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  • HWM Market Recap - November 2022

    Investing can be scary. Particularly in volatile times like these. After a down month in September, the Dow Jones Industrial Average (DJIA) had its best rally for October in recorded history (since 1896). All the while, the DJIA is still down more than 8.5% since January, and the S&P 500 is down more than 18.75% in the same period. The economy sent further mixed signals with a 2.6% rise in third-quarter Gross Domestic Product (GDP) after declining the first two quarters of the year. Meanwhile, the manufacturing sector is headed into recession, Core Consumer Price Inflation is at a forty-year high, and home sales fell to their fourth lowest reading on record as mortgage interest rates more than doubled since the start of the year. So, how does one invest during a bear market? Moreover, what should one do during tumultuous times like these if they are retired and living off returns from investments? When it comes to investing, investors are compensated to take on risk -- the lower the risk, the lower the expected return; the higher the risk, the higher the expected return. Consequently, our shorter-term investments should be in lower-risk assets to meet current needs and protect from short-term volatility. In contrast, longer-term investments should take on more risk allowing them the time to benefit from the additional risk. Therefore, to start, allocate your retirement funds into short (1-2 years), intermediate (2-5 years), and long-term (5+ years) investments. For the short term, you should have enough low-risk money to pay your expenses for about a year or two. This money can be in the form of an income stream, cash, or cash equivalents (certificates of deposit (CDs), treasuries, money market). Once you know your average monthly expense requirements, you determine your income (Pensions, Social Security, dividends, interest) and supplement that with enough low-risk assets to safely meet your needs for the coming year or two. A reasonable withdrawal rate to work with is 4%, which is approximately the same as the Required Minimum Distribution (RMD) for retirement accounts. Next, you will have low to moderate-risk assets that generate income and capital gains to meet your needs for the next two to five years. The idea is to manage the portfolio’s risk so that regardless of short to intermediate-term market fluctuations, your cash flow needs are met without being forced to sell long-term assets at an inopportune time because the stock market is going down. Long-term investments that you do not expect to sell for at least five years can generate dividends or interest that flow into your short-term assets. In addition, as you sell or trim positions, those funds can be reinvested or moved into shorter-term assets. By systematically employing this strategy, you will have the funds required to meet your expenses while keeping other funds invested to take advantage of long-term rates of return. In addition to proper portfolio construction, establishing a financial plan can create a beneficial blueprint to help systematically monitor cash flows, ensure that you remain on track, and adjust for any changes in your circumstances or the financial markets. For example, by reviewing your plan annually, you can determine if you have excess funds or shortfalls and need to tighten your budget. The idea is to maintain an analytical and reasoned approach to your retirement finances. It is human nature to feel like everything is great during strong up markets and to worry when markets decline. By doing the analytical work up front, it gives us a jumping-off point to make careful, well-thought-out decisions during tricky times. Additionally, in structuring portfolios according to your needs and preferences, routinely monitoring their progress, and adjusting systematically or as circumstances warrant, we can better stay on track to help you feel more at ease about retirement despite the ups and downs of the market. Change is the one constant. By having a road map and steering a charted course, you will be better prepared to manage inevitable changes which will come your way. Monthly Changes in Major Indices S&P 500: +7.99% Dow Jones Industrial Average: +14.05% Nasdaq Composite: +3.90% Monthly Performance By Sector Energy (XLE) +24.96% Industrials (XLI) +13.92% Financials (XLF) +11.96% Health Care (XLV) +9.68% Materials (XLB) +8.99% Consumer Staples (XLP) +8.99% Technology (XLK) +7.68% Utilities (XLU) +2.04% Consumer Discretionary (XLY) +1.10% Real Estate (XLRE) +0.43% Communication Services (XLC) -1.34% Monthly Top 5 Performers Energy (XLE) +24.96% Energy was back in the top spot as the best-performing sector for October. Its leaders included: Halliburton Co (+47.93%), SLB (+44.93%), Marathon Oil Corp (+34.85%), APA Corp (+33.69%), and Baker Hughes Co Class A (+31.97%). Industrials (XLI) +13.92% Industrials finished the month as the second-best performing sector, with its leaders being: Caterpillar Inc (+32.65%), United Airlines Holdings Inc (+32.43%), Lockheed Martin Corp (+25.99%), General Electric Co (+25.68%), and Honeywell International Inc (+22.19%). Financials (XLF) +11.96% Financials fell one spot month-over-month to the third-best performing sector. Leaders in the sector were: Synchrony Financial (+26.96%), Lincoln National Corp (+23.71%), Everest