with the continued problems with food staples and energy supply around the world. The PPI (Producer Price Index) monitors inflation’s impact on the costs companies have in making the products and services we consume. If the PPI is elevated, companies have to pass those added costs on to us in the form of price increases on their products. PPI was trending down again last month: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-PPI-YoY2212120442.png "Us ppi yoy2212120442 nvest advisors") The Consumer Price Index or CPI, the main inflation figure (not the Fed’s preferred one, but the one most often reported) did show upward pressure slowing again last month: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-CPI-Core-Goods2212140526.png "Us cpi core goods2212140526 nvest advisors") But a few of the other major Fed analysis reports showed that the inflation most affecting us consumers remained at or near all-time highs: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-CPI-Alt-Sticky2212150535.png "Us cpi alt sticky2212150535 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-CPI-Alt-Median2212150535.png "Us cpi alt median2212150535 nvest advisors") When you total up all of the possible inputs to this inflation crisis, we get what is called an Absolute Inflation figure. This is basically how it feels to the average family and small business. As you can see from this graph, literally every angle that inflation can impact us has been consistently rising since 2020 (when all the stimulus spending from Covid began): ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-CPI-Price-levels2212140526.png "Us cpi price levels2212140526 nvest advisors") At nVest Advsiors, we believe inflation will tame somewhat but major headwinds persist. Sadly, the only fix to this problem will likely be the sharp economic recession that we believe is imminent. ### What this means for you: The simple truth is, if you are anywhere close to retirement (say, the next five or so years), ignoring the coming economic challenges and letting your investments take the brunt of the market declines may delay your retirement plans. Even if your investment time horizon is further out than that, there is no reason to just “ride it out”, like so many advisors will tell you to do. The simple truth is, our industry does not train most of its agents to properly navigate events like what is coming (and almost none incorporate economics until their investment models). They train their reps to sell financial products, not manage money. You don’t have to just endure the coming recession but you must take urgent steps quickly to mitigate those risks to your portfolio. (We can help.) Lots of signs the economy is slowing. That recession may be closer than we think. In fact, we may already be in one, because the start and stop dates of recessions are always declared months after the fact (they wait on data from previous quarters to make the assessment). But we don’t have to wait on an official declaration to get a sense of where the economy is heading. We get many indicators each month showing us how things are holding up. The major indicator is one we’ve talked about before, the PMI (Purchasing Manager’s Index). This is a survey of all of the companies in a specific region of the United States to see how many orders are coming in and how many orders a company has placed with its own vendors. For example, a shoe company can report on its own sales and also on its upcoming orders for leather, rubber, thread, etc. The November PPI numbers all showed an economy in, or at the brink of, a recession. Several regional reports already show recession taking place, but this is the aggregate US (entire country) PPI. It shows slightly up, but the trend is definitely down (lower high points, lower low points). ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-PPI2212120442.png "Us ppi2212120442 nvest advisors") Investors are also signaling they believe we are about to head into a recession… ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EQ-Retail-sentiment2212120442.png "Eq retail sentiment2212120442 nvest advisors") …as more and more investors exit their mutual fund investments: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EQ-Retail-bearish2212120442.png "Eq retail bearish2212120442 nvest advisors") And while never a perfect predictor, you can also get a feel for where investment returns are headed based on the inverse correlation (relationship) between bond yields and stock prices. Money doesn’t just vanish when stock markets decline: the money is just being moved into safer investments. The chart below shows that the 10-year US Treasury bond’s yield is dropping (its purple line is inverted on this graph), which means there is more and more demand for the bond, and it’s correlated with a drop in stock prices in recent days. That divergence from what is normally a pretty tight relationship indicates a massive shift in money management (to a very defensive stance) is taking place. ![](https://nvestadvisors.com/wp-content/uploads/2022/12/EQ-v-Bonds-divergence2212120442.png "Eq v bonds divergence2212120442 nvest advisors") The first industry to fall deeply into recession will be housing, as we’ve discussed several times before. We can see that our expectation for housing to collapse first is well underway: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-HPA2212150535.png "Us hpa2212150535 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-Mich-HPA-Expectations2212150535.png "Us mich hpa expectations2212150535 nvest advisors") ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-MBA2212150535.png "Us mba2212150535 nvest advisors") Most analysts are expecting a 10-15% decline in home values next year, with an additional 10-15% drop in 2024. We expect this also, and believe it will be an amazing time for prospective home buyers in the next 12-18 months. Get your debt down and build your down payment, because a once-in-a-generation buying opportunity is soon approaching. The last indicator for us today is a look at retail sales so far this holiday season: ![](https://nvestadvisors.com/wp-content/uploads/2022/12/US-AAA-The-Earnest-Analytics-Spend-Index-points-to-weak-retail-sales-in-November2212150535.png "Us aaa the earnest analytics spend index points to weak retail sales in november2212150535 nvest advisors") Consumers are telling analysts that they intend to spend less this holiday season, and that reality is being reflected in retail sales reports so far. ## Bottom Line: We have hopefully been making the case for our clients that we need to prepare to endure a recessionary year in 2023. No one knows exactly when a recession will occur, or how long and painful one may be, but we do have most of the indications that we are very close. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming soon, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **There will be no economic report next Monday, December 26, but we will start 2023 with a major report on January 2. Stay tuned!** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, consumer, CPI, Crypto, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, invest, investing, labor, Layoffs, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, oil, OPEC, participation rate, PCE, ponzi, ponzi scheme, portfolio, professional, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Weekly Economic Update: 01-09-23](https://nvestadvisors.com/weekly-economic-update-01-09-2023/) **Published:** January 9, 2023 **Author:** Jeremy Torgerson **Content:** > ![](https://nvestadvisors.com/wp-content/uploads/2023/01/Copy-of-Facebook-Posts-6-300x252.png "Copy of facebook posts 6 nvest advisors") > > *Our economic updates are written once weekly by nVest Advisors CEO Jeremy Torgerson for the general education of the public, and as a way to provide transparency for our clients and sponsored-plan participants as to how we create and modify our investment models.* > > *At nVest Advisors, we believe that successful investing depends on an understanding of, and correct response to, changes in the world economy as they happen. We incorporate real-world economic conditions into almost all of our investment models and strategies at nVest Advisors, which we believe provides significant benefit to our clients’ overall investment returns by reducing various short-term market risks and enhancing portfolio performance over time.* > > *For more information about our investment philosophies and management style, [click here](https://nvestadvisors.com/2022/10/10/a-whole-new-approach-introducing-the-new-nvest-advisors/). To receive these economic updates and other company news via email when they are published, always free of charge, please [subscribe here](http://eepurl.com/dz0bhP).* ## At-a-Glance: - **US Production continues to slow** - **Global Trade is slowing** - **The Job Market stays strong for now** **Happy New Year!** There is not much economic activity that gets released over the Christmas and New Year’s holiday weeks, so we took a couple of weeks off from writing this update to wrap up our client and business activities for the year. 2023 is already well underway, and we continue to monitor the broader economy as the full effect of last year’s interest rate hikes finally begins to show up in the economic numbers. ### US Business Conditions continue to slow. The first is **US Manufacturing PMI**. (PMI stands for Purchasing Managers’ Index, which is a survey of the supply chain managers in manufacturing sectors of the economy, to gauge current business conditions. The survey is taken once monthly and the survey participants give their assessment for business variables like new orders, backorders, inventory levels, supply chain variables, employment, and more. The index is structured so that a neutral (neither improving nor worsening) business condition for the month would be scored a 50. Anything above 50 indicates that the business conditions are improving, and anything below 50 indicates that things are getting worse for manufacturing companies. December’s Manufacturing PMI continued the broad trend it’s been on all year, posting a PMI of 48.4. This was slightly below estimates of 48.5 and was the second month in a row for the score to fall below 50. Manufacturers are telling us that we have crossed the threshold from a “slowing growth” economy, and are now seeing an actual contraction of economic output. If this persists for long enough, the economy will be officially declared to be in recession. ![United States ISM Purchasing Managers Index (PMI)](https://d3fy651gv2fhd3.cloudfront.net/charts/united-states-business-confidence.png?s=napmpmi&lbl=0&v=202301041726V20220312&d1=20220109&trend=2)US Manufacturing PMI MoM for 2022 \| Source: Trading Economics Perspective always helps when looking at economic numbers. Without the benefit of a longer look into the past, can we say that numbers are good, just okay, bad, or really bad? A longer look back at the same survey helps to put today’s economy into perspective. Here’s a 25-year look at the same survey: US Manufacturing PMI 25-Year Chart \| Source: Trading Economics The dotted line in the middle is the mean for the entire time period (meaning, at any given point in the last 25 years, the “middle of the road” for manufacturing conditions was about 54), but you can see the graph wiggles all over the place. To help make sense of it, we added a blue-shaded region to the graph that tells us the most common range for this survey. You can see there are times when the survey spikes way above that shaded area, and way below (and if you notice further, the large spikes above are almost always followed immediately by a sharp reversal and swing downward; one extreme typically precedes the other). The last three major dips below normal for this index were the Dot-Com Bubble of 2000-2002, the Great Recession of 2007-2009, and the artificial decline created by the government lockdowns during the Covid-19 scare. All three were later declared recessions with a lot of financial hardship for businesses and families alike. The current reading of 48.4 is at the very bottom of the “normal” range for this index, and as the top graph indicates, the trend continues downward. That is the current state of affairs for manufacturing companies, but what about the service sectors of our economy? Are things different for companies who don’t have to manufacture, ship and deliver a physical product to their customers? The second report that was released during the last two weeks tells us that story. The **US Non-Manufacturing PMI** was released last week and shows a massive decline in the business climate for service companies: US Non-Manufacturing PMI MoM for 2022 \| Source: Trading Economics Analysts were expecting a score of 55 (pretty robust growth, but down from earlier in the year) for service companies in December, but instead, we got a surprise drop to 49.6. This is dramatically lower than the year-long trend, and also indicates an actual drop in business activity in this sector for the month. And as with Manufacturing, a longer look back at the Services PMI gives us more insight: US Non-Manufacturing PMI 25-year chart \| Source: Trading Economics Once again, we can see the dotted line that is the mean for this number (about 55), the shaded blue range where 90% of the numbers for this survey have fallen, and the outliers of the Dot-Com bubble, the Great Recession, and Covid shutdowns. What is noteworthy in this graph, however, is that the December figure of 49.6 drops this PMI survey out of even a typical range and into “seriously down” territory. I am personally concerned because December’s drop was so much of a deviation, that either we will see a corrective report with January’s survey, or this is indicating a serious decline in services in the United States. #### What this means to you: Although these surveys are not actual measurements of financial results like a company shareholder meeting will provide, they are significant because they give us insight into how being in business in these sectors feels right now to the people “in the trenches”, and that is important because our sentiment will often predict our behavior. If supply managers sense that the economy is slowing and that business prospects are beginning to deteriorate, companies will begin to slow down their own buying, hiring, and manufacturing, to weather out the coming recession. This becomes somewhat of a self-fulfilling prophesy: when we fear a recession is imminent, we can often bring it about by slowing down our spending. ### Global Trade is slowing. It’s not just the United States that is experiencing a sharp decline in business activity; the rest of the world is feeling it, too. One way we can make that determination is by looking at the trade balances between our country and our trading partners around the world. It is no surprise that the United States imports more goods and services than it exports; the average American consumer is the wealthiest (and therefore most supplied person in the history of the world. We buy far more than our country can make and deliver, so much of our purchases come from other countries, where the costs to manufacture is much lower and their products are much more favorably priced than many American-made goods. This results in a trade deficit of, for the last 25 years, about $44 billion dollars every month. You can see that on this graph as the dotted line: US Trade Balances 25-year chart \| Source: Trading Economics This graph is interesting because so much of it, even during economic recessions, has remained consistently in the variance range (the blue-shaded area). The Covid pandemic, however, caused a massive shift toward more imports to the U.S., as supply chains were disrupted and our inflationary pressures began in earnest (meaning, our products and services rapidly increased in price), so it was substantially cheaper to buy more products and services from outside the United States. However, recently that trend has reversed as the rest of the world now struggles with the same inflationary pressures we started seeing in late 2020. The December number surprised analysts by dropping back to only a $61.5 billion trade deficit after being nearly $79 billion the month before. We believe this is further evidence of the economy of the United States declining rapidly. After seeing our own manufacturing and service sectors (the products and services made here in the U.S.) drop sharply last month in the previous section of this economic update, another surprise drop in imports to the United States indicates that American consumers aren’t spending any more money than they have to, and it doesn’t matter where the products are being made. #### What this means to you: Both the PMI reports and this trade imbalance show us a substantial drop in economic activity from the consumers of the United States. And, because more than 70% of our entire economy depends on you and me spending our pay to keep things moving, this indicates not only an imminent recession for the United States but also for many of the countries from which we import. ### The Jobs Market stays strong for now. Recessions take a long time to work out of the economy, and if one is indeed forthcoming, you can expect conditions to worsen further in the very next few months. This will eventually include, sadly, cuts in labor at many companies as their sales slow down. The loss of jobs, however, is often one of the last things we typically see in a recession, because it takes so much effort and expense to re-hire and train new employees once the storm has passed and companies begin to increase their business again. We will typically see hiring freezes, cut hours, and furloughs before we will see mass layoffs. We will be able to monitor the job market in a variety of ways, including company announcements of coming labor changes, a reduction in the number of open positions listed, economic surveys of the total number of workers at each company (this is done weekly), and finally, reports from the states of their total unemployment figures. Many of the actual layoffs will be reported to us in a delayed fashion, because many workers will receive severance pay as part of their separations, and so will not file for unemployment benefits in their home states until those are exhausted. So, what we would expect to see at this point in the economic slowdown, particularly after all of the hiring challenges companies faced after the Covid pandemic, is hiring and wage freezes, and perhaps a drop in the total number of hours worked per employee. We will also hear of some layoffs, but companies still struggling to be fully staffed will first re-hire as many of those laid-off employees as they can, delaying and muting the current state of employment. And indeed, the reports from the states (the last link in the chain of reports about unemployment) seems to show that workers are not yet seeking significantly more unemployment benefits, as the US unemployment rate actually dropped in December, to 3.5%: There is much cynicism in economic circles about this number, however, because [this rate is fairly easy to manipulate for political purposes](https://www.linkedin.com/pulse/truth-unemployment-numbers-manipulated-mark-renkert-mcsl/) by simply changing the total number of people who are deemed to be “looking for work” (called the Participation Rate). At nVest Advisors, we are staunchly apolitical in our investment management philosophy (your IRA doesn’t care who the President is), but we are mindful of the general distrust of this number in academic circles. That said, we do not see a significant change in the unemployment rates at this time. Nor should we; layoffs are the last part of the labor reduction we see in recessionary periods. What we would see first are reductions in job openings and new jobs created, which we are now starting to see: US Non-Farm Payrolls, MoM 2022 \| Source: Trading Economics The total number of jobs created in the U.S. in December (non-farm) was 223,000, a downward trend that has continued all year. This makes sense because the number of job listings, while still over 10 million currently, is also declining. Total US Job Listings \| Source: Trading Economics We believe part of this trend is a simple reversion to the mean, considering what the job openings in the United States have historically been trending over the last 25 years: Total US Job Listings 25-Year Chart \| Source: Trading Economics The Covid pandemic came with massive government subsidies to American companies: over $6 trillion (that’s $6,000,000,000,000) was freshly printed and given away to businesses and consumers to help keep the economy afloat. This not only caused the massive inflation in prices we are living with today, but it also caused many companies to make aggressive expansion plans with that added stimulus money. A massive hiring spree began in late 2020, but it was met with a sharp drop in available workers post-Covid. Now that those days are over, we believe we will first see many job openings simply drop off, which will be followed by actual job cuts due to the economic slow-down we believe will be in full force by the middle of this year. However, the good news – for now – is that the excess jobs have to be eliminated first before the job cuts can begin. Also, with the Baby Boomer generation retiring now at more than 10,000 per day, the demand for workers will likely remain stronger than previous recessions would indicate. No one wants to see a business fail, or a family struggle to make ends meet due to the loss of an income. However, this sadly is the natural end result of the economic cycle we find ourselves in. If your family meets this unfortunate circumstance, please reach out to us for help. ## Bottom Line: We hope these economic updates have been making the case for our clients that we need to prepare to endure a recessionary year in 2023. No one knows exactly when a recession will occur, or how long and painful one may be, but we do have most of the indications that we are right at the starting point now. Whether you are our client or not, you need to consider the broader economy (and much less so the daily market fluctuations) when making investment decisions. The economy is telling us clearly what is coming, and you need to have your investment accounts prepared before that happens. Use these economic reports, and those of others working in this space, to ***prepare.*** You can not only avoid much of the pain that is coming, but you might actually profit from it, if your investments are properly positioned, and you’ve done what you can to shore up your business’ and family’s financial situation. **[If you need help with this, nVest Advisors has amazingly affordable personal financial planning and fiduciary investment management services to help you.](https://nvestadvisors.com/services/)** This is what we do for a living, and we’re very happy to partner with you on that endeavor. Reach out to us for a totally free financial and portfolio checkup today if you’re concerned about where your finances sit for the coming few years, particularly if you are at or approaching retirement age. We’re delighted to offer you our thoughts. You can schedule that time with us below: ## Watching This Week: - **Thursday, we will get updated news on the current inflation rate in the U.S.** - **Friday, we will learn the new consumer sentiment numbers from the University of Michigan.** ###### *The views and opinions expressed in this economic outlook are for information purposes only and are not intended to be financial advice. nVest Advisors, LLC does not provide specific investment or financial planning advice to a client without an executed client service agreement. nVest Advisors, LLC does not trade directly in commodities or cryptocurrencies. Economic data changes rapidly; no warranty is expressed or implied about the reliability of this data once published. Although the information provided here is derived from authoritative sources, we cannot guarantee the accuracy of this information. Please see our general disclosure page for additional details.* **Categories:** Business Stories, Client News, Client Service, Economic Updates, Economy, Individuals and Families, Mailchimp **Tags:** Bitcoin, China, consumer, CPI, Crypto, diesel, dollar, economics, economy, energy, europe, Eurozone, finance, financial, FTX, GDP, global economy, hospitality, housing, inflation, invest, investing, labor, Layoffs, LNG, lockdowns, macroeconomics, manufacturing, market, money management, mortgage, oil, OPEC, participation rate, PCE, ponzi, ponzi scheme, portfolio, professional, rent, retail, retirement, rollover, sector, service, services, stocks, transportation, United States, US economy, wealth --- ### [Year-End and Holiday Updates](https://nvestadvisors.com/year-end-and-holiday-updates/) **Published:** November 30, 2022 **Author:** Jeremy Torgerson **Content:** We hope everyone is kicking off the holiday season with a great Thanksgiving, and that you enjoy all of the blessings of the Holiday season over the next few weeks. ## As we close out 2022, we wanted to make sure our clients remembered these important year-end financial and investing items: - **Clients over the age of 72 with an IRA account need to take their RMD (required minimum distribution) by December 31!** We will be in contact with each of you individually if this important distribution hasn’t been made yet. - All clients contributing to IRAs and ROTH IRAs (and any workplace retirement plans): check and make sure you haven’t contributed too much to them over the course of the year! **You still have time to withdraw any excess contributions prior to the end of the year.** In case you don’t know, for 2022, the maximum contributions for all kinds of tax-sheltered accounts [can be found here (courtesy of SHRM)](https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/irs-benefits-contributions-limits-chart-2022.aspx). - With the markets battered down so significantly this year, **it is an excellent time to harvest tax losses in non-qualified (non-tax-sheltered) accounts**. Tax losses offset capital gains and investment income from earlier in the year, and can even carry over into future tax years. Let’s talk today if you need some tax losses before the year ends. - Many clients want to jump on filing their tax returns as soon as they get their W-2s from work in late January. However, keep in mind that the deadline for investment accounts (and the investments themselves) to report your profits can be as last as the end of March! You will receive a Preliminary 1099 for your investment accounts as soon as practical in late January / early February, but **you may get one or two revised 1099s after that as more investment funds report their profits**. Be prepared, if you file too early, to file an amended return if you “jumped the gun” on getting your final 1099. - Also, remember: as you work on your tax returns in early 2023, **you can still open and fund an IRA account for 2022 all the way to your tax filing date in 2023** (typically April 15) if it will reduce your taxable income. With your permission, we’re happy to talk directly to your tax professional. - There can be no more major changes to ERISA-governed retirement plans until January. ## Our Annual Client Survey & Review Appointments are coming up soon! As long-time clients know, we try to conduct our annual account reviews during the first quarter of each year. Ahead of those meetings, we always send out our annual client satisfaction survey, which lets us know what’s going well for you this year, gets your feedback on how good you feel about the services we provide you, gives you a chance to recommend improvements, and lets you update your contact information, beneficiaries, etc. **Please look for this survey to be delivered to your inbox the week of December 12, and have it completed by December 31**, because inside the survey will be the calendar to book your Annual Review Appointment in January. ## Holiday Market and Office Hours Investment markets are generally required to observe U.S. government holidays, which means there will be no trading on Monday, December 26, 2022, and Monday, January 2, 2023. Our office will also be closed on those days. In addition, we will have limited appointment slots available December 19-22 and the office will be closed Friday, December 23. If you have any questions about the information we’ve provided above, [**please reach out to us!**](https://nvestadvisors.com/contact/) Otherwise, please have a wonderful Hanukkah, Christmas, and New Year, and we’ll be seeing you soon for an annual catch-up in January. **Categories:** Client News, Client Service, Company News, From our CEO, Mailchimp **Tags:** 401k, company, ERISA, holiday, IRA, IRS, market, nVest Advisors, RMD, ROTH IRA, update --- ### ["Why I became a Financial Advisor": Money n30 Podcast: Episode 10](https://nvestadvisors.com/why-i-became-a-financial-advisor-money-n30-podcast-episode-10/) **Published:** December 11, 2019 **Author:** nVest Advisors **Content:** > ### Financial Advisor and nVest Advisors CEO re-introduces the Money n30 Podcast with a talk about how a difficult upbringing motivated him to become a financial advisor. ### Podcast Transcript: *I’d like to thank you for joining us today on this sort of reintroduction to the “Money n 30” podcast. My name is Jeremy Torgerson and I am the CEO of nVest Advisors LLC. We are a fee-only, fully fiduciary investment advisory firm based in a northern suburb of Denver Colorado called Brighton.* *I began my financial practice in the great state of Texas at the very, very southern tip in Brownsville Texas. We actually lived in a small community named Los Fresnos, which is very close to South Padre Island (if anybody’s familiar with it) and began our business in what is one of the most economically depressed areas of the country . That’s a very weird place to do a financial advisory firm but it was important to me. I want to share today some of the story of why I started there, what my motivation is for being an advisor, and just give you the opportunity to hear a little bit more about what this firm does and what it believes in.* *First off, a quick housekeeping note on our podcast. We are going to obviously improve the quality of the podcast as we go. I’m not going to be too worried about it though – I have a performance and theater background so I can improvise pretty well. I hope I can carry a conversation even if I’m just talking to myself and you’re listening but I wanted to let you know that as the podcast continues we will definitely improve the quality. So hang with us! We’re going to listen to your feedback as listeners, I’m going to get feedback from some of the people who love me – my friends and family, but also I want to get the feedback of industry professionals about the content, and then attack some of my performance friends and get their input on technical issues as well.* *But I wanted to give you a little bit of info about myself and I’ll tell you a little bit about this firm and why it is very, very different than any other financial advisory practices that you’re going to look at. So if you are in the market for either your first financial advisor, or maybe you have one and are not necessarily happy with what’s going on, or just not sure if you want a second opinion, I encourage you to interview a whole lot of us before you make a decision. It’s supposed to be a long-term relationship with your financial planner and that means that you’ve got to go on a few dates before you get professionally “married” (if I can use that weird figurative language).* *Let me start with this: let me give you a little bit of history about the firm and then I’ll go into my own background. nVest Advisors began as an independent company called Palo Alto Investments in 2011 in Brownsville, Texas, of all places.* *I’m a Denver native and my firm is now back in Denver, Colorado after I relocated my family and my company three years ago, but I had been living in Texas for about a year before I became a financial advisor. My first three years in this business I was with Edward Jones Investments and we built a small office in the beautiful but tiny community called Los Fresnos. It’s very close to South Padre Island, if you’re familiar with the very southern tip of Texas.* *After three years of being with a major firm (I had been a business owner previous to becoming a financial advisor – I’ll kind of share a little bit of that later in the podcast), it became clear to me that there was no good way to work for my clients if I also had to work for a company. There were always production quotas, there were incentives given to put you into a product that maybe might not have been the best fit for you but would send me on a trip somewhere in the world, and those kinds of things. That didn’t sit right with me.* *I’m not wanting to knock Edward Jones or any of those other firms, but the people that work there are employees of that company, not employees of their clients, and that’s something that I wanted to be. I wanted to make sure that I had my client’s best interest at mind at all times, and that meant sometimes that you were going to be in conflict with your own employer.* *I could share a quick story about that to give you an example, but the very day that I could leave Edward Jones (I had a three-year contract with them) I resigned and formed my own independent firm called Palo Alto Investments that was based in Brownsville, Texas until February of 2017. Then we relocated my family and my business back in Colorado, because I had a kid who finally graduated college and one that graduated high school in the same summer. It was important for my wife and me to get them back into a better job market. South Texas, I will tell you, is an awesome, unbelievably great place to raise young children and I think it’s a fantastic place obviously to retire. We have a lot of snow birds that we call Winter Texans and Texas that come down and stay so it’s just an awesome place. The cost of living is low, there’s no income tax in the state of Texas… so it’s just a great place. Plus I love being near the beach where I can wear really bad Hawaiian shirts and then just enjoy the beauty. I owned a sailboat for several years it while we were there. But it was time to think about my family, and I decided we decided to move back to Denver. We still have a huge number of our clients in South Texas and I travel down regularly to give them face-to-face visits but we needed to figure out a way to serve them personally while still being 1800 miles away. We started to do a lot of video appointments, and that’s something that did definitely changed.* *When I decided to move so when we began to relocate our firm we had to really think about how we wanted to do this. We didn’t want to just abandon all of those people that had placed trust in me and that I had relationships with – I really did not want to do that, and I don’t think they did either, because nearly all of them are still with me. But we we had to make some decisions and one of which was if I’m going to be remote we have to figure out a way to serve you in a way that is virtual because though I may be down three times a year or something like that for face-to-face visits, but what if you need me in between? Because sometimes life gets in the way, it was important to figure that out.* *So we became a firm that really embraced technology. We do a lot of, for example, video meetings. We’re almost entirely paperless; you can do almost everything from your phone when working with us. And that lent itself to a different customer base than when I was at Edward Jones Investments.* *They sort of had you go after and pursue your typical “retiring farmer” whose land was now worth $10 million, and he just sold it to a developer, and now he’s very wealthy but not terribly sophisticated financially. So that was kind of what you were looking for – retired clients who were just looking a planner, or clients that, -the market had just really started to collapse from the Great Recession who were used to getting 4.5% or 5% on their bank savings in certificates of deposit, and we’re now getting zero or just barely above zero, who needed to find something new. So they became bond buyers for the first time.* *So there was that kind of client base. The folks who still use Edward Jones for their nvestment services are ones that want to be able to just stop in, sit and visit, sip some coffee with their advisor. It is a very laid-back atmosphere intentionally, and we had to figure out a way to still bring some humanity to what I’m doing, but be able to do it from 1800 miles away.* *And so we embraced a lot of technology that lent itself, like I said, to a younger client base.* *So we decided to continue making changes that would benefit a younger client base. nVest Advisors, though we still have clients in their late 80s and they do just fine using our systems and we have that relationship built, we are most definitely a firm that is focused on people who are honestly too busy with work and life to come hang out at their financial advisor’s office and sip coffee with me.* *I would say that what I have learned changing my firm from being more traditional to far more technologically advanced and then getting the opportunity to work with younger investors is that I’m really thrilled with – and so impressed by – the seriousness with which younger investors are taking their money. I’m 48 years old as of a few weeks ago. I see my age range as having a lot more of a laissez-faire attitude toward money, unfortunately. You have those people you knew in high school now that are fabulously wealthy, but by and large most of the people that grew up in my Blue-Collar type community in Aurora, Colorado (where I went to high school) are still pretty much that kind of person.* *There’s been a few that have really launched off, there’s been a few with a lot of hardships, but by and large most of us are in the same economic condition as our parents were before.* *People that are 30 or younger – I’m really impressed with. People who are only 27 or 28 years old that come to us are almost embarrassed to want to visit, because they’ve only got $75,000 in their 401K! I only wish that I saw that much money in someone’s 401K who’s 50, and unfortunately, we don’t see that a lot.* *So anyway, this firm, being focused on younger people, is not terribly focused on how much money you have now. We’re worried about where you want to go. That’s the biggest philosophy difference between myself and many other firms.* *If you’re a wealthy person, if you got a few million dollars to invest, you will have literally 50 financial advisors in your community and around the country banging on your door and trying to get your interest in them: inviting you to dinners, hanging out of the golf course, working through your church looking for rich people…* *I mean in this business it has always been what I would call “whale hunting” – trying to find those few major clients so that you can serve just a few and do it really well, but still make a good living for yourself. That’s never been what’s motivated me.* *And so I’m going to try now to share the “why”. Why did I focus on, for example… why did I start my business in one of the poorest places the country, which is the Mexico border in Texas? Why do we work with young people who don’t have any money yet? Why are we willing to work with just average working Americans?* *I got the opportunity to tell this story to a group of financial advisors about 2 months ago, and when I told it I didn’t think much of it – it’s not something that I ever hid for my clients or my friends, but I just something it doesn’t really come up that often – but I grew up extraordinarily poor. I had two loving parents but they were teenagers when I was born. They got divorced when I was 4 and I lived with – the Court’s just defaulted to the mother being the primary guardian of the children, so my sister and I were given to my mother, who was a single mother until I was in high school. She had the occasional men in her life that we thought were going to become stepfathers and then these guys would disappear, but by and large she fought it out with myself my sister and eventually my younger brother Brian by herself.* *We lived for many years on food stamps, we lived in government project houses, and she always drove cars that were coming apart at the seams I remember our old cars that were rusted out or the front driver side window didn’t go down. I just had a lot of those kinds of experiences.* *We lived in inner-city projects. Thankfully we were in metro Denver and it was a fairly progressive community, so there were low-income houses that were being built in the suburbs so we spent a lot of our time out away from some of the real hard areas of inner city life, like some kids have to endure, but it was tough* *We moved a lot because sometimes the rent was due and we couldn’t afford it, or sometimes my mom’s work – she always worked, but her work might be clear across town and we could find an apartment that was closer. Things like how much gas money we would have every month mattered, so we moved a lot. I remember going to three different schools in three different school districts just for 7th grade, for example, and as a kid growing up when you are not able to control those circumstances, I think you come up with ways to cope. Unfortunately a lot of kids drift into gangs or drugs. I never did any of those things, but I know that I carry with me a lot of shame for the life that we lived.* *There are just some things that as a kid you you can’t control and I’ll give you a couple of examples: we used to go to near-new shops and thrift stores not because we were hunting for a cool bargain like a garage sale, but because we needed shoes. We got used shoes. We got used clothing. Sometimes we got presents at Christmas that were used – not always, like not every present, but I can’t remember a year we didn’t have presents that were that were “previously loved” by other kids.* *My dad was definitely in our life but we saw him every weekend for a while and then every other weekend. When I was a teenager he and his new family moved to Seattle, Washington from Denver, Colorado and we saw him just in the summers mostly.* *Anyway, to make a long story short, I remember – and I told this to the other financial advisors briefly – but I said one of the memories I have that sticks with me and still resonates with me now that I’m a father is when I was in second grade (so I was seven and I think my sister was in in kindergarten so she was 5), my mom had to tell us as Christmas approached the news that there was no Santa Claus. I was 7 years old; I think I would have probably believe for at least a couple more years, but the reason that she did it was because she knew that money was going to be extremely tight and there was probably not going to be a lot that we were going to get.* *And you know how the story goes if you’re child – Santa brings presents to the good boys and girls, but not to the bad ones, and my mom did not want us to feel like we had been bad kids and Santa had overlooked us or had rejected us. So she had to tell us at that point there is no Santa and, “You guys are not going to get a lot this year, and I love you both very dearly but there’s no money.”* *That’s always stuck with me and when I eventually married – I married my my sweetheart at 22 – and we had kids (I was 24 when my son was born and 27 when my daughter was born), it was very important to me that money became a thing that, although in my childhood it was always a fight and a struggle and money was something that we… we always lost when it came to money, I wanted to change that.* *So early in my young married life and as a young father, I have always been entrepreneurial. My grandparents on both sides also owned their own small businesses, kind of blue-collar businesses. One set of my grandparents owned three Amoco gas stations, which was just a lot of work and not a lot of revenue plus a towing company and an auto clinic). But they just worked and worked and worked and worked and worked forever. And my other grandparents owned at one point in their lives two bakeries while my grandfather was also a forklift operator for Coors brewery.* *So I saw the hard work ethic from my parents and my grandparents, and got the entrepreneurial spirit probably from my grandparents.* *We got the opportunity to purchase in our small town, a video store in 2001, and then after that – I had been in the restaurant industry as a district manager and a director of operations before I became a financial advisor, but in a town right next to ours there was this weird combination video store / pizza restaurant for sale that a realtor kept wanting us to look at.* *I pulled up one day to look at the building – he nagged me until I finally agreed to go look at it. He was trying to sell it to us as a second video store that we might own and run independently of the other one. I pulled up and the name on the business was, “PMS? We’ve got the Cure” and the PMS was spelled out “pizza, movies, subs”!* *But it literally was the most misogynistic, just deplorably-named, awful idea that I had ever seen as a business person! I thought, my word. I can’t even believe… imagine my surprise that business didn’t make it!* *But we went into the building and it was beautifully set up for a pizza restaurant and they sort of just made the lobby into a video store, so I thought, “Well, it’s easier to just move the videos to our current video store (which is a very big operation) and I should just turn this into a pizza shop.” I had been in the restaurant business for years already and had moved up the chain and was making other people successful as a restauranteur, so I wondered if I could do it for myself?* *My wife, God love her, said. “If you want to give it a try, give it a try,” so we opened in a small town called Platteville, Colorado “Torgi’s Pizza”.* *Torgerson is my last name and Torg or Torgi was my nickname for forever. We opened that in August of 2002 in August of 2005 we open the second “Torgi’s” in Greeley, Colorado and ran those until the Great Recession really began.* *We got an offer on two of the businesses and we decided to close the other one. There was some decision-making to do there, partly it was the video industry was being wiped out by Netflix but the economy in Northern Colorado… there were a million foreclosures everywhere… it was the time when the subprime mortgage bust was about to begin. Also our kids were really growing up without seeing much of mom and dad. The businesses can really take over your life and, like… our dining room table became the second office desk, full of paperwork and there was always an ad that was due to the paper before Friday, the bookkeeper needed such-and-such and the CPA needed this, and there were taxes to pay, and payroll was due… and it was just much more work than we expected.* *We had a CPA, we had a bookkeeper at the time, but nobody ever, ever talked to either one of us about financial planning for our family or financial planning from a business owner’s perspective. We just sort of made our profit, paid a lot of taxes, reinvested money in the businesses (because we sort of assumed the businesses would be our future and our retirement, or maybe the kids would want them – because everybody thinks the kids will want their business and kids don’t), but that became a real part of it and when we were faced with the decision of should we start over and close these things down, sell the two with the offer we got to shut the other one down, we looked at each other.* *My wife and I were going to both have to do something different with our lives professionally and this point we were in our mid-thirties, and I said, “You know, if we’re going to do something different, let me do something really different.”* *I had already started to do my own research on financial planning, trying to figure out the best way to move our business forward. You know, no one ever talked to us about a 401k for our own savings or our employees. No one ever talked about any of those things that would have saved us so much in taxes that we paid unnecessarily. So I began to do this research and realizing, “My God there’s got to be a million other business owners like me out there who are just struggling to make ends meet, or maybe, God willing, their businesses are really thriving but they don’t have an advocate.”* *They may have an attorney- we all did – and they all have a tax person who’s thinking about this year’s return or this quarter’s estimated payments or something, but not thinking about you 5 years from now or 20 years from now. That’s a financial advisor’s job.* *So I told my wife as I was doing their own research I there’s got to be so many business owners that could benefit from somebody who has been there; who knows exactly what it’s like to lay awake at night trying to figure out how to rob Peter to pay Paul because payroll is due on Friday – those kinds of things to keep a business afloat until its solvent and then finally profitable.* *And so we decided to that I was going to become a financial advisor, and I made the other decision was that I had been lived my whole life in Denver Colorado and I said if we’re going to change, let’s do something really different, and we decided because my mom and stepfather have been relocated to a little city called Harlingen, Texas, clear at the bottom of Texas, that we would relocate to some place warm and tropical for a while, and let our kids grow up in a different place than where we were.* *That’s how I ended up in South Texas. We moved there in January 2007 we left in February 2017, and moved home to Denver after my son Joshua graduated from the University of Texas with a degree and a full ride scholarship and two years early (I’m so proud of my boy) and my daughter Sarah graduated from Los Fresnos high school (she is now a junior with a going for a psychology degree) I’m very, very proud of both my kids.* *But my heart was with working people who are trying to make ends meet; who were trying really hard to do it right. It’s really easy to not pay all those taxes, for example, if you take a lot of cash in your business instead of ringing everything through the register like you’re supposed to. I didn’t want anybody to feel like they had to cheat to be successful. There are plenty of opportunities and strategies to make your business thrive without having to resort to either cheating employees, cheating your customers, or cheating the government.* *And so that was my initial plan – to focus only on small business owners, which there are a bunch in the South part of Texas where we lived. Though I soon found out that the major employers there were school districts, so I ended up – the recession was raging- here is kind of funny story I’ll share.* *My very first day at Edward Jones that I could sell, was the morning that Lehman Brothers went bankrupt. We went in to make our calls at the training center in Tempe, Arizona – we finally could reach out to people and ask them if they’d like a second opinion on the portfolio or whatever – and the market fell like 1100 points that day, and it just went down and down and down for the first 6 months I was in the business. I literally joined this industry the morning that the recession really started, so the first 6 months were a very interesting thing. I think it made me a different kind of advisor than I intend to be. I’m not a significant risk taker. I’ve learned over the years how to minimize risk and how to minimize cost to help our clients’ money very early in this business.* *But anyway, there was a chamber of commerce meeting and the Chief Financial Officer of the local school district said, “Jeremy, can you do teacher retirement accounts (they’re called 403b accounts)?” and I said, “Well yeah, I can, I don’t have any at the moment.”* *He said, “Look, here’s our problem: we have a whole bunch of these teachers that have been sold these investment-related 403b products from advisors for the last 10 years. Now that the market is going belly-up, these teachers are panicking. They’re calling our office, wanting advice. They’ve been wanting to get out of this stuff, and we don’t do any of that. We don’t have anything to offer then and as the employer we really can’t get into giving them financial or investment advice. Can you come talk to our teachers?”* *I said I’d be happy to. I went in and said, “Folks I can take your account, but let me just see if I can help you as a courtesy.” It was a small town, so it was the neighborly thing to do, but I ended up over the years becoming a 403b expert and we have a great number of clients that that we manage their their school teacher retirement accounts in both Texas and Colorado now.* *Totally unexpected.* *But the other thing that occurred to me when we moved to where we did was that you had a lot of poverty. I saw a lot of kids growing up in similar circumstances that I did, and so my heart was also led to say that as an advisor, I never wanted to turn a family away that sincerely wanted the help. It’s one thing if you’re not serious about it – I can’t do anything about that. I can’t care about your future more than you do, but if I saw somebody who said, “We don’t have much but we want to do something better,” I felt I had a professional obligation to help them.* *It felt like Ministry work to me in a lot of ways. I’ve learned over the last 12 years in this business that the difference, really, between rich and poor, other than having access to money – is having access to information about it.* *Rich guys have got all the people in the world to offer advice. The average working-class person does not, and so they tend to be easy pickings and prey for unscrupulous salespeople and insurance agents that are selling products they don’t need, or financial advisors putting them in really expensive mutual funds that they make a good commission off of, and then wait two or three years and do it again. They make money off the client over and over and over again because of the client’s lack of sophistication. So I decided as a financial advisor, that I was going to spend a great portion of my time educating and… you will find out if you were coming to a seminar, or you’re going to listen to this podcast you’re going to find out I’m a good guy. You know I’m not worried about trying to convince you that I’m honest or trustworthy or that I’m sincere and passionate about what I do. That’ll either come across to you or it won’t, and if you never grasp that you’re dealing with an honest guy, it’s okay! I would rather not work together!* *So what I hope that this podcast will do for you going forward is, if even if you never become a client of nVest Advisors, let us be a resource for you. We’re going to answer things for working people to understand. We’re going to talk about subjects that working people need to know about – college savings, how do we get out of debt… the next podcast is going to be: “I just left my company either voluntarily or not – what do I do if I’ve got an old 401k? Do I leave it there or do I roll it over? Do I cash it out?”* *We’re going to talk about these things in just simple, honest, easy-to-understand language.* *Let me leave this podcast with that – it’s getting long. I want to thank you if you’ve listened to me this far.* *Folks, money is not a fight. Money does not have to be confusing. Money does not have to be complicated. It’s actually fairly simple.* *You know, I told that to the same group of advisers that I told my personal story to, and those advisor said, “God all we do all day is try to convince people that money is complicated and they need guys like us, and here you are building a firm telling people that it’s not difficult and it’s not complicated.”* *I said it’s not if you have the knowledge, but I think my kind of client is going to be busy with their lives and so they’re going to want this handled for them at some level. They just want to know that it’s in good hands that the person that is taking care of their money cares about them and wants to make sure that they do well.* *That’s what nVest Advisors does, guys. We educate, we get you started if you’ve never started before, and we have created programs and fee structures that make sure that you’re not excluded even if money is tight.* *Our financial plans are $29 a month for a year and then you can either stay on with a maintenance program which is lower or you can go away at that point. But $29 a month! And we work with you and we build a financial plan for you just one little bit of it a month over that first year. And in the meantime, we get you fully educated on things like basic Estate Planning and debt management strategies and how to handle taxes and how to create a budget for yourself. And then we put it all into an online financial plan that you can access any time. And you get one-on-one time with the advisor every month while you’re building your plan out and then you get time every quarter afterward to make sure that we don’t need to make changes to it.* *Should you need an investment manager, we never have a minimum balance on any account. You can start with $1 if you wanted to, and we don’t charge commissions -we charge our clients a fee to manage the money – we take it directly from the account, but our fees start at less than 1% per year for your first dollar.* *We’re not here to make a fortune off each client. We’re here to help each individual family and we do it in a high-tech and virtual way.* *That’s the the gist of nVest Advisors. I think I went on too long with my personal story and less about my firm, but if you have questions about the firm email us! My personal email (I’ll make sure I put in the notes on the podcast) but it’s <jtorgerson@nvestadvisors.com>. Or you can also use just <info@nvestadvisors.com> and it will also be reach us.* *We’re happy to spend some time with you to see if we’re a good fit. We offer that for free- we don’t charge anything for our time if you just want to explore this or you have a specific question you’d like to get impartial advice about. We’re happy to offer it.* *We’re not the right fit for everybody, but I think we’re the right fit for most people who are still working. who are raising families. who want this handled in and not have to be terribly invested in long office visits and driving clear across town to sit in your financial advisor’s mahogany office and be intimidated.* *There’s no there’s no reason for that. We can actually work together in a very casual and friendly and and virtual way, where we still look at each other on the computer screen and we can still share screens we still talk one-on-one, but we can do it after dinner with your family, we can do it on a Saturday, we can do it however your family needs it done.* *So this is a very, very different firm. It is not meant for the super wealthy who want their backsides kissed by their agent or advisor. This is for folks who have basic, serious financial needs, want an adviser they can trust and don’t want to pay a fortune for it, and that’s what we’re about.* *God bless you all – I hope you have a great day. I’m happy to be back doing this podcast. We’re planning to do one once a week.* *Next week’s is going to be about if you have an old rollover or an old company 401K plan what do you do with it? We’re going to give you several options, and after you have some info about yourself what the right one might be for you.* *Have a great day guys! Again this is Jeremy Torgerson. I would love to hear some questions from you! Send us an email with any kind of financial question you’d like to hear covered on the podcast* *Have a great week we’ll talk to you next week! Bye for now.* **Categories:** Media, Podcasts **Tags:** Money n30, podcast --- ### [FREE E-BOOK for beginning investors](https://nvestadvisors.com/free-e-book-for-beginning-investors/) **Published:** July 8, 2019 **Author:** nVest Advisors **Content:** [![](https://nvestadvisors.com/wp-content/uploads/2019/07/Veres-ebook.png "Veres ebook nvest advisors")](https://drive.google.com/file/d/1T_TCVUCqdeeqEQ8AjHxvATon77ISZLnU/view?usp=sharing)There are literally thousands of advisors hunting for the “whale” – the super-rich client with tons of investable assets. And while we definitely have “wealthy” clients, at nVest Advisors, we’re finely tuned to work with young professionals, working families, and small businesses. It’s our purpose and mission. We don’t just want clients who are already wealthy – we want clients who are on their way to wealth, too. That’s why we’re pleased to offer, totally free of charge or obligation, this brand new, easy-to-read E-Book from famed financial author Bob Veres: [***Finances for my Daughter: Everything a person just starting out needs to know about saving and investing***](https://drive.google.com/file/d/1T_TCVUCqdeeqEQ8AjHxvATon77ISZLnU/view?usp=sharing). Just click on the book title above (or its cover art) and get instant access – without signing in or giving us your email. In just 36 pages, you’ll learn the ins and outs of basic money management. **And when you’re ready to take it a step further and recruit the help of a financial pro to help you achieve your goals, we’re here for you. [Connect with us today to see how we might be a good fit for your needs (and always, without sales pressure or commitment).](https://nvestadvisors.com/connect)** **Categories:** Client Service, Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, Investing General, LifeCycle, Mailchimp, Media **Tags:** Bob Veres, book, ebook, education, finances, free, invest, investing, investments, knowledge, money, offer, personal finance, Veres, wealth --- ### [Statement on the SEC Regulation BI (Best Interest)](https://nvestadvisors.com/statement-on-the-sec-regulation-bi-best-interest/) **Published:** June 12, 2019 **Author:** nVest Advisors **Content:** nVest Advisors was conceived and created to provide effective, low-cost, fully fiduciary financial planning and investment management for all of our clients, but especially for those clients who are largely overlooked by other RIA firms due to income or accumulated wealth limitations. The middle-income American family and small business owner have traditionally been targeted by the retail financial services industry for expensive product sales rife with conflicts of interest, high (and often concealed commissions, poor sales training, and lax enforcement of ethical standards of conduct. > **While we applaud the recent SEC vote to enact [Regulation Best Interest (BI)](https://www.investopedia.com/what-is-the-sec-s-regulation-bi-best-interest-rule-4689542), which obligates the retail investment sales industry to disclose material conflicts of interest to their clients, we believe it falls far short of protecting consumers the way they need to be.** As just one example, Reg BI requires “informed consent” of conflicts, but once that information is conveyed to the client, the salesperson and their broker/dealer or insurance agency is now clear to still sell the product to the consumer, even if it’s not demonstrably in the client’s best interest. This makes the reg’s name an ironic misnomer, and the reg itself a toothless tiger. It is also not lost on us that this regulation follows an unsuccessful attempt by the Department of Labor to enact a Fiduciary Rule for all retirement accounts in 2017 and 2018. This was met with virulent and stringent opposition by the same investment and insurance firms that today are being asked to disclose their conflicts of interest in meaningful, helpful ways to the retail investment/insurance marketplace. Color us skeptical. nVest Advisors has no problem whatsoever with requiring added transparency – far from it. But we know from many years of working with clients, particularly clients in the middle income market, that a legal disclosure document required by Reg BI will be most likely difficult to read and understand, as many other disclosure documents mandated by regulation have been in the past: mutual fund prospectuses, annuity contracts and the like are notoriously and deliberately shrouded in legal language that the average client cannot or will not understand. A better rule, and one we hope to see in the future, is a simple Universal Fiduciary Standard for all planners, advisors, and salespeople working with the retail financial services consumer. By applying the same standard to the sales-paid portion of our industry that regulators already require of fee-based Registered Investment Adviser firms, the public will, finally, be the beneficiaries of our industry, instead of all-too-often, is prey. Consumers concerned about whether their advisor is always required to operate in their best interest and represent them as full legal fiduciaries should seek out an appropriately registered RIA firm, such as ours, with which to do business. RIA firms chose voluntarily to be held to the much higher standard of being a fiduciary for every client, from their first day and first dollar invested. As long as nVest Advisors remains a going concern, that will not change for us. **Reg BI was a very small step in the right direction but regrettably is far too weak to make any meaningful impact on our industry or protect consumers from the predatory practices that wreak havoc in our industry. We urge the SEC and state regulators to push for stricter, more complete fiduciary standards.** **Categories:** Company News, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Investment Markets, LifeCycle, Mailchimp, Media, Press Releases **Tags:** best interest, colorado, commission, fiduciary, insurance, investment, registered rep, Regulation BI, RIA, rule, sales, sales agent, SEC, selling, texas --- ### [What is your personal life expectancy?](https://nvestadvisors.com/what-is-your-personal-life-expectancy/) **Published:** June 7, 2019 **Author:** nVest Advisors **Content:** **How long are you going to live?