The New Year is always a good time to reflect on what’s important in life and what can make us happy. Carver Financial Services, Inc., was founded with the unique vision of making people’s lives better.

The old adage “Money can’t buy happiness” has been around for a long time. We might be inclined to believe this saying when we think about all the ultra-wealthy people who were chronically unhappy and destroyed their lives, craving and seeking something more meaningful.

But many people argue that money can buy happiness. So, which statement is true? As it turns out, there is some truth in both arguments. For example, a Harvard University Business School professor says financial stability helps people escape the everyday hassles of life and brings us more control.

The importance of relationships for happiness

Through decades of research, Harvard psychiatrist Dr. Robert Waldinger has been attempting to discover the factor that seems to make the biggest difference in people’s lives. Waldinger is a co-author of The Good Life: Lessons from the World’s Longest Scientific Study of Happiness.

He says relationships are the key to happiness. The stronger our relationships, the more likely we are to live happy, satisfying and overall healthier lives. In fact, the Harvard Study of Adult Development reveals that the strength of our connections with others can predict the health of both our bodies and our brains as we go through life.

There are many other factors that contribute to happiness as well, and what is important will vary from person to person. Here are a few elements that people often cite as being important for happiness, with strong relationships listed first:

1. Strong relationships: Having close, supportive relationships with friends and family can bring a sense of connection, belonging and purpose to our lives.
2. Personal growth and fulfillment: Pursuing activities that challenge us and allow us to learn and grow can bring a sense of accomplishment and fulfillment.
3. A sense of purpose: Having a sense of purpose — of meaning in life — can give us direction and motivation.
4. Financial stability: While money can’t buy happiness, having a stable financial foundation can remove a significant source of stress and allow us to focus on other areas of our lives.

How does wealth contribute to happiness?

People often view wealth as a means to an end, a way to provide for basic needs and wants. However, the role of money in our lives goes beyond just meeting our material needs. The old adage “Money can’t buy happiness” doesn’t hold up to the scrutiny of many recent research studies.

In fact, a 2021 Proceedings of the National Academy of Sciences (PNAS) study found that happiness actually increases as people’s income rises. The more money we make, the happier we become — or rather, we have the means to buy the things or experiences that make us happy. The study concluded that there is a direct connection between higher incomes, feeling better day-to-day and being more satisfied with life overall.

But one licensed mental health therapist, Billy Roberts, says money doesn’t directly contribute to our happiness. Instead, money can make us happy if it enables us to live by the values we’ve defined as important. Roberts says that for some people, value lies in power, while others find value in security or self-care. And people with different needs will likely have different financial needs. He concludes that a person’s salary should support a value-driven lifestyle.

Let’s look at some of the values people consider important and how they relate to financial well-being:

1. Financial stability and security: Having a stable financial foundation allows us to feel secure and confident in our ability to meet our needs and the needs of our loved ones. It can also give us the freedom to make choices and pursue opportunities that might not be available to us otherwise.
2. A sense of independence: Financial independence allows us to make our own decisions and not have to rely on others for financial support. It can also give us the freedom to pursue our passions and interests without the constraints of financial insecurity.
3. Enhanced overall well-being: Studies have shown that having a stable financial situation is linked to better mental and physical health. Financial stress can take a toll on our well-being, so having a healthy financial situation can help us feel more balanced and at ease. This is because higher income can provide access to a range of resources and opportunities that can promote good health, such as:

• Access to health care: Higher income can afford individuals and families access to quality healthcare services, including preventive care, diagnostic tests, and treatments.
• Nutritious food: Higher income can allow individuals and families to afford a varied and nutritious diet, which is important for maintaining good health.
• Stress reduction: Higher income can also reduce financial stress, which can have a positive effect on physical and mental health.
  • It’s important to note that while income can be a key factor in determining health outcomes, it is not the only factor. Other determinants of health include genetics, lifestyle and            environmental factors.

4. The ability to make a positive impact for others: Having financial resources can allow us to give back to our communities and make a positive difference in the world. Whether it’s through charitable donations, volunteering our time or supporting causes we care about, money can give us the means to make a positive impact, and that is a key to happiness for those who value doing so.

Keep your eyes on your Personal Vision

What brings you the most happiness? And how is that element of life related to money? What can you do to derive more happiness in 2023?

While money certainly isn’t everything, it can play a significant role in our lives and help us achieve our goals and aspirations. Ultimately, happiness is a complex and multifaceted emotion that depends on an individual’s values, goals and circumstances. It’s important to focus on what brings us joy and fulfillment and to make an effort to cultivate positive relationships and experiences in our lives.

At Carver Financial Services, we are focused on making lives better. We do this by financial and wealth planning and by providing experiences for our clients and community, ranging from travel to educational seminars. Most importantly, we use our proven Personal Vision Planning^® process to enable you to achieve your perfect vision of retirement. We are here to listen to what each client’s vision is for the future and then to help develop and implement a personalized plan for achieving that vision.

Please reach out, without cost or obligation, if we can answer questions or be of service as you develop your vision. You can learn about upcoming events on our website and also in some of our videos on timely and timeless topics that may be of interest to you.

We are here for you and look forward to helping you find what makes you happy and fulfilled in 2023 and beyond.

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Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc. was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.2 billion in assets for clients globally, as of December 2022. Randy and his team work with individuals who are in financial transition as a result of divorce, retirement or the sale of a business. You may reach Randy directly at randy.carver@raymondjames.com in the office at (440) 974-0808.

