By: Matt Garrott
Year-to-date, markets are still mostly down. The S&P 500 is down 13.1% through the end of November and the Bloomberg US Aggregate Bond Index is down 12.6%. November itself was a positive month, however. The S&P 500 gained 5.6% while the Bloomberg US Aggregate Bond Index clawed back 3.7%. A small rally started in the middle of October. Since then, the S&P 500 is up 14.3%, Developed International stocks are up 21.3%, and bonds are up 6.5%. No one expected a pre-Halloween rally, but diligent rebalancing served investors better than trying to time the markets or pick/abandon asset classes.
December is a time when many families gather to celebrate the holidays. This may be a good time for a family wealth update or briefing. No matter the size of the portfolio, family wealth seems to be difficult to preserve past three generations. This usually isn’t due to bad investments (“don’t blame me” writes the investment guy), but a lack of planning and communication. We are happy to help with these conversations whether it’s facilitating a family meeting, providing a template family wealth update agenda, tapping into our expertise to answer questions, or even just the use of our board room if needed. Communication increases the odds of wealth becoming dynastic wealth.
Along the same lines, now is a good time to give thought to gifting and charitable planning. The annual gift exclusion for 2022 is $16,000 per donee. There are also exclusions that may be used for education or medical expenses. It may make sense to talk to your advisor to see how best to take advantage of these. Donor advised funds should be considered to allow for the easy use of appreciated stock to fund large charitable gifts, instead of cash. For donor advised funds or other charitable giving, give yourself and the charity plenty of time to process the gift before the end of the year to ensure it gets processed in the current calendar year.
