Braeburn Wealth Management

What Historical Data Has Shown with Interest Rate Cuts

Wed, 10 Jun 2026 13:37:55 GMT

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In March of 2022, the Fed began its mission to combat lofty levels of inflation by raising interest rates at an aggressive pace unseen in decades. In fact, between March of 2022 and July of 2023, the Fed raised interest rates 11 times! Many forget that the Fed had interest rates floating around zero at the start of 2022. As of this writing, interest rates are hovering between 5.25% and 5.50%.

Currently, it appears the Fed has gained control on the rampant rise of inflation. In fact, inflation eased in August to a new three-year low, setting the scene for the anticipated decision to start lowering interest rates. Many may wonder, what does that mean for the stock market? Let’s take a look at what the past has to say.

History has shown that the S&P 500 has a variety of market responses after interest rates start to decline. Economic conditions have a relative influence on the market’s response to this news. In the early 2000s, the Fed started cutting rates in response to the bursting of the dot-com bubble and a slowing economy. Although initially the market reaction following this decision was not ideal, it did set up a strong bull market between 2003 and 2007. The S&P 500 gained roughly 103% in that time span.

In 2019 (Pre-COVID Economic Softening), the FED cut rates three times to combat slowing global growth and trade tensions between the U.S. and China. The S&P 500 reacted positively to these rate cuts, continuing to hit new highs in the second half of the year and adding 24.36% in growth right before the start of the COVID pandemic.

So, although the market’s immediate short-term reaction to rate cuts depends on multiple economic variables, history has shown that the long-term positive trajectory of the S&P 500 prevails.

Holding Market Leaders

Wed, 10 Jun 2026 13:37:53 GMT

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Does your portfolio hold today’s market leaders? Well, it should!

Holding market leaders is a very effective strategy for building long-term wealth through the stock market. These companies typically have strong competitive advantages with the products/services they provide, their high-level of financial stability, and their ability to sustain consistent growth. This makes certain stocks better prepared for volatile markets and positioned favorably for upswings in the future. By holding these names, investors can potentially capture attractive gains and reduce the risk of underperforming the rest of the market.

Let’s look no further than today’s market leader, NVDIA. It’s no secret that NVDIA has been the talk of the market for the last 2 years. Over that span, NVDIA has risen 711%! This is mainly due to consistency in strong earnings reported and its reputation as the leader of creating and distributing semiconductor chips. And although it’s hard to determine when a certain stock is about to take off on a massive bull run, you still could have obtained a return of 181% buying the stock a year later.

Microsoft is another example of a stock that has been a leader for many years (or even decades). If you were unfortunate enough to buy Microsoft at its high of $37.00 (right before the Great Recession), you still would have obtained a $1,018% return if held to this very day! Why is that? Because Microsoft is a leader in cloud computing that delivers strong financial results on a consistent basis.

Market Rotation

Wed, 10 Jun 2026 13:37:51 GMT

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Recently we have seen a rotation from the technology stocks that has led the market into other areas, such as smaller and medium-sized companies. For example, Mohawk Industries, a mundane flooring manufacturer, is up over 24% in the last month, while Nvidia, the market darling of recent years, is down over 17% in recent weeks.

We’ve all heard the old saying “trees don’t grow to the sky.” Put into stock market parlance, it is unhealthy and unwise to think the tech stocks that have led the market will do so infinitely. The rotation to other segments of the market is healthy for investors.

At Braeburn, we have started to allocate more exposure to these smaller and medium-sized companies but have also started moving into the large cap value space as well. This gives our clients exposure to large, financially stable companies like Berkshire Hathaway, Home Depot, and JP Morgan. The technology craze may not be as robust as it once was just months ago, but it’s important for other sectors of the market to start providing potential alternative avenues for long term growth.

Tactical Investing

Wed, 10 Jun 2026 13:37:48 GMT

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The fact that the price of a stock market average, like the S&P 500, is lower than it has been on average over the last 50 days is often a signal. A signal of what, you may ask? When a stock or ETF price closes lower than it has, on average, over the last 50 days, we can assume that it was not strong positive news that moved the index in a negative direction, as it’s reasonable to conclude the most likely influencing factor was bad news that caused the price to decline.

A “Tactical Investor” would act upon this by taking a slightly more conservative position in their portfolio. They may, for example, sell a risky stock or an underperforming one, and move that money into cash. If the news that drove the index below its 50-day average gets worse, the cash position will not lose value. Instead, it will earn positive interest.

A “buy and hold” investor will not raise cash but continue to hold, focusing on the long-term view. Which investor is “doing it right”? This depends on the strategy and risk tolerance of the portfolio.

All market corrections and bear markets begin with the stock market average dropping below its 50-day moving average. A drop below the 50-day does not mean the market will fall further or fail to rise quickly back above the 50-day moving average, but a tactical investor can act upon this in the interest of playing defense before they play offense.

A moving average is not the only data point utilized to make tactical changes to a portfolio. Some investors use observations from the business cycle to evaluate the performance of different industries. For example, when the market is coming out of a recession, it is believed that cyclical stocks will see large upswings in profitability. This may be a time to overweight cyclicals in your portfolio. Another example can be made with bonds. If interest rates appear to be on the rise (a condition which is very negative for bond holders), an investor may want to reduce exposure to bonds in his or her portfolio.

A Tactical Investing Strategy involves actively adjusting investment portfolios to capitalize on short-term market opportunities.

Revitalize Your Investments: A Spring Cleaning Guide

Wed, 10 Jun 2026 13:37:47 GMT

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As the first buds of spring emerge, it’s time to embark on the annual ritual of refreshing and revitalizing—not just our homes, but also our investment portfolios. Just as clutter accumulates in our living spaces over time, our investment strategies become cluttered with underperforming assets, outdated holdings, or allocations that no longer align with our financial goals.

