Perpetually Looking Forward

In our most recent webinar, Simon Quick Advisors, Chief Investment Officer Christopher Moore, Head of Investments Wayne Yi, and Chief Marketing Officer Darcy O'Brien (moderator) discuss recent market volatility and notable factors driving it. During the webinar, they talk about the shifting economic landscape driven by inflation, interest rates, labor, and how to best position portfolios to weather through it.

In this ongoing series, we are profiling some Simon Quick clients to reveal some of the financial and estate planning challenges faced by wealthy families and how we have been able to help them meet these challenges.

Many people’s thoughts turn to college this time of year as students across the country are heading back to school. More specifically, many parents are thinking about how to pay for their kids’ college educations.

Not all periods of inflation are the same. Last year’s inflation can be likened to that awkward cousin that you were obliged to invite to your wedding. You were annoyed they accepted the invitation, messed up the seating chart, and increased the cost of the reception, but their presence was supposed to be temporary and not a meaningful distraction from the celebration.

When you own life insurance, whether it's a temporary or permanent policy, the death benefit is included in your taxable gross estate. Alternatively, if the policy is owned by an Irrevocable Life Insurance Trust (ILIT), the death benefit proceeds are not included in your gross estate and therefore are not subject to state and federal estate taxation. For some people, this may not matter if their estate is below estate tax exemption levels. As of 2022, the federal exemption level is over $12 million per person or $24 million for married couples. However, that is currently scheduled to sunset in 2025 and be cut in half to over $6 million per person, or $12 million for married couples. Different states have varied estate tax exemption levels as well.

Volatility across markets remained elevated into the second quarter of the year. High inflation and Central Bank monetary tightening continue to be the dominant drivers behind it, but rising fears of a global recession also began to weigh on markets.  

There are lots of wealth management firms out there today that you can choose from. However, they aren’t all the same — far from it. Your choice of a wealth management firm is one of the most important decisions you will ever make. You should look for a firm that is big enough to meet your needs but not so large that you feel neglected. A wealth management firm should also be willing to go above and beyond what’s expected to deliver the highest possible level of customer service.

The May Consumer Price Index (“CPI”) results were a disappointment to investors, business owners, central bank governors, and all of us as individual consumers. The latest inflation reading bucked the April trend of moderating price increases, and instead rose 1% over the prior month and is 8.6% higher than last year. Both equity and fixed income market reactions were sharply negative on the news, with interest rates moving up into the mid-3%’s and the S&P 500 officially falling into a bear market. The Federal Reserve Board was compelled to move more aggressively on its rate hiking program, announcing a 75-basis point increase this week, with the potential for the same next month. Chairman Powell emphasized that they needed to stabilize inflation to maintain economic stability, even if it meant giving back some of the significant strides made in bringing down unemployment.