First Quarter – 2024
Advisor Desk
In the first quarter of 2024, the financial markets witnessed a period of cautious optimism, navigating through a series of pivotal economic data releases and decisions. Notably, there were a series of interest rate decisions from central banks worldwide.
Equity markets as a whole increased significantly with mixed performance between sectors. Energy and materials sectors outperformed while technology stocks started to loose the momentum we saw in 2023. On the other hand, bond markets experienced fluctuations, influenced by changing investor sentiments and expectations for future interest rate adjustments.
Commodity markets, particularly oil and precious metals, saw significant price movements, reflecting the ongoing geopolitical tensions and supply chain concerns.
The Federal Reserve (Fed) continued its cautious approach to loosening monetary policy, opting to keep rates stable for now with a plan for 3 rate cuts throughout the year. As an interesting comparison, across the Atlantic, the European Central Bank (ECB) also avoided any rate cuts for now, but signaled rate cuts starting in June. Switzerland was the first major country to cut rates this quarter further increasing the likelihood that the ECB and Fed will follow.
There are a variety of links and SFA updates below for you to dig into including information about our May conference and a new “Ask an Advisor” section where our own Kyre Lahtinen breaks down some of the considerations for long term international travel.
SFA Announcements
Friday, May 10, 2024
We are excited to announce the plans for our 2024 Personal Finance Conference & Client Reception. This is a one-day complimentary event in Winston-Salem, North Carolina centered around connecting with our current clients.
To view the full itinerary, visit our Conference Webpage.
RSVP using the button below.
Team Updates
Derek Cheshire, CFP, EA Paraplanner
As one of our paraplanners, Derek brings ten years of experience as a financial advisor and planner. In his prior roles, he has extensive experience working with individuals with varying backgrounds and needs to help them achieve their financial goals. Additionally, Derek earned his MBA with a specialization in financial analysis from the University of Colorado at Denver. He attained his Certified Financial Planner designation in 2016 and has been an enrolled agent with the IRS since 2020. As an enrolled agent, Derek prepared taxes for small businesses and their owners, giving him extensive knowledge of taxation and the needs of small business owners. Derek takes great pride in his work on behalf of the individuals, families, and the Scholar advisor team he supports.
What We Are Reading
Ask an Advisor
In this month’s edition, advisor Kyre Lahtinen, Ph.D. answers the following question:
“What investing considerations should someone take into account when wanting to move to a different country for a long period of time?”
Moving to a different country is an opportunity that promises growth, learning, and a myriad of experiences. Whether you’re seeking cultural immersion, career advancement, or personal exploration, living abroad can be a transformative journey. Having lived abroad, I highly recommend an international experience to anyone with an adventurous spirit. Here are a few tips to help you prepare to move abroad for a long period of time.
Understanding Your Motivation
The first and foremost aspect to ponder is your core reason for wanting to live abroad. Are you looking for an adventure, eager to learn a new language, or aiming for career growth? Your motivation will not only influence your destination but also your satisfaction and overall experience. Identifying your primary reason will guide your planning and decision-making process, ensuring your journey aligns with your expectations and goals.
Choosing Your Destination
Where do you want to set up your new base? Whether it’s the bustling streets of a metropolis or the tranquil ambiance of a coastal town, your choice of location should resonate with your lifestyle preferences and personal goals. Consider factors such as climate, lifestyle, cost of living, and political stability when making your choice.
Financial Considerations
Living abroad involves various financial considerations, including cost of living, currency exchange rates, and banking. Budgeting for your new life should encompass housing, utilities, transportation, food, healthcare, and leisure activities. You are sure to want to travel regionally, but don’t forget to budget for occasional travel back to your home to see family and friends. Additionally, it’s essential to understand the tax implications for expatriates and ensure compliance with both your home and host countries’ tax regulations. Speaking with finance or accounting experts can help you navigate the complexities of the Foreign Earned Income Exclusion in the United States, seeking out Digital Nomad visas, determining if you have tax residence in a particular country, and how to pay your taxes.
Maintaining Your Residence Back Home
A major financial decision is deciding what to do with your residence back home. Whether you choose to rent it out, sell it, or leave it vacant, ensure that your property is secure and well-maintained in your absence. Additionally, consider how you will manage your financial obligations, mail, and any other home-related matters from abroad. This is especially important if your bank accounts require a permanent US address.
Cultural Immersion and Adaptation
Living in a new country offers a unique opportunity to immerse yourself in a different culture. Engaging with local traditions, cuisines, and festivities can enrich your experience and broaden your perspectives. However, cultural differences can also pose challenges. Prepare to embrace these differences with an open mind and a respectful attitude, fostering mutual understanding and appreciation. Before moving, seek out and attend local or regional cultural events for the country or region that interests you. I especially recommend finding authentic cuisine to try before moving.
Navigating Language Barriers
Language can be a bridge or a barrier. While English is widely spoken in many parts of the world, not all countries have English-speaking populations. Learning the local language, even at a basic level, can significantly enhance your experience, allowing you to connect with locals, understand cultural nuances, and navigate daily life more effectively. When learning a foreign language, consistency is the key. Practice, practice, practice. Many cultures around the world greatly value the effort displayed by first trying to communicate in the local language. Technology, smart phones, and apps can significantly reduce any language barrier.
Wrapping It Up
Living abroad and learning a new language was a life changing experience for me. My hope is that anyone who has the goal to travel or live abroad will achieve it. Don’t let the uncertainty or obstacles prevent you from trying it out if you really want to do it.
Here are some things to expect in Q2:
Taxes: With tax season in full swing, we are on the look out for last minute K-1s and missing 1099s. Once your return is complete we’ll start work on plans for 2024 so that we are proactive with tax efficiency and not playing catch up in Q4.
Portfolio updates: We will be looking at overall allocations, tax loss harvesting opportunities, and portfolio stress tests.
If you are interested in becoming a member of our Signature Client Program, click the link below to fill out an application.
Things We Are Watching
- Tech stocks continue to be a major component of the US market creating a unique type of concentration risk despite signs of slowing momentum to start the year.
- Home prices are starting to stall or drop in many cities.
- US Federal Reserve plans for three rate cuts in 2024 totaling 0.75%.
- Supply chain issues and higher oil and commodity prices due to geopolitical tensions.
Reminders
Need more help?
Contact us to inquire about professional recommendations, including CPAs.
When should you contact us outside of your annual meeting?
Anytime you have a build up of cash, change your job, make or consider a major purchase, relocate, or are concerned about the allocation of your portfolio.
Reach out anytime with questions or to schedule a meeting.
We look forward to hearing from you!
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