Re Group Ltd (+22.95%), Ameriprise Financial Inc (+22.69%), and Prudential Financial Inc (+22.63%). Health Care (XLV) +9.68% Health Care dropped from the best-performing sector in September to the fourth-best performing. Leading the sector in October included: DexCom Inc (+49.96%), Intuitive Surgical Inc (+31.49%), Universal Health Services Inc Class B (+31.40%), Gilead Sciences Inc (+27.18%), and Moderna Inc (+27.13%). Materials (XLB) +8.99% Leading the fifth-best performing sector in October were: Nucor Corp (+22.80%), Freeport-McMoRan Inc (+16.50%), Corteva Inc (+14.33%), DuPont de Nemours Inc (+13.49%), and FMC Corp (+12.49%). The IRS released the increased contribution limits to tax-advantaged accounts, including 401(k)s, which for 2023 increased by a record 9.8% because of inflation. It's the most significant jump ever in terms of both percentage and dollar amount, according to the WSJ. The increases included: 401(k), 403(b), and 457(b) Plans: $22,500 if you are under age 50 (up from $20,500 in 2022). If you are 50 or older, you can contribute an additional $7,500 in 2023 (up from $6,500 in 2022) for a total limit of $30,000. IRAs and Roth IRAs: $6,500 if you are under age 50 (up from $6,000 in 2022), $7,500 if you are 50 or older. Income-based contribution limits may apply. Defined Benefit Plans (i.e., pensions): Annual benefit limit is $265,000 for 2023, up from $245,000 in 2022. Solo 401(k)s and SEP Plans: $66,000 in 2023, up from $61,000 in 2022. If you are 50 or older, you can contribute an additional $7,500 in 2023 (up from $6,500 in 2022). Health Savings Accounts (HSAs): $3,850 for individual coverage for those with self-only High Deductible Health Plans (HDHPs), up from $3,650 in 2022, and $7,750 for those with family HDHPs, up from $7,300 in 2022. Additionally, tax brackets will get a 7% bump for 2023. The highest income tax rate (37%) will now apply to individual single taxpayers earning $578,125 or more ($693,750 for married couples filing jointly), up from $539,900 ($647,850 for married couples) for 2022. With regards to the new standard deduction, married couples filing jointly can claim a standard tax deduction of $27,700 for 2023, up from $25,900. For single filers, it will increase to $13,850 from $12,950. Social Security checks for 2023 will also see a substantial increase, up 8.7%, marking the largest cost-of-living adjustment for the program since 1981. On average, recipients' benefits will increase by more than $140 per month starting next year. Additionally, Medicare Part B premiums will decrease by $5.20, or 3.1%, per month. President Biden unveiled a plan to sell 15 million barrels of oil from the U.S. strategic reserve to keep oil and gas prices from rising. This unusual move follows a decision by OPEC+ nations to cut oil production. October also saw a wave of protests across Europe as tens of thousands of people marched in opposition to high inflation, particularly the price of energy. In a recent interview, Jamie Dimon, the CEO of JP Morgan Chase, voiced his concerns about the current energy shortage and its implications for world peace and prosperity: "America should have been pumping more oil and gas… We should've gotten that right starting in March at the start of the Russian invasion of Ukraine. Obviously, America needs to play a real leadership role – America is the swing producer, not Saudi Arabia... I would put it in the critical category. This should be treated almost as a matter of war at this point, nothing short of that. It's Pearl Harbor, it's Czechoslovakia, and it's really an attack on the Western world. We still need renewable fuels, and there are long-run climate issues that need to be tackled by perhaps technology. This is a chance to get our act together and to solidify the Western, free, democratic, capitalist, free people, free movements, freedom of speech, free religion for the next century." As of October 27th, the average 30-year fixed-rate mortgage rate was 7.08%, according to Freddie Mac. Mortgage rates have increased almost every week since late August and have more than doubled since the beginning of 2022. According to Bloomberg, California's gross domestic product (GDP) is poised to top Germany's to become the fourth largest in the world, after the U.S., China, and Japan. If you liked this letter, please share it and let us know if you have any comments or questions! ** This writing is for informational purposes only. The author and Holzberg Wealth Management do not guarantee or otherwise promise any results that may be obtained from using this report. No reader should make any investment decision without first consulting their financial advisor and conducting their own research and due diligence. These commentaries, analyses, opinions, and recommendations represent the personal and subjective views of the author and do not constitute a recommendation, offer, or solicitation to make any securities transaction. The information provided in this report is obtained from sources that the author believes to be reliable. External links to third parties are being provided for informational purposes only. Holzberg Wealth Management is not affiliated with the third-party websites linked to, unless otherwise explicitly stated, and does not constitute an endorsement or approval by Holzberg Wealth Management of any of the third party’s products, services, or opinions.