Spring cleaning your investment portfolio involves a deliberate and thorough assessment of each holding, ensuring that it remains in line with your risk tolerance, investment horizon, and overall financial objectives. Just as you might clean your living space by discarding items that no longer serve a purpose, searching your portfolio for underperforming or redundant assets can streamline your investment approach and potentially enhance returns.

Begin by reviewing each investment with a critical eye, considering its performance relative to benchmarks, its role within your broader asset allocation, and any changes in market conditions or economic outlook that may affect its future performance. Ask yourself whether each holding still contributes meaningfully to your portfolio’s diversification and risk management objectives, or if it’s time to part ways.

Like dusting off neglected corners of a room, rebalancing your portfolio can help ensure that your asset allocation remains aligned with your desired risk-return profile. Consider reallocating capital from over-weighted assets to those that offer better growth potential or are better positioned to weather prevailing market conditions.

Spring cleaning isn’t just about discarding the old—it’s also an opportunity to introduce fresh perspectives and new opportunities into your investment strategy. As you assess your portfolio, keep an eye out for emerging trends, industries, or asset classes that may offer compelling growth prospects or diversification benefits. Just as the changing season brings new life to the natural world, so too can it bring new opportunities for your financial future.

By approaching your investment portfolio with the same diligence and attention to detail that you apply to spring cleaning your home, you can ensure that it remains well-organized, efficient, and positioned for long-term success. So roll up your sleeves, sharpen your pencils, and let the spirit of renewal guide you as you embark on the annual ritual of spring cleaning your investment portfolio.

Tax Planning: Tax Year 2023

Wed, 10 Jun 2026 13:37:45 GMT

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A new year means new tax changes. While Congress didn’t pass any major tax reform last year, some tax provisions have been updated that could affect how much money you keep and how much goes to Uncle Sam.

In this blog, we have included some of the most significant changes for investors and retirees. Please note that these changes relate to your filing for the 2023 tax year . Our suggestion: Look over the material below and circle anything you have questions about. Then, feel free to share this information with your tax professional! They should be able to answer any questions you have.

One last thing. As you know, tax season is now upon us. To help reduce the stress of tax season, feel free to have your accountant or tax preparer contact us directly for any needed investment information. We are always happy to coordinate with other professionals you work with to minimize your workload.

As always, if there’s anything our team can do to be of assistance, please let us know. Have a great month!

Important Updates for the 2023 Tax Year

Changes to the Filing Deadline

One thing to note before we get into the nitty-gritty: After two straight years with an April 18 deadline, this year returns to the more traditional April 15 deadline. (Remember, though, that filing earlier is almost always better than filing later.)

For those who need to file for an extension, the due date is October 15.

Changes to Federal Tax Brackets

As it often does, the IRS has adjusted the 2023 tax brackets based on inflation. These adjustments are even greater than usual this year as the country continues to contend with higher-than-normal prices. While tax rates have not changed, bracket ranges increased by roughly 7%. That’s good news for those whose wages have gone up to keep pace with the rise in prices, because it means they won’t necessarily get bumped into a higher bracket. And some people may even find themselves dropping down a level, even if their pay stayed the same.

The brackets for the 2023 tax year are as follows:

Changes to Capital Gains

The income threshold for long-term capital gains rates has also gone up.

Changes to Deductions

As you know, when you file your taxes, you can either claim a standard deduction or dive into the details and itemize your deductions. (Since the passing of the Tax Cuts and Jobs Act back in 2017, most people choose the former.) Per the IRS, the standard deduction is “a specific dollar amount that reduces the amount of income on which you’ve been taxed.”

Due to inflation, the IRS has also increased the standard deduction for your 2023 taxes. For singles, the standard deduction is now $13,850, up from $12,950. For married couples filing jointly, it is $27,700 up from $25,900. For heads of households, the standard deduction is $20,800, up from $19,400.

Remember, you can’t take the standard deduction if you also itemize deductions. And for married couples filing separately, both spouses must take the same type of deduction. So, if one spouse chooses to itemize, the other spouse must as well.

Changes to Alternative Minimum Tax (AMT) Exemption Levels

When Congress passed the Tax Cuts and Jobs Act back in 2017, the number of Americans who owe the AMT has been drastically reduced. But in case you fall under this category, the exemption levels for 2023 are as follows:

These exemption levels begin to phase out at $578,150 for single individuals, and $1,156,300 and $1,505,600 for married couples filing jointly.

We hope you found this information helpful. Obviously, it’s not a completely exhaustive list of every change for the 2023 tax year. But it is an overview of some of the most important ones. If you have any questions or concerns, please let us know. Our door is always open!

2023 The Year in Review

Wed, 10 Jun 2026 13:37:44 GMT

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Take a look at these two charts. The top shows interest rate levels since 1955. The gray bars indicate a recession. Notice how often a gray bar appears in the aftermath of a sharp rise in rates? Similarly, the bottom chart shows the unemployment rate. See how the gray bars always coincide with a major spike in unemployment? It’s clear that, historically, fast-rising rates often trigger a rise in unemployment…which contributes to a recession.

What about when prices come down, but the economy does not? Economists call that a soft landing, and it’s proven to be very difficult to achieve. It’s no surprise, then, that most economists predicted a hard landing in 2023.

One year later, that hasn’t happened. Interest rates did continue to rise. As of this writing, they’re at 5.3%. Inflation has continued to cool, albeit slowly. As of November, the inflation rate was 3.1%. That’s a 3.4% drop from the beginning of the year. But consumer spending has remained steady. The labor market has remained strong. The unemployment rate was only 3.7% as of November. And, as we’ve already covered, the economy has continued to grow.