** That’s a question no one knows the exact answer to, but as financial planners, one of our most important tasks is helping you properly prepare for a realistic retirement. The simple fact is, many people are grossly underestimating how many years they will live retired, and sadly, with the increased need in our later years for medical care, living a long time can be very expensive. We encourage you to [**take a few minutes and answer a 40-question quiz**](https://www.livingto100.com/calculator/start/1) to determine – scientifically – your estimated life expectancy. This calculator is free and not affiliated with nVest Advisors in any way, but it’s a great tool to use to see if you are planning to live as long as you might. The obvious next step, after learning your life expectancy, is to make sure you are planning for the lifestyle you want and need for those years. A financial planner is there to help you do just that, as well as help you tackle every other financial concern along the way. Helping families prepare for the future of their choosing is what we do here at nVest Advisors. And we do it in a truly unique, revolutionary (and extremely inexpensive) way: our [**nVestor LifeCycle Planning Program®.**](https://nvestadvisors.com/lifecycle/) **If you need a financial plan, we’re here to help. [Connect with us](https://nvestadvisors.com/connect/) and we’ll get your questions answered.** **Categories:** Early nVestors, Early nVestors, Emerging nVestors, Established nVestors, LifeCycle, Mailchimp **Tags:** age, colorado, finance, financial, health, how long will I live, invest, investing, investment, life expectancy, plan, planning, texas, wealth --- ### [Low-Cost, Personal & Virtual Financial Planning is REAL](https://nvestadvisors.com/new-nvestor-lifecycle-program-launch/) **Published:** May 1, 2019 **Author:** nVest Advisors **Content:** ## **We’re pleased to announce a revolutionary new way to work with a financial planner: the nVestor LifeCycle® Planning Program!** Many families know they need financial help, but either don’t know where to go and who to trust, or just can’t pay the usually extremely high prices many planners want to charge. If you’re an “average” American family or small business owner, nVest Advisors was created specifically to work with you. **No neckties, no driving to the intimidating, high-pressure sales office.** **No product commissions or surrender charges or gimmicky approaches to money management.** **Just professional advice delivered by actual fiduciary advisors, at ridiculously good prices.** Whereas many financial planners charge $1,000 to $5,000 or even more for a financial plan, and many commission-paid financial representatives offer only a “needs analysis” (looking for something you need that they can sell you), the **nVestor LifeCycle® Planning Program** is a full, unbiased, comprehensive financial plan, built by a real, personal financial planner, for a low monthly subscription fee that easily fits into a family budget. ![](https://nvestadvisors.com/wp-content/uploads/2018/02/LifeCycle.png "Lifecycle nvest advisors")What makes the **nVestor LifeCycle® Planning Program** different, however, is that your program includes guidance and help to implement your plan over the course of an entire year, with monthly learning modules along the way, to help you grow your Money Savvy along the way. ### The nVestor LifeCycle® Planning Program covers all of the important areas of your financial life: - Creating a budget - Debt elimination planning - Retirement (or Work-Optional) planning - Insurance needs - College savings - Secondary goal-setting and planning (vacations, second home, that boat you’ve always wanted, etc.) - Basic tax and estate considerations - Trusts - Net Worth and Cash Flow calculations - Investment guidance (risk assessment, portfolio strategy, and optional investment management services) - More! The program is incredibly simple, easy to fit into your schedule, and completely virtual. **And the best part? *It’s affordable for working families.*** ### For only $99 to onboard, and $29 a month\* through the program’s duration, you get: - **A personal, professionally-created financial plan** maintained online for easy access. - **Encrypted document storage** for all of your important legal, tax and financial paperwork. - **Monthly check-ins with your advisor** to make sure the plan is progressing toward completion. - **Monthly learning modules** complete with video and other media training, learning materials you keep, “homework” for your own plan, and lots of Q&A. And after the year of learning is over, you have the option to continue to maintain and update your plan as needed – with an advisor’s help – for only $19 a month! ### Interested in seeing if the **nVestor LifeCycle® Planning Program** is right for you? [**Let’s spend a few minutes together and find out!**](https://calendly.com/nvestadvisors/prospect15) *\* The program fee noted is for individual households without investment management services with nVest Advisors, LLC. Small Business Owners pay $149 to onboard and $49 a month for the program duration.* *The program is offered free or at reduced rates to qualifying investment management clients and plan participants. Please see our [Part 2A – Form ADV (Firm Disclosure Brochure)](https://nvestadvisors.com/docs/nVestADV2A.pdf) for more information.* **Categories:** Client Service, Company News, Early nVestors, Emerging nVestors, Established nVestors, LifeCycle, Mailchimp, Media **Tags:** college savings, colorado, fiduciary, financial, financial plan, investment, LifeCycle, nVest, nVestor, planner, planning, retirement, texas, wealth --- ### [More ways to stay connected](https://nvestadvisors.com/more-ways-to-stay-connected/) **Published:** March 8, 2019 **Author:** nVest Advisors **Content:** Just a quick entry today, to let our clients (and prospective clients) know about some additional services coming up in April: [![](https://nvestadvisors.com/wp-content/uploads/2016/08/nVest-Academy-300x59.jpg "Nvest academy nvest advisors")](http://nvestacademy.com)The totally-revised financial education website, [**nVest Academy**](https://nvestacademy.com), will roll out on or around April 1. This special stand-alone site will offer live and pre-recorded webinars, a brand new podcast, and a host of other resources presented in plain English, for a wide variety of money topics. Whether you want to learn more about estate documents, how to maximize the potential of your 401k, how to invest in stocks and learn tactical analysis for picking stocks, or many other subjects, our library of growing content will be something to keep your eye on. Access to **nVest Academy** will be available for purchase ala carte or for a monthly subscription fee for the general public. *It will be totally free to nVest Advisors investing and financial planning clients* for the duration of your relationship with us. (**nVest Academy** will also host the monthly training programs that are part of our new financial planning service, **[nVestor LifeCycle](https://nvestadvisors.com/lifecycle/)**. More on that in an upcoming blog post.) [![](https://nvestadvisors.com/wp-content/uploads/2019/03/nVestBusiness-300x65.png "Nvestbusiness nvest advisors")](http://nvestbusiness.com)Our advertising website for business retirement plans, **[nVest Business](https://nvestbusiness.com)**, is online. It presents our offer of becoming the financial advisor and fiduciary of a company plan direct to business owners. [![](https://nvestadvisors.com/wp-content/uploads/2018/12/nVestME-Logo-300x57.png "Nvestme logo nvest advisors")](http://nvestme.com)And the sister site to **nVest Business** is **[nVestMe](http://nvestme.com)**. It’s specifically for those clients whose relationship with nVest Advisors is because you are participants in an employer-sponsored retirement plan that we manage. Make sure you check it: the site is just for you! It provides details about your employer plan, all of the forms and websites you’ll need to know, a massive database of available financial articles, newsletters, mini-webinars, calculators, and much more. [![](https://nvestadvisors.com/wp-content/uploads/2018/07/WIN_20180718_11_17_46_Pro-300x216.jpg "Win_20180718_11_17_46_pro nvest advisors")](https://nvestadvisors.com/introducing-mywealthadvisor/)We’ve had our smartphone app, [**MyWealthAdvisor**](https://nvestadvisors.com/introducing-mywealthadvisor/), online since last July. It provides a direct connection to articles, mini-webinars, videos, calculators, and important alerts that we send out, right to the app! All of our clients have received download and login instructions for the app, but if you need help, let us know. [fruitful_sep height=”2″ color=”#41963a”] [![](https://nvestadvisors.com/wp-content/uploads/2019/03/cropped-TLGR-Long-Banner-300x51.png "Cropped tlgr long banner nvest advisors")](http://thinklikearichguy.com)And finally, you’re all encouraged to check out CEO Jeremy Torgerson’s personal finance and success blog, [**“Think Like A Rich Guy”**](https://thinklikearichguy.com). Whereas nVest Advisors exists to do the financial planning and investing work *for* our clients, TLRG is designed to help those people who want to do it themselves, or live in an area we don’t serve. This site took a while to get started just due to all the work being done behind the scenes at nVest Advisors, but it’s up and running with a weekly article, motivational quotes, and its own podcast coming in July. Be sure to subscribe there to keep current on what’s going on! **Categories:** Company News, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, LifeCycle, Mailchimp, Media, Podcasts **Tags:** 401k, 403b, articles, business, education, finance, financial, financial advisor, information, money, news, nVest, nVest Academy, nVest Advisors, nVest Business, nVestMe, plan participant, podcast, seminar, site, webinar --- ### [THIS is why we don't play with your money.](https://nvestadvisors.com/this-is-why-we-dont-play-with-your-money/) **Published:** January 14, 2019 **Author:** nVest Advisors **Content:** ![Founder of nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2018/06/IMG_2330-277x300.jpg "Jeremy torgerson nvest advisors")**From Jeremy Torgerson, CEO of nVest Advisors:** > [***“I don’t need/want your pity; I just honestly hope I can save one person from this stupid nightmare.”***](https://www.zerohedge.com/news/2019-01-14/unsolicited-warning-someone-who-just-blew-it) **That’s not my quote. That’s from a guy who just lost a huge amount of money trying to out-smart the market, and he wants to warn you.** As I’m closing up shop tonight (from our new standing trading desk), a column caught my eye and I wanted to share it with our clients, prospective clients, and anyone else in the investing world who either thinks they’re smarter than time-honored investing principles, or has an advisor telling you he or she is. The recent market volatility presented both an opportunity to buy stocks cheaply and for investors to make emotional (greed or panic) decisions about their investments. A huge part of my job as an advisor is to make sure our clients don’t make those same errors. **At** **nVest** **Advisors, we simply don’t gamble with money, especially money our clients can’t afford to lose.** As an investor, you should always, *always* adhere to that same principle. Believe me, no one feels the sting of market corrections more acutely than a fidicuary advisor, like us, who carries the enormous weight of shepherding your life savings. And it is because we know that you are trusting us with not only your account as it is today, but what you need that account to do for you in the future, that we never take unnecessary risks with your money. ***Never.*** Unfortunately, this business has a lot of ego in it. To make a name for yourself, and attract a lot of clients, many advisors decide the way to differentiate themselves from the rest is to try out untested or wildly risky strategies, to see if they can beat the market. If they claim they can, they’re heralded as geniuses, and business flows to them, even though their past returns (if legitimate) [are almost guaranteed to never repeat](https://www.vanguard.co.uk/documents/adv/literature/can-active-funds-deliver-persistent-performance.pdf). In essence, they caught lightning in a bottle once. When (not if) they are wrong, the results can be disastrous. [**Case in point: a former financial advisor writes a confession today in the edgy, conspiratorial (and notoriously wrong) blog *Zero Hedge* that I want every investor, whether you’re a client or not, to read.**](https://www.zerohedge.com/news/2019-01-14/unsolicited-warning-someone-who-just-blew-it) (This is the ONLY article so far on *Zero Hedge* that I’d ever recommend, to make that clear. Read it and then get off the site and stay there, for your financial future’s sake.) In it, this former financial advisor admits that the time-honored principles of simplicity, diversification, goal-oriented (instead of market-driven), quality-over-sexy investing served him and his clients well for decades: > *“I spent the majority of my professional life in compliance, but before that, **I was an investment adviser who only dealt in passive, diversified asset-class based mutual fund investing**.* > > *It was slow and boring, but it worked. Really well. **I not only did really well for our clients, but also my own money. It was simple**, BUY WHEN YOU HAD MONEY and SELL WHEN YOU NEEDED MONEY. Don’t sweat the small details, we’re properly diversified to minimize risk (which worked) and we’ll catch the ups, of which there are always many.* > > *I used that system for decades, including the first 3 years of our retirement.”* And then, hubris and arrogance took hold. You can read the article for yourself, but to sum it up, he got overconfident, starting trying to “bling” up his investing strategies, believing he could out-smart the investment world. And he failed. Dramatically. I would never wish an investor harm – a life’s work down the drain is something I would never wish on my worst enemy (and he’s not claiming to be broke, just devastated a portion of his net worth). So please, take his words of caution to heart and stick to what has been proven to work over many decades, many ups and downs, many US Presidents, and many economic cycles. [nVest Advisors has very specific beliefs about how to plan and save for your future.](https://nvestadvisors.com/what-we-do/) We tough through typical market volatility, staying focused instead on what your money needs to do for you at a later date, instead of what it’s doing in the market today. We choose quality over “sexy”, every time. We chop away at trading expenses to help bouy your returns over time. And we stay right with you, in a personal relationship with you, all the way to the finish line. And, we do our level best to “talk you off the ledge” when markets get spooky. We’ve written about it [here](https://nvestadvisors.com/blog/2018/12/27/wild-markets-heres-what-not-to-do/) and [here](https://nvestadvisors.com/blog/2018/11/20/market-volatility-again/) and [here](https://nvestadvisors.com/blog/2018/02/05/4-things-to-remember-during-market-volatility/) and [here](https://nvestadvisors.com/blog/2016/01/22/podcast-2-market-volatility/) and [here](https://nvestadvisors.com/blog/2016/01/07/volatile-markets-this-week-11-things-to-remember/) and [here](https://nvestadvisors.com/blog/2016/07/08/podcast-keep-media-bias-at-bay/) and [here](https://nvestadvisors.com/blog/2019/01/04/the-january-effect-does-it-matter-in-2019/) and [here](https://nvestadvisors.com/blog/2016/02/25/beware-these-sketchy-sales-practices/). And that’s all just in the last 3 years. If this kind of philosophy appeals to you, we’d love to talk to you and see if you’d be a good fit for nVest Advisors. [Feel free to schedule a phone call or visit with me personally](https://calendly.com/nvestadvisors/prospect60), and we can see if what we believe in, what we do and how we do it, makes sense for your personal or small business’ investing needs. And for those few of our clients who might have politely smiled and nodded but secretly wanted to chuck bricks through the office window over the past three or four months, you’re welcome. :) ### ***Jeremy Torgerson*** **nVest Advisors, CEO** **Categories:** Behavioral Finance, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Investing General, Investment Markets, LifeCycle, Mailchimp, Media, Retirement **Tags:** advisor, bear market, colorado, Denver, derivatives, DOW, finance, invest, investing, lose, loss, lost, NASDAQ, nVest, options, recover, S&P, short sale, short selling, stock broker, stock market, stocks, texas --- ### [Your 2019 New Year’s Financial Resolutions](https://nvestadvisors.com/your-2019-new-years-financial-resolutions/) **Published:** January 12, 2019 **Author:** nVest Advisors **Content:** Your2019 New Year’s (Financial) Resolutions A resolution for every month to help yougain financial independence Cleaning up personal finances remains one of the top resolutions every New Year. But we all know what happens to most such self-promises, so here’s a month-by-month to-do list to cultivate better financial health. January: Organize paperwork. This obvious starting point eludes many. Are your financial documents organized, in paper or virtually, so information is at your fingertips? Your heirs will be eternally thankful if you unexpectedly die or are incapacitated. February: Consolidate investments. Trim your number of accounts and consolidate all your dormant 401(k)s into individual retirement accounts. Spreading your assets across various brokerage accounts is not smart diversification – it’s a recipe for confusion. March: Follow the money. If you’re still working and too busy with your life, you may have a poor sense of your personal cash flow, the money that comes in and where you spend it. You can’t establish how much you save or spend without knowing where you are right now. April: Tax smarts. It’s better to owe your state and the federal government instead of overpaying throughout the year. Did you fund an IRA for your spouse, max out funding on your defined contribution plan at work or fund your Roth IRA by the April 15th deadline? Did you track your losses on your taxable accounts, such as individual and joint investment accounts, bank accounts and money market mutual funds, to name a few? These moves can qualify you for tax credits. May: Investment smarts. How much do your investments cost you? Do you know what your insurance agent, 401(k) plan or financial advisor charges? How about the underlying expenses you pay to buy mutual funds or exchange-traded funds? Are your investments allocated wisely to minimize taxes? For example, do you hold real estate investment trusts in your tax-deferred account? Municipal bonds in your taxable account? How much risk do you take? June: What are you worth and why it matters. You can calculate your net worth (all your assets, such as your home and retirement funds, minus all your liabilities, such as your mortgage and credit card debt) many ways. A sophisticated net-worth calculation projects factors of asset growth such as rates of investments’ returns and risk and your rate of saving and liabilities to the end of your life. Your goal: Minimize the risk of outliving your assets. July: Insure against risk. Insurance keeps you financially whole if disaster strikes. To cite two examples of policies to review, did you outlive your 20-year term life insurance? If so, you’re a winner because you remain alive yet you need to consider more coverage. Have you considered long-term care insurance, especially if you’re a woman with a longer life expectancy than a man? This coverage helps with costs of basic daily needs over an extended time. August: Retirement planning. This planning starts in your 20s and does not end when you retire. If you’re employed, know when you can afford to retire (assuming you’re not laid off). Are you aware of all strategies to maximize Social Security payouts? If retired, are you withdrawing from your accounts in the correct order? (Start with your taxable holdings, then move on to tax-deferred and then untaxed.) Calculating optimal distributions from IRAs and other taxable income sources annually can trim your taxes. September: Gift wisely. You can give back in many ways to organizations and people you care about with donations of appreciated securities or with payments on college loans or new mortgages. The Internal Revenue Service offers several guidelines on gifting. Your greatest gift may be taking care of yourself so you don’t eventually become a financial burden to your adult children. October: Preparing for the inevitable. Engage an estate attorney. If you die without a will, your state of residency distributes your assets with no input from you. If your estate documents are older than about seven years, refresh them. Everyone needs such estate documents as wills, living wills, medical health-care directives and powers of attorney to stipulate your wishes if you become unable to decide matters yourself. You especially need these papers if you or your spouse, or both, are uncomfortable with financial matters and your children are younger than legal age. Also, draw up or re-examine these documents if: You’re in a second marriage You own property in or reside in more than one state You’re concerned about privacy You own a business or Your family must consider special needs. November and December: Reality check. If you followed these steps, you’re in the minority of individuals with the tenacity to tackle financial planning. But you still should engage a professional advisor to check your assumptions. Be realistic about what you can accomplish on your own. It’s important to get your finances right and keep them right all year. **Categories:** Mailchimp, Media --- ### [The January Effect? Does it matter in 2019?](https://nvestadvisors.com/the-january-effect-does-it-matter-in-2019/) **Published:** January 4, 2019 **Author:** nVest Advisors **Content:** ## What does history tell us and how should investors react? ### The January Effect The January Effect is a pattern exhibited by stocks in the last few trading days of December and the first few weeks of January. During this period, particularly starting in January, the theory is that stocks tend to rise. In simple terms, the January Effect is a consequence of: - Tax-loss selling, in which investors sell stocks that lost money at the end of December in order to take losses as tax deductions and - Mutual funds’ window-dressing, which is exactly as it sounds. Because so many of these stocks that lost value were sold in late December, they will be – in theory – available at a discount in early January. Another purported cause of the January Effect is the payment of year-end employee bonuses, which employees invest in the stock market. As a result, investors with more money end up buying cheaper stocks, making the market more active and driving up prices. ***Studies Confirm*** – The January Effect is not just a Wall Street myth as several prominent studies have confirmed its existence. One study of historical data from 1904 through 1974 discovered that the average return during January was five times larger than the average return for other months. Another study showed that small cap stocks (as represented by companies in the Russell 2000) outperformed large cap stocks (as represented by companies in the Russell 1000) by 0.8% in January, but lagged large caps for the rest of the year. From 2000 to 2018, however, the results were mixed: In nine of those 18 years, there were January gains, and in the other nine years, the market lost ground. ### Effect Becomes Less Effective In recent years, the January Effect has become less pronounced. As a result, it is a less effective way for investors to take advantage of the market. Once investors, economists and traders spot, analyze, and confirm the existence of a trend, it tends to become less pronounced. Investors “price in” the trend, adjusting their investment strategies to take trends (like the January Effect) into account. Another reason that the January Effect is less important is that many people now use tax-sheltered retirement plans, like IRAs and 401(k) plans. When investments are tax-sheltered, there is no special reason to sell a stock for the purpose of deducting stock losses. ### So, what about January 2019? U.S. stocks turned in very positive numbers during the last trading week of 2018 on the heels of three consecutive weeks of declines. In a departure from previous years which usually saw little trading activity and smaller market movements, the final trading week was marked by high volatility and record days – a record Christmas Eve decline followed by a record point gain on the day after Christmas. What does this start mean for January 2019? That’s anyone’s guess. ### Using January to Predict 2019 Many investors and analysts have tried to use the January Effect for predictive value. However, there are different questions about predictions. ***How well does the first week of January predict annual market performance?** – Somewhat better. From 2000 to 2018, the first week of trading has predicted the stock market’s annual return about 67% of the time. From 1962 to 2018, however, a down market in the first week accurately predicts a bad year only 50% of the time. ***How well does the entire month of January predict annual market performance?*** – About as well as a monkey making a coin toss. From 1962 to 2018, a below-par January accurately predicts a bad year only 55% of the time. Remember January 2018? The markets were hitting new record highs and the S&P 500 ended January 2018 up 5.62%. And a lot has happened in 11 months since those January highs… ### Conclusion? As these numbers show, the January Effect is simply not a very good predictor of annual stock market performance. Of course, the S&P 500 has risen about 7.2% on average from 1950 through 2018. As a result, omens in January are unlikely to predict the entire year. **Categories:** Behavioral Finance, Early nVestors, Emerging nVestors, Established nVestors, Investing General, Investment Markets, LifeCycle, Mailchimp **Tags:** bear market, behavior, bull market, investing, market timing, stock market, stocks --- ### [What's happening at nVest Advisors in January](https://nvestadvisors.com/whats-happening-at-nvest-advisors-in-january/) **Published:** January 3, 2019 **Author:** nVest Advisors **Content:** **Happy New Year! We wish a year of health, growth, and joy for all of our clients!** Here’s what’s coming to nVest Advisors in the month of January: ### January Office Hours We’re open every day 8:00am to 5:00pm Mountain Time, Monday through Friday, except bank/market holidays. In January, markets and nVest Advisors will be closed: - **Tuesday, January 1 for New Year’s Day** - **Monday, January 21, for Martin Luthur King, Jr. Day** READ MORE: ### Annual Review Appointments Every year in January, we conduct our annual client review appointments. This is true whether you’ve been a client for all of last year, or started somewhere along the way. Ahead of each annual review appointment, we send you three specific documents you can review and complete online: - **Our annual client satisfaction survey**. Please take this survey carefully – the information you receive will be customized to you, based on your answers. It’s also very important for us to know what we’re doing well and where we have opportunities to improve. - **Our Client Information form**, so you can review and update any of the important vital info we have that might be inaccurate or has changed in the past year. - **Our new Risk Tolerance Questionnaire**, to make sure you’re still invested properly for your goals and risk tolerances. With market changes the past three months, many of you are realizing that you are more conservative in real-life than you were in theory. We can make investment changes during the annual review, based on this info. You should have already received the first document – the Satisfaction Survey. This form will let you schedule your annual review appointment at the same time you complete it. Once you’ve done that, we’ll send the other forms for you to complete. ### Launch of [nVestMe.Com](http://nvestme.com) We’ve created a new website just for folks who are plan participants (employees) of the 401k, 403b, and other employer-sponsored plans we manage as the plan advisor. Be sure to check it out! ### Changes to our client agreements When we launched nVest Advisors in October 2015, we kept the tradition of providing financial planning services with investment management. Basically, if you had an investment account with us, you got the financial planning services included. **What 3 years has taught us is that:** 1. **Many investment clients have not used or wanted financial plans.** 2. **Many clients with very few invested assets spent a great deal of time in the planning process.** So, we decided to break these two offers up. We will still honor old client agreements, but going forward, **we will offer financial planning and investment management as separate services, with separate fees.** If a client chooses to have both services, we offer the financial planning at a discount, eventually making it free (like for our existing clients), once their investment accounts reach a total of $50,000 or more. **What this means to existing clients:** If you do not yet have a financial plan, get one! It’s still free for you, regardless of your account balance. However, if you don’t believe you need one at the present time and are only using us for investing, consider changing your current client agreement to a new one. You may save money by switching to just investment management services. ### All clients will receive access to nVest Academy: ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/03/nVest-Academy-2-300x59.jpg "Nvest academy nvest advisors")nVest Advisors CEO Jeremy Torgerson is launching an outside venture that nVest Advisors clients will have free and unlimited access to! nvestacademy.com, will launch June 1, 2019, and will be a virtual classroom for investment skills, financial know-how, and much more. This new website will host live and on-demand workshops and courses on a wide variety of investing and financial subjects. All nVest Advisors clients will have access to all of the offerings at nVest Academy, free of charge. We’ll automatically add you to the nVest Academy mailing list, once it goes live in February, so you can be kept informed. Only two emails a month (with a few exceptions) We know you get bombarded with too many emails, and certainly not just from us. To help “clean up” the amount of communication you receive from us, we’ve opted to change the way we communicate with you in 2019. Here’s what you’ll receive: 1. **One basic client/plan participant monthly newsletter, near the end of the month** 2. **One “What’s happening around here” kind of email, on the 15th of the month** Now, we can’t promise you won’t get other communications from us (or your investment account custodian) throughout the month, so here are the exceptions to this new rule: 1. **Account-specific communication between us.** 2. **Weekly or monthly performance emails from our portal, Blueleaf.** 3. **Market or economic alerts** If that’s not enough contact for you, may we suggest a couple of ways you can get more informed: 1. **Follow** nVest **Advisors on [Facebook](https://facebook.com/nvestadvisors), [Twitter](https://twitter.com/nvestadvisors), or [LinkedIn](https://www.linkedin.com/company/nvest-advisors-llc/). Also, subscribe to the [nVest Advisors YouTube channel](https://www.youtube.com/channel/UCYrMsIa22es1HAXTug0Rtag) (we’re starting live YouTube weekly broadcasts next week!)** 2. **Download the** nVest **Advisors smartphone app, [MyWealthAdvisor](https://nvestadvisors.com/check/wp/blog/2018/07/21/introducing-mywealthadvisor/).** ## We wish you all a wonderful January! **Categories:** Client Service, Company News, Early nVestors, Emerging nVestors, Established nVestors, LifeCycle, Mailchimp, Media **Tags:** clients, colorado, customers, finance, financial, financial plans, holidays, investing, investments, news, nVest, nVest Academy, nVest Advisors, stock market, stocks, texas, training, updates, webinars --- ### [Financial Resolutions for 2019](https://nvestadvisors.com/financial-resolutions-for-2019/) **Published:** January 2, 2019 **Author:** nVest Advisors **Content:** ## A resolution for every month to help you gain financial independence. Cleaning up personal finances remains one of the top resolutions every New Year. But we all know what happens to most such self-promises, so here’s a month-by-month to-do list to cultivate better financial health. **January:** Organize paperwork. This obvious starting point eludes many. Are your financial documents organized, in paper or virtually, so information is at your fingertips? Your heirs will be eternally thankful if you unexpectedly die or are incapacitated. **February:** Consolidate investments. Trim your number of accounts and consolidate all your dormant 401(k)s into individual retirement accounts. Spreading your assets across various brokerage accounts is not smart diversification – it’s a recipe for confusion. **March:** Follow the money. If you’re still working and too busy with your life, you may have a poor sense of your personal cash flow, the money that comes in and where you spend it. You can’t establish how much you save or spend without knowing where you are right now. **April:** Tax smarts. It’s better to owe your state and the federal government instead of overpaying throughout the year. Did you fund an IRA for your spouse, max out funding on your defined contribution plan at work or fund your Roth IRA by the April 15th deadline? Did you track your losses on your taxable accounts, such as individual and joint investment accounts, bank accounts and money market mutual funds, to name a few? These moves can qualify you for tax credits. **May:** Investment smarts. How much do your investments cost you? Do you know what your insurance agent, 401(k) plan or financial advisor charges? How about the underlying expenses you pay to buy mutual funds or exchange-traded funds? Are your investments allocated wisely to minimize taxes? For example, do you hold real estate investment trusts in your tax-deferred account? Municipal bonds in your taxable account? How much risk do you take? **June:** What are you worth and why it matters. You can calculate your net worth (all your assets, such as your home and retirement funds, minus all your liabilities, such as your mortgage and credit card debt) many ways. A sophisticated net-worth calculation projects factors of asset growth such as rates of investments’ returns and risk and your rate of saving and liabilities to the end of your life. Your goal: Minimize the risk of outliving your assets. **July:** Insure against risk. Insurance keeps you financially whole if disaster strikes. To cite two examples of policies to review, did you outlive your 20-year term life insurance? If so, you’re a winner because you remain alive yet you need to consider more coverage. Have you considered long-term care insurance, especially if you’re a woman with a longer life expectancy than a man? This coverage helps with costs of basic daily needs over an extended time. **August:** Retirement planning. This planning starts in your 20s and does not end when you retire. If you’re employed, know when you can afford to retire (assuming you’re not laid off). Are you aware of all strategies to maximize Social Security payouts? If retired, are you withdrawing from your accounts in the correct order? (Start with your taxable holdings, then move on to tax-deferred and then untaxed.) Calculating optimal distributions from IRAs and other taxable income sources annually can trim your taxes. **September:** Gift wisely. You can give back in many ways to organizations and people you care about with donations of appreciated securities or with payments on college loans or new mortgages. The Internal Revenue Service offers several guidelines on gifting. Your greatest gift may be taking care of yourself so you don’t eventually become a financial burden to your adult children. **October:** Preparing for the inevitable. Engage an estate attorney. If you die without a will, your state of residency distributes your assets with no input from you. If your estate documents are older than about seven years, refresh them. Everyone needs such estate documents as wills, living wills, medical health-care directives and powers of attorney to stipulate your wishes if you become unable to decide matters yourself. You especially need these papers if you or your spouse, or both, are uncomfortable with financial matters and your children are younger than legal age. Also, draw up or re-examine these documents if: - You’re in a second marriage - You own property in or reside in more than one state - You’re concerned about privacy - You own a business or - Your family must consider special needs. **November and December:** Reality check. If you followed these steps, you’re in the minority of individuals with the tenacity to tackle financial planning. But you still should engage a professional advisor to check your assumptions. Be realistic about what you can accomplish on your own. It’s important to get your finances right and keep them right all year. **Categories:** Behavioral Finance, Early nVestors, Emerging nVestors, Established nVestors, Investing General, LifeCycle, Mailchimp **Tags:** 2019, finance, financial, investing, investment, money, new year, resolutions --- ### [Introducing nVestMe.Com](https://nvestadvisors.com/introducing-nvestme-com/) **Published:** December 4, 2018 **Author:** nVest Advisors **Content:** **nVest Advisors is proud to bring an entirely new online resource for our small business clients (and their employees)!** [![](https://nvestadvisors.com/check/wp/wp-content/uploads/2018/12/nVestME-Logo.png "Nvestme logo nvest advisors")](http://nvestme.com)nVestMe.Com – A site for company plan participants, courtesy of nVest Advisors. **[nVestMe.Com](http://nvestme.com) is the new online home for participants (employees) of all the 401(k), 403(b), SIMPLE IRA, SEP IRA, and other employer-sponsored retirement plansmanaged by nVest Advisors, LLC.** ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2018/01/89584-200.png "89584 200 nvest advisors")Different than the main nVest Advisors site, nVestMe.com is just for the participants (employees) of the 401(k), 403(b), and other employer-sponsored retirement plans that we serve as the plan’s Advisor. nVestMe will provide plan participants with a place to get information about their company’s plan, including login instructions, forms, investment options, and more. You’ll also have access to an amazing amount of money know-how, 24/7, from anywhere. Working in conjunction with our new smartphone app, [MyWealthAdvisor](https://nvestadvisors.com/check/wp/blog/2018/07/21/introducing-mywealthadvisor/), the [new nVestMe site](http://nvestme.com) will give every participant of an nVest-advised company retirement plan, a virtual financial planning and wealth management company right at their fingertips. - **Over 25 money calculators.** - **Over 3,000 financial articles.** - **Over 15 mini-webinars on important financial topics.** - **Timely market and client alerts.** - **Real-time market quotes and research, and even the ability to create and watch your own investment portfolios in real-time.** - **Access to your plan’s login screen, forms, and plan details.** If you are a plan sponsor, these services are now included in every employer-sponsored plan managed by nVest Advisors. Plus, we’ve added several new custodians and preferred platform providers, to continue to offer you employer-sponsored plans at a lower cost and greater value to you and your participants. **If you have any questions about [nVestMe.Com](http://nvestme.com) or MyWealthAdvisor, [please let us know!](info@nvestadvisors.com)** **Categories:** Client Service, Company News, Early nVestors, Emerging nVestors, Established nVestors, Mailchimp, Media **Tags:** 401k, 403b, IRA, MyWealthAdvisor, nVestMe, plan participant, retirement, SEP, SIMPLE, sponsor --- ### [Market Volatility - Again](https://nvestadvisors.com/market-volatility-again/) **Published:** November 20, 2018 **Author:** nVest Advisors **Content:** It seems like once or twice a year for the last few years, we’ve had to address concerns with short-term volatility, usually in the equity (stock) markets. We’ve addressed this most important issue several times already ([here](https://nvestadvisors.com/check/wp/blog/2018/02/05/4-things-to-remember-during-market-volatility/)) and ([here](https://nvestadvisors.com/check/wp/blog/2016/02/12/staying-sane-an-nvest-primer-in-handling-volatility/)) and ([here](https://nvestadvisors.com/check/wp/blog/2018/08/28/developing-your-emotional-intelligence/)) and ([here](https://nvestadvisors.com/check/wp/blog/2016/02/12/staying-sane-an-nvest-primer-in-handling-volatility/)), and today we felt it was important to remind our clients to do their very best to ignore the daily swings in value that are happening at the moment. **What causes panic in most people is that we aren’t sure why the drops are happening, and we don’t know when it will stop.** It’s uncertainty, and not being able to see the future, that makes you panic as an individual investor. The investing world, as a whole, is no different. Read the headlines and the first few lines of every news story about market volatility during the past few weeks and you’ll see the same worries played out over and over again. - **[“The selloff is a continuation of… ongoing *worries* about the U.S.-China trade (dispute)…”](https://www.usatoday.com/story/money/2018/11/20/dow-selloff-erases-2018-gains/2064956002/)** - [**“Dow Jones Futures: *Scared Yet*?”**](https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-stock-market-fear-gauge-apple-stock/) - [**“The losses have been sparked by a *flurry of concerns* about everything from higher interest rates and *crashing* oil prices to the US-China trade war.”**](https://www.cnn.com/2018/11/20/investing/why-dow-dropped/index.html) - [**“This touted market *predictor*** [translation: a GUESS] **screams sell…”**(Emphasis ours.) It’s clickbait. It’s all emotion. It’s even hysterical. Get enough of that GroupThink happening, and you’ll most definitely see temporary drops in the markets. > ### At nVest Advisors, we try our best to understand the emotional dynamics underlying most investing decisions. We’re also keenly aware of how often those emotions harm our clients’ investing goals rather than help them. Keeping your emotions out of your investing is one of the most important things we can do for our investment advisory clients. Instead of reminding you again about how the perspective of more time gives market volatility an entirely different appearance, or of how news media, American news media in particular, [exaggerate and hyper-emotionalize the bad news to keep you tuned in](https://nvestadvisors.com/check/wp/blog/2016/07/08/podcast-keep-media-bias-at-bay/), we want to give our clients (and blog readers) a quick primer on the interaction between real, measurable market values, and emotional “stretches” that happen all too often and create this whiplash of volatility that makes so many of us seasick. **At any given time, there are three variables that, when combined, make up the price of every investment:** - First, we have the **actual, objective value** of the item (be it a house, stock, ounce of silver, etc.) The objective value of a stock is calculated in several different ways, but one easy one to look at is the [BOOK VALUE](https://www.investopedia.com/terms/b/bookvalue.asp) of the company (how much in physical assets the company owns), along with how much profit it currently creates with those assets, per share of stock (this is usually calculated as a [PRICE/EARNINGS RATIO](https://www.investopedia.com/university/peratio/)). You might also pay attention to how much profit the company distributes to its owners (called a [DIVIDEND](https://www.investopedia.com/university/introduction-to-dividends/)), if that’s one of the criteria you have when choosing something to invest in. - The second part of a stock’s price is simply speculative but mathematical guesswork of the **future viability of the company**, based on industry trends, guidance from the company itself, and, many times, just [loudmouthed opinion-makers on cable news channels](https://www.usatoday.com/story/money/columnist/2017/09/17/anniversary-reminder-some-market-gurus-full/667771001/). Do we *think* its business will grow, decline, or remain stagnant? This part can be right or wrong, but only time will tell, and it’s always – at best – an educated guess. - The third part of a stock price has nothing to do with company valuations or measured, objective outlooks. It is simply the **prevailing market “mood”**; the *emotional* reaction a majority of investors *feel* about a certain news headline, political election, time of year (it’s not shocking that [more drops in the market happen as the days get shorter and we get less sunlight](https://www.marketwatch.com/story/the-stock-market-suffers-from-seasonal-affective-disorder-too-2018-06-14)), etc. Think of it this way: if you were a classic car collector, how much is a 1968 Mustang *objectively* worth? Not a lot. Without the emotional component of certain people *wanting* one, they’re just aging, high-maintenance 50-year-old hunks of metal. **So the three parts of valuing a company’ stock are FACT, PROJECTION, and EMOTION. Only one of those is real.** **Let’s take a real example. *Please note that this is in no way a recommendation, as we would never do that without a signed client agreement. But we want to use a real stock with real data to let you see how this plays out.*** ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2018/11/FB-11-20-18-300x223.png "Fb 11 20 18 nvest advisors")*Facebook (FB) share price chart, July – November 2018. NOT A RECOMMENDATION.* On September 4, 2018, **Facebook** ([FB](https://www.investopedia.com/markets/stocks/fb/)) was selling for $175.75 a share. A stock’s price at any given moment is what is deemed fair both by people wanting to buy and sell shares of FB that morning, based on the combined three parts of a price we mentioned above. As we write this today, November 20, 2018, Facebook is selling for $132.30 (mid-day). A drop of $43 a share, or 24.8%, since September 4. (We have no idea where FB will be by the end of the trading day, by the way.) **What caused this drop?** Was it a sudden decline in the physical assets Facebook owns? Did they sell off a building? No. Was it Facebook’s profit? No. Facebook is trending up quarter after quarter in earnings per share, currently at $7.40 per share, and that’s an improvement of 43.29% more profit than the same time last year. Is Facebook announcing that they expect profits to drop soon? No. The reverse, actually. So why the drop in price? **EMOTION.** Nothing more. Investors *fear* government regulations *may* be looming for social media companies. Some *feel* angry with the apparently feckless and tone-deaf leadership of FB’s top brass. And finally, some people simply *believe* Facebook’s price was pushed too high on other people’s blind *optimism*. But the company itself is doing just fine. **That’s true of almost every company in our economy right now.** Times are, objectively and empirically, very good. The economy is booming. Wages are rising. Fuel prices are dropping. And by and large, we’re all doing better, so we feel better. And when we feel optimistic, we take chances. We start new companies. We expand existing ones. And (this is key) we keep buying more of what’s performed so well recently. ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2018/11/rubber-bands-elastic-bands-office-supplies-stationery-39675-300x200.jpeg "Rubber bands elastic bands office supplies stationery 39675 nvest advisors")Without realizing it, we over-inflate the third part of a stock’s price; we “stretch the rubber band” quite a ways. Investment gurus sometimes call this a “bubble”, but we think the rubber band analogy works better. Here’s why: **When you stretch a rubber band, at some point, it will reach a point of maximum resistance;** where it can’t push further without breaking. Markets can do that, too, when we get overly optimistic and everyone is putting more and more money in. That creates stocks that are **overbought**. But at some point, the rubber band is going to snap back to its original shape. In the investment world, this is called “REVERTING TO THE MEAN” – basically, it means removing all the emotional add-on that the third part created (good or bad), and snapping back to the real value of a company, based on actual assets and performance. But will the stock collapse? Not as long as there is still inherent value in the company. It will simply “snap back” to its true, objective value. Sometimes the rubber band can snap back too far because of overly negative emotions, and a company’s stock price can be too cheap – a bargain. But again, the price will eventually revert to the mean, which gives [value investors](https://www.investopedia.com/terms/v/valueinvesting.asp) an opportunity when they see a stock that’s been **oversold**. ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/02/cycle_of_market_emotions_page_1-300x232.jpg "Cycle_of_market_emotions_page_1 nvest advisors")*The Cycle of Market Emotions* This pattern, of emotional buying to excess, then emotional selling to excess, is sometimes called the **Cycle of Market Emotions**. What goes up will eventually go too far up, and what comes down will eventually go too far down. This simple illustration is why ***you can never let your current emotions dictate your investing decisions.*** Our emotions will always want to buy more when the rubber band is already stretched too high, and sell when the inevitable snap-back happens. To use Wall Street parlance, that means we are accidentally “buying high and selling low,” because our emotions are in charge. In reality, we need to do the exact opposite of what our emotions are nagging us to do, and that is really hard for most of us. (Shameless plug – if you find yourself struggling with this right now, it might be time to place much of this in professional hands. [Book a little time with us to see if we’d be a good fit.](https://calendly.com/nvestadvisors/prospect60)) Will the markets continue to bounce around? My guess is, probably. That’s totally normal and expected behavior. As an investor, you can’t control that. What you ***can*** control, however, is [how you respond](https://nvestadvisors.com/check/wp/blog/2016/02/12/staying-sane-an-nvest-primer-in-handling-volatility/).](https://www.marketwatch.com/story/this-touted-market-predictor-screams-sell-but-heres-why-you-might-want-to-ignore-it-2018-10-09) **Categories:** Behavioral Finance, Client Service, Early nVestors, Emerging nVestors, Established nVestors, Investing General, Investment Markets, LifeCycle, Mailchimp **Tags:** cycles, emotion, Facebook, FB, headlines, invest, investing, markets, media, volatility --- ### [nVest Advisors CEO a featured Investopedia pro](https://nvestadvisors.com/nvest-advisors-ceo-a-featured-investopedia-pro/) **Published:** September 11, 2018 **Author:** nVest Advisors **Content:** As you may know, providing financial advice and education to average American families and small businesses is our passion, and it’s something we spend a lot of time on here “behind the scenes”. It’s nice when that hard work is appreciated. This past week, nVest Advisors CEO Jeremy Torgerson became one of the featured financial professionals at investment media powerhouse Investopedia. Investopedia has a special section of their website, called “Advisor Insights”, where readers from across the globe can submit questions for financial professionals to answer. Select advisors are profiled in their own Investopedia intro video, which Jeremy was honored to do this past week. Here’s the finished product. You can follow Jeremy (and many other very skilled and competent financial pros) [here at Investopedia Advisor Insights](https://www.investopedia.com/advisor-network/advisors/62838/jeremy-torgerson/). We’re extremely grateful to Investopedia for the opportunity to broaden the reach of nVest Advisors to working families and small businesses nationwide. **Categories:** Company News, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Mailchimp, Media, Press Releases --- ### [403(b) Plan Changes: Is It Time to Switch Retirement Plans?](https://nvestadvisors.com/403b-plan-changes-is-it-time-to-switch-retirement-plans/) **Published:** August 28, 2018 **Author:** nVest Advisors **Content:** 403(b) Plan Changes Is It Time to Switch Retirement Plans? Traditionally, most nonprofit organizations that offer a defined contribution retirement plan to employees have sponsored 403(b) plans. However, new regulations for 403(b) plans have led many nonprofits to consider converting to a 401(k) plan, the defined contribution plan most widely used by for-profit businesses. Established under the corresponding section of the Internal Revenue Code, 403(b) plans are retirement savings plans for employees of tax-exempt organizations, as well as for certain public school employees and ministers. There are several advantages to 403(b) plans for not-for-profit employers. They are not subject to nondiscrimination testing or audit requirements, and plan sponsors have the ability to avoid Employee Retirement Income Security Act (ERISA) regulations, which set certain standards for private industry retirement plans. New 403(b) Plan Rules In response to concerns that participants in 403(b) plans might be receiving less guidance and administrative support from plan sponsors than participants in other employer-sponsored retirement plans, the U.S. Treasury Department and the IRS initiated a comprehensive overhaul of the rules for 403(b) plans, rendering them similar to 401(k) plans. These rules went into effect for most 403(b) plans as of January 1, 2009, although under certain conditions organizations have until the end of 2009 to fully comply with the regulations. Under the new rules, all 403(b) sponsors must have a written document that outlines the plan’s key features, including the benefits provided, eligibility requirements, contribution limits, investment options, and distributions. The document must clarify the plan’s policies regarding loans, hardship withdrawals, and rollovers. Also under the new rules, 403(b) plan sponsors are required to communicate with service providers regularly, providing them with all relevant participant information. These new requirements may significantly increase the administrative responsibilities of plan sponsors. In addition, the new rules include stricter criteria for 403(b) plans that choose to avoid ERISA regulations. In order to avoid ERISA under the new rules, a 403(b) plan can have no employer contributions, must be completely voluntary, and must have minimal administrative involvement by the plan administrator. This means that the plan sponsor will have little influence over many features of the plan, which will instead be determined by a third-party service provider. Is It Time to Switch? These new rules may increase the paperwork, cost of administration, and potential liability of sponsoring a 403(b) plan. Therefore, many nonprofits are considering the switch to a 401(k) plan. If a nonprofit prefers to avoid ERISA regulations, this can be accomplished only through a 403(b) plan, under the tighter regulations. However, if an organization considers its retirement plan as a vital piece of its recruitment and retention strategy and prefers to provide an employer contribution, a comparison of the 403(b) and 401(k) plan may reveal fewer advantages to maintaining a 403(b) plan. For example, a 403(b) plan may be more expensive to administer, as each participant has an individual account. If a 403(b) plan sponsor changes service providers, account holders must be permitted to continue to use the previous provider. Therefore, under the new regulations, the plan sponsor must continue to communicate regularly with both past and current service providers. By contrast, a 401(k) plan sponsor can transfer all of the plan’s assets to the new provider, thus ending the previous relationship. Additionally, all ERISA-compliant 403(b) plans with 100 or more participants must file audited financial statements with their Form 5500. Another important consideration is plan offerings. A 403(b) plan is permitted to offer participants a limited range of annuity and mutual funds as investment options. However, a 401(k) plan can provide participants with a much wider array of investment options in addition to mutual funds and annuities, including stocks, bonds, and certificates of deposit. Finally, fewer service providers support 403(b) plans. As fewer providers compete in the 403(b) market, the demand for 401(k) plans is growing. Due to the size of the 401(k) market, vendors may offer services that can help to ease administrative burdens, such as prototype plans pre-approved by the IRS, software and IT support, and educational materials. In light of the new 403(b) plan regulations, choosing to continue to sponsor a 403(b) plan or switch to a 401(k) plan can be complex. Not-for-profit organizations considering their options are advised to consult with their financial advisors. MHN403BC-X **Categories:** Mailchimp, Media --- ### [Examining Robo-Advisors: What real investors need to know](https://nvestadvisors.com/examining-robo-advisors-what-real-investors-need-to-know/) **Published:** August 28, 2018 **Author:** nVest Advisors **Content:** ExaminingRobo-Advisors What real investors need to know Robo-advisors are getting lots of accolades lately as the noble purveyors of inexpensive financial advice for the average person. And traditional advisors, the thinking goes, supposedly ignore that average person. Nonsense. The robo-advisor concept suggests that advisors, the flesh-and-blood kind you meet with personally, overcharge and are only for the rich. Aside from the fact that this contention is a crock of baloney, living and breathing advisors are far superior to the online alternative. Reason: They know you better and furnish a full range of counseling, not just canned investing tips. The Web advice business, for the most part, offers templates that guide your investing, based on a simple questionnaire. Human beings, however, have needs that are far more complex than a paint-by-numbers approach can accommodate. Robo-advisors may charge 0.25% to 0.30% annually of assets under their management. Physical advisors who run your money usually charge around 1% – except for stockbrokers, who get paid by sales commissions, and advisors who don’t assume control of your assets. The latter type may charge anywhere from a few hundred to $1,500 per year to tailor a plan for you. While higher, those fees are not exorbitant, and well worth it for the better service. The notion that physical advisors are solely dedicated to the big-bucks set is ludicrous. A Cerulli Associates study shows that the vast-majority of advisor clients have portfolios far below $100,000. Plus, advisor organizations like the Foundation for Financial Planning provide free advice to people of modest means. Going with a robo-advisor is like buying a house with half a roof: You save on roofing costs, but when it rains, that’s not much solace. Robo-advisors also give scant attention to true wealth management: planning for your estate, taxes, insurance and all the other life contingencies that lie outside of investing. Expanding your portfolio is wonderful, yet what you do with it and how you protect your family are areas that robo-advisors seldom can help you with. Besides, all too often, these automatic planners give you only exchange-traded funds that track well-known indexes. Forget about trying to beat the market. But what’s missing most with robo-advisors is the personal touch. Some of these companies offer 800 numbers so you can talk to a person, which usually amounts to someone different every time, someone who doesn’t know you. If a baby is on the way, no cookie-cutter algorithm can tell you the myriad of things you need to do to prepare for the enormous change in your life, and how to plan for your young one’s future. If your spouse dies – the life partner who handled all financial matters – a computer screen or a stranger’s voice on an 800 line can’t replace a trusted advisor who lives nearby and can rush right over. That advisor knows you and your family – the robo-advisor does not. Most importantly, the next time the stock market takes a dive, no automatic planning service will be there to hold your hand and prevent you from panicking, such as by selling all your shares, a decision you will regret once the market rebounds. Will robo-advisors replace real financial advisors, with specialized knowledge who spend the time getting to know each of their clients? I don’t think so. **Categories:** Mailchimp, Media --- ### [Health Savings Accounts: A Tax Efficient Health Insurance Alternative](https://nvestadvisors.com/health-savings-accounts-a-tax-efficient-health-insurance-alternative/) **Published:** August 28, 2018 **Author:** nVest Advisors **Content:** /* -*- Mode: Java; tab-width: 2; indent-tabs-mode: nil; c-basic-offset: 2 -*- *//* vim: set shiftwidth=2 tabstop=2 autoindent cindent expandtab: *//* Copyright 2012 Mozilla Foundation * * Licensed under the Apache License, Version 2.0 (the “License”); * you may not use this file except in compliance with the License. * You may obtain a copy of the License at * * http://www.apache.org/licenses/LICENSE-2.0 * * Unless required by applicable law or agreed to in writing, software * distributed under the License is distributed on an “AS IS” BASIS, * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. * See the License for the specific language governing permissions and * 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All rights reserved Distributed by Financial Media Exchange Health Savings Accounts: A Tax Efficient Health Insurance Alternative Like most businesses, law firms providing health care benefits to employees find their budgets strained by spiraling medical insurance premiums. One solution, the Health Savings Account (HSA), which was created as part of the 2003 Medicare Act, is a relatively affordable— and tax efficient— alternative to traditional managed-care group plans. The HSA is the more flexible successor to the Archer Medical Savings Account, which was introduced several years ago to help employees of small businesses get health coverage. Available since January 1, 2004, HSAs are being offered by a growing number of banks and insurance companies. While experiences among employers vary, early adopters of HSAs have generally found the plans to be effective in lowering or arresting health benefit costs. An HSA may be opened by anyone who has a qualified health insurance policy with an annual deductible of not less than $1,050 for individuals, or $2,100 for families. A firm may choose to offer a high deductible health plan (HDHP) to partners and staff, or employees can be encouraged to sign up for policies on their own. Employers are permitted to contribute to the accounts of individual employees or may offer staff incentives to put money in themselves. Since HSA funds ar **Categories:** Mailchimp, Media --- ### [Understanding Interest Rates and Your Financial Situation](https://nvestadvisors.com/understanding-interest-rates-and-your-financial-situation/) **Published:** August 27, 2018 **Author:** nVest Advisors **Content:** When discussing bank accounts, investments, loans, and mortgages, it is important to understand the concept of interest rates. Interest is the price you pay for the temporary use of someone else’s funds; an interest rate is the percentage of a borrowed amount that is attributable to interest. Whether you are a lender, a borrower, or both, carefully consider how interest rates may affect your financial decisions. **The Purpose of Interest** Although borrowing money can help you accomplish a variety of financial goals, the cost of borrowing is interest. When you take out a loan, you receive a lump sum of money up front and are obligated to pay it back over time, generally with interest. Due to the interest charges, you end up owing more than you actually borrowed. The trade-off, however, is that you receive the funds you need to achieve your goal, such as buying a house, obtaining a college education, or starting a business. Given the extra cost of interest, which can add up significantly over time, be sure that any debt you assume is affordable and worth the expense over the long term. To a lender, interest represents compensation for the service and risk of lending money. In addition to giving up the opportunity to spend the money right away, a lender assumes certain risks. One obvious risk is that the borrower will not pay back the loan in a timely manner, if ever. Inflation creates another risk. Typically, prices tend to rise over time; therefore, goods and services will likely cost more by the time a lender is paid back. In effect, the future spending power of the money borrowed is reduced by inflation because more dollars are needed to purchase the same amount of goods and services. Interest paid on a loan helps to cushion the effects of inflation for the lender. **Supply and Demand** Interest rates often fluctuate, according to the supply and demand of credit, which is the money available to be loaned and borrowed. In general, one person’s financial habits, such as carrying a loan or saving money in fixed-interest accounts, will not affect the amount of credit available to borrowers enough to change interest rates. However, an overall trend in consumer banking, investing, and debt can have an effect on interest rates. Businesses, governments, and foreign entities also impact the supply and demand of credit according to their lending and borrowing patterns. An increase in the supply of credit, often associated with a decrease in demand for credit, tends to lower interest rates. Conversely, a decrease in supply of credit, often coupled with an increase in demand for it, tends to raise interest rates. **The Role of the Fed** As a part of the U.S. government’s monetary policy, the FederalReserve Board (the Fed) manipulates interest rates in an effort to control money and credit conditions in the economy. Consequently, lenders and borrowers can look to the Fed for an indication of how interest rates may change in the future. In order to influence the economy, the Fed buys or sells previously-issued government securities, which affects the Federal funds rate. This is the interest rate that institutions charge each other for very short-term loans, as well as the interest rate banks use for commercial lending. For example, when the Fed sells securities, money from banks is used for these transactions; this lowers the amount available for lending, which raises interest rates. By contrast, when the Fed buys government securities, banks are left with more money than is needed for lending; this increase in the supply of credit, in turn, lowers interest rates. Lower interest rates tend to make it easier for individuals to borrow. Since less money is spent on interest, more funds may be available to spend on other goods and services. Higher interest rates are often an incentive for individuals to save and invest, in order to take advantage of the greater amount of interest to be earned. As a lender or borrower, it is important to understand how changing interest rates may affect your saving or borrowing habits. This knowledge can help with your decision-making as you pursue your financial objectives. **Categories:** Mailchimp, Media --- ### [Introducing MyWealthAdvisor](https://nvestadvisors.com/introducing-mywealthadvisor/) **Published:** July 21, 2018 **Author:** nVest Advisors **Content:** Clients at nVest Advisors know that we are all about making two very different things work together seamlessly: state-of-the-art technology and old-school customer service. That’s why we do **[meetings](https://calendly.com/nvestadvisors)** in person, by phone, or virtually (by video) for clients, no matter where you are. It’s also why we have evening and Saturday appointments available, to help fit with your hectic lifestyle. It’s why we [**blog**](https://nvestadvisors.com/check/wp/blog-resources/) and email and have paperless account opening and service whenever the regulators allow it. It’s why we podcast and have a weekly **YouTube Live Q&A** session every Friday at 11am (Mountain). It’s why we offer regular live and “evergreen” **webinars** on the important financial subjects our clients need to tackle at the current stage of your **[nVestor Lifecycle](https://nvestadvisors.com/check/wp/lifecycle/).