  • HWM Market Recap - October 2022

    So, how’s the market? Let’s just say I’ve seen better. In the USA, the organized stock market we know today has been around since the Buttonwood Agreement of 1792, and marketplaces date back as long as human beings have been trading. The one constant across time and markets has always been human emotion. Money is 80% emotion. The other 20% is dynamic, vast, and intricate and demands a lifetime of study and diligence. Nonetheless, human emotion is greatly more influential. Investments exist to help us make our financial way, but nothing is automatic. Decisions must be made, and, by nature, our emotions will fundamentally assert themselves in our investment decision-making process. Sir John Templeton, one of the most influential global investors of the twentieth century, described stock market cycles as: Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. Notice there are no words in there that have anything to do with earnings or economic growth. Over long periods, business (microeconomic) fundamentals and economic (macroeconomic) fundamentals drive stock and bond prices. However, in short periods, human emotions cause volatility and extreme price fluctuations. Market-savvy investors will say that bear markets typically end because investors are apathetic, not when everyone is pessimistic. In other words, bear market bottoms often form when most investors have stopped looking for them after unsuccessfully trying to pick them time and time again. With emotion taking up 80% of the stock market, the other 20% starts with the prospects for a growing company and increasing earnings. Consider that when the economy is in a recession and earnings decline, that is consequently negative for stock prices. Conversely, a growing economy is positive for stock prices. Another consideration is what investors are willing to pay for the growth and earnings of a company -- this is the price-to-earnings ratio (P/E). Since the beginning of this year, the average P/E ratio has fallen from 21x to 17x. In other words, investors, on average, are willing to pay less for every dollar of earnings now than when the year began. This is how stock prices can fall, or rise, even when earnings do not change. When rising or falling earnings combine with varying P/E ratios, the consequent price changes can be substantial. Currently, P/E ratios are falling; however, corporate earnings have remained constructive. If the economic environment weakens, we can expect earnings to decline. As advisors, we are taught “not to fight the Fed.” While the Fed is not the only game in town, it is the most significant. Fundamentally, stocks rise and the economy expands when the Fed accommodates economic growth through steady and/or lowering interest rates. Conversely, stocks fall and the economy contracts when the Fed raises interest rates to slow the economy to curtail inflation. Currently, the economy and the Fed are working against us. Because of this, we remain cautious. In the meantime, we adjust our portfolios to ensure we are comfortable with our investments while we allow the current environment to run its course. As Sir John Templeton said: The four most expensive words in the English language are ‘This time, it’s different.’ Monthly Changes in Major Indices S&P 500: -9.90% Dow Jones Industrial Average: -9.46% Nasdaq Composite: -10.94% Monthly Performance By Sector Health Care (XLV) -3.16% Financials (XLF) -8.36% Consumer Staples (XLP) -8.70% Consumer Discretionary (XLY) -9.11% Energy (XLE) -10.38% Materials (XLB) -10.43% Industrials (XLI) -11.19% Communication Services (XLC) -11.54% Utilities (XLU) -11.87% Technology (XLK) -12.83% Real Estate (XLRE) -13.48% Monthly Top 5 Performers Health Care (XLV) -3.16% Health Care jumped from the third-worst-performing sector in August to the best-performing in September. Leaders in the sector included: Regeneron Pharmaceuticals Inc (+17.08%), Bristol-Myers Squibb Co (+5.79%), Eli Lilly and Co (+5.31%), Johnson & Johnson (+0.57%), and Merck & Co Inc (-0.09%). Regeneron Pharmaceuticals Inc (REGN) stock skyrocketed in September after two trials of a dosage of a signature eye drug showed promising results in treating two types of eye diseases related to blood vessel issues caused by old age and/or diabetes. Financials (XLF) -8.36% Financials remained in the top five performing sectors month-over-month, moving from the third-best-performing sector to the second. Its leaders included: Charles Schwab Corp (-0.87%), Chubb Ltd (-3.86%), Aon PLC (-5.05%), The Travelers Companies Inc (-5.75%), and PNC Financial Services Group Inc (-6.20%). Consumer Staples (XLP) -8.70% Consumer Staples also jumped one spot month-over-month from the fourth-best-performing sector in August to the third