Fall is the time when children return to school. It is also a good time to consider starting or contributing to an education savings fund, such as a 529 plan. The rules around 529 plans have changed since their inception and current plans offer flexibility as to what types of educational pursuits may be funded and who may be a beneficiary of the plan. There are rules as to how funds may be drawn tax-free and options exist for unused funds. We would be happy to provide guidance.

One of our earlier issues this year discussed tax planning. The final quarter of the year provides a good opportunity to consider increasing your contribution to a tax-deferred plan. Remember the time to do tax planning is not when you are doing your tax return.

Finally, the Fall is the time for Medicare recipients to review and make changes to their various plans. In particular, Part D prescription plans offer a wide range of coverages and premiums, so your 2024 plan may not be the right plan for 2025.

Every month, we're hosting live, in-person educational workshops throughout the local community. We welcome you to attend these events and to share these with those in the community that may benefit from these no-cost seminars and workshops!

September 18, 2024 at 1:00PM

at Lewes Public Library | No Cost

Discover the secrets to a financially secure and healthy retirement. This engaging workshop offers a deep dive into the often-overlooked aspect of retirement planning: healthcare costs. We'll guide you through the intricacies of Medicare, supplemental insurance, and more, providing practical solutions for a future where your health and wealth are in harmony. Join us for an insightful session that promises to transform your approach to retirement healthcare planning.

October 23, 2024 at 10:30AM

at Lewes Public Library | No Cost

October is Cybersecurity Awareness Month, and we're here to empower you and your loved ones with essential knowledge. In an increasingly digital world, protecting your financial information online is paramount. Join our workshop to bridge the Cybersecurity Knowledge Gap. Discover your personal cybersecurity score and gain actionable insights to fortify your online presence. Learn practical tips for password security, safeguarding your home Wi-Fi, enabling 2-step verification, and even freezing your credit for added protection.

About the Presenter:

These educational workshops will be presented by Kenneth Reese, MSFS, CPWA®, CFP®, CIMA®, CLU®, ChFC®, EA, Partner and Financial Advisor of Black Diamond Financial Solutions and instructor with the Money School, a program of the Delaware Community Reinvestment Action Council. 

Kenneth graduated from Penn State University, focusing on finance and law, and has over ten years of wealth management experience. He is passionate about developing tax-centered financial planning strategies and is committed to lifelong learning and client empowerment.

The stock market has begun to show increased volatility and the weakness in the U.S. economy is starting to become more evident in corporations' earnings and warnings about future months.  Layoffs are picking up amongst the largest employers and small business bankruptcies are up significantly from the historic lows during Covid when the government handed out trillions to businesses to survive.  

My daily research supports my reasons for deep concerns for American investors, particularly those who are in retirement or about to retire.  History, particularly 2000 and 2008, reminds me that extremely overpriced stocks and troubled loans are two ways to crush the investment accounts of the masses.  The question becomes what happens when both happen at the same time.

Much of what I follow contradicts Wall Street's rosy outlook.  The stock market’s most used valuation metric (Price to Earnings ratio) is higher today than before the Great Depression and 3rd highest in history.  By a Price-to-sales ratio, we are only 2.6% from the all-time high in 2020, which shortly thereafter led to a 25% correction in 2021. 

As for the economy, the US Government has been providing much of the economic gains to the GDP in the past 2 years, but at a very steep cost.  The government debt versus the US GDP is now at levels above what we saw during World War II.  The pandemic is over but government spending has resulted in an annual budget deficit of over $1.8 trillion, which would appear to not be sustainable.  The solutions consist of reducing spending, increasing taxes, or both, all of which will provide a drag on the economy.

As well, the consumer continues to experience the effects of inflation, although the current 3% rate is an “improvement” from 8.52% experienced not long ago.  The problem is that prices are not going down, simply going up at a slower pace.  This has led to high balances on credit cards, doubling impacted by high interest rates, and a sharp decrease in savings.  One has to wonder, where will consumers get the money to purchase goods and services to spark a rebound in spending should the economy experience a slowdown?  

Currently, the risk-free rate of return on short-term government treasuries is around 5%.  I continue to recommend investors maintain a reduced risk profile until stock valuations come down to a more reasonable level.  This can only happen in 1 of 2 ways.  Either companies’ earnings must rise significantly (highly unlikely considering the above information), or stock prices must fall significantly.  

There are broader challenges that help me get to my analysis of a significant drop in stock prices including bank losses in long-term mortgages and bonds as well as their impending write-down in commercial real estate due to COVID-19-led changes in employees working from home. The amount of world debt topping $300 trillion and Wall Street derivatives at a staggering $200 trillion, well above the disastrous 2008 levels further adding to the mix. Unfortunately, we will have to wait and see.

Jeffrey T. Puglia, CFP ®,  ChSNC®, AIF®

President and Financial Advisor

Jeff and Andrea are proud to see their daughter, Laci, start her college career this month!

Mark and his wife, Sally, celebrated their 50 year wedding anniversary!

Austin Carter has joined the team as our newest Advisor Associate!

Nate and his wife, Morgan welcomed a baby girl to their family!

Rose's flock grew by a few!

Stay tuned for our next newsletter where we will announce a new team member!

BDFS treated it's employees to a Blue Rock's game with their families!

Black Diamond values educating the next generation of advisors which is why we hosted two interns over the summer.  Our goal in hosting interns each year is to make an early impact on their morals and dedication to their future clients.

We've partnered with Vivid Creative Studio to give you a glimpse at what our advisors are doing for our clients. Be on the lookout for new releases of our branded video series on our social pages!

Sources

Chances are, you've met Rosalie "Rose" Whitehouse if you've visited Black Diamond Financial Solutions before.  In addition to excelling as our Senior Account Representative and Office Manager, she is an excellent photographer.  While some of our clients are her biggest fans, we love supporting her hobby by sharing some of her photos from time to time.  Enjoy!