From a financial standpoint, this, to me, is the major storyline of 2023. Which means we have to ask ourselves: “What can we learn from it?” As your financial advisor, I’ve taken the time to jot down a few lessons I think are worth remembering as we move into the New Year. Here they are:

#1: Always emphasize preparation over prediction . The economists who predicted a recession weren’t stupid. They used the best data they had to make the best predictions they could. But 2023 shows that even the most well-informed people simply can’t see the future. Even the near future! There are simply too many variables to consider. That’s why, as investors, we must always emphasize planning over predicting. We can’t predict when the markets will drop nearly 20%, as they did in 2022, or when they’ll rise by well over 20%, as they did in 2023. What we can do is plan ahead for what we’ll do if the markets fall, or if they rise. We can prepare mentally and financially for both market storms and market sunshine, so that we can weather the former and take advantage of the latter.

When we predict, we’re essentially swinging for the fences on every pitch. Occasionally, a prediction can lead to a home run…but it can also lead to a lot of strike outs. By planning, we don’t have to swing at all. Since we can’t control the situation, we simply make the best out of every situation. We control only what we can control – ourselves.

#2: Be wary of confirmation bias . Earlier in the year, I spoke to many people who were convinced a recession would happen. Because of that, they tended to disregard all data that pointed away from a recession, and only valued information that confirmed what they already believed. As a result, many investors missed out on a stellar year in the markets! This is another example of why preparing is so much better than predicting. It removes emotion from our decision-making. Because we’re not so focused on “being right,” we can focus instead on “being ready!”

#3: Remember that past performance is no guarantee of future results . You’ve probably seen this line in the past, and 2023 is a great example of why. Just because rising interest rates have led to recessions in the past doesn’t mean they always will. Just because the markets went one direction yesterday doesn’t mean they’ll go the same direction tomorrow. While history is a great resource to draw from when making decisions, it’s just a guide, not a guarantee.

#4: At the same time, don’t anchor to the present . As humans, we have a natural tendency to think that the way things are today is how they’ll be tomorrow. When 2022 ended, many investors felt that 2023 would be much the same. Now, we run the risk of thinking that just because a recession didn’t happen last year, it won’t happen this year.

Again, it all goes back to planning and preparation. Here at Braeburn Wealth Management, we will continue to prepare for all possible outcomes. We’ll plan for how to reach the outcomes we want and avoid the ones we don’t. But instead of predicting, instead of assuming, instead of anchoring, we will accept that the future is written in clay, not stone. Only when it becomes the past does it harden. So, when you get right down to it, the lesson of 2023 is this: The future is flexible, and so we must be flexible, too. By doing this, we can continue shaping your future into whatever it is you want it to be.

So, that’s 2023! We hope it was a wonderful year. On behalf of the entire team, we look forward to making 2024 even better. Have a Happy New Year!

Every January, it’s customary to look back on the year that was. What were the highlights? What were the “lowlights”? What events will we remember? Most importantly, what did we learn? As you know, many noteworthy and historic events happened in 2023. Conflicts in Gaza, Ukraine, and Sudan. India surpassed China as the most populous country in the world. New temperature records were set all around the globe. The use of “artificial intelligence” exploded and turned multiple industries on their heads. Chinese spy balloons and deep-sea submarines grabbed the headlines. The “Barbenheimer” phenomenon reinvigorated Hollywood.

But in some ways, one of the most notable occurrences of 2023 is actually what didn’t happen: We never entered a recession.

When 2023 began, the fear of a recession was so widespread that it almost seemed inevitable. According to one survey, 70% of economists expected a recession to hit the U.S. in 2023. Another survey found 58% of economists believed there was a more than 50% chance of a recession. For politicians, pundits, and analysts, it was practically all they could talk about.

But it never happened. Instead, the economy grew by 2.2% in the first quarter, 2.1% in the second, and 4.9% in the third. (As of this writing, the numbers for Q4 are not yet available, but it’s expected to go up again.) None of this is to say that our economy is perfect, or that we won’t have a recession in the future. But for 2023, all the gloomy forecasts simply didn’t come to pass.

Now, let’s be fair to all those economists who got it wrong: They had very good reasons for expecting a recession. Reasons based on data, logic, and history.

You see, when the year began, the U.S. was coming off a nasty 2022. While consumer prices were already coming down from their earlier highs, the national inflation rate was still 6.5%. Interest rates, meanwhile, had risen dramatically, from just above 0% at the beginning of 2022 to over 4% by the end. It was already the highest level we’d seen in fifteen years – just before the Great Recession, in fact – and every indication was that rates would continue to rise higher. All this economic pain was reflected in the stock market. The S&P 500, for example, dropped over 19% in 2022.

For economists, all this data seemed to point a clear way forward. The Federal Reserve is mandated to keep consumer prices as stable as possible. (Its target has long been to hold inflation to around 2%.) When inflation runs hot, the Fed’s main tool for lowering it is to raise interest rates. Higher rates often lead to lower consumer spending. Lower spending, in turn, prompts businesses to decrease the cost of the goods and services they provide. Essentially, higher rates create an environment where supply is greater than demand , thus cooling inflation.

But there’s a side effect to this. If spending drops too much, businesses are often forced to cut back on expansion, investment, and labor costs. This leads to a rise in unemployment…and a contracting economy. In short, a recession.

This string of events isn’t just logical. It’s supported by history. When inflation has skyrocketed in the past, the Fed’s playbook has usually worked to bring prices down…but it’s usually triggered a recession, too. Economists call this a “hard landing.”

Gifts That Matter Most

Wed, 10 Jun 2026 13:37:40 GMT

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Christmas is the most wonderful time of the year. It’s a time for visiting family and friends; a time for renewing old acquaintances. We share gifts with those we care about, reach out to those we might not know as well, and help all those in need.

Yet, one of the most common laments I hear about Christmas is that it has become such a commercialized holiday.