in September. Its leaders included: General Mills Inc (-0.48%), Monster Beverage Corp (-1.77%), Walmart Inc (-2.10%), The Hershey Co (-2.54%), and Kellogg Co (-4.06%). Consumer Discretionary (XLY) -9.11% Leading the fourth-best-performing sector for September were Starbucks Corp (+1.02%), O’Reilly Automotive Inc (+0.73%), Dollar General Corp (+0.47%), AutoZone Inc (+0.23%), and TJX Companies Inc (-0.70%). Starbucks Corp (SBUX) saw gains in September after the company announced plans to invest roughly $450 million to upgrade its cafes with new equipment. The company also outlined plans to build about 2,000 new stores over the next three years. Energy (XLE) -10.38% Despite a difficult month for Energy, the sector finished in the top five for September. Leading the sector in September were: Marathon Petroleum Corp (-2.14%), ConocoPhillips (-6.13%), Schlumberger Ltd (-6.75%), EOG Resources Inc (-7.23%), and Exxon Mobil Corp (-9.34%). The Consumer Price Index (CPI) report showed that prices rose by 1% in August after being unchanged in July. The index was up 8.3% year-over-year, slowing from an annual rate of 8.5% in July. Surging food, shelter, and medical care costs all contributed -- food prices increased 11.4% from a year ago, marking the most significant 12-month increase since 1979. However, the report also demonstrated that prices were largely offset by a 10.6% reduction in gas prices. The core CPI, which excludes food and energy prices, rose 0.6% in August and was up 6.3% from a year ago, compared to 5.9% in July. For the third consecutive time, the Federal Reserve raised interest rates by 0.75% (75 basis points). Interest rates now sit at their highest levels since 2008. Other central banks around the globe followed the Federal Reserve by increasing their interest rates, including the Bank of England, the Swiss National Bank, and the Indonesian central bank. The U.S. Department of Commerce’s Bureau of Economic Analysis reported that real gross domestic product (GDP) decreased at an annual rate of 0.6% in the second quarter of 2022, after a 1.6% decrease in the first quarter. The smaller decrease in Q2 compared to Q1 reflected an increase in exports and consumer spending. The University of Michigan’s Consumer Sentiment Index (MSCI) announced that consumer sentiment saw a month-over-month increase of 2.2%. Compared to one year ago, sentiment is still down 18.3%. Hiring has remained strong, despite a cooling labor market. According to the Bureau of Labor Statistics (BLS), the U.S. added 528,000 jobs in July, while the unemployment rate fell to 3.5%, matching its pre-pandemic low. According to the Bureau of Labor Statistics (BLS), there were two job openings for every individual seeking a job last month. Freddie Mac reported as of September 29th that mortgage rates had risen for the sixth consecutive week. Their survey indicated “that the range of weekly rate quotes for a 30-year fixed-rate mortgage has more than doubled over the last year.” As of September 29th, the weekly average for a 30-year fixed sits at 6.7%, which is up by 3.69% from last year. The previous time rates were close to this high was in August 2008, when they reached 6.57%. Additionally, mortgage application volume dropped by 3.7%, home purchase applications fell by 0.4%, and refinancing applications sank by 11%. Not to mention, home purchase cancellations were above 15% for the second straight month. About 64,000 agreements, or 15.2%, were canceled in August, up 12.1% from a year earlier. “Pandemic boomtowns” located in the Sun Belt states saw the highest cancellation rates -- all ten cities with cancellation rates of 20% or higher were located in the Sun Belt. The Department of Education is set to release the application for the White House’s student loan forgiveness plan in October. Under President Biden’s plan, individuals with federal student loans who in 2020 or 2021 earned less than $125,000, or married couples or heads of households who made less than $250,000, could see up to $10,000 of their loans forgiven. Furthermore, an additional $10,000 of relief will be available for recipients of Pell Grants. Borrowers can sign up on the Department of Education’s website for updates on the form’s status. Click on “NEW!! Federal Student loan Borrower Updates.” To find out more and to see if you qualify, reach out to us! Or check out this helpful article on studentaid.gov. The Bank of England (BoE) said it is “monitoring developments in the financial market very closely” and “will not hesitate” to raise interest rates to curb inflation. These comments come after many call for the bank to address the impact of massive tax cuts and other fiscal measures announced by Chancellor of the Exchequer Kwasi Kwarteng. In reacting to the stimulus plan, the