TPW Trending Today

It is this investment advice from Warren Buffett that has been ubiquitous throughout his storied career:

1. Accurately predicting the stock market is a fool’s game, and
2. Never bet against America!

After two remote pandemic years, an estimated 25,000 Berkshire Hathaway shareholders flocked to Omaha, Nebraska last weekend for the in-person return of the Berkshire Hathaway annual shareholder’s meeting, featuring the omnipresent, dynamic, and larger-than-life 91-year-old Warren Buffett.

Along with his 98-year-old right hand man and long-time sidekick Charlie Munger, the “Oracle of Omaha” presided over a spirited, intellectual, and oftentimes jovial congregation of investors from around the globe. Live-streamed by CNBC, the event had a festival feel to it, and was described as an “opportunity to learn from the masters.” Whitney Tilson, the CEO of Empire Financial Research who has been going to Berkshire’s shareholder meeting for the past 25 years, said that the event is always “intellectually, physically, and emotionally fulfilling.”

Want some investment advice from Warren Buffett? Here are four excellent takeaways from the Berkshire shareholders meeting:

Investment Advice from Warren Buffett

1. Both Buffett and Munger see market volatility and speculative behavior as an opportunity.

Buffett lambasted Wall Street for encouraging speculative behavior in the stock market and effectively turning it into a gambling parlor.

“Wall Street makes money, one way or another, catching the crumbs that fall off of the table of capitalism… They make a lot more money when people are gambling than when they are investing” Buffett said.

However, he then went on to say that the situation can create market dislocations that give Berkshire Hathaway an opportunity. “That’s why markets do crazy things, and occasionally Berkshire gets a chance to do something.”

2.  Buffett’s trick for getting his money’s worth out of the stock market? Not obsessing about finding a perfect time to invest in a stock.

Go ahead and invest, and then observe the market over time to see if you should buy more of that company’s stock. Buffett says that this strategy has a higher chance of return, and it alleviates some of the pressure of predicting the stock market.

If the value of the stock dips after you buy it, and you still believe in the company, he suggests that the shares have become less expensive, so buy more. This is where Warren Buffett invests.

Another billionaire appears to feel the same way:

3. Buffett prefers “assets with value” over bitcoin.

While bitcoin has steadily been gaining acceptance from the traditional finance and investment world, Buffett is sticking to his skeptical stance on the cryptocurrency.

When asked about bitcoin, Warren Buffett said it is not a productive asset and doesn’t produce anything tangible. He then elaborated and gave a hypothetical answer:

In short, bitcoin will not be where Warren Buffett invests.

4. Inflation swindles almost everybody.

From stock and bond investors, to people who stash cash under their couch, inflation hurts many different kinds of investors.

“You print loads of money, and money is going to be worth less,” Warren Buffett said.

Additionally, while he said that he couldn’t, and wouldn’t, predict the trajectory of inflation over the coming months or years (just like he avoids predicting the stock market), he did say that the best protection against inflation is your own personal “earning bar,” as a person’s skills, unlike currency, won’t be taken away and are inflation-proof.

Buffett then summarized: “The best investment by far is anything that develops yourself – and it’s not taxed at all.”

Buffett, Munger, and Berkshire appear to be doing something right, as the S&P 500 has dropped more than almost 14% this year so far, while Berkshire’s stock is up almost 6% year-to-date! We do believe that investment advice from Warren Buffett is worthy of our attention.

Click the image below to watch any part (or all!) of the BRK annual shareholder’s meeting.

What’s Happening at TPW

It’s a family affair at Towerpoint Wealth!

It felt a little like a Billigmeier family reunion earlier this week, as Marc and Glenda, two good Towerpoint Wealth clients, flanked their son and our Director of Research and Analytics, Nathan Billigmeier, prior to their comprehensive financial, investment, and retirement review meeting.

Both Marc and Glenda are well-versed in Warren Buffett’s philosophies, and know that accurately predicting the stock market is next to impossible. A key factor in their longer-term success is most certainly their humility and their discipline, which are also two foundational TPW wealth-building and wealth-protection ideals.

Our President, Joseph F. Eschleman, CIMA®, and friend of Towerpoint Wealth, John Palombi, put some work in last weekend at the Fair Oaks Sun Run, clocking a quick five miles. Nice work, gentlemen!

TPW Taxes – 2022

Is it full steam ahead for Secure 2.0?

After passing the House in late March by a 414-5 vote, the bipartisan Securing a Strong Retirement Act of 2021 is now awaiting approval by the Senate, with Congress expected to vote on a final measure before the end of 2022.

Providing even more and arguably better opportunities to save for retirement, the passage of Secure 2.0 appears to be more of a ‘when’ than an ‘if’, and as we wait for this legislation to hopefully become law, click the image below to read an excellent overview from Wealth Management.com that discusses five key provisions of the bill:

TPW News You Can Use

Useful and interesting content we read the past two weeks:

1. What Was the Strategy Behind the Supreme Court Leak? – NY Times – 5.4.2022 The leak of a draft Supreme Court decision that would overturn Roe v. Wade is not a surprise, but it is something of a mystery. The mystery: The logic of and strategy behind the leak.

2. The Bottom Line in Ohio? Trump Wins – Washington Post – 5.4.2022

Most one-term presidents recede from the political scene, with their party’s voters happy to see them go. But Donald Trump continues to dominate the Republican Party a year and a half after he lost re-election. Tuesday’s Republican Senate primary in Ohio confirmed Trump’s influence, as a Trump-endorsed J.D. Vance won the nomination, with 32 percent of the vote, in a primary that included four other major candidates.

3. A ‘Haven for Criminals’ – NY Post – 5.4.2022 A NYC subway conductor outraged about attacks on transit riders and his fellow transit workers confronted MTA CEO Janno Lieber during a live radio interview on Wednesday.

TPW Chart of the Week

Rising interest rates are bad for the stock market, right? Not so fast…

While it may have felt that way in April, the illustration below from Nuveen indicates the opposite is actually true!

Note the Average column on the far right: equities have historically performed well through tightening cycles, albeit not without volatility.

Do you enjoy predicting the stock market? Do you believe rising interest rates will cause the market to go up, or go down?

Send us a quick message and let us know what you think!

Quote of the Week

“During this time of reopening, we are likely to see some upward pressure on prices… But those pressures are *likely to be temporary* as they are associated with the reopening process.”

Jerome Powell, Chairman of the Federal Reserve April, 2021

The sardonic truth? Almost a year later, the consumer price index (CPI) is +8.5%, and accelerating.

Here’s the point: predicting the stock market, or inflation, or any future economic occurrence, is next to impossible to consistently (and accurately) do. Be aware but wary of the accuracy of expert predictions, understanding that today’s forgone conclusions are often hindsight’s most embarrassing moments. Those who can mix knowledge with humility are often at a longer-term competitive advantage.

Want further testimony? From August of last year: Why Fed’s Powell Still Thinks High Inflation is ‘Temporary’

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

• Law enforcement prepares for potential violence, unrest surrounding Roe v. Wade decision
• Netflix is responding to its loss of customers by making some production cuts, including Megan Markle’s animated show, “Pearl”
• Munich Mayor Dieter Reiter announced Oktoberfest plans with no COVID restrictions this year
• The low level of Lake Powell, the second largest U.S. reservoir, threatens the production of electricity for millions of people
• AOC attacks Kyrsten Sinema over filibuster after SCOTUS leak
• Is that an outlaw lawn? Las Vegas has a new approach to saving water
• Following pandemic-era losses, oil companies are now seeing record-breaking profits (while we’re paying more and more at the pump)

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

We enjoy social media, and are actively growing our online community!

Follow us on any of these platforms, message us there and let us know your favorite charity. We will happily donate $10 to it!

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Click HERE to follow TPW on Instagram
Click HERE to follow TPW on Twitter

Today’s housing market – it feels to us like we are at a true inflection point right now, and perhaps not a good one.

Clients and colleagues are frequently asking: “Is the housing market in a bubble?” And they are hearing conflicting words from economists:

“Housing starts have historically been unresponsive to changes in mortgage rates in a supply-constrained environment, likely because homebuilders are able to continue building with little fear that homes will sit vacant after completion.” – Ronnie Walker, Goldman Sachs economist
vs.

“We expect the combination of surging mortgage rates and record-high home prices to cause more homebuyers to drop out of the market.” – Daryl Fairweather, Redfin chief economist

Can we expect to see housing prices go down with overall economic growth remaining strong? The housing market does seem to be struggling a bit under the weight of higher interest rates, consistent with Fairweather’s statement above. Don’t let anyone tell you that interest rates don’t matter – they do! The cost of money (read: the interest rate you are charged to borrow) is extremely important, and directly correlated to the overall long-term growth of the housing market!

While still hot, the housing sector seems to be just a touch cooler today when compared to the 2021 market, when over 70% of home listings saw a bidding war!

We argue how can it not be, understanding US home prices soared by a seemingly unsustainable 18.8% (!) last year.

But housing prices going down? Current “expert” opinion on what happens next is quite varied, and while we are admitted skeptics of expert predictions due to their consistently poor overall track record, the current dichotomy is extreme. 

On one hand, housing “bulls” say:

• Demand remains strong, with many properties still consistently selling for above asking price.

According to a new report from Redfin, some 5,897 homes nationwide sold for at least $100,000 over (!) asking price at the beginning of 2022, up from 2,241 compared to the same period in 2021.

• There’s no inventory!

Among the 327 housing markets tracked by Zillow, 254 have inventory levels that are down by more than 30%between December 2019 and December 2021. In another 54 housing markets (Miami and Ft. Collins, CO being two), housing inventory is down by over 50% from pre-pandemic levels!

• Buyer urgency has increased.

As interest rates rise, people may push to buy sooner rather than later, anticipating and getting ahead of further rate increases. This could be creating additional temporary demand.

On the other hand, housing “bears” say:

• We have a “hawkish” Fed. The housing sector is vulnerable to the risk of the Fed orchestrating a “hard landing” with its interest rate hikes, possibly leading to a recession.

• Yields/interest rates on 30-year mortgages are surging.

Just last month, the average 30-year mortgage rate was 4.2%. NOW, it is north of 5.3%, the highest it has been since 2009!

• Affordability is horrible.

The combination of surging mortgage rates and rapidly increasing home prices translates into even more difficulty for aspiring homebuyers, and many Americans are being priced out of safe and affordable housing.

• The SPDR® S&P® Homebuilders exchange traded fund (XHB) is out of favor, down nearly 25% year-to-date

XHB seeks to provide exposure to the homebuilders segment of the S&P Total Market Index, which comprises the following sub-industries: Home Building, Building Products, Home Furnishings, Home Improvement Retail, Home Furnishing Retail, and Household Appliances.

Interest-rate sensitive areas of the economy and stock market, like XHB, are portending pain, and less-than-attractive profits, in the housing market.

At Towerpoint Wealth, we do believe we are at an inflection point right now, and that home appreciation may soon begin to slow. However, appreciation that is slowing is still appreciation, and is clearly much better than no growth or, even worse, negative growth.

Put differently, we fully agree with Citi analyst Steve Zaccone’s take:

TPW in the Media

Described as “a human wellbeing and flourishing podcast,” LifeBlood is released daily and features a myriad of different professionals and subject matter experts. Produced and hosted from Scottsdale, AZ by George Grombacher, Lifeblood featured our President, Joseph Eschleman, earlier this week.

Click the thumbnail below hear what Joe had to say about leading by example, focusing on process and on things you can control, and about his membership, along with Tim Cook, Oprah, and Michelle Obama, in the 4AM club!

What is happening at TPW?

Flanked by two beautiful young ladies and outstanding Christian Brothers’ freshmen, our President, Joe Eschleman, was not interviewing for upcoming summer internship positions, but instead chauffeuring his daughter Josephine, and her good friend Bailey, to and from the Crocker Art Museum last week, with a TPW pit-stop mixed in!

Arches National Park, the world’s largest concentration of natural sandstone arches, is the latest vacation destination for our adversome Director of Tax and Financial Planning, Steve Pitchford!

Nice work, Steve – your affinity for Mother Nature and goal to see all 63 amazing US national parks is ambitious and wonderful, and we are all jealous of your getaway and amazing photos!

What else is happening with the Towerpoint Wealth family? Follow us on Instagram to find out!

TPW Taxes 2022

With the passing of the 2021 income tax filing deadline on Monday (hooray!), myths abound about ways to get information about tax refunds and how to speed one up.

As of the week ending April 1, the IRS said it has sent out more than 63 million refunds worth over $204 billion! The average refund is $3,226.

Click the image below to read an excellent article from ThinkAdvisor that discusses seven common myths about income tax refunds.

TPW News You Can Use

Useful and interesting content we read the past two weeks:

1. We’re Trader Joe’s Workers, and There are Some Items You Should Never Buy – NY Post – 4.19.2022

Four unnamed workers revealed a list of products that shoppers shouldn’t buy, as well as seasonal items shoppers shouldn’t miss out on, when visiting their local Trader Joe’s store this spring.

2. All Hope Isn’t Lost for Democrats in November – The Hill – 4.5.2022

“We got a story to tell; just got to tell it,” former President Obama replied to a question about Democrats’ chances in the 2022 midterms as he left a news conference with President Biden. I watched the moment on live TV and immediately thought, “Easy for you to say.”

3. A LePen Upset Would Be as Big a Shock to Markets as Brexit – Yahoo! Finance – 4.20.2022

All the polls show French President Emmanuel Macron is likely to win a second term Sunday. But from Citigroup Inc. to asset manager Amundi SA, the warnings are piling up that markets are underestimating the risk of a surprise.

Chart/Infographic of the Week

The National Association of Home Builders (NAHB) Housing Market Index (HMI) in the US fell in April for a *fourth* consecutive month, to reach its lowest point since September of last year. See our commentary above for some of the possible reasons why, as well as NAHB’s Chief Economist Robert Dietz’s quote below:

The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices, and escalating material costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market.

Quote of the Week

Saving money and investing money are two completely different philosophies, and require two completely different mindsets, as the excellent wealth-building and wealth-protection illustration below demonstrates!

Responsible Investing

Happy Earth Day 2022! Did you know you can align your portfolio with your *personal values*? Yes, you can!

Click the thumbnail below, or visit our responsible investing page to learn more.

Trending Today

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it. 

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

Top 5 Ways to Recession-Proof Your Portfolio!

Is the United States economy on the verge of slipping into a recession?

Or is the exact opposite happening – is the economy continuing to recover, more robust than it is getting credit for?

A broad measure of the “stock market,” the S&P 500 ended 2021 at 4,766.18. It then proceeded to “correct” down to 4,173.11 on March 14. However, since 3/14, the market has notched an impressive rally, sailing back out of correction territory in less than a month.

So what gives? Are we looking towards an economy in recession, or are we more recession proof than many economists believe?

It should come as no surprise to our clients and to TPW friends and colleagues that we take this volatility with a grain of salt. We pay attention, but rarely react, to these short-term movements. Daily, weekly, and monthly market movements are much more important to, and are scrutinized more closely by, traders and speculators, as opposed to investors interested in taking a disciplined approach to building and protecting wealth. As Warren Buffett said:

However, we do seem to be at an odd inflection point in our economy, and unsurprisingly, there is anything but consensus on what happens next.

While the Towerpoint Wealth Investment Committee remains cautiously optimistic and sanguine (a favorite adjective used often in the investment community by analysts and talking heads who want to sound extra intelligent) about the future of the US economy and financial markets, not everyone agrees with us.

While it currently seems fashionable to portray a bearish / negative outlook for the US economy and financial markets, we believe that record corporate profits, plentiful jobs, significant declines in coronavirus cases, wage increases, and excess consumer savings will outweigh the economic risks of inflation, interest rate increases, Ukraine-Russia geo-political and supply-chain concerns, and potentially higher US federal income taxes.

At Towerpoint Wealth, we firmly believe that a possible slowdown does not have to mean recession, and we also firmly believe that when you have an economy in recession, truly, almost by definition, it involves job losses and high unemployment. In today’s environment, it is not hard to see that the absolute opposite is currently true.

Click the thumbnail below to read an excellent report from T. Rowe Price discussing why recession in the US appears unlikely amid our reopening economy.

We also believe that Putnam’s graph below, illustrating economic expansions and recessions, and concurrently, bull (rising) and bear (declining) markets, does an excellent job of helping our clients to understand:

1. Economic expansions (above the line, in green) are much more robust than recessions (below the line, in red)
2. Over the past 73 years, bull markets have lasted longer (50 months, on average) than bear markets (13 months, on average), and have more than made up for periodic market declines

However, at Towerpoint Wealth, we don’t want to say that we have a recession-proof economy – we fully recognize that the risk of a recession is not zero, and that it is important to be mindful of and have a plan to protect against the possibility that the Fed “slams on the brakes” by aggressively increasing interest rates (and concurrently the cost, or “price,” of borrowing money), which would result in a rapid slow-down of our economy.

What to do to recession-proof your portfolio? Read on!

1. Own and have exposure to blue-chip equities (stocks)

Investors almost always find blue chip stocks attractive, but especially during a recession. They typically pay attractive dividends, which provides a tangible return in the form of consistent income. Blue chip stocks also tend to be larger companies with more stable and predictable streams of revenue and profits, which can lessen the impact on the price of a stock during a market pullback or recession.

2. Harness the power of low-correlation investments and alternative diversifiers

Owning or adding to your portfolio investments whose price and value tend to “zig” when more traditional stocks and bonds “zag” can help lower your risk, especially during a recessionary period. Commodities, precious metals, timber, commercial real estate, cryptocurrency and digital assets, hedge funds, private equity and debt, timber, and art are just a few examples of low-correlation investments.

3. Increase your exposure to non-US equities

Owning international stocks is another way to recession-proof your portfolio. While the economies, and stock markets, of the major developed countries and economies around the globe seem to be more correlated than ever before, the discounted valuations, and currencies, that oftentimes can be found within international stock markets can be an excellent hedge against a possible US recession. Additionally, international markets oftentimes offer more exposure to structural growth opportunities than the US market, and can be an excellent hedge against rising inflation here in the US.

4. Cash is (or can be) king!

Cash adds “bubble wrap” to your portfolio, especially during a recession. Having cash allows an investor to further recession proof their portfolio by cushioning against volatility and market declines. Smart investors also can utilize this “dry powder” to take advantage of attractive investment opportunities as they arise during a market pullback or correction, especially if they believe a recession is coming.

Cash is considered “oxygen” for a portfolio, as it becomes more and more important to have as temporary market declines occur during a recession. Lastly, while checking, savings, and money market accounts have paid little if any interest over the past few years, things are quickly changing, and as interest rates rise throughout 2022, you should earn higher rates on your cash and money market deposits.

5. Be properly diversified

Through maintaining a portfolio allocation across a diversified group of asset classes, investors can position themselves, and their portfolios, to better weather market and economic volatility. Additionally, being properly diversified allows for the benefits of disciplined portfolio rebalancing, helping an investor to recession proof their portfolio by buying low and selling high when transitioning their portfolio back to its original strategic targets. Plus, who wants all of their eggs in just one or two baskets when a recession is coming? Not us…

What’s Happening at TPW

A BIG congratulations to our Partner, Wealth Advisor, Jonathan LaTurner, and his new bride, Katie McDonald, who tied the knot last week in Tulum, Mexico! We couldn’t be happier for both of them!

And of course our President, Joseph Eschleman, was in attendance to help the happy couple celebrate!

It’s not a Happy Friday without a McDonald’s McNuggets Happy Meal!

Ethan, the son of our Director of Research and Analytics, Nathan Billigmeier, keeps getting more and more adorable as the months pass! #heartbreaker

 What else is happening with the Towerpoint Wealth family? Follow us on Facebook to find out!

TPW Taxes – 2022

While here in California, state income tax rates continue to climb, this is not the norm and not the case throughout many parts of the US. A dozen states introduced measures to REDUCE corporate or personal income tax rates last year. Click the two images below to read examples from states that are doing the opposite of what California is doing – cutting the state taxes their residents have to pay.

We are officially in the Tax Day 2022 “home stretch,” as the filing deadline to submit 2021 tax returns, or an extension to file and pay tax owed, is Monday, April 18. As we have mentioned previously, we welcome and look forward to directly interfacing and collaborating with you, and/or your tax advisor. 

Towerpoint Wealth’s Director of Tax and Financial Planning, Steve Pitchford, CPA, CFP® is our resident tax expert, and we invite you to simply click his image below to reach out to him about any specific income tax-related need, issue, service or document request, or question.

TPW News You Can Use

1. A New COVID Mystery – Why Haven’t Cases Started Rising Again in the US? – NY Times – 4.6.2022

To many people’s surprise, new COVID-19 cases in the US have not begun to rise. Over the past two weeks, they have held roughly steady, falling about 1%, even as the highly contagious BA.2 subvariant of Omicron has become the dominant form of COVID in the US.

2. Making it Rain – Yankees, Mets Both Have the Obscene Payrolls NY Teams Need – NY Post – 4.5.2022

The Mets and the Yankees will combine to spend $532 million on baseball players this year, and if that seems outrageous… well, sure, it probably is.

3. The Remarkable Brain of a Carpet Cleaner Who Speaks 24 Languages – SF Gate – 4.5.2022

Vaughn Smith, a real, live hyperpolyglot (a person who can speak several languages), is fluent in eight languages and conversational in another 25!

Chart / Infographic of the Week

Incremental change – small micro-actions, when done repeatedly, over a long period of time, can cause massive improvements. Also known as baby steps!

Also, if you haven’t heard, rampant inflation is one of the central reasons that interest rates continue their upwards march, as borrowing for a mortgage has quickly become much more expensive…

Quote of the Week

Very consistent with the theme of the Chart/Infographic of the Week found above, we love NBA legend and Hall of Famer Jerry West’s quote and outlook on life found below.

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

• President Biden extends the moratorium on student loan payments until the end of August
• The first commercial drone deliveries in the U.S. took off on Thursday, as Alphabet’s ‘Wing’ unleashed its aircraft over the suburban towns of Frisco and Little Elm
• LeBron James and the Los Angeles Lakers are eliminated from this year’s NBA playoffs
• 2022 NCAA College Basketball championship pulls more viewers than Oscars, Grammys
• Katanji Brown Jackson is seeing some bipartisan support to become the 116th justice of the Supreme Court
• Scientists have mapped the final eight percent of the human genome sequence, a quest that took 20 years
• Police arrest a third suspect in Sacramento mass shooting that left six dead
• Elon Musk files Form 13D, admits that his Twitter investment is not passive, and has a goal of ‘effecting change’ at the company

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

We enjoy social media, and are actively growing our online community!

Follow us on any of these platforms, message us there and let us know your favorite charity. We will happily donate $10 to it!

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The stock market has been a friend to investors in recent years, just as Brutus was a friend (for a time) to Caesar. However, most of us know the end of that ancient tale: Caesar ignored the soothsayer’s dark and gloomy warning, “beware the ides of March,” ultimately to his peril, as Brutus stabbed him in the back.

Seeing that we are only three days removed from 2022’s Ides of March, should today’s investors be concerned that their portfolio this year may suffer a similar outcome as Caesar, especially understanding the recent spate of “doom and gloom” economic, geo-political, and market forecasts?

Through the Ides of March (March 15), the S&P 500 was down more than 11% year-to-date, marking the fifth worststart to the year ever.

However, then came Tuesday’s, Wednesday’s, and yesterday’s swift and major rebound.

Historically, and as evidenced by the “10 Worst Starts for the S&P 500*” chart found above, comparably

1) The remainder of March
2) The remainder of the first half of the year
3) The remainder of the entire year

How closely are you regularly following financial news stories? Do you feel that 2022 will, or will not, follow this bounceback trend?

Towerpoint Wealth’s wealth-building and wealth-protection philosophy leads us to rarely be led by feelings, get worried or excited by daily market movements (please see the below Chart/Infographic of the Week). And despite historical trends, we have no soothsayer. However, considering the deluge of troubling and worrisome news we have been overburdened with recently, it is important not to get overwhelmed, but instead to be aware and not lose perspective. While history rarely repeats itself exactly, it is certainly rhyming so far this March.

Of course, we would be remiss if we did not also briefly touch upon the price of oil, and concurrently, the price at the pump of a gallon of gasoline. While it is evident that supply disruptions will continue to persist, we feel there is a high probability of a “settling out” of oil and gasoline prices. In fact, it’s already underway.

US oil production is increasing again

The price of oil is down ~ 25% from its recent early March highs

The U.S. imports WAY more oil from Canada than from any other country

What is happening at TPW?

Cheers and a BIG thank you to two excellent Towerpoint Wealth clients, Steve and Toni Shaffer!

Steve and Toni gave a very apropos t-shirt to our craft beer-loving President, Joseph F. Eschleman, CIMA®, after their financial and wealth planning meeting last week with Joseph and our Director of Research and Analytics, Steve Pitchford.

Helping out and giving back to our local community has always been a central core value here at TPW.

We were humbled and privileged to assemble, and then distribute, 100+ bagged lunches, hot coffee, and hand warmers to Sacramento’s homeless community late last month at the Cathedral of the Blessed Sacrament here in downtown Sacramento.

A big thank you to Marilynn Fairgood (again!), and the Brown Bag Lunch program she is in charge of, for helping us coordinate our volunteering efforts.

TPW in the Media

Speaking of financial news stories, our President was recently featured in the February 25 edition of Financial Advisor IQ, a highly regarded wealth management industry publication, discussing what clients need to know about Russia’s invasion of Ukraine, the impact these developments may have on investments, and how clients can and potentially should respond.

Click the thumbnail image below to read Joseph’s insightful comments and perspective in greater detail.

TPW Taxes – 2022 – Financial News Stories

As the April 18, 2022 “Tax Day” personal filing deadline draws closer, we have seen an unsurprising uptick in tax-related questions, CPA inquiries, and service-related needs. And in the interests of making your life a little easier as you gather your information and prepare to file, we continue to stand ready to help you (and your CPA)!

Additionally, click on any of the six thumbnail images below for resources, tax tips, commonly asked tax-related questions, and other information. Enjoy!

Chart/Infographic of the Week

Understanding we can all be influenced by today’s in-your-face, 24/7 news cycle, we believe it is extremely important to put some SPACE between these events, and any response that they may (or perhaps more likely, may *not*) merit.

Quote of the Week

Once again, Warren Buffett nails it. While nobody is perfectly comfortable with volatility and temporary market and portfolio declines, we believe it is important to both expect and embrace volatility throughout your career as an investor.

Trending Today

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

Just over two months ago, markets were at a record high, as healthy data on the US economy signaled continued economic growth on the horizon.

Then, as Vladimir Putin and his Russian military first threatened, and then began, an outright invasion of Ukraine on February 24, world financial markets began a correction and decline. The events of the past week and a half have again reminded us – we live in extremely unsettled and uncertain times.

Click the image below to watch a well-articulated and important message from our President, Joseph Eschleman, as he addresses not only the major implications of the Russia/Ukraine crisis for the financial markets and our economy, but perhaps most importantly, for your portfolio.

Bitcoin launched back in 2009. Thirteen years have since gone by, there now exist more than 10,000 new cryptocurrencies, and the global crypto market capitalization tops $2 trillion!

However, as modeled by Larry David’s character in FTX’s hilarious Super Bowl commercial last weekend (look for a link to it later in this newsletter!), there are still plenty of no-coiners who continue to ask “Will crypto crash again?”

Even with the explosive growth referenced above, a healthy amount of skepticism and a fair amount of ignorance about digital assets and cryptocurrencies remain, informally correlated to one’s age and level of interest in technology. What’s keeping people from “buying in” to cryptocurrencies?

• “Blockchain technology seems to be a solution looking for a problem.”
• “Crypto is too complicated for me.”
• “The adoption of crypto has been insufficient.”
• “Using crypto will increase my transaction costs.”

Some people even believe crypto is a trojan horse, sent by radical libertarians to undermine the global financial system! While that last reason may be a bit alarmist, there continue to be those who argue blockchain and crypto may be too disruptive for their own good.

We disagree, and believe that while the journey to mass acceptance may continue to be wild and schizophrenic, that distrust of blockchain technology will ultimately prove to be unwarranted. We believe that the adoption of cryptocurrency will be much like the adoption of any other technology: The rate at which adoption occurs grows gradually, then generally explodes upwards.

Consider the internet thirty years ago. In 1990, only a handful of governments, universities, businesses, and individuals were using the internet. But by the year 2000, everyone had a website. In 2021, consumers spent more than $871 billion online, a 44% increase from 2019, and almost triple the 15.1% increase the previous year.

Remember when the iPhone was invented back in 2007? Smart phones were scarce then. Only a few short years later, and just about everyone had the internet available to them in their pockets and at their fingertips.

We are not doubting that the feel of a crisp $100 bill in your hand is unduplicable, and there will always be demand for fiat currency as long as there are governments. However, we firmly believe that the movement towards a global financial system that removes the control that banks have on money is inevitable. While this evolution will almost assuredly be met with many impediments, obstacles, and outright deterrents (such as the most recent cryptocurrency pullback, that began in early November and ended in late January, causing folks to ask “will crypto crash again?”), global finance is moving away from being centralized (money being held by banks, which have the goal of earning profits) to being decentralized, where blockchain technology eliminates the need to use profit-seeking intermediaries and third-parties to lend, spend, trade, and borrow.

DeFi, as decentralized finance is commonly known, is disruptive. And when something is disruptive, it is confusing, and causes disorder.

Please do not mistake our belief and confidence in the future of crypto, blockchain, and DeFi as being willfully ignorant, as we fully recognize the risks, uncertainties, and pitfalls that exist and will persist for some time. After all, is there anyone who does not believe that centralized financial institutions will fight tooth and nail to protect their primary means of earning profits? There seems to never be a dull moment with crypto!

However, understanding the advancements that need to be made, and the myriad of questions that still need to be answered before crypto is commonly accepted and DeFi trends towards becoming the norm, we believe it is not an if, but a when, finance becomes decentralized.

Will crypto and blockchain adoption perfectly mirror the two aforementioned examples? Probably not, but the similarities are noteworthy and should not be discounted. Will crypto crash again? It’s certainly possible, arguably even probable. But for those who understand, embrace, and adopt cryptocurrency and blockchain as an innovative new financial technology, we believe there are rewards to be had. Will the ride continue to be wild? Absolutely, but we believe it will become less and less wild as adoption increases, skepticism wanes, and use cases increase.

Below are five reasons why we believe crypto is here to stay and not going away!

1. Mainstream awareness: It wasn’t the Super Bowl, it was the Crypto Bowl!

A few short years ago, a number of media outlets including Facebook, Twitter, and Google banned advertisements that had anything to do with digital assets.

Last Sunday, an estimated 112 million viewers tuned in to watch the Rams defeat the Bengals in Super Bowl LVI. And a healthy number of them tuned in more for the halftime show and the commercials than for the game itself. And leading the advertising pack were Binance, FTX, Coinbase, Crypto.com, eToro, and Bitbuy – all cryptocurrency exchanges. And one of the best and funniest commercials of the entire Super Bowl featured the curmudgeonly Larry David, and his dismissal of history’s greatest inventions, including crypto. Click below to watch it!

The overlying point of these advertisers? Play into FOMO (fear of missing out), and don’t listen to Larry! The messaging continues to be clear – we are real companies, real advertisers, we’re here to stay, and we’re mainstream.

2. Rapid growth in mainstream adoption

More than 220 million people now own digital assets, as of June of last year. By some measures, this growth is rising faster than the internet did in its early stages. Trends firmly point to more users, longer holding periods, and growing institutional investment.

Bitcoin is also disrupting traditional payment processes, and is now one of the largest settlement networks in the world. By the end of 2021, the Bitcoin network settled over $13.1 trillion in transactions, up 470% from 2020, representing over half of the US’s GDP for the year, and MORE than what Visa, one of the largest payment processors in the world, settled last year!

3. Demographics – The Great Wealth Transfer

Over $68 trillion (yes, you read that right, trillion) is set to be transferred from the Baby Boomers to Millennials and Gen Xers over the next 25 years. Both Millennials and Gen Xers have a higher level of interest in innovation (read: decentralized finance) and a lower level of trust in traditional institutions (read: centralized finance). Supporting this perspective, 83% of millennial millionaires already own digital assets, a trend we believe is likely to continue as this demographic reaches peak earning and spending years.

Click the video below to learn more:

4. “We’ll just print more (money)”

Governments and central banks around the globe have clearly demonstrated a willingness to provide economic stimulus in the form of bailouts, social spending, and quantitative easing. In the past two years alone, 29% of the current US money supply was created.

The unsurprising result? Monetary, price, and asset INFLATION.

Conversely, bitcoin has programmed scarcity – its supply cannot be manipulated or devalued by fiscal or monetary policy, and provides direct protection from global fiat currency debasement.

5. Bitcoin is sound money

What qualities and characteristics about traditional money and fiat currency are important to us as users? The same ones that bitcoin and other cryptocurrencies exhibit: Portability, security, storability, durability, acceptability, scarcity, divisibility, and fungibility.

All of these qualities allow bitcoin to be used as both a medium of exchange and a store of value.

Throughout history civilizations have used many different mediums of money, including cattle, leather, rocks, squirrels, jewels, wine, and seashells. And before sovereign currencies took hold, gold was the medium of trade for many nations (and to this day still is a very good store of value). As with any new currency, it will take time for cryptocurrency adoption to grow.

Bitcoin is only 12 years old, and many other cryptocurrencies are still in their infancy. However, each day crypto remains accepted, active, secure, and continues to grow in popularity and usage, it will become more and more mainstream. To be clear, bank notes and credit cards were not made for the internet and the digital age we are clearly in – crypto was!

Interested in learning more? Click the image below to read a well-assembled report from Eaglebrook Advisors about the bitcoin market cycle.

And while we don’t expect for you know, understand, and adopt all 10,000 cryptocurrencies, we couldn’t resist sharing the below “primer” with you.

Have you thought but are unsure about integrating crypto into your longer-term investment portfolio? Click HERE to message us, as we welcome opening an objective dialogue with you about the many advantages, disadvantages, risks, and considerations involved.

What is Happening at TPW

Kings win!

Our President, Joseph Eschleman, spent an enjoyable, action-packed, and productive evening last Wednesday at the Golden1 Center, soaking in an upset Kings victory over the Brooklyn Nets, 112-101.

As usual, Joseph mixed some business with pleasure during the game – flanking him in the photo is District 7 Sacramento Councilmember and Super Bowl XIchampion, Rick Jennings II, and one of the top estate planning attorneys in Northern California, Mark Drobny, CEO of Drobny Law Offices.

The entire TPW family was rocking their new company-branded winter vests yesterday at the office.

Everyone is excited at how warm and chic their new Towerpoint Wealth gear is, and a big thanks to FnD Embroidery for helping with the customization and finishing touches!

TPW Taxes – 2022

January 24 marked the official beginning of the 2022 tax season, when the IRS will begin accepting and processing 2021 tax returns. Taxpayers and tax advisors are beginning to clamor for tax information, with the April 18 tax filing deadline only two short months away.

If you are a Towerpoint Wealth client, please expect your Form 1099 Composite any day now, as Charles Schwab has indicated that by mid-February you should have these important tax forms.

TPW News You Can Use

Useful and interesting content we read the past two weeks:

1. Looking for Evidence? Trust Us, Biden Administration Says – Associated Press – 2.5.2022

When President Biden’s administration was asked for evidence to back up dramatic claims about national security developments last week, it demurred with a simple rejoinder: You’ll have to trust us on that.

No, they would not reveal what led them to say they knew that Russia was plotting a false flag operation as a pretext to invade Ukraine. No, they would not explain their confidence that civilian casualties were caused by a suicide bombing rather than U.S. special forces during a raid in Syria.

The lack of transparency strained already depleted reserves of credibility in Washington, a critical resource diminished over the decades by instances of lies, falsehoods, and mistakes on everything from extramarital affairs to the lack of weapons of mass destruction in Iraq.

2. The Craziest Ways Wall Street is Spending This Year’s Record-Setting Bonuses – NY Post – 2.8.2022

Flush Wall Street hotshots blow their record-setting bonuses on cars and caviar.

3. How a Secret Assault Allegation Against an Anchor Upended CNN and Jeff Zucker – NY Times – 2.16.2022

The network’s top-rated host and its president were forced out following ethical lapses, an office romance, and a letter from a lawyer for “Jane Doe.”

Chart / Infographic of the Week

The below illustration from First Trust is an “oldie but goodie.”

While we generally believe that the stock market is very efficient, we also believe that the markets can be quite irrational in certain situations. Of course there are booms and busts.

Accurately predicting the exact days to “go all in” or “go all out” is next to impossible, and if you MISS the best days because you are out, you will pay a steep price! As evidenced by the chart below, we strongly encourage you to be humble when considering the binary decision of “going all in” or “getting completely out,” as the consequences can be devastating if you are wrong!

Quote of Week

If (when?) anyone tries to push or drag you down, just think about this quote from Denzel Washington!

TPW Washington Watch

Congress returned to Washington in 2022 facing a difficult legislative environment. The narrow margins in both chambers were already a huge impediment to passing legislation, but the fact that 2022 is a midterm election year only exacerbates the political tensions.

As a result, 2022 is expected to be relatively light on big legislative initiatives—though the atmosphere could be right for a dormant retirement savings bill to be rekindled. It is also expected to be a big year for regulations, as the administration seeks to use the regulatory process to accomplish some of its priorities away from the gridlock on Capitol Hill.

Click below for an excellent commentary from Charles Schwab that summarizes many of the key issues in Washington that could impact you in the year ahead.

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

• Clouded by doping scandals, human rights abuses, and a boycott by US diplomats, record-low ratings for NBC’s coverage of the Beijing Winter Olympics
• Scientists may have cured HIV in a woman for the first time
• Judiciary under the microscope as Congress weighs stock trading ban
• California schools will still require masks inside classrooms, even as mandate ends elsewhere
• NYC Mayor Adams fires 1,430 workers who refused to get a COVD vaccination
• The first free at home COVID tests are arriving from the U.S. government – every home in the US is eligible for four tests
• Former President Trump says filing by Justice Dept. special counsel John Durham proves he was spied on in 2016
• Intel Corp set to acquire Tower Semiconductor Ltd. for $5.4 billion

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

We enjoy social media, and are actively growing our online community!

Follow us on any of these platforms, message us there and let us know your favorite charity. We will happily donate $10 to it!

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If your goal is to successfully build net worth, and you harbor concerns that a market correction (when stocks fall 10% or more from a recent high) is coming, perhaps MAD® Magazine’s Alfred E. Neuman’s catchphrase may be appropriate for you:

Over the course of 67 years, from 1952 until 2018, MAD®  published 550 regular magazine issues, as well as countless reprint “Specials”, original-material paperbacks, reprint compilation books, and other print projects. And during that same time span (while unrelated, of course), the value of the S&P 500 index grew from 23.80 to 2,506.85.

And while our point is not to celebrate Mr. Neuman and his brash and sophomoric antics, if you are at all familiar with the content of MAD® magazine, it is tempting to equate its raw satire and derision with today’s unsettled, unpredictable, and vexing global financial markets and economic environment. And for some, paging through an issue of MAD® might be as objectionable as tolerating the painful and inevitable declines that are inextricably linked to the attractive longer-term growth prospect that owning and investing in equities can provide. There is little doubt in our mind that having a strong stomach is necessary if you truly want to build net worth.

Today’s newsletter is not meant to “talk you off the ledge,” or be a diatribe instructing you to not panic. Frankly, if you are distraught about a four week decline (the length of the pullback so far in 2022), then it may actually clarify for you that owning stocks and investing in the stock market is not going to suit you very well. To quote famed investor and founder of Vanguard, John Bogle:

Additionally, a key element to success when working to build net worth is discipline. It is very important to remember to not think in terms of days, weeks, months, quarters, or even years, but instead, decades:

Fortunately, 2022’s pullback, while uncomfortable and sobering, hasn’t been too scary (not yet, at least) for most investors:

A popular measure of investor nerves is known as the VIX, or the Volatility Index, which projects the volatility of the S&P 500. While the VIX has increased significantly in four weeks, moving from 17.22 (right around its historic average) as of December 31 to 24.83 as of Thursday’s close, it is a far cry from the 80+ readings that it was clocking during the 2008-2009 Global Financial Crisis, or during the beginning of the coronavirus pandemic in March of 2020.

While we believe that working to build net worth is simple, we also understand that it certainly is not easy. And independent of whether or not a market correction is coming, is a head fake, or is already here, below are three important takeaways and reminders that should be internalized in your quest to build net worth:

1. Diversification is your friend when corrections occur and volatility is elevated.

The risk of larger losses is much greater when owning individual stocks, as opposed to owning a more diversified basket of equities, or index fund:

2. Remember, corrections happen (a lot) – on average, once every other year!

It may be tempting to try and stop the bleeding by selling while prices are depressed, but it almost always exacerbates the pain. In order to come out of this ahead, you’d have to precisely and correctly time your exit from AND your re-entry into the market. In other words, you have to be right twice.

Can you 1.) get out at – or close to – the top, and 2.) also then have the intestinal fortitude to buy back in at – or close to – the bottom, when prices are lower but things are even scarier? This is extremely difficult to do once, yet alone regularly, which is a virtual impossibility.

The S&P 500 has experienced ten bear markets of -20%, and 36 corrections of -10% or more since 1950! It is advisable instead of fearing or worrying about them, to be expecting (and embracing) them. This chart shows the peaks and troughs of all corrections from 1950 to 2020. The ones in red are bear markets, those that were over a 20% decline.

3. Lock away the password to your 401(k) and other online accounts, and keep your nose out of them. 

We’re not saying that burying your head in the sand is a good solution, but sometimes, from a behavioral standpoint, intentional ignorance can indeed be bliss. At a minimum, remembering that market and economic events that are occurring today, while important, will ultimately represent just a small “blip on the radar screen” over your entire investing career as you strive to build net worth. As Peter Lynch says:

Yes, inflation is rising, we are still firmly entrenched in the pandemic, there are heightened tensions between Ukraine, Russia, the United States, and NATO, and corporate earnings growth has slowed. All excellent excuses for a shorter-term trader to sell stocks, which clearly has happened so far in 2022. However, longer-term investors should also recognize that there are plenty of excuses to buy stocks, as interest rates are still historically low, real estate values continue to appreciate, the economy (and concurrently, corporate profits) will hopefully grow more rapidly as the omicron variant subsides and people start spending more money, and unemployment and layoffs remain extremely low.

Whether or not you are a believer that a market correction is coming, we encourage you to channel your inner Alfred E. Neuman, and not overthink it! No worry!

Our advice hasn’t wavered: Be patient, be disciplined, be humble about your ability to consistently and accurately predict the future, teach yourself to tolerate (and embrace) corrections, and maintain the resolve and the confidence that the next recovery will happen.

What’s Happening at TPW?

Just out together for a nice lunch, or auditioning for a new job at Il Fornaio??!!

We are hopeful, as are our TPW clients, that our Client Service Specialist, Michelle Venezia, and our Director of Operations, Lori Heppner, aren’t considering a career change!!

Raise your hand if you own appreciated real estate!

If you believe prices might be close to their highs, and that selling your appreciated investment real estate might be a good idea, doing a tax-free 1031 exchange is oftentimes a very attractive option!

If you are considering a 1031, are you familiar with Delaware Statutory Trusts, or DSTs?

Towerpoint Wealth has partnered with a number of leading DST sponsors such as Versity Investments and partners like Brad Davidson (pictured with our President, Joseph Eschleman, CIMA®) to help us help our clients gain exposure to commercial real estate, and its potential diversification, cash flow, and capital appreciation benefits.

Message Us to Learn More

TPW continues to seek innovative products and solutions such as DSTs to empower our clients to capture upside and keep Uncle Sam at bay, despite the uncertain future of real estate values and interest rates.

TPW Taxes – 2022

What exactly is a Form 1099, why can they be so frustrating to process, and how do you manage the problem of receiving an amended 1099 in March or April? (Hint – don’t file your taxes too soon.)

Click the image or button to read the white paper written by Steve Pitchford, our Director of Tax and Financial Planning, about handling the frustrations of Form 1099. Read White paper

TPW News You Can Use

Useful and interesting content we read the past two weeks:

1. Crime, Homelessness, Taxes: Hollywood Big Shots Fleeing L.A. – The Wrap – 1.26.2022

Why are executives and elites becoming disillusioned with Los Angeles? Rising crime, homelessness, and California’s anti-business policies are all cited by Hollywood’s rich and famous.

2. Experts Are Ringing Alarms About Elon Musk’s Brain Implants – The Daily Beast – 1.25.2022

As Elon Musk’s brain-implant startup, Neuralink, gears up for human trials, scientists are worried about the company’s oversight, the potential impact on trial participants, and whether society has meaningfully grappled with the stakes of fusing Big Tech with human brains.

3. 12 Bucket List Hikes in Northern California, One for Every Month of 2022 – 7×7 – 1.24.2022

There aren’t many regions in the U.S., let alone in the world, with the kind of ecological diversity of Northern California. With not one but three national parks in the Sierra Nevada, moody redwood forests, and a dreamy coastline teeming with whales and sea lions, you don’t have to try too hard to find a landscape that inspires.

2022 Market Perspective

In her latest market note, Liz Ann Sonders, Charles Schwab’s chief investment strategist, noted that the stock market’s decline so far in January is “glaring” (and the month isn’t over yet), and she expects the Fed to take note of the weakness and the slowdown in the U.S. economy.

She expects the Fed to start hiking interest rates in March. The uncertainty about the pace and veracity of this shift in policy could add volatility to the stock market. Click the image below to read Smoke on the Water… Fire Down Below for additional insights about Liz Ann’s perspective of 2022.

Chart / Infographic of the Week

Think cryptocurrency and digital assets are a volatile new asset class?

While we do not necessarily disagree, it is important to note that in a long-term study recently done by Van Eck, Associates, more than a quarter of S&P 500 companies had a HIGHER volatility than Bitcoin!

Quote of the Week

The overall return you ultimately earn over a lifetime of investing is largely determined by how you behave (or do not behave) when the market gets wild and crazy, like it is right now. Analogous to being a successful longer-term investor and creator of net worth, Napoleon’s definition of a “military genius” rings true:

The ultimate market irony: All past market declines look like opportunities in hindsight; all future market declines look like risks.

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

• The worst January slump for the NASDAQ since 2008
• Boris Johnson’s political future hangs in the balance as the British Prime Minister faces calls to resign over “partygate” revelations
• With the news of Justice Breyer’s retirement, eyes turn to President Biden’s potential replacements
• The NFL Divisional Round – Most exciting weekend of NFL playoff football ever??!!
• President Biden is among other Western leaders preparing for Russian military action in Ukraine
• Pfizer and BioNTech announce plans to test omicron-specific COVID-19 vaccine in adult trials
• Twitter forced 4.7MM Tweet removals that violated Twitter’s rules during the first half of 2021

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

The oldest and still most widely quoted proxy for the U.S. stock market, the Dow Jones Industrial Average (DJIA), or “the Dow” for short, continues to be regularly quoted by news broadcasts, newspapers, and smartphone apps as an indicator of the health (or lack thereof) of the financial markets and U.S. economy.

The Dow history is interesting, as it was created in the late 19th century by Charles Dow, co-founder of Dow Jones & Company and co-founder and editor of the Wall Street Journal (WSJ), and Edward Jones, the WSJ’s other co-founder. It is an index that has gone through 57 different revisions since it was created, and to this day is supposed to encapsulate the overall state of the stock market in a single number.

The composition of the Dow right now is determined by the Index Committee, and is designed to change as the economy changes over time. Initially comprised of 12 of the biggest and most influential companies of the day, the Dow history includes an expansion to 20 companies in 1916; by 1928, it included 30 companies, which continues to be the number tracked today. Any current member of the Dow can be dropped by the Committee if the company is deemed to be less relevant to current economic trends, to be replaced by a new company that the Committee determines to better reflect said trends. The 30 companies that currently comprise the DJIA index, and the year they were added, are as follows:

As the U.S. economy has grown over time, so has the value of the Dow. Below is a graph from FRED (Federal Reserve Economic Data) reflecting how the DJIA has almost tripledover just the past ten years, growing from 12,741.02 on 1/12/2012, to 36,252.02 on 1/11/2022:

Ten years of data not enough for you? Below is a logarithmic chart from Macrotrendsreflecting the Dow history and growth over the past 100 years (the grey bands reflect recessions in the U.S.):

Albeit with regular speed-bumps along the way, the continued and sustained growth of the Dow has been pretty amazing!

Interested in learning more? Click the thumbnail below for a straightforward YouTube video from PBS that discusses everything to do with the Dow right now:

However, for all of its “glory” and history as the best-known and perhaps most widely followed stock market index in the world, is the Dow right now really all it’s cracked up to be? At Towerpoint Wealth, we argue the answer is no, as the index is as flawed today as when it was first calculated on May 26, 1896. The various “warts” of the Dow give us pause, and cause us to discourage our clients from considering it a truly useful proxy and viable resource to rely on.

Here are four specific reasons why we disavow the Dow right now:

1. It is narrow – “only” 30 companies are represented in the index.

Because (in theory) the 30 companies that comprise the Dow Jones Industrial Average (DJIA) index are the largest and most influential in the country, they represent only about 25% of the value of the entire U.S. stock market. However, many experts (ourselves included) feel that because it consists of only 30 large capitalization (“large cap”) U.S. companies, and neglects mid cap and small cap companies, the DJIA index does not properly represent the comprehensive state of the U.S. economy.

2. The Dow is a price-weighted index

An index that is price-weighted means that higher-priced stocks have greater weight and influence on the index compared to lower-priced stocks. On the surface this may seem logical, but the problem is that a higher-priced stock has zero correlation with a higher-value company. Put differently, a $9 stock could have a higher value than a $50 stock, but because the Dow is price-weighted, that doesn’t matter.

In a price-weighted index, a stock that increases from $90 to $100 (an 11% increase) will have the same effect on the value of the overall index as a stock that increases from $10 to $20 (a 100% increase), even though the percentage move for the lower priced stock is far greater than that of the higher-priced stock.

Put differently, a percentage change up or down in the Dow doesn’t necessarily mean that the entire market has gone up or down, or even that the Dow’s 30 companies have collectively gone up or down. The higher-priced stocks contained in the index simply exert a much greater influence on its overall direction and movement.

A prime example of why the price-weighted indexing method doesn’t make logical sense is when an index component undergoes a stock split. Prior to splitting 4-for-1 in August of 2020, Apple was the highest weighted position in the Dow at 11%, but once its stock split, it immediately had much less influence on the Dow, as it dropped to the 18th highest weighted stock in the index. While a stock split obviously does not have any influence nor change the underlying value of a company (it just lowers the share price and increases the amount of shares outstanding), it does change the influence a company has within the price-weighted index it is part of.

3. The Index Committee has only five members, and uses a vague methodology for including a stock in the Dow

Discretion is an integral part of how indices are constituted, and the Dow is certainly no exception. Unlike the S&P 500, which has a long list of eligibility requirements that some big companies can’t meet, the Dow does not have hard-and-fast rules regarding how a stock gains entry to the index. It is not governed by quantitative rules, with S&P Global subjectively stating that “A stock is typically added only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors.”

Additionally, on the Dow’s Committee there are only two representatives from the Wall Street Journal and three from S&P Global. Given the cozy size of the Committee, the subjective nature of how the index is constructed, and the sheer size and financial importance of the Dow, any decisions to include or remove companies from the index impact trillions of dollars of investor funds, not to mention the potential retention of institutional investor clients by S&P Global. This can create conflicts of interest, or even opportunities for illegal activity and fraud. Don’t believe us? In September of 2020, James Yang, a member of the Index Committee, was charged with being part of an insider trading scheme leading to more than $900,000 in profits.

4. The Dow right now does not contain some of the largest and most dominant companies in the U.S. economy

Even though they represent well what has become the most dominant sector of the U.S. economy, three of the largest and most influential technology “titans” – Alphabet (formerly Google), Amazon, and Meta Platforms (formerly Facebook), are not part of the Dow. Why? See #2 above – their share prices are too high. While there is nothing fundamentally wrong with these companies, because of the Dow’s price weightings, they won’t be included in the index because they would swamp it due to their high share prices.

The only way the Dow would ever be able to accommodate any of these three stocks is if they went through a stock split, which makes zero sense, as does excluding companies from the Dow who clearly are excellent representatives of the overall United States economy just because their stock prices are too high.

The Dow has been around for 125 years, is not going anywhere, and continues to clearly be in the mind’s eye of investors. However, the four reasons listed above support our belief that it does not accurately represent the market, and just because the Dow right now is an old, familiar, and oft-quoted figure does not make it accurate, and it should not be used as a proxy for investors to gauge the health of our economy or to measure the progress (or lack thereof) of the stock market.

What’s Happening at TPW?

A big thank you and shout-out to two excellent Towerpoint Wealth clients, David Junod and Pauline Lhote, for the very generous and thoughtful sparkling wine holiday gift fromDomaine Chandon!

Now we just have to find an excuse to actually pop a bottle or two and enjoy, rather than just pretending! Cheers!

Just last week, our President, Joseph Eschleman, CIMA®, earned his Certificate in Blockchain and Digital Assets (CBDA) from the Digital Assets Council of Financial Professionals.

The CBDA course is the only cryptocurrency certificate program designed specifically for financial professionals. Graduates of the program have gained the essential knowledge and understanding of blockchain and digital assets, better equipping them to provide investors the expertise and advice they need about this new and transformational asset class.

TPW Taxes – 2022

2022 will assuredly be a different year than 2021, with income taxes no exception. Click the image below to access the 2022 Quick Tax Reference Guide, a practical resource providing a plethora of consolidated and easy-to-understand information to help you make sense of the complex and ever-evolving array of U.S. federal tax rules.

At Towerpoint Wealth, we recognize that income taxes are a “necessary evil” when helping you build and protect your wealth and net worth, but fortunately they can be planned for, managed, and oftentimes minimized!

TPW News You Can Use

Useful and interesting content we read the past two weeks:

1. Desperate No-Vaxxers Paying COVID-Positive People $150 for Dinner and COVID Infection – The Daily Beast – 1.12.2022
   
   A new vaccination mandate in Italy requires everyone over 50 to be vaccinated or pay a hefty fine. Some are opting to pay to get infected with COVID instead.
2. The 2022 NFL Playoffs – Everything You Need to Know – com – 1.9.2022
   
   AFC, NFC, and Super Bowl 2022 schedule. Seedings. TV times, dates, locations. Find everything you need to know about the NFL playoffs here.
3. Hillary 2024? Don’t Rule It Out – The New York Post – 1.12.2022
   
   Could a third time be the charm for Hillary Clinton? That’s the case made by two prominent Democrats who claim a “perfect storm” of President Biden’s plummeting job approval ratings, Vice President Kamala Harris’ own unpopularity, and the commander-in-chief’s advanced age could provide an opening for the former first lady and secretary of state.

Chart/ Infographic of the Week

After a 26.9% gain for the S&P 500 in 2021, many investors are hopeful that 2022 is another strong year for the markets. And while consistently and accurately predicting the future is next to impossible, the chart below from Morningstar gives hope to what the future may have in store for the market this year:

Quote of the Week

Staying positive and keeping a good attitude is key!

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

• Microsoft hit by defections as employees move to Facebook parent Meta
• Inflation reaches its highest level since 1982 as consumer prices surge 7.0% over the past year
• San Francisco mayor London Breed announces no new restrictions, says that “we are learning to live with COVID”
• Russia has amassed 100,000 combat-ready troops, tanks, and other military equipment by Ukraine, and NATO is doing what it can to ease tensions
• Rachel Balkovec to be the first woman ever to manage a team affiliated with Major League Baseball
• Oakland students threaten to boycott classes unless school district meets COVID demands
• Sidney Poitier dies at home at the age of 94
• Analysts speculate that oil prices could hit $100 as demand outstrips supply

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

We enjoy social media, and are actively growing our online community!

Follow us on any of these platforms, message us there and let us know your favorite charity. We will happily donate $10 to it!

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If your inbox looks anything like ours right now, the last thing you need is a generic 2021 recap or a run-of-the-mill outlook for 2022!

Never inclined to jump on a bandwagon, we’d like to offer you something a bit different, and with that being said, here is what we at Towerpoint Wealth will NOT do in 2022:

1. We will NOT glean our news from TV nor from social media

It takes a herculean effort to source truly objective and reliable news nowadays. And unfortunately, for the most part, stories we see and hear on TV do have some sort of slant or bias, that even extends to the numbers and statistics presented. Everything feels politicized, and it can be extremely difficult to separate fact from fiction, and/or opinion from objectivity.

Are you skeptical or trusting of the news media?

It obviously is important to recognize that news is negative by design, and that impressions and clicks are fast replacing television Nielsen ratings. And understanding that the fight for eyeballs (and concurrently, advertising revenue) is as intense as ever, negative stories have always sold.

What to do? Read the news, don’t watch it on TV. If you are liberal, read conservative sources. And if you are conservative, read liberal sources. Put differently, understand that completely unbiased reporting is challenging even for the most seasoned journalists; look for the whole picture, be mindful of having a “deep bench” of diverse and well-rounded news sources, and do not become pigeon-holed into only reading stories that feel right and feed into your belief system.

We value the importance of having convictions and opinions, but be disciplined enough to have opinions that are formulated from a solid foundation of quality information and sources. Read carefully, and trust cautiously.

2. We, and our clients, will NOT be misled by “lonely numbers”

“The world cannot be understood without numbers. But

the world cannot be understood with numbers alone.”

-Hans Rosling, Factfulness

Numbers and statistics can appear to offer support or even hard proof about a particular issue. However, without a larger context, they can be meaningless or even misleading. The world of wealth management, investing, and economics is awash in numbers and statistics, and we will continue to be mindful and think hard about how to help our clients appropriately interpret and find meaning in them.

Additionally, our clients expect us to be statistically literate, and we acknowledge and embrace the fact that part of our job is to figure out exactly what story the numbers tell, and why it matters. Data is an important tool for allocating capital, developing strategy, and making tactical decisions as circumstances change and evolve, but incomplete or incorrect data can muddy the waters and create a false sense of safety and a false sense of urgency (see number 3 below).

3. We will NOT lose perspective during this, or the next, crisis

Use of the word “crisis” in news stories may be at an all-time high, with reported crises involving:child-care, college dropouts, immigration, the climate, Sudan, homelessness, rural healthcare, Scandinavian money laundering, avocados, the automotive industry, Iran, Moldova, Pakistan, Israeli bacon, Trump’s reelection prospects, and Canadian national unity.

At Towerpoint Wealth, we are attuned to reports, numbers and statistics, but never are we reactionary to the hour-by-hour developments in the economy and financial markets. In the case of a reported crisis, we encourage you to follow our lead. Take a deep breath before hitting the panic button, and try to consider a larger context. There is always a broader, longer-term narrative with every news story.

4. We will NOT take outsized risks in pursuit of outlandish growth

While we faithfully execute on the customized plans we establish in tandem with our clients to compound and grow their net worth and assets, we recognize that protecting that net worth is just as important as aggressively growing it and will only take calculated and justified risks.

The math behind “making up” for investment declines speaks for itself:

If you suffer a 50% loss, you will need to DOUBLE your money to get back to break-even!

We are also quite mindful of the following:

The only thing people hate more than losing money is the person who lost it for them.

5. We will NOT lose confidence in the longer-term health of our country, our society, our government, the American economy and the American dream.

Some argue that the American Dream has become a nightmare. We vehemently disagree. No matter who we are or where we’re from or what we look like or who we love, the American Dream excludes no one. Our core values as a nation are not Republican nor Democrat, not conservative nor liberal, they are American ideologies. And as we head into 2022, we believe that Julian Castro’s quote sums it up well:

What’s Happening at TPW?

A rare photo of the Grinch (aka our Director of Operations, Lori Heppner), sneaking around on Christmas Day!

Our Director of Research and Analytics, Nathan Billigmeier, took his son Ethan to his firstSacramento Kings game last week at the Golden1 Center. The Kings didn’t win, but both dad and son had a great time!

Don and Beth Parvin, two important Towerpoint Wealth clients, were in the office for a review meeting last week, and gifted a sweet throwback Christian Brothers High School winter jacket to our President, Joseph Eschleman, which, though our offices are heated, he just had to try on.

Happy Holidays, Don and Beth – thank you for your generosity!

TPW News You Can Use

Useful and interesting content we read the past two weeks:

1. I Got COVID Three Times 
   – BuzzFeed News – 12.23.2021
   
   Yes, you can get COVID twice, and even more. While this situation is incredibly rare, this is a story of a person who was directly exposed to the virus (or parts of it that trigger an immune reaction), five times. “My antibodies should be as jacked as an Instagram bodybuilder. But apparently, they’re not…”
   
   
2. A-Rod Building Business Empire After Controversial MLB Career 
   – BNNBloomberg – 12.23.2021
   
   Alex Rodriguez had one of the most successful – and controversial – careers in Major League Baseball history. Now eligible for the Hall of Fame, the baseball world continues to weigh his lofty achievements against his sins. However, his goals in business have been as lofty as his athletic endeavors, and his ambitions are accelerating.
   
   
3. Will Apple or Microsoft Hit $3 Trillion Next Year? 10 Tech Predictions for 2022 
   – SeekingAlpha – 12.24.2021
   
   Wall Street has started its annual “look-ahead” predictions for 2022, with Wedbush Securities Dan Ives predicting big growth in the NASDAQ, the metaverse, cybersecurity spending, and the cloud, along with a moderation in the microchip shortage.

Chart/Infographic of the Week

A great legend at Merrill Lynch for several decades, Bob Farrell had a front-row seat to the go-go markets of the late ‘60’s, mid ‘80’s, and late ‘90’s, as well as the brutal bear market of ’73-’74, and also the October of ’87 crash. He was a pioneer in investor sentiment studies and market psychology, and perhaps was most famous for his Ten Rules for Investing, which are still passed around on Wall Street today:

Quote of the Week

Having a strong disdain for the scientific pretensions and formal apparatus of modern economics, and despite his Harvard professorship, John Kenneth Galbraith was never really an economist in the ordinary sense. He believed that the math and numbers-crunching missed the point, and was a full believer in being careful not to fall prey to paralysis by analysis.

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

• West Virginia Senator Joe Manchin stops President Biden’s Build Back Better plan in its tracks, and is also invited by Senate Minority Leader Mitch McConnell to join the GOP
• The USFDA authorizes Pfizer’s new pill to treat COVID-19, following the end-of-November approval of Merck’s antiviral COVID-19 drug
• Bloomberg reports that South Africans contracting the omicron variant of COVID-19 are 80% less likely to be hospitalized, according to a study released by the National Institute for Communicable Diseases
• NHL players will not be participating in the 2022 Beijing Olympics due to the recent spread of COVID-19
• Teens build bus stop shelter for 5-year-old wheelchair user, protecting him from harsh weather
• Sacramento’s New Year’s Eve Sky Spectacular will take place in Old Sacramento, with fireworks set for 9:00PM PST
• The CDC shortens COVID-19 quarantine time
• Anthony Fauci says that a domestic travel vaccination rule should be considered

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

–  Joseph Eschleman, Jonathan, Steve, Lori, Nathan, and Michelle

We enjoy social media, and are actively growing our online community!

Follow us on any of these platforms, message us there and let us know your favorite charity. We will happily donate $10 to it!

Click HERE to follow Towerpoint Wealth on LinkedIn
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Click HERE to follow Towerpoint Wealth on Instagram
Click HERE to follow Towerpoint Wealth on Twitter
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Click HERE to follow Towerpoint Wealth Podcast A Wealth of Knowledge

The Build Back Better Bill tax changes – do you stand to pay MORE, or less?

Will the Build Back Better bill tax changes translate to an unexpected de-facto holiday bonus, or instead, an unwelcome lump of coal? Read on to find out more!

While Build Back Better is a good marketing slogan, it is obviously important to unpack and better understand what this 2,135 page, $1.75 trillion piece of spending and legislation might mean for YOU. What exactly are the key provisions of this signature bill, and importantly, will the proposed Build Back Better Bill tax changes cause you to pay MORE or LESS to Uncle Sam if the proposed legislation passes?

Let’s briefly “unpack” the Build Back Better Act, discuss which provisions are NOW being negotiated in the Senate, and importantly, evaluate the potential Build Back Better bill tax changes, and the tax consequences of what a final package might look like.

First, a brief background. The Build Back Better Act is the third and most economically significant part of President Biden’s Build Back Better Plan. Originally an immense $3.5 trillion social spending package, lawmakers in the House of Representatives have scrambled and negotiated over the past six months, finally ending up here – approving and sending to the Senate a “slimmed-down” (but hardly modest) $1.75 trillion (!) version of the plan. Now, the REAL debate and negotiations begin.

With two noteworthy holdouts…

…Senate Democrats are mostly united in passing this major legislation, but haven’t yet been able to agree on what should be kept and what should be scrapped to obtain the two needed votes from the aforementioned holdouts. On the flip side, and unsurprisingly in today’s partisan political atmosphere, all 50 Senate Republicans are aligned against it.

Now, regardless of whether you are a Democrat or a Republican, and regardless of whether you agree or disagree with the need to pass this IMMENSE bill, at Towerpoint Wealth we believe that it is a when, and not an if, some version of this legislation ultimately DOES pass and become law, even if it isn’t until 2022. And while the final terms are obviously still unclear, the bill is proposing to make MAJOR changes to four main areas:

1. Social services and programs
2. Clean energy
3. Immigration
4. Build Back Better bill tax changes

And as Joe Manchin, Senator from West Virginia and one of the two Democratic holdouts who is squarely in the middle of this debate, said earlier about the bill, “We should be very careful what we do. We get any of these wrong, we’re in trouble.”

If you are interested in a deeper breakdown of the first three areas (as well as Build Back Better tax changes highlighted below), we encourage you to click the thumbnail below and watch our newly-produced educational video:

Today’s Trending Today is specifically focused on the proposed Build Back Better bill tax changes, which would raise a SIGNIFICANT amount of tax revenue from the very wealthy and corporations, and also offer a proposed tax cut for those who live in high income and mostly blue tax states.

The Congressional Budget Office (CBO) estimates the bill will cost a total of almost $1.7 trillion, and add $367 billion to the federal deficit over 10 years. Adding in $207 billion of revenue that is estimated to result from increased tax enforcement in the bill, and the net total increase to the deficit is projected to be $160 billion.

Originally, President Biden’s initial Build Back Better plan was to raise taxes on families earning more than $400,000/year, which would have overturned the Tax Cuts and Jobs Act passed in 2017. However, this provision was dropped in the final version of the bill passed by the House of Representatives on November 19, as holdout Democratic Senator Kyrsten Sinema of Arizona balked at it, saying she wouldn’t accept any additional higher tax rates: not for individuals, not for capital gains, and not for corporations.

Instead, a significant and updated House-passed Build Back Better bill tax change imposes surtaxes on taxpayers with extremely high incomes. When would this surtax kick in? When adjusted gross income eclipses $10 million, a 5% surtax on income would be applied. Additionally, taxpayers would be subject to an additional 3% surtax on any income over $25 million. Clearly these proposed Build Back Better bill tax changes would only be punitive to very high income earners.

Something else to keep in mind – the new surtaxes applicable to the $10 million and $25 million adjusted gross income thresholds INCLUDES capital gains taxes. So, if you have owned highly appreciated securities (think Apple or Tesla or Amazon stock) for a long time, and then sell your shares and realize a large capital gain, that income is also included when calculating whether or not you would be subject to them.

Additionally, another major Build Back Better bill tax change would be to INCREASE the state and local income tax deduction, commonly known as the SALT deduction.

The SALT deduction is a tax deduction that allows taxpayers of high-tax states to deduct local tax payments on their federal tax returns. Before 2017, there was no limitation on the SALT deduction. However, under the Trump administration’s Tax Cuts and Jobs Act, the SALT deduction was CAPPED at $10,000. The Build Back Better bill tax change to SALT proposes a new INCREASED deduction limit of $80,000, benefitting wealthier residents of high-tax blue states like California, New Jersey, and New York.

This change would cost the government $229 billion in revenue, and was not part of Biden’s original BBB plan – it was added later in the House negotiations.

Backdoor Roth IRA conversions, a popular technique oftentimes used to fund a tax-free Roth IRA without being subject to the Roth IRA income limitations, would also be eliminated as another Build Back Better bill tax change.

And lastly, income recognized on cryptocurrency transactions would be subject to 1099 reporting by crypto brokers and custodians.

Here is a visual summary of the Build Back Better bill tax changes:

Head spinning yet? Obviously the myriad of proposed Build Back Better bill tax changes is a lot to keep track of. However, at Towerpoint Wealth, that is exactly what we continue to do on a regular basis.

Considered by some to be the most consequential economic legislation in the past 50 years, negotiations on the Build Back Better bill are far from over. And any tweaks to this massive legislation will then require another vote in the House. However, regardless of how and when this situation plays itself out, we feel it is safe to say that YOU WILL feel the effects of at least one component of the proposed Build Back Better bill tax changes, and encourage you to contact us to have an objective conversation about how you will be positively or negatively affected by the tax changes you will personally see from this bill.

What’s Happening at TPW?

A huge thank you to Ascent Builders for the AMAZING holiday wreath, and perhaps an even better gift, the personal delivery from their esteemed controller, Patty McElwain (holding the wreath and standing next to our phenomenal Client Service Specialist, Michelle Venezia)!

Spreading cheer is an Ascent Builders specialty, and they are a firm we feel very fortunate to have such a long and productive partnership with.

Our President, Joseph Eschleman, spent some time earlier this month celebrating Christmas (yes, that is a Griswold Family Christmas t-shirt he is wearing!) with close Towerpoint Wealth friend and business partner, Niki Dawson. Niki is the President of TaylorMade Web Creations, and she is absolutely amazing if you have any web design and/or digital marketing needs!

Graph of the Week

Tesla’s market value is now more than General Motors, Ford, Volkswagen, and Mercedes-Benz, COMBINED!

The below chart indicates that electric vehicle sales will exceed gas-powered vehicles by 2040 – do you agree? Disagree?

Cartoon of the Week

We came across this gem that provides a different and unique “take” capturing the essence of what perseverance means, and felt compelled to share!

Illustration of the Week

Surprisingly, in the wealth management industry, there are two different standards of care for clients:

1. The fiduciary standard – a legal obligation requiring a financial advisor to act solely in a client’s best interest, 100% of the time, when offering personalized financial advice, counsel, and planning
2. The suitability standard – a much lower legal hurdle to clear than fiduciary, not obligating a financial advisor to put their client’s best interests first, and instead only requires a reasonable belief that a recommendation is “suitable” for a client

While we believe that consumers and clients are harmed with the absence of a uniform fiduciary standard that applies to ALL financial professionals, this is the world we live in. A non-fiduciary is legally allowed to sell you a product or investment that pays the highest commission, as long as it is considered suitable.

If you have an advisor who works for any of these firms, he or she is NOT a fiduciary to you. Conversely, if you are working with an advisor at a fully-independent, SEC-regulated investment advisory firm (such as Towerpoint Wealth), he or she IS a fiduciary to you!

Put differently…

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

• Underlining the dramatic surge in infections the country continues to see, the U.K. reported a record number of new daily COVID-19 cases on Wednesday, with 78,610
• The U.S. House of Representatives voted on Tuesday to hold former White House chief of staff Mark Meadows in contempt, over defiance of January 6 Committee subpoena
• Businesses, employers, and universities begin mandating COVID-19 booster shots
• The rematch? Hillary vs. Trump in 2024?
• Steph Curry gives new Rolexes to Draymond Green and Andre Iguodala after sinking his 2,974th career 3-pointer, breaking Ray Allen’s NBA record
• Iconic American musician Bruce Springsteen reportedly sold his full song and publishing catalog to Sony Music for a whopping $500 million
• Hackers linked with governments of China, Iran, North Korea, and Turkey are exploiting a critical flaw in software used by big tech firms around the world

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

 Joseph Eschleman, Jonathan, Steve, Lori, Nathan, and Michelle

We love social media, and are always actively growing our social media community!

Follow us on any of these platforms you use, and then message us with your favorite charity, and we will happily donate $10 to it!

Click HERE to follow Towerpoint Wealth on LinkedIn
Click HERE to follow Towerpoint Wealth on Facebook
Click HERE to follow Towerpoint Wealth on Instagram
Click HERE to follow Towerpoint Wealth on Twitter
Click HERE to follow Towerpoint Wealth YouTube
Click HERE to follow Towerpoint Wealth Podcast A Wealth of Knowledge