Servet Wealth Management

I wanted to share my letter to clients today: As we process the events of last night and what they mean for our country, I wanted to share some initial insights on how these changes could influence the markets and our approach to financial planning and portfolio management. I’ll continue refining my thoughts over time as we get more information, but here are some key points to consider in the meantime. Regardless of election outcomes, market reactions are expected, and our goal remains to maintain a balanced, measured perspective. Here’s a quick brief overview of how certain areas of the market are responding and what might drive their direction in the short term: 1. Small-Cap Stocks: We're seeing gains in small-cap companies, largely reflecting a renewed focus on domestic growth. Policies that prioritize “America First” can present challenges for companies heavily reliant on imports, which may face potential tax and tariff implications. 2. Energy Sector: Oil companies are currently experiencing positive momentum, possibly due to an anticipated focus on deregulation and increased U.S. oil production. In contrast, solar and renewable energy stocks are seeing declines, with market speculation around potential changes to the Inflation Reduction Act. 3. Bond Market: Bond prices have fallen slightly, reflecting inflationary concerns that could limit the Fed’s flexibility to reduce interest rates. This shift may impact both short-term and long-term rate expectations. 4. Tax and Estate Planning Implications: There will be renewed attention on the Tax Cuts and Jobs Act, which is set to expire at the end of next year. With more control over the process, there may be a stronger push for corporate tax cuts and adjustments in income tax policy. There could also be significant impacts not only from a tax perspective but also for estate planning. We’ll keep an eye on these developments and how they might shape strategies around wealth management. As always, our approach is to remain thoughtful and steady, avoiding reactionary moves and focusing on long-term goals. Please feel free to reach out if you have any questions, and I’ll be in touch soon with more insights.

I’ve been working hard behind the scenes to revamp my website, and this week, I’m excited to share a few of my favorite pages with you. I always remind my clients that financial planning is a personal journey—there’s no one-size-fits-all solution, and every plan should be tailored to your unique goals and personality. With that in mind, I’d love to share one of my favorite pages, a sneak peak into who I am when I am not talking about financial planning!

I've always been intrigued by the "picks and shovels" business model. For those unfamiliar, the term originates from the gold rush era. While only a handful of miners struck it rich, the ones who consistently profited were those who supplied the essential tools—like picks and shovels—to the miners. The utilities sector is up 27% ytd vs the SP500 of 22%. This graph is a really interesting way to look at how AI has changed even the most boring sectors. 26% of power consumed in Virginia is from data centers. Have you heard of any other "picks and shovels" businesses? (this is not an endorsement to go out and buy utility stocks as there are a few factors that have lead to their outperformance, but just an observation)

Sports and money are always going to be fascinating to me. Ja'marr Chase just bought a $50M insurance policy on himself and here is why that is smart: Here are the high-level details first: - He was offered $140M over 4 year extension. This would mean at $35M per year, he was to be the highest-paid WR next to Justin Jefferson - The offer included $90M in guarantees - Ja'maar did not like the way the guarantees were structured as he was essentially only guaranteed his signing bonus with the rest of the guarantees not coming until 2027, which, in football is a long way to go. NFL teams can cut a player at any time, just as you typically have an "at will" clause in your own employment agreements. - Bengals typically do not negotiate during the season, which means if he wants to play, he could be risking all that money in the future if he gets hurt this year. So he buys a $50,000,000 injury policy on himself so that he can continue to play and negotiate his payday next year. If Ja'maar cannot play due to injury or his injury affects certain parts of his future contract, his contract value would likely be worth less. He also paid a LOT of money for that insurance coverage, but it is very small compared to what he is going to earn if he either collects on the insurance or gets his huge contract next season. I think about this in simpler terms for highly paid employees RSUs and paydays in the future. While we aren't thinking about injury the same way, disability policies can protect against our future ability to earn an income. If you are injured or disabled (long term sickness is included), what is the likelihood that your current employer will keep you on payroll? What happens to all those RSUs you thought you would be getting? Ya, they go away if you aren't there. A disability policy can work to guarantee certain incomes in the future. Some employers offer limited disability policies so it's always important to understand those benefits, especially with benefit enrollment season coming to many companies over the next few months. If you want to know how your disability policy works, drop a note in the comment section and we can review it together.

"If you had 10 million dollars, what would you do in retirement?" I asked that question to my new clients recently as they are approaching retirement and we have had a few conversations. This one question though made the response different. Prior, they answered with uncertainty saying things like travel more and spend time with their kids and grandkids. But nothing concrete. This time, they answered with: We would have a home in Europe where we would summer and we would spend the remainder of the year close to our family. No hesitation. So what changed? Their perceived confidence in how much money they needed to what they thought they had. When we completed our financial plan, we found that they could actually do all the things they wanted and didn't even need 10 million. They had the assets, it just meant being more thoughtful on where the money was being spent. Being intentional with their goals and having a plan was the biggest difference in being excited about approaching retirement and being nervous about not having a fulfilling one.

I used to think you needed to have a reason or a goal to save money; Buy a home Buy a car Go on Vacation Retire Now I believe the reason to save money is to have ultimate flexibility over your time and options; Ability to pay for a large healthcare need Ability to retire early Ability to walk away from a job you don't like Ability to start a business Ability to buy a 2nd home Ability to support a loved one Ability to do whatever you want, whenever you want

"Doing well with money has little to do with how smart you are and a lot to do with how you behave." One of the first paragraphs of Morgan Housel's book The Psychology of Money and one of the best. Great book if you can get ahold of it. I happened to listen to my audiobook copy for free on the Libby app, which I think is appropriate given the topic of the book. Anyone else use Libby also? What are you reading/listening to that should be next on my list?

We are coming up on the season where facts are skewed and politicians will say anything to make you worried about the economy and the stock market. I think this chart is a good reminder that stocks will largely trade with their earnings expectation (profits) over the next 12 months.

Know your time frame and you'll know your risk.

🦞 Age is Just a Number: Meet the 104-Year-Old 'Lobster Lady' 🚤 Virginia Oliver, Maine's maritime marvel, just renewed her commercial lobster license at 104 years old. Why? Because retirement isn't in her vocabulary! Picture this: A centenarian rising at 3 AM, donning lipstick and earrings, to catch lobsters thrice a week. That's Virginia's life, and she wouldn't have it any other way. Her secret? "You've gotta keep living, you gotta keep working." Virginia's story isn't just about lobsters. It's about passion, purpose, and shattering age stereotypes. As we plan for our futures, perhaps we should ask: What's our equivalent of Virginia's lobster boat? Source: https://lnkd.in/g2zjDrHB