British pound slumped to a record low compared to the U.S. dollar and drove up U.K. government bond rates to their highest level since the 2007-2008 financial crisis. The International Energy Agency (IEA) released its annual Tracking Clean Energy Progress report, showing that 2022 could be a record year around the globe for electric vehicle sales. The IEA says EVs could equate to 13% of all light vehicle sales in 2022, up from about 9% last year. Despite the positive overall outlook for the EV market, the IEA says they are “not yet a global phenomenon. Sales in developing and emerging countries have been slow due to higher purchase costs and a lack of charging infrastructure availability.” If you liked this letter, please share it and let us know if you have any comments or questions! ** This writing is for informational purposes only. The author and Holzberg Wealth Management do not guarantee or otherwise promise any results that may be obtained from using this report. No reader should make any investment decision without first consulting their financial advisor and conducting their own research and due diligence. These commentaries, analyses, opinions, and recommendations represent the personal and subjective views of the author and do not constitute a recommendation, offer, or solicitation to make any securities transaction. The information provided in this report is obtained from sources that the author believes to be reliable. External links to third parties are being provided for informational purposes only. Holzberg Wealth Management is not affiliated with the third-party websites linked to, unless otherwise explicitly stated, and does not constitute an endorsement or approval by Holzberg Wealth Management of any of the third party’s products, services, or opinions.

  • HWM Market Recap - September 2022

    Energy, like food and shelter, is essential to our everyday lives and therefore is fundamental to our investments. To meet our needs, we require affordable and reliable energy -- everything in economics is about tradeoffs. When the price of a necessity rises, most individuals must use less of it or forego the use of something else. Those who can afford the price increase will have reduced discretionary funds or savings. For businesses, perhaps a portion of the additional cost can be passed on to customers. Maybe offsetting changes can be made. Frequently, however, profits will decline; and at some point, companies have to cut back or go out of business. Reliability is the other consideration. Problems include rolling blackouts, power outages due to storms, gas line interruptions, supply chain disruptions, system malfunctions, falling water levels limiting hydropower, weather conditions wreaking havoc on wind and solar, and power plants being shuttered for one reason or another. The point is that low energy prices are beneficial, and reliable power sources are necessary for developed and developing economies. Conversely, for most people, rising energy costs, especially with repeated supply disruptions, will lead to a lower standard of living. For important reasons, the global mix of energy must become cleaner. The objective is to transition in ways that are affordable and reliable. Recently, the European Commission president, Ursula von der Leyden, declared an energy emergency: “The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity design.” Time Magazine reported that European “energy prices are ten times higher than the five-year average.” In Prague, tens of thousands of Czechs protested continued energy hyperinflation resulting in a cost-of-living crisis for ordinary people. Perhaps the war in Europe is to blame; undoubtedly, there are other contributing factors. The New York Times reported that “there is rising panic about the cost of energy” across Britain and that “there could be a tsunami of closings over the winter… especially pubs and restaurants.” The Financial Times reports that “German manufacturers are halting production in response to the surge in energy prices.” The German economy minister, Robert Habeck, pointed out that: “$2 trillion of value added depends on $20 billion of gas from Russia … that’s 100-times leverage.” I fear that energy scarcity will continue (or even worsen) for Europe and the world economy at large heading into the winter. In China, water scarcity is causing power shortages, while electric vehicle owners are asked to schedule charging their cars when the grid is not overburdened to prevent blackouts. Here at home, the California Independent System Operator told customers that over Labor Day weekend: “set thermostats to 78 degrees or higher, avoid using large appliances and charging electric vehicles.” All of this is to say that the problem will take many