A recent study showed us what we spend our money on during the Christmas season:

Christmas Tree: $41.50

Cards and Postage: $32.43

Floral Arrangements: $22.61

Food and Candy: $95.04

Decorations: $51.43

Travel: $960.50

Gifts: $750.68

So, for those of you who might want to take at least some of the commercialization out of Christmas, I found some suggestions for excellent gifts that cost little to nothing.

THE GIFT OF LISTENING: But you must REALLY listen. No interrupting, no daydreaming, no planning your response. Just listening – to your children or grandchildren as they excitedly tell you what they hope Santa brings. As your spouse recounts fond memories of Christmases past. To the carolers who tramp around in the cold, aiming to spread just a little holiday cheer.
THE GIFT OF AFFECTION: Be generous with appropriate hugs, kisses, pats on the back and holds. Let these small actions demonstrate the love you have for family and friends.
THE GIFT OF LAUGHTER: Clip cartoons. Share articles and funny stories. Your gift will say, “I love to laugh with you.”
THE GIFT OF A WRITTEN NOTE: It can be a simple “Thanks for the help” note or a full sonnet. A brief, handwritten note may be remembered for a lifetime, and may even change a life.
THE GIFT OF A COMPLIMENT: A simple and sincere “You look great in red,” “You did a super job,” or “That was a wonderful meal” can make someone’s holiday.
THE GIFT OF A FAVOR: Every day, go out of your way to do something kind.
THE GIFT OF SOLITUDE: There are times when we want nothing better than to be left alone. Be sensitive to those times and give the gift of solitude to others.
THE GIFT OF A CHEERFUL DISPOSITION: The easiest way to feel good is to extend a kind word to someone. It’s not that hard to say, “Hello” or “Thank You.”

Author Unknown — Submitted by Farez Shabudin Karimani — Kinshasa, Congo

This Christmas season, I hope we can all give the gifts that are of the most value, that will last a lifetime, and won’t be tossed aside when they get old or worn out. These are the gifts that make Christmas truly special.

On behalf of the Braeburn team, we wish you a happy holiday season and a merry Christmas.

Thanksgiving with Braeburn Wealth Management

Wed, 10 Jun 2026 13:37:38 GMT

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Happy Thanksgiving! Recently, we came across a poem that reminded us of all there is to be grateful for. It’s about the little things in life and why they matter. In honor of Thanksgiving, we thought we’d share it with you. The author seems to be unknown, but we think their words are a good reminder of why we give thanks the way we do.

The Things I Cannot Do Without
Anonymous

When I was young, I thought I knew
What life was all about;
I thought I knew what mattered
There wasn’t any doubt.

Fame and fortune I would gain,
Rich finery I’d wear,
And photos of my exploits,
Were all I cared to share.

Money, mansions, clothes and cars
Were the treasures of those days.
Exotic trips, expensive gifts,
My neighbor’s envious gaze.

Wealth and status did I crave,
Plus title, rank, and clout.
I thought it was such grand things
That I could not do without.

But as spring made way for summer,
And summer turned to fall,
A strange and curious thing I learned:
These were not my needs at all.

It started with a lover’s kiss,
And then the words, “I do.”
It followed with a baby’s laugh,
Those big eyes bright and new.

And then, before I knew it,
I started to take care
To notice all the little things
Life sprinkles everywhere.

A family to adventure with,
Friends over at my place,
A cherished colleague’s handshake,
My neighbor’s smiling face.

The flowers in my garden,
The hills and mountains tall,
The coolness of a shade tree,
A songbird’s trilling call.

The orange glow at sunset,
The warmth of a sunrise,
The moon that bathes the nighttime,
The stars that fill the skies.

All these routine happenings
We call normal and mundane
are the gifts life gives to us,
As vital as the rain.

As the Earth’s made out of elements,
And a body out of of cells,
Life is made of little things:
Sights, sounds, tastes, and smells.

Remind me, then, to give thanks
For all things sweet and small;
For without these tiny little things
We’d have no joy at all.

And when a new Thanksgiving comes,
I’ll whisper, and I’ll shout:
That now I know it’s little things
I cannot do without.

On behalf of our team, we wish you a wonderful Thanksgiving and a happy holiday season!

Cause and Effect in Today’s Market; Simple Explanations

Wed, 10 Jun 2026 13:37:36 GMT

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If you’ve been paying attention to the headlines, you know that September was a rough month for the markets. The S&P 500 finished down 4.9%, making it the worst month of the year. For the quarter, the S&P dropped 3.6%, while the Dow lost 2.6%. What’s behind this surge in volatility? While it’s easy to see all these numbers and headlines and feel overwhelmed, it might be helpful to think of the markets as a knotted-up ball of string. By slowly tracing the string backward, we can gradually untangle it. By doing that, we can discover the markets’ recent performance is based largely on a series of causes and effects, each leading into the next. So, in this message, let’s unravel that string together and make sense of what’s going on.

Cause : Reduced oil production by Saudi Arabia, Russia, and others → Effect : Higher oil prices

In June, Saudi Arabia – second only to the United States as the world’s largest oil-producing country – announced it would cut its production by one million barrels per day. Several other nations, including Russia, followed suit. All told, these cuts total around five million barrels a day. Prior to this, oil prices had slid by nearly 15% over the previous seven months. These countries wanted to reduce supply to drive prices back up. Initially, the cuts were only supposed to last for one month, but they have since been extended. The law of supply and demand holds that when supply goes down and demand does not, prices go up. Due to these cuts, oil prices have risen to their highest level since November of 2022. This, in turn, has driven up the cost of gasoline.

