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The ‘Roar’

Recently I was chatting with a longtime client about the current state of the stock market, as in, not good. They told me that, after many decades of investing, they were no longer having fun. This struck me as unsurprising given the continuous downdrafts the market has been experiencing of late. However, it was an interesting way to think about investing in the first place – ‘fun’. Perhaps because investing is work for me, I don’t think about investing as fun, like I do biking or skiing. Of course, working with our clients is gratifying, but when you experience the unpredictability and volatility of markets daily, fun may no longer be an apt description.

Speaking of unpredictable and volatile, 2022 has been both, and definitely no fun. At the close of the third quarter, September 30, the stock market notched its (so far?) low point for the year. With virtually all stock benchmarks down more than twenty percent apiece, there has been no place to hide for investors. Bonds? Safe? Not this year, as the Bloomberg US bond aggregate closed the quarter down 14.61% year to date (Source: Bloomberg Bond Aggregate). Commodities? Real estate? Cryptocurrency? Down, down, down.

What do we do? Bail out of everything? Hold cash until things look rosier? Perhaps until the Federal Reserve decides to stop increasing interest rates, or go back in when retail sales look set to rebound, or when inventories drop again? Those who read this newsletter regularly already know the answer. But for those who don’t frequent these pages, the answer is already written, in the market’s performance in the first two trading days of the fourth quarter. As I write this letter in the middle of the second day, I am watching the S&P 500 gain 5.7% over the two days (Source: S&P Global). Up? During all this doom and gloom? For markets, it is often darkest before the dawn, but unlike day and night, when the light comes back is unpredictable. The increase in interest rates over the past year has created somewhat of a silver lining in this volatile market for investors who own bonds due to the potential to enhance their cash flows and total returns.

While markets remain out of our direct command, the end of the year coming up presents opportunities that we can control. For those of you who are saving for children and grandchildren, making use of the annual gift exclusion can be valuable. This allows a maximum gift of sixteen-thousand-dollars per person, which means a married couple can give up to thirty-two thousand dollars combined. Gifts to 529 plans may provide opportunities for couples to save on capital gains taxes if and when the funds are used for education. For young kids, these benefits can be significant. These ‘annual’ gift exclusions expire at the end of the calendar year, so it is a ‘use it-or-lose it’ benefit. Another item is IRA and Roth IRA contributions. While these contributions can be extended to April, 2023 it may be worth looking at now given the market volatility. Lastly, if you are a corporate worker, open enrollment season is coming, we are available to discuss which optional benefits are the best suited for you.  

Finally, you will potentially notice some movement in your portfolios over the next few months. Part of this is us taking tax-losses on your behalf, if they are applicable, and part is us resetting allocations in accordance with your stated financial objectives and time horizon. In the near-term, our goals are to prepare you to successfully go forward in the new ‘normal’ within the wonderful and fun world of investing. Please call with any questions or if anything changes in your financial situation or to discuss changes you are contemplating.




Scott Lasky, CFP™

Lionshead Wealth Management, LLC is an investment adviser in New York. Lionshead Wealth Management, LLC is registered with the Securities and Exchange Commission (SEC).  Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.  Lionshead Wealth Management only transacts business in states in which it is properly registered or is excluded or exempted from registration.  A copy of Lionshead Wealth Management 's current written disclosure brochure filed with the SEC which discusses among other things, Lionshead Wealth Management's business practices, services and fees, is available through the SEC's website at: Past performance is not an indication of future results. Please note, the information provided in this document is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. Please refer to the disclosure and offering documents for further information concerning specific products or services. Nothing provided in this document constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction. This document may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio's operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of Lionshead Wealth Management or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.

 All statements are opinions and should not be construed as facts. This newsletter is for informational purposes only and should not be deemed as a solicitation to invest, or increase investments in Lionshead Wealth Management products or affiliated products. Information provided is for educational purposes. Your advisor does not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions. Further, your advisor makes no warranties with regard to such information or a result obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.S&P 500® Index: is an unmanaged index of 500 common stocks primarily traded on the New York Stock Exchange, weighted by market capitalization. Index performance includes the reinvestment of dividends and capital gains.

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