years to resolve and that various energy sources must be included in any mix of solutions. Consider that nuclear is an essential answer to decarbonizing a sustainable power grid. A recent article in the BBC pointed out that “the world’s coal-fired power stations currently generate waste containing around 5,000 tons of uranium and 15,000 tons of thorium. Collectively, that’s over 100 times more radiation dumped into the environment than that released by nuclear power stations.” In closing, energy is fundamental to our way of life and our investment decision-making. We will continue to study and inform ourselves on this crucial topic and carefully consider its implications in our investment advisory process. Monthly Changes in Major Indices S&P 500: -3.34% Dow Jones Industrial Average: -2.98% Nasdaq Composite: -4.00% Monthly Performance By Sector Energy (XLE) +3.60% Utilities (XLU) +1.19% Financials (XLF) -1.22% Consumer Staples (XLP) -1.25% Industrials (XLI) -2.01% Materials (XLB) -2.28% Consumer Discretionary (XLY) -3.54% Communication Services (XLC) -3.76% Health Care (XLV) -5.17% Real Estate (XLRE) -5.28% Technology (XLK) -5.29% Monthly Top 5 Performers Energy (XLE) +3.60% After spending the last two months as the worst performing sector, Energy is back on top as the best performing sector for the month of August. Its leaders included: ConocoPhillips (+13.93%), Devon Energy Corp (+13.09%), Marathon Petroleum Corp (+11.40%), EOG Resources Inc (+9.57%), and Occidental Petroleum Corp (+9.52%). Utilities (XLU) + 1.19% Utilities, again, finished in the top five performing sectors in August, with its leaders being: The AES Corp (+14.49%), American Electric Power Co Inc (+3.62%), Eversource Energy (+2.89%), Evergy Inc (+2.48%), and Entergy Corp (+2.36%). Financials (XLF) -1.22% Financials finished the month of August as the third-best performing sector. Leading the sector were: Progressive Corp (+7.98%), Charles Schwab Corp (+5.31%), MetLife Inc (+3.55%), The Travelers Companies Inc (+3.00%), and Wells Fargo & Co (+1.32%). Consumer Staples (XLP) -1.25% Consumer Staples finished August back in the top five performing sectors. Its leaders included: Archer-Daniels-Midland Co (+6.29%), General Mills Inc (+2.93%), Altria Group Inc (+2.87%), The Kroger Co (+2.87%), and Clorox Co (+2.70%). Industrials (XLI) -2.01% Industrials have been among the top five performing sectors month-over-month for the last three months. Its leaders for August included: Deere & Co (+7.45%), Trane Technologies PLC (+5.34%), Waste Management Inc (+3.75%), Lockheed Martin Corp (+2.73%), and General Dynamics Corp (+1.96%). According to the August Consumer Price Index, prices in July were unchanged month-over-month from June. On an annual basis, July prices jumped 8.5%, less than the 9.1% spike in June. The “core CPI,” which disregards energy and food costs, increased only 0.3% in July, much lower than June’s 0.7% gain, indicating changing consumer appetite for goods and services and easing supply shortages. August’s CPI report is a hopeful sign of more inflation reduction to come, but only time will tell. According to a survey by The Balance, over one-third of U.S. adults say they are reconsidering significant milestones such as buying a house or car because of inflation. Purchasing a car is the #1 milestone to be delayed. The national average gas fell again in August to $3.79 (as of 9/5/22), per AAA. It’s down $1.23, or 25%, from the record high of $5.02 on June 14. The U.S. added 528,000 jobs in July, while the unemployment rate sank to 3.5%, matching a 50-year low. In addition, total employment in the U.S. has now fully returned to its levels before the pandemic in February 2020. The National Association of Home Builders (NAHB) reported that its sentiment index dropped for the eighth straight month and turned negative. The index has not been negative since the start of the pandemic. The data led the NAHB to declare that the nation is facing a “housing recession.” The average rate on a 30-year fixed-rate mortgage rose to 5.22% in August, down from the 5.81% peak in June but above the 4.99% rate recorded last week, according to Freddie Mac. For reference, at the start of 2022, the average rate on a 30-year fixed-rate mortgage stood at 3.11%. The National Association of Realtors (NAR) reported in August that existing home sales dropped 5.9% in July. It was the sixth consecutive month of declines and the fewest homes sold since June 2020 when the market slumped during the early days of the COVID-19 pandemic. Additionally, reports showed that U.S. homebuilding sank to its lowest level in over a year, with housing starts plunging by 9.6%. This comes as the national median price for a single-family home reaches a record $413,500, rising 14.2% compared