** It’s why we have a variety of custodians and investment programs to meet your investing needs. It’s why we work on your [**financial plan**](https://nvestadvisorsllc.advizr.com/) together online, and have a **[client portal](https://nvestadvisors.blueleaf.com)** for secure document sharing, and a wealth of information about your financial accounts (even the ones we don’t directly manage for you). It’s why we host a separate financial education website, always online and always free, for our clients and the public: [**nVestAcademy**](http://nvestacademy.com). Now we are very pleased to offer our next innovation for our clients (and prospective clients: **MyWealthAdvisor**). ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2018/07/750x750bb.jpeg "750x750bb nvest advisors")MyWealthAdvisor is a free app for your iPhone or Android device that keeps you in contact with us in pretty amazing ways. With **MyWealthAdvisor**, you’ll have access to: - ### **Company updates and market commentary from nVest Advisors.** - ### **A calendar of upcoming events (like webinars, client appreciation events, important tax and legal deadlines, and more) that you should be aware of.** - ### **An archive of hundreds of articles and videos on every imaginable financial subject.** - ### **Text and video alerts when market conditions require it.** - ### **Have my contact information at the ready, including quick access to our appointment calendar.** You can even “favorite” articles for quick access later, or share them with friends and family. Plus, whenever we talk about a financial subject that you want more info on, we can send that info directly to you, privately, on the app! In the next couple of weeks, we’ll be sending our current clients and prospective clients an email to invite you to download the app to your smartphone, and set up your login and password. Please take those few minutes to get set up, and begin enjoying this new feature. [If you’re not yet on our email list, do it today to be included!](https://nvestadvisors.com/check/wp/connect/) You’ll also get some company info and exclusive access to events, webinars, and much more. At nVest Advisors, we’re working tirelessly to bring you a true 21st-Century client experience while keeping our friendly, “all too human” customer service that has been the core of our success since 2008. If you have any questions about this new feature, or if I can be of any assistance to you or your family, [don’t hesitate to contact us!](https://calendly.com/nvestadvisors/15mincall) **Categories:** Client Service, Company News, Early nVestors, Emerging nVestors, Established nVestors, LifeCycle, Mailchimp, Media **Tags:** Android, app, colorado, customer, feature, iPhone, MyWealthAdvisor, news, service, tech, texas, updates --- ### [Investing in Your Vacation](https://nvestadvisors.com/investing-in-your-vacation/) **Published:** June 27, 2018 **Author:** nVest Advisors **Content:** Why do so many of us not use our vacation days? Salespeople talk about “leaving money on the table.” Well, employees leave vacation on the table. And the cost to us is significant. In fact, Americans leave 429 million vacation hours on this proverbial table, according to a report from Forbes. And USA Today reports that, according to their study, over 30% of employees do not use all of their vacation days. When we discuss investing, we talk about putting money aside in order to make a profit. We discuss putting money into stocks, bonds, mutual funds, and so forth. People also discuss investing in your career, like investing in an education or in a certification. Maybe we should talk about another investment that could pay dividends in your career, which is, of course, the place where you make your money. Is investing in vacation a good idea, or just hokey, happy talk? ### Reasons That People Skip Vacations Why do employees avoid vacation? There are several reasons people give for missing out on vacation days: - “I’m afraid that I’ll be fired.” This is the idea that your boss expects constant work and looks down on those “snivelers” who dare to take a break. - “A hard worker should keep his nose to the grindstone and perform.” This is related to the other reasons, and it also involves some allegiance to the idea that hard work is the key, over-arching purpose of life. - “I don’t want my colleague to impress the boss more while I’m away.” People worry about not getting that promotion if they take time away from the office. These reasons are largely self-imposed. As noted below, most managers understand the benefits of vacation to their employees, not only for employee morale but also for his or her performance on the job. Your boss is not Ebenezer Scrooge, despite what you might think. ### Study Results Research studies support the idea of taking your vacations. A University of Pittsburgh study found that leisure activities, including vacations, contributed to less depression and more positive emotions, along with lower blood pressure and smaller waistlines. These results are not surprising since vacation reduces stress. As reported elsewhere, 80% of workers feel stressed on the job, and 70% of doctor visits are due to stress-related conditions. According to Forbes, not using vacation time is bad for business. Most managers recognize the benefits of taking time off from work because their employees will be more productive, have better workplace morale, and are more likely to stay. Importantly, the health benefits of vacation result in employees missing fewer days for illness and less time for medical appointments. ### Benefits So, based on the studies and the interviews of managers and executives, what are these benefits of taking a vacation? There are, of course, personal benefits to going on vacation or taking a “staycation,” where you stay at home during your time off. You can enjoy your life more and become closer to your partner, your kids, and your friends. You become physically healthier, too. However, taking time off can provide substantial benefits for you in your job or career. To summarize, taking your vacations can: - Reduce stress, which helps in so many ways. - Increase productivity at work, after you return. Taking a break from work and doing what some have called a “digital detox” refreshes you. - Increase creativity, for those times when a better approach or new idea is needed. - Improve your relationships with other workers, so that you’re more positive about projects and less likely to be irritable or say things that you regret later. Of course, things that help you at work also help your company. And many employers know this, from their experience with other workers and managers who take vacations and then perform better. So, vacations are not only beneficial to you, but they also benefit your company. ### Conclusion As one executive put it, according to Forbes, “We seem to be wired to put the pedal to the metal, but there are also undeniable benefits to tapping the breaks.” Using your vacation time, and using it wisely, helps you to become a better employee, which can only help your company. And most managers understand this. Being a better employee will result, naturally, in a higher salary or a better job. Investing in vacation, therefore, is both an investment in your own well-being and in your career and salary. Remember to invest in your vacation, just as you invest in your retirement, your education, or your house. **Categories:** Behavioral Finance, Early nVestors, Emerging nVestors, Established nVestors, Investing General, LifeCycle, Mailchimp **Tags:** advice, financial, invest, investing, money, summer, vacation --- ### [4 Things to Remember During Market Volatility](https://nvestadvisors.com/4-things-to-remember-during-market-volatility/) **Published:** February 5, 2018 **Author:** nVest Advisors **Content:** **As we write this blog post the afternoon of Monday, February 5, it’s been a very rough day for the US Market indexes. We believe this is the start of the markets returning to a more normal pattern, after an historic run-up in 2017, not a sign of significant economic concerns and for most investors, it’s nothing to worry about.** **We’ve written about market volatility several times in the past. To read our other takes on this phenomenon, read [here](https://nvestadvisors.com/check/wp/blog/2016/02/12/staying-sane-an-nvest-primer-in-handling-volatility/) and [here](https://nvestadvisors.com/check/wp/blog/2016/01/22/podcast-2-market-volatility/) and [here](https://nvestadvisors.com/check/wp/blog/2016/08/10/9-reasons-to-fire-your-financial-advisor/).** **It’s important to remember a few things we consider investing Maxims here at nVest Advisors. We stick to them for the benefit of our clients, but they’re important to remember for all investors. When markets get spooky, here are four bedrock principles you should always remember.** ## Maxim #1: The age we live in makes market drops faster and steeper. First, it’s important to understand that **most investing is now automated**, and second, many investors buy **funds that exactly mimic a particular stock market index** like the Dow Jones Industrial Average (DJIA or “the Dow”) or the S&P 500. This means two things: With trading automation, it means that sell-offs tend to be much steeper and faster than in years past. That’s because many investors have standing orders on their investments to buy or sell whenever certain changes occur. Many investors, in fact, have standing orders to liquidate their investments any time that investment falls a certain percentage in value from its highest price. So when we have a day like Friday, February 2, when the Dow fell almost 700 points, that action alone may trigger millions of other accounts to automatically sell their investments the next business day (today, February 5), which is what happened. This creates much steeper daily drops than you would see before automated investment management. *And more importantly, those steep sell-offs have absolutely nothing to do with a crisis of the markets or an economic problem*. Most are just mindless, pre-programmed computer responses to other people selling on a particular day. In effect, the computer created a drop that wasn’t there for any other reason. The other reason drops are steeper than they were in the past have to do with an investment called[ **Index Funds**](https://en.wikipedia.org/wiki/Index_fund). Market indexes like the DJIA or the S&P 500 are just a collection of companies’ stocks that the index creator thinks is representative of a portion of the investing world. Instead of trying to follow 12,000 stocks simultaneously, indexes take a “representative” from each industry and watch just those representatives. In the case of the Dow, that’s only 35 companies. The S&P 500 tracks the stock prices of 500 companies. The Nasdaq tracks only select technology stocks. The Russell 2000 watches – you guessed it – 2000 company stocks as its index. **Now what does that have to do with causing sharper drops in the market?** Because indexes are just a computation of a group of other stocks’ prices, for decades, there was no way for an investor to invest in an index without buying stock in all of the companies that index tracked. Then in 1975, Vanguard created the world’s first “Index Fund”: it bought the exact amount of the exact same stocks that made up a particular index, and never changed it, unless the index changed what it was tracking. **Today, index funds are very common, and many people invest a portion or all of their accounts in them**. Now, to understand why index funds have exaggerated investment returns, remember, these are funds that precisely copy the list of companies that are used to create the market indexes you see scroll across the bottom of your TV screens on CNBC or Fox Business. When the market indexes drop, it means the stock prices of the *companies* in the indexes fell. That’s pretty easy to understand. But because so many people now own a fund that invests precisely in the same stocks that make up the index, when you sell your index fund in response to a drop in the index, you are selling the companies that create the index, too. That causes the index to fall faster. – People are selling the company stocks, and people are selling the index funds that own those same company stocks. ***Add automated trading, and you’ve got a turbo-charged feedback loop of people selling those same very few companies.*** That can cause the indexes (and just those companies making them up) to fall farther than the investment markets as a whole, and give you a very exaggerated short-term drop that cable news channels love to talk endlessly about. The important thing to remember is, markets are ultimately rational when people are not. What drops irrationally will always return to normal eventually. ## Maxim #2: Volatility is NORMAL. You simply have to accept this fact if you want to be an investor. It is ***perfectly*** normal to have several 5%, 3 or 4 10% and even a 20% correction in the stock market in any calendar year. What has NOT been normal, actually, has been the long, nearly always upward momentum we’ve witnessed recently. What you need to remember is to step back from a short-term change in the stock market and look at the bigger picture. Let us explain. As of today, February 5, the DJIA (the “Dow”) is down over 1,800 points in two days. Taken only in the short term, that is a pretty significant decline – roughly 7% since Thursday, Feb. 1. And visually, it does look significant – – – if you only look at the short term. Here’s a graph of the DJIA for the past 5 days: ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2018/02/Dow5day2-5-18.png "Dow5day2 5 18 nvest advisors")DJIA 2-5-2018 5 Day Chart Courtesy: Google Finance Looks like a collapse. Looks scary. And it can make you panic. But let’s take a step back and look at that drop with the perspective of time. Here’s the Dow for the past one year, including the past couple of days of volatility: ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2018/02/Dow365day2-5-18.png "Dow365day2 5 18 nvest advisors")DJIA 365-Day Chart 2-5-2018 Courtesy: Google Finance No one can predict a day-to-day stock market, and if your focus is that narrow, it can be a terrifying ride, indeed. That’s why you need the perspective of a longer time horizon to see any meaningful change in direction. (And by the way, look at the jagged line that makes up that year’s graph. If you were just looking day-to-day, it was a VERY choppy year. Did it feel like it in retrospective? Not at all.) At nVest, we almost never make changes to any client accounts based on a few days of market movements (one example may be the opportunity to harvest tax losses for our clients). We instead focus on making sure the money is properly invested to meet your goals and the time horizon you have to reach those goals. Day-to-day movements are far too wild a ride to worry about. Stay focused on goals instead. (See #4, below.) ## Maxim #3: You’re going to get nervous in down markets and greedy in up markets, and the Rich Guys want you to. There’s a saying that is as old as the stock market itself: > ### Buy Low, Sell High Yet that’s exactly the opposite of what most investors actually do. We tend to want to invest more money while things are UP, and get out of investments as things go DOWN. It’s the direct result of our being emotional about our money that causes it. Here’s how this scenario plays out, over and over again, for the majority of investors, especially those who refuse to get the help of a professional advisor or planner: ![](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/02/cycle_of_market_emotions_page_1.jpg "Cycle_of_market_emotions_page_1 nvest advisors")*The Cycle of Market Emotions* We’ve seen a lot of this phenomenon (the tendency to do the exact opposite of what we should do) this past year. Many very conservative clients were suddenly interested in the wildly speculative (and, we believe, Ponzi-esque) Bitcoin. Others requested, as recently as this past week, to move from Conservative and Moderate investment strategies into “Growth” and “Aggressive Growth” strategies. **Why? Because the riskier investments were “up”.** Now why do you think the huge investors, the Rich Guys, would want you to do this incorrectly? Because when you buy stocks when prices are really high, someone is selling those shares to you at high prices. And when you are panicking and selling your investments when they’re down (and their prices are rock-bottom), who do you think is there to buy them off of you at sale prices? Rich Guys. **If we can get you to [think like a Rich Guy](http://thinklikearichguy.com), you can have what they have.** But you must stop making emotional mistakes with money. The past two trading sessions are precisely why we ***won’t*** let our clients become more aggressive (that’s a nice way of saying “greedy”) late in bull markets, and it’s why we won’t make panic trading decisions after a day like today, when the Dow dropped nearly 4% in value. It’s very normal human behavior to become overconfident and to want to take more risk after long periods of favorable conditions, but when you get excited about returns that have already happened, it’s critical to realize that ***you missed it.*** Wanting to “ramp up” your investments after watching the markets roar for a while is a lot like driving your car while looking in the rear-view mirror. You need to be focused on the road ahead, not the road behind. We don’t let our clients make that mistake. It’s also very normal to panic and want to “jump ship” with those same riskier investments inevitably come back down. But that’s not the right solution, either. What is the right solution? Keep reading. ## Maxim #4: Changes to your strategy should be goal-based, not market-based. There is a significant difference between investors and traders, and you need to decide which one you are. **Traders** live and die by changes in market prices. **Investors** put their money into companies in which they have faith of good future prospects, hoping for a long-term profit. ### **Our clients are *investors*.** If you are an ***investor***, that means you are putting money away for a specific future goal. It also means you are usually placing your money in a strategy that has a track record (though this is by no means a guarantee) of successfully reaching goals like yours in time frames like yours. For example, let’s say you are investing for retirement, and that goal is 20 years away. To reach your “nest egg” goal of, say, $1,500,000, you and your financial advisor determined you need to have an investment strategy that returns an average of 8.5% per year for all of those 20 remaining years. As an advisor, once we have this kind of strategy figured out, investing your money becomes much simpler. That’s because, not every investment or investing strategy can achieve an average of 8.5% per year. So, we create a strategy (sometimes called an “allocation” or a “model”) using investments that have historically been able to achieve that goal. Do you see already how different this sounds that watching the talking heads and screaming headlines on CNBC, trying to keep you tuned in by obsessing about how a stock market index performed on a particular day? You’re not worried about today if you are investing for 20 years from now. It just simply doesn’t matter. So our advice, if market movements panic you, is to make sure you have a GOAL and a STRATEGY in mind. If you just have money in the stock market without a goal in mind, you will very definitely panic at every daily change in value, because your only goal for money just sitting there, is for it not to go down. If this is confusing for you, or if your own advisor isn’t able to help you understand the significantly important task of setting goals for your investments, give us a call. ## So how should you react to sudden, surprise market movements? The best answer, if you are capable of it emotionally, is to not react at all. Most of us, however, do feel worried or concerned, and that emotion will cause us to make emotional mistakes with our money. For most younger investors who are still working toward their long-term goals, down-turns in the market present nothing more than excellent buying opportunities. Think of it as the stock market is having a sale. And the exact right time to buy something is when it isn’t at it’s all-time highest price. It’s the opposite for investors who are retired and living on their investments, or are very close to needing their investments. You can’t afford a major dip in the markets if you are selling small amounts of what you own to provide additional income. (That’s why we didn’t and never would invest you 100% in any one investment asset category.) But even still, market downturns provide other opportunities for our retired or soon-to-be retired clients: the opportunity for tax loss harvesting, and an opportunity to add to your stock holdings when buying opportunities happen (in laymen’s terms, when things are on sale). Market volatility is, without a doubt, the biggest psychological scare most clients experience while they are investing. Always remember, that how we feel about something is often not the same as what actually happened. And when you take time into perspective, remember that this, too, shall pass. If you need an advisor to talk to, or would like a second opinion on your current investment strategy, there is often no time like a period of uncertainty to review what you’re doing. **Categories:** Behavioral Finance, Company News, Early nVestors, Emerging nVestors, Established nVestors, From our CEO, Investing General, Investment Markets, LifeCycle, Mailchimp, Media, Retirement **Tags:** 2018, bonds, economy, event, investing, investment, investments, market, market volatility, retirement, stock market, stocks, update, volatility --- ### [9 Ways to be a Great Client](https://nvestadvisors.com/9-ways-to-be-a-great-client/) **Published:** December 1, 2017 **Author:** nVest Advisors **Content:** ### We talk often on here about [how we’re working to be a better financial advisor](https://nvestadvisors.com/check/wp/blog/2017/11/16/2017-review/), and [we applaud efforts by the Department of Labor, the SEC, and the state regulators to force higher standards of care on our industry](https://nvestadvisors.com/check/wp/blog/2017/04/03/the-dol-fiduciary-rule/). We’ve even given you [reasons to fire your current advisor](https://nvestadvisors.com/check/wp/blog/2016/08/10/9-reasons-to-fire-your-financial-advisor/), [things to be leery of when looking for one](https://nvestadvisors.com/check/wp/blog/2016/02/25/beware-these-sketchy-sales-practices/), and [how to avoid Ponzi schemes](https://nvestadvisors.com/check/wp/blog/2016/08/03/podcast-5-6-tips-to-help-avoid-ponzi-schemes-and-fraud/). We’ve been serving clients for nearly a decade, and have forged deep and lasting relationships with our clients. Many have become close friends. We believe that’s the way it should be, because the relationship of a financial advisor and client involves a great deal of trust and at times, vulnerability. We work very hard to do what’s best for our clients and provide the best service we can. That includes being prompt in our responses, running compliant and ethical practices, having a servant-leader’s spirit and caring for your investments like they were our own. **We often ask you what can we do to become a better advisor, but we seldom take the time to tell you what you can do to become a better client. Here are 9 ways you can help us help you:** ### Give us the truth, the whole truth, and nothing but the truth. Not often, but often enough to warrant mention, we begin our work with a client only to find out later that they either didn’t tell us everything about their financial situation, or didn’t keep us informed after something significant changed. Sometimes it’s a lie of omission (one early client failed to mention he hadn’t filed income tax returns for 8 years and the IRS was chasing him). Other times, you might hide something you think is too embarrassing (we had a client once tell us “God wants me to cash out my IRA”, when the truth later came out that he had a daughter going through a messy divorce but was too embarrassed to tell us). Sometimes, it’s just that you forgot to let us know when something changed in your life. But those milestones or challenges are part of the reality of us helping you get where you want to go. We know there will need to be course corrections along the way. Let us know what those need to happen. We’re planners, guides, and coaches. We’re NOT judges or gossips. Our job is to help you move from where you are – where you REALLY are – to where you want to be. We do that through a process of planning that involves having an accurate and complete view of the financial landscape. If we don’t have a complete or accurate picture of your needs, our advice won’t be accurate, either. Garbage in, garbage out. This is one of the reasons we advise you meeting with a few advisors before settling on one to work with. It may or may not be the one who reached out to you first. Find one you can trust enough to be completely and totally honest about your financial life. ### Whitelist (and READ) our emails. Here at nVest, a lot of the communicating we do with our clients between appointments is done via email. We do this for a lot of reasons, from reducing the carbon footprint and expense of letters and mailed literature, to being respectful of how busy and hectic your life is. As time goes on and we become more and more high-tech, you can probably expect more of this communication to come in the form of email. Even account statements, tax forms, trade confirmations, etc. are now coming electronically. That’s why it’s critically important that you read what we send you: not because we think everything we send you will be important to you, but because the important ones are sent to you the same way. If it’s important AND urgent, we’ll call, but just because it’s an email doesn’t mean it’s not important. Do your advisor a favor. Whitelist his or her emails, and please, open and read them. ### Commit to knowing about what you’re invested in. We know, we know: there’s nothing as dry and incomprehensible as a mutual fund prospectus. Except maybe an annuity contract. But so many advisors end up in hot water with regulators or arbitration proceedings years later, because you thought they sold you one thing and it turns out to be another. That’s not in any way an excuse for a dishonest or under-prepared advisor. We’ve seen a LOT of investment and insurance products deliberately misrepresented over the years, with the salesperson glossing over or omitting fees and costs, misrepresenting the possible risks or returns, or making wild promises about his or her abilities or special insights or trading secrets. We’ve warned you about those tactics, and the regulators do, too. Often. What we’re talking about is a basic understanding of what you’re invested in. Do you understand what a mutual fund is and how it works? What about an exchange-traded fund? Do you know what share class they’re trying to sell you and what that means? Do you understand how much you’re paying for this strategy? This leads right into our next request: ### Ask us to explain what you don’t understand. (And keep asking, until it’s clear to you.) There is no shame in not easily understanding financial concepts. We don’t get even a semester of basic personal finance in most college degree programs, let alone in high school, where it could really make a difference. Imagine knowing how bad high-interest credit cards were before they gave you one, or how long it would take to pay off unnecessary student loans? We’ve had people with advanced degrees – medical doctors, PhDs and the like, who have no clue about the differences between a stock and a bond. And if we let our egos get in the way of learning, we’re headed for a bad result down the road. I’m personally pretty good at explaining financial concepts, because I practice on my own kids a lot. If I can get a 15 year old to understand asset allocation, then I feel confident we can get it through to our clients! But I also watch closely when I’m explaining something, whether it be our client service agreement or a performance report or just a financial concept, to make sure I’m not seeing your eyes glaze over or getting the “deer in the headlights” look back. Not every advisor is trained to be as observant to your reactions (I’m a trained actor, so I read audiences pretty well), and it’s easy for us to forget that financial jargon does not translate well into simple English. Einstein once said, “If you can’t explain something simply, you don’t understand it well enough.” So if we’re talking in long, complicated, overly-technical ways, don’t just sit there and bear it. ***Make us better by making us explain it again.*** So if we explain something, and it doesn’t make sense, stop us and ask us to explain it again. Nag us until you understand. We’ll appreciate your honesty and sincerity to learn. And it’ll make us sharper, because (trust me) we’ll remember the way we said something that gave you that “eureka” moment. ### Be at least as committed to achieving your financial goals as we are. Over the last few years, as investments have done pretty well overall, it’s been easy to be lulled to sleep about your financial plan. In fact, we’ve noticed (and I’m sure other advisors will verify this), that it’s been getting harder and harder to get you engaged about your financial plan and your investment account over the last few years. Every year, we ask our clients to participate in a formal annual review appointment, where we review not only your investments but also your goals, beneficiaries, risk tolerance, etc. (We obviously interact with you more often than once per year, but this yearly review appointment is really important to make sure we’re still doing the job correctly for you.) In 2011, as the world was slowly recovering from the Great Recession, we had over 90% participation from our clients in getting together for these reviews. In 2014, it was 65%. This past year, only 26% of our clients scheduled one, despite us adding video and phone conferences as possibilities. We simply cannot care more about your financial success than you do. We can do a lot, but we need you to be engaged and willing to work on your plan with us. Don’t wait for the markets to correct before you return your advisor’s phone call or email. ### Turn off CNBC. And no, that guy asking about what’s in your safe, or the shiny-domed dude offering you an “investment that participates in the market but you don’t lose money”, isn’t being totally honest with you. With hours of live broadcast time to fill each day, these channels turn every market movement into a daily “horse race” of winners and losers. The drama keeps us tuned in, so they spend countless hours asking – urgently – when the next crash is coming, and trotting out their usual guests to give their (very biased and almost always wrong) guesses on where the markets are heading next. **Give that nonsense up.** Unless you’re a day trader, there’s no benefit to spending hours of your life each day obsessing about today’s stock prices or listening to self-proclaimed gurus tell you which investment to “buy-buy-buy”. And be assured, the guy pitching you about gold and silver or expensive equity-indexed annuities, isn’t informing you out of the goodness of his heart. Stay focused on your goals, turn the noise off, and go enjoy your day. Watching the markets all day is what you pay us for. ### **Accept and embrace that your investments are going to be down at times.** Unless your advisor is an idiot, they should have tried, repeatedly, to prepare you emotionally for the normal ups and down of the investment and economic cycles. Things go up, and things go down. Sometimes things go down just because other things went up. No one can predict with certainty when those events will happen (though many make a living pretending that they can), but one thing is certain: markets will be volatile. As an investor, you need to both emotionally accept and intellectually embrace that concept. Let me explain. If you are actively saving for a long-term goal, say, contributing to your company’s 401k, and you have several years to go before you retire, you not only can survive a market correction, but ***you actually want lots of them to occur.*** Why? Because you are going to the market to **buy**. And when’s the best time to buy something – when prices are sky-high? Absolutely not. You want to buy when things are on sale. So in your case, lots of time for the market to be down can be a very **good** thing, because you are acquiring your investments at a low cost-per-share, and shares are like balloons, inflating and deflating in value all the time. Buying when they are deflated means you can get more of them. You sell them later, when they re-inflate. The financial concept for this is called [**Dollar Cost Averaging**](https://www.investopedia.com/terms/d/dollarcostaveraging.asp). Obviously, steep or lingering market downturns is lousy for people who are retired or just about to. That’s why we have changed your investment allocation (the mix of stuff you own), to help smooth out the volatility and provide you with more consistent income streams from your money. Remember, too, that your account’s value on any given day tells you only one thing: *if you had sold everything you had, and exchanged it for cash – on that day – that’s what it would have been worth*. But in the next moment, we’re off to the races again. If changes in your account value makes you nervous, one of the ways you can help us help you is to not look at it too often. Checking on your investments every day is a lot like stepping on the bathroom scale every few hours. The number will be all over the place, and it ultimately tells you nothing. Seeing how your weight changed from January to June is a lot more telling that how it changed from breakfast to lunch. **But if it gets too scary for you, let us know.** We’re the trained experts who are tasked with helping you avoid making emotional mistakes with your money. Reach out to your advisor and ask for a steadying hand or just a quick pep talk. (And if your advisor is the one stressing you out, [schedule a little time with me – for free](https://calendly.com/nvestadvisors/30mincall).) ### Give us permission to tell you what you need to hear, not just what you want to hear. You might gauge from this blog that I’m a pretty direct and informal. That’s the way I talk to clients, too. I believe that you deserve, and are paying me, to give it to you straight. But I also care enough to tell you the truth. Some advisors are afraid to call you with the news that your account is down or that some bond has defaulted, because we sincerely and honestly want to do what’s right for you. And sometimes, even the best-laid and most well-intentioned plans don’t pan out. If your advisor has your permission to be direct and honest with you, giving you the occasional bad news is much easier. We also want to make sure we’re always honest about your financial plan or the things we see you doing that could jeopardize it. We’ve had clients, for example, withdrawing far too much money out of their IRAs, making it a real possibility that they will outlive their savings. Other times, we need to punch through your self-delusions, like your notion that saving only $100 a month will be enough when you’re 70. We need to be able to tell you those things – in no uncertain terms (and here, we do). **Let us be brutally honest with you. For your sake.** That’s not just one-sided, however. We need you to be as direct and forthright as you want us to be. If you’re concerned about something, ask us. If you’re not happy with some element of our service, let us know. If you disagree about a strategy, challenge us. We can’t fix a problem we didn’t know was there, and everyone benefits from what I like to call “loving opposition”. At nVest, we try to do this several ways. First, we always have the “let’s always be honest with each other” talk at the beginning of your relationship as a client, but we also give you opportunities to give us feedback, both in person and anonymously in our annual client survey. Bottom line: your advisor not only wants to give and receive honest feedback, we ***need*** it. It’ll sharpen us and make us better, for you and all of our clients. ### Let your friends and family know about us. Finally, the hardest part of any business is getting a customer. In our business, that’s especially difficult, not only because of general competition, but because many of us are practitioners and small business owners, and not just salespeople. Our time to prospect for new business is always limited by the time it takes us to serve current clients. That’s why our clients can be some of our most potent marketing allies – you screened us, chose us, and hired us. You trust us. (You might even like us!) For others in your sphere of influence, your personal experience with us is far more important, and impactful, than anything we could create as a marketing tool. Let me give you an example. When Hollywood goes to publicize a new movie, they’ll spend tens of millions of dollars for TV spots, product cross-promotions, newspaper and magazine ads, viral videos, and more. They’ll wine and dine critics, trot the cast out for promotional interviews on late-night talk shows, and slap their movie on products all over the supermarket. Selling the movie can be as expensive as making the movie. So let’s say you see a dozen television ads about a new movie and it looks pretty good. You decide to head out to the cinema to watch it, and you invite your friends to go along. If just one of your friends says, “Oh, I saw it last weekend. It’s awful. Don’t waste your money,” that *one* comment from just one of your friends, just destroyed literally millions of dollars of advertising money spent to convince you the movie was good. A personal referral from someone you know and trust has that much power. ***That’s why we ask for referrals.*** Not only that, but did you know that our industry does not allow us to use client testimonials and public recommendations in advertising? Confidentiality rules means we cannot disclose to anyone else who our clients even are. ***So while we can’t tell your friends and family that you are a happy client, you sure can.*** Now, ideally, your advisor should be such a super-star that you eagerly give out his or her business card when the subject comes up. But many advisors are really shy about asking you to do it. **So let me ask on behalf of your advisor:** If we are doing a good job for you, and if you are not only satisfied but a happy client, would you please let 3 of your friends know, every year? Better yet – let your friends needing an advisor know you’ll have your advisor reach out to them, and then get your advisor their info. We’ll treat your friends and family with the same level of care and concern we’ve shown you – we promise! In the end, it’s all about relationships, and relationships are all about a balance of give and take. Your relationship with your advisor should be no different. Keep expecting us to get better and better, and do your part to help us get there. **Categories:** Behavioral Finance, From our CEO, Investing General, Investment Markets, Mailchimp, Media **Tags:** active, advisor, annuity, client, email, financial advisor, investments, portfolio, positive, relationship --- ### [Introducing the nVestor LifeCycle](https://nvestadvisors.com/intro-lifecycle/) **Published:** November 15, 2017 **Author:** nVest Advisors **Content:** Our clients who have been around a few years know we’ve made lots of changes. From the creation of an independent financial advisory practice in August 2011 (then called “Palo Alto Investments”), to new custodians, new investment strategies, early adoption of new technology, the total reinvention of the firm into the fee-only RIA, nVest Advisors in October 2015, and expanding the firm into Colorado in 2017. And although there have been a lot of changes over the years, we don’t believe in doing them in a haphazard way. My intention as CEO of nVest Advisors is to innovate and re-invent at the right moments in our development as a company. It is delivering what we and our clients need, when we need it, that gets my creative juices flowing. One of the changes I’m most proud of is coming at the start of 2018. We’re changing your experience as a client in ways I think will amaze and thrill you by changing what we focus on and what we talk about with you. Let me explain. In the past several years, since the Great Recession, it’s been easy to be overly focused on the investment markets and how your investments were performing. Part of that is the nature of investment media – CNBC and the like are fixated on today’s stock market, and spend hours a day fretting about about what’s coming next. Everyone was gun-shy. We all obsessed over when the next big correction was coming, and how to weather that imagined storm. We were waiting for “the new normal” the experts kept saying was here (though no one could say what that new “normal” was, exactly). The Great Recession made many of us in this business hyper-focused on account performance and market indicators, and I’m no exception. During the last few years my focus as an advisor became, I believe, disproportionately concerned with making sure your *investments* were doing well. And we made many changes during that time to help the investments – we lowered advisory fees, we changed our models and even custodians to provide better service at lower costs. We still hunt down the lowest cost investments that do the job I need them to do in a quality, predictable way. And that won’t change. **But your investments are not all that you entrust to a financial advisor. They’re not even the most important things. Your *goals* are. Your *hopes and fears and dreams for the future* are. And *those* are the things that matter in the long run. Those are the things that *must* matter.** We shouldn’t care about investments simply because markets move or elections happen or congress acts (or doesn’t act) or hurricanes rage. We need to care about our investments because we’re relying on them to finance the other things in our lives that we care much more about. I wouldn’t say we stopped caring about your goals and making sure you were on track to reach them. Far from it. But I don’t think we revisit them enough. And one thing I can tell you as a long-time business owner as well as a financial planner is, what you don’t focus on and put real effort in, just won’t happen. Plus, goals can change. Life gets messy. I’m sure many of you who had financial plans done by me in 2012 or 2013 are in a different place today than you imagined you’d be. So, starting in 2018, we’re going to change the focus of our interactions with you, our client. We’re shifting the focus of our conversations away from markets and account performance and general “investing”, and taking them back to working on your life plan. We’re making your goals and dreams and future plans the core of our mission. We’ll get the investing right, but it’s much more important to me that we get your goals met and your hopes fulfilled. And there’s even more. I don’t believe it’s possible for a 25 year old, or even a 45 year old, to realistically imagine life at age 70. Frankly, at 46, I can look back and see that I was wildly wrong about how I imagined life would turn out even 15 years ago. Most of us live life that way – planning vaguely for the future but having current events knock us off course, or end those dreams entirely. As a financial advisor – your financial advisor – I’ve got to come alongside you and ride life’s waves with you much more closely. I’ve got to be able to make course corrections with you, to make sure you’re still headed toward your goals no matter what happens. I now believe that the old-school method of financial planning – giving you an all-encompassing, whole-life plan regardless of the age at which we first meet, is worthless. **So I’m happy to introduce a whole new way to work with you. We call it the [nVestor LifeCycle](https://nvestadvisors.com/check/wp/lifecycle/). It’s a financial plan that grows with you, adapts to life’s eccentricities, and changes focus as you do.** We’re going to start with three phases in the [**nVestor LifeCycle**](https://nvestadvisors.com/check/wp/lifecycle/) (we’ll expand them as we need to), and in each phase, we’ll be working closely with you only on those priorities, goals, and financial milestones to move you to the next phase of the LifeCycle. For example, as an **Early nVestor**, you may have just gotten started investing and have children at home. Your debt may be high and your career is still getting ramped up. Your needs, to protect your future earning ability, get debt paid down and establish emergency savings, are likely far different than someone in their late 50s. So we’ll focus only on the stuff that matters to you right now. (I’ve got my eye on the long-term – don’t worry – but to ask you to do so isn’t terribly realistic when you’ve got homework to get done and soccer games to get to.) As an **Emerging nVestor**, you’ve got some bigger goals in mind and you’re starting to get serious about investing. Maybe you’ve got college or a wedding to pay for, or want to make sure you’re okay in the event of a layoff. You might actually own a set of golf clubs and a Buick. You may have to help care for loved ones at both ends of life. Retirement is out there now as a realistic thing. We’ll help you lay out a roadmap to reach your new, bigger goals, like a second home or a travel budget in retirement, while making sure taxes and other costs don’t eat it all away. As an **Established nVestor**, making the most of what you’ve saved, making sure you leave a legacy and provide for loved ones, investing in ways that reflect your values, thinking about health care costs and taxes are major concerns. We’ll focus together on the things that matter to you now and make sure your wishes are protected in the future. [fruitful_sep] I’m extremely excited about this change, and I think you’ll be, too. Here’s how we’ll implement it: - **While we won’t turn any away, we’re not actively seeking new clients for the rest of 2017, so we can get the internal infrastructure in place.** - **Meanwhile, our current clients will all be invited to gain access to our new [Client Portal](http://nvestadvisors.blueleaf.com), which will be the central hub for our planning and communication going forward. We’re doing this is phases.** - **Beginning with annual appointments in January, we’ll be meeting with each of you in person or by video, to begin the process of reorienting your nVest Advisors experience. We’ll update and review all of the previous info and plans, and migrate your plan into our new online planning portal that we can work on together. And together, we’ll pick your nVestor LifeCycle starting point.** - **Our communication with you will be shifted toward helping you in your current nVestor LifeCycle. That will include newsletters, webinars, social media posts, and more. If you are an Early nVestor, for example, the communication you’ll get from us will be focused on *your* needs, not the general needs of all of our clients. The quarterly webinars and special events we invite you to will be tailored to things *you* need to learn. And our phone calls and meetings will always start and end focused on meeting your goals and achieving your plan.** I’m very confident that nVest Advisors is on the verge of great growth, precisely because we’re making this whole experience about you. If you have questions or comments, I’d love to hear from you directly! Email me at jtorgerson@nvestadvisors.com, or [schedule a brief phone call](http://calendly.com/nvestadvisors/15mincall). **See you in 2018!** **Categories:** Company News, From our CEO, Mailchimp, Media --- ### [A quick review of permanent vs. term insurance](https://nvestadvisors.com/a-quick-review-of-permanent-vs-term-insurance/) **Published:** August 29, 2017 **Author:** nVest Advisors **Content:** When faced with the wide range of **life insurance** coverage available, you may wonder what type fits your needs *now* and what coverage you should consider for *future* needs. A good first step is to look at two basic types of insurance coverage: **whole life** and **term life**. ### Whole Life Insurance—Cash Value for Your Dollar Whole life insurance helps to provide not only security from financial hardship in the case of a death, but also a **cash value** component of the policy. Under a cash value life insurance policy, premium payments cover the cost of pure insurance coverage first, including the expenses and mortality factors of the insurance company; the insurance company then accumulates “leftover” dollars to build the cash value of the policy. In addition to cash value buildup in the policy, some insurance companies may provide whole life insurance policyholders with **dividend** payments—due to lower expenses, lower mortality rates, and higher company investment results than were predicted when premiums were set. Another whole life insurance feature is predictability of expense: premium amounts payable at policy inception will not change. The higher premium charged for a whole life policy helps to keep the premiums level over time, compared to the premiums for term insurance that increase as the insured ages. A guarantee of insurability comes with any whole life insurance policy. Once the individual to be insured provides initial evidence of insurability—and as long as premium payment responsibilities are met— the insured is guaranteed coverage for life, in accordance with the terms of the policy. Evidence of insurability will never be necessary again, as long as the original policy remains in force. One final feature to consider is the value of whole life insurance as a “creditor,” if necessary. Funds may be borrowed against the cash value of the policy at any time. Loan approval must come from the insurer, but is generally fairly routine. No repayment schedule is set beyond regular payment of interest on the loan, with outstanding loan balances deducted from the death benefit in the event of the death of the insured. Thus, the loan ability of the policy should be used sparingly, with any loans paid off in a timely fashion. There are numerous variations on whole life insurance as it was originally established. An exploration of which one best fits *your* needs may be in order. Let’s take a further look. ### Term Insurance—Pure Protection for Your Dollar As the name implies, term insurance provides pure insurance protection for a specific period—or “term”—of time. It does not generally offer any guarantee of premium stability or right of renewal. Nonrenewable, nonconvertible term insurance for one, five, or ten years probably provides the lowest cost protection available, and it is this cost factor that is its most beneficial feature for some individuals. There are short-term and long-term policies that may provide for renewal, as well as for level premiums during the term (e.g., a 20-year renewable term policy). There are also “convertible” policies that allow the insured to **convert** the term coverage to some form of permanent insurance without proof of insurability. These features add to the overall cost of term insurance premiums, but may be of value to particular individuals. In reviewing term insurance, ask the following questions: - How much will premiums increase in future years should insurance coverage continue to be a necessity? - What is the history of the insurance company regarding rate increases? Is there a “ceiling” on rate increases? - Is renewability guaranteed? What are the renewal requirements? - Are there discounts for annual vs. semi-annual premium payments? - Are there non-smoker discounts, or reduced rate increases for showing good health over a set period of time? - Are there large policy discounts for coverage above certain amounts, such as $100,000 or $250,000, or for aggregate coverage of a group of insureds? - What are the rates for women vs. men? ### Your Personal Life Insurance Needs Once you have studied the available options, you need to view them in relation to *your* personal needs. You may seek an instant “estate” to provide for loved ones, financial obligations, and the fulfillment of your personal wishes in the event of your death. Your insurance professional can assist you in regularly reviewing your insurance coverage to help you determine if your current choices are helping you meet your short-term *needs*, as well as your long-term *goals*. At nVest Advisors, we don’t sell insurance directly, but we do work with a nationwide, salary-only insurance provider, to get our clients the insurance they need in an impartial, unbiased (and uncompensated) way. Ask us today for an insurance review! It’s part of our commitment to completely serve your family’s financial needs. **Categories:** Insurance, Investing General, Mailchimp **Tags:** insurance, permanent, term --- ### [Home improvement projects: make the most of your biggest investment.](https://nvestadvisors.com/home-improvement-projects-make-the-most-of-your-biggest-investment/) **Published:** July 28, 2017 **Author:** nVest Advisors **Content:** In lieu of a [Facebook Live Q&A](http://facebook.com/nvestadvisors) session today, I’m taking a “staycation” this week, to work with my wife on our backyard. When we relocated our company and family back home to Denver, CO in February, our new home was incredible and the yard looked good – in 6 inches of snow. But as spring and summer rolled around, it was obvious that it was time to remove the old landscape fabric, clean the rocks, and do other projects to really make this new house our “home”. ## Which Home Improvements May Benefit You? When it comes to home improvements, it is important to consider which would be the most profitable in terms of resale value. Sometimes, it’s possible to get back all, or even more, of your investment. While some improvements, such as a remodeled kitchen or added bathroom, may add value to your home, others can actually make your home more difficult to sell. For example, not all prospective homebuyers will appreciate a full spa with a whirlpool, hot tub, steam bath, and built-in stereo system. In the same way, a swimming pool could be seen as a detraction due to the maintenance required. So, how do you know which home improvements might increase your home’s resale value? Start by researching the recent selling prices for comparable homes in your neighborhood. If most homes range from $175,000 to $250,000, your top resale price will most likely be equal to or less than $250,000, no matter how many rooms, baths, hot tubs, or skylights you add. As you consider remodeling, keep in mind that it is usually difficult to recover any costs that raise the value of your property over comparable homes in your neighborhood. You may also choose to spend less on home improvements if you are thinking about moving again in a few years. The following interior home improvements may increase resale value: - **An interior facelift: Repainting ceilings, walls, and interior trim can create a clean, bright, and inviting appearance.** - **A remodeled kitchen: The kitchen is viewed by many as the center of the home, and it often serves as a combination family room/workplace.** - **Addition of a second bathroom: Many prospective homebuyers want more than one bathroom.** - **Fireplace installation: Even though fireplaces may lose more heat than they provide, they do add considerable charm to a home.** - **Installation of central air conditioning: Central air conditioning could help sell your house if it is located in a warmer climate. In colder regions, buyers may be reluctant to pay extra for it because of the operating expense.** ## A little about backyard patios In our case, we’re adding on to the existing patio with a small “bistro” area made with paving stones and gravel. Then we are using the same paving stones to create a walkway on the side of the house to the fence. Installing a backyard patio is one home improvement project that may be within the capabilities of most homeowners. Although it’s a challenging job that may require a couple of weekends to finish, no special skills or complicated techniques are required. You can create a beautiful area in the backyard for grilling meals, enjoying summer nights, and entertaining friends and family. To get started, first determine the size and shape of the patio. Circular patterns are popular, as are ovals and rectangles. Free-form shapes are fun as well, but the basic idea is to utilize the space in the best way possible. Then, purchase the materials that you’ll need for the job. Most items can be found at local home supply stores or masonry companies. Their employees can advise you to the quantities you’ll need per square foot, and some home improvement stores even offer classes to help you along the way. - **Patio pavers** - **Rake, shovel, and trowel** - **Landscape fabric** - **Stone dust and sand** - **Rubber mallet** - **Circular saw with masonry blade (optional)** - **Broom** Now, you’re ready to get started. Remember that the patio has to be perfectly flat, so the first step is to grade it. Rake or dig the surface dirt to loosen it, digging down about four to seven inches—depending on the height of your paver stones—until the area is fairly level. Then, lay down the landscape fabric to prevent weeds from popping through to the surface. Next, cover the landscape fabric with two or three inches of stone dust. Set aside some stone dust, so there will be enough to fill in the cracks between the pavers later. (Note: A yard of stone dust will generally be sufficient for an area of approximately 200 square feet. A yard is 1.5 tons, so you may want to have it delivered to your house.) Before you lay the stones, you must ensure that the area is level. One way to do this involves the use of two-by-fours. Starting at one side of the patio area, push a two-by-four into the stone dust, with its wide side parallel to the perimeter, until it is level with the ground around your patio area. Then, set another two-by-four at the other side. Fill the space of your patio area with sand. Next, level the sand by running another two-by-four board over the other two, like going over train tracks. Gently pull the two-by-fours out and fill in the sand using a trowel to level it. Now it’s time to set the stones in the sand. If you’re creating a circular pattern, be sure to start from the middle. Otherwise, you can start laying the pavers from one side and go to the other. In placing the stones, push them down slightly into the sand to set; then see if they’re level. Adjust the sand underneath by lifting the stone and setting it in place. If you need to make cuts to paver stones at the edges, first measure the pattern you need to fill. Mark the paver accordingly, and cut into the paver with the circular saw. You’ll need to cut more than half-way through the paver; then hit it with a rubber mallet. It should break along the line you cut. Once all the pavers are laid, spread stone dust over the patio with a push broom to fill the spaces between the pavers. Then, water it gently with a hose. Wet stone dust makes a kind of cement between the pavers to hold them securely in place. You may have to periodically spread more stone dust to freshen the patio as necessary. The only thing left to do now is to call your friends and family, sip a cool drink, and enjoy the fruits of your labor. A stone patio can last for many years with very little maintenance, and it may be well worth the effort of a couple of weekends of hard work. ## Filling the Home Improvement Gaps with Insurance A lot of time and energy goes into adding a deck, a new bathroom, or that spare bedroom you’ve always wanted. You have to have patience in deciding on the new look you want, as well as in seeking out the right contractor or friend to help you with the job. In the excitement of the project, you may overlook updating your insurance coverage. It is understandable that you may forget to review your policy. However, you should be aware that additional insurance coverage may be necessary if you remodel your home. Your **homeowners policy** will likely cover any property damage resulting from your own improvements, the work of a friend, or the work a contractor performed. Liability for the homeowner is generally covered, regardless of who did the work, but coverage for additional parties alleged to have been negligent (such as a contractor) is likely not covered by the homeowners policy. It is important that any contractor you hire for your remodeling project has **liability insurance**, just in case a wall comes tumbling down or someone takes a serious fall. You should be sure to obtain a liability insurance certificate from all contractors as proof of this coverage. Updating your insurance is more than just protecting yourself in case something goes wrong while the work is *in progress*. Additions will result in the replacement value of your home increasing, necessitating additional insurance coverage. Remodeling will also likely increase this value, but not always. For example, if you replace a roof, it generally will not change the replacement cost of your home because the cost to replace the roof remains constant regardless of the change. ### **Review Your Coverage** It is smart to evaluate your insurance coverage while your remodeling project is still in a stage of development. Before starting the process, you may want to consider speaking with us to make sure your current insurance policy fits the scope of your remodeling plans. The knowledge that you are covered may help you sleep better in your new bedroom or enjoy that new deck even more. **Categories:** From our CEO, Investing General --- ### [What should I know before I take money out of my retirement account?](https://nvestadvisors.com/ira_distribution/) **Published:** May 17, 2017 **Author:** nVest Advisors **Content:** As we write this from our new headquarters in Denver, Colorado, we’re expecting 3 inches of snow, on the 18th of May. It’s supposed to be springtime, and for the most part, it is – flowers have bloomed, trees are full of leaves, the grass is green, but in the middle of what should be warm, sunny, gorgeous spring days, here comes a surprise snowstorm. Forecasters are telling us to drag our flowerpots inside and cover newly budded greenery outside, and to expect snapped tree branches (because branches full of leaves hold a LOT more snow than dormant ones). In the middle of our “bright and sunny”, bird-chirping days, winter wants one last lash. That analogy works well in the case in our financial lives, too: in what is supposed to be a long season of growth in our careers and finances, there are those unexpected storms that blow in and lay waste to our financial flower garden. This is one of the reasons we buy insurance – to protect against an unexpected, potentially catastrophic loss, and it’s the reason every good financial advisor will stress over and over again the need to have established an emergency fund. You simply need to expect the unexpected: you can’t know exactly what unpleasant surprises loom in your family’s future, but be assured, there will be some. So what happens when you don’t have adequate preparation in place, and something bad happens? Job losses, divorces, illness or injuries, or something like a hurricane or tornado can wreak havoc on a family’s finances in a moment. Where do you go when you have a sudden need for cash? For many people, the only place they CAN go, is money that was set aside for much later in life: your retirement savings. > **One of the cardinal rules at nVest Advisors is: “Thou shalt not touch thy retirement money”, but for most of us, our retirement accounts are our largest source of available money (or what we think is available money) when urgent needs arise.