Cause : Higher oil prices → Effect : Rising Inflation

As you know, many goods and services depend on oil and gas. Higher prices make certain types of transportation and manufacturing more expensive for businesses. Anything that requires oil to be produced becomes more expensive. Anything that requires oil to be shipped from one place to another becomes more expensive. You get the idea. These costs are often passed to consumers in the form of more expensive airline tickets, food, electricity…it starts adding up. We have a name for rising prices: Inflation. Now, inflation is still down significantly from where it was earlier in the year. (The inflation rate was 6.4% in January and dropped to as low as 3% in June.) But it has ticked up again during the summer, rising to 3.7% in August.

Cause : Persistent Inflation (plus resilient economy) → Effect : High Interest Rates

To combat inflation, the Federal Reserve has hiked interest rates to their highest level in decades. Higher interest rates have helped bring prices down, but they also make things more costly for businesses. As a result, investors had hoped that lower inflation would prompt the Fed to slowly reduce interest rates. Technically, rates have not risen in two months. But since inflation is still proving stubborn – and since the economy is still growing – investors are coming to terms with the likelihood that rates will remain high for the foreseeable future. Furthermore, if inflation continues to tick up, we may even see another rate hike before the year is out. Cause: High interest rates → Effect: Higher bond yields

The realization that rates are likely to remain high has led to a spike in bond yields. In fact, the yield on 10-year Treasury bonds is currently at its highest level in 16 years! You see, when interest rates go up, the price of existing bonds usually falls. That’s because investors can buy newly issued bonds that pay higher coupon rates than older bonds. As a result, if bond owners want to sell their older bonds, they must do so at a discount. When bond prices go down, bond yields – the return an investor expects to gain until the bond matures – go up.

Cause : High bond yields → Effect : Less attractive stock market

Rising yields tend to make bonds more attractive to some investors. Bonds, especially US Treasurys, are often seen as more stable and less volatile compared to stocks. So, when investors feel they can get a decent return with less volatility, that tends to cause money to flow out of the stock market and into the bond market. The end result: Stocks go down. Whew! We did it. We traced the string and discovered some of the causes and effects currently driving the stock market.

Now, to be clear, this string doesn’t cover every factor beneath the current volatility. For example, higher gas prices and rising inflation tend to also decrease consumer spending, the lifeblood of our economy. Should spending go down, that would lead to lower quarterly earnings for many companies that trade on the stock market. To-date, consumer spending has been steady enough to keep the labor market strong and our economy growing. (The economy grew by 2.2% in the first quarter of 2023, and 2.1% in the second quarter. Data for the third quarter won’t be released until the end of October, but, as of this writing, the Federal Reserve projects even higher growth for Q3.

The fear that some investors have, however, is that higher prices will lead to a drop in consumer spending. This, of course, would lead to a more anemic economy. Now, in some respects, this is actually what the Federal Reserve wants. A drop in consumer spending would force companies to lower prices on the goods they provide, thereby decreasing inflation. But it’s a fine line the Fed has to hit, rather like a parachuter trying to land on a very small target. If the economy slows too much, that will cause a recession. If it doesn’t slow enough, that would cause stagflation – a situation where the economy becomes stagnant even though inflation remains high. Stagflation is rare, and currently, we’re nowhere near it. In fact, we’ve only had one significant period of it in living memory, which occurred all the way back in the 1970s. But since the markets move largely on what could happen – not what is currently happening – the fear of stagflation may also be contributing to the recent volatility.

So, that’s where things stand.

As you can see there is a lot to monitor right now. Over the coming months, investors will be poring over every bit of data that comes out of the government for hints of what might come down the road. Meanwhile, the markets may well remain volatile for some time. The good news is that you don’t have to spend your time scrutinizing reports and worrying about what they mean. That’s what we’re here for! My team and I will continue keeping a close eye on the markets and the economy. We’ll be posting updates here, so be sure to check back every month! In the meantime, I hope you enjoy the upcoming holiday season! Get out there and experience the fall colors, the crisp air, and the taste of pumpkin in seemingly every drink you order. And, if you ever have any questions or concerns, please let me know. I am always happy to address them.

Have a great autumn!

It Is Open To Interpretation

Wed, 10 Jun 2026 13:37:35 GMT

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Jackson Pollock was an action painter. He poured, dropped, and dripped paint onto horizontal canvases. Some people look at his work and wonder why it’s highly valued. Others find deep meaning in the paintings. For instance, Pollock’s Convergence is a collage of splattered colors that has been described as “the embodiment of free speech and freedom of expression…It was everything that America stood for all wrapped up in a messy, but deep package.”

Today, gauging the state of the American economy is akin to interpreting abstract art. Many economic indicators suggest the economy remains strong despite the Federal Reserve’s efforts to cool it off.

For example:

• Inflation is sticky. Last week’s inflation report wasn’t everything Americans hoped it would be. Overall, prices moved 8.3 percent higher over the 12-month period that ended in August. Core inflation, which does not include food and energy, moved higher from July to August. Taming inflation is the Federal Reserve (Fed)’s job.

• Rates have been moving higher. As it works to tame inflation, the Fed is raising the federal funds rate at a rapid pace. Some are concerned that the Fed will make a policy mistake and raise rates too much, causing a recession. In August, Fed Chair Jerome Powell warned some pain may be ahead for the U.S. economy.

• The labor market remained vibrant. Despite the Fed’s efforts, U.S. employers returned to the workforce. At the end of August, the unemployment rate was slightly higher at 3.7 percent, reported Megan Cassella of Barron’s, which could mean Fed tightening is beginning to have an effect.

• The manufacturing sector continued to grow, and so did the services sector. The Institute for Supply Management reported the Manufacturing Purchasing Manager’s Index (PMI)® and the Services PMI® showed the economy expanded for the 27th consecutive month. Readings above 50 indicate economic growth. New orders were up in August, and prices were down.

