You/We Made It
We hope you had a wonderful Christmas and New Year celebration with family and friends! With the Holiday falling on a Monday, we all enjoyed some extra time with family and friends. Thank you for allowing this to happen with some extra “office closed” days.
Twelve months ago, we challenged our Team and clients to “Make 2023 Better” due to the challenges we all faced in 2022, particularly relating to the difficult performance of the capital markets. We encouraged you to think positively and look towards a brighter future, despite the gloom and doom of the bankers and negative prognosticators.
If you were paying attention to the news of the day, we were led to believe 2023 would bring a severe recession, inflation would continue to erode purchasing power and interest rates would continue to cool the capital markets. We want to say “no surprise” but that might imply we knew it would not happen, but NONE of that happened. 2023 ended up being a great year and we hope you enjoy your year-end statement.
As we start 2024, similar negativity abounds the news of the day, just like it does each and every year. Will the fortune tellers of today be right for 2024? We won’t know until next year. But our expectation is the same as every year – most likely not.
Last year, we reminded you that there was a very low probability we would experience back-to-back negative years. We reminded you that all capital market declines recover. We reminded you that we have had 21 “negative” events dating back to 1987 and despite the negativity, the capital markets have continued their advance. We reminded you to “stay the course”.
It wasn’t easy. The continued market swings both positively and negatively throughout 2023 created concern. First quarter, decent. Second quarter, mediocre. Third quarter, terrible. Fourth quarter, unbelievable. If only we had the crystal ball to have figured all that out in advance. Hindsight vision is always perfect.
So now we start a new year. What’s in store for the capital markets? The truthful answer is “We don’t know.” The forecasts are somewhat better than last year. Here’s the summary range:*
S&P 500: Expected return 5% to 9%
Russell 2000: Expected return 5% to 12%
MSCI EAFE: Expected Return 2% to 15%
(*Source: Morgan Stanley, BlackRock, MarketWatch, UBS, Seeking Alpha, Raymond James, Wedbush)
So once again, we encourage you to look forward to 2024. Time is precious. Great memories will be created with intention. Several clients will celebrate their retirement this year. A handful will reach “full retirement” for Social Security eligibility. We will celebrate monumental wedding anniversaries. The number of “expected” grandchildren for the first quarter is big. Next thing we know it will be summer, filled with graduations and weddings. These are the things that matter most, and we look forward to celebrating them with you!
Pat yourselves on the back for making 2023 better. You made it. We made it. And we look forward to an even better 2024. We look forward to seeing you in person and virtually in the upcoming days, weeks and months. If you have any changes to your financial situation that need attention now, please contact our office by phone, email or through our website: kempfm.com
KFM Update
Last year we were hard at work with technology enhancements within our KFM Website and our Client Portal. We hope you enjoy both and see the improvements.
We have just released our updated KFM App, available through the Google Play Store or Apple App Store. Please know, we have been reluctant to put forth a mobile app, in so much that we do not want to encourage checking your balances on a frequent basis. Fun fact, on average there are 252 days the capital markets are open for trading. In any given year, on average, the capital markets are down 54% of the time on a daily basis, or 136 trading days. You can make yourself “crazy” and “unhappy” by checking too often. We are hopeful the app is nothing more than another communication tool between you and KFM.
1099’s from your custodian are generally distributed in late February. As normal, they will flow from your custodian to your Client Portal where they will be found in the Documents/Statements section under “Tax Reports”. Please let us know if you would like assistance in getting your tax documents delivered to your CPA or Tax Advisor. You can contact anyone on the KFM Team for this request.
Lastly, THANK YOU! 2023 brought yet another year of great introductions to KFM from you. Our number one priority is taking care of our clients first while accommodating recommendations as time permits. We are greatly encouraged and grateful for your continued trust and confidence in what we do. Thank you!
Election Year
As we enter this election year, we know to expect plenty of twists and turns. As of now, all signs point to a presidential rematch. Although, the battle for control on Capitol Hill might be even more fascinating to watch unfold. The House and Senate have never flipped in opposite directions in the same election but that could be the case in 2024. In the Senate, Democrats currently hold a 51-49 majority. Democrats will be defending 23 seats whereas just 11 Republican held seats are on the ballot. On the other hand, Democrats have a shot at flipping control of the House. Republicans have just a four-seat majority, a number of which were highly contested in 2022. It’s important to remember that partisan control of Congress and the White House has had little impact on the economy and markets; U.S. GDP growth has continued to climb through each of the last 46 presidencies, and stocks have trended upward over the long term. Be on the lookout for an Election Year education piece during your next update meeting.
There are lot of things to watch as this campaign year unfolds. What we know for certain is that plenty of opinions and predictions will be had in the year ahead. We also know that elections should not influence long-term investment decisions. History shows that election month returns have been well disbursed throughout the range of outcomes. It is important to remember that being a shareholder means investing in a company, and regardless of who is in the White House, companies focus on growth and efficiency. All of that to say, stocks reward long-term investors, and we are confident in the long-term plans we have in place for you.
New Year, New Goals
Setting personal goals can be an exciting way to grow and improve in the new year! Here are some ideas for good personal goals you can consider for 2024, categorized into different areas.
Health and Wellness:
Improve your physical fitness: Set a goal to train for a race, join a gym, or simply exercise regularly.
Develop a healthy eating routine: Focus on whole foods, try new recipes, and reduce processed foods.
Prioritize mental health: Practice mindfulness, meditation, or seek professional help if needed.
Get enough sleep: Aim for 7-8 hours of quality sleep each night.
Learn a new skill: Take up a yoga class, learn to cook healthy meals, or explore a new hobby.
Relationships and Social Life:
Strengthen existing relationships: Spend more quality time with loved ones, communicate openly, and show appreciation.
Build new connections: Join a club, participate in volunteering activities, or take a class to meet new people.
Improve communication skills: Practice active listening, express yourself clearly, and be considerate of others' feelings.
Set boundaries: Learn to say no and prioritize your needs without feeling guilty.
Travel to a new place: Explore a new culture, connect with different people, and gain new perspectives.
Personal Growth and Development:
Learn a new language: Take a language course, use online resources, or practice through conversation.
Develop a new skill: Learn to code, play an instrument, or pick up a new artistic skill.
Read more books: Explore different genres, challenge yourself with complex topics, and join a book club for discussion.
Challenge yourself intellectually: Take online courses, attend workshops, or engage in stimulating conversations.
Practice self-compassion: Be kind to yourself, forgive your mistakes, and learn from your experiences.
Remember, choose goals that are meaningful to you and align with your values. Set realistic and achievable goals that you can track and measure. Break down large goals into smaller, manageable steps. Celebrate your achievements along the way, even small victories. Don't be afraid to adjust your goals as needed.
