Happy New Year from Signature Wealth Management!
2024 has officially arrived and we are off to a fresh start. Please enjoy our first newsletter of the new year.
Market Minute with First Trust
“Santa Claus is Coming to Town” is a great Christmas hit. Yet no one ever wrote a song called “Santa Claus is Leaving Town”…and for good reason. Reality sets in that there is a lot of work to do after a big celebration and the big man won’t be back for a whole year. The Santa Claus rally in the equity markets the last two months of the year was a wild celebration. The S&P 500® Index more than doubled its return from the first ten months of the year (10.7%) by adding another 14% in just 41 trading days to end the year with a massive annual return of 26%. The much maligned Russell 2000® Index of small cap stocks did even better since October 31st. Down 4.5% through the first 10 months of 2023, the Russell 2000® Index rallied 22% in the final two months and finished up 17% on the year.
Where do we have the most conviction? Our belief is that the narrow market experienced over the first ten months of last year continues to broaden out in 2024 as it did in the last two months [see chart below]. As opposed to the first ten months of 2023 when only 27% of stocks outperformed the S&P 500 Index, 56% of stocks outperformed in the last two months of the year. While 2023 was highlighted by the seven largest, mostly technology related stocks leading the market, we believe 2024 will see much broader participation for two reasons: 1. Valuations are significantly better outside the largest mega-cap names in the U.S. market, 2. Technology is not the only sector expected to experience strong earnings growth as sectors such as healthcare and industrials should also grow at an above market pace.
Our final message…stay in the market and own a broad array of equities as, in our opinion, there is a wider group of companies that will reward investors in 2024 than in 2023.
Weekly Market Update Call
We strive to keep you regularly updated with important market changes and news. Please listen to the most recent market update from Phil Blancato, Advisor Group’s Chief Market Strategist. This call discusses recent updates for the economy and financial markets.
Upcoming Social Security Webinar
Thursday, January 18, 2024 at 12pm CT
Are you interested in learning more about Social Security? Signature Wealth Management is excited to host Jim Blair and Marc Kiner of Premier Social Security Consulting for this timely webinar.
Jim is currently part owner and Social Security Consultant with Premier Social Security Consulting. Jim is also a certified instructor for the National Social Security Advisor Certificate program. Jim retired after 35 years with the Social Security Administration. Jim created and developed the National Social Security Advisor Certificate program with his partner, Marc.
Marc is currently part owner and President with Premier Social Security Consulting. Marc is also a certified instructor for the National Social Security Advisor Certificate program. Marc created and developed the National Social Security Advisor certificate program with his partner, Jim. Marc has over 30 years’ experience in public accounting. Marc recently sold his CPA practice to concentrate on Social Security.
Ben Hovland Wins
Five Star Wealth Manager Award
Cody Pollock Earns CFP® Certification
Cody Pollock, CFP®, Financial Advisor at Signature Wealth Management, has attained his CFP® certification, the standard in financial planning, and has been authorized by CFP Board to use the CERTIFIED FINANCIAL PLANNER™ and CFP® certification marks. Cody has worked at Signature Wealth since 2022 with John Madson, CFP®.
The CFP® marks identify those individuals who have met the rigorous experience and ethical requirements of CFP Board, including having successfully completed financial planning coursework at an accredited college or university and passed the 6-hour comprehensive CFP® certification exam. The exam covers the following areas: Professional Conduct and Regulations, General Principles of Financial Planning, Risk Management and Insurance Planning, Investment Planning, Tax Planning, Retirement Savings and Income Planning, Estate Planning and Psychology of Financial Planning.
2024 Tax Updates
Tax Brackets & Retirement Contribution Limits
The Internal Revenue Service recently released updated income tax brackets, standard deduction, and retirement contribution limits for the 2024 tax year. While these taxes are not due for some time, it may benefit you to start thinking ahead. Overall, more than 60 provisions have changed. Here are a few of the most critical tax bracket and retirement contribution limit changes.
Limits Tax Bracket Inflation Adjustment
Overall, tax brackets have been adjusted upwards by 5.4% for 2024. The primary purpose of this adjustment is to account for inflation, which is based on the Consumer Price Index. The government’s goal is to keep income taxes in sync with consumer buying power.
The standard deduction has increased to $29,200 for married couples filing jointly, up $1,500 from the previous year. For single filers, this number increased by $750 to $14,600.
Individual Retirement Accounts (IRAs)
IRA contribution limits are up $500 in 2024 to $7,000. Catch-up contributions for those over age 50 remained at $1,000, bringing the total limit to $8,000.
The income phase-out range for Roth IRA contributions increased by $8,000 to $146,000-$161,000 for single filers and heads of household. For married couples filing jointly, phase-out will be $230,000 to $240,000 (a $12,000 increase). Married individuals filing separately see their phase-out range remain at $0-10,000.
Adjustment Workplace Retirement Accounts
Those with 401(k), 403(b), 457 plans, and similar accounts will see a $500 increase for 2024, bringing the total maximum contribution amounts to $23,000. The catch-up contribution for those aged 50 and older remains at $7,500, bringing their total limit to $30,500.
Adjustment Gift Tax
The annual gift tax exclusion is now $18,000 for 2024, an increase of $1,000 from the previous year.
We Love Introductions!
We’ve been receiving an influx of inquiries as to whether or not we’re available as a resource for your personal and professional networks. As always, those important to you are important to us. We’ve helped those close to our clients with a range of things, such as:
- Meaningful outcomes (leaving a legacy, retirement lifestyle, supporting family and causes)
- Financial confidence (behavioral coaching, financial planning, organization)
- Strategic planning (tax considerations, income & withdrawal strategies, college savings, cash flow/budgeting, estate planning, insurance evaluation)
- Portfolio management (asset allocation, risk tolerance, investment selection, goal prioritization, disciplined rebalancing, overall review)
Whether your friends, family, and colleagues know what they want to focus on or they don’t know what they don’t know, you can give them access to us and our expertise in the form of a 20-Minute “Ask Anything Session”; 20 minutes of our time is all theirs. Please reach out to your financial professional or check out our website at www.signaturewealthmn.com.
Securities and investment advisory services offered through Osaic Wealth, Inc., member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Osaic Wealth does not provide tax or legal advice.
PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of the information provided at these web sites. This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Past performance does not guarantee future results. Neither Asset Allocation nor Diversification guarantee a profit or protect against a loss during a declining market. They are methods used to help manage investment risk. Rebalancing can entail transactional costs and tax consequences that should be considered when determining a rebalancing strategy.
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Our mailing address is:
St. Louis Park office: 5775 Wayzata Blvd, Suite 360, St. Louis Park, MN 55416 | Phone: 952.388.6390
Duluth Office: 4815 West Arrowhead Rd, Suite 230, Duluth, MN 55811 | Phone: 218.525.9001
Elk River Office: 221 Main Street, Suite A, Elk River, MN 55330 | Phone: 763.633.1300