to a year earlier and the first time prices exceeded $400,000. President Biden signed into law the Inflation Reduction Act of 2022, which aims to reduce health costs, cut greenhouse gas emissions, and raise taxes on corporations and wealthy investors. The law also authorizes $80 billion in additional funding over ten years to the IRS. President Biden signed the CHIPS Act into law, providing $250 billion of government spending on various federal programs. As part of that amount, the law provides $52 billion in subsidies to semiconductor companies to incentivize them to bring manufacturing back to the U.S. rather than overseas. President Biden announced that the federal government would forgive up to $10,000 in federal student loans for borrowers making up $125,000 in adjusted gross income per year (if their filing status is single) and up to $250,000 (for couples married filing jointly). Additionally, up to $20,000 would be forgiven for Pell Grant recipients. The forgiveness applies to federal student loans for both undergraduate and graduate degree programs, as well as Parent Plus loans. Biden also included a four-month extension on the moratorium of loan repayments, thus encompassing the seventh (and likely final) extension on the repayment freeze since March 2020. A study from the Penn Wharton Budget Model estimates the program’s cost to be between $605 billion and $1 trillion over ten years, depending on future details of the program. As the president does not legally have the expressed power to forgive student debt, this decision will likely face challenges in court. If you liked this letter, please share it and let us know if you have any comments or questions! ** This writing is for informational purposes only. The author and Holzberg Wealth Management do not guarantee or otherwise promise any results that may be obtained from using this report. No reader should make any investment decision without first consulting their financial advisor and conducting their own research and due diligence. These commentaries, analyses, opinions, and recommendations represent the personal and subjective views of the author and do not constitute a recommendation, offer, or solicitation to make any securities transaction. The information provided in this report is obtained from sources that the author believes to be reliable. External links to third parties are being provided for informational purposes only. Holzberg Wealth Management is not affiliated with the third-party websites linked to, unless otherwise explicitly stated, and does not constitute an endorsement or approval by Holzberg Wealth Management of any of the third party’s products, services, or opinions.

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    Holzberg Wealth Management Holzberg Wealth Management Time-Tested Investment Strategies For The 21st Century Learn More Our Services Wealth Management Plan, grow, protect, and ultimately distribute your wealth. Investment Advising Personalized portfolio design and risk management based on comprehensive analysis of opportunities across a range of asset classes. Retirement Planning Saving and investing your money so that you can retire on your own terms. Estate Planning Accumulating, conserving, and transferring wealth given legal, tax, and personal objectives. Tax Guidance Utilizing tax advantages and incentives to maximize your wealth and long-term rates of return. Insurance Counseling Analyzing risk tolerance levels and determining the best course of action for you, whether it be risk: reduction, transfer, avoidance or retention. About Holzberg Wealth Management A Registered Investment Advisory Firm Since 2013 As financial advisors, it is our job to learn about your goals and sensibilities, and to tailor our strategies to you. We want what is best for our clients. We accomplish this by leveraging our expertise, you prepare for life transitions and unexpected events, and reducing the stress and frustration often associated with these changes to maximize value for our clients. We want to build your trust and make the most of every circumstance together. Read More Harris Holzberg, ChFC, CLU Partner The founder of Holzberg Wealth Management. Harris is an expert in financial planning and the markets with over 40 years of experience. Read More Marcus Holzberg Partner The managing partner of the firm. Marcus specializes in investing for millennials as well as the information technology and entertainment sectors. Whatever your financial goals, we'll help you achieve them. As Seen In Contact Us I'm interested in... Wealth Management Investment Advising Retirement Planning Estate Planning Tax Guidance Insurance Counseling Other Submit Thanks for submitting!

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