It’s no secret that 2022 was challenging for both the stock and bond markets. Stocks ended the year down 18%*, while bonds were down 13%**. How did we do in 2022? Thanks to our compliance group, all we can say here is that our strategy of investing in low-cost, diversified strategies that tilt toward small, value, more profitable stocks meaningfully outperformed the S&P500 index in 2022. 

As much as I would like to pat our firm on the back, you know our refrain: one year is essentially meaningless when it comes to investing. Due to the volatility and randomness of markets, any strategy can outperform or underperform in any given year. Our strategy certainly does not outperform every year and can even underperform several years in a row. To have real confidence in an investment strategy’s reliability, investors must look at how it performs over decades, not just years.

To see how we measure up over the long haul, we go back as far as we can, looking at the investments we recommended each year (and own ourselves) to see how our philosophy has held up over time. Our favorite chart compares the value of a hypothetical $1 invested in the year 2000 to 2022. Some of you may be familiar with Paul Harvey’s famous line regarding “the rest of the story.” Shoot me a note at zenz@hillinvestmentgroup.com for the details and the rest of the returns story. We can share how our recommended equity strategy has performed over time and the magnitude of the benefit of taking the long view.

If you have been a client for a while, you have likely seen the benefit of a long-term, evidence-based strategy show up in your portfolio.  If you’re not a client, ask yourself why.  Then pick up the phone and call us. You can schedule a call with me anytime here.  

As most of us were celebrating the holiday season, a significant piece of legislation passed that, in one way or another, impacted every person reading this. We’ve tried to boil down the 100+ pages to these highlights:

Required Minimum Distributions: The age at which required minimum distributions (RMDs) begin was pushed back to age 73 for individuals born between 1951-1959 and age 75 for those born after 1960, allowing for additional tax deferrals for many.

529 Plan Changes: Beginning in 2024, some individuals can move money from a 529 plan directly to a Roth IRA. This can be incredibly impactful if you set up a 529 years ago and the beneficiary finished college (or didn’t attend college) without completely exhausting the funds.

Retirement Plan Changes: Beginning in 2025, catch-up contributions will be indexed to inflation, ultimately allowing for more significant retirement vehicle savings. Additionally, matching contributions from employers can now be made to Roth accounts.                                                                                    

Student Loan Debt: Starting in 2024, employers can “match” employee student loan payments by contributing to a retirement account for the employee.

Please get in touch with us if you’d like to discuss any of the above information and see how it may impact your specific situation.

Hill Investment Group is a registered investment adviser. Registration of an Investment Advisor does not imply any level of skill or training. This information is educational and does not intend to make an offer for the sale of any specific securities, investments, or strategies. Investments involve risk and, past performance is not indicative of future performance. Consult with a qualified financial adviser before implementing any investment strategy.

If you are a Hill Investment Group client, you’re used to our team managing and reviewing your investments and allocation regularly. If you don’t work with us yet, let me ask you when the last time you had a fresh set of eyes review your investment portfolio was?  If it’s been more than 5 years, then it’s time for an objective check-up.  

Why? Too many investors are overpaying for underperforming investments. Or people are heavily concentrated in just a few companies. Or they’ve never rebalanced and are taking on more risk than they originally intended. 

Recently, we talked to one family paying over 2.5% annually on a mutual fund.  By repositioning to a less expensive and more globally diversified ETF, we lowered their fees by 2%. That means they save $20,000 a year in fees for every $1 million invested!    

The best part of a check-up?  It’s complimentary. And you get the eyes and attention of our 3X engineer, Harvard MBA, former Dimensional portfolio manager, CIO Matt Zenz analyzing your holdings and providing transparency into your investments. What’s stopping you? Click here to find a time to chat.