•Consumers were more optimistic. As gasoline prices dropped, the University of Michigan’s Consumer Sentiment Index showed that consumer sentiment rose to a five-month high last week. That’s not as positive as it may seem. Sentiment levels were comparable to those during the Great Recession, reported Alicia Wallace of CNN.

While economic data are open to interpretation, one thing is for sure: many investors are not happy. Retail investors remained strongly bearish last week, according to the AAII Sentiment Survey, and institutional investors had little appetite for risk. Some investors are making losses permanent by moving from equities to cash. Some are holding investments as they wait for the turmoil to end, and others are waiting patiently for opportunities to arise in the midst of market volatility.

Major U.S. stock indices moved lower last week, and U.S. Treasury yields moved higher across the yield curve.

Stocks Popped Higher, Anyway

Wed, 10 Jun 2026 13:37:32 GMT

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Central banks are hawkish. Stocks popped higher, anyway.

Last week, despite signs that inflation is slowing, U.S. Federal Reserve (Fed) officials emphasized their commitment to tightening monetary policy to lower inflation. Several indicated they anticipate a third consecutive rate hike of 75 basis points, reported Craig Torres and Matthew Boesler of Bloomberg.

Investors seemed to disregard the Fed as U.S. stocks moved higher, snapping a three-week losing streak. The Standard & Poor’s 500 Index finished the week up 3.6 percent, the Dow Jones Industrial Average gained 2.7 percent, and the Nasdaq Composite rose 4.1 percent, reported Christine Idzelis and Joseph Adinolfi of MarketWatch.

The European Central Bank (ECB) announced a rate increase of 75 basis points and revised its expectations for inflation higher last week. The ECB emphasized that tightening will continue and more rate hikes are likely. European stocks rose following the ECB’s announcement, reported Karen Gilchrist and Katrina Bishop of CNBC.

Last week’s stock market gains were a bit confounding, especially when you consider the fact that money has been flowing out of global equities and bonds and into cash and investments that are perceived to be safe havens. The stock market’s performance may be the result of investors whose only option was to buy shares. Bloomberg’s Lu Wang and Isabelle Lee explained:

“In a week that saw discretionary buyers beat a quick retreat from risky assets, another set of traders stood up to halt a three-week plunge in the S&P 500: those with little choice but to buy. They included short sellers, whose rush to cover lifted stocks [that] they’re betting against to gains of more than twice the market’s. Options dealers were another bullish force after getting caught needing to boost hedges by buying stocks when they rise.”

Major U.S. stock indices moved higher last week, and U.S. Treasury yields moved higher across the yield curve.

Back To School

Wed, 10 Jun 2026 13:37:30 GMT

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Across the country, school supplies have been purchased and many children have returned to the classroom to start a new school year. The give and take between teachers and students can produce some memorable – and humorous – moments. The following are from stories shared in Reader’s Digest.

Teacher: Where is your homework?
Student: It’s still in my pencil.

Teacher: Why can’t freshwater fish live in salt water?
Student: The salt would give them high blood pressure.

Teacher: How would you make the world a better place?
Student: I’d make potato skins a main dish rather than an appetizer.

Teacher: Mira went to the library at 5:15 and left at 6:45. How long was Mira at the library?
Student: Not long.

Teacher: Why do you think our librarian is leaving?
Student: Because she’s read all our books?

Teacher: In Franz Kafka’s The Metamorphosis, a man who is discontented with his life, wakes up to find he has been transformed into a large, disgusting insect.
Student: So, is this fiction or nonfiction?

Teacher: Why aren’t you wearing your glasses?
Student: My glasses are for reading, not math.

What are your favorite school stories?

Starting a 401(k) Is More Affordable Than Most Owners Think

Mon, 02 Mar 2026 07:10:00 GMT

Starting a 401(k) Is More Affordable Than Most Owners Think

Many small business owners assume a 401(k) is too expensive to start. Under current law, that’s often no longer true. Federal tax credits can significantly reduce — and in some cases largely offset — the early-year costs of launching a plan.

Here’s how it works.

Startup Cost Tax Credit

If your business has 100 or fewer employees, you may qualify for a credit covering administrative and setup costs.

Credit = 100% of eligible startup expenses
Capped at the greater of:
- $500, or
- $250 × number of non-highly compensated employees (NHCEs)
Maximum: $5,000 per year for 3 years

Example:
20 NHCEs × $250 = $5,000.
If annual admin costs are $6,000, you receive a $5,000 tax credit.

That’s up to $15,000 over three years.

Eligible expenses include recordkeeping, plan documents, and administrative fees (not employer contributions).

Auto-Enrollment Credit

Add automatic enrollment and receive:

$500 per year for 3 years
Total potential credit: $1,500

This applies to new plans or when adding auto-enrollment to an existing one.

Employer Contribution Tax Credit (SECURE 2.0)

For businesses with 50 or fewer employees, there’s an additional credit tied to employer contributions made to employees earning under $100,000.

Up to $1,000 per employee
100% credit in Years 1–2
75% in Year 3
50% in Year 4
25% in Year 5

Example:
10 eligible employees × $1,000 contribution = $10,000.
In Years 1–2, you may receive a $10,000 tax credit, directly reducing your tax bill.

What This Means

In Year 1, a qualifying employer could receive:

Up to $5,000 startup credit
$500 auto-enrollment credit
Up to $1,000 per eligible employee in contribution credits

For many small businesses, that can translate into five-figure tax savings in the early years of a new 401(k), dramatically lowering the real cost of offering a retirement plan.

The post Starting a 401(k) Is More Affordable Than Most Owners Think appeared first on Braeburn Wealth Management .