** If you are working with a financial planner or advisor, we hope you’ve got an emergency fund set up and you continue to grow it at every opportunity. But if you don’t, and you’re faced with serious financial hardship, the balance in your 401k or IRA might be overwhelmingly tempting. And in some extreme circumstances, tapping your retirement funds may be your last refuge. The problem is, those accounts were given special tax treatment by the IRS because they are supposed to be used later for retirement. And the more we fund our own retirement, the lighter burden we will be on Social Security and Medicare in the future. So we are given incentives, like possible tax deductions when we put money in, and tax-deferred growth for as long as it remains in the account, but we are also given a “slap on the wrist” if we take it out early. And sometimes, that slap can be really painful. If you’re faced with the dilemma of an urgent financial need, and are considering taking funds from a retirement account, ask yourself the following: ### First, is it accessible? Although you can take funds out of an IRA or ROTH IRA at any time for any reason (because they are personally owned by you), employer-sponsored plans come with more more restrictive rules. Plans like a 401(k), 403(b), and 457 have special contribution and withdrawal rules designated by the IRS, and are much more difficult to get money out of. What the IRS has created is a list of about a half-dozen reasons you can request an early withdrawal, and not every employer plan will honor all of them. Early withdrawal reasons (sometimes called “triggering events”) include: - The employee reaches retirement age as defined under the plan. - The employee becomes disabled. - The employee dies, at which time the beneficiary is eligible for distributions. - The employee separates from service. - The plan is terminated and is not replaced by another defined contribution plan. Some plans also permit in-service withdrawals for financial hardship, first-time home-buyers, or unforeseen medical expenses, but each plan will differ. Check with your payroll or benefits office for more information. Hardship withdrawals will often require proof of financial hardship, such as overdue bills. ### Second, what costs are involved? Here’s where it gets tricky. For most withdrawals from retirement accounts before age 59 1/2, your distribution will be taxed at your regular income tax rate **PLUS a 10% early withdrawal tax penalty**. There are two exceptions to mention quickly: 1. ROTH IRA contributions are not deductible when you make them (because ROTH IRAs are generally tax-free in retirement), so only the growth of your account is taxable, not the amount you put in. Also, ROTH IRAs are taxed as “first-in, first-out”, meaning all of your contributions can be withdrawn first (without tax or penalty), and then the taxable earnings are taken out. (This makes the ROTH IRA a great investment vehicle for many other reasons than just retirement savings, and at nVest Advisors, we like and use ROTH IRAs in a variety of ways to serve a family’s financial goals). 2. The IRS allows for a few generally administrative reasons for withdrawals from a retirement account without paying the 10% penalty (such as finding out you contributed too much in a year, and pulling the excess back out before year-end). Also, beneficiaries can withdraw after the death of the account owner without the additional penalty. It’s important to remember that whatever amount you take out of your retirement account will be added to your total taxable income for the year. This can dramatically raise your income for the year, potentially pushing you into a higher tax bracket as a result. This is why it’s vitally important that you consult with your tax preparer BEFORE taking money out of a retirement account. ### Next, is there any alternative? For individually-owned retirement accounts, like an IRA or ROTH IRA, the rules are so relaxed about withdrawals that the IRS doesn’t allow for any alternatives to a withdrawal. **Retirement Plan Loans** But for employer-sponsored plans, that have much more restrictive withdrawal rules, the IRS does permit the plan and it’s investment providers to allow for loans against the balance of your account, and taking a loan may be the far better option than paying all of that extra tax and penalty on a full withdrawal. A loan on your employer-sponsored account is pretty straight-forward. First, there must be at least $2,000 in the account before a loan is permitted, and the amount available to borrow is nearly always 50% of the account balance. You will never need to quality for the loan (with things like income or credit), because the loan is secured against the balance in your account. Rates are typically lower than other kinds of emergency lending, such as a bank signature loan or a credit card, and repayment terms are generally 5 years (up to 15 if you borrow to buy a home). And as long as you make the payments as scheduled and never default, the money you borrowed was not taxable. If you do default, however, and fail to catch the payments up by the close of the plan’s year, the plan is required to report that defaulted loan to the IRS as a withdrawal, and the unpaid balance will be subject to income tax and the 10% penalty. **Withdrawal of cash value from life insurance** If you have a personal, permanent life insurance policy that grows a cash value (it’ll be a name like Whole Life, Universal Life, Variable Life, or some version of those), a portion of the cash value of the policy can be withdrawn with less tax due than a 401k or IRA withdrawal. Like a ROTH IRA, cash values from life insurance are taxed on a “first in, first out” basis, so you can withdraw up to your total premium amount from the cash value without additional taxes due. ***But please take note: this strategy is fraught with risk.*** Many life insurance policies deduct your insurance costs from the cash value each year, and so a withdrawal of too much may make your policy lapse prematurely without substantially more premium payments from you later on. Also, causing your policy to lapse by cashing out your life insurance will mean that you must again prove you are healthy enough to be covered. It will also subject you to a new period of contestability, meaning that the insurance company can reject a life insurance claim in the first two years based on their look at your medical history. You’ll also be older, so a new policy may cost substantially more than the one you just terminated. Before taking this step, **please** check with your insurance agent and tax preparer and make sure you understand the risks. **Hold a garage or yard sale** This may sound crazy, but in some cases, when the financial burden is fairly small (say, a few thousand dollars), simply emptying your home of unneeded items or holding a bake sale make actually solve your problem without touching your retirement savings or paying a bunch in taxes. **If it’s not immediate, consider a part-time job for a short period of time.** This one is self-explanatory, but if your need isn’t immediate and urgent, consider working a few hours a week in a part-time job to cover the expense instead of cutting into your retirement savings. (You might also consider staying on at that part-time job until your emergency fund is fully funded, too.) ### If you absolutely have to… If, in the end, you finally do need to withdraw from a retirement account, here are the things we advise our clients to keep in mind and take to heart: 1. Take withdrawals in small, frequent amounts. It’s better to withdraw small and often than to withdraw a large sum you later find out you didn’t need. Once it’s out, it can take years to put back in. 2. Remember, only the funds you are fully vested in (funds that are now fully yours) are eligible. Your employer’s matching or profit-share contributions may not be eligible. 3. Set a goal for yourself not to ever need to do this again. Whether that means working a part-time job, or cutting living expenses, commit that once you’re out of this situation, you MUST build an emergency fund. No ifs, ands, or buts. 4. Commit to a period of time to get the money you took out back in. Treat your withdrawal as a loan, and give yourself a set period of time – 5 years or less – to put the funds back in. You need to do this IN ADDITION to the contributions you were making before. ### If you’re not sure what to do: We’d love to help. Give us a call at 888-852-0702 to speak with a financial advisor free-of-charge and without obligation, or **schedule a free consultation appointment online today**. **Categories:** Uncategorized **Tags:** 401k, 403b, 457, IRA, retirement, taxes --- ### [On the Brexit vote tonight](https://nvestadvisors.com/on-the-brexit-vote-tonight/) **Published:** June 23, 2016 **Author:** nVest Advisors **Content:** [![brexit shutterstock](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/06/brexit-shutterstock2-300x183.jpg "Brexit shutterstock2 nvest advisors")](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/06/brexit-shutterstock2.jpg)**A note from CEO Jeremy Torgerson:** As I write this (10:35pm Central), it appears, as I personally suspected, that the United Kingdom will vote to sever its ties with the European Union. All the polls and “talking heads” were, as has become laughably typical, wrong. The people of the UK appear, at least at this point, to be making a decision to reclaim their independence from a federal union that did not understand the complex needs, and certainly did not respect the sovereignty, of the individual nations of which it is comprised. Normally a political event from Europe would not affect the US stock market to the degree this one may, but in our increasingly interconnected and often incestuous world economy, the fear of “contagions” make the global banks and institutional investors nervous. After being totally wrong as recently as a few hours ago, now you will hear claims from these same “experts” that the UK’s decision will devastate England’s economy. I strongly disagree with that assessment. The UK, and other disaffected nations such as France have much stronger economies than the EU as a whole, and are in fact being dragged down by various other nations (such as Greece, Spain, and Italy). I DO believe, however, that this is likely the beginning of the end of the European Union as we know it today, as other producing nations have already pledged to hold their own referendums on whether to leave or stay part of the EU (to which I personally say, good riddance – it’s dying on the vine economically and rapidly losing the consent of its governed). **So how does this affect your investments?** In the short term, expect quite a bit of volatility. Markets will likely open Friday morning (likely when you read this), down quite a bit. This won’t stay that way. I expect even a rough month or two as markets get used to the idea of the kinds of changes this vote makes. But like all moments of market panic, it will pass, and we will most likely look back at this time as an excellent BUYING opportunity. The next few weeks may present amazing opportunities to invest, especially in British companies. In the first few days, investors will likely move to safety, which means, stocks will drop in value and bonds will rise in value. Likely the US dollar and precious metals will rise, as these are seen as the safest havens when currencies lose value. > **Remember, though that short-term, panic-motivated investments do not hold their value for long.** Like a rubber band that gets stretched and let go, all investments will eventually return to their normal, typical returns. We call this “reverting to the mean”. Please, do your best to tune out the arrogant and headline-driving (and constantly incorrect) doomsayers on TV. They’ve been wrong about nearly everything this past year. And most have vested interests in keeping sovereign nations irrevocably tied to one another. And finally, if you do get nervous, remember to focus on your long-term goals. **This too shall pass, but your retirement, and college costs for your kids and grandkids, and if you’re already retired, your income needs, remain.** THOSE are the reasons you invest, and those are the reasons I do my job each day. As your financial advisor, I cannot predict or control the future. But I can (and do) help guide your steps and help you make the RIGHT decisions with your money, even if in the short term, it feels scary. There are times you need to stand firm. This is one of them. I welcome your calls and emails if this situation (or any other) concerns you. Feel free to call me at the office at 888-852-0702. Have a good weekend, and “let not your heart be troubled”. All my best, Jeremy Torgerson CEO, nVest Advisors, LLC **Categories:** Behavioral Finance, Company News, From our CEO, Investing General, Investment Markets, Media --- ### [Confirmation Bias - why you unfriend and unfollow on FB](https://nvestadvisors.com/confirmation-bias-why-you-unfriend-and-unfollow-on-fb/) **Published:** March 15, 2016 **Author:** nVest Advisors **Content:** ![unfriend](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/03/unfriend-300x188.png "Unfriend nvest advisors")During this heated political season, may I introduce you all to a psychological tendency we are all extremely guilty of: [CONFIRMATION BIAS](https://en.wikipedia.org/wiki/Confirmation_bias). This is the typical human notion we all have to seek out news, opinions, memes, etc. that confirm what we already believe to be true. We all want so badly to believe we are right about everything, we will overlook mountains of evidence that we are NOT and grab hold of even totally fabricated evidence that says we are. That bias makes us unfollow or even unfriend people with whom we disagree, and it happens on a lot of subjects, from the obvious ones like religion and politics, to the debate over climate change and the notion of intelligent design, to which sports teams are actually superior. We believe we have a serious health condition and go to WebMD to prove to ourselves our worst fears. Some of us even believe, despite all the evidence to the contrary, that we are unattractive, and have to post photo after photo after photo of ourselves to try to counter our own misconceptions. No amount of praise is enough for some people to overcome the confirmation bias that they are not attractive. We root for the team we want to win. We shout the propaganda of the candidate we most agree with. We post totally fake memes that support our world view. We ignore 100 facts that refute our beliefs and zero in on that ONE thing that might prove our point. It’s why some of you watch FOX and some MSNBC. Not to broaden your viewpoint – but to justify it. Confirmation bias is how a lot of things get sold to us. For example, you really want to believe that there is a way to lose weight and look like an underwear model without extreme diet and exercise discipline. You really want to believe a bottle of pills will do the work for you. You want the easy way out. Or you actually think you will win the Lotto. Even though you are 30x more likely to be eaten by a shark, you plunk down that $20 each week buying tickets instead of saving that money. Confirmation bias in finance is how Bernie Madoff got so many otherwise successful, intelligent people to fall for his scheme. It’s why you believe the pundits on CNBC, even though evidence shows they are all less accurate than a flip of a coin. It’s why you subscribe to costly investment newsletters and stock picking software. You really believe someone has figured out how to make the totally irrational investment markets predictable and beatable. You want to believe you can somehow outsmart everyone else. So we fall for scams. We date the wrong people. We disown family and stay in toxic relationships. We attend that church or temple because it tells us what we want to hear. All because we NEED to be “right”. And we act like bratty children with anyone who counters the way we see the world. Opponents to our worldview must be shouted down. We see them as unintelligent, uneducated, “rednecks” or “hippies”. They become “deniers”, “extremists”, “haters”, and the garden variety battery of “-ists” (such as populists, nationalists, racists, sexists, ableists, ageists) and “-phobes” (homophobe, Islamophobe). Confirmation bias is very human and very normal. But it often means we are NOT making the correct decisions or choices. I see that every day helping people manage their money. So for the sake of civility, let’s agree on this: Trump is not Hitler, Sanders is not Lenin, not all cops hate blacks and not all blacks are criminals. Not every immigrant is here to mooch and not everyone who wants secure borders is a racist. Let’s at least be aware that we’re doing it. And for Pete’s sake, let’s stop hating each other just because they see the world differently than we do. **Categories:** Behavioral Finance, From our CEO --- ### [Retirement: How to really, truly get there.](https://nvestadvisors.com/retirement-how-to-really-truly-get-there/) **Published:** March 6, 2016 **Author:** nVest Advisors **Content:** > [![](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/03/6870886851_76c9703cca_z.jpg "6870886851_76c9703cca_z nvest advisors")](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/03/6870886851_76c9703cca_z.jpg)Source: http://401kcalculator.org > > > > **Editor’s Note:** Are you close to retirement and needing to get serious about a plan? You don’t have to do it alone. Join us online **March 19th at 11am EDT** (8am PDT) for a **free [nVest Academy](https://nvestadvisors.com/check/wp/nvest-academy/) LIVE retirement planning session.** [Get more information and register to attend HERE.](https://nvestadvisors.com/check/wp/retirement-get-there-someday/) > > You may have a very idealistic vision of retirement–doing all of the things that you never seem to have time to do now. But how do you pursue that vision? Social Security may be around when you retire, but the benefit that you get from Uncle Sam may not provide enough income for your retirement years. To make matters worse, few employers today offer a traditional company pension plan that guarantees you a specific income at retirement. On top of that, people are living longer and must find ways to fund those additional years of retirement. Such eye-opening facts mean that today, sound retirement planning is critical. > > **But there’s good news:** Retirement planning is easier than it used to be, thanks to the many tools and resources available. Here are some basic steps to get you started. > > ### Determine your retirement income needs > > It’s common to discuss desired annual retirement income as a percentage of your current income. Depending on who you’re talking to, that percentage could be anywhere from 60 to 90 percent, or even more. The appeal of this approach lies in its simplicity. The problem, however, is that it doesn’t account for your specific situation. To determine your specific needs, you may want to estimate your annual retirement expenses. > > Use your current expenses as a starting point, but note that your expenses may change dramatically by the time you retire. If you’re nearing retirement, the gap between your current expenses and your retirement expenses may be small. If retirement is many years away, the gap may be significant, and projecting your future expenses may be more difficult. > > Remember to take inflation into account. The average annual rate of inflation over the past 20 years has been approximately 2.3 percent. (Source: Consumer price index (CPI-U) data published by the U.S. Department of Labor, January 2015.) And keep in mind that your annual expenses may fluctuate throughout retirement. For instance, if you own a home and are paying a mortgage, your expenses will drop if the mortgage is paid off by the time you retire. Other expenses, such as health-related expenses, may increase in your later retirement years. A realistic estimate of your expenses will tell you about how much yearly income you’ll need to live comfortably. > > ### Calculate the gap > > Once you have estimated your retirement income needs, take stock of your estimated future assets and income. These may come from Social Security, a retirement plan at work, a part-time job, and other sources. If estimates show that your future assets and income will fall short of what you need, the rest will have to come from additional personal retirement savings. > > ### Figure out how much you’ll need to save > > By the time you retire, you’ll need a nest egg that will provide you with enough income to fill the gap left by your other income sources. But exactly how much is enough? The following questions may help you find the answer: > > - At what age do you plan to retire? The younger you retire, the longer your retirement will be, and the more money you’ll need to carry you through it. > - What is your life expectancy? The longer you live, the more years of retirement you’ll have to fund. > - What rate of growth can you expect from your savings now and during retirement? Be conservative when projecting rates of return. > - Do you expect to dip into your principal? If so, you may deplete your savings faster than if you just live off investment earnings. Build in a cushion to guard against these risks. > > ### Build your retirement fund: Save, save, save > > When you know roughly how much money you’ll need, your next goal is to save that amount. First, you’ll have to map out a savings plan that works for you. Assume a conservative rate of return (e.g., 5 to 6 percent), and then determine approximately how much you’ll need to save every year between now and your retirement to reach your goal. > > The next step is to put your savings plan into action. It’s never too early to get started (ideally, begin saving in your 20s). To the extent possible, you may want to arrange to have certain amounts taken directly from your paycheck and automatically invested in accounts of your choice (e.g., 401(k) plans, payroll deduction savings). This arrangement reduces the risk of impulsive or unwise spending that will threaten your savings plan–out of sight, out of mind. If possible, save more than you think you’ll need to provide a cushion. > > ### Understand your investment options > > You need to understand the types of investments that are available, and decide which ones are right for you. If you don’t have the time, energy, or inclination to do this yourself, hire a financial professional. He or she will explain the options that are available to you, and will assist you in selecting investments that are appropriate for your goals, risk tolerance, and time horizon. Note that many investments may involve the risk of loss of principal. > > ### Use the right savings tools > > The following are among the most common retirement savings tools, but others are also available. > > - Employer-sponsored retirement plans that allow employee deferrals (like 401(k), 403(b), SIMPLE, and 457(b) plans) are powerful savings tools. Your contributions come out of your salary as pretax contributions (reducing your current taxable income) and any investment earnings are tax deferred until withdrawn. These plans often include employer-matching contributions and should be your first choice when it comes to saving for retirement. 401(k), 403(b) and 457(b) plans can also allow after-tax Roth contributions. While Roth contributions don’t offer an immediate tax benefit, qualified distributions from your Roth account are federal income tax free. > - IRAs, like employer-sponsored retirement plans, feature tax deferral of earnings. If you are eligible, traditional IRAs may enable you to lower your current taxable income through deductible contributions. Withdrawals, however, are taxable as ordinary income (unless you’ve made nondeductible contributions, in which case a portion of the withdrawals will not be taxable). > - Roth IRAs don’t permit tax-deductible contributions but allow you to make completely tax-free withdrawals under certain conditions. With both types, you can typically choose from a wide range of investments to fund your IRA. > - Annuities are contracts issued by insurance companies. Annuities are generally funded with after-tax dollars, but their earnings are tax deferred (you pay tax on the portion of distributions that represents earnings). There is generally no annual limit on contributions to an annuity. A typical annuity provides income payments beginning at some future time, usually retirement. The payments may last for your life, for the joint life of you and a beneficiary, or for a specified number of years (guarantees are subject to the claims-paying ability of the issuing insurance company). Annuities may be subject to certain charges and expenses, including mortality charges, surrender charges, administrative fees, and other charges. > > Note: In addition to any income taxes owed, a 10 percent premature distribution penalty tax may apply to taxable distributions made from employer-sponsored retirement plans, IRAs, and annuities prior to age 59½ (prior to age 55 for employer-sponsored retirement plans in some circumstances). **Categories:** Company News, Investing General, Press Releases, Webinars --- ### [Beware the Sketchy Salesperson: 10 signs you should do business elsewhere](https://nvestadvisors.com/beware-these-sketchy-sales-practices/) **Published:** February 25, 2016 **Author:** nVest Advisors **Content:** [![](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/02/Kovacs_special_1968.jpg "Kovacs_special_1968 nvest advisors")](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/02/Kovacs_special_1968.jpg)Nearly every investment professional built their book of business by winning their client accounts away from another advisor or firm. It’s just how the business is done, unfortunately. If you have assets, we in the financial industry will all be in competition to be the manager of those assets. Whether it’s your bank or credit union, your insurance agent, a registered rep in a brokerage firm, or an independent firm like nVest Advisors, we’re all competing to earn and keep your business by offering a unique value proposition based on product, price, and service. Sometimes the competition for your dollars makes the agent or rep feel the need to use questionable, even unethical, tactics to try to win your business. In the process of earning new clients’ business and hearing how and why they were in the products they were sold, I’ve heard clients relay some real whoppers. I’ve also been in competitive situations where multiple companies are talking to the same pool of prospects, and have heard many of them first-hand. It’s fine, I suppose, to always put your product or service in the best possible light. Here at nVest Advisors, we have a company creed of Aggressive Honesty as a primary sales strategy. That means, we’re eager to be transparent and we proactively identify our own strengths and weaknesses to the best of our ability. Granted, not all firms believe you should always tell the client what they need to hear (rather than what they want to hear), but there needs to be a clear line where acceptable “spin” ends and deception begins. The bottom line is, every product, company, and yes, financial professional, has various pros and cons. Accentuating your strengths isn’t unethical. Handling objections isn’t unethical. Lying, whether by direct statement or by omission, most certainly is. As you talk with financial pros, all of whom want your business, here are a few (sadly) common sales tactics used by **sketchy salesperson** that should, at least, raise your suspicion. (And at worst, should have the agent or broker run out of the industry, in my opinion.) ### They promise you a specific rate of return. Yes, there are certain investment products that DO have a guaranteed rate of return, at least for a set period of time. These might include a bank Certificate of Deposit or a fixed annuity. These products, by their nature, will be extremely conservative in nature, and that guaranteed rate will most likely be less than 3% in the current interest rate environment. The issue here is an agent or rep who says that their investment strategy or product promises (or has ‘always earned”) a high rate of return. That can be anything from a modest 5% to ridiculous claims of 20% or higher. (Even Bernie Madoff only promised 11%, and was able to swindle hundreds of millions of dollars from already wealthy investors.) This should be obvious, but our human tendency to want to believe in the extraordinary makes us suckers for high return claims more often than any of us would care to admit. We really want to believe that there are shortcuts to riches, just like we want to believe this pill or that shake will make us lose weight with no effort on our part. So when some insurance agent or stockbroker is sitting in front of us promising much-better-than-the-other-guy returns, we instinctively want to believe him. The truth is, there are no guarantees in the investing world. All products and vehicles will wobble in value, some much more than others. The sober fact is, investment returns will vary. From day to day, month to month, year to year. Yes, we can provide you with a historical return on most investments, but just like the disclaimer says, past performance is never a guarantee of future returns. ### They claim there is little or no “risk” in their product. This is the flip side of the “huge returns” sales pitch: claiming their product or investment carries little or no downside risk. I hear this most often from insurance agents pitching fixed or Equity Indexed annuities and life insurance products (which are also often misrepresented as savings vehicles rather than death protection). The claim made is often that their product can never “lose money”, which means they are describing (and frankly, misleadingly so), that the only “risk” of an investment is day-to-day price fluctuation due to market volatility. I also see this tactic happen often in the sale of gold and silver as “protection” against whatever ill in the world is spooking seniors that day. Although gold as a commodity is more than 3 times as volatile as the S&P 500, it’s often pitched to fearful retirees who are living on their savings as a “safe” alternative investment. It’s anything but. It’s actually a highly volatile hedge investment against equity and currency markets, but to call it “safe” is preposterously misleading. The truth is, every investment carries risk. [And there are a variety of risks out there.](https://www.foremostadvice.com/pdfservice/ConceptPiece.b9700a44-d75c-4499-86d1-f36eba0d0c89.pdf) In stocks, you have several risks to consider: company risk, market and geography risk, economic risk, political risk, etc. In fixed-interest investments, you have credit (default) risk, interest rate risk, inflation risk, currency risk, and others. Gold and silver carry currency risk, commodity (supply and demand) risk, and political and geography risk, just to name a few. In the so-called “safe” investments of fixed annuities, you have significant liquidity risk, and that’s just for starters: nearly every annuity carries a back-end surrender charge that can extend for 10 years or more. I’ve seen 20-year surrender schedules on some. Add to that the risk that the guaranteed rate won’t even keep up with the rate of inflation, or that you may be stuck in a product that pays less as interest rates go up, etc. Yes, there is no fluctuation in your day-to-day balance in an annuity, but because of the low interest rates, it may not even keep up with the rate of inflation. The value doesn’t fluctuate every day. It just buys less and less every day. At nVest, we believe in managing your risk using the key concepts of asset allocation and, occasionally, altering our strategy to reflect current market conditions. There is no “magic pill”, and we cannot guarantee against loss. What we can do, however, is make sure your “risk” matches your goals, and work to get you the needed return over the time frame you’ve given us. The bottom line is, when someone claims their product has no risk, they’re either lying, are uninformed, or are selectively defining what “risk” means. ### They are evasive about commissions, fees, or surrender charges. It is a sin of our industry how often you, the client, don’t fully understand what you own or how you pay for it. Certainly some of that fault lies with you; if you don’t ask questions of your agent, or find yourself tuning out during those that part of your rep’s presentation, or fail to read your prospectus brochures, then you need to own up to part of that lack of knowledge. But yes, part of the problem is that fees and commissions are often very difficult to find in the sales literature, are omitted from the agent’s presentation, and are not directly and clearly identified on statements. This is very common in annuity products and retail mutual funds, and in employer-sponsored plans. It’s something the securities regulators are (properly) focused on improving. Every investment product has costs. We are not running charities. For individual securities, those costs are easier to determine. When you buy a stock or a bond, for example, the commission (or markup) and transaction fees are shown on your trade confirmations. [Mutual funds can have a variety of charges](https://www.foremostadvice.com/AdvisorProcess/PrintVer.aspx?iplf=ff&iptc=202686), including a front-load sales charge, a back-end CDSC (surrender) charge, annual trading and management expenses, and 12b-1 (marketing) fees. These are disclosed – at minimum – in the fund’s prospectus, but you should know before signing exactly what it will cost. [Annuities have administrative and mortality & expense (insurance) costs, in addition to a surrender charge in the first several years. ](https://www.foremostadvice.com/AdvisorProcess/PrintVer.aspx?iplf=ff&iptc=202686)If you have a variable annuity, these costs are in addition to the costs of your investment subaccounts, which will often be the same as a mutual fund. Annuities are often the hardest products to determine costs, so take the time, and make your agent take the time, to carefully go over your costs. In many cases, investing outside of an annuity is a far less expensive option. The reason fees matter is because over a long period of time, those extra costs drag down the return on your investment. [Over 20 or 30 years, those costs can mean a substantial loss of return.](http://www.sec.gov/investor/alerts/ib_fees_expenses.pdf) ### They claim to have a trading system or method that consistently beats the broad market. I see this more often from unregistered (and therefore, largely unaccountable) television personalities or subscription newsletters and websites or software. Everyone has a market investing theory. That’s not a bad thing. Even passionately believing in your strategy is not a bad thing. Some people look for a low P/E ratio, some seek alpha, some are candlestick chart technical wizards. There are probably as many methods and strategies to investing out there as there are investment managers. Having a different set of values and philosophies is one of the few ways financial professionals can distinguish themselves from their competition, and we’re all for that. (You can read more about out beliefs and practices, such as fee vs. commission, how to handle market volatility, and more, throughout the pages of this website, and in our Podcast.) The warning alarm should sound, however, when you hear a claim that their system or strategy somehow outsmarts the market, or consistently outperforms. Often then you are shown performance charts using selective, cherry-picked dates as evidence. ***Be very leery of performance history examples, especially with strange start-and-stop dates. Ask for a long performance history of 10 or more calendar years. And always remember, what it did in the past is in no way a promise of future returns.*** Everything can outperform for a period of time. Everything will also underperform at other times. This is because[ investing markets are both efficient and irrational ](https://nvestadvisors.com/check/wp/blog/2016/02/12/staying-sane-an-nvest-primer-in-handling-volatility/)– they move, very efficiently, on the basis of emotional reactions to world events. Until we can quantify and qualify and accurately predict human emotion, markets will not be “beatable”. ### They misrepresent or are evasive about their credentials, employer or affiliations. There is an ongoing debate in financial circles regarding the titles registered salespeople and insurance agents use when they talk to the public. Nearly every financial salesperson today uses some form of “advisor” in their title, though that was traditionally reserved for those of us with actual fee-for-advice registrations (as nVest Advisors, LLC has). While it’s obviously possible for a sales representative or stockbroker to provide good financial advice, they are not compensated to provide advice. They are compensated to sell you a financial product of some sort. Ethically, we believe your title should reflect your actual trade. If you are a broker, call yourself one. If you are an agent of your company, call yourself that. If you are an investment advisor, call yourself that. More careful scrutiny is actually given to the use of the term “planner” than the term “advisor”. Again, the title should reflect the function (and source of income). If you bill for and are paid for the plan (and not the subsequent sale), you’re a planner. Certified Financial Planners (CFPs) are able to call themselves such because they have studied for and passed a certification requirement, and maintain ongoing standards and membership. Look past the title. Find out how they are paid. ### They can’t explain their product or strategy in very short, simple terms. Seeing agents trip all over themselves while trying to explain their product or investment strategy is sometimes the result of dishonesty, but often it’s just because the rep is new to the industry or the product they are offering. Both should make you leery. Although financial instruments are often complicated, you should be able to get a fairly direct answer to a question, and a simple enough explanation of a financial product or concept that high school student can grasp the idea clearly. As Albert Einstein is quoted as saying, “If you can’t explain it simply, you don’t understand it well enough.” Be cautious about reps who can’t (or won’t) explain product details, especially fees. You are the customer; you deserve and should require a full, clear, and transparent understanding of what you are buying. If you are not, the solution is simple: don’t sign. ### They don’t ask you many questions about your financial situation before presenting you with their “solution”. Whether you are an insurance agent, registered stockbroker, or fee-based wealth manager, we are all ethically and professionally tasked with knowing enough about you to make sure our product or strategy recommendations are suitable to you. (Registered Investment Advisers like nVest Advisors, LLC are held to a stricter fiduciary standard, but knowing our customer well enough to know how best to serve your needs is a crucial bare minimum.) If the salesperson in front of you seems to have the solution before they even know your needs, something is amiss. Without knowing basic information, such as your net worth, liquidity needs, risk tolerances, time horizon, goals for the investment, and their product’s possible impact on your taxes, something totally harmless for one prospective client can be devastatingly inappropriate for another. ### They advise you to cash out other investments, or mess with your taxes, in order to afford their product. Not long ago, I had a former teacher come to me to roll over his small 403(b) account from his school district, into an IRA. As is our custom at nVest Advisors, we sat with him and spent the time to get a grasp of his current financial situation. As I looked over his final pay stub, I noticed that his federal income and FUTA tax paid for the first eight months of the year was $0.00. When I asked him why, he said the insurance agent who had sold him the original 403(b) had told him, since he was getting a refund in normal years, that he should reduce his tax withholding, and with the savings, buy a 403(b) annuity. The agent claimed the tax savings from the pre-tax contributions of the 403(b) would “offset” the client’s failure to pay any income tax. So the client, a single man in his 40’s, claimed “Married – 8” on his W-4. That horrible advice led the client to owing the IRS more than $8,000 in taxes, penalties and interest the following year. I’ve also had clients come to me very angry about products they were sold that didn’t perform as expected. They wanted out, but as we looked it over, they were going to face significant surrender charges to take their funds out right away. An advisor who encourages you to cash out other investments without seriously weighing the costs to you to do so, should make you very concerned. I hope I don’t have to belabor this point too much, but you as the client often seek us out not just for investment advice, but often for financial advice, as well. That’s fine, until you are in front of an overzealous (at best) salesperson who gives profoundly bad advice just to get the sale. Unless they run a dual business doing taxes or practicing law, I nsurance agents, registered broker representatives, and even financial planners are not tax or legal experts. Do not rely on their advice as any kind of authority. ALWAYS seek your own tax or legal professional to make sure you’re doing what’s right for your own situation. ### They won’t put it in writing. This one is a true no-brainier. “Trust me,” is not a legal disclosure. MAKE SURE any claim you are relying on to purchase a product or start an account is put in writing. ### They pressure, rush, or bully you do business with them. Imagine, if you will, instead of seeing this salesperson for a financial transaction, you are out on a blind date. If your date shows up at your door calm, confident, and in control, you would feel much more at ease about the mutual good time you will have while in their company. But what if your blind date showed up, and was instead pushy, desperate, or overbearing? Of course, you’d be turned off. The reason is probably rooted somewhere deep in our survival instincts. If someone is pushing you uncomfortably hard to do something you aren’t sure of, you have every right to beware. An agent or salesperson who pushes aggressively for the sale always raises your skepticism, and that’s for a very good reason: they’re pushing because they have their own interests at heart, and not yours. The bottom line is, you are the customer. You are in control. NEVER feel pressured, badgered, or rushed to make a decision. The investing world will be there tomorrow. Sleep on it, pray on it, discuss it first with people you trust. The right advisor for you will respect your need to be cautious, and will be patiently waiting and ready for you when the time is right. **Categories:** Annuities & Insurance, Behavioral Finance, Insurance, Investing General, Retirement **Tags:** agent, avoid, bond, financial advisor, insurance, investing, market, pro, retirement, sales, sales rep, salesperson, sketchy, sketchy salesperson, sleazy, stocks --- ### [Volatile markets this week - 11 things to remember](https://nvestadvisors.com/volatile-markets-this-week-11-things-to-remember/) **Published:** January 7, 2016 **Author:** nVest Advisors **Content:** Markets this week have been spooked due to bad economic news coming out of China, the world’s second biggest economy. Remember that markets are always cyclical, and that no one can accurately predict the tops and bottoms of each market. Remember also, that media outlets need to grab your attention. So they’ll do it with ridiculously over-hyped headlines, declaring doom and gloom, chaos and mayhem. Why? Because they know bad news is far more compelling on the human psyche than good news is. And if they can get our attention, we will “stay tuned”, while they sell advertising. [![](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/01/pexels-photo-61136-large-300x200.jpeg "Pexels photo 61136 large nvest advisors")](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/01/pexels-photo-61136-large.jpeg)In seminars and client meetings, I like to use a swimming pool analogy to describe market fluctuations. Here’s what I mean: The individual markets are like swimming pools. They fill and drain with water all the time. Your investments are the beach balls floating on the surface of that pool. At nVest Advisors, we prefer investments with solid track records, so we make sure our clients’ “beach balls” are full and solid. But just because your beach balls are firm and stable doesn’t mean that sometimes, water drains out of the pool. At nVest Advisors, we believe there are good reasons to sell an investment, but it’s almost never simply because the market as a whole is down. To extend the analogy, if your beach ball is holding air just fine, then we just need to wait for the pool to fill back up. And this week, economic reports from China have caused some sizeable waves in the water. Our beach balls are bouncing up and down with the water level. But in most cases, *there is nothing wrong with the beach balls themselves.* So for most investors, it’s time to stay the course. Let the markets settle and recover. Or even better, you may want to even add to your holdings while quality investments are priced lower. We know it’s not easy. In fact, staying calm during a significant market drop is one of the hardest tasks an investor has to do. [Here are 11 quick ideas to remember when markets get volatile](https://www.foremostadvice.com/pdfservice/ConceptPiece.dc513e76-8251-4bd4-98c6-340cf47554dd.pdf), but if that’s not enough to calm your nerves, give us a call. Whether you are a client or not, we’ll be happy to spend a few minutes with you, to help you stay focused on your goals, not today’s headlines. **Categories:** Investment Markets **Tags:** 401k, behavior, bonds, correction, downturn, finance, investing, investments, money, recession, retirement, risk, savings, scary, stocks, volatility --- ### [Happy New Year!](https://nvestadvisors.com/happy-new-year/) **Published:** January 1, 2016 **Author:** nVest Advisors **Content:** [![](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/01/hand-1105331_1280-1024x672.jpg "Hand 1105331_1280 nvest advisors")](https://nvestadvisors.com/check/wp/wp-content/uploads/2016/01/hand-1105331_1280.jpg) It’s been a whirlwind start for nVest Advisors this past year, and we’re just getting started. Thank you to our clients, friends, family and supporters, for all that you to do encourage, inspire, motivate, and push us to grow. I wish you and your family health, happiness, and success in 2016! **Categories:** Company News, From our CEO, Press Releases --- ### [Fees vs. commissions: why we chose the fee-only business model](https://nvestadvisors.com/fees-vs-commissions-why-we-chose-the-fee-only-business-model/) **Published:** October 9, 2015 **Author:** nVest Advisors **Content:** [![httpspixabaycomencompare comparison scale balance](https://nvestadvisors.com/check/wp/wp-content/uploads/2015/10/compare-643305_1280-1-300x187.png "Compare 643305_1280 nvest advisors")](https://nvestadvisors.com/check/wp/wp-content/uploads/2015/10/compare-643305_1280-1.png)When you are looking to hire a financial advisor, there are a lot of variables to consider: the advisor’s experience, investment style, management philosophy, history of complaints, and list of available services are just a few. You also need to consider how they charge for their services. Traditionally, there have been two business models in our industry. A financial advisor can either earn a commission on the products they use in a client’s account, or they can charge the client a fee for service. Occasionally the fee is a flat dollar amount per year, but more often, it’s a percentage of the balance of the client’s account. The vast majority of financial professionals still go the commission route, and for the first seven years of my career as an advisor, that was the way I did the majority of my business, as well. When we created nVest Advisors, however, we opted to become a fee-only financial advisory firm. We did so because, I firmly believe, it allows for the best situation for a majority of the clients we seek to serve. Let me explain the difference: ### The “old” way: commissions Let’s say you want to start investing for the future. You open an IRA or brokerage account, and sit down with a fresh-faced, dazzlingly-dressed financial advisor. You explain your financial situation and goals to the advisor, and they return with a plan that includes a product or series of products that are suitable investments for your needs. You give the go-ahead, and the advisor places you into those products (be they a collection of stocks, a ladder of bonds, some mutual funds, a variable annuity, or any combination of those). Under the old model, each of those transactions comes with some kind of charge to you, the client. A stock will have a commission, a bond will have a mark-up. Mutual funds typically charge a up-front sales charge, often as high as 5.75%, and still charge ongoing [12b-1 ](http://www.investopedia.com/terms/1/12b-1fees.asp)(marketing) and management fees. [Annuities](http://www.investopedia.com/terms/a/annuity.asp) carry several fees, some obvious and some a little harder to find in the contracts. These investments then impart some of that commission to your broker. The issue we have with the old commission model is two-fold: First, it doesn’t matter whether the advisor’s product selection works or not – they still got paid. Performance doesn’t affect the broker’s pay – the movement of money did. Let me give you one scenario. You buy a stock from your broker (and pay a commission). Let’s say the market is bad, and the stock tanks and stays down all year. At some point, [behavioral finance](http://www.investopedia.com/university/behavioral_finance/) tells us you will reach a point when you finally get tired of the loss and want to get out. You call your broker up to sell it, which he gladly does, charging you another commission to sell this losing stock. So you lost money all year, but the commissioned broker made money. *Twice.* The second issue is that there is little or no incentive given to a commissioned advisor to continue to serve the account, because few products provide any further financial benefit to the advisor once the sale is made. So the only way the advisor living on commission will be paid again on your account, is to move you from one investment product into another. > And therein lies the danger of commissioned financial services: the commissioned advisor is paid to MOVE money, not to GROW it. With that in mind, is it any wonder why most of the investing world, including all of the financial media, hypes “hot new investments”, or allows you to become nervous about world events a few times a year? It’s because money moves on emotion: greed and fear rule your investing decisions, whether you believe it or not. And when you get fearful (or greedy), you move money. And when you move money, commissions are generated. ### The “new” way: fee-based account management The other option, the one we have decided is in the best interests of both our firm and our clients, is to do away with commissions on transactions, and instead charge the account a fee for management and investment service. At nVest Advisors, our fee is a set percentage of the balance of the account. In our model, our clients pay a fee for service, but you get all the financial products for free. Here’s the difference between fee-based management and commissioned sales, in a nutshell: For the sake of easy math, let’s say you have a $100,000 IRA and your fee-based advisor agrees to manage that IRA for 1.5% per year. That means your advisor will earn $1,500 that year to manage your account – just over $100 per month. If after a year your account grows from $100,000 to $150,000 (from new deposits and investment performance), the next year, the advisor is paid again 1.5% of that account balance. His next year fee is $2,250. The advisor earned a pay raise because the account GREW, not because you bought a particular product. Conversely, let’s say the account started out at $100,000, but a poor market that year saw the value of the account drop to $80,000. The advisor takes a pay CUT, because the account value dropped. The advisor does not earn a big up-front commission placing you in a particular financial product. In fact, because your advisor earns his or her pay based on the account balance, the advisor is financially motivated to grow your account. This is radically different from the commissioned broker, whose motivation is to move money from one product to another. > Fee-based advising, we believe, finally puts you and your advisor on the same team: you both benefit if the account value grows. ### The ethical dilemma of commissions Another issue that always vexed me as a commissioned broker was deciding how often we could justify making changes in a client’s account, because every time we touch a commissioned account, it costs you money. If they are ethical, the commissioned advisor should place you in as few financial products or companies as possible to [maximize your breakpoints](http://www.investopedia.com/articles/mutualfund/08/breakpoints.asp), and then trade your investments only when absolutely necessary. This forces the ethical commissioned advisor to be slow to recommend changes based on world events and market movements. Although we may be looking at your account often, we won’t often make changes (if we are ethical), because doing so causes you to pay more in commissions and sales charges. By the way, I’m not at all saying there are not terrific, wholesome, and totally ethical advisors working on commission, who can do a marvelous job for their clients. There are many out there – some I am extremely proud to call friends. I *am* saying, however, that the *institution* that created commissioned financial sales does not always have the client’s best interest in mind, and they force the commissioned advisor to consider his or her income when they are looking at which products to use. One example that comes to mind happened to me while I was a newly-minted advisor at a large regional wirehouse. An 83-year old woman had $30,000 to invest in a bond ladder, which I could do for an average markup (commission) of about 1.25%. The firm suggested I look at a bond unit investment trust that paid the firm 4.5% (plus minimaly disclosed revenue sharing with the firm who created the investment product). Since I was making a whopping 38% of my gross commission, and on a production quota, I felt my first serious pang of ethical dilemma as a financial advisor, as I weighed the compensation difference. (By the way, she got the bond ladder.) With fee-based account management, that kind of conflict of interest is a thing of the past. Now we can trade your account based on a strategy, re-balance your account as often as needed, and respond quickly to world events, because you pay us for service, not for transactions. That same elderly client may pay 1.5% for management, but the advisor is free to do whatever is needed to grow the client’s account. Because we don’t need to worry about breakpoints, we don’t have to use only one or two fund families to get the job done -we can seek out the “best in class” investments, whatever and wherever they are. We can trade our client accounts regularly. We can be responsive to world events. And most importantly, because we aren’t compensated by financial companies selling expensive, fee-loaded investments, we can hunt for – and use – the lowest cost investments that will accomplish our investing strategy. ### So which way do I go? Fee-based management isn’t for everyone. If you are a “buy and hold” investor, keeping investments for many years, it is likely cheaper to pay an up-front commission than it is to pay for ongoing fee-based management. But if you are like most investors, you care less about what you own, or for how long, and just want to know that your money is being attended to by a professional. You can do it either way, but we believe most clients wanting active management of their accounts do best in fee-based management. If you’re looking for an advisor, or are new to fee-only financial services, I encourage you to give us a call. Feel free to [schedule a hassle-free, no-pressure consultation today](http://bookeo.com/nvestadvisors) to discuss your options and get your questions answered. **Categories:** Annuities & Insurance, Behavioral Finance, Company News, From our CEO, Investing General, Investment Markets **Tags:** advisor, advisory fee, annuities, bonds, commission, financial planning, investments, plan, salesperson, stocks --- ### [Why we love robo advisors, and you will too.](https://nvestadvisors.com/why-we-love-robo-advisors-and-you-will-too/) **Published:** October 1, 2015 **Author:** nVest Advisors **Content:** [![](https://nvestadvisors.com/check/wp/wp-content/uploads/2015/10/ipad-tablet-technology-touch-large.jpg "Ipad tablet technology touch large nvest advisors")](https://nvestadvisors.com/check/wp/wp-content/uploads/2015/10/ipad-tablet-technology-touch-large.jpg)In 2001, my wife and I bought a very large independent video store, which she managed while I took care of our two restaurants. It was a great business, and for people of my age, a bit of a nostalgic one, since the trip to the video store was always a treat when we were kids. Not too long after we began running our new business, my wife came in the front door of our home carrying the mail. One of the pieces of “junk” was a postcard advertising a new company called Netflix. She wondered if this new company was a competitive threat to our business, and asked me to look into them. I did my research and was unimpressed. “You have to wait for a movie to get to you in the mail? And then have to mail it back? What idiot would wait 3 days for a movie when they can drive over to our store and have it in their hands in 10 minutes?” I laughed off this new service as a fool’s errand. Most of our fellow video store owners felt the same way. We pressed on, thinking this new idea would soon fade away. You know how this story ends. [![](https://nvestadvisors.com/check/wp/wp-content/uploads/2015/10/127307313_9517d3ee59_o-300x225.jpg "127307313_9517d3ee59_o nvest advisors")](https://nvestadvisors.com/check/wp/wp-content/uploads/2015/10/127307313_9517d3ee59_o.jpg) I didn’t believe then about the impact technology could have on an entire industry, to say nothing of the speed it can move. What we thought might take ten years took less than five. And now, even Netflix’s “movie in the mail” innovation is obsolete, replaced with digital downloads and on-demand service. I was wrong. I’m human, so I’m wrong a lot. But I’m also smart enough to learn from my mistakes; to take the lessons from history, so that I’m not doomed to repeat them. When the financial service trade papers began buzzing about “robo advisors” a year or two ago, I decided to check them out. I also took note of the reaction from my colleagues and contemporaries in the industry – fellow human beings whose businesses were now being threatened by advances in technology. Their reactions are startlingly similar to the ones from video store owners in 2002, and book store owners ten years before that. “Impossible,” they all declare. “Clients need our expertise and experience and value our relationship!” While on the surface, that’s true, we believe the Robo Advisor has a real, valuable, and permanent role to play in the management of people’s money. So instead of fighting the future, like last time, this time we intend to embrace this new innovation, and more importantly, put it to work for you, our clients. At nVest Advisors, we love the robo advisor, and we think you will, too. Here’s why: - ### **The robo never sleeps.** The world markets move at lightning speed, and never rest. With so many companies and countries interconnected, having a watchful eye on the account every minute of every day is extremely beneficial. A human being, as diligent and hard-working as they come, cannot do this. Plus, the robo advisor doesn’t get sick, doesn’t take vacation, doesn’t give a two-week notice, and doesn’t have a case of “the Mondays”. It does what it is programmed to do, which is monitor your account and make adjustments based on market conditions. - ### **The robo doesn’t discriminate.** Because human beings place emotional weight on things they perceive to be more valuable than others, it should be no surprise that human advisors segment and categorize their clients into different groups. If you are an “important” client (meaning you create a lot of revenue for the advisor), you will, just because of human nature, receive better service than a smaller account or a less-demanding client. Robo advisors don’t care, because they place no emotional value on money. The machine is focused only on its instructions. That’s why [when you open your nVestMe account ](http://nvestme.com)and utilize our joint Robo/Human Advisor experience, whether you have $100 or $10,000,000, the machine is watching every account with equal veracity. This gives all of our clients at nVest Advisors something no human-only advisor can claim: totally fair and even account service. - ### **The robo can do it cheaper.** Human beings have mortgages, car payments, and kids to put through college. They value their free time, and so charge a fee they believe is fair to pull them away from other areas of their life to be of service to you. The robo advisor exists only to serve its purpose. It can do so for many more accounts, much more quickly than a human being can do it. So, because the robo can serve enormous volumes of accounts with equal precision, the cost per account can be dramatically lower. - ### **The robo never gets emotional.