Quarterly Commentary

The first quarter of 2024 is behind us, and this year is shaping up to be full of excitement!   

We already have some great things to report!  Our team has grown with two terrific additions, Luciano Betman as Client Account Associate and Leigh Buchmann as Executive Assistant. Our monthly Investment Committee webinars via Zoom continue to be popular and feature guest speakers for you all.  Bobby launched his podcast, Business Unchained, tune in and listen to insightful stories straight from business owners and be inspired in business and in life.  Finally, Bobby and I are humbled and proud to have been named NJBIZ 2024 “Leaders in Finance!” 

When it comes to the market, global politics, and economic data, the presidential election is sucking all the oxygen out of the room.  It is impossible to hear anything without someone adding a political bend to it.  So, as much as I can, I want to just give a quick state of the union. 

  1. Equity markets have had a strong first quarter, with the S&P rising over 10%.   
  1. Bitcoin rose over 60% in the first quarter!  We think Bitcoin is a great litmus test for market participants’ overall appetite for risk. With Bitcoin making new highs, it seems the market is “risk on”. 
  1. The economy is strong.  Unemployment logged a new low in March at 3.8%.  Both consumer and corporate spending is rising.   
  1. Inflation is hanging in between 3 – 4%.  The 8% inflation days seem to be behind us, and the 2% days are not returning in any quick fashion.   
  1. Interest rates have done little to nothing in the first quarter.  The Federal Reserve is on hold, and while there is speculation they may cut rates in June, points 1-4 above would disagree. 

With this backdrop, it makes sense that the rally from 2023 has continued. If this trend continues, we expect the market to follow suit. The market rally has stabilized, and at this point, you would need a curveball to cause a break.  But that doesn’t mean we should sit back and kick our feet up, because anyone who pays even half attention to the news knows that the unexpected is always lurking around the corner! 

We want to address some concerns surrounding the market going up quickly and outlier risks. As Bobby likes to say in his videos, “lazy asset management has no place here!” At GRWP we are always actively watching markets and making shifts; and looking for opportunities to take advantage of, getting out of things that aren’t delivering strong risk adjusted returns, and finding ways to earn higher rates of return.  We are not just sitting by and waiting for things to play out.   

Building Good Habits: 

A little over three months into the year, how many people are sticking to their New Year’s resolutions?  It is difficult to swap bad habits with good ones.  We all struggle with this, and part of the reason is that willpower is like any other muscle; we need to exercise it and train it.  If your willpower muscle is weak, it will become exhausted, and you may find yourself falling back into less desirable habits. 

Habits and willpower also play a role in investing.  This is something we probably don’t talk enough about, so let’s spend a minute pointing out where our willpower gets tested, and highlight some good habits that can improve our chances of success. 

Will Power Killers: 

  1. Negativity:  Whether news, a friend that just won’t stop telling you everything wrong with the world, or your own mindset; negativity will wear you down.  We don’t suggest being foolishly positive, but instead, spend an equal amount of time thinking about what can go right as you do about what can go wrong
  1. Procrastination:  When we procrastinate, we are often giving in to our short-term desires versus our long-term goals.  This is not helping us build up willpower.  Don’t wait another month to hit your savings goals, or review your budget, or start that diet or exercise plan.  When you procrastinate in one area, it tends to bleed into all the other things you are trying to accomplish. 
  1. Lack of Clear Goals:  You need to have goals, keep track of your progress towards those goals, and have a system for rewarding yourself when you hit checkpoints on the way. The key is finding the right things to measure and frequency to improve your chances of achieving those goals. 

Understanding some of the things above can help us identify and overcome our challenges.  Again, this is true in all things in life, not just finances.  If you are negative, procrastinate, and don’t have clear goals, good luck accomplishing anything.  If you turn those around into optimistic, diligent, and goal oriented, you will be amazed at how much you accomplish. 

So, what are the habits we can work on to help us achieve our financial goals?  While those habits vary by person, below is a short list of easy things to incorporate if you are not already doing so. 

  1. Keep your credit cards paid off.  No credit card debt.  Absolutely none.  If you have credit card debt, it needs to be extinguished yesterday, or you must have a clear plan on how to extinguish it soon.  If you can’t do this, see the section on “Willpower” above. 
  1. Really comb through your budget each year.  You may find some saving opportunities, some things you don’t need, or even just better awareness. 
  1. Review your balance sheet once a quarter.  This will help remind you how your current savings and budget are impacting your net worth.  
  1. Schedule time each year to talk to your Accountant and Advisor about tax saving opportunities.  Our most successful relationships for helping to lower people’s tax obligations are when we are actively collaborating with their CPA. 

Have a great Spring! 

Jordan Kaufman 

Chief Investment Officer, Green Ridge Wealth Planning 

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