Your 2025 Year-End Financial Checklist: Key Moves Before December 31

Wed, 03 Dec 2025 14:33:00 GMT

Your 2025 Year-End Financial Checklist: Key Moves Before December 31

As we close out the year, December is one of the most important months for financial planning. A few strategic steps now can strengthen your long-term outlook and ensure you’re entering 2026 with clarity and confidence. Here are the key items to review before year-end:

Maximize retirement contributions.
If you’re able, consider increasing contributions to your 401(k), IRA, or HSA before December 31. Small increases today can have a meaningful long-term impact.
Evaluate Roth conversion opportunities.
If your income is lower this year or your tax bracket is favorable, a partial Roth conversion may make sense. This strategy is time-sensitive and must be completed by year-end.
Use tax-loss harvesting wisely.
If certain investments are down, realizing losses can help offset gains elsewhere and reduce your tax bill. This is a disciplined, strategic process, not market timing.
Make charitable contributions.
Whether you give through cash, appreciated stock, or a donor-advised fund, charitable gifts completed before December 31 can provide a tax benefit and support causes you care about.
Confirm required minimum distributions (RMDs).
If you’re subject to RMDs, be sure they’re completed before year-end. Our office actively monitors these but reach out if you have questions.
Review beneficiaries and key documents.
Life changes quickly. December is a great time to make sure your retirement accounts, insurance policies, and estate documents still reflect your wishes.

Closing the year with a strong plan in place brings peace of mind and helps set the tone for a successful 2026. If you’d like help reviewing your year-end checklist or discussing tax-efficient strategies, our team is here to help.

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529 plans vs UTMAs

Fri, 05 Sep 2025 20:56:00 GMT

529 plans vs UTMAs

When families begin saving for their children’s future, two popular options often come up: 529 college savings plans and UTMA custodial accounts. While both are designed to help transfer wealth to the next generation, they work very differently and serve different purposes.

A 529 plan is specifically geared toward education. Contributions grow tax-deferred, and withdrawals are tax-free if used for qualified education expenses such as tuition, books, and even certain K–12 costs. Some states, including Michigan, also offer a state tax deduction for contributions. Importantly, 529 plans aren’t just for traditional four-year colleges—they can also be used for many community colleges, vocational programs, and trade schools, as long as the institution participates in the U.S. Department of Education’s aid programs. This makes them a flexible tool for a wide variety of career paths.

By contrast, an UTMA (Uniform Transfers to Minors Act) account is far more flexible. Assets can be used for anything that benefits the child—whether that’s school costs, buying a car, or other expenses. The downside is taxation: while the first portion of income may be tax-advantaged, earnings above a certain threshold are taxed at the parent’s rate (“kiddie tax”). Additionally, once the child reaches the age of majority (18 or 21 in Michigan, depending on circumstances), they gain full control of the account, which may not align with the parent’s wishes.

Ultimately, the choice between a 529 and UTMA often comes down to your goals. If education funding is the priority, a 529 plan usually offers greater tax advantages and more educational coverage than most families realize. If broader flexibility is desired—and you’re comfortable with your child having control later on—a UTMA might be worth considering. Many families actually use both, balancing tax benefits with flexibility.

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What the One Big Beautiful Bill Act Means for Your Financial Plan

Thu, 17 Jul 2025 08:40:00 GMT

On July 4th, President Trump signed the “One Big Beautiful Bill Act” (BBB) into law, introducing wide-ranging changes to areas such as taxes, benefits, and savings. While much of the discussion has been political, our focus is on what it means for your financial plan.

Below is a summary of key provisions that could impact individuals and families across a variety of situations. While not all changes will apply to everyone, we encourage you to share this information with anyone it may benefit.

Changes to Tax Deductions and Exemptions

– Standard deduction increases:
– Single filers: $15,750
– Married couples filing jointly: $31,500
These amounts will now adjust annually with inflation.

– SALT (State and Local Taxes) deduction cap:
Increased from $10,000 to $40,000, with a 1% annual increase until 2030, after which the cap reverts back. A phaseout begins for incomes over $500,000.

– Estate and gift tax exemption:
– Individuals: $15 million
– Married couples: $30 million

These changes are especially relevant for those doing estate planning or with significant property or investment assets.

Tax Credit Adjustments

– Child Tax Credit:
Permanently raised from $2,000 to $2,200 per child under 17.

– Green energy credits:
Credits for electric vehicles and home energy improvements will expire:
– EV credits end September 30, 2025
– Energy-efficiency credits end December 31, 2025
If you’re planning energy-related purchases, it may make sense to act soon.

A New Deduction That Could Affect Social Security Taxes

A temporary tax deduction for seniors has been introduced:
– Individuals 65+ with income ≤ $75,000 can deduct $6,000
– Married couples with income ≤ $150,000 can deduct $12,000
– Phases out completely at $175,000 (individual) and $250,000 (couple)

While this doesn’t change how Social Security benefits are taxed directly, it may reduce taxable income enough to make those benefits partially or entirely tax-free for some. This deduction is set to expire after 2028.

New Child Savings Accounts

For children born between 2025 and 2028, families can now open new tax-advantaged savings accounts:
– One-time government deposit: $1,000
– Annual contribution limits:
– Parents/relatives: $5,000
– Employers: $2,500
– Growth is tax-deferred until age 18; withdrawals taxed as long-term capital gains

These accounts could help with future education or other goals, but they come with strict rules. Let’s review your options before moving forward.

Final Thoughts

The One Big Beautiful Bill Act touches many areas that influence retirement planning, taxes, savings, and family finances. Not all provisions will apply to everyone, but for many of our clients, the impact will be real.

We’ll continue to analyze the bill in detail and update you with any relevant guidance. In the meantime, if you have questions about how the new law affects you or your loved ones, don’t hesitate to reach out.

The post What the One Big Beautiful Bill Act Means for Your Financial Plan appeared first on Braeburn Wealth Management .

Should You Consider a Roth Conversion?

Wed, 18 Jun 2025 10:43:00 GMT

When planning for retirement, taxes can take a bigger bite out of your savings than you might expect. One way to stay ahead of this is by considering a Roth IRA conversion .

Here’s how it works: you move money from a traditional IRA or 401(k) which hasn’t been taxed yet — into a Roth IRA. You’ll pay taxes on that amount now, but from then on, your money grows tax-free , and qualified withdrawals in retirement won’t add a dime to your income taxes.

Many people wonder, “Why pay taxes now if I can wait?” It’s a fair question — but here’s something to think about: with a traditional IRA or 401(k), you’re not just deferring taxes — you’re deferring taxes on an even bigger balance in the future . This means you could end up paying taxes on the original contributions plus years of growth at whatever tax rate applies down the road.

Renowned IRA expert Ed Slott highlights in his book The Retirement Savings Time Bomb Ticks Louder that today’s tax rates are historically low compared to what Americans paid in the past. With the national debt growing, Congress could raise tax rates in the future to balance the budget. By converting now, you lock in today’s rates and hedge against that risk.

Roth conversions can also help you reduce future required minimum distributions (RMDs) and give you more flexibility in retirement — plus, they can make it easier to leave tax-free money to your heirs.

Of course, Roth conversions aren’t a one-size-fits-all move. They can increase your taxable income in the year you convert, which could bump you into a higher tax bracket or affect your Medicare premiums. That’s why it’s so important to run the numbers and plan carefully.

If you’d like to explore whether a Roth conversion makes sense for you — and how to do it in the smartest way — We’re here to help. Let’s talk about how you can keep more of your money working for your future, not Uncle Sam’s.

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NUA Explained: A Powerful Tax Strategy for Retiring with Company Stock

Thu, 08 May 2025 21:48:00 GMT

If you’re approaching retirement and hold employer stock in your 401(k) or company retirement plan, there’s a little-known tax strategy that could save you significantly in taxes: Net Unrealized Appreciation (NUA).

Many people assume rolling over their entire 401(k) into an IRA is the default best option—but when it comes to company stock, there’s another potential route that’s worth considering.

What is NUA?

Net Unrealized Appreciation (NUA) refers to the growth in value of company stock held in your workplace retirement plan. If you meet specific requirements, this growth can be taxed at the long-term capital gains rate rather than ordinary income tax rates—which is a big difference for many retirees.

How NUA Works?

You retire or leave your job and own company stock in your 401(k).
Instead of rolling everything into an IRA, you:
- Take a lump-sum distribution of the entire 401(k in one tax year).
- Transfer the company stock “in-kind” to a brokerage account.
- Roll over the remaining assets (mutual funds, cash, etc.) into an IRA.
You pay ordinary income tax on the cost basis of the stock (what you originally paid for it).
When you sell the stock later in your brokerage account, the appreciation (NUA) is taxed at long-term capital gains rates—even if you sell the next day.

Why It Matters

Let’s say your company stock is worth $200,000, but your cost basis is only $50,000:

If you roll it all into an IRA, you’ll pay ordinary income tax on the full $200,000 when withdrawn.
With NUA, you pay ordinary tax only on the $50,000 cost basis now, and the $150,000 in appreciation is taxed at long-term capital gains rates later.

For many, this results in a significantly lower overall tax bill, especially if they’re in a high income bracket.

Is NUA Right for You?

NUA isn’t for everyone. Here are a few key things to consider:

✅ You have highly appreciated company stock in your 401(k)
✅ You’re separating from service due to retirement, disability, or after age 59½
✅ You don’t need to access all your retirement funds immediately
✅ You want to reduce your ordinary income tax burden over time

But be cautious—NUA must be executed properly, and once you roll over the stock into an IRA, the opportunity is lost.

The post NUA Explained: A Powerful Tax Strategy for Retiring with Company Stock appeared first on Braeburn Wealth Management .

Investing Through Uncertainty: Avoiding Emotional Decisions Amid Tariff News

Mon, 10 Mar 2025 14:10:00 GMT

With headlines dominated by trade tensions and new tariffs, it’s easy to feel the urge to react and make changes to your portfolio. However, history shows that emotional investment decisions often lead to costly mistakes. Before you decide to exit the market due to short-term uncertainty, ask yourself these three critical questions:

If I get out of the market now, how will I know when it’s time to get back in?

Markets move faster than headlines and trying to time the perfect exit and reentry is nearly impossible. Studies show that missing just a few of the best trading days each year can significantly reduce long-term returns. The market often rebounds before investors feel confident again, leading to missed opportunities.

Would I rather miss a correction that could last for a few months, or a rebound that could last for years?

Market downturns driven by policy uncertainty—like trade tariffs—tend to be short-lived. On the other hand, recoveries and long-term growth can last for years. For example, in 2018 when the U.S. imposed tariffs on China, the S&P 500 dropped sharply but rebounded with a 28% gain in 2019. Investors who stayed on the course benefited significantly.

If I own investments I like, would I really want to sell them and risk buying them back at a higher price later?

If you’ve built a strong portfolio based on solid companies, does it make sense to sell those holdings just because of temporary uncertainty? Selling now might feel like “playing it safe,” but many investors find themselves buying back the same stocks at higher prices when markets recover.

Staying Focused on the Long Term

Market volatility is normal, and headlines will always create uncertainty. But history has consistently rewarded long-term investors who stay patient and avoid emotional decisions. If you have concerns about your portfolio’s exposure to tariffs, let’s discuss how to keep your investments aligned with your long-term financial goals.

*Photo by Markus Winkler

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Tax Season

Fri, 24 Jan 2025 20:13:00 GMT

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Year End Fiscal Moves that Make Sense

Fri, 20 Dec 2024 15:31:00 GMT

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Election Season

Thu, 31 Oct 2024 19:07:00 GMT

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