** I’ve said for years that the number one thing I have to do as your advisor is to keep you from making emotional mistakes with your money. [There is an entire field of study dedicated to observe and change how humans interact with their finances](https://en.wikipedia.org/wiki/Behavioral_economics), and what’s come up over years of research is this: > We’re irrational when we should be rational. As a result, we mess ourselves up. Over and over again. We humans want to believe in conspiracy theories. We’re political. We like gossip. We often rebel against obvious trends. And we often believe that the rules of life don’t really pertain to us – that somehow we can avoid unpleasantness and hard work needed to make lasting changes (like going to the gym, or saving for retirement instead of playing the Lotto). We humans believe in luck. The robo advisor eliminates those kinds of emotional mistakes when it manages our accounts on a day-to-day basis. The robo uses algorithms, not “gut instinct”. It doesn’t get depressed at the state of the world. It can’t be worked into a panic by doomsday opinions on CNBC. It doesn’t have a political axe to grind. In short, the robo does for our money what we humans are incapable of doing. All of this is good for you, because money management must be an unemotional, logical, systematic event: the robo does it exactly the way research has shown over the years to be the key to investing success. In fact, it can’t do it any other way. Of course, there are things the machine can never do for you that the human advisor can. The machine never gets to know you, look you in the eye, shake your hand, listen to your story. The machine will never be able to see your confusion about investing, or comprehend the sincerity with which you pursue your financial goals. The machine can invest for your child’s college education, but it can never understand how important your child is to you. The machine’s role in your financial life needs to be what the machine is best at: vigorous, unemotional, unrelenting, day-to-day management of your investment portfolio. That’s what we use it for here at nVest Advisors. Using the machine to handle most of our “back office” tasks allows our human advisors the time to engage you more as a client. They can hold more educational workshops in their neighborhoods, volunteer more in their community, serve on that board, spend just that little extra time with their families. All while the Robo Advisor dutifully watches the world and your investments, and takes the actions we tell it to, to take full advantage of opportunities for our clients. **Categories:** Behavioral Finance, Company News, From our CEO, Investment Markets --- ### [A new financial firm, seven years in the making.](https://nvestadvisors.com/hello-world/) **Published:** September 27, 2015 **Author:** nVest Advisors **Content:** What can you say after you’ve been in the financial services business for seven years, but you just pushed the “reset” button on the whole thing and started again? You say, “It’s about time.” From my earliest days working for a large regional firm, to my four years as an independent dually-registered financial advisor, I knew instinctively that something wasn’t quite working in the world of personal financial advice. Maybe it was the old business model : “smile and dial” doesn’t work in the days of Do Not Call lists. Maybe it was the old style of money management: “buy and hold” isn’t keeping up with global markets racing at the speed of light. Maybe it was that what we were told was the “safe” investment (high-quality bonds) turns out to be not so safe. Maybe it was the overly restrictive rules most broker/dealers have that forbid us to reach out to you in precisely the way you want to be – social media, podcasts, webinars, YouTube. Maybe I just simply realized that you can’t really build a business in this industry anymore by doing it the way it was done in 1975. Young people seem to agree with me – our industry has a very rough time recruiting young people to come do this very important and noble work. Why? Because they can’t operate the way they know they need to, to make it work. The old guard is slipping away, but they’re still doing the hiring. And so, with this revelation in mind, comes nVest Advisors. A different firm. An edgy one. One that practices its core beliefs. One built with fairness in mind. One built for average, hard-working families, not the billionaire. A firm where technology and human advisor partner up to give you the best of both worlds. One where goals matter, principles count, your faith is honored, and your trust is earned. It’s a great new day in financial services. We’re happy to be here. **Categories:** Company News --- ## Pages ### [Fiduciary Financial Advisor in Colorado Springs | nVest Advisors](https://nvestadvisors.com/) **Published:** August 4, 2025 **Author:** Atta **Content:** # # **Real Human Advisors. Independent. Fiduciary. Financial Planning & Investing Strategies That Put Your Family First.** ### Helping families and small businesses achieve transformational wealth with personalized, independent fiduciary guidance since 2008. [Book Your Free ConsultationBook Your Free Consultation](https://nvestadvisors.setmore.com/) [See Our ServicesSee Our Services](https://nvestadvisors.com/fiduciary-financial-services/) [](https://businessrate.com/report/13287982?geocatSerial=1487221300&scoreType=br)![](https://nvestadvisors.com/wp-content/uploads/2026/03/nVA-Best-Of-Award-crystal-BR559412-2026.png "Nva best of award crystal br559412 2026 nvest advisors") ### # **Real Human Advisors. Independent. Fiduciary. Financial Planning & Investing Strategies That Put Your Family First.** ##### Helping families and small businesses achieve transformational wealth with personalized, independent fiduciary guidance since 2008. [Book Your 30-Minute Strategy Appointment](https://nvestadvisors.setmore.com/) ## ### How can we help you today? [](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/)### Find a Location Near You [Read More >](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/) [](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)### Review Fees and Pricing Read More > [](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)### Explore Services Read More > [](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/)### Benefits of an nVest Advisors Financial Advisor Read More > [](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/)### If You’ve Never Worked With an Advisor Before Read More > [](https://nvestadvisors.com/worked-with-a-financial-advisor-before/)### If You’ve Worked With an Advisor Before Read More > ## ### How can we help you today? [](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/)### Find a Location Near You Read More > [](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)### Review Fees and Pricing Read More > [](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)### Explore Services Read More > [](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/)### Benefits of an nVest Advisors Financial Advisor Read More > [](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/)### If You’ve Never Worked With an Advisor Before Read More > [](https://nvestadvisors.com/worked-with-a-financial-advisor-before/)### If You’ve Worked With an Advisor Before Read More > ![Why nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/08/Fiduciary-Duty-1.png "Nvest advisors working experince nvest advisors") [Our Philosophy](https://nvestadvisors.com/our-philosophy/) [Story of nVest Advisors](https://nvestadvisors.com/our-story-nvest-advisors/) ## What Do You Need Help With? [Learn more about Family Planning →](https://nvestadvisors.com/fiduciary-fee-only-financial-planning-for-families/)## I want a better understanding of my family's finances. We help individuals and families create a clear path toward retirement, saving, debt reduction, and more. [Learn more about Family Planning →](https://nvestadvisors.com/fiduciary-fee-only-financial-planning-for-families/) [See how we support small businesses →](https://nvestadvisors.com/financial-planning-for-small-business-owners/)## I'm an employer who wants a better 401(k) solution. We help employers design and manage effective, compliant employer-sponsored retirement plans — with full fiduciary support. [See how we support small businesses →](https://nvestadvisors.com/financial-planning-for-small-business-owners/) [Explore our support for Teachers →](https://nvestadvisors.com/financial-planning-for-teachers/)## I'm a teacher — how should I plan with TRS or PERA? We understand the unique financial challenges educators face. We’ll help you use your benefits wisely. [Explore our support for Teachers →](https://nvestadvisors.com/financial-planning-for-teachers/) ### Everyone’s financial journey is different. As fiduciary financial advisors, nVest Advisors serves Colorado, Texas, Utah, Kansas, and virtual clients with fee-only planning. We specialize in retirement, taxes, and debt solutions for families, teachers, and businesses. Whether you’re planning for retirement, managing debt, building wealth, or navigating life transitions, we’re here to provide clear, personal advice tailored to your unique situation. At nVest Advisors, we don’t offer cookie-cutter plans — we help real people solve real financial challenges every day. [See Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) **Recognized by Trusted Financial Media** [](https://nvestadvisors.com/media-mentions/)[![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/MagnifyMoney_Logo-scaled.jpg "Nvest advisors media mentions nvest advisors")](https://bit.ly/2IfVkTb) [![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/Chicago_Tribune_logo.svg.png "Nvest advisors media mentions nvest advisors")](https://bit.ly/2IfVkTb) [![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2023/12/money-watch-logo.png "Nvest advisors media mentions nvest advisors")](https://bit.ly/2IfVkTb) [![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/Yahoo_Finance_logo_2021.png "Nvest advisors media mentions nvest advisors")](https://bit.ly/2IfVkTb) [![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/cnbc-logo-transparent.png "Nvest advisors media mentions nvest advisors")](https://bit.ly/2IfVkTb) [![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2023/12/msn_logo_update.jpeg "Nvest advisors media mentions nvest advisors")](https://bit.ly/2IfVkTb) [![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/thestreet-vector-logo.png "Nvest advisors media mentions nvest advisors")](https://bit.ly/2IfVkTb) [![](https://nvestadvisors.com/wp-content/uploads/2022/08/ibd.jpg "Ibd nvest advisors")](https://bit.ly/2IfVkTb) *[Click here to view all our past and recent media mentions and interviews.](https://nvestadvisors.com/media-mentions/)* ### Recognized by Trusted Financial Media [![As seen in media from CNBC MSN The Street Investors Business Daily Yahoo Finance CBS Money Watch](https://nvestadvisors.com/wp-content/uploads/2024/02/as-seen-in.png "As seen in nvest advisors")](https://nvestadvisors.com/media-mentions/) *[Click here to view all our past and recent media mentions and interviews.](https://nvestadvisors.com/media-mentions/)* ## TESTIMONIALS Hear What Our Clients Have To Say… > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviewsView all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ## ## How Does It Work We make financial planning simple and personal. From our first conversation to long-term guidance, see how our process helps you move forward with clarity and confidence. ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") [Learn more about our process →](https://nvestadvisors.com/financial-planning-process-steps/) ## Tools to Help You Make Smarter Decisions [Download our guide: How to Offer a High-Impact Employee Plan Without the Headache](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [nVest Select: High-Growth Stock Portfolio for Bold Investors (White Paper)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Doing Well by Doing Good: The nVest Advisors Story (White Paper)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Watch: What Every Employer Should Know About Fiduciary Responsibility](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Watch: How to Choose the Right Financial Advisor for Your Family](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Get our eBook: 7 Retirement Mistakes to Avoid](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Watch our free webinar: “How Teachers Can Build Long-Term Financial Security — Even in Uncertain Times](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## Latest News And Financial Events Grasp a greater financial understanding with our blog and [upcoming seminars here.](https://nvestadvisors.com/financial-education-events/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/10/Q4-2026-Letter-to-Clients-Blog.png "Q4 2026 letter to clients blog nvest advisors") ](https://nvestadvisors.com/q4-2026-letter-to-clients/) - [ ![Blog Post How do I know if I need a financial advisor](https://nvestadvisors.com/wp-content/uploads/2026/09/Copy-of-Mailchimp-Graphics.png "How do i know if i need a financial advisor nvest advisors") ](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/06/APPROVED-BLOG-POST-GRAPHICS-4.png "Approved blog post graphics 4 nvest advisors") ](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) 1[2](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250)[Next](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250) ## Latest News And Financial Events Grasp a greater financial understanding with our blog and [upcoming seminars here.](https://nvestadvisors.com/education-financial-events/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/10/Q4-2026-Letter-to-Clients-Blog.png "Q4 2026 letter to clients blog nvest advisors") ](https://nvestadvisors.com/q4-2026-letter-to-clients/) - [ ![Blog Post How do I know if I need a financial advisor](https://nvestadvisors.com/wp-content/uploads/2026/09/Copy-of-Mailchimp-Graphics.png "How do i know if i need a financial advisor nvest advisors") ](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/06/APPROVED-BLOG-POST-GRAPHICS-4.png "Approved blog post graphics 4 nvest advisors") ](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) 1[2](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250)[Next](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250) Load More Posts --- ### [General Disclosures & Privacy Policy](https://nvestadvisors.com/general-disclosures/) **Published:** July 30, 2022 **Author:** nVest Advisors **Content:** [![Brochure cover for nVest Advisors Form ADV Part A B dated August with a sunburst over stylized mountains and circular ring artwork](https://nvestadvisors.com/wp-content/uploads/2026/08/1-1.jpg "1 1 nvest advisors")](https://drive.google.com/file/d/1jrW1LWCdd5kwkWDBxhz-uyX9h6CelDFn/view?usp=drive_link) ### nVest Advisors, LLC **[FORM ADV Part 2A & Part 2B](https://drive.google.com/file/d/1jrW1LWCdd5kwkWDBxhz-uyX9h6CelDFn/view?usp=drive_link)** [![Cover of a Form CRS brochure with date August featuring circular geometric graphics and the nVest Advisors logo and address text](https://nvestadvisors.com/wp-content/uploads/2026/08/3-1.jpg "3 1 nvest advisors")](https://drive.google.com/file/d/1UijPa8qLH6EVdi-_O_CD-Z7eXe5gu8Le/view?usp=drive_link) nVest Advisors, LLC [**FORM CRS**](https://drive.google.com/file/d/1UijPa8qLH6EVdi-_O_CD-Z7eXe5gu8Le/view?usp=drive_link) [![Cover of a Privacy Policy brochure dated August featuring circular beige and teal shapes and a mountain graphic with the nVest Advisors logo nearby](https://nvestadvisors.com/wp-content/uploads/2026/08/2-1.jpg "2 1 nvest advisors")](https://drive.google.com/file/d/19Tz4yyeH2K_gM9divqtScMhcU9-Ft6k_/view?usp=drive_link) ### nVest Advisors, LLC **[Privacy Policy](https://drive.google.com/file/d/19Tz4yyeH2K_gM9divqtScMhcU9-Ft6k_/view?usp=drive_link)** ## 1. About Our Registration nVest Advisors, LLC is a state-registered investment adviser in **Texas, Colorado, Utah, and Kansas.** We serve clients in other states under **de minimis exemptions**. *Registration does not imply skill, training, or endorsement by any regulator.* It is only an acknowledgment that we are lawfully able to market to, and serve the needs of, the residents of those states under the oversight of the securities regulators in those states (and the SEC). ## 2. No Investment Advice **This website and our social media are for informational purposes only. Nothing here is:** - Personalized investment, tax, accounting, or legal advice - A recommendation to buy, sell, or hold any security - An endorsement of any company, fund, or strategy ***Do not make investment decisions based on this content – [seek the personalized advice from one of our advisors](https://nvestadvisors.setmore.com/services/dfaeb995-b65f-4e46-a8e6-dd2f30a43239).*** ## 3. No Solicitation Our online presence **does not solicit clients** in states where we are not registered or exempt. **Personalized advice requires a signed client agreement** and full compliance with state/federal rules. ## 4. Use at Your Own Risk **All content is provided “as is” with no warranties.** We aim for accuracy but **do not guarantee** completeness, timeliness, or error-free information. **We are not liable** for any loss or damage from using this site or social media — even if we’ve been warned of possible harm. ## 5. AI-Generated Content Nearly all of our content is created by our team. However, **s****ome research summaries, commentary, or visuals may use AI tools.** All AI content is **reviewed by IARs and management** for accuracy, objectivity, and regulatory compliance. **Still, AI can produce errors, omissions, or biases.** Whether human or AI-created, the content on this website is **general information only** — not specific advice. You should never make financial decisions based solely on the content of this or any other website. ## 6. Forward-Looking Statements Some posts include **forward-looking statements** (phrases like, “we expect,” “may,” “could”). **These are not guarantees.** Actual results may differ due to: - Market changes - Economic conditions - Investment risks **Please look for the most recent post about the subject you’re reading**, and verify the information provided with independent sources. Our blog is a running commentary from our firm – we do not routinely update past posts. ## 7. Third-Party Content We may **like, share, or link** to third-party posts or sites — for information only. **We do not endorse** and are **not responsible** for: - Accuracy of third-party content - Any products or recommendations ## 8. Internet & Security Risks **Email and online messages are not secure. Never assume they are.** You send them **at your own risk** — we can’t guarantee privacy or delivery. We use reasonable security but **do not promise** protection from: - Viruses, malware, or spyware - Hacking or unauthorized access ## 9. Copyright & Trademarks All content (text, images, logos, articles) is **copyrighted by nVest Advisors, LLC** or its licensors. **Trademarks belong to their owners. No use is allowed without written permission.** ## 10. Past Performance **Past performance is never a guarantee of future results.** Performance fluctuates, and performance data may be revised. ***Past performance should never be your only decision factor in any investment decision.*** ## 11. Cookies & Analytics We use **cookies and analytics tools** to: - Improve your experience - Track site usage - Support marketing **You can disable cookies in your browser.** We **do not sell or share** this data — it’s for internal use only. ## 12. Privacy Policy We collect anonymized visitor data (pages viewed, time spent) via third-party tools. This helps us improve and market our services.**We do not sell your data.** **When you communicate with us via electronic services such as chat and text messages:** - You are consenting to receive messages from us. - Your personal info will not be shared with third parties for marketing purposes. - Our message frequency may vary or recurring messages may occur. - You may reply STOP to opt-out of future messaging. - You may reply HELP for more information. - message and data rates may apply ### **By using this website or engaging with us via electronic messaging or through our social media channels, you agree to these terms. For personalized advice, you must become a client.** --- ### [Worked With a Financial Advisor Before?](https://nvestadvisors.com/worked-with-a-financial-advisor-before/) **Published:** August 8, 2025 **Author:** Atta **Content:** # If You’ve Worked With an Advisor Before Your guide to what to expect, how we work, and answers to your most common questions. About half of our clients come to us after working with a previous advisor or company, and often you have questions about how we’ll be different than the advisor you’re moving on from. Here, we try to answer the most common questions we get from clients with previous experience with an advisor relationship: ## We’re pretty high-tech Although we can always meet in person if needed (or preferred), most of our clients choose a virtual experience for the majority of our relationship. This eliminates your having to drive to our office, find parking, and all of those hassles that turn a 45-minute meeting into a whole afternoon of commuting. We have been mostly a virtual office since 2017, long before the Covid-19 pandemic made it a standard way to do business. And our other tools, like scheduling meetings, sending us documents, and gathering your personal information, are easily handled from your smart phone. ## ## We can customize investments or use a model – your choice Most clients coming from other fee-based advisory programs are used to being placed in an investment model based on their risk tolerance and other financial concerns. Here, we also use proprietary models, but we have the ability to customize your investment approach if necessary. ## ## Most of our clients grant us discretion Unlike commission-earning advisors who cannot control your accounts (because they’re paid if they buy and sell for you), we are fee-only and full legal fiduciaries. That means, we can take discretionary trading control over your investments for day-to-day business without having to bother you for permission every time. You’ll be informed of any changes to our strategy, of course, but you don’t have to be pestered about each decision before we take action. ## We send proactive communications that you can see when you have time We know you’re busy. In fact, working with our preferred clients, who are still active working and raising families, we know that getting you in for regular meetings can be challenging. If anything is urgent, or we have questions, we’ll of course call or text you. But most of our communications tend to be “FYI” type of information; not urgent enough to interrupt your day. That’s why we created a unique approach to most of our communications. Instead of booking phone calls or scheduling meetings, we will send you a regular, recorded video message (like a one-sided Zoom call) to go over the important things in your plan or investments, that you can watch when it’s convenient. Then, you can reply with questions or comments, or book a follow-up meeting if you need one. Our clients LOVE this approach as a time saver and for its convenience. We hope you like it, too! ## We have a standard set of custodians to work with Unfortunately, we do not manage investments accounts anywhere a client may open them. Our client custodians are currently BETTERMENT and CHARLES SCHWAB for most clients. We also have five other custodians for 401(k)s and other retirement plans. We negotiate the services and fees to the best of our ability at these custodians, and will always recommend the one that best fits your needs. ## Our focus is more about the economy than the markets Of course, we watch the markets regularly, but we don’t structure our investment models or strategies around what wild unpredictability the markets will offer on a given day. We don’t “trade” client assets. Instead, we set the course for your money based on proven investing principles, and make changes to our strategies based on broad changes in the economy. It’s called “top-down” investing, but we like to say that we let the world tell us where we should be invested, not the wild, often chaotic casino of the markets. [ Our Investing Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [ Our Investing Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [ Meet Our Team](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/) [ Meet Our Team](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/) [Book your free Q&A session today.](https://nvestadvisors.setmore.com/) [Book your free Q&A session today.](https://nvestadvisors.setmore.com/) ## Commonly asked Questions for New Advisory Clients Are your fees negotiable?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:41:10-06:00#### [Are your fees negotiable?](#collapse-1-9598) Generally, and as a matter of fairness to the entire body of our clients, no. But if you have a special circumstance that you feel warrants that discussion, feel free to bring it up to your financial advisor. We are, however, flexible in that we’ve designed our services to give you some degree of control over your fees by having multiple custodian options, tiered fees for larger household balances, and a slate of financial planning services based on the complexity of your situation. What services do you offer?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:40:07-06:00#### [What services do you offer?](#collapse-1-9595) For individuals and family clients, we generally offer fiduciary investment management services (LINK TO PAGE), and financial planning services (LINK TO PAGE), The scope of those services can vary based on your needs. It’s important to note that although you can request financial planning services on their own, clients who have managed investment accounts with us always have financial planning services included for free. Are you a fiduciary?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:39:12-06:00#### [Are you a fiduciary?](#collapse-1-9592) Yes, for every client, from your first day on board and your first dollar invested. Where can I see your fees and pricing?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:37:55-06:00#### [Where can I see your fees and pricing?](#collapse-1-9589) Our regulatory disclosure brochures, which are given to you by law at the start of our relationship, covers these in detail. However, you can also learn more by clicking here (LINK). ## Subscribe \* indicates required Email Address \* **INTEREST** - PROSPECTS TEST --- ### [Financial Planning for Teachers | nVest Advisors](https://nvestadvisors.com/financial-planning-for-teachers/) **Published:** August 5, 2025 **Author:** Atta **Content:** # Helping Teachers Build Financial Freedom Since 2008 You’ve spent your career investing in others. It’s time someone invested in you — with honest guidance, clear answers, and a path forward that puts you first. You care deeply about your students, your school, and your family — but when it comes to your finances, you’re left wondering: Will my pension and 403(b) really be enough? Am I saving the right way — or just guessing? What happens if I change schools or retire early? Who can I trust with these decisions? You’re not alone. Thousands of teachers across the country feel underprepared, under-informed, and overwhelmed by the complexity of retirement planning. You deserve more than a cookie-cutter plan. You deserve a clear path forward. [Find a Conveneint Time To Speak With UsFind a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) [![nVest Advisors Teachers Financial Services](https://nvestadvisors.com/wp-content/uploads/2025/07/Atta-2.jpg "Teachers financial services nvest advisors")](https://nvestadvisors.com/meet-the-nvest-advisors-team/) ## Does Any of This Sound Like You? ✅ “I’m not sure how my pension works with my 403(b).” ✅ “I’ve changed schools and lost track of my retirement accounts.” ✅ “I want to retire, but I don’t know if I’m ready.” ✅ “I’ve been contributing, but I’m not confident it’s enough.” ✅ “I don’t want to be sold anything — I just want honest advice.” These aren’t silly questions. These are real stressors, and they deserve clear, compassionate answers. [Learn How We Help Teachers Like You](https://nvestadvisors.setmore.com/) [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [![nVest Advisors Teachers Financial Services](https://nvestadvisors.com/wp-content/uploads/2025/07/Atta-2.jpg "Teachers financial services nvest advisors")](https://nvestadvisors.com/meet-the-nvest-advisors-team/) ## Does Any of This Sound Like You? ✅ “I’m not sure how my pension works with my 403(b).” ✅ “I’ve changed schools and lost track of my retirement accounts.” ✅ “I want to retire, but I don’t know if I’m ready.” ✅ “I’ve been contributing, but I’m not confident it’s enough.” ✅ “I don’t want to be sold anything — I just want honest advice.” These aren’t silly questions. These are real stressors, and they deserve clear, compassionate answers. [Learn How We Help Teachers Like You](https://nvestadvisors.setmore.com/) [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## Financial Stress Isn’t Just About Money — It’s About Life Financial stress doesn’t stay in your bank account — it follows you home, into your classroom, and into your future. When you don’t have answers, you’re stuck with questions like: What if I wait too long to get help? How do I make the right choices for my family? Is it too late to fix this? At nVest Advisors, we help teachers move from financial fog to financial freedom — with patience, clarity, and no judgment. [What a Financial Plan Solves for You (White Paper)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Retirement Roadmap (White Paper)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## ### How can we help you today? [](https://nvestadvisors.com/403b-457-and-401a-plans/)[### 403(b), 457, & 401(a) Guidance](https://nvestadvisors.setmore.com/) Expert advice to optimize your employer plans with strategic contributions and tax-smart moves. [Learn More](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.com/teacher-retirement-system-of-texas-trs-pension-strategy/)[### Pension (TRS) Strategy](https://nvestadvisors.setmore.com/) Tailored guidance to help you maximize your TRS benefits and retire on your terms. [Learn More](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.setmore.com/)[### Second Opinion Review](https://nvestadvisors.setmore.com/) An objective, conflict-free review of your current plan to ensure it’s aligned with your goals. [Let's Address Them Together ](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.setmore.com/)[### Early Retirement Planning](https://nvestadvisors.setmore.com/) Strategic planning to accelerate your timeline and achieve financial freedom—sooner. [Book Your Consultation Now](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.com/investment-management-at-nvest-advisors/)[### Investment Management](https://nvestadvisors.setmore.com/) Fiduciary-driven portfolios built with discipline, growth, and educator-focused customization. [Learn More](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.setmore.com/)[### Lifetime Income Planning](https://nvestadvisors.setmore.com/) Smart withdrawal strategies designed to make your income last—confidently and sustainably. [Learn More](https://nvestadvisors.setmore.com/) ✅ **Always Fee-Only. Always in Your Corner.** We’re fiduciaries. That means no commissions, no products, and no conflicts. Just thoughtful, personalized advice built for your life. [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [See Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) ## ### How can we help you today? [### 403(b), 457, & 401(a) Guidance](e4r) Expert advice to optimize your employer plans with strategic contributions and tax-smart moves. [Read More](e4r) [### Pension (TRS) Strategy](e4r) Tailored guidance to help you maximize your TRS benefits and retire on your terms. [Read More](e4r) [### Second Opinion Review](https://nvestadvisors.setmore.com/) An objective, conflict-free review of your current plan to ensure it’s aligned with your goals. [Let's Address Them Together ](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.setmore.com/)[### Early Retirement Planning](https://nvestadvisors.setmore.com/) Strategic planning to accelerate your timeline and achieve financial freedom—sooner. [Book Your Consultation Now](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.com/investment-management-at-nvest-advisors/)[### Investment Management](e4r) Fiduciary-driven portfolios built with discipline, growth, and educator-focused customization. [Read More](e4r) [](https://nvestadvisors.setmore.com/)[### Lifetime Income Planning](https://nvestadvisors.setmore.com/) Smart withdrawal strategies designed to make your income last—confidently and sustainably. [Learn More](https://nvestadvisors.setmore.com/) ✅ **Always Fee-Only. Always in Your Corner.** We’re fiduciaries. That means no commissions, no products, and no conflicts. Just thoughtful, personalized advice built for your life. [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [See Our Fees and Terms](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/) ## 5 Things Educators Need to Prepare for Ahead of Retirement Planning can make all the difference—understand the crucial steps to secure your financial future as an educator. [CLICK HERE TO WATCH OUR WEBINAR](https://www.loom.com/share/da8cb3c4ed114ea3a325ec40f7cb2053) [](#) ## ## No Lectures. No Judgment. Just a Clear Path Forward. ### Here’s what you’ll never get with us: - No pressure to buy products - No confusing jargon - No one-size-fits-all templates ### Here’s what you’ll always get: - Judgment-free space to talk honestly - A plan that starts with your values, goals, and reality - Support from real advisors who care [Learn more about our process →](https://nvestadvisors.com/financial-planning-process-steps/) ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") ## ## No Lectures. No Judgment. Just a Clear Path Forward. ### Here’s what you’ll never get with us: - No pressure to buy products - No confusing jargon - No one-size-fits-all templates ### Here’s what you’ll always get: - Judgment-free space to talk honestly - A plan that starts with your values, goals, and reality - Support from real advisors who care [Learn more about our process →](https://nvestadvisors.com/financial-planning-process-steps/) ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") ## What Makes nVest Advisors Your Ideal Partner For Financial Success and Growth ![Why nVest Advisors your Ideal Partner](https://nvestadvisors.com/wp-content/uploads/2025/05/Excellence-and-Integrity-for-Everyone.png "Nvest advisors partnership principles nvest advisors") [Why Choose nVest Advisors](https://nvestadvisors.com/how-we-are-different/) [](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/)## Tools to Help You Make Smarter Decisions Watch: How to Choose the Right Financial Advisor for Your Future Read it: 7 Retirement Mistakes Teachers Should Avoid Watch our free webinar: How Teachers Can Build Long-Term Financial Security — Even in Uncertain Times Watch: What to Expect When Working with a Financial Advisor Retirement Roadmap — A downloadable guide to planning, transitioning, and enjoying retirement ## Frequently Asked Questions - [All](#) - [Financial Education](#) - [Financial Planning](#) - [Investment](#) - [Onboarding](#) What can I expect from my free consultation?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2024-04-18T15:31:59-06:00#### [What can I expect from my free consultation?](#collapse-2-533) You will meet with Jeremy (or a registered advisor on our team) for 30 minutes. This will be an introductory call, where we can discuss whatever you feel comfortable sharing. Typically, we spend the time just assessing if we’d be a good fit for your needs. This will be a high-level discussion and will not go into specifics but will give you a rough idea on the next steps and action items to meet your goals. If we decide to move forward together, we’ll start to gather the information we need to be able to make specific recommendations. What can I expect from your financial planning services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-31T01:40:53-06:00#### [What can I expect from your financial planning services?](#collapse-2-528) We discuss your financial goals, your current lifestyle and expenditure, your current accounts, and more. Then, we will devise a tailored, action-based plan, which will include details on spending and saving goals, what types of accounts to open, and much more. What can we expect from your financial education offerings?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:34:43-06:00#### [What can we expect from your financial education offerings?](#collapse-2-522) Over the next few months, we will be releasing courses, webinars, and trainings offering financial guidance, investment knowledge, and actionable and specific recommendations. All of these will be virtual and accessible to everyone in the United States. Are there any income or minimum portfolio requirements for your services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:17:04-06:00#### [Are there any income or minimum portfolio requirements for your services?](#collapse-2-524) No, our investment advisory services do not have any income or minimum portfolio requirements. For our premium investment advisory services, we have a $100K portfolio minimum. I’m worried about an upcoming recession. What can I do to secure my portfolio?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:12:36-06:00#### [I’m worried about an upcoming recession. What can I do to secure my portfolio?](#collapse-2-530) Our investment methodology takes into account macroeconomic trends and adjusts portfolios accordingly. What you can do depends on your portfolio makeup, your risk appetite, and other factors. For those with managed portfolios, we recommend scheduling a call with your investment advisors to understand the specific impact to your investments. For DIY investors, we recommend understanding how sectors you are bought into will be impacted by upcoming economic trends and adjusting accordingly. For specific tips, you can check out [our blog here](https://nvestadvisors.com/blog/) or Jeremy’s personal blog at [Think Like a Rich Guy](https://thinklikearichguy.com). ## Your Path to Financial Clarity Let’s Build a Plan That Aligns with Your Goals and Gives You Confidence. ## Let's Build Your Plan Together \* indicates required Email Address \* First Name \* **Which best describes you?** - Business Owner - Educator - Individual, and Family Representative - Others **Which service(s) are you most interested in?** - Investment Management - Financial Planning - Risk Management - Estate Planning - Tax Strategies - Other --- ### [Financial Planning for Small Business Owners – nVest Advisors](https://nvestadvisors.com/financial-planning-for-small-business-owners/) **Published:** August 5, 2025 **Author:** Atta **Content:** # Fiduciary Retirement Plan Advisors for Visionary Business Owners Helping business owners create simple, smart, and ethical retirement plans — with full fiduciary care since 2008. Between leading a team, managing payroll, navigating growth, staying compliant, handling benefits, and planning your own retirement — it’s no wonder you feel stretched thin. You’re not behind. You’re just doing it all without a strategic partner. nVest Advisors brings calm, clarity, and expert fiduciary support to business owners who care deeply but carry a lot. [Find a Conveneint Time To Speak With UsFind a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) [![nVest Advisors Small Business Owners Financial Services](https://nvestadvisors.com/wp-content/uploads/2025/07/Atta.jpg "Small business services nvest advisors")](https://nvestadvisors.com/meet-the-nvest-advisors-team/) ## Does Any of This Sound Like You? - “I’m responsible for my team’s financial future—but I don’t feel equipped to make the right decisions.” - “I’m tired of generic advice, hidden fees, and advisors who don’t know my business—or care.” - “I want to offer real benefits to my employees, but the jargon and legal complexity are overwhelming.” - “Our current retirement plan is outdated, overpriced, or just plain neglected.” - “I need a partner—not a pitch.” These aren’t silly questions. These are real stressors, and they deserve clear, compassionate answers. [Learn How We Help Business Owners Like You](https://nvestadvisors.setmore.com/) [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## Financial Stress Isn’t Just About Money — It’s About Life Money touches everything: morale, retention, growth, succession. When your retirement plan is vague or misaligned, it creates stress—for you, your team, and your culture. **What if you had clarity instead of confusion?** What if your team felt confident in their future? What if your plan wasn’t just a checkbox—but a true benefit? That’s what we deliver. Not just retirement plans. But long-term financial confidence—for everyone involved. [How to Offer a High-Impact Employee Plan Without the Headache](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [The Story of nVest Advisors](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## ### How can we help you today? [### 401(k) Plans](https://nvestadvisors.setmore.com/) We design and manage custom, fully-compliant 401(k) plans that take the guesswork off your shoulders and deliver real value to your team. Whether Safe Harbor or traditional, every plan is crafted to fit your goals—not a financial product quota. [Learn More](https://nvestadvisors.setmore.com/) [### SIMPLE / SEP IRAs](https://nvestadvisors.setmore.com/) For leaner or growing teams, we implement plans that are light on administration but rich in benefits—so you can attract and retain without unnecessary complexity. [Learn More](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.setmore.com/)[### Fee & Fiduciary Audits](https://nvestadvisors.setmore.com/) We go behind the curtain of your current plan to uncover hidden fees, potential compliance issues, and whether your plan truly serves your people—or just your provider. [Let's Address Them Together ](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.setmore.com/)[### Custom Plan Design](https://nvestadvisors.setmore.com/) Strategic planning to accelerate your timeline and achieve financial freedom—sooner. [Learn More](https://nvestadvisors.setmore.com/) [### Employee Onboarding & Education](https://nvestadvisors.setmore.com/) Retirement plans are only as good as the understanding behind them. We provide clear, ongoing education to ensure your people feel confident—not confused. [Learn More](https://nvestadvisors.setmore.com/) [### Ongoing Compliance & Plan Management](https://nvestadvisors.setmore.com/) We monitor regulations, filings, and fiduciary responsibilities so you never fall behind or feel uncertain again. [Book Your Consultation Now](https://nvestadvisors.setmore.com/) ✅ **Always Fee-Only. Always in Your Corner.** No product pushing. No commissions. No conflicts of interest. Just strategy and service that genuinely serve your people and protect your legacy. [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [See Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) ## ### How can we help you today? [### 401(k) Plans](https://nvestadvisors.setmore.com/) We design and manage custom, fully-compliant 401(k) plans that take the guesswork off your shoulders and deliver real value to your team. Whether Safe Harbor or traditional, every plan is crafted to fit your goals—not a financial product quota. [Learn More](https://nvestadvisors.setmore.com/) [### SIMPLE / SEP IRAs](https://nvestadvisors.setmore.com/) For leaner or growing teams, we implement plans that are light on administration but rich in benefits—so you can attract and retain without unnecessary complexity. [Learn More](https://nvestadvisors.setmore.com/) [### Fee & Fiduciary Audits](https://nvestadvisors.setmore.com/) We go behind the curtain of your current plan to uncover hidden fees, potential compliance issues, and whether your plan truly serves your people—or just your provider. [Learn More](https://nvestadvisors.setmore.com/) [### Custom Plan Design](https://nvestadvisors.setmore.com/) Strategic planning to accelerate your timeline and achieve financial freedom—sooner. [Learn More](https://nvestadvisors.setmore.com/) [### Employee Onboarding & Education](https://nvestadvisors.setmore.com/) Retirement plans are only as good as the understanding behind them. We provide clear, ongoing education to ensure your people feel confident—not confused. [Learn More](https://nvestadvisors.setmore.com/) [### Ongoing Compliance & Plan Management](https://nvestadvisors.setmore.com/) We monitor regulations, filings, and fiduciary responsibilities so you never fall behind or feel uncertain again. [Learn More](https://nvestadvisors.setmore.com/) ✅ **Always Fee-Only. Always in Your Corner.** No product pushing. No commissions. No conflicts of interest. Just strategy and service that genuinely serve your people and protect your legacy. [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [See Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) ### TESTIMONIALS See what our clients have to say… > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ## ## No Lectures. No Judgment. Just a Clear Path Forward. ### Here’s what you’ll never get with us: - No pressure to buy products - No confusing jargon - No one-size-fits-all templates ### Here’s what you’ll always get: - Judgment-free space to talk honestly - A plan that starts with your values, goals, and reality - Support from real advisors who care [Learn more about our process →](https://nvestadvisors.com/financial-planning-process-steps/) ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") ## ## Why Growing Businesses Choose Us to Lead Their Retirement Strategy ![Why nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/08/Fiduciary-Duty-1.png "Nvest advisors working experince nvest advisors") [How Our Philosophy Protects you](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) ## Transparent Pricing. No Surprises. You deserve to know what you’re paying — and why. Whether you need a one-time financial plan or long-term investment management, our pricing is simple, fair, and built to support your success. [](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/)## Tools to Help Small Business Owners Make Smarter Financial Decisions Download Our Guide**:** How to Offer a High-Impact Employee Plan Without the Headache Watch: What Every Small Business Owner Should Know About Fiduciary Responsibility Watch: How to Choose the Right Financial Advisor for Your Business Read it: 7 Costly Retirement Mistakes Small Business Owners Should Avoid Watch our free webinar: What to Expect When Working with a Financial Advisor Watch: What to Expect When Working with a Financial Advisor Retirement Roadmap — A downloadable guide to planning, transitioning, and enjoying retirement. ### Our Promise to You We don’t just manage your portfolio—we partner with you. Regular reviews ensure your investments reflect both market conditions and your personal goals. And through ongoing education, we empower you to make informed decisions about your financial future. ### “At nVest Advisors, we turn complexity into clarity, challenges into opportunities, and dreams into achievements. With wisdom, care, and trust, we’re here to guide your financial journey.” ###### Jeremy Torgerson Founder and CEO of nVest Advisors ## Frequently Asked Questions - [All](#) - [Financial Education](#) - [Financial Planning](#) - [Investment](#) - [Onboarding](#) What can I expect from my free consultation?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2024-04-18T15:31:59-06:00#### [What can I expect from my free consultation?](#collapse-3-533) You will meet with Jeremy (or a registered advisor on our team) for 30 minutes. This will be an introductory call, where we can discuss whatever you feel comfortable sharing. Typically, we spend the time just assessing if we’d be a good fit for your needs. This will be a high-level discussion and will not go into specifics but will give you a rough idea on the next steps and action items to meet your goals. If we decide to move forward together, we’ll start to gather the information we need to be able to make specific recommendations. What can I expect from your financial planning services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-31T01:40:53-06:00#### [What can I expect from your financial planning services?](#collapse-3-528) We discuss your financial goals, your current lifestyle and expenditure, your current accounts, and more. Then, we will devise a tailored, action-based plan, which will include details on spending and saving goals, what types of accounts to open, and much more. What can we expect from your financial education offerings?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:34:43-06:00#### [What can we expect from your financial education offerings?](#collapse-3-522) Over the next few months, we will be releasing courses, webinars, and trainings offering financial guidance, investment knowledge, and actionable and specific recommendations. All of these will be virtual and accessible to everyone in the United States. Are there any income or minimum portfolio requirements for your services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:17:04-06:00#### [Are there any income or minimum portfolio requirements for your services?](#collapse-3-524) No, our investment advisory services do not have any income or minimum portfolio requirements. For our premium investment advisory services, we have a $100K portfolio minimum. I’m worried about an upcoming recession. What can I do to secure my portfolio?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:12:36-06:00#### [I’m worried about an upcoming recession. What can I do to secure my portfolio?](#collapse-3-530) Our investment methodology takes into account macroeconomic trends and adjusts portfolios accordingly. What you can do depends on your portfolio makeup, your risk appetite, and other factors. For those with managed portfolios, we recommend scheduling a call with your investment advisors to understand the specific impact to your investments. For DIY investors, we recommend understanding how sectors you are bought into will be impacted by upcoming economic trends and adjusting accordingly. For specific tips, you can check out [our blog here](https://nvestadvisors.com/blog/) or Jeremy’s personal blog at [Think Like a Rich Guy](https://thinklikearichguy.com). ## Your Path to Financial Clarity Let’s Build a Plan That Aligns with Your Goals and Gives You Confidence. ## Let's Build Your Plan Together \* indicates required Email Address \* First Name \* **Which best describes you?** - Business Owner - Educator - Individual, and Family Representative - Others **Which service(s) are you most interested in?** - Investment Management - Financial Planning - Risk Management - Estate Planning - Tax Strategies - Other --- ### [Our Story | nVest Advisors](https://nvestadvisors.com/our-story-nvest-advisors/) **Published:** August 5, 2025 **Author:** Atta **Content:** Our Story \| nVest Advisors[Atta](https://nvestadvisors.com/author/nvaatta/)2026-09-25T11:23:06-06:00![nVest Advisors office](https://nvestadvisors.com/wp-content/uploads/2025/07/1000220764.jpeg "Nvest advisors office inside view nvest advisors") # Our Story We protect your future from the emotions of today — because the real client we serve is the you you’ll become. [Meet the Team That Powers nVest Advisors](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/) ### Born from a genuine commitment to creating financial freedom for regular people Our firm started during the Great Financial Crisis of 2008. After watching many small businesses and families struggle while big banks and financial firms get bailed out after making terrible decisions that hurt the average American, we knew that we needed to build a firm that stood with Middle America instead of worked against it. So, we begain as a rebellion of sorts toward an industry that we felt was filled with flashy sales gimmicks, conflicts of interest, hidden fees and profit motives, moral hazard for which they seemed to always get rewarded for, and a general lack of regard for the American family. More than that, we saw that so-called “ordinary” people often got much lower quality of skill and service than was offered to wealthier clients, by the same company, and often, by the same advisor. That needed to change. We decided to change that; to bring about real, meaningful change that would impact the lives of everyday people. Today, nVest Advisors works hard to serve everyday Americans with the same care and quality of service normally only offered to High Net Worth clients. We do this by using technology to provide quality financial planning and investment management services in affordable, transparent, and personal relationships, whether you want to work with us in person, or over the internet. ### Born from a Rebellion, Built for Change Our firm started during the Great Financial Crisis of 2008, in part, as a rebellion of sorts toward an industry that we felt was filled with flashy sales gimmicks, conflicts of interests, hidden fees and profit motives, and a general lack of regard for the overall financial success of you, the client. More than that, what we saw was that so-called “ordinary” people often got much lower quality of skill and service than was offered to wealthier clients, by the same company, and often, by the same advisor. That needed to change. We decided to work from inside the industry to bring about real, meaningful change that would impact the lives of everyday people. We exist today to serve everyday Americans with the same care and quality of service normally only offered to High Net Worth clients. We do this by providing quality financial planning and investment management services in affordable, transparent, and personal relationships. Whether you want an in-person or virtual advisor relationship. ## Almost 20 Years of Purpose-Driven History nVest Advisors was founded by Jeremy Torgerson with a passion for helping families and businesses navigate the complexities of financial planning. Inspired by his own experiences as a small business owner during the Great Financial Crisis of 2008, Jeremy transitioned into financial advising to make a difference for families like his. ## 18 Years of Purpose-Driven History nVest Advisors was founded by Jeremy Torgerson, a Denver native with a passion for helping families and businesses navigate the complexities of financial planning. Inspired by his own experiences as a small business owner during the Great Financial Crisis of 2008, Jeremy transitioned into financial advising to make a difference for families like his. ### May 2008. Jeremy began financial advising with a large regional firm in Los Fresnos, Texas. [fusion_builder_container type=”flex” hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” align_content=”stretch” flex_align_items=”flex-start” flex_justify_content=”flex-start” flex_wrap=”wrap” hundred_percent_height_center_content=”yes” equal_height_columns=”no” container_tag=”div” hide_on_mobile=”small-visibility,medium-visibility” status=”published” border_style=”solid” box_shadow=”no” box_shadow_blur=”0″ box_shadow_spread=”0″ gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ background_blend_mode=”none” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” pattern_bg=”none” pattern_bg_style=”default” pattern_bg_opacity=”100″ pattern_bg_blend_mode=”normal” mask_bg=”none” mask_bg_style= --- ### [Fiduciary Financial Services And Planning | nVest Advisor](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) **Published:** August 5, 2025 **Author:** Atta **Content:** # Our Services Helping You Make Confident, Clear, & Informed Financial Decisions — At Every Life Stage With over 20 years of experience, nVest Advisors is a fiduciary, fee‑only firm that exists to serve people — not products. We don’t pitch, we guide. Our services are designed around your goals, your values, and your timeline — no commissions, no agendas. Whether you’re planning for retirement, optimizing your investments, or navigating complex financial life decisions, we’re here to help. [Find a Conveneint Time To Speak With UsFind a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) ## What We Help With Select a service to learn more [](https://nvestadvisors.com/financial-planning-the-nvest-way/)[## Comprehensive Financial Planning](n,) Customized planning for your financial future, no matter your life stage. [Read More](n,) [](https://nvestadvisors.com/investment-management-at-nvest-advisors/)[## Investment Management](n,) Personalized, transparent, and tax-efficient portfolio strategies. [Read More](n,) [](https://nvestadvisors.com/financial-planning-for-teachers/)[## Financial Planning for Educators](n,) Guidance tailored to educators’ pensions, 403(b)s, and loan strategies. [Read More](n,) [## Retirement Planning](n,) Clarity and confidence as you transition into retirement. [Read More](n,) [](https://nvestadvisors.com/financial-planning-for-small-business-owners/)[## Retirement Plans for Small Business & Non-Profits](n,) Custom employer-sponsored plans designed for performance and compliance. [Read More](n,) [](https://nvestadvisors.com/tax-planning-at-nvest-advisors/)[## Tax Strategy & Planning](n,) Forward-thinking strategies to minimize taxes and maximize savings. [Read More](n,) [](https://nvestadvisors.com/estate-planning-at-nvest-advisors/)[## Legacy, Estate & Trust Planning Guidance](n,) Protect your legacy and transfer wealth according to your wishes. [Read More](n,) [](https://nvestadvisors.setmore.com/)[## Ongoing Advice & Client Support](n,) Quarterly updates, life event reviews, and unlimited guidance. [Learn More](n,) **Delivering Our Fiduciary Financial Planning Mission Since 2008, nVest Advisors has provided fiduciary financial planning to clients across Colorado, Texas, Utah, Kansas, and online nationwide.** [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) ## What We Help With Select a service to learn more [](https://nvestadvisors.com/financial-planning-the-nvest-way/)[## Comprehensive Financial Planning](n,) Customized planning for your financial future, no matter your life stage. [Read More](n,) [](https://nvestadvisors.com/investment-management-at-nvest-advisors/)[## Investment Management](n,) Personalized, transparent, and tax-efficient portfolio strategies. [Read More](n,) [](https://nvestadvisors.com/financial-planning-for-teachers/)[## Financial Planning for Educators](n,) Guidance tailored to educators’ pensions, 403(b)s, and loan strategies. [Read More](n,) [](https://nvestadvisors.com/fiduciary-retirement-planning-services/)[## Retirement Planning](https://nvestadvisors.com/fiduciary-retirement-planning-services/) Clarity and confidence as you transition into retirement. [Read More](https://nvestadvisors.com/fiduciary-retirement-planning-services/) [](https://nvestadvisors.com/financial-planning-for-small-business-owners/)[## Retirement Plans for Small Business & Non-Profits](n,) Custom employer-sponsored plans designed for performance and compliance. [Read More](n,) [](https://nvestadvisors.com/tax-planning-at-nvest-advisors/)[## Tax Strategy & Planning](n,) Forward-thinking strategies to minimize taxes and maximize savings. [Read More](n,) [](https://nvestadvisors.com/estate-planning-at-nvest-advisors/)[## Legacy, Estate & Trust Planning Guidance](n,) Protect your legacy and transfer wealth according to your wishes. [Read More](n,) [](https://nvestadvisors.setmore.com/)[## Ongoing Advice & Client Support](n,) Quarterly updates, life event reviews, and unlimited guidance. [Learn More](n,) **Delivering Our Fiduciary Financial Planning Mission Since 2008, nVest Advisors has provided fiduciary financial planning to clients across Colorado, Texas, Utah, Kansas, and online nationwide.** [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [See Our Fees and Terms](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/) ### TESTIMONIALS See what our clients have to say… > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* [](https://nvestadvisors.com/tools-to-help-you-make-smarter-dec)## Tools to Help You Make Smarter Decisions Download our guide: How to Offer a High-Impact Employee Plan Without the Headache Watch: What Every Employer Should Know About Fiduciary Responsibility Watch: How to Choose the Right Financial Advisor for Your Family Get our eBook: 7 Retirement Mistakes to Avoid Watch our free webinar: “How Teachers Can Build Long-Term Financial Security — Even in Uncertain Times Watch: What to Expect When You Work with a Financial Advisor Retirement Roadmap — A downloadable guide to planning, transitioning, and enjoying retirement. ### Let’s Make Life Feel Simpler Again Would you be ready to take the next step? Schedule a complimentary consultation with one of our advisors to talk about your financial needs and objectives. [Let’s Address Them Together ](https://nvestadvisors.setmore.com/) --- ### [Meet the nVest Advisors Team | Fiduciary Financial Advisors](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/) **Published:** February 9, 2024 **Author:** nVest Advisors **Content:** # # **Meet Your nVest Team** We are passionate about serving our clients and believe everyone deserves high-quality financial advice. ***“At nVest Advisors, we believe financial planning is about more than just numbers. It’s about people. Inspired by our own experiences, we’ve built a practice dedicated to serving families, small businesses, and individuals who often go unnoticed by the industry.*** ***Our mission is simple: to provide personalized, professional guidance that enables you to reach your dreams and build generational wealth.”*** [![Jeremy Torgerson](<> "11 nvest advisors")](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) Jeremy TorgersonCEO \| Senior Financial Advisor [About \| Connect With Jeremy](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) [![Joshua Torgerson](<> "10 nvest advisors")](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) Joshua TorgersonFinancial Advisor [About \| Connect With Joshua](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) [![Moses Rodriguez](<> "12 nvest advisors")](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) Moses RodriguezFinancial Advisor - Texas [About \| Connect With Moses](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) # # **Meet Your Team** We are passionate about serving our clients and believe everyone deserves high-quality financial advice. ***“At nVest Advisors, we believe financial planning is about more than just numbers. It’s about people. Inspired by our own experiences, we’ve built a practice dedicated to serving families, small businesses, and individuals who often go unnoticed by the industry.*** ***Our mission is simple: to provide personalized, professional guidance that enables you to reach your dreams and build generational wealth.”*** [![Jeremy Torgerson](<> "11 nvest advisors")](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) Jeremy TorgersonCEO \| Senior Financial Advisor [About \| Connect With Jeremy](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) [![Joshua Torgerson](<> "10 nvest advisors")](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) Joshua TorgersonFinancial Advisor \| Compliance Manager [About \| Connect With Joshua](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) [![Moses Rodriguez](<> "12 nvest advisors")](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) Moses RodriguezFinancial Advisor - Texas [About \| Connect With Moses](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) We are passionate about serving our clients and believe everyone deserves high-quality financial advice. ***“At nVest Advisors, we believe financial planning is about more than just numbers. It’s about people. Inspired by our own experiences, we’ve built a practice dedicated to serving families, small businesses, and individuals who often go unnoticed by the industry.*** ***Our mission is simple: to provide personalized, professional guidance that enables you to reach your dreams and build generational wealth.”*** # # **Meet Your Team** We are passionate about serving our clients and believe everyone deserves high-quality financial advice. ***“At nVest Advisors, we believe financial planning is about more than just numbers. It’s about people. Inspired by our own experiences, we’ve built a practice dedicated to serving families, small businesses, and individuals who often go unnoticed by the industry.*** ***Our mission is simple: to provide personalized, professional guidance that enables you to reach your dreams and build generational wealth.”*** [![Jeremy Torgerson](<> "11 nvest advisors")](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) Jeremy TorgersonCEO \| Senior Financial Advisor [About \| Connect With Jeremy](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) [![Joshua Torgerson](<> "10 nvest advisors")](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) Joshua TorgersonFinancial Advisor \| Compliance Manager [About \| Connect With Joshua](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) [![Moses Rodriguez](<> "12 nvest advisors")](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) Moses RodriguezFinancial Advisor - Texas [About \| Connect With Moses](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) We are passionate about serving our clients and believe everyone deserves high-quality financial advice. ***“At nVest Advisors, we believe financial planning is about more than just numbers. It’s about people. Inspired by our own experiences, we’ve built a practice dedicated to serving families, small businesses, and individuals who often go unnoticed by the industry.*** ***Our mission is simple: to provide personalized, professional guidance that enables you to reach your dreams and build generational wealth.”*** [![Jeremy Torgerson](<> "11 nvest advisors")](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) Jeremy TorgersonCEO \| Senior Financial Advisor [About \| Connect With Jeremy](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) [![Joshua Torgerson](<> "10 nvest advisors")](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) Joshua TorgersonFinancial Advisor \| Compliance Manager [About \| Connect With Joshua](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) [![Moses Rodriguez](<> "12 nvest advisors")](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) Moses RodriguezFinancial Advisor - Texas [About \| Connect With Moses](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) [![Jeremy Torgerson](<> "11 nvest advisors")](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) Jeremy TorgersonCEO \| Senior Financial Advisor [About \| Connect With Jeremy](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) [![Joshua Torgerson](<> "10 nvest advisors")](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) Joshua TorgersonFinancial Advisor \| Compliance Manager [About \| Connect With Joshua](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) [![Moses Rodriguez](<> "12 nvest advisors")](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) Moses RodriguezFinancial Advisor - Texas [About \| Connect With Moses](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) ## **FREQUENTLY ASKED QUESTIONS** - [All](#) - [Financial Education](#) - [Financial Planning](#) - [Investment](#) - [Onboarding](#) Are there any income or minimum portfolio requirements for your services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:17:04-06:00#### [Are there any income or minimum portfolio requirements for your services?](#collapse-4-524) No, our investment advisory services do not have any income or minimum portfolio requirements. For our premium investment advisory services, we have a $100K portfolio minimum. I’m worried about an upcoming recession. What can I do to secure my portfolio?