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The SECURE Act 2.0, which was signed into law on December 29, 2022, is intended to make retirement planning easier and more secure. This is great news because Americans are chronically behind in saving for retirement.

On average, Americans have around $141,542 saved up for retirement, according to the “How America Saves 2022” report compiled by Vanguard, an investment firm that represents more than 30 million investors. However, most people likely have much less. The median 401(k) balance is just $35,345.

The SECURE 2.0 Act attempts to accomplish three goals: Get people to save more for retirement, improve retirement rules and lower employer’ costs of setting up a retirement plan. Some provisions went into effect starting January 1, 2023, while others will go into effect in 2024, 2025 and even later.

How the SECURE Act 2.0 Boosts Retirement Saving

The SECURE Act 2.0 (Securing a Strong Retirement Act of 2022), is an expansion of the SECURE Act, which was signed into law in 2019. The acronym SECURE stands for “Setting Every Community Up for Retirement Enhancement.” The newer bill expands on the original legislation, with new provisions and more opportunities for individuals and employers to save for retirement. This new law aims to make it easier for individuals and employers to save for retirement, and it will provide more secure retirement options.

Most of the changes under the new rules will be phased in over the next few years; they do not take effect right away.

Here are just some of the many ways this legislation will make it easier to save money for retirement:

• Increases the amount that individuals can save in their retirement plans
• [LM1] Enables part-time employees to contribute to 401(k) plans to save for retirement
• Provides tax credits for small employers who offer retirement plans
• Raises the age for required minimum IRA distributions to 73 for 2023 and eventually to age 75
• Allows employers to make 401(k) matching contributions based on employees’ student loan payments
• Allows employees to open emergency savings accounts inside their 401(k) plans
• Enables people to make tax-free and penalty-free rollovers from 529 college savings plans to Roth IRAs, subject to certain limitations
• Allows SEP and Simple IRAs to accept Roth contributions, which are made with after-tax dollars
• Requires automatic enrollment in 401(k) and 403(b) plans.Now, any employer that starts a new plan must automatically enroll newly hired workers, when eligible, and start their contributions at 3 percent of their pay. They can opt out of making these contributions, but they no longer have to opt in. This will help increase the number of people who participate in these retirement savings plans through employers.

Be Aware of Provisions That Might Not Benefit You

As with many situations in life, there are some potential downsides to the SECURE Act 2.0 It is important for you to work with your team of fiduciary advisors to be aware of all the provisions of this legislation so you can avoid potential pitfalls.

For example, in the past, beneficiaries of individual retirement accounts (IRAs) could take distributions from the deceased’s plan over the course of their lives, but now, the new rules state that most non-spousal recipients must take all their distributions within ten years. That could create a real challenge, especially if the beneficiary is employed and those distributions bump him up into a higher tax bracket.

As Always, We Are Here for You!

The SECURE Act 2.0 contains 92 new provisions to promote savings, boost incentives for businesses and offer more flexibility to those saving for retirement.

We are here to guide you through the new rules and to ensure we leverage them to benefit you. Please work with your team of advisors to learn which of the provisions of the new SECURE Act could impact your situation, and how.

We develop comprehensive plans that allow our clients to enjoy their lives today while saving for the future. We can review your current retirement plan and investments for you without cost or obligation. It is never too early or too late to plan for your future. We have helped thousands of people enhance and maintain their lifestyles while simplifying their lives — and we look forward to helping you. Reach out to us any time we can be of service to you, your family or your friends.

 

• [LM1] Employers already offer matching contributions to employees.

Randy Carver, CRPC®, CDFA®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc. was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.2 billion in assets for clients globally, as of December 2022. Randy and his team work with individuals who are in financial transition as a result of divorce, retirement or the sale of a business. You may reach Randy directly at randy.carver@raymondjames.com in the office at (440) 974-0808.

The information contained in this post does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

Returns are based on the S&P 500 Total Return Index, an unmanaged, capitalization-weighted index that measures the performance of 500 large capitalization domestic stocks representing all major industries. Indices do not include fees or operating expenses and are not available for actual investment. The hypothetical performance calculations are shown for illustrative purposes only and are not meant to be representative of actual results while investing over the time periods shown. The hypothetical performance calculations are shown gross of fees. If fees were included, returns would be lower. Hypothetical performance returns reflect the reinvestment of all dividends. The hypothetical performance results have certain inherent limitations. Unlike an actual performance record, they do not reflect actual trading, liquidity constraints, fees and other costs.

Also, because the trades have not actually been executed, the results may have under- or overcompensated for the impact of certain market factors such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. Returns will fluctuate and an investment upon redemption may be worth more or less than its original value. Past performance is not indicative of future returns. An individual cannot invest directly in an index.

 

 

You may have heard of “the January Effect.” It refers to the belief that stock prices tend to rise more in January than in any other month.

Some traders believe the January Effect is a reliable “calendar effect” that can enable them to purchase stocks at a low price and then sell them after the January Effect has taken place and prices have increased.

How the Theory Came to Be

Investment broker Sidney Wachtel first noticed the “January Effect” in 1942. As he analyzed market returns dating back to 1925, he saw that stocks tended to see greater gains in January than in other months. Later on, a variety of academics confirmed this trend. This pