Things We Are Watching

• On September 17, the Federal Reserve, through a vote by the Federal Open Market Committee (FOMC), cut its target federal funds rate by 25 basis points to a range of 4.00–4.25%, marking its first rate cut of the year. The FOMC’s dot plot indicated a median expectation of two additional 25-basis-point cuts in 2025 and further reductions into 2026, bringing the projected funds rate down to roughly 3.25–3.50% by the end of that year.
   
• In the Treasury market, the yield on the 10-year U.S. note rose from about 4.06% on September 17 to around 4.15% by September 22, underscoring that long-term Treasury yields are set by market forces rather than by Federal Reserve decisions. We are watching whether the expected cuts to the federal funds rate eventually filter into the 10-year Treasury yield and, in turn, into lower mortgage rates.
   
• The S&P 500 continues its climb, reaching an all-time high of 6,693.75 on September 23, 2025. A notable difference from 2024 is the source of these gains. In 2024, nearly half of the S&P 500’s total return was driven by the “Magnificent 7” (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla). In 2025, about one-third of the index’s advance has come from these companies, with stronger contributions from industrials and other sectors. We are monitoring whether this shift signals a move away from Big Tech toward value-oriented sectors and greater diversification within the index.
   
• Gold remains a significant asset class in 2025. Its price has risen from $2,674.10 per troy ounce on December 31, 2024, to $3,747.90, representing a nearly 40% increase this year. The drivers of this surge remain uncertain but may include inflation concerns, a weaker U.S. dollar, rising U.S. deficits, or geopolitical instability. We are watching closely how gold responds to today’s release of the Personal Consumption Expenditures (PCE) index, as the data will influence market expectations for future Federal Reserve policy.

Deon Strickland, Ph.D.
is an Advisor at Scholar Financial Advising.

Ask An Associate Advisor

In this month’s edition, Derek Cheshire, CFP®, EA discusses the topic:
Planning for a Liquidity Event
 

A liquidity event, such as selling a business, cashing out equity, or receiving a large inheritance, can be life-changing. While these moments often bring complexity, with the right planning, you can simplify the process and confidently manage your newfound wealth.

Start Early
Most missteps occur because planning begins after the money is received. By starting early, you widen your options to manage taxes, control risk, clarify goals, and prepare your family. Before the funds arrive, engage your team: a financial planner, estate attorney, and tax professional.

Define Your Goals
The first step is identifying what you want your wealth to accomplish. Do you want to fund your children’s or grandchildren’s education, support charitable causes, build generational wealth or spend it all? Establishing your goals provides the foundation for every decision that follows.

Plan for Taxes
Taxes are often one of the biggest considerations. If you are selling a business, review options with your tax professional such as asset versus stock sales, installments, earn-outs, or equity rollovers. Your financial planner can model these scenarios and help determine which structure best aligns with your financial plan and long-term objectives.

Consider Charitable Giving
If philanthropy is important to you, a donor-advised fund or charitable trust may be a valuable tool. These strategies can reduce your tax burden in the year of your liquidity event while also allowing you to fulfill your charitable goals. Work with your financial planner, CPA, and estate attorney to ensure your giving plan integrates seamlessly with your overall estate strategy.

Protect Your Assets
Increased wealth often brings increased liability risk. Review your umbrella insurance coverage to make sure you are adequately protected against lawsuits and creditors. In some cases, family LLCs or irrevocable trusts can provide additional protection and serve as effective estate planning tools.

Align Your Investment Strategy
A major liquidity event also calls for a portfolio review. Align your assets with your risk tolerance and long-term goals for the funds.

Some individuals emphasize preservation, ensuring their wealth lasts a lifetime. Others, with higher risk tolerance, see this as an opportunity to build generational wealth through growth-focused investing. Whatever your approach, a diversified portfolio can balance risk, growth, liquidity, and cash flow needs.

Prepare the Next Generation
If you plan to leave a large inheritance, preparing your heirs is just as important as preparing your portfolio. Share your values and intentions with beneficiaries, and consider making gifts during your lifetime. These gifts can be especially impactful while your children are still building their own wealth, and they help develop financial literacy and responsibility ahead of a larger inheritance.

Final Thought
A liquidity event has the potential to transform your financial life. With proactive planning, clear goals, and the right team of advisors, you can turn this milestone into an opportunity to build lasting security and a meaningful legacy.

Derek Cheshire, CFP®, EA
is an Associate Financial Advisor at Scholar Financial Advising.