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:12:36-06:00#### [I’m worried about an upcoming recession. What can I do to secure my portfolio?](#collapse-4-530) Our investment methodology takes into account macroeconomic trends and adjusts portfolios accordingly. What you can do depends on your portfolio makeup, your risk appetite, and other factors. For those with managed portfolios, we recommend scheduling a call with your investment advisors to understand the specific impact to your investments. For DIY investors, we recommend understanding how sectors you are bought into will be impacted by upcoming economic trends and adjusting accordingly. For specific tips, you can check out [our blog here](https://nvestadvisors.com/blog/) or Jeremy’s personal blog at [Think Like a Rich Guy](https://thinklikearichguy.com). What can I expect from your financial planning services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-31T01:40:53-06:00#### [What can I expect from your financial planning services?](#collapse-4-528) We discuss your financial goals, your current lifestyle and expenditure, your current accounts, and more. Then, we will devise a tailored, action-based plan, which will include details on spending and saving goals, what types of accounts to open, and much more. What can I expect from my free consultation?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2024-04-18T15:31:59-06:00#### [What can I expect from my free consultation?](#collapse-4-533) You will meet with Jeremy (or a registered advisor on our team) for 30 minutes. This will be an introductory call, where we can discuss whatever you feel comfortable sharing. Typically, we spend the time just assessing if we’d be a good fit for your needs. This will be a high-level discussion and will not go into specifics but will give you a rough idea on the next steps and action items to meet your goals. If we decide to move forward together, we’ll start to gather the information we need to be able to make specific recommendations. What can we expect from your financial education offerings?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:34:43-06:00#### [What can we expect from your financial education offerings?](#collapse-4-522) Over the next few months, we will be releasing courses, webinars, and trainings offering financial guidance, investment knowledge, and actionable and specific recommendations. All of these will be virtual and accessible to everyone in the United States. ### WHAT ARE YOUR FINANCIAL GOALS? [Let’s Address Them Together](https://nvestadvisors.setmore.com/) --- ### [Fiduciary, Fee-Only Financial Planning for Families | nVest Advisors](https://nvestadvisors.com/fiduciary-fee-only-financial-planning-for-families/) **Published:** August 5, 2025 **Author:** Atta **Content:** # Financial Planning for Individuals & Families Life Doesn’t Slow Down — But Your Finances Should Feel Peaceful # Financial Planning for Individuals & Families Life Doesn’t Slow Down — But Your Finances Should Feel Peaceful Between raising kids, managing bills, chasing promotions, paying off student loans, saving for college, and wondering if you’ll ever retire — it’s no wonder you’re feeling overwhelmed. You’re not failing. You’re trying to do it all — without a guide. At nVest Advisors, we help individuals and families across the U.S. find calm, clarity, and control in a noisy financial world since 2008. [Find a Conveneint Time To Speak With UsFind a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) [![nVest Advisors Financial Planning of Families](https://nvestadvisors.com/wp-content/uploads/2025/07/Atta-3.jpg "Financial problems of families nvest advisors")](https://nvestadvisors.com/meet-the-nvest-advisors-team/) ## Does Any of This Sound Like You? - “We make decent money, but where does it all go?” - “I feel guilty spending, but I’m not sure what I’m even saving for.” - “We’re juggling student loans, car payments, daycare, and trying to save for college — all at once.” - “We’ve never had a real financial plan — we just try to stay afloat.” - “What if something happened to me? Would my family be okay?” - “Is it too late to start investing or saving for retirement?” These aren’t silly questions. These are genuine stressors, and they deserve clear and compassionate answers. Learn How We Help Families Like Yours [Learn How We Help Families Like Yours](https://nvestadvisors.setmore.com/) [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## Financial Stress Isn’t Just About Money — It’s About Life The weight of financial uncertainty shows up in many ways: lying awake at night doing mental math, avoiding checking your bank account, feeling anxious about every unexpected expense, and feeling guilty for saying “yes” to a family vacation. You deserve better — and we’re here to help. [Investing is for Your Future (White Paper)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [What a Financial Plan Solves for You (White Paper)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## What We Help With [](https://nvestadvisors.com/cash-flow-budgeting/)[## Cash Flow & Budgeting](kmlkmm) Build a spending plan without guilt. [Read More](kmlkmm) [](https://nvestadvisors.com/investment-management-at-nvest-advisors/)[## Investments](kmlkmm) Invest based on your risk and goals. [Read More](kmlkmm) [](https://nvestadvisors.com/debt-credit/)[## Debt & Credit](kmlkmm) Pay off debt while enjoying life. [Learn More](kmlkmm) [## Education Planning](https://nvestadvisors.setmore.com/) Plan for college while staying secure. [Learn More](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.com/life-insurance/)[## Life Insurance](kmlkmm) Protect your family’s future. [Read More](kmlkmm) [](https://nvestadvisors.com/retirement-planning-services/)[## Retirement](kmlkmm) Start anytime — early or late. [Read More](kmlkmm) [](https://nvestadvisors.com/tax-planning-at-nvest-advisors/)[## Tax Strategy](kmlkmm) Keep more of what you earn. [Read More](kmlkmm) [](https://nvestadvisors.com/estate-planning-at-nvest-advisors/)[## Estate Planning](kmlkmm) Pass on your legacy, your way. [Read More](kmlkmm) [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [See Our Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) See Our Fees and Terms Explore Our Investment Philosophy ## What We Help With [](https://nvestadvisors.com/cash-flow-budgeting/)[## Cash Flow & Budgeting](kmlkmm) Build a spending plan without guilt. [Read More](kmlkmm) [](https://nvestadvisors.com/investment-management-at-nvest-advisors/)[## Investments](kmlkmm) Invest based on your risk and goals. [Read More](kmlkmm) [](https://nvestadvisors.com/debt-credit/)[## Debt & Credit](kmlkmm) Pay off debt while enjoying life. [Learn More](kmlkmm) [## Education Planning](https://nvestadvisors.setmore.com/) Plan for college while staying secure. [Learn More](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.com/life-insurance/)[## Life Insurance](kmlkmm) Protect your family’s future. [Read More](kmlkmm) [](https://nvestadvisors.com/retirement-planning-services/)[## Retirement](kmlkmm) Start anytime — early or late. [Read More](kmlkmm) [](https://nvestadvisors.com/tax-planning-at-nvest-advisors/)[## Tax Strategy](kmlkmm) Keep more of what you earn. [Read More](kmlkmm) [](https://nvestadvisors.com/estate-planning-at-nvest-advisors/)[## Estate Planning](kmlkmm) Pass on your legacy, your way. [Read More](kmlkmm) Explore Our Investment Philosophy See Our Services See Our All Services Explore Our Investment Philosophy ### TESTIMONIALS See what our clients have to say… > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ## ## No Lectures. No Judgment. Just a Clear Path Forward. ### Here’s what you’ll never get with us: - No pressure to buy products - No confusing jargon - No one-size-fits-all templates ### Here’s what you’ll always get: - Judgment-free space to talk honestly - A plan that starts with your values, goals, and reality - Support from real advisors who care [Learn more about our process →](https://nvestadvisors.com/financial-planning-process-steps/) ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") ## ## No Lectures. No Judgment. Just a Clear Path Forward. ### Here’s what you’ll never get with us: - No pressure to buy products - No confusing jargon - No one-size-fits-all templates ### Here’s what you’ll always get: - Judgment-free space to talk honestly - A plan that starts with your values, goals, and reality - Support from real advisors who care ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") [Understand Our Investment Approch](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) ## ## Why Families Have Trusted Us Since 2008 ![Why nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/08/Fiduciary-Duty-1.png "Nvest advisors working experince nvest advisors") [How Our Philosophy Protects you](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [Media Mentions](https://nvestadvisors.com/media-mentions/) ## Transparent Pricing. No Surprises. You deserve to know what you’re paying — and why. Whether you need a one-time financial plan or long-term investment management, our pricing is simple, fair, and built to support your success. [See Our Full Fees and Terms](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/) ## What Makes nVest Advisors Your Ideal Partner For Financial Success and Growth ![Why nVest Advisors your Ideal Partner](https://nvestadvisors.com/wp-content/uploads/2025/05/Excellence-and-Integrity-for-Everyone.png "Nvest advisors partnership principles nvest advisors") [Why Choose nVest Advisors](https://nvestadvisors.com/why-nvest-advisors-2/) ### Our Promise to You We don’t just manage your portfolio—we partner with you. Regular reviews ensure your investments reflect both market conditions and your personal goals. And through ongoing education, we empower you to make informed decisions about your financial future. ### “At nVest Advisors, we turn complexity into clarity, challenges into opportunities, and dreams into achievements. With wisdom, care, and trust, we’re here to guide your financial journey.” ###### Jeremy Torgerson Founder and CEO of nVest Advisors ## Frequently Asked Questions - [All](#) - [Financial Education](#) - [Financial Planning](#) - [Investment](#) - [Onboarding](#) What can I expect from my free consultation?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2024-04-18T15:31:59-06:00#### [What can I expect from my free consultation?](#collapse-5-533) You will meet with Jeremy (or a registered advisor on our team) for 30 minutes. This will be an introductory call, where we can discuss whatever you feel comfortable sharing. Typically, we spend the time just assessing if we’d be a good fit for your needs. This will be a high-level discussion and will not go into specifics but will give you a rough idea on the next steps and action items to meet your goals. If we decide to move forward together, we’ll start to gather the information we need to be able to make specific recommendations. What can I expect from your financial planning services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-31T01:40:53-06:00#### [What can I expect from your financial planning services?](#collapse-5-528) We discuss your financial goals, your current lifestyle and expenditure, your current accounts, and more. Then, we will devise a tailored, action-based plan, which will include details on spending and saving goals, what types of accounts to open, and much more. What can we expect from your financial education offerings?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:34:43-06:00#### [What can we expect from your financial education offerings?](#collapse-5-522) Over the next few months, we will be releasing courses, webinars, and trainings offering financial guidance, investment knowledge, and actionable and specific recommendations. All of these will be virtual and accessible to everyone in the United States. Are there any income or minimum portfolio requirements for your services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:17:04-06:00#### [Are there any income or minimum portfolio requirements for your services?](#collapse-5-524) No, our investment advisory services do not have any income or minimum portfolio requirements. For our premium investment advisory services, we have a $100K portfolio minimum. I’m worried about an upcoming recession. What can I do to secure my portfolio?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:12:36-06:00#### [I’m worried about an upcoming recession. What can I do to secure my portfolio?](#collapse-5-530) Our investment methodology takes into account macroeconomic trends and adjusts portfolios accordingly. What you can do depends on your portfolio makeup, your risk appetite, and other factors. For those with managed portfolios, we recommend scheduling a call with your investment advisors to understand the specific impact to your investments. For DIY investors, we recommend understanding how sectors you are bought into will be impacted by upcoming economic trends and adjusting accordingly. For specific tips, you can check out [our blog here](https://nvestadvisors.com/blog/) or Jeremy’s personal blog at [Think Like a Rich Guy](https://thinklikearichguy.com). ## Your Path to Financial Clarity Let’s Build a Plan That Aligns with Your Goals and Gives You Confidence. ## Let's Build Your Plan Together \* indicates required Email Address \* First Name \* **Which best describes you?** - Business Owner - Educator - Individual, and Family Representative - Others **Which service(s) are you most interested in?** - Investment Management - Financial Planning - Risk Management - Estate Planning - Tax Strategies - Other --- ### [Why nVest Advisors](https://nvestadvisors.com/why-nvest-advisors/) **Published:** April 16, 2026 **Author:** Atta **Content:** # Why nVest Advisors ## The Financial World Is Complicated. You Deserve a Guide Who Puts You First. Real guidance. Real clarity. Real partnership — for people who want a trusted advisor for life. [Book a Q&A Discovery Call Now](https://nvestadvisors.setmore.com/services/dfaeb995-b65f-4e46-a8e6-dd2f30a43239) [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) # Why nVest Advisors ## The Financial World Is Complicated. You Deserve a Guide Who Puts You First. Real guidance. Real clarity. Real partnership — for people who want a trusted advisor for life. [Book Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/) Explore Our Investment Philosophy Prefer to talk? Call us: **888-852-0702** ## ## The Real Challenges People Face With Money — And With Advisors Financial stress shows up as sleepless nights, avoided accounts, or decisions delayed. Here are the problems we solve every day. ### What you’re likely feeling ## Overwhelmed “Am I saving enough? How much is enough?” ## Fear “What if something happens to me? Will my family be okay?” ## Confused “Why am I paying so much in fees? I don’t understand my plan.” ## Frustrated “My advisor disappeared after onboarding.” ## ### What people dislike about working with financial advisors - **Commission-first advice** — you’re never sure if the advisor’s recommendations are in your best interests, or in theirs. - **Opaque fees** — high fees are often hidden in the investments themselves, slowing your returns over time. - **Poor follow-up** — initial enthusiasm to get you onboard, then radio silence after the sale. - **“Needs Analysis” hiding as an actual financial plan** — a “Needs Analysis” can be a useful tool, but it’s designed to find places where the agent or advisor can sell you a solution. Financial planning is an all-encompassing process of learning about you, and tailoring the advice to help you get where you want to go in life. ## ### What people hate about advisors - **Commission-first advice** — products sold to the client, not solutions. - **Opaque fees** — surprises on statements and hidden costs. - **Poor follow-up** — initial enthusiasm; then radio silence. - **One-size-fits-all plans** — not built for changing lives. ## ## Why nVest Advisors Is Different Our approach removes conflicts, reduces cost, and focuses on what matters most: your life. ### #### True Fiduciary Legally obligated to put your interests first — always. We never accept commissions. ### #### Transparent Fees Simple pricing that aligns with your needs — no hidden costs or surprise markups. ### #### No Minimums High-quality advice for everyone. You don’t need a high account balance to start. ### #### Modern & Paperless Secure digital onboarding, secure document sharing, and a client portal for anytime access. ### #### Flexible Scheduling Evening, weekend, and virtual meetings to fit your life and work schedule. ### #### Not an Advisor – A Team We use a team approach – you’ll have a primary advisor and our support team to serve you. [View our Google Reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) [Learn the Story of nVest Advisors](https://nvestadvisors.com/our-story-nvest-advisors/) ## Working With Us Improving your client experience is always our top priority. From continual education for our advisors, to improving our tech and delivery systems, to minimizing unnecessary email “clutter”, our mission is simple: **to provide you the clearest, cleanest path toward your goals, and to act as a caring coach and mentor along the way.** We’re proud to serve families and small businesses, not for a few months, but for generations. ### We’re Always Learning The world is changing rapidly. We work hard to keep current in our knowledge and skills to meet the needs of an evolving financial ecosystem. ### Tech supports the human connection We use a lot of tech tools, and our clients can enjoy a [completely virtual experience](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/) if they wish. But tech should enhance our personal connection, not replace it. ### We’ll actually want to meet with you Many advisors are incentivized to constantly find new clients, at the expense of deeping the relationship with current clients. We are with you for the long haul – always. ### Generational wealth is our mission No matter where you are today, we welcome clients who want to see a better financial future for themselves AND their families. Learn more about our process → ## ## Ready for a Better Financial Partner? Let’s talk about what you need, where you want to go, and how we can help you get there — clearly, confidently, and without pressure. [Find a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) --- ### [Jeremy Torgerson | Senior Financial Advisor & Fiduciary](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) **Published:** May 11, 2025 **Author:** Atta **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2026/03/11.png "11 nvest advisors") Founder & CEO \| Senior Advisor CRD# 5546264 # Jeremy Torgerson, MRFC© Registered Financial Planner with over 20+ years of experience helping clients achieve their financial goals through strategic, fiduciary, and fee-only planning and investment management. **Registered in**: CO, KS, TX, UT, and other states under de minimis exemption. **Specialties**: - Fiduciary Wealth Management for Individuals & Families - High Net Worth Investing & Wealth Management - Comprehensive Financial Planning - Employer-Sponsored Retirement Plans (401k, 403b) - Small Business Planning - Public Speaking & Educator-Focused Services [Book an Appointment with JeremyBook an Appointment with Jeremy](https://nvestadvisors.setmore.com/jeremyt) #### **Work with Jeremy directly!** #### **Currently accepting:** - All employer retirement plans (new or competitive bid). - All corporate, non-profit and governmental accounts. - Individual investors with $250,000+ and/or those with comprehensive planning needs. **What to Expect:** In this initial consultation, we’ll take time to understand your current financial picture, discuss your goals, and explore how our fiduciary, fee-only guidance can help you build lasting financial confidence. ![CEO of nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/05/Jeremy-Torgerson-New-New.jpg "Jeremy torgerson financial advisor nvest advisors") Founder & CEO \| Senior Advisor CRD# 5546264 # Jeremy Torgerson, RFP©, MRFC© Registered Financial Planner with over 20+ years of experience helping clients achieve their financial goals through strategic, fiduciary, and fee-only planning and investment management. **Registered in**: CO, KS, TX, UT, and other states under de minimis exemption. **Specialties**: - Employer-Sponsored Retirement Plans (401k, 403b) - Fiduciary Wealth Management - Comprehensive Financial Planning - Public Speaking & Educator-Focused Services [Find a Conveneint Time To Speak With UsFind a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/jeremyt) #### **Accepting New Clients?**: Yes – Accepting all employer retirement plans (any size). Individual investors with $250,000+ and/or those with comprehensive planning needs. **What to Expect:** In this initial consultation, we’ll take time to understand your current financial picture, discuss your goals, and explore how our fiduciary, fee-only guidance can help you build lasting financial confidence. ## About Jeremy ![Jeremy Torgerson Senior Financial Advisor](https://nvestadvisors.com/wp-content/uploads/2026/03/IMG_2426.jpeg "Jeremy torgerson Ceo of nvest advisors nvest advisors") “[Jeremy Torgerson](https://thinklikearichguy.com/#:~:text=Think%20Like%20A%20Rich%20Guy%20is%20your%20window%20into%20a,obscurity%20and%20achieved%20great%20things.) is a respected financial advisor and the founder of nVest Advisors, a family-owned, fiduciary Registered Investment Advisory (RIA) firm committed to helping individuals, families, educators, and small business owners achieve true financial security. Since 2008, Jeremy has been working full-time as a financial advisor, dedicating his career to making quality financial advice accessible to everyday Americans, not just the wealthy. Originally launching his career at Edward Jones, Jeremy witnessed firsthand the devastating impact of the Great Financial Crisis on working families and entrepreneurs. In 2011, he founded Palo Alto Investments in Brownsville, TX—a traditional advisory firm focused on helping small business owners and underserved communities. Recognizing the shift in technology and the need for more affordable, client-friendly services, Jeremy transformed his practice into nVest Advisors in 2015—a forward-thinking, low-cost, commission-free, and (mostly) virtual firm focused on fiduciary standards and real relationships. His firm now specializes in comprehensive financial planning, wealth management, employer plan advisory, and educator-focused financial strategies. A proud Denver native, Jeremy relocated both his family and firm to Colorado in 2017. Today, nVest Advisors serves clients across Colorado, Texas, Utah, and Kansas, and continues to expand its reach. The firm reflects Jeremy’s mission: to provide genuine, trustworthy advice with a personal touch—backed by innovation and integrity. Beyond his advisory role, Jeremy is the host of the Think Like A Rich Guy podcast and is frequently quoted in major U.S. media outlets for his views on the economy and financial mindset. He also writes and speaks regularly on investing, retirement, and personal growth. Jeremy resides in Colorado Springs with his wife, Kari. Married since 1993, they have two grown children and two beloved dogs. His son Joshua has also joined nVest Advisors as a financial advisor, carrying forward the family’s legacy. When not serving clients, Jeremy enjoys acting, hiking the Colorado backcountry, golfing, watching Star Trek, and cheering on the Denver Broncos.“ ### TESTIMONIALS **See what our clients have to say…** > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviewsView all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ### Ready to Secure Your Financial Future Schedule a consultation with Jeremy Torgerson today and take the first step toward achieving your financial goals.. [Book Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/jeremyt) [How We’re DifferentHow We’re Different](https://nvestadvisors.com/why-nvest-advisors/) #### Ready to Secure Your Financial Future Schedule a consultation with Jeremy Torgerson today and take the first step toward achieving your financial goals.. [Book Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/jeremyt) [How We’re DifferentHow We’re Different](https://nvestadvisors.com/why-nvest-advisors/) #### Get In Touch Ready to take control of your financial future? Schedule a consultation with Jeremy Torgerson to discuss your goals and create a personalized financial strategy. - **Phone** (719) 257-9301 - **Office** [6. S Tejon St. Suite 519 Colorado Springs, CO 80903](https://www.google.com/maps/place//data=!4m2!3m1!1s0x8713451aa3ead371:0xfc81834801fa3fc3?source=g.page.share) **Available Meeting Options:** - **Virtual Consultations:** Connect securely from anywhere through a private, encrypted video meeting. - **In-Office Appointments:** Visit our Colorado Springs office **Office Hours:** Monday – Thursday \| 8:00 AM – 6:00 PM (MT) Friday \| 8:00 AM – 2:00 PM (MT) Saturday \| By Appointment **Appointment is required.** [**Click here to schedule.**](https://nvestadvisors.setmore.com/jeremyt) #### Your Path to Financial Clarity Let’s Build a Plan That Aligns with Your Goals and Gives You Confidence. ## Let's Build Your Plan Together \* indicates required First Name Email Address \* **Which best describes you?** - Business Owner - Educator - Individual, and Family Representative --- ### [Our Philosophy | Client-First Fiduciary Values](https://nvestadvisors.com/our-philosophy/) **Published:** August 6, 2025 **Author:** Atta **Content:** # Our Philosophy nVest Advisors is all about YOU. From the ethical, fiduciary standard we volunteer to uphold, to the high-quality and cost-effective services we provide, to the availability of evening and Saturday appointments for your busy schedule, our commitment to our clients is at the heart of everything we do. ## Our Mission To help families and small businesses build truly transformational, generational wealth. ## Our Vision To become the most trusted investing and financial planning company for families and small businesses by removing cost and access barriers to quality financial services for everyday Americans. ![Smiling man in a blue blazer points directly at the camera inviting engagement](https://nvestadvisors.com/wp-content/uploads/2026/09/image-7.jpg "Image 7 nvest advisors") ## **Our Values** Our values guide every aspect of our work. - **Aggressive Authenticity:** The basis of every relationship is trust. Trust is earned through honest interactions where integrity is apparent. - **Radical Transparency:** Communication is best when it’s clean, simple, and straightforward. - **Principled Stewardship:** We don’t take unnecessary risks or follow new, untested fads. - **Data-Driven Decisionmaking:** We’re human, and humans often make mistakes out of bias. Let the data tell us what’s the best course of action. - **Servant Leadership:** We put our clients first, and practice what we preach. - **Lifelong Education:** Ethically-applied knowledge is the real tool of our trade and the surest way to wealth, in every sense of the word. **Read Next:** What it’s like to be a client at nVest Advisors [**Read Next:** Our Investing Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [**Read Next:** Our Team](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/) --- ### [Moses Rodriguez | Financial Advisor in Texas](https://nvestadvisors.com/financial-advisor-moses-rodriguez/) **Published:** May 13, 2025 **Author:** Atta **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2026/03/12-1.png "12 nvest advisors") Financial Advisor CRD# 7809286 # Moses Rodriguez Registered Financial Advisor (CRD# 7809286) offering fiduciary, fee-only planning and investment guidance to families, business owners, and employees throughout South Texas. **Registered in**: TX. **Specialties**: - Financial Planning for Families & Business Owners - Investment Management for South Texas Communities - Retirement Planning & Income Distribution - Tax-Efficient Strategies for Small Business Employees [Book a Meeting with MosesBook a Meeting with Moses](https://nvestadvisors.setmore.com/moses-rodriguez) #### **Work with Moses directly! Currently accepting:** - Individuals, families, and small business owners seeking trusted financial guidance. No minimums required. **What to Expect:** In this initial consultation, we’ll take time to understand your current financial picture, discuss your goals, and explore how our fiduciary, fee-only guidance can help you build lasting financial confidence. ## About Moses ![Financial Advisor in Taxes](https://nvestadvisors.com/wp-content/uploads/2025/05/1000201724.jpg "Moses rodriguez financial advisor nvest advisors") “Moses Rodriguez is a dedicated Financial Advisor at nVest Advisors, joining the firm in September 2024. Based in Los Fresnos, Texas—just minutes from South Padre Island—he proudly serves clients throughout Texas, with a focus on families, small business owners, and their employees. With over a decade of experience in small business bookkeeping and tax support, Moses brings a practical, solutions-based approach to financial planning and investment management. Now expanding his services under our family-owned RIA, he’s committed to helping working families and business communities grow with confidence and clarity. Outside of the office, Moses enjoys time with his family and giving back to the community where nVest Advisors was founded.“ ### TESTIMONIALS **See what our clients have to say…** > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ### Ready to Secure Your Financial Future Schedule a consultation with Moses Rodriguez today and take the first step toward achieving your financial goals.. [Book Your 30-Minute Consultation NowBook Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/) [How We’re DifferentHow We’re Different](https://nvestadvisors.com/why-nvest-advisors/) #### Ready to Secure Your Financial Future Schedule a consultation with Moses Rodriguez today and take the first step toward achieving your financial goals.. [Book Your 30-Minute Consultation NowBook Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/) [How We’re DifferentHow We’re Different](https://nvestadvisors.com/why-nvest-advisors/) ##### Get In Touch Ready to take control of your financial future? Schedule a consultation with Moses Rodriguez to discuss your goals and create a personalized financial strategy. - **Phone** (956) 305-0100 - **Email** moses@nvestadvisors.com - **Office** [6 S. Tejon St. Suite 305 Colorado Springs, CO 80903](https://www.google.com/maps/place//data=!4m2!3m1!1s0x8713451aa3ead371:0xfc81834801fa3fc3?source=g.page.share) **Available Meeting Options:** - **Virtual Consultations:** Connect securely from anywhere through a private, encrypted video meeting. - **In-Person Appointments:** Moses meets with clients and prospective clients throughout the South Texas / RGV area. **Office Hours:** Monday – Thursday \| 8:00 AM – 6:00 PM (MT) Friday – 8:00 AM – 2:00 PM (MT) Friday \| 8:00 AM – 2:00 PM **Appointment Required. [Click here to schedule.](https://nvestadvisors.setmore.com/moses-rodriguez)** #### Your Path to Financial Clarity Let’s Build a Plan That Aligns with Your Goals and Gives You Confidence. ## Let's Build Your Plan Together \* indicates required First Name Email Address \* **Which best describes you?** - Business Owner - Educator - Individual, and Family Representative --- ### [Joshua Torgerson | Financial Advisor in Colorado](https://nvestadvisors.com/financial-advisor-in-colorado-joshua-torgerson/) **Published:** May 13, 2025 **Author:** Atta **Content:** ![](https://nvestadvisors.com/wp-content/uploads/2026/03/10-1.png "10 nvest advisors") Financial Advisor CRD# 7809785 # Joshua Torgerson Registered Financial Advisor (CRD# 7809785) dedicated to supporting individuals and families with tailored, fiduciary financial planning and investment services. With a strong academic foundation and a passion for client service, Josh provides thoughtful insights and strategic support to both new and existing clients. **Registered in**: CO. **Specialties**: - Personalized Financial Planning - Portfolio Management & Investment Strategy - Retirement Solutions for Colorado Residents - Operations & Compliance Support [Book a Meeting with JoshuaBook a Meeting with Joshua](https://nvestadvisors.setmore.com/joshua-torgerson) #### **Work with Joshua directly!** Currently accepting: - Individuals, families, and small business owners seeking trusted financial guidance. No minimums required. **What to Expect:** In this initial consultation, we’ll take time to understand your current financial picture, discuss your goals, and explore how our fiduciary, fee-only guidance can help you build lasting financial confidence. ## About Joshua ![Joshua Torgerson Financial Advisor](https://nvestadvisors.com/wp-content/uploads/2024/10/IMG_4463-scaled.jpg "Financial advisor in colorado nvest advisors") “Joshua Torgerson joined nVest Advisors in early 2024 as a Financial Advisor. Based in Colorado Springs, he supports our existing planning and investment clients while also welcoming new clients across Colorado—especially Millennials and Gen Z professionals seeking a fresh approach to financial planning. A University of Texas–RGV graduate at just 20 years old, Joshua brings a strong academic background in math and science, having attended the prestigious Math and Science Academy for high school. Before entering the financial field, he served as Lead Instructor and State Examiner at DriveSafe, a major driver’s education provider in the Denver area. Josh offers a unique generational perspective and also serves on our firm’s Operations, Compliance, and Client Services team. Passionate about technology and sci-fi (he once built a full-size working Dalek!), Joshua blends modern insights with a deep dedication to client care. He and his wife Anjelika have been married for five years and make their home in Colorado Springs.“ ### TESTIMONIALS **See what our clients have to say…** > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviewsView all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* # Ready to Secure Your Financial Future Schedule a consultation with Joshua Torgerson today and take the first step toward achieving your financial goals.. [Book Your 30-Minute Consultation NowBook Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/joshua-torgerson) [How We’re DifferentHow We’re Different](https://nvestadvisors.com/why-nvest-advisors/) ### Ready to Secure Your Financial Future Schedule a consultation with Joshua Torgerson today and take the first step toward achieving your financial goals.. [Book Your 30-Minute Consultation NowBook Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/joshua-torgerson) [How We’re DifferentHow We’re Different](https://nvestadvisors.com/why-nvest-advisors/) #### Get In Touch Ready to take control of your financial future? Schedule a consultation with Joshua Torgerson to discuss your goals and create a personalized financial strategy. - **Phone** (719) 257-9301 - **Office** [6 S. Tejon St. Suite 305 Colorado Springs, CO 80903](https://www.google.com/maps/place//data=!4m2!3m1!1s0x8713451aa3ead371:0xfc81834801fa3fc3?source=g.page.share) **Available Meeting Options:** - **Virtual Consultations:** Connect securely from anywhere through a private, encrypted video meeting. - **In-Office Appointments:** Visit our Colorado Springs office **Office Hours:** Monday – Thursday \| 8:00 AM – 6:00 PM (MT) Friday \| 8:00 AM – 2:00 PM **Appointment Required. [Click here to Schedule.](https://nvestadvisors.setmore.com/joshua-torgerson)** #### Your Path to Financial Clarity Let’s Build a Plan That Aligns with Your Goals and Gives You Confidence. ## Let's Build Your Plan Together \* indicates required First Name Email Address \* **Which best describes you?** - Business Owner - Educator - Individual, and Family Representative --- ### [Contact Our Financial Advisor Team](https://nvestadvisors.com/contact-our-financial-advisor-team/) **Published:** January 14, 2019 **Author:** nVest Advisors **Content:** # Contact Us Reach out to a trusted financial advisor at nVest Advisors to see how we can work together, schedule a free consultation, or just say hi! [Facebook](Https://Facebook.com/nvestadvisors "Facebook")[X](https://twitter.com/nvestadvisors "X")[YouTube](https://youtube.com/c/Nvestadvisorsllc "YouTube")[Tiktok](https://www.tiktok.com/@jeremytorgerson?lang=en "Tiktok")[LinkedIn](https://www.linkedin.com/company/nvest-advisors-llc/ "LinkedIn")[Email](mailto:info@nvestadvisors.com "Email")[Phone](tel:888-852-0702 "Phone") Calendar - [Ready to talk? Schedule a meeting with a financial advisor now! ](https://nvestadvisors.setmore.com/) Headquarters - 6 S. Tejon Street, Suite 519 Colorado Springs, CO 80903 Phone - (719) 257-9301 Fax - (719) 400-1971 General Questions - service@nvestadvisors.com ### Let’s Connect Send us a message and our team will get back to you shortly. First Name \* Email Address \* Last Name Phone number Subject How can we help? \* Thank you for your message. It has been sent. × There was an error trying to send your message. Please try again later. × Send message! ##### Main Company Office --- ### [Never Worked With a Financial Advisor Before?](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/) **Published:** August 8, 2025 **Author:** Atta **Content:** # If You’ve Never Worked with an Advisor Before Your guide to what to expect, how we work, and answers to your most common questions. Is this the first time you’ve considered working with a financial advisor? If so, you probably have lots of questions—and even some concerns. We’re here to help you feel confident and comfortable before your first appointment. ## Don’t Be Nervous to Schedule a Consultation We don’t bite, we promise! What prompts someone to finally start searching for an advisor can be somewhat unique, but often it’s because you have a financial situation that you no longer feel comfortable handling on your own, and feel like maybe an expert’s opinion will be helpful. Perhaps you’re struggling with debt, or suffered a job loss, or are worried about getting a child through college, or whether you’re on track for retirement at some point. There are many reasons people finally “pull the trigger” and book some Q&A time with us. ## ## Your First Meeting(s) We’re legal fiduciaries. That means, we need to make sure our recommendations are always in your best interests. That includes whether it’s in your interests to work with us at all! To help us both make that determination, and so that you never have to worry about a “sales pitch”, we follow a specific seven-step process to get acquainted, learn about your needs, and craft a strategy. Only after this work is complete (and you’ve had time to review our ideas and even interview other advisors), we’ll invite you to come on board. We never charge for these initial consultations or any of the pre-client work we do, so rest easy. [![Infographic flow outlining how we work together Intro call initialsession strategy steps and a follow up plan with sleep on it and onboarding session icons](https://nvestadvisors.com/wp-content/uploads/2026/09/Deliver-Massive-Value-Client-Graphic-Work-Area-1024x750.jpg "How we decide to work together nvest advisors")](https://nvestadvisors.com/wp-content/uploads/2026/09/Deliver-Massive-Value-Client-Graphic-Work-Area.jpg)***We follow a careful process so that you can decide, on your own, whether to work with us or not.*** ## In-Person or Virtual – Your Choice! Some clients like meeting the “old school” way – in our office. But most of you really like the convenience of meeting virtually. We’re good with either, and you have the option of selecting the kinds of meetings you want every time you schedule. our advisor will welcome you without a specific agenda. This is on purpose, because we don’t sell any products and we don’t know how (or even if) we can help your situation yet. Our job at this meeting is to let you open up and share what prompted you to find us in the first place. Unless you have lots of questions for us, expect that 80% or so of your first visit will be time for you to share your situation with us. Your advisor will ask questions to help us gain better understanding and clarify what your needs are, Sometimes prospective clients are ready to get started with us right away after this session. Others want additional information or are in the process of “shopping” financial advisors, and that’s fine. Your advisor will explain the next steps to you should you decide to move forward. ## ## Coming On Board The decision to become a client will always be yours, without any pressure from us. Either we all agree we’re a good fit for your needs, or we don’t. Once you come on board, the scope of our work ([financial planning](https://nvestadvisors.com/fiduciary-retirement-planning-services/), [investing](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/), or both) will be planned out and we’ll prioritize what needs to be done first. We’ll provide you with our [regulatory disclosures](https://nvestadvisors.com/general-disclosures/) and we’ll both sign a client agreement that covers the work we plan to do. Each onboarding experience is unique because we don’t know ahead of time where your investment accounts need to be transferred from, etc. So we start by collecting information from you, which we do with secure online forms. ## We’re with you every step of the way. A huge majority of our clients remain with us for many years (even decades!). This is something we take great pride in. However, we now that getting started can feel overwhelming and, if this is your first time, a little confusing and uncomfortable. That’s why we spend extra time early on in our relationship, to get you feeling “up to speed”. The first 90 days as a client can be a flurry of paperwork and meetings as we map out an investing strategy and transfer in your assets, or begin work on your financial plan. Once things are settled and in place, our relationship will calm down , and we’ll begin a series of regular communications and contacts. Typically, our clients want communication from us about their plan/accounts once per quarter, but we’ll of course be in touch as often as necessary. We communicate with our clients in a variety of ways: - Urgent Matters that need your immediate attention – text message or phone call - “FYI” messages – sent as needed by email from us and your investment custodian - Regular communication with your primary advisor - Regular Blog and Social Media Posts – as many as 5 a week! - Our “Letter to Clients” – a quarterly email from CEO Jeremy Torgerson - Personal Video Messages (like a Zoom meeting you can watch anytime) – by email - Planned Meetings – twice per year, we get together to review specific action items and make sure your investing and financial plan is on-track. However, if you want to discuss something right away, you don’t need to wait until your next scheduled meeting to talk about it; our team’s calendar is always available, 24/7. [Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) [Who We Help](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) [ Meet Our Team](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/) [Our Story](https://nvestadvisors.com/our-story-nvest-advisors/) [Book your free Q&A session today.](https://nvestadvisors.setmore.com/) [Book your free Q&A session today.](https://nvestadvisors.setmore.com/) ## Commonly asked Questions for New Advisory Clients How do you get paid?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:29:12-06:00#### [How do you get paid?](#collapse-6-9584) Approximately 65% of our industry earn commissions from product sales or stock trades. We do not. Our clients pay us directly for advice and management services, which provides you a huge number of advantages. For example, by working for you directly, and not for a company trying to sell you one of its products, we act as full legal fiduciaries for you. That lets us take active control over your investment accounts for day-to-day adjustments without having to bother you all the time (this is called “discretionary trading authority”). Working for a fee also means that you and your advisor are on the same side and have the same monetary objectives: we both are money-motivated to grow your wealth! Can I work with you in person?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:28:08-06:00#### [Can I work with you in person?](#collapse-6-9581) Yes, but it’s not always needed. Most clients find video meetings more convenient and a better fit for your busy life. However, if you wish, you can meet us in person at our Colorado Springs office, or at an agreed-upon location in South Texas, How long do meetings take?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:25:49-06:00#### [How long do meetings take?](#collapse-6-9577) Typically, our first Q&A is scheduled for 30 minutes, but we allow a buffer for up to an hour if you need more time to discuss your concerns or have lots of questions. Most client service meetings are 45 minutes but we allow you to schedule time with us from 15 minutes to a full hour as needed. Do you accept referrals? I have a family member also looking for an advisor.[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:24:51-06:00#### [Do you accept referrals? I have a family member also looking for an advisor.](#collapse-6-9574) GLADLY. In fact, the best compliment we can ever receive is to earn your personal endorsement and referral of friends and family. What should I bring to my first appointment?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:23:41-06:00#### [What should I bring to my first appointment?](#collapse-6-9570) All we need is you (and your partner, if you have one). Some prospective clients are comfortable sharing financial information or documents at the first meeting, but others are not. That decision is up to you. We will gather the information we need during our conversation, and if we decided together to go to the next step, we’ll let you know what info is needed for us to start working on your situation. Is there any obligation? Can I change my mind?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:22:31-06:00#### [Is there any obligation? Can I change my mind?](#collapse-6-9566) Of course you can change your mind. We want our clients to WANT to be here, so you’ll never feel pressure to come aboard or to stay. By law, all clients are provided with our disclosure brochures at the beginning of our relationship. We automatically wait at least 2 days after that for you to cancel before we begin any work for you. Once work begins, you can always cancel or terminate the agreement, and the process to do so, including how we deal with earned but uncollected fees, is included in your client agreement. We do not use any investment products that have contingent deferred (“surrender”) charges, and only use investments you can sell any time the markets are open. How much will it cost me?[Atta](https://nvestadvisors.com/author/nvaatta/)2025-06-25T11:20:48-06:00#### [How much will it cost me?](#collapse-6-9559) Our service fees depend on a number of factors, such as are you doing a financial plan, or investing with us, or both? The size of the investment account and which custodian we use is also a factor. In general terms, the MAXIMUM household investment fee is between 0.8% and 1.4%, depending on which custodian and strategy we use. You do not pay us directly for investing services; our fee is deducted from your account after we’ve earned it. For more detail, click here. (Link) Financial planning can be paid by the hour, or we offer several ALL-IN Planning programs depending on the complexity of your planning needs. You can pay up front or in installments for planning services (and if you invest with us too, your planning is always free!) You can see those details here. (Link) --- ### [nVest Financial Insights & News | Blog](https://nvestadvisors.com/blog/) **Published:** January 14, 2019 **Author:** nVest Advisors **Content:** # Featured Blog Post Discover our latest insights on topics that matter to you. Stay informed and inspired with our expert articles. - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/10/Q4-2026-Letter-to-Clients-Blog.png "Q4 2026 letter to clients blog nvest advisors") ](https://nvestadvisors.com/q4-2026-letter-to-clients/) ## [Q4 2026 Letter to Clients](https://nvestadvisors.com/q4-2026-letter-to-clients/) [nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2026-10-01T14:56:43-06:00October 1st, 2026\| Q4 2026 Letter to Clients It's hard to believe 2026 is almost behind us! What strikes me most about the [Read More](https://nvestadvisors.com/q4-2026-letter-to-clients/) - [ ![Blog Post How do I know if I need a financial advisor](https://nvestadvisors.com/wp-content/uploads/2026/09/Copy-of-Mailchimp-Graphics.png "How do i know if i need a financial advisor nvest advisors") ](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) ## [How do I know I need a financial advisor?](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) [nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2026-09-22T12:42:52-06:00September 21st, 2026\| How Do I Know I Need a Financial Advisor? Managing your personal finances can sometimes feel like trying to [Read More](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/06/APPROVED-BLOG-POST-GRAPHICS-4.png "Approved blog post graphics 4 nvest advisors") ](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) ## [Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) [Maryam Irfanmeer](https://nvestadvisors.com/author/maryam-irfanameergmail-com/)2026-09-20T02:35:51-06:00June 29th, 2026\| Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected Many employers view compliance with federal [Read More](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/05/APPROVED-BLOG-POST-GRAPHICS-3.jpg "Approved blog post graphics 3 nvest advisors") ](https://nvestadvisors.com/the-401k-decision-hr-is-making-without-realizing-it/) ## [The 401(k) Decision HR Is Making Without Realizing It](https://nvestadvisors.com/the-401k-decision-hr-is-making-without-realizing-it/) [Maryam Irfanmeer](https://nvestadvisors.com/author/maryam-irfanameergmail-com/)2026-06-29T05:28:29-06:00June 29th, 2026\| The 401(k) Decision HR Is Making Without Realizing It Many HR leaders and business executives believe that once a 401(k) [Read More](https://nvestadvisors.com/the-401k-decision-hr-is-making-without-realizing-it/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/06/APPROVED-BLOG-POST-GRAPHICS-2.jpg "Approved blog post graphics 2 nvest advisors") ](https://nvestadvisors.com/the-401k-problems-employers-dont-notice-until-they-become-expensive/) ## [The 401(k) Problems Employers Don’t Notice Until They Become Expensive](https://nvestadvisors.com/the-401k-problems-employers-dont-notice-until-they-become-expensive/) [Maryam Irfanmeer](https://nvestadvisors.com/author/maryam-irfanameergmail-com/)2026-06-29T04:59:58-06:00June 29th, 2026\| The 401(k) Problems Employers Don’t Notice Until They Become Expensive Most executives assume their 401(k) plan is fine until it [Read More](https://nvestadvisors.com/the-401k-problems-employers-dont-notice-until-they-become-expensive/) ## [403(b), 457 and 401(a) Plans](https://nvestadvisors.com/403b-457-and-401a-plans/) [Maryam Irfanmeer](https://nvestadvisors.com/author/maryam-irfanameergmail-com/)2026-06-01T06:33:08-06:00June 1st, 2026\| 403(b) Plan Guidance A plan that looks simple on the surface, but quietly shapes outcomes through decisions most people never [Read More](https://nvestadvisors.com/403b-457-and-401a-plans/) 1[2](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250)[Next](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250) [](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/)## Tools to Help You Make Smarter Decisions Download our guide: How to Offer a High-Impact Employee Plan Without the Headache Watch: What Every Employer Should Know About Fiduciary Responsibility Watch: How to Choose the Right Financial Advisor for Your Family Get our eBook: 7 Retirement Mistakes to Avoid Watch our free webinar: “How Teachers Can Build Long-Term Financial Security — Even in Uncertain Times Watch: What to Expect When You Work with a Financial Advisor Retirement Roadmap — A downloadable guide to planning, transitioning, and enjoying retirement. **Read More:** **[Our Team](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/)** **[Our Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)** **[Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/)** --- ### [Is Your 401(k) Working as Hard as You Are? | Free 401(k) Webinar](https://nvestadvisors.com/is-your-401k-working-as-hard-as-you-are-free-401k-webinar/) **Published:** June 27, 2026 **Author:** Atta **Content:** ## When was the last time you took a fresh look at your company’s 401(k) plan? Get instant access to this free recorded webinar and learn the questions that can help you better evaluate your company’s 401(k) plan—at your own pace, whenever it’s convenient for you. Free recorded webinar • 30 min ## Get Instant Access to the Webinar Enter your first name and email and we will send your webinar access within a minute. ##### Trusted Fee-only • Fiduciary • Family-owned since 2008 Sorry, your browser doesn't support embedded videos. We respect your inbox. You’ll receive instant access to the webinar hosted by **Jeremy Torgerson**, and you can unsubscribe from future emails at any time. ![](https://nvestadvisors.com/wp-content/uploads/2026/03/nVA-Best-Of-Award-crystal-BR559412-2026-1.png "Nva best of award crystal br559412 2026 nvest advisors") ## How Would You Answer These Five Questions? Many investors contribute consistently but never review whether their retirement strategy is still aligned with their long-term goals. ## 1. Is my current 401(k) plan still the best fit for my business and employees? Your business evolves over time—your retirement plan should evolve with it. ## 2. Do I understand the fees associated with my 401(k) plan? Knowing what your plan costs can help you evaluate whether you’re receiving appropriate value for those expenses. ## 3. Would I be able to confidently explain why our current 401(k) plan is the right choice for our business? Understanding the reasoning behind your current plan can help ensure it continues to meet the needs of both your business and your employees. ## 4. When was the last time my 401(k) plan was independently reviewed? A fresh perspective can help identify opportunities to improve your plan and confirm it continues to align with your business goals. ## 5. Am I meeting my fiduciary responsibilities as a plan sponsor? Understanding your responsibilities can help you make informed decisions and support good plan governance. ##### About the speaker ### Jeremy Torgerson RFP®, MRFC ###### CEO & Co-Founder, nVest Advisors — financial & career guidance since 2008 [Jeremy Torgerson](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) is the Founder and CEO of nVest Advisors, where he has spent more than two decades helping professionals, educators, and business owners make informed financial decisions. As an experienced financial advisor, Jeremy is passionate about helping individuals and organizations better understand their retirement plans, ask the right questions, and make decisions with greater confidence. Through this recorded webinar, Jeremy shares the same educational approach that has helped clients navigate important retirement planning decisions for years. [Learn More About Jeremy](https://nvestadvisors.com/jeremy-torgerson-senior-financial-advisor-fiduciary/) ![Jeremy Torgerson Senior Financial Advisor](https://nvestadvisors.com/wp-content/uploads/2026/03/IMG_2426.jpeg "Jeremy torgerson Ceo of nvest advisors nvest advisors") ## What You’ll Learn - How to evaluate your current 401(k) strategy - Common mistakes investors make - Ways to review portfolio allocations - The impact of fees over time - How risk changes throughout your career - Practical steps for better retirement outcomes What Clients Are Saying About nVest Advisors…. > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ![Why nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/08/Fiduciary-Duty-1.png "Nvest advisors working experince nvest advisors") nVest Advisors • Fee-only fiduciary advisors © nVest Advisors 2008–2026 **Read More:** [Our Story](https://nvestadvisors.com/our-story-nvest-advisors/) [401(k) Fiduciary Services](https://nvestadvisors.com/fiduciary-401k-management/) [Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [Media Mentions](https://nvestadvisors.com/media-mentions/) --- ### [Fiduciary Financial Advisor in Texas | nVest Advisors](https://nvestadvisors.com/fiduciary-financial-advisor-in-texas/) **Published:** May 26, 2025 **Author:** Atta **Content:** # # **Helping Texans Plan Their Financial Future with Honest, Fiduciary Advice** ### Your Fiduciary, Fee-Only Family RIA Since 2008 – Relieving Retirement Fears, Tax Pressures, and Business Struggles Across Austin, Houston, Dallas, San Antonio, and Beyond [Book Your Free ConsultationBook Your Free Consultation](https://nvestadvisors.setmore.com/) [See Our ServicesSee Our Services](https://nvestadvisors.com/fiduciary-financial-services/) # **Helping Texans Plan Their Financial Future with Honest, Fiduciary Advice** Your Fiduciary, Fee-Only Family RIA Since 2008 – Relieving Retirement Fears, Tax Pressures, and Business Struggles Across Austin, Houston, Dallas, San Antonio, and Beyond [Find a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) ## ### How can we help you today? [](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/)### Find a Location Near You Read More > [](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)### Review Fees and Pricing Read More > [](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)### Explore Services Read More > [](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/)### Benefits of an nVest Advisors Financial Advisor Read More > [](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/)### If You’ve Never Worked With an Advisor Before Read More > [](https://nvestadvisors.com/worked-with-a-financial-advisor-before/)### If You’ve Worked With an Advisor Before Read More > ## ### How can we help you today? [](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/)### Find a Location Near You Read More > [](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)### Review Fees and Pricing Read More > [](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)### Explore Services Read More > [](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/)### Benefits of an nVest Advisors Financial Advisor Read More > [](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/)### If You’ve Never Worked With an Advisor Before Read More > [](https://nvestadvisors.com/worked-with-a-financial-advisor-before/)### If You’ve Worked With an Advisor Before Read More > ## ## The Real Financial Challenges Facing Texans Today ![](https://nvestadvisors.com/wp-content/uploads/2025/10/Your-paragraph-text-5.png "Financial challenges in texas nvest advisors") Texas’s economy is thriving, but that growth comes with hurdles. Here’s what the data shows, and why it’s hitting home for so many: ✅ **Retirement Shortfalls and Longevity Challenges:** Texas ranks 26th in WalletHub’s 2025 Best & Worst Places to Retire, with affordability and healthcare access dragging down scores. In fact, 45% of Americans – including many Texans – are at risk of outliving their savings, according to the 2024 Employee Benefit Research Institute. For Texas retirees, this is amplified by the state’s second-worst ranking for retirement in Bankrate’s 2025 study, where healthcare costs alone could eat up 25% of a typical retiree’s income. ✅ **High Taxes and Rising Cost of Living Pressures:** Property taxes in Texas average 1.68% of home value – the highest in the nation – adding $3,200 annually for a median $300,000 home. Combined with inflation, 70% of pre-retirees nationwide (and a similar share in Texas) worry about healthcare expenses draining their nest egg, per AARP’s 2024 survey. For small business owners, cash flow gaps affect 1 in 4 firms, with Texas ranking as the most financially distressed state in 2025 due to the ninth-lowest credit scores and third-highest distressed accounts per person. ✅ **Teacher and Educator Retirement Struggles:** Texas educators contribute 8% of their salaries to the Teacher Retirement System (TRS), the sixth-largest public pension fund in the U.S., with $200 billion in assets. Yet, TRS members face a 7% assumed rate of return amid market volatility, and recent bills like HB 5156 aim to add cost-of-living adjustments – but only if passed. With 930,000 active educators relying on TRS for security, many feel the pinch of stagnant benefits and rising costs. ✅ **Small Business Cash Flow and Growth Barriers:** Texas boasts 3.5 million small businesses (99.8% of all firms), but 1 in 4 face cash flow gaps, exacerbated by potential tax hikes like the expiring 20% Small Business Deduction in 2025. SBA relief is available for drought-affected businesses, but many struggle with limited cap space and regulatory changes from the 89th Legislature. ✅ **Overall Financial Distress:** Texas ranks #1 in WalletHub’s 2025 financial distress index, with a 22% surge in bankruptcies (6th-highest nationally), 7.1% of residents in forbearance (7th-highest), and 9th-lowest average credit scores, driven by high debt and no state income tax reliance on property taxes. These pain points are widespread among Texans, with housing and retirement estimated to affect 70%+ households, based on the Texas Comptroller’s forthcoming 2025 Housing Affordability Challenge report (projected from 2024 trends). [See the 2024 Texas Housing Affordability Challenge report here ](https://comptroller.texas.gov/economy/fiscal-notes/economics/2024/aff-housing/)– 2025 data forthcoming. \[SEC Disclaimer: Estimates are based on projections and 2024 trends; individual results may vary.\] [Our Distinctive Approach and Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## ## Transform Your Financial Future with Confidence in Texas At nVest Advisors, we’re not just financial planners — we’re your partners in building a secure, prosperous life right here in the Lone Star State. Our family-owned, fee-only firm delivers personalized, no-nonsense strategies that empower you to thrive. Here’s how we turn your financial challenges into opportunities for success: ✅ **Secure Your Dream Retirement:** Worried about outliving your savings in Texas’s rising economy? We take a deep dive into your **TRS, 401(k), or IRA**, identifying hidden gaps and designing a tailored roadmap to financial freedom. Our proven strategies help you **avoid the 45% risk** of running short — ensuring a retirement filled with **peace of mind and the lifestyle you’ve earned.** **✅ Master Taxes and Keep More of Your Money** Texas’s soaring property taxes can feel overwhelming — but we’re here to lighten the load. Our expert advisors uncover **smart deductions** and craft **tax-efficient plans** that put more money back in your pocket. With our clear, practical approach, you’ll feel in control of your finances — **no stress, no gimmicks, just results.** ✅ **Empower Texas Educators for a Worry-Free Future:** As a **Texas teacher**, your **TRS pension** is a cornerstone of your future — but its $200 billion fund faces market ups and downs. We blend your pension with **personalized savings strategies** to build a balanced, growth-driven plan. Retire with the **confidence and security** you deserve, knowing your financial future rests on a solid foundation. ✅ **Grow Your Small Business with Ease:** Texas is home to **3.5 million small businesses**, and we’re passionate about helping yours thrive. From mastering cash flow to navigating tax changes, our **strategic growth plans** and **budgeting tools** turn challenges into opportunities. Let us help you **unlock your business’s full potential** — with clarity, confidence, and long-term success. Our family-owned, fee-only approach means we’re on your side – no commissions, just honest advice tailored to Texas life. [See Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) ### TESTIMONIALS See what our clients have to say… > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ## Our Commitment to Texas With 30 years of experience in financial advisory marketing, I’ve seen how Texas’s unique blend of growth and volatility demands tailored support. As a certified fiduciary RIA serving Texas since 2008, nVest Advisors is committed to the Lone Star State’s investors. We focus on easing property tax burdens (averaging 1.68% per home value, adding $3,200 annually for a median $300,000 property) and navigating TRS reforms (HB 5156 pending for COLA adjustments). Our family-owned approach means genuine, virtual, or in-person guidance, helping you thrive amid 2025 tax shifts like the expiring 20% Small Business Deduction. Discover our philosophy on the[Philosophy page](https://nvestadvisors.com/our-philosophy/). ### Latest News And Financial Events Grasp a greater financial understanding with our blog and [upcoming seminars here](https://nvestadvisors.com/education-financial-events/)[.](https://nvestadvisors.com/education-financial-events/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/10/Q4-2026-Letter-to-Clients-Blog.png "Q4 2026 letter to clients blog nvest advisors") ](https://nvestadvisors.com/q4-2026-letter-to-clients/) - [ ![Blog Post How do I know if I need a financial advisor](https://nvestadvisors.com/wp-content/uploads/2026/09/Copy-of-Mailchimp-Graphics.png "How do i know if i need a financial advisor nvest advisors") ](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/06/APPROVED-BLOG-POST-GRAPHICS-4.png "Approved blog post graphics 4 nvest advisors") ](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) 1[2](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250)[Next](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250) [](https://nvestadvisors.com/tools-to-help-you-make-smarter-dec)## Tools to Help You Make Smarter Decisions Download our guide: How to Offer a High-Impact Employee Plan Without the Headache Watch: What Every Employer Should Know About Fiduciary Responsibility Watch: How to Choose the Right Financial Advisor for Your Family Get our eBook: 7 Retirement Mistakes to Avoid Watch our free webinar: “How Teachers Can Build Long-Term Financial Security — Even in Uncertain Times Watch: What to Expect When You Work with a Financial Advisor Retirement Roadmap — A downloadable guide to planning, transitioning, and enjoying retirement. ![Financial Advisor in Taxes](https://nvestadvisors.com/wp-content/uploads/2025/05/1000201724.jpg "Moses rodriguez financial advisor nvest advisors") ##### “As a proud Texan myself, I understand the unique financial challenges our families face—from navigating retirement to managing rising costs and planning for the next generation. At nVest Advisors, I don’t sell products—I provide honest, expert guidance to help Texans take control of their future with clarity, confidence, and lasting peace of mind.” ###### Moses Rodriguez *Fiduciary Financial Advisor* ### Ready to Strengthen Your Finances in Texas? Texas offers a wealth of opportunities, and we’re honored to help you ensure your finances align with your aspirations. We invite you to schedule a complimentary consultation at your convenience to discover tailored solutions that support your investment goals. [Let’s Start the Conversation](https://nvestadvisors.setmore.com/) --- ### [Fiduciary 401K Management | Smarter 401K Plans for Modern Businesses](https://nvestadvisors.com/fiduciary-401k-management/) **Published:** December 2, 2025 **Author:** Atta **Content:** ### Fiduciary 401(k) Management ## Smarter 401(k) Plans for Modern Businesses We don’t just manage your company’s 401(k) — we optimize it. As fiduciaries since 2008, nVest Advisors delivers transparent, compliant, and performance-driven retirement plans that serve both employers and employees. [Benchmark Your 401(k) Plan Today ](https://nvestadvisors.setmore.com/) [See Our 8-Step Process](https://nvestadvisors.com/our-proven-8-step-401k-benchmarking-onboarding-process/) #### Over 60% of U.S. companies overpay for their 401(k) plans — we make sure yours isn’t one of them. ### Fiduciary 401(k) Management ## Smarter 401(k) Plans for Modern Businesses We don’t just manage your company’s 401(k) — we optimize it. As fiduciaries since 2008, nVest Advisors delivers transparent, compliant, and performance-driven retirement plans that serve both employers and employees. [Benchmark Your 401(k) Plan Today ](https://nvestadvisors.setmore.com/) See Our 8-Step Process #### Over 60% of U.S. companies overpay for their 401(k) plans — we make sure yours isn’t one of them. ## The Hidden Cost of Standard 401k Plans Most companies believe their plan is competitive — until they see the numbers. Below are the common pain points that quietly reduce returns and increase risk. ## Excessive Fees Hidden recordkeeping and fund fees can drain 20–40% of potential participant returns over time. ## Low Employee Participation Without clear education and easy enrollment, participation remains low — reducing the plan’s impact. ## Fiduciary & Regulatory Risk Sponsors can face personal liability for plan mismanagement — a risk many companies don’t fully appreciate. ## Underperforming Investments Default funds or poorly chosen menus can lag peers by 2–3% annually, quietly eroding balances. ## Administrative Burden HR spends hours on compliance, reporting, and audits — time that could be spent on strategic initiatives. ![](https://nvestadvisors.com/wp-content/uploads/2026/04/401K-Pitfalls.jpg "401k pitfalls nvest advisors") ## The Hidden Cost of Standard 401k Plans Most companies believe their plan is competitive — until they see the numbers. Below are the common pain points that quietly reduce returns and increase risk. ## Excessive Fees Hidden recordkeeping and fund fees can drain 20–40% of potential participant returns over time. ## Low Employee Participation Without clear education and easy enrollment, participation remains low — reducing the plan’s impact. ## Fiduciary & Regulatory Risk Sponsors can face personal liability for plan mismanagement — a risk many companies don’t fully appreciate. ## Underperforming Investments Default funds or poorly chosen menus can lag peers by 2–3% annually, quietly eroding balances. ## Administrative Burden HR spends hours on compliance, reporting, and audits — time that could be spent on strategic initiatives. ![](https://nvestadvisors.com/wp-content/uploads/2026/04/401K-Pitfalls.jpg "401k pitfalls nvest advisors") ## How nVest Advisors Is Different We fix root causes — not symptoms. Our approach is fiduciary-first, transparent, and outcome-focused for mid-sized businesses. ## True Fiduciary Oversight We make decisions in your company’s best interest — legally accountable as fiduciaries. ## Fee Transparency & Cost Reduction We uncover hidden fees and typically save companies 20–40% in unnecessary plan costs. ## Employee Engagement That Works Targeted education and communications increase participation — often lifting rates by up to 35%. ## Performance-Driven Investment Strategy We select funds for risk-adjusted returns — not based on commissions or quotas. ![nVest Advisors office](https://nvestadvisors.com/wp-content/uploads/2025/07/1000220764.jpeg "Nvest advisors office inside view nvest advisors") Why Choose nVest Advisors ## How nVest Advisors Is Different We fix root causes — not symptoms. Our approach is fiduciary-first, transparent, and outcome-focused for mid-sized businesses. ## True Fiduciary Oversight We make decisions in your company’s best interest — legally accountable as fiduciaries. ## Fee Transparency & Cost Reduction We uncover hidden fees and typically save companies 20–40% in unnecessary plan costs. ## Employee Engagement That Works Targeted education and communications increase participation — often lifting rates by up to 35%. ## Performance-Driven Investment Strategy We select funds for risk-adjusted returns — not based on commissions or quotas. ![nVest Advisors office](https://nvestadvisors.com/wp-content/uploads/2025/07/1000220764.jpeg "Nvest advisors office inside view nvest advisors") Why Choose nVest Advisors ## ### Key Features & Business Benefits A scannable view for decision-makers — practical, measurable advantages your company will get. ### Feature - **True Fiduciary Oversight** - **Fee-Only, Transparent Pricing** - **Plan Design Optimization** - **Ongoing Benchmarking & Audits** - **Employee Education** - **Compliance & Documentation Support** ### Business Benefit - Reduces sponsor liability & aligns decisions with participants. - Typically reduces unnecessary costs by 20–40%. - Better match & auto-enroll settings increase participation & retention. - Continuous monitoring keeps funds competitive and costs low. - Improves contribution decisions and participation up to 35%. - Reduces HR workload & audit stress. ### Why It Matters - Defensible processes and legal protection. - Lower fees improve participant outcomes. - Supports recruiting and retention goals. - Measurable performance tracking for transparency. - Happier employees and better financial wellness. - Clean records, timely filings, less risk. ## ### Key Features & Business Benefits A scannable view for decision-makers — practical, measurable advantages your company will get. ### Feature - **True Fiduciary Oversight** - **Fee-Only, Transparent Pricing** - **Plan Design Optimization** - **Ongoing Benchmarking & Audits** - **Employee Education** - **Compliance & Documentation Support** ### Business Benefit - Reduces sponsor liability & aligns decisions with participants. - Typically reduces unnecessary costs by 20–40%. - Better match & auto-enroll settings increase participation & retention. - Continuous monitoring keeps funds competitive and costs low. - Improves contribution decisions and participation up to 35%. - Reduces HR workload & audit stress. ### Why It Matters - Defensible processes and legal protection. - Lower fees improve participant outcomes. - Supports recruiting and retention goals. - Measurable performance tracking for transparency. - Happier employees and better financial wellness. - Clean records, timely filings, less risk. ## Typical 401(k) Plans vs. The nVest Advantage ### Category - Fee Structure - Employee Engagement - Investment Performance - Administrative Burden - Fiduciary Risk - Business Impact ### Typical 401(k) Plan - Opaque, layered fees hidden within fund costs - Low participation, little education or guidance - Generic default funds often lag market benchmarks - HR shoulders compliance, vendor coordination, and reporting - High potential liability for plan sponsors - Lower net returns and higher operational risk ### The nVest Advantage - Transparent, fee-only structure with full cost visibility - Tailored education programs and auto-enrollment that boost engagement - Strategically selected funds for stronger, risk-adjusted returns - We handle all administration, audits, and fiduciary oversight - Full fiduciary management and ongoing regulatory compliance - Improved outcomes for employees, reduced liability for employers ## ### Typical 401(k) Plans vs. The nVest Advantage ### Category - Fee Structure - Employee Engagement - Investment Performance - Administrative Burden - Fiduciary Risk - Business Impact ### Typical 401(k) Plan - Opaque, layered fees hidden within fund costs - Low participation, little education or guidance - Generic default funds often lag market benchmarks - HR shoulders compliance, vendor coordination, and reporting - High potential liability for plan sponsors - Lower net returns and higher operational risk ### The nVest Advantage | | |---| - Transparent, fee-only structure with full cost visibility - Tailored education programs and auto-enrollment that boost engagement - Strategically selected funds for stronger, risk-adjusted returns - We handle all administration, audits, and fiduciary oversight - Full fiduciary management and ongoing regulatory compliance - Improved outcomes for employees, reduced liability for employers ## ### Our 401(k) Onboarding Process Getting started with nVest Advisors is straightforward and stress-free. We follow a clear, step-by-step process that ensures your company’s transition is smooth, compliant, and tailored to your needs from day one. Our Proven 8-Step 401(k) Benchmarking & Onboarding Process ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") ## See How Your 401(k) Can Work Smarter for Your Business Request a no-obligation benchmark — 30 minutes to reveal immediate opportunities and potential savings. ## Get a Second Opinion on Your Company’s 401(k) \* indicates required Email Address \* First Name Company (optional) Breif Note (Optional) **Read More:** 4O1K vs 403b? [Our Story](https://nvestadvisors.com/our-story-nvest-advisors/) [Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [For Small Business Owner ](https://nvestadvisors.com/financial-planning-for-small-business-owners/) --- ### [Our Proven 8-Step 401(k) Benchmarking & Onboarding Process](https://nvestadvisors.com/our-proven-8-step-401k-benchmarking-onboarding-process/) **Published:** June 22, 2026 **Author:** Atta **Content:** ## Our Proven 8-Step 401(k) Benchmarking & Onboarding Process A clear, transparent, and fiduciary-driven approach designed to protect your business and improve employee outcomes. ## ## **Why This Matters** Most companies don’t realize they are **overpaying**, **underperforming**, or carrying **unnecessary fiduciary risk** until a proper benchmarking analysis is done. Our 8-step process removes the guesswork and gives you a complete, unbiased picture of how your current plan is performing — and where improvements can dramatically benefit your employees. ## The 8-Step nVest 401(k) Benchmarking Process ### 1. Independent Research & Diagnostic Review Before we meet, we gather third-party, independent research on your current plan, including: - Fee structure & hidden costs - Vendor performance - Investment lineup quality - Fiduciary “red flags” - Compliance exposure You get a **data-driven, factual** assessment — no opinions, no sales pressure. ### 2. Initial Consultation With Key Decision Makers We meet with plan sponsors and leadership to understand: - What’s working in your current plan - What’s frustrating employees or HR - What your ideal 401(k) would look like This meeting sets the foundation for a customized plan, not a cookie-cutter solution. ### 3. Employee Input: Interviews or Surveys Your employees’ voices matter. We interview or survey key team members to understand: - Their needs - Their frustrations - Their expectations - Their confidence in the current plan You receive a summary report with clear insights and improvement opportunities. ### 4. We Shop Your Plan to At Least Three Providers Using your goals + employee input, we benchmark your plan by comparing: - Fees - Investment options - Technology & payroll integration - Fiduciary support - Service model - Value vs. cost You see **side-by-side comparisons** backed by objective data. ### 5. Presentation of Findings In a follow-up meeting, we provide: - A full benchmarking report - Clear red/green flags - Potential cost savings - Performance improvements - Compliance considerations - Employee-impact insights This is YOUR report — yours to keep regardless of your decision. ### 6. Vendor Selection & Rollover Support (If Needed) If the data shows your plan could perform better elsewhere, we help you: - Evaluate vendor proposals - Select your best-fit provider - Oversee the transition or rollover You don’t have to navigate any of this alone. ### 7. If You Hire Us: Full Plan Advisory & Employee Onboarding As your plan’s fiduciary financial advisor, we manage: - Employee orientation - Enrollment education - One-on-one investment support - Risk tolerance guidance - Plan structure optimization HR is no longer overwhelmed — we take the heavy lifting. ### 8. Ongoing Employee Education & Plan Optimization A great 401(k) doesn’t stop at onboarding. We continue with: - Quarterly or yearly employee education - Workflow and process improvements - Regular reviews with leadership - Ongoing benchmarking - Fiduciary updates - Investment lineup monitoring Your plan stays compliant, competitive, and in your team’s best interest — year after year. ## See How Your 401(k) Compares Get a complete, transparent, and unbiased benchmarking review — free of cost. [Start Your 401(k) Benchmark Review](https://nvestadvisors.setmore.com/) --- ### [Find a Financial Advisor Near You | Virtual & Local](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/) **Published:** August 8, 2025 **Author:** Atta **Content:** ![nVest Advisors Headquarter in Colorado](https://nvestadvisors.com/wp-content/uploads/2025/06/1000211584.webp "Nvest advisors headquarter in colorado nvest advisors") # Colorado: Where It All Comes Together **Started in Texas. Rooted in Colorado. Reaching You.** Since 2008, our journey began in Texas—but it’s in Colorado where we’ve built the heart of our mission, grounded in trust, clarity, and care. It’s here we’ve strengthened our ability to listen, plan, and lead with integrity. From that foundation, we now proudly serve individuals, families, and small business owners across the country—virtually and personally. ## Virtual Experience. Real Connection. **Real Advice. Real Connection. On Your Terms.** Life doesn’t pause for finances—so we meet you where you are. Whether you’re building wealth, running a business, starting over, or just trying to make smarter money moves, we bring trusted guidance to your screen—secure, personal, and pressure-free. ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") [Find a Convenient Time To Speak With Us](https://nvestadvisors.setmore.com/) ## Trusted Presence in These States [![nVest Advisors Financial Services in Texas](https://nvestadvisors.com/wp-content/uploads/2025/06/reduced_image-1.jpg "Nvest advisors financial services in texas nvest advisors")](https://nvestadvisors.com/fiduciary-financial-advisor-in-texas/) ### Texas We serve families, professionals, educators, and business owners across the Lone Star State—with strength, simplicity, and no sales agenda. [🔗 Visit Texas Page](https://nvestadvisors.com/fiduciary-financial-advisor-in-texas/) ![nVest Advisors Financial Advisor in Colorado](https://nvestadvisors.com/wp-content/uploads/2025/04/BANNERS-4.webp "Nvest_advisors_ _registered_financial_planner colorado springs nvest advisors") ### Colorado Our home base. Still grounded in personal values, still focused on real people and real businesses, not products. You can visit us in person or talk to the same trusted advisors virtually. [🔗 Visit Colorado Page](https://nvestadvisors.com/) ![nVest Advisors Financial Advisor in Kansas](https://nvestadvisors.com/wp-content/uploads/2025/05/ChatGPT-Image-May-28-2025-12_53_17-PM.jpg "Nvest advisor financial services in kansas nvest advisors") ### Kansas Small-town values, big-picture thinking. We support hardworking people and small businesses with strategies that last. [🔗 Visit Kansas Page](https://nvestadvisors.com/fiduciary-financial-advisor-in-kansas/) ![Financial Services in Utah](https://nvestadvisors.com/wp-content/uploads/2025/05/optimized_utah_hero_image.jpg "Financial advisor in utah nvest advisors") ### Utah In a fast-moving economy, we help individuals and entrepreneurs build steady plans that grow with purpose—not pressure. [🔗 Visit Utah Page](https://nvestadvisors.com/fiduciary-financial-advisor-in-utah-nvest-advisors/) ## Trusted Presence in These States ![nVest Advisors Financial Services in Texas](https://nvestadvisors.com/wp-content/uploads/2025/06/reduced_image-1.jpg "Nvest advisors financial services in texas nvest advisors") ### Texas We serve families, professionals, educators, and business owners across the Lone Star State—with strength, simplicity, and no sales agenda. [🔗 Visit Texas Page](https://nvestadvisors.com/fiduciary-financial-advisor-in-texas/) ![nVest Advisors Financial Advisor in Colorado](https://nvestadvisors.com/wp-content/uploads/2025/04/BANNERS-4.webp "Nvest_advisors_ _registered_financial_planner colorado springs nvest advisors") ### Colorado Our home base. Still grounded in personal values, still focused on real people and real businesses, not products. You can visit us in person or talk to the same trusted advisors virtually. [🔗 Visit Colorado Page](https://nvestadvisors.com/) ![nVest Advisors Financial Advisor in Kansas](https://nvestadvisors.com/wp-content/uploads/2025/05/ChatGPT-Image-May-28-2025-12_53_17-PM.jpg "Nvest advisor financial services in kansas nvest advisors") ### Kansas Small-town values, big-picture thinking. We support hardworking people and small businesses with strategies that last. [🔗 Visit Kansas Page](https://nvestadvisors.com/fiduciary-financial-advisor-in-kansas/) ![Financial Services in Utah](https://nvestadvisors.com/wp-content/uploads/2025/05/optimized_utah_hero_image.jpg "Financial advisor in utah nvest advisors") ### Utah In a fast-moving economy, we help individuals and entrepreneurs build steady plans that grow with purpose—not pressure. [🔗 Visit Utah Page](https://nvestadvisors.com/fiduciary-financial-advisor-in-utah-nvest-advisors/) ## What You Deserve You deserve a plan that brings peace of mind, not pressure. You deserve to be heard, not sold to. You deserve advice built around your life—and your business—not someone else’s idea of “success.” ## Let’s Begin With a Conversation No sales pitch. No jargon. Just the first step toward financial clarity for you, your family, or your business. Because you’ve worked too hard to keep guessing. [Book Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/) --- ### [Fiduciary Financial Advisor in Kansas | nVest Advisors](https://nvestadvisors.com/fiduciary-financial-advisor-in-kansas/) **Published:** October 7, 2025 **Author:** Atta **Content:** # # **Smart Financial Planning for Kansans — Built Around Your Goals** ### Fiduciary. Fee-Only. Family-Owned Since 2008. We serve Kansas families, business owners, teachers, and retirees with conflict-free financial advice tailored to your life. [Book Your Free ConsultationBook Your Free Consultation](https://nvestadvisors.setmore.com/) [See Our ServicesSee Our Services](https://nvestadvisors.com/fiduciary-financial-services/) [](https://businessrate.com/report/13287982?geocatSerial=1487221300&scoreType=br)![](https://nvestadvisors.com/wp-content/uploads/2026/03/nVA-Best-Of-Award-crystal-BR559412-2026.png "Nva best of award crystal br559412 2026 nvest advisors") ### # **Helping Kansans Build a More Confident Financial Future** Fiduciary. Fee-Only. Family-Owned Since 2008. We serve Kansas families, business owners, teachers, and retirees with conflict-free financial advice tailored to your life. [Find a Conveneint Time To Speak With UsFind a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) ## ### How can we help you today? [](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/)### Find a Location Near You Read More > [](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)### Review Fees and Pricing Read More > [](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)### Explore Services Read More > [](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/)### Benefits of an nVest Advisors Financial Advisor Read More > [](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/)### If You’ve Never Worked With an Advisor Before Read More > [](https://nvestadvisors.com/worked-with-a-financial-advisor-before/)### If You’ve Worked With an Advisor Before Read More > ## ### How can we help you today? [](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/)### Find a Location Near You Read More > [](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)### Review Fees and Pricing Read More > [](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)### Explore Services Read More > [](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/)### Benefits of an nVest Advisors Financial Advisor Read More > [](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/)### If You’ve Never Worked With an Advisor Before Read More > [](https://nvestadvisors.com/worked-with-a-financial-advisor-before/)### If You’ve Worked With an Advisor Before Read More > ## ## The Real Financial Challenges Facing Kansans Today ![Financial Challenges in Kansas](https://nvestadvisors.com/wp-content/uploads/2025/10/Your-paragraph-text-8.png "Kansas financial insights nvest advisors") Kansas’s economy thrives on agriculture and industry, but growth brings hurdles. Here’s what the data reveals and why it matters to you: ✅ **Retirement Shortfalls and Longevity Risks:** Kansas ranks 22nd in WalletHub’s 2025 Best & Worst Places to Retire, with healthcare costs and income stability as concerns. Nationally, 45% of Americans—including many Kansans—are at risk of outliving their savings, per the 2024 Employee Benefit Research Institute, with healthcare expenses potentially consuming 23% of a retiree’s income, according to Bankrate’s 2025 study. ✅ **Rising Taxes and Cost of Living Pressures:** Kansas property taxes average 1.34% of home value, adding about $2,500 yearly for a median $250,000 home. With inflation, 70% of pre-retirees nationwide (and a similar share in Kansas) worry about healthcare costs, per AARP’s 2024 survey, while small business cash flow issues affect 1 in 5 firms due to market volatility. ✅ **Teacher and Educator Retirement Struggles:** Kansas educators contribute 6% of their salaries to the Kansas Public Employees Retirement System (KPERS), managing a $20 billion fund. With a 7.5% assumed return facing market shifts, and 120,000 active members relying on it, many face stagnant benefits amid rising costs, with proposed reforms still pending. ✅ **Small Business Cash Flow and Growth Barriers:** Kansas hosts 100,000 small businesses (99.7% of all firms), but 1 in 5 struggle with cash flow due to agricultural price swings and potential tax changes in 2025. SBA support exists, yet access remains limited for rural entrepreneurs. These challenges are real for hardworking Kansans. The good news? Thoughtful guidance can pave the way forward. [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## ## Build a Brighter Financial Future in the Heart of Kansas At nVest Advisors, we’re more than financial planners—we’re your dedicated partners in creating a secure, prosperous life in the Sunflower State. As a family-owned, fee-only firm, we provide personalized, transparent strategies that empower you to overcome financial challenges and embrace opportunities. Here’s how we help you thrive: ✅ **Secure a Retirement That Stands Strong:** Concerned about outlasting your savings in Kansas’s evolving economy? We thoroughly review your KPERS, 401(k), or IRA, identifying gaps and crafting a tailored plan to ensure lifelong financial stability. Our proven strategies help you steer clear of the 45% risk of running out of funds, delivering a retirement filled with peace of mind and the freedom you’ve worked for. ✅ **Take Control of Taxes and Costs:** Rising property taxes in Kansas can feel daunting, but we’re here to ease the burden. Our expert advisors uncover smart deductions and design tax-efficient plans to keep more money where it belongs—in your pocket. With our clear, practical approach, you’ll gain confidence and control without complexity or gimmicks. ✅ **Empower Kansas Educators for a Confident Tomorrow:** As a Kansas educator, your KPERS pension is a foundation, but its $20 billion fund faces market swings. We expertly blend your pension with personalized savings strategies, creating a balanced, growth-driven plan. Retire with the certainty and security you’ve earned, knowing your future is built to last. ✅ **Grow Your Small Business with Confidence:** Kansas’s 100,000 small businesses are the backbone of our communities, and we’re passionate about helping yours flourish. From mastering cash flow to navigating tax changes, our budgeting tools and strategic growth plans turn challenges into opportunities for success. Let us fuel your business’s potential with clarity and stability. Our family-owned, fee-only approach ensures we’re your advocate—no commissions, just tailored advice for Kansas. [See Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) [Our Distinctive Approach and Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) ### TESTIMONIALS See what our clients have to say… > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ## Our Commitment to Kansas As a registered fiduciary RIA serving Kansas since 2008, nVest Advisors is deeply committed to the Sunflower State’s investors, bringing Colorado roots to address your unique challenges. We focus on easing housing affordability pressures (median $250K homes, up 4% YoY) through tax-efficient strategies and retirement planning that integrates KPERS pensions with personal savings to combat the 45% outliving risk (EBRI 2024). For Kansas’s 100,000 small businesses facing cash flow gaps (1 in 5 firms), we provide budgeting tools and growth plans amid 2025 tax shifts and stagflation risks. Our family-owned approach ensures genuine, virtual or in-person support, helping you thrive in Kansas’s dynamic economy—from Wichita manufacturing hubs to rural communities. Discover our philosophy on the [Investment Philosophy page.](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) ### Latest News And Financial Events Grasp a greater financial understanding with our blog and [upcoming seminars here](https://nvestadvisors.com/education-financial-events/)[.](https://nvestadvisors.com/education-financial-events/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/10/Q4-2026-Letter-to-Clients-Blog.png "Q4 2026 letter to clients blog nvest advisors") ](https://nvestadvisors.com/q4-2026-letter-to-clients/) - [ ![Blog Post How do I know if I need a financial advisor](https://nvestadvisors.com/wp-content/uploads/2026/09/Copy-of-Mailchimp-Graphics.png "How do i know if i need a financial advisor nvest advisors") ](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/06/APPROVED-BLOG-POST-GRAPHICS-4.png "Approved blog post graphics 4 nvest advisors") ](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) 1[2](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250)[Next](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250) [](https://nvestadvisors.com/tools-to-help-you-make-smarter-dec)## Tools to Help You Make Smarter Decisions Download our guide: How to Offer a High-Impact Employee Plan Without the Headache Watch: What Every Employer Should Know About Fiduciary Responsibility Watch: How to Choose the Right Financial Advisor for Your Family Get our eBook: 7 Retirement Mistakes to Avoid Watch our free webinar: “How Teachers Can Build Long-Term Financial Security — Even in Uncertain Times Watch: What to Expect When You Work with a Financial Advisor Retirement Roadmap — A downloadable guide to planning, transitioning, and enjoying retirement. ![Senior Financial Advisor Jeremy Torgerson Founder and CEO of nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/02/Jeremy-Torgerson.jpeg "Jeremy torgerson Ceo of nvest advisors nvest advisors") ##### ”Kansas families have always held a special place in my heart. Since 2008, we’ve been honored to serve clients here, helping them face the challenges of rising costs, retirement uncertainties, and planning for future generations. At nVest Advisors, our mission isn’t to sell products—it’s to provide Kansans with honest, straightforward guidance they can trust, so they can move forward with confidence, clarity, and peace of mind.” ###### Jeremy Torgerson *Senior Financial Advisor* ### Ready to Strengthen Your Finances in Kansas Kansas life is rich with potential, and we’re privileged to help your finances match that promise. We invite you to schedule a complimentary consultation at your convenience to explore personalized solutions that support your investment goals. [Let’s Start the Conversation](https://nvestadvisors.setmore.com/) --- ### [Fiduciary Financial Advisor in Utah | nVest Advisors](https://nvestadvisors.com/fiduciary-financial-advisor-in-utah-nvest-advisors/) **Published:** October 7, 2025 **Author:** Atta **Content:** # # **Helping Utah Families Build a More Confident Financial Future** ### Fiduciary. Fee-Only. Family-Owned Since 2008. We serve Utah families, business owners, teachers, and retirees with personalized, commission-free financial advice. [Book Your Free ConsultationBook Your Free Consultation](https://nvestadvisors.setmore.com/) [See Our ServicesSee Our Services](https://nvestadvisors.com/fiduciary-financial-services/) [](https://businessrate.com/report/13287982?geocatSerial=1487221300&scoreType=br)![](https://nvestadvisors.com/wp-content/uploads/2026/03/nVA-Best-Of-Award-crystal-BR559412-2026.png "Nva best of award crystal br559412 2026 nvest advisors") ## Helping Utah Families Build a More Confident Financial Future Fiduciary. Fee-Only. Family-Owned Since 2008. We serve Utah families, business owners, teachers, and retirees with personalized, commission-free financial advice. [Find a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) ## ### How can we help you today? [](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/)### Find a Location Near You Read More > [](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)### Review Fees and Pricing Read More > [](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)### Explore Services Read More > [](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/)### Benefits of an nVest Advisors Financial Advisor Read More > [](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/)### If You’ve Never Worked With an Advisor Before Read More > [](https://nvestadvisors.com/worked-with-a-financial-advisor-before/)### If You’ve Worked With an Advisor Before Read More > ## ### How can we help you today? [](https://nvestadvisors.com/find-a-financial-advisor-near-you-virtual-local/)### Find a Location Near You Read More > [](https://nvestadvisors.com/fee-only-financial-advisor-fees-pricing/)### Review Fees and Pricing Read More > [](https://nvestadvisors.com/fiduciary-financial-services-and-planning/)### Explore Services Read More > [](https://nvestadvisors.com/the-benefits-of-partnering-with-nvest-advisors/)### Benefits of an nVest Advisors Financial Advisor Read More > [](https://nvestadvisors.com/never-worked-with-a-financial-advisor-before/)### If You’ve Never Worked With an Advisor Before Read More > [](https://nvestadvisors.com/worked-with-a-financial-advisor-before/)### If You’ve Worked With an Advisor Before Read More > ## ## The Real Financial Challenges Facing Utahns Today ![Utah Financial Challenges and Solutions](https://nvestadvisors.com/wp-content/uploads/2025/10/Your-paragraph-text-7.png "Utah financial challenges nvest advisors") Utah’s economy is booming, but prosperity comes with challenges. Here’s what the data shows and why it impacts you: ✅ **Housing Affordability and Cost of Living Crisis (Affecting 80%+ of Residents):** Utah’s median home price has surged to $450,000 (up 5% YoY), making homeownership unattainable for 53% of Utahns per a 2025 Salt Lake Tribune study. Grocery costs and inflation have risen 6.5% annually, driving food bank demand to record highs (up 20% in 2025). AARP reports 70% of pre-retirees worry about these expenses eroding savings, with population growth slowing due to affordability fears. ✅ **Retirement Security and Longevity Risks (Impacting 45-60% of Working-Age Adults):** Utah ranks 15th in WalletHub’s 2025 Best Places to Retire, but healthcare access lags, with costs consuming 22% of retiree income (Bankrate 2025). The Utah Retirement Systems (URS) manages $35B for 90,000 educators, but a 6.75% assumed return faces volatility, leaving 45% at risk of outliving savings (EBRI 2024). Reforms are pending, but stagnant benefits amid inflation hit teachers hardest. ✅ **Small Business Cash Flow and Growth Barriers (Affecting 1 in 6 Firms):** Utah’s 110,000 small businesses (99.6% of firms) face cash flow gaps in 16% of operations due to rapid expansion and 2025 tax adjustments (Utah Department of Commerce). The State Small Business Credit Initiative provides $69M in loans, but rural access is limited, exacerbating economic uncertainty from tech/energy volatility (15% of firms impacted). NFIB notes 20% tax deduction expiration could add $816M annual GDP loss. ✅ **Healthcare and Medicaid Access Gaps (70% Pre-Retiree Concern):** 70% of pre-retirees fear healthcare costs (AARP 2024), with Utah’s Medicaid covering 120,000 adults but facing funding shortfalls from federal changes. Provider shortages in rural areas (e.g., fluoride ban impacts preventive care) compound this, per 2025 Health Policy reports. These pain points are universal for Utahns, with housing and retirement affecting 80%+ households, per [Gardner Policy Institute’s Utah Informed 2025.](https://gardner.utah.edu/public-policy/utah-informed-2025/) [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Our Distinctive Approach and Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) ## ## Transform Your Financial Future in the Heart of Utah At nVest Advisors, we’re more than financial planners—we’re your trusted partners in crafting a secure, thriving future right here in the Beehive State. As a family-owned, fee-only firm, we deliver personalized, transparent strategies that empower you to conquer financial challenges and seize opportunities. Here’s how we make your financial dreams a reality: ✅ **Secure a Retirement That Lasts:** Worried about stretching your savings in Utah’s growing economy? We meticulously review your URS, 401(k), or IRA, pinpointing gaps and designing a customized plan to ensure lasting financial security. Our proven approach helps you avoid the 45% risk of outliving your funds, paving the way for a retirement filled with confidence and comfort. ✅ **Master Costs and Taxes with Ease:** Utah’s rising housing costs and tax pressures can weigh heavily, but we’re here to lift the burden. Our expert advisors uncover smart tax-saving strategies and deliver practical, tailored plans to keep more of your hard-earned money in your pocket. With nVest, you’ll gain clarity and control, free from complexity or gimmicks. ✅ **Empower Utah Educators for a Confident Future:** As a Utah educator, your URS pension is vital, yet its $35 billion fund faces market fluctuations. We seamlessly integrate your pension with personalized savings strategies, creating a balanced, growth-focused plan. Retire with the assurance you deserve, knowing your financial future is rock-solid. ✅ **Grow Your Small Business with Confidence:** Utah’s 110,000 small businesses fuel our economy, and we’re passionate about helping yours succeed. From streamlining cash flow to navigating tax changes, our budgeting tools and strategic growth plans transform challenges into opportunities. Let us empower your business to thrive with clarity and stability. Our family-owned, fee-only approach means we’re your partner—no commissions, just customized guidance for Utah. [See Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) ### TESTIMONIALS See what our clients have to say… > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* Our Commitment to Utah As a certified fiduciary RIA serving Utah since 2008, nVest Advisors is deeply committed to the Beehive State’s investors, bringing Colorado roots to address your unique challenges. We focus on easing housing affordability pressures (median $450K homes, up 5% YoY) through tax-efficient strategies and retirement planning that integrates URS pensions with personal savings to combat the 45% outliving risk (EBRI 2024). For Utah’s 110,000 small businesses, which face cash flow gaps (approximately 1 in 6 firms), we provide budgeting tools and growth plans amid the 2025 tax shifts. Our family-owned approach ensures genuine, virtual or in-person support, helping you thrive in Utah’s dynamic economy—from Salt Lake City tech hubs to rural communities. Discover our philosophy on the [Philosophy page](https://nvestadvisors.com/our-philosophy/)[.](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) ### Latest News And Financial Events Grasp a greater financial understanding with our blog and [upcoming seminars here](https://nvestadvisors.com/education-financial-events/)[.](https://nvestadvisors.com/education-financial-events/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/10/Q4-2026-Letter-to-Clients-Blog.png "Q4 2026 letter to clients blog nvest advisors") ](https://nvestadvisors.com/q4-2026-letter-to-clients/) - [ ![Blog Post How do I know if I need a financial advisor](https://nvestadvisors.com/wp-content/uploads/2026/09/Copy-of-Mailchimp-Graphics.png "How do i know if i need a financial advisor nvest advisors") ](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/06/APPROVED-BLOG-POST-GRAPHICS-4.png "Approved blog post graphics 4 nvest advisors") ](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) 1[2](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250)[Next](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250) ## Tools to Help You Make Smarter Decisions Download our guide: How to Offer a High-Impact Employee Plan Without the Headache Watch: What Every Employer Should Know About Fiduciary Responsibility Watch: How to Choose the Right Financial Advisor for Your Family Get our eBook: 7 Retirement Mistakes to Avoid Watch our free webinar: “How Teachers Can Build Long-Term Financial Security — Even in Uncertain Times Watch: What to Expect When You Work with a Financial Advisor Retirement Roadmap — A downloadable guide to planning, transitioning, and enjoying retirement. ![CEO of nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/05/Jeremy-Torgerson-New-New.jpg "Jeremy torgerson financial advisor nvest advisors") ##### “Utah families remind me so much of my own—hardworking, family-centered, and always striving to build something lasting for the next generation. Since 2008, it’s been an honor to come alongside Utah clients, helping them face the challenges of rising costs, retirement worries, and the responsibility of caring for loved ones. At nVest Advisors, we don’t believe in selling products—we believe in listening, understanding, and offering the kind of honest guidance that gives families real confidence, clarity, and peace of mind about their future.” ###### Jeremy Torgerson *Senior Financial Advisor* ### Ready to Strengthen Your Finances in Utah? Utah’s potential is yours to seize, and we’re privileged to help your finances rise to meet it. We invite you to schedule a complimentary consultation at your convenience to explore personalized solutions that support your investment goals. [Let’s Start the Conversation](https://nvestadvisors.setmore.com/) --- ### [Fiduciary Retirement Planning Services | nVest Advisors](https://nvestadvisors.com/fiduciary-retirement-planning-services/) **Published:** October 13, 2025 **Author:** Atta **Content:** # Want to Retire with Financial Freedom? Ignite Your Retirement Dream with Trusted and Reliable Fiduciary Planning Since 2008. Imagine waking up each day with the thrill of true financial independence – no stress about outliving your savings, market swings, or unexpected costs. At nVest Advisors, our fiduciary retirement planning services turn that dream into reality. As a fee-only RIA since 2008, we prioritize your goals, crafting personalized plans that solve real retirement challenges and spark excitement for your future. Serving Colorado, Texas, Utah, Kansas, and online nationwide, we’re here to build the retirement you deserve. [Find a Conveneint Time To Speak With UsFind a Conveneint Time To Speak With Us](https://nvestadvisors.setmore.com/) [![Retiremnent Financial Freedom](https://nvestadvisors.com/wp-content/uploads/2025/09/Atta-4.jpg "Nvest advisors offers fiduciary retirement services nvest advisors")](https://nvestadvisors.com/meet-the-nvest-advisors-team/) ## Build the Retirement You Deserve Retirement is your chance to embrace a vibrant new chapter filled with adventure and security. But obstacles like insufficient savings, tax burdens, or healthcare costs can dim that excitement. Our fiduciary, fee-only approach cuts through complexity, maximizing your wealth and minimizing risks. With over 20 years of experience, we’ve empowered hundreds of families, teachers, and business owners to retire confidently. Learn more about our approach on our Story page. [Our Story](https://nvestadvisors.com/our-story-nvest-advisors/) [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [![nVest Advisors Teachers Financial Services](https://nvestadvisors.com/wp-content/uploads/2025/07/Atta-2.jpg "Teachers financial services nvest advisors")](https://nvestadvisors.com/meet-the-nvest-advisors-team/) ## Does Any of This Sound Like You? ✅ “I’m not sure how my pension works with my 403(b).” ✅ “I’ve changed schools and lost track of my retirement accounts.” ✅ “I want to retire, but I don’t know if I’m ready.” ✅ “I’ve been contributing, but I’m not confident it’s enough.” ✅ “I don’t want to be sold anything — I just want honest advice.” These aren’t silly questions. These are real stressors, and they deserve clear, compassionate answers. [Learn How We Help Teachers Like You](https://nvestadvisors.setmore.com/) [The nVest Advisors’ Client Journey](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) Guiding Your Retirement Journey with Fiduciary Wisdom Picture a retirement where financial freedom isn’t just a dream—it’s your vibrant reality! With 45% of Americans at risk of outliving their savings (Employee Benefit Research Institute, 2024) and 70% of pre-retirees anxious about healthcare costs draining their nest egg (AARP, 2024), the stakes are high. Yet, studies show fiduciary advisors like us can boost your retirement portfolio by 3% annually—adding up to $150,000 over 20 years for a $500,000 portfolio (Morningstar, 2023)—thanks to our conflict-free guidance. Since 2008, nVest Advisors has empowered over 500 clients across Colorado, Texas, Utah, Kansas, and online nationwide to break free from financial worries. Our family-owned RIA brings unmatched passion, integrity, and a proven track record, turning uncertainties into a thrilling future of independence. With 82% of clients reporting greater confidence after partnering with a fiduciary (CFA Institute, 2023), our expertise is your key to unlocking a retirement filled with joy and security. Discover our approach further on our Investment Philosophy page. ![Retirement Savings Growth Comparison Chart](https://nvestadvisors.com/wp-content/uploads/2025/10/Your-paragraph-text-9.png "Retirement savings grwoth comparison chart by nvest advisors nvest advisors") [Retirement Roadmap ( Ebook)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Investing is for Your Future ( White Paper)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) Guiding Your Retirement Journey with Fiduciary Wisdom Picture a retirement where financial freedom isn’t just a dream—it’s your vibrant reality! With 45% of Americans at risk of outliving their savings (Employee Benefit Research Institute, 2024) and 70% of pre-retirees anxious about healthcare costs draining their nest egg (AARP, 2024), the stakes are high. Yet, studies show fiduciary advisors like us can boost your retirement portfolio by 3% annually—adding up to $150,000 over 20 years for a $500,000 portfolio (Morningstar, 2023)—thanks to our conflict-free guidance. Since 2008, nVest Advisors has empowered over 500 clients across Colorado, Texas, Utah, Kansas, and online nationwide to break free from financial worries. Our family-owned RIA brings unmatched passion, integrity, and a proven track record, turning uncertainties into a thrilling future of independence. With 82% of clients reporting greater confidence after partnering with a fiduciary (CFA Institute, 2023), our expertise is your key to unlocking a retirement filled with joy and security. Discover our approach further on our Investment Philosophy page. ![Retirement Savings Growth Comparison Chart](https://nvestadvisors.com/wp-content/uploads/2025/10/Your-paragraph-text-9.png "Retirement savings grwoth comparison chart by nvest advisors nvest advisors") [Retirement Roadmap ( Ebook)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) [Investing is for Your Future ( White Paper)](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) ## ### Types of Retirement Plans We Optimize We craft tailored, fiduciary-guided strategies to secure your financial future with transparency: [### 401(k) and Employer Plans:](https://nvestadvisors.setmore.com/) Maximize contributions, optimize matches, and manage rollovers to reduce fees and taxes. For business owners, we create cost-effective plans – explore [our Small Business Solutions.](https://nvestadvisors.com/financial-planning-for-small-business-owners/) [Learn More](https://nvestadvisors.setmore.com/) [### IRAs and Roth IRAs:](https://nvestadvisors.setmore.com/) Strategic conversions and distributions to minimize taxes and grow tax-free wealth. [Learn More](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.setmore.com/)[### Pensions and State Plans:](https://nvestadvisors.setmore.com/) For teachers in Colorado (PERA), Texas (TRS), Utah (URS), or Kansas (KPERS), we integrate pensions with savings – [see our Teacher Retirement Guide.](https://nvestadvisors.com/financial-planning-for-teachers/) [Let's Address Them Together ](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.setmore.com/)[### Social Security and Medicare:](https://nvestadvisors.setmore.com/) Timing strategies to maximize benefits and navigate healthcare costs for a worry-free retirement. [Book Your Consultation Now](https://nvestadvisors.setmore.com/) [](https://nvestadvisors.com/investment-management-at-nvest-advisors/)[### Custom Portfolios:](https://nvestadvisors.setmore.com/) Diversified, low-cost investments aligned with your risk tolerance for steady growth.Our plans tackle challenges like inflation and market volatility, turning obstacles into opportunities for financial freedom. [Learn More](https://nvestadvisors.setmore.com/) [### Lifetime Income Planning](https://nvestadvisors.setmore.com/) Smart withdrawal strategies designed to make your income last—confidently and sustainably. [Learn More](https://nvestadvisors.setmore.com/) ✅ **Always Fee-Only. Always in Your Corner.** As fiduciaries, we deliver commission-free, conflict-free retirement planning tailored for your financial freedom in Colorado, Texas, Utah, Kansas, and online – ignite your future with personalized expertise! [Explore Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) [See Our All Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) Who We Help Retire Confidently Our retirement planning sparks enthusiasm for diverse clients: ## Families: Multi-generational strategies to protect legacies and enjoy retirement without worry – check our [Family Planning Services.](https://nvestadvisors.com/fiduciary-fee-only-financial-planning-for-families/) ## Teachers and Educators: Navigate TRS/PERA complexities, maximizing pensions and 403(b)s for a fulfilling post-career life – visit our [Teacher Retirement Guide.](https://nvestadvisors.com/financial-planning-for-teachers/) ## Small Business Owners: Succession planning and tax-efficient wealth transfer to retire on your terms – explore [Small Business Solutions.](https://nvestadvisors.com/financial-planning-for-small-business-owners/) ## Pre-Retirees and Retirees: Address income gaps and longevity risks to live vibrantly in Colorado, Texas, Utah, Kansas, or online. We solve fears of “running out” with resilient plans that fuel excitement for your golden years. ![nVest Advisors office](https://nvestadvisors.com/wp-content/uploads/2025/07/1000220764.jpeg "Nvest advisors office inside view nvest advisors") Who We Help Retire Confidently Our retirement planning sparks enthusiasm for diverse clients: ## Families: Multi-generational strategies to protect legacies and enjoy retirement without worry – check our [Family Planning Services.](https://nvestadvisors.com/fiduciary-fee-only-financial-planning-for-families/) ## Teachers and Educators: Navigate TRS/PERA complexities, maximizing pensions and 403(b)s for a fulfilling post-career life – visit our [Teacher Retirement Guide.](https://nvestadvisors.com/financial-planning-for-teachers/) ## Small Business Owners: Succession planning and tax-efficient wealth transfer to retire on your terms – explore [Small Business Solutions.](https://nvestadvisors.com/financial-planning-for-small-business-owners/) ## Pre-Retirees and Retirees: Address income gaps and longevity risks to live vibrantly in Colorado, Texas, Utah, Kansas, or online. We solve fears of “running out” with resilient plans that fuel excitement for your golden years. ![nVest Advisors office](https://nvestadvisors.com/wp-content/uploads/2025/07/1000220764.jpeg "Nvest advisors office inside view nvest advisors") ## ## Our Proven Retirement Planning Process ### Here’s what you’ll never get with us: - No pressure to buy products - No confusing jargon - No one-size-fits-all templates ### Here’s what you’ll always get: - Judgment-free space to talk honestly - A plan that starts with your values, goals, and reality - Support from real advisors who care [Learn more about our process Step by Step →](https://nvestadvisors.com/financial-planning-process-steps/) ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") TESTIMONIALS ## Client Success Stories > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* ## ## No Lectures. No Judgment. Just a Clear Path Forward. ### Here’s what you’ll never get with us: - No pressure to buy products - No confusing jargon - No one-size-fits-all templates ### Here’s what you’ll always get: - Judgment-free space to talk honestly - A plan that starts with your values, goals, and reality - Support from real advisors who care [Learn more about our process →](https://nvestadvisors.com/financial-planning-process-steps/) ![nVest Advisors Process](https://nvestadvisors.com/wp-content/uploads/2025/06/compressed_virtual_advisory_image_better.jpg "Nvest advisors virtual system nvest advisors") [](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/)## Tools to Help You Make Smarter Decisions Watch: How to Choose the Right Financial Advisor for Your Future Read it: 7 Retirement Mistakes Teachers Should Avoid Watch our free webinar: How Teachers Can Build Long-Term Financial Security — Even in Uncertain Times Watch: What to Expect When Working with a Financial Advisor Retirement Roadmap — A downloadable guide to planning, transitioning, and enjoying retirement ## Frequently Asked Questions - [All](#) - [Financial Education](#) - [Financial Planning](#) - [Investment](#) - [Onboarding](#) What can I expect from my free consultation?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2024-04-18T15:31:59-06:00#### [What can I expect from my free consultation?](#collapse-7-533) You will meet with Jeremy (or a registered advisor on our team) for 30 minutes. This will be an introductory call, where we can discuss whatever you feel comfortable sharing. Typically, we spend the time just assessing if we’d be a good fit for your needs. This will be a high-level discussion and will not go into specifics but will give you a rough idea on the next steps and action items to meet your goals. If we decide to move forward together, we’ll start to gather the information we need to be able to make specific recommendations. What can I expect from your financial planning services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-31T01:40:53-06:00#### [What can I expect from your financial planning services?](#collapse-7-528) We discuss your financial goals, your current lifestyle and expenditure, your current accounts, and more. Then, we will devise a tailored, action-based plan, which will include details on spending and saving goals, what types of accounts to open, and much more. What can we expect from your financial education offerings?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:34:43-06:00#### [What can we expect from your financial education offerings?](#collapse-7-522) Over the next few months, we will be releasing courses, webinars, and trainings offering financial guidance, investment knowledge, and actionable and specific recommendations. All of these will be virtual and accessible to everyone in the United States. Are there any income or minimum portfolio requirements for your services?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:17:04-06:00#### [Are there any income or minimum portfolio requirements for your services?](#collapse-7-524) No, our investment advisory services do not have any income or minimum portfolio requirements. For our premium investment advisory services, we have a $100K portfolio minimum. I’m worried about an upcoming recession. What can I do to secure my portfolio?[nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2022-08-22T16:12:36-06:00#### [I’m worried about an upcoming recession. What can I do to secure my portfolio?](#collapse-7-530) Our investment methodology takes into account macroeconomic trends and adjusts portfolios accordingly. What you can do depends on your portfolio makeup, your risk appetite, and other factors. For those with managed portfolios, we recommend scheduling a call with your investment advisors to understand the specific impact to your investments. For DIY investors, we recommend understanding how sectors you are bought into will be impacted by upcoming economic trends and adjusting accordingly. For specific tips, you can check out [our blog here](https://nvestadvisors.com/blog/) or Jeremy’s personal blog at [Think Like a Rich Guy](https://thinklikearichguy.com). - [nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2026-10-01T14:56:43-06:00#### [Q4 2026 Letter to Clients](https://nvestadvisors.com/q4-2026-letter-to-clients/) [nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2026-10-01T14:56:43-06:00October 1st, 2026\|[0 Comments](https://nvestadvisors.com/q4-2026-letter-to-clients/#respond) Q4 2026 Letter to Clients It's hard to believe 2026 is almost behind us! What strikes me most about the year we're ending is how much uncertainty looms in the air. Whether it's the Iran - [nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2026-09-22T12:42:52-06:00#### [How do I know I need a financial advisor?](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) [nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2026-09-22T12:42:52-06:00September 21st, 2026\|Comments Off on How do I know I need a financial advisor? How Do I Know I Need a Financial Advisor? Managing your personal finances can sometimes feel like trying to assemble complex furniture without the instruction manual—or worse, with too many conflicting manuals throwing advice - [Maryam Irfanmeer](https://nvestadvisors.com/author/maryam-irfanameergmail-com/)2026-09-20T02:35:51-06:00#### [Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) [Maryam Irfanmeer](https://nvestadvisors.com/author/maryam-irfanameergmail-com/)2026-09-20T02:35:51-06:00June 29th, 2026\|Comments Off on Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected Many employers view compliance with federal regulations as the ultimate measure of success for their 401(k) plan. They diligently complete annual ### Your Path to Financial Clarity Ready to solve retirement challenges and embrace financial freedom with enthusiasm? Schedule your free consultation today and let’s craft your dream retirement in Colorado, Texas, Utah, Kansas, or online. [Let’s Address Them Together ](https://nvestadvisors.setmore.com/) --- ### [Market & Economy](https://nvestadvisors.com/market-economy/) **Published:** October 17, 2023 **Author:** nVest Advisors **Content:** # Markets & Economy nVest Advisors is pleased to present this dashboard of live, continuously updated information on world markets and general economic events, including real-time investment news headlines. Although we believe this information to be accurate, timely and reliable at all times, this data comes from outside sources and is provided here solely as a reference for our site visitors. We make no express or implied warranty as to the accuracy of this information, and its presentation should never be construed as an endorsement or affirmation of any company, index, trading or investing strategy. ## Current US Markets ### Market Headlines #### [LIVE ECONOMIC NEWS](https://www.foxbusiness.com/economy) - [More than 265K Ram vehicles facing recall over steering defect, regulators say](https://www.foxbusiness.com/economy/more-than-265k-ram-vehicles-facing-recall-over-steering-defect-regulators-say) - [Americans heating their homes this winter face a stark cost divide](https://www.foxbusiness.com/economy/americans-heating-homes-winter-face-stark-cost-divide) - [Immigrant who defended American dream against socialism fires back at critics, warns: 'Don't be fooled'](https://www.foxbusiness.com/economy/immigrant-defended-american-dream-against-socialism-fires-back-critics-dont-be-fooled) - [Colleges are slashing tuition prices as students balk at soaring costs](https://www.foxbusiness.com/economy/colleges-slashing-tuition-prices-students-balk-soaring-costs) - [Workers using AI are seeing major benefits – but a gap is emerging](https://www.foxbusiness.com/economy/workers-using-ai-seeing-major-benefits-gap-emerging) - [Baby boomers are poised to unleash millions of homes — but there's a catch for first-time buyers](https://www.foxbusiness.com/economy/boomers-poised-unleash-millions-homes-theres-catch-first-time-buyers) - [Bond yields are hovering near multi-year highs: What it means for your wallet](https://www.foxbusiness.com/economy/bond-yields-hovering-near-multi-year-highs-what-means-your-wallet) - [Trump's investment push hits Europe as Irish PM eyes next tariff break](https://www.foxbusiness.com/economy/trumps-investment-push-hits-europe-irish-pm-eyes-next-tariff-break) - [US economy added 29,000 jobs in September, a slower pace than expected](https://www.foxbusiness.com/economy/us-jobs-report-september-2026) - [Ford recalls more than 40,000 trucks and SUVs over visibility risk](https://www.foxbusiness.com/economy/ford-recalls-more-than-40000-trucks-suvs-over-visibility-risk) ### Economy Headlines #### [LIVE MARKET NEWS](https://www.foxbusiness.com/markets) - [Union Pacific CEO makes case for $85B Norfolk Southern merger amid pushback](https://www.foxbusiness.com/markets/union-pacific-ceo-makes-case-85b-norfolk-southern-merger-amid-pushback) - [If you'd bought $10,000 worth of Amazon stock 10 years ago, here's how much you'd have today](https://www.foxbusiness.com/markets/if-youd-bought-10000-worth-of-amazon-stock-10-years-ago-heres-how-much-youd-have-today) - [Tesla posts stronger-than-expected quarterly deliveries](https://www.foxbusiness.com/markets/tesla-posts-stronger-than-expected-quarterly-deliveries) - [October could be a huge month for the stock market. Here's why.](https://www.foxbusiness.com/markets/october-could-be-a-huge-month-for-the-stock-market-heres-why) - [Disney cuts hundreds of jobs across multiple departments: report](https://www.foxbusiness.com/markets/disney-cuts-hundreds-jobs-across-multiple-departments-report) - [Nvidia launches security platform to keep AI agents from going rogue](https://www.foxbusiness.com/markets/nvidia-launches-security-platform-keep-ai-agents-from-going-rogue) - [Tesla begins delivering Semi trucks to customers after years of delays](https://www.foxbusiness.com/markets/tesla-begins-delivering-semi-trucks-customers-after-years-delays) - [Costco receives $184M in tariff refunds, says most will go toward lower prices](https://www.foxbusiness.com/markets/costco-receives-184m-tariff-refunds-says-most-go-toward-lower-prices) - [McDonald’s to spend $8.5B on revamping restaurants, tech and franchise support](https://www.foxbusiness.com/markets/mcdonalds-spend-8-5b-revamping-restaurants-tech-franchise-support) - [Major airlines cut flights as higher jet fuel prices hit carriers](https://www.foxbusiness.com/markets/major-airlines-cut-flights-higher-jet-fuel-prices-hit-carriers) ### Our Articles ## [Q4 2026 Letter to Clients](https://nvestadvisors.com/q4-2026-letter-to-clients/) [nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2026-10-01T14:56:43-06:00[Read More](https://nvestadvisors.com/q4-2026-letter-to-clients/) ## [How do I know I need a financial advisor?](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) [nVest Advisors](https://nvestadvisors.com/author/nva-admin/)2026-09-22T12:42:52-06:00[Read More](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) ## [Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) [Maryam Irfanmeer](https://nvestadvisors.com/author/maryam-irfanameergmail-com/)2026-09-20T02:35:51-06:00[Read More](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) ## [The 401(k) Decision HR Is Making Without Realizing It](https://nvestadvisors.com/the-401k-decision-hr-is-making-without-realizing-it/) [Maryam Irfanmeer](https://nvestadvisors.com/author/maryam-irfanameergmail-com/)2026-06-29T05:28:29-06:00[Read More](https://nvestadvisors.com/the-401k-decision-hr-is-making-without-realizing-it/) --- ### [Tools to Help You Make Smarter Decisions](https://nvestadvisors.com/tools-to-help-you-make-smarter-decisions/) **Published:** August 27, 2025 **Author:** Atta **Content:** # Real Help, Premium Tools for Your Financial Freedom We’re here to guide you with expert insights—unlock premium content tailored to your needs, absolutely free. ## Claim Your Free Financial Freedom Tools Now \* indicates required Email Address \* First Name **Choose Your Premium Resource Today!** - nVest Select Stock Portfolio - How to Offer a High-Impact Employee Plan Without the Headache - The nVest Advisors' Client Journey - Retirement Roadmap - Factor / Factor+ Model Portfolios - Sector / Sector+ Model Portfolios - Doing Well by Doing Good: The Story of nVest Advisors - What a Financial Plan Solves for You - Investing is for Your Future - 7 Retirement Mistakes to Avoid --- ### [Job Market Webinar | Build a Career That Thrives Anywhere](https://nvestadvisors.com/job-market-webinar-build-a-career-that-thrives-anywhere/) **Published:** December 2, 2025 **Author:** Atta **Content:** ## Inside the Job Market: What Recruiters and Employers Aren’t Saying Learn what employers really look for—and uncover the hidden trends shaping today’s job market. Discover how to stand out, stay valuable, and build a career that grows no matter what the economy does. Free recorded webinar • 30 min ## Get Instant Access to the Webinar Enter your first name and email and we will send your webinar access within a minute. ##### Trusted Fee-only • Fiduciary • Family-owned since 2008 ## Inside the Job Market: What Recruiters and Employers Aren’t Saying Learn what employers really look for—and uncover the hidden trends shaping today’s job market. Discover how to stand out, stay valuable, and build a career that grows no matter what the economy does. Free recorded webinar • 30 min ## Get Instant Access to the Webinar Enter your first name and email and we will send your webinar access within a minute. ##### Trusted Fee-only • Fiduciary • Family-owned since 2008 Sorry, your browser doesn't support embedded videos. ## How to Access the Webinar **Step #1**: Enter your name & email → **Step #2:** Check your inbox for the access link → **Step #3:** Watch the recorded webinar on any device. ##### About the speaker ### Jeremy Torgerson RFP®, MRFC ###### CEO & Co-Founder, nVest Advisors — financial & career guidance since 2008 As the CEO and Founder of nVest Advisors, ***Jeremy Torgerson*** has been helping professionals, educators, and business owners achieve financial confidence since 2008. With over 20 years of experience in financial planning and career guidance, Jeremy has dedicated his career to empowering individuals to make smarter, more strategic decisions about their money and their future. Now, he’s sharing the key lessons he’s learned about building long-term success and career resilience in every job market. ![Founder of Nvest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/11/MG_3010-Edit-2.jpg "Jeremy torgerson Ceo of nvest advisors nvest advisors") ## Why This Webinar Matters **The job market has changed—and no one told you the full story.** Recruiters are filtering talent differently, industries are shifting faster than ever, and automation is quietly reshaping hiring standards. In this free webinar, you’ll learn how to navigate these changes with confidence and future-proof your career. You’ll discover: ✅ What employers value most (and what they ignore) ✅ How to position yourself for growth—no matter your field ✅ The new “currency” of modern careers that keeps you employable and adaptable ✅ How to turn uncertainty into opportunity in every market cycle ![Why nVest Advisors](https://nvestadvisors.com/wp-content/uploads/2025/08/Fiduciary-Duty-1.png "Nvest advisors working experince nvest advisors") nVest Advisors • Fee-only fiduciary advisors © nVest Advisors 2008–2025 **Read More:** Our Story Our Investment Philosophy Media Mentions --- ### [Media Mentions | Featured Financial Advisor](https://nvestadvisors.com/media-mentions/) **Published:** August 8, 2025 **Author:** Atta **Content:** # Recognized by Trusted Financial Media nVest Advisors and our founder Jeremy Torgerson have been featured in leading financial publications for our mission to provide clear, trustworthy financial guidance and real freedom for everyday families. ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/MagnifyMoney_Logo-scaled.jpg "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/Chicago_Tribune_logo.svg.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/Yahoo_Finance_logo_2021.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/cnbc-logo-transparent.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2023/12/money-watch-logo.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2023/12/msn_logo_update.jpeg "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/thestreet-vector-logo.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2025/07/download.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/MagnifyMoney_Logo-scaled.jpg "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/Chicago_Tribune_logo.svg.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/Yahoo_Finance_logo_2021.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/cnbc-logo-transparent.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2023/12/money-watch-logo.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2023/12/msn_logo_update.jpeg "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2022/08/thestreet-vector-logo.png "Nvest advisors media mentions nvest advisors") ![nVest Advisors Media Mentions](https://nvestadvisors.com/wp-content/uploads/2025/07/download.png "Nvest advisors media mentions nvest advisors") [## Yahoo Finance \| 9 Psychological Biases That Hurt Investors](https://www.yahoo.com/news/9-psychological-biases-hurt-investors-152754821.html) Quoted on how emotional bias impacts smart decision-making, Jeremy explores how everyday investors can protect themselves from costly behavior traps. [Read More](https://www.yahoo.com/news/9-psychological-biases-hurt-investors-152754821.html) [## U.S. News & World Report \| 5 Retirement Planning Mistakes Self-Employed Workers Should Avoid](https://money.usnews.com/investing/articles/2016-10-12/5-retirement-planning-mistakes-self-employed-workers-should-avoid) For self-employed professionals, Jeremy highlights often-overlooked retirement pitfalls and strategies to build sustainable financial freedom. [Read More](https://money.usnews.com/investing/articles/2016-10-12/5-retirement-planning-mistakes-self-employed-workers-should-avoid) [## CNBC \| The Truth About Dow 20,000 for Investors and the Stock Market](https://www.cnbc.com/2016/12/29/the-truth-about-dow-20000-for-investors-and-the-stock-market.html) Jeremy Torgerson explains what big market milestones like Dow 20,000 really mean for long-term investors — and why the hype shouldn’t distract from smart planning. [Read More](https://www.cnbc.com/2016/12/29/the-truth-about-dow-20000-for-investors-and-the-stock-market.html) [## Wise Bread \| 7 Reasons Millennials Should Stop Being Afraid of the Stock Market](https://www.wisebread.com/7-reasons-millennials-should-stop-being-afraid-of-the-stock-market) In this article, Jeremy breaks down common fears millennials have about investing — and how to take confident, calculated steps forward. [Read More](https://www.wisebread.com/7-reasons-millennials-should-stop-being-afraid-of-the-stock-market) *[Click here to explore all our media interviews, expert quotes, and published articles →](https://nvestadvisors.com/media/)* **Read More:** [Our Story](https://nvestadvisors.com/our-story-nvest-advisors/) [Our Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) [Our Process](https://nvestadvisors.com/financial-planning-process-steps/) [Our Investment Philosophy](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) --- ### [Thank You for Your Interest! Schedule a Consultation with nVest Advisors](https://nvestadvisors.com/thank-you-for-your-interest-schedule-a-consultation-with-nvest-advisors/) **Published:** August 12, 2024 **Author:** Atta **Content:** Thank You for Taking a Step Toward Financial Confidence We appreciate your interest and commitment to enhancing your financial well-being, especially during these uncertain times. For expert guidance and dedicated support, we invite you to [**Book Your 30-Minute Consultation** ](https://nvestadvisors.setmore.com/)Now with **Jeremy Torgerson, CEO of nVest Advisors**. Jeremy is committed to helping you achieve your financial goals and would be honored to assist you on your financial journey. [Book Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/) --- ### [Investment Philosophy | Fiduciary Approach](https://nvestadvisors.com/investment-philosophy-fiduciary-approach/) **Published:** August 6, 2025 **Author:** Atta **Content:** # Our Investing Philosophy Purpose-Driven. Process-Based. Risk-Aware. Always Focused on You. nVest Advisors was built to support the financial and investing needs of everyday families with the same care and diligence we give to our high-net-worth clients. This means having a variety of approaches to crafting an investing strategy, while always adhering to a core set of investing principles: ## 1) Place your goals front and center Successful investors need a reason to invest, not just a strategy. Those reasons are crucial to keeping you focused during difficult markets or periods of uncertainty. They help you stay grounded when your strategy might seem to be challenged by unexpected events. Our job as advisors is to help you identify what matters most to you, quantify what your money needs to do for you (and by when), and set your investing course squarely focused on those objectives. ## 2) Bring on only enough risk to accomplish your goals Investing always involves risk. It cannot be avoided. Even so-called “safe” investments like Treasury bonds carry the risk of losing serious value under the right conditions. At nVest, we practice the philosophy of risk mitigation as a primary focus of our strategies. We believe in time-honored principles like diversification and systematic rebalancing, but we also believe in shifting your strategy toward safety automatically when economic conditions warn us that trouble is ahead (LINK HERE TO OUR MACRO APPROACH). We also recognize that your tolerance for risk will change over time (particularly when the world gets scary), and will shift strategy when your appetite for risk changes. Gains are great; we love them! But not at the expense of putting your hard-earned money at risk of unnecessary losses. ## 3) Markets are rarely ever rational and efficient One of the great myths of investing is that markets are always properly priced. The theory is, so many people are seeing the same information at the same time, that there is no way for errors to occur. If that were true, we’d never have booms and busts, insider trading, or “pump and dump” scams. The truth is, markets move all over the place, every minute of every day. Sometimes those moves are rational, but often they are based solely on the emotional responses of investors to news headlines (true or not), unfounded rumors, and even a celebrity’s social media posts. Trying to make sense of that chaos (and stay sane) is a terrible way to try to invest for long-term growth. Your goals are well-thought-out, reasonable, and important to you – why should the clamor of the herd have that much control over them? ## 4) Focus first on the economy So if markets are rarely rational and efficient, what can we base our investing decisions on that provides better clarity and structure? In a single word: the economy. The economy is the world in which all companies and investors must participate. It is non-political, unemotional, doesn’t pick winners and losers, and can’t favor one investor over another. A focus on the economy gives us a clear, unbiased view of the basic investing conditions. When the economy shows that growth is ahead, we can prepare our strategies for good times, and when the economy shows signs of slowing down, we can “batten down the hatches” and wait for the storm to pass. ## 5) Use a process, not a hunch Some investors (and even a few advisors) put their money into the markets by playing their hunches or making professional guesses as to what the next “hot stock” or trend will be. This, obviously, can have wildly unpredictable results. Investing is not gambling. It is about setting the course for your funds by employing quality investment assets that work together to minimize your risk and accomplish your long-term goals. Our management style is data-dependent and rules-based. We do this to remove the emotion and bias (and hunch-taking) out of our decisions regarding your money. Instead, we follow a proven, principled process to make changes to your investing strategy. ## 6) Keep it cheap & liquid Some investors (and even a few advisors) put their money into the markets by playing their hunches or making professional guesses as to what the next “hot stock” or trend will be. This, obviously, can have wildly unpredictable results. Investing is not gambling. It is about setting the course for your funds by employing quality investment assets that work together to minimize your risk and accomplish your long-term goals. Our management style is data-dependent and rules-based. We do this to remove the emotion and bias (and hunch-taking) out of our decisions regarding your money. Instead, we follow a proven, principled process to make changes to your investing strategy. **Read More:** [Our Services](https://nvestadvisors.com/fiduciary-financial-services-and-planning/) [Our Process](https://nvestadvisors.com/financial-planning-process-steps/) [Meet the Team](https://nvestadvisors.com/meet-the-fiduciary-financial-advisors/) [Our Story](https://nvestadvisors.com/our-story-nvest-advisors/) --- ### [Financial Planning Process Steps | How We Work](https://nvestadvisors.com/financial-planning-process-steps/) **Published:** August 8, 2025 **Author:** Atta **Content:** # How It Works Our 5-Step Process to Financial Clarity At nVest Advisors, we believe in building long-term relationships based on trust, transparency, and a personalized approach. Here’s what the journey looks like when you become a client: ### 1. Start the Conversation We begin with a no-pressure, 30-minute virtual meeting. This is our opportunity to get to know each other and discuss your goals, concerns, and vision for the future — to determine if we’re a good fit to work together. ### 2. Understand Your Needs You provide the essential details. We take the time to listen, analyze, and create a tailored financial game plan designed around your specific needs and lifestyle. ### 3. Launch Your Personalized Plan Once you’re ready, we take care of the logistics. We handle the paperwork, set up your accounts, and begin turning your financial puzzle into a clear, cohesive strategy. ### 4. Bring Everything Together With your initial plan in motion, we implement a step-by-step process to align your investments, goals, and long-term strategy. This is where the real transformation begins — and where our long-term partnership takes shape. ### 5. Meet Regularly and Adapt As your life evolves, so does your financial strategy. We’ll schedule regular reviews to monitor progress, make adjustments, and ensure you’re always moving confidently toward your goals. ## Ready to Get Started? Book your free 30-minute consultation and take the first step toward clarity and confidence in your financial future. [Book Your 30-Minute Consultation Now](https://nvestadvisors.setmore.com/) --- ### [nVest in the Media | Archives](https://nvestadvisors.com/media/) **Published:** November 13, 2023 **Author:** nVest Advisors **Content:** # **nVest Advisors in the Media** We’re proud to have been quoted as a local and national authority on personal finance and investing over the years, in a wide variety of major media and podcasts. Below is an archive to all of the articles and podcast media in which we appear: - [CEOBlogNation 8-27-2016](http://hear.ceoblognation.com/2016/08/27/15-entrepreneurs-explain-how-they-came-up-with-their-business-name/) - [WiseBread 9-8-2016](http://www.wisebread.com/7-reasons-millennials-should-stop-being-afraid-of-the-stock-market) - [TheStreet.Com 10-8-2016](https://www.thestreet.com/story/13841446/4/are-financial-advisors-walled-off-from-directly-helping-clients-with-their-401-k-s.html) - [TheStreet.Com 10-9-2016](https://www.thestreet.com/story/13841170/1/5-questions-to-ask-your-financial-advisor-before-a-recession.html) - [SafetyFirstFinancialPlanners 10-12-2016](http://webcache.googleusercontent.com/search?q=cache:rUwpm2ocMG0J:safetyfirstfinancialplanners.com/author/adminKelley/page/16/&num=1&hl=en&gl=us&strip=0&vwsrc=0) - [US News & World Report 10-12-2016](http://money.usnews.com/investing/articles/2016-10-12/5-retirement-planning-mistakes-self-employed-workers-should-avoid) - [Magnify Money 10-21-2016](http://www.magnifymoney.com/blog/featured/stock-market-might-election-trump-clinton571091558) - [Oaklandvert.com 10-27-2016](http://oaklandvert.com/archives/159) - [Hearpreneur 10-31-2016](http://hear.ceoblognation.com/2016/08/27/15-entrepreneurs-explain-how-they-came-up-with-their-business-name/) - [US News & World Report 11-28-2016](http://money.usnews.com/investing/articles/2016-11-28/how-to-bear-down-in-a-declining-stock-market) - [Yahoo Finance 12-12-2016](http://finance.yahoo.com/news/9-psychological-biases-hurt-investors-152754821.html) - [US News & World Report 12-13-2016](http://money.usnews.com/investing/articles/2016-12-13/4-things-millennials-should-know-about-mutual-funds-and-retirement) - [FinancialBuzz.Com 12-15-2016](http://www.financialbuzz.com/things-to-know-about-retirement-and-mutual-funds-642962) - [InsuranceNews.Net 12-20-2016](https://insurancenewsnet.com/innarticle/trump-effect-managing-client-portfolios-2017) - [US News & World Report 12-22-2016](http://money.usnews.com/investing/articles/2016-12-22/dont-start-investing-until-you-know-what-youre-doing) - [CNBC 12-29-2016](http://www.cnbc.com/2016/12/29/the-truth-about-dow-20000-for-investors-and-the-stock-market.html) - [St. Louis Today 12-30-2016](http://www.stltoday.com/news/your-daily-serena-s-surprise-no-putin-payback-and-passengers/collection_e01ca559-b459-5eb6-a57e-d9c8cb941d50.html) - [TheStreet.Com 1-7-2017](https://www.thestreet.com/story/13941875/1/take-these-steps-if-your-financial-advisor-switches-firms.html) - [US News & World Report 5-16-2017](https://money.usnews.com/investing/articles/2017-05-16/these-life-events-require-the-most-insurance-planning) - [US News & World Report 5-17-2017](https://money.usnews.com/investing/articles/2017-05-17/what-is-a-registered-investment-advisor) - [Ebix 7-11-2017](http://www.ebix.com/blog/basics-retirement-plan-fees/) - [US News & World Report 8-22-2017](https://money.usnews.com/investing/investing-101/articles/2017-08-22/3-dos-3-donts-for-boosting-your-portfolio-returns) - [US News & World Report 9-1-2017](https://www.msn.com/en-us/money/savingandinvesting/why-more-risk-isnt-for-all-investors/ar-AAr5pBO) - [MSN 9-1-2017](https://www.msn.com/en-us/money/savingandinvesting/why-more-risk-isnt-for-all-investors/ar-AAr5pBO) - [CBS Moneywatch 10-10-2017](https://www.cbsnews.com/news/paying-off-student-loans-early-doesnt-always-pay/) - [Investor’s Business Daily 10-14-2017](http://www.investors.com/etfs-and-funds/etfs/money-managers-lure-millennials-with-low-minimums-live-advice/) - [Nasdaq 10-16-2017](http://www.nasdaq.com/article/money-managers-lure-millennials-with-low-minimums-live-advice-cm859566) - [Chicago Tribune 10-17-2017](http://www.chicagotribune.com/business/ct-biz-money-managers-millennials-inv-20171017-story.html) - [US News & World Report 10-24-2017](https://money.usnews.com/investing/funds/articles/2017-10-24/3-costly-mistakes-first-time-mutual-fund-investors-make) - [Zing! by Quicken Loans 11-17-2017](https://www.quickenloans.com/blog/ready-invest-consider-assets-usually-grow-value-time) - [US News & World Report 11-20-2017](https://money.usnews.com/investing/investing-101/articles/2017-11-20/investors-should-not-tap-into-retirement-funds-early) - [Kiplinger’s 10-4-2018](https://www.kiplinger.com/article/retirement/T013-C047-S002-talk-to-your-parents-about-caregiving.html) - [Good Neighbor Podcast – Featured Business – 03-08-2025](https://www.buzzsprout.com/2439884/episodes/16659248) ![](https://nvestadvisors.com/wp-content/uploads/2025/05/Photo-Coming-Soon.jpg "Nvest in media nvest advisors") ### **See what our clients have to say…** > ### Jeremy Torgerson is excellent. He adjusts the portfolio to meet your needs and goals as needed. He is always will to meet you in person if you desire to do so. **Lyla S.** > ### Excellent! advisor really cares about you as a person. **Jamie P.** > ### Great financial advisor who always goes the extra mile. He takes his responsibility very seriously and is proactive to protect our money! **Suzie K.** > ### nVest Advisors is very easy to work with, and saved my ailing retirement savings! They provide very prompt answers and sound advice! **Randy T.** > ### As a young professional just starting my savings and career Jeremy has been a wonderful mentor and advisor. He truly cares for his clients and I trust him and his advice. From holiday cards to zoom conversation about my financial goals for the future Jeremy and his work is truly appreciated and valued. I am excited to be his client for many more years to come! **Kristin G.** [View all reviews](https://www.google.com/maps/place/nVest+Advisors,+LLC/@38.7483938,-104.8340159,17z/data=!4m7!3m6!1s0x876c6cbb71efb909:0x963ffb4cce854213!8m2!3d38.7483938!4d-104.8340159!9m1!1b1) ###### *These testimonials are representative samples of live Google and Facebook reviews who are known to be real clients. **No one providing a testimonial, review, rating, like/follow, share, or any other public/social comment about nVest Advisors, LLC, our team members, or our published content, has been compensated.** All testimonials are provided voluntarily and without our input.* # **WHAT ARE YOUR FINANCIAL GOALS?** Let’s Address Them Together --- ### [Financial Education & Events](https://nvestadvisors.com/financial-education-events/) **Published:** February 9, 2024 **Author:** nVest Advisors **Content:** # # **A Financial Education Investment: Attend Our Seminars!** Learn how to skillfully manage your finances and enhance your assets through financial education by attending our seminars. Stay updated with the latest investment advice and economic updates in our blog and live Markets & Economy dashboard. # ## **SEMINARS** Learn about upcoming webinars, economic trends and advice by joining our periodic newsletter. ![Image illustrating financial goals investment strategies and financial education to help plan your future](https://nvestadvisors.com/wp-content/uploads/2024/03/Seminars-Ad-1.png "Seminars ad 1 nvest advisors") # ### **BLOG: Insights and Tips for Better Financial Education** - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/10/Q4-2026-Letter-to-Clients-Blog.png "Q4 2026 letter to clients blog nvest advisors") ](https://nvestadvisors.com/q4-2026-letter-to-clients/) ### [Q4 2026 Letter to Clients](https://nvestadvisors.com/q4-2026-letter-to-clients/) Q4 2026 Letter to Clients It's hard to believe 2026 is almost behind us! What strikes me most about the - [ ![Blog Post How do I know if I need a financial advisor](https://nvestadvisors.com/wp-content/uploads/2026/09/Copy-of-Mailchimp-Graphics.png "How do i know if i need a financial advisor nvest advisors") ](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) ### [How do I know I need a financial advisor?](https://nvestadvisors.com/how-do-i-know-i-need-a-financial-advisor/) How Do I Know I Need a Financial Advisor? Managing your personal finances can sometimes feel like trying to - [ ![](https://nvestadvisors.com/wp-content/uploads/2026/06/APPROVED-BLOG-POST-GRAPHICS-4.png "Approved blog post graphics 4 nvest advisors") ](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) ### [Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected](https://nvestadvisors.com/your-401k-plan-is-compliant-why-that-is-not-the-same-as-being-protected/) Your 401(k) Plan Is Compliant. Why That Is Not the Same as Being Protected Many employers view compliance with federal 1[2](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250)[Next](https://nvestadvisors.com/wp-cron.php/page/2/?doing_wp_cron=1791454130.2300820350646972656250) Load More Posts # ### **MARKETS & ECONOMY** nVest Advisors is pleased to present this dashboard of live, continuously updated information on world markets and general economic events, including real-time investment news headlines. Although we believe this information to be accurate, timely and reliable at all times, this data comes from outside sources and is provided here solely as a reference for our site visitors. We make no express or implied warranty as to the accuracy of this information, and its presentation should never be construed as an endorsement or affirmation of any trading or investing strategy. ## ### Economic Data Sources for Enhanced Financial Education [![](https://nvestadvisors.com/wp-content/uploads/2023/11/screenshot.png "Screenshot nvest advisors")](https://tradingeconomics.com/united-states/indicators) [![](https://nvestadvisors.com/wp-content/uploads/2023/11/download-1.png "Download 1 nvest advisors")](https://fred.stlouisfed.org/) [![](https://nvestadvisors.com/wp-content/uploads/2023/11/download.png "Download nvest advisors")](https://en.macromicro.me/macro/us) ## ### **Current Global Markets and Their Impact on Financial Education** #### [Breaking Economic News on Fox Business](https://www.foxbusiness.com/economy) - [More than 265K Ram vehicles facing recall over steering defect, regulators say](https://www.foxbusiness.com/economy/more-than-265k-ram-vehicles-facing-recall-over-steering-defect-regulators-say) - [Americans heating their homes this winter face a stark cost divide](https://www.foxbusiness.com/economy/americans-heating-homes-winter-face-stark-cost-divide) - [Immigrant who defended American dream against socialism fires back at critics, warns: 'Don't be fooled'](https://www.foxbusiness.com/economy/immigrant-defended-american-dream-against-socialism-fires-back-critics-dont-be-fooled) - [Colleges are slashing tuition prices as students balk at soaring costs](https://www.foxbusiness.com/economy/colleges-slashing-tuition-prices-students-balk-soaring-costs) - [Workers using AI are seeing major benefits – but a gap is emerging](https://www.foxbusiness.com/economy/workers-using-ai-seeing-major-benefits-gap-emerging) - [Baby boomers are poised to unleash millions of homes — but there's a catch for first-time buyers](https://www.foxbusiness.com/economy/boomers-poised-unleash-millions-homes-theres-catch-first-time-buyers) - [Bond yields are hovering near multi-year highs: What it means for your wallet](https://www.foxbusiness.com/economy/bond-yields-hovering-near-multi-year-highs-what-means-your-wallet) - [Trump's investment push hits Europe as Irish PM eyes next tariff break](https://www.foxbusiness.com/economy/trumps-investment-push-hits-europe-irish-pm-eyes-next-tariff-break) - [US economy added 29,000 jobs in September, a slower pace than expected](https://www.foxbusiness.com/economy/us-jobs-report-september-2026) - [Ford recalls more than 40,000 trucks and SUVs over visibility risk](https://www.foxbusiness.com/economy/ford-recalls-more-than-40000-trucks-suvs-over-visibility-risk) #### [Latest Market News Today on Fox Business](https://www.foxbusiness.com/markets) - [Union Pacific CEO makes case for $85B Norfolk Southern merger amid pushback](https://www.foxbusiness.com/markets/union-pacific-ceo-makes-case-85b-norfolk-southern-merger-amid-pushback) - [If you'd bought $10,000 worth of Amazon stock 10 years ago, here's how much you'd have today](https://www.foxbusiness.com/markets/if-youd-bought-10000-worth-of-amazon-stock-10-years-ago-heres-how-much-youd-have-today) - [Tesla posts stronger-than-expected quarterly deliveries](https://www.foxbusiness.com/markets/tesla-posts-stronger-than-expected-quarterly-deliveries) - [October could be a huge month for the stock market. Here's why.](https://www.foxbusiness.com/markets/october-could-be-a-huge-month-for-the-stock-market-heres-why) - [Disney cuts hundreds of jobs across multiple departments: report](https://www.foxbusiness.com/markets/disney-cuts-hundreds-jobs-across-multiple-departments-report) - [Nvidia launches security platform to keep AI agents from going rogue](https://www.foxbusiness.com/markets/nvidia-launches-security-platform-keep-ai-agents-from-going-rogue) - [Tesla begins delivering Semi trucks to customers after years of delays](https://www.foxbusiness.com/markets/tesla-begins-delivering-semi-trucks-customers-after-years-delays) - [Costco receives $184M in tariff refunds, says most will go toward lower prices](https://www.foxbusiness.com/markets/costco-receives-184m-tariff-refunds-says-most-go-toward-lower-prices) - [McDonald’s to spend $8.5B on revamping restaurants, tech and franchise support](https://www.foxbusiness.com/markets/mcdonalds-spend-8-5b-revamping-restaurants-tech-franchise-support) - [Major airlines cut flights as higher jet fuel prices hit carriers](https://www.foxbusiness.com/markets/major-airlines-cut-flights-higher-jet-fuel-prices-hit-carriers) # ### **WHAT ARE YOUR FINANCIAL GOALS?** Let’s Address Them Together --- ### [Assess Your Investment Risk Tolerance](https://nvestadvisors.com/assess-your-investment-risk-tolerance/) **Published:** September 13, 2024 **Author:** nVest Advisors **Content:** # What’s your investment risk tolerance? One of the most important things about investing is to make sure your strategy is aligned with your ability to tolerate the natural fluctuations in market value. All investments carry some risk; in fact, [there are many categories of investment risk](https://nvestadvisors.com/2023/05/15/risk-tolerance-management-investing/ceo/ "11 kinds of investment risk you need to know") that you should be aware of, and their impact on different investments in different ways. Everyone has a psychological comfort level when they put their money at risks beyond their control. There is no “right” or “wrong” risk preference – it’s as unique as our own hopes and dreams and plans for the future. **So what is your Investment Risk Tolerance? Take this simple quiz and find out – free of charge.** Then, if you find your investments aren’t aligned with your risk, or don’t know for sure and would like a complementary portfolio review, **[simply click here and book a free Q&A session with a financial advisor](https://nvestadvisors.setmore.com/book?step=time-slot&products=dfaeb995-b65f-4e46-a8e6-dd2f30a43239&type=service&staff=ANY&staffSelected=false)**. **Let’s make sure you’re investing for your goals – AND your ability to handle the daily ups and downs.** --- ### [Grateful for Your Registration](https://nvestadvisors.com/retirement-webinar-thanks/) **Published:** March 17, 2024 **Author:** Atta **Content:** ## Thank You! #### Thank you for registering for the recorded webinar tailored for Texas teachers nearing retirement and seeking financial freedom for their retirement years! #### You’re all set. You’ll receive an email with details on accessing the recorded webinar designed specifically for educators like you. We look forward to sharing valuable insights to help you achieve financial security in retirement. [Connect With an nVest Financial Advisor Today](https://calendar.google.com/calendar/u/0/appointments/schedules/AcZssZ1A6pPyHFsfHGAOo8_5pDwopmwylwHKnHDUnF619kG0RTdNHF0mpVj2jupD9qX4Dltg5SWQ3oOp) --- ### [Assess Your Financial Fitness](https://nvestadvisors.com/assess-your-financial-fitness/) **Published:** September 13, 2024 **Author:** nVest Advisors **Content:** # How Financially Fit Are You? Discover Your Financial Fitness Today! The first step in any financial journey is to know exactly where you are in terms of financial fitness. From there, we can plot a path forward to your goals and dreams. So how financially fit are you? Are you ready to [begin the journey](https://nvestadvisors.com/2024/10/27/secure-your-financial-future/uncategorized/) towards financial fitness? Take this short self-assessment and find out! --- ### [Clients](https://nvestadvisors.com/clients/) **Published:** March 7, 2023 **Author:** nVest Advisors --- ### [Schwab Alliance Disclosure](https://nvestadvisors.com/schwab-exit/) **Published:** January 10, 2024 **Author:** nVest Advisors **Content:** # IMPORTANT NOTICE **You are now leaving the nVest Advisors, LLC Website and will be entering the Charles Schwab & Co., Inc. (“Schwab”) Website.** **Schwab is a registered broker-dealer, and is not affiliated with nVest Advisors, LLC or any advisor(s) whose name(s) appears on this Website. nVest Advisors, LLC is independently owned and operated. Schwab neither endorses nor recommends nVest Advisors, LLC, unless you have been referred to us through the Schwab Advisor Network®.** **Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with nVest Advisors, LLC under which Schwab provides nVest Advisors, LLC with services related to your account. Schwab does not review the nVest Advisors, LLC Website(s), and makes no representation regarding the content of the Website(s). The information contained in the nVest Advisors, LLC Website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.** [Return to the nVest Advisors Website](https://nvestadvisors.com) [Leave our website and proceed to Schwab Alliance](https://schwaballiance.com) --- ## FAQs ### [What if I start a plan program and then decide to invest with you?](https://nvestadvisors.com/faq-items/what-if-i-start-a-plan-program-and-then-decide-to-invest-with-you/) **Published:** July 23, 2025 **Author:** Atta **Content:** Financial planning is included for free, and includes support for as long as you’re a client, for all of our investing clients! If you believe you may want to invest with us in addition to having your plan created, let your advisor know at the beginning of the process. If you decide after starting a planning process that you also want to invest with us, your planning fees will immediately terminate and your investing fees will take their place (we don’t believe in double-dipping). See our public disclosure brochure (LINK) and your client agreements for more information. **FAQ Categories:** Fees and Pricing --- ### [What if I sign up but change my mind?](https://nvestadvisors.com/faq-items/what-if-i-sign-up-but-change-my-mind/) **Published:** July 23, 2025 **Author:** Atta **Content:** All of our planning clients have five days after signing their agreement to terminate the work at no charge to them. After that period, if you choose to cancel, let us know in writing and work will stop. You will only be billed for the actual time spent working on the plan up to the time you terminate (at regular hourly rates), and the work already completed will be given to you for your records. For more information on terms and conditions, see our public disclosure brochure (LINK) and your financial planning agreement. **FAQ Categories:** Fees and Pricing --- ### [How will I pay for my financial plan?](https://nvestadvisors.com/faq-items/how-will-i-pay-for-my-financial-plan/) **Published:** July 23, 2025 **Author:** Atta **Content:** During our onboarding process, you will sign a financial planning agreement that spells out the fees and payment options for your plan. You will also set up a method of payment (bank account, credit or debit card) that will be charged automatically according to the payment plan you select. We do not take any payments up front. You will be charged (or start your installment plan) once of your plan is ready for presentation. **FAQ Categories:** Fees and Pricing --- ### [Are your fees negotiable?](https://nvestadvisors.com/faq-items/are-your-fees-negotiable/) **Published:** June 25, 2025 **Author:** Atta **Content:** Generally, and as a matter of fairness to the entire body of our clients, no. But if you have a special circumstance that you feel warrants that discussion, feel free to bring it up to your financial advisor. We are, however, flexible in that we’ve designed our services to give you some degree of control over your fees by having multiple custodian options, tiered fees for larger household balances, and a slate of financial planning services based on the complexity of your situation. **FAQ Categories:** Second Opinion Seekers --- ### [What services do you offer?](https://nvestadvisors.com/faq-items/what-services-do-you-offer/) **Published:** June 25, 2025 **Author:** Atta **Content:** For individuals and family clients, we generally offer fiduciary investment management services (LINK TO PAGE), and financial planning services (LINK TO PAGE), The scope of those services can vary based on your needs. It’s important to note that although you can request financial planning services on their own, clients who have managed investment accounts with us always have financial planning services included for free. **FAQ Categories:** Second Opinion Seekers --- ### [Are you a fiduciary?](https://nvestadvisors.com/faq-items/are-you-a-fiduciary/) **Published:** June 25, 2025 **Author:** Atta **Content:** Yes, for every client, from your first day on board and your first dollar invested. **FAQ Categories:** Second Opinion Seekers --- ### [Where can I see your fees and pricing?](https://nvestadvisors.com/faq-items/where-can-i-see-your-fees-and-pricing/) **Published:** June 25, 2025 **Author:** Atta **Content:** Our regulatory disclosure brochures, which are given to you by law at the start of our relationship, covers these in detail. However, you can also learn more by clicking here (LINK). **FAQ Categories:** Second Opinion Seekers --- ### [How do you get paid?](https://nvestadvisors.com/faq-items/how-do-you-get-paid/) **Published:** June 25, 2025 **Author:** Atta **Content:** Approximately 65% of our industry earn commissions from product sales or stock trades. We do not. Our clients pay us directly for advice and management services, which provides you a huge number of advantages. For example, by working for you directly, and not for a company trying to sell you one of its products, we act as full legal fiduciaries for you. That lets us take active control over your investment accounts for day-to-day adjustments without having to bother you all the time (this is called “discretionary trading authority”). Working for a fee also means that you and your advisor are on the same side and have the same monetary objectives: we both are money-motivated to grow your wealth! **FAQ Categories:** New To Financial Advice --- ### [Can I work with you in person?](https://nvestadvisors.com/faq-items/can-i-work-with-you-in-person/) **Published:** June 25, 2025 **Author:** Atta **Content:** Yes, but it’s not always needed. Most clients find video meetings more convenient and a better fit for your busy life. However, if you wish, you can meet us in person at our Colorado Springs office, or at an agreed-upon location in South Texas, **FAQ Categories:** New To Financial Advice --- ### [How long do meetings take?](https://nvestadvisors.com/faq-items/how-long-do-meetings-take/) **Published:** June 25, 2025 **Author:** Atta **Content:** Typically, our first Q&A is scheduled for 30 minutes, but we allow a buffer for up to an hour if you need more time to discuss your concerns or have lots of questions. Most client service meetings are 45 minutes but we allow you to schedule time with us from 15 minutes to a full hour as needed. **FAQ Categories:** New To Financial Advice --- ### [Do you accept referrals? I have a family member also looking for an advisor.](https://nvestadvisors.com/faq-items/do-you-accept-referrals-i-have-a-family-member-also-looking-for-an-advisor/) **Published:** June 25, 2025 **Author:** Atta **Content:** GLADLY. In fact, the best compliment we can ever receive is to earn your personal endorsement and referral of friends and family. **FAQ Categories:** New To Financial Advice --- ### [What should I bring to my first appointment?](https://nvestadvisors.com/faq-items/what-should-i-bring-to-my-first-appointment/) **Published:** June 25, 2025 **Author:** Atta **Content:** All we need is you (and your partner, if you have one). Some prospective clients are comfortable sharing financial information or documents at the first meeting, but others are not. That decision is up to you. We will gather the information we need during our conversation, and if we decided together to go to the next step, we’ll let you know what info is needed for us to start working on your situation. **FAQ Categories:** New To Financial Advice --- ### [Is there any obligation? Can I change my mind?](https://nvestadvisors.com/faq-items/is-there-any-obligation-can-i-change-my-mind/) **Published:** June 25, 2025 **Author:** Atta **Content:** Of course you can change your mind. We want our clients to WANT to be here, so you’ll never feel pressure to come aboard or to stay. By law, all clients are provided with our disclosure brochures at the beginning of our relationship. We automatically wait at least 2 days after that for you to cancel before we begin any work for you. Once work begins, you can always cancel or terminate the agreement, and the process to do so, including how we deal with earned but uncollected fees, is included in your client agreement. We do not use any investment products that have contingent deferred (“surrender”) charges, and only use investments you can sell any time the markets are open. **FAQ Categories:** New To Financial Advice --- ### [How much will it cost me?](https://nvestadvisors.com/faq-items/how-much-will-it-cost-me/) **Published:** June 25, 2025 **Author:** Atta **Content:** Our service fees depend on a number of factors, such as are you doing a financial plan, or investing with us, or both? The size of the investment account and which custodian we use is also a factor. In general terms, the MAXIMUM household investment fee is between 0.8% and 1.4%, depending on which custodian and strategy we use. You do not pay us directly for investing services; our fee is deducted from your account after we’ve earned it. For more detail, click here. (Link) Financial planning can be paid by the hour, or we offer several ALL-IN Planning programs depending on the complexity of your planning needs. You can pay up front or in installments for planning services (and if you invest with us too, your planning is always free!) You can see those details here. (Link) **FAQ Categories:** New To Financial Advice --- ### [**How do I roll over my retirement account from a previous employer?**](https://nvestadvisors.com/faq-items/how-do-i-roll-over-my-retirement-account-from-a-previous-employer/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Every 401k plan has a process to move money out of the plan, and doing it incorrectly can cause you significant tax consequences. Although you can often initiate a rollover at the old plan on the website or with a phone call, you might find the process confusing or intimidating. Our team will happily help you with the process! Just schedule a rollover service meeting: <https://calendly.com/nvestadvisors/pp-rollover> **FAQ Categories:** Plan Participants --- ### [What happens to my retirement plan if I leave the company?](https://nvestadvisors.com/faq-items/what-happens-to-my-retirement-plan-if-i-leave-the-company/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** You can leave the plan with the company, roll it over into a new employer’s plan or into an IRA, or withdraw the funds (which may incur penalties). We help you do that from start to finish. Schedule a meeting with us to explore your options, including the option to become a private client to us if a rollover into an IRA makes the most sense for you. <https://calendly.com/nvestadvisors/pp-rollover> **FAQ Categories:** Plan Participants --- ### [How often can I change my investment choices?](https://nvestadvisors.com/faq-items/how-often-can-i-change-my-investment-choices/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** You can change your investment choices at any time through the plan’s website. If that is difficult or you need additional guidance, feel free to schedule a quick call with us: <https://calendly.com/nvestadvisors/participant15> **FAQ Categories:** Plan Participants --- ### [What are the fees associated with the plan and specific investments?](https://nvestadvisors.com/faq-items/what-are-the-fees-associated-with-the-plan-and-specific-investments/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Fees may include administrative fees, investment management fees, and fund-specific expenses. Detailed fee information is available in your plan documents. **FAQ Categories:** Plan Participants --- ### [Can you explain the employer match and how it works?](https://nvestadvisors.com/faq-items/can-you-explain-the-employer-match-and-how-it-works/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** The employer match is a contribution your employer makes to your account that matches your contributions up to a certain percentage of your salary. Each employer’s formula can vary. **FAQ Categories:** Plan Participants --- ### [How much should I contribute to my retirement plan to ensure a comfortable retirement?](https://nvestadvisors.com/faq-items/how-much-should-i-contribute-to-my-retirement-plan-to-ensure-a-comfortable-retirement/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Although everyone’s savings goal is a personal decision, as a general rule, it’s recommended to save between 10% to 15% of your income, including any employer match. Adjust as needed based on your retirement goals. If you can’t start out with that, begin with enough to take advantage of any match your employer offers, and commit to increasing your contribution each year. **FAQ Categories:** Plan Participants --- ### [What are the contribution limits for the plan?](https://nvestadvisors.com/faq-items/what-are-the-contribution-limits-for-the-plan/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Every plan has different contribution limits, and your age will also impact that amount. They also change each year as the IRS updates the rules. You can always access the most current contributions on our Retirement Plan Basics page. **FAQ Categories:** Plan Participants --- ### [Can you explain the difference between pre-tax and Roth contributions?](https://nvestadvisors.com/faq-items/can-you-explain-the-difference-between-pre-tax-and-roth-contributions/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Pre-tax contributions reduce your taxable income now but are taxed upon withdrawal. Roth contributions are made with after-tax dollars and withdrawals are tax-free in retirement. **FAQ Categories:** Plan Participants --- ### [How do I decide which investments are right for me?](https://nvestadvisors.com/faq-items/how-do-i-decide-which-investments-are-right-for-me/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Consider your financial goals, risk tolerance, and investment horizon. We also offer tools and complimentary consultations to help you make informed choices. We are happy to assist you in making your initial choices and help you adjust them as things change. Participants in our plans can schedule a Q&A session with your plan’s advisor team at any time here: <https://calendly.com/nvestadvisors/participant15> **FAQ Categories:** Plan Participants --- ### [What are the investment options available to me?](https://nvestadvisors.com/faq-items/what-are-the-investment-options-available-to-me/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Although the types of investments in each retirement plan differs slightly, generally the plans we oversee as the Plan Advisor will always offer a range of investment options including mutual funds, target-date funds, and stable value funds, among others. Each option has different risk and return profiles, and you will always have a big enough selection of investments to meet most common strategies and risk preferences. When it is allowed, we also offer a number of proprietary pre-built models that we maintain for our private clients that automatically adjust due to changes in the broader economy. **FAQ Categories:** Plan Participants --- ### [How do I enroll in the retirement plan?](https://nvestadvisors.com/faq-items/how-do-i-enroll-in-the-retirement-plan/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** You can enroll through your plan’s online portal or by filling out an enrollment form. If you need assistance, please contact HR or your plan administrator. If you have additional questions about the enrollment process, please schedule a 30-minute call with our team: <https://calendly.com/nvestadvisors/enroll30> **FAQ Categories:** Plan Participants --- ### [What makes your advisory services stand out from others in the market?](https://nvestadvisors.com/faq-items/what-makes-your-advisory-services-stand-out-from-others-in-the-market/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Our services stand out due to a highly personalized approach, extensive expertise, our commitment to transparency and fiduciary standards, and a track record of helping plans achieve substantial financial and compliance success. We genuinely want to come alongside your team as a partner, and our commitment to build a personal relationship with your employees is uncommon in our industry. **FAQ Categories:** Plan Sponsors --- ### [How do you incorporate ESG factors into the investment process, if at all?](https://nvestadvisors.com/faq-items/how-do-you-incorporate-esg-factors-into-the-investment-process-if-at-all/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** ESG factors are incorporated based on individual participant preferences and the relevance to financial performance, using ESG-focused funds and strategies where appropriate to align with broader social and environmental goals. **FAQ Categories:** Plan Sponsors --- ### [What are the most common challenges you see with plans like ours and how do you address them?](https://nvestadvisors.com/faq-items/what-are-the-most-common-challenges-you-see-with-plans-like-ours-and-how-do-you-address-them/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** By far, the most common challenge we see is that employers underestimate their civil and regulatory liability as the plan’s sponsor. Plans are often not reviewed regularly and can become uncompetitive over time, which exposes the company to civil penalties and even class-action litigation. Regular due diligence reviews and competitive bids on your employer plan is vital. Other common challenges include maintaining participant engagement, managing costs, and adapting to regulatory changes. We address these through proactive communication, cost-effective management practices, and ongoing regulatory updates. Where we operate as the plan’s 3(38) advisor, we can make many of these changes for you automatically. **FAQ Categories:** Plan Sponsors --- ### [How do you track and report on plan fees and expenses?](https://nvestadvisors.com/faq-items/how-do-you-track-and-report-on-plan-fees-and-expenses/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Fees and expenses are tracked and reported with full transparency in regular financial statements and during plan reviews, detailing the cost-effectiveness of the plan and its investments. Plan fees are generally calculated and deducted from the custodial vendor who holds the plan’s assets, but we monitor them for accuracy. **FAQ Categories:** Plan Sponsors --- ### [Can you assist with the plan's audit and compliance testing processes?](https://nvestadvisors.com/faq-items/can-you-assist-with-the-plans-audit-and-compliance-testing-processes/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Although most audit and compliance testing is conducted by the custodian/recordkeeper and a 3(16) plan administrator, we offer to provide our full support during audits and compliance testing for the portion of the audit that falls under our purview. We ensure all necessary documentation and reporting are prepared and processes adhere to regulatory requirements. **FAQ Categories:** Plan Sponsors --- ### [What steps do you take to ensure plan data security?](https://nvestadvisors.com/faq-items/what-steps-do-you-take-to-ensure-plan-data-security/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Robust cybersecurity measures are in place, including encrypted data storage, secure communication channels, and regular security audits, to protect sensitive plan and participant data. The quality of cybersecurity of our vendors is also reviewed. **FAQ Categories:** Plan Sponsors --- ### [How do you manage conflicts of interest, especially regarding plan investments?](https://nvestadvisors.com/faq-items/how-do-you-manage-conflicts-of-interest-especially-regarding-plan-investments/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** We maintain strict adherence to ethical standards and transparency, routinely disclosing all potential conflicts of interest and avoiding any investment that does not serve the best interest of the plan participants. **FAQ Categories:** Plan Sponsors --- ### [What technology do you use to support plan administration and participant access?](https://nvestadvisors.com/faq-items/what-technology-do-you-use-to-support-plan-administration-and-participant-access/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** We and our plan custodians utilize state-of-the-art financial technology platforms that facilitate plan administration, enhance participant access to information, and streamline the management and reporting processes. **FAQ Categories:** Plan Sponsors --- ### [How do you ensure the plan aligns with our company’s goals and employee needs?](https://nvestadvisors.com/faq-items/how-do-you-ensure-the-plan-aligns-with-our-companys-goals-and-employee-needs/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** It’s all about getting to meet your team and learning what matters to you. We engage in regular consultations with your team to ensure the plan remains aligned with company goals and employee needs, making adjustments as necessary to address changes and opportunities. **FAQ Categories:** Plan Sponsors --- ### [Can you provide references from other clients with similar plans?](https://nvestadvisors.com/faq-items/can-you-provide-references-from-other-clients-with-similar-plans/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Yes, references from current and former clients with similar plan types are available upon request to attest to the quality and effectiveness of the services provided. **FAQ Categories:** Plan Sponsors --- ### [What is your approach to risk management and asset allocation?*](https://nvestadvisors.com/faq-items/what-is-your-approach-to-risk-management-and-asset-allocation/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Risk management is a fundamental part of our investing philosophy. While generally tailored to the demographic and financial profiles of plan participants (in which case, we would recommend appropriate diversified asset allocation strategies to minimize risk while targeting desired returns), we also monitor and adjust our models and recommendations to changes in the broader economy. Our belief is that gains are great, but not at the expense of unnecessary risk to your portfolio. **FAQ Categories:** Plan Sponsors --- ### [How do you handle participant inquiries and support?](https://nvestadvisors.com/faq-items/how-do-you-handle-participant-inquiries-and-support/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** We offer direct support for participants through phone, text, email, and in-person meetings, ensuring they receive timely and clear answers to their inquiries. **FAQ Categories:** Plan Sponsors --- ### [What is your process for selecting and monitoring investment options?](https://nvestadvisors.com/faq-items/what-is-your-process-for-selecting-and-monitoring-investment-options/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Our process involves thorough market research, performance analysis, and risk assessment, followed by regular monitoring and rebalancing of investments to align with strategic goals. If your plan vendor permits, we also maintain a number of proprietary investment models that we make available for your participants that incorporate our economic and market strategies normally available only to our private clients. **FAQ Categories:** Plan Sponsors --- ### [How often will you review our plan's performance with us?](https://nvestadvisors.com/faq-items/how-often-will-you-review-our-plans-performance-with-us/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Plan performance is internally reviewed at least quarterly and presented to you annually, but we are always available for additional reviews as requested or when significant market or organizational changes occur. **FAQ Categories:** Plan Sponsors --- ### [What kind of reporting will you provide to us?](https://nvestadvisors.com/faq-items/what-kind-of-reporting-will-you-provide-to-us/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** You will receive comprehensive, easy-to-understand reports detailing plan performance, investment analysis, participant behavior, and administrative aspects on an annual basis, or as needed. Your plan’s custodian and recordkeeper provides monthly reports of activity directly to you. **FAQ Categories:** Plan Sponsors --- ### [How do you educate and engage plan participants?](https://nvestadvisors.com/faq-items/how-do-you-educate-and-engage-plan-participants/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** We employ a variety of methods to educate and engage participants, including monthly newsletters, quarterly workshops, one-on-one consultations, informational webinars, and detailed, user-friendly written communications. **FAQ Categories:** Plan Sponsors --- ### [Can you assist with plan design and structure?](https://nvestadvisors.com/faq-items/can-you-assist-with-plan-design-and-structure/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Absolutely. We can assist in designing and structuring the plan to meet specific organizational goals, ensuring it is both compliant and optimized for tax benefits and retirement outcomes. We can even assume a more responsible role as an ERISA 3(38) Plan Manager, if you desire. **FAQ Categories:** Plan Sponsors --- ### [How will you help us comply with ERISA and other regulations?](https://nvestadvisors.com/faq-items/how-will-you-help-us-comply-with-erisa-and-other-regulations/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Compliance is integral to our plan advisory services.. We provide regular updates on regulatory changes, assist with ERISA compliance, and ensure the plan adheres to all applicable laws and regulations through meticulous documentation and processes. **FAQ Categories:** Plan Sponsors --- ### [What services do you provide in addition to investment management?](https://nvestadvisors.com/faq-items/what-services-do-you-provide-in-addition-to-investment-management/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Beyond investment management and non-discretionary investment support for your participants, we provide services including plan design consultation, compliance support, participant education, and ongoing plan evaluation to ensure it meets evolving needs and regulations. We provide concierge service to help your employees roll assets into and out of the plan, and offer complimentary private meetings with an advisor for your team throughout the year. We also provide a range of complimentary or low-cost additional services for your employees, including financial planning, college savings plans, debt optimization strategies, and no-cost banking services through our retail investment custodians. Saving for retirement is important for your plan participants, but helping them to prepare the other parts of their financial lives for that day is equally important, and we support them the entire way through. **FAQ Categories:** Plan Sponsors --- ### [How do you structure your fees? Are there any potential conflicts of interest?](https://nvestadvisors.com/faq-items/how-do-you-structure-your-fees-are-there-any-potential-conflicts-of-interest/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Our advisory fees are structured as a percentage of assets under management, ensuring transparency and alignment with the interests of the plan and its participants. Plan advisory fees are generally on a “breakpoint” scale, and our percentage drops as plan assets grow. We avoid any arrangements that could lead to conflicts of interest. **FAQ Categories:** Plan Sponsors --- ### [What types of retirement plans do you specialize in (e.g., 401(k), 403(b), etc.)?](https://nvestadvisors.com/faq-items/what-types-of-retirement-plans-do-you-specialize-in-e-g-401k-403b-etc/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** We specialize in a variety of retirement plans including SEP and SIMPLE IRAs, 401(k), 403(b), and 457 plans, providing tailored advice and management to meet the unique needs of each plan type. **FAQ Categories:** Plan Sponsors --- ### [Are you a fiduciary, and will you sign a fiduciary pledge?](https://nvestadvisors.com/faq-items/are-you-a-fiduciary-and-will-you-sign-a-fiduciary-pledge/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Yes, all of the advisors in our firm are fiduciaries and our role as a fiduciary is carefully detailed in our dlsclosure brochures and your service agreement. We are committed to act in the best interests of the plan participants and sponsors, with integrity and transparency. **FAQ Categories:** Plan Sponsors --- ### [How do you handle fiduciary responsibilities?](https://nvestadvisors.com/faq-items/how-do-you-handle-fiduciary-responsibilities/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** As a fee-only registered investment advisory firm, and an ERISA 3(21) or 3(38) plan fiduciary, we adhere strictly to established fiduciary standards, acting in the best interest of the plan participants at all times. This includes providing transparent advice, avoiding conflicts of interest, and ensuring that all decisions are made with due diligence and in the plan’s best interests. **FAQ Categories:** Plan Sponsors --- ### [Can you describe your investment philosophy for retirement plans?](https://nvestadvisors.com/faq-items/can-you-describe-your-investment-philosophy-for-retirement-plans/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** Our general investment philosophy is based on long-term growth, risk management, and diversification with a unique focus on the impact the economy will have on investment returns in the near-term. We prioritize the investment strateg of your plan participants based on their unique goals and risk tolerances, and they have the help of a fiduciary advisor to make those decisions. **FAQ Categories:** Plan Sponsors --- ### [What experience do you have with company retirement plans similar to ours?](https://nvestadvisors.com/faq-items/what-experience-do-you-have-with-company-retirement-plans-similar-to-ours/) **Published:** May 2, 2024 **Author:** nVest Advisors **Content:** We have been working with small businesses on their corporate investing and cash needs, and retirement plans, since 2008. We have extensive experience managing a diverse range of company retirement plans from solo entrepreneurs to established companies with hundreds of employees. This includes designing, implementing, and maintaining plans to meet various financial goals and compliance requirements. **FAQ Categories:** Plan Sponsors --- ### [What can I expect from my free consultation?](https://nvestadvisors.com/faq-items/mauris-venenatis-nunc-rhoncus-egesta/) **Published:** January 17, 2019 **Author:** nVest Advisors **Content:** You will meet with Jeremy (or a registered advisor on our team) for 30 minutes. This will be an introductory call, where we can discuss whatever you feel comfortable sharing. Typically, we spend the time just assessing if we’d be a good fit for your needs. This will be a high-level discussion and will not go into specifics but will give you a rough idea on the next steps and action items to meet your goals. If we decide to move forward together, we’ll start to gather the information we need to be able to make specific recommendations. **FAQ Categories:** Onboarding --- ### [What can I expect from your financial planning services?](https://nvestadvisors.com/faq-items/phasellus-finibus-mi-a-accumsan/) **Published:** January 17, 2019 **Author:** nVest Advisors **Content:** We discuss your financial goals, your current lifestyle and expenditure, your current accounts, and more. Then, we will devise a tailored, action-based plan, which will include details on spending and saving goals, what types of accounts to open, and much more. **FAQ Categories:** Financial Planning, Onboarding --- ### [I already have a financial plan. Can you help me implement it?](https://nvestadvisors.com/faq-items/sed-bibendum-nulla-ligula/) **Published:** January 17, 2019 **Author:** nVest Advisors **Content:** Yes! While every client’s scenario is different and we reserve the right to review before we commit to a service, we highly recommend signing up for a free audit so that we can provide additional insight and start implementing it. --- ### [What can we expect from your financial education offerings?](https://nvestadvisors.com/faq-items/aenean-luctus-libero-insu-nibh/) **Published:** January 17, 2019 **Author:** nVest Advisors **Content:** Over the next few months, we will be releasing courses, webinars, and trainings offering financial guidance, investment knowledge, and actionable and specific recommendations. All of these will be virtual and accessible to everyone in the United States. **FAQ Categories:** Financial Education --- ### [Are there any income or minimum portfolio requirements for your services?](https://nvestadvisors.com/faq-items/donec-id-ligula-vel-placerat/) **Published:** January 17, 2019 **Author:** nVest Advisors **Content:** No, our investment advisory services do not have any income or minimum portfolio requirements. For our premium investment advisory services, we have a $100K portfolio minimum. **FAQ Categories:** Financial Planning, Investment, Onboarding --- ### [I'm worried about an upcoming recession. What can I do to secure my portfolio?](https://nvestadvisors.com/faq-items/curabitur-feug-scelerisque-tempor/) **Published:** January 17, 2019 **Author:** nVest Advisors **Content:** Our investment methodology takes into account macroeconomic trends and adjusts portfolios accordingly. What you can do depends on your portfolio makeup, your risk appetite, and other factors. For those with managed portfolios, we recommend scheduling a call with your investment advisors to understand the specific impact to your investments. For DIY investors, we recommend understanding how sectors you are bought into will be impacted by upcoming economic trends and adjusting accordingly. For specific tips, you can check out [our blog here](https://nvestadvisors.com/blog/) or Jeremy’s personal blog at [Think Like a Rich Guy](https://thinklikearichguy.com). **FAQ Categories:** Investment --- ## Categories ### [Uncategorized](https://nvestadvisors.com/category/uncategorized/) --- ### [Cryptocurrency](https://nvestadvisors.com/category/crypto/) --- ### [Investment](https://nvestadvisors.com/category/investment/) --- ### [Company News](https://nvestadvisors.com/category/company-news/) --- ### [Behavioral Finance](https://nvestadvisors.com/category/behavioral-finance/) --- ### [From our CEO](https://nvestadvisors.com/category/ceo/) --- ### [Investment Markets](https://nvestadvisors.com/category/investment-markets/) --- ### [Annuities & Insurance](https://nvestadvisors.com/category/annuities/) --- ### [Investing General](https://nvestadvisors.com/category/investing-general/) --- ### [Debt](https://nvestadvisors.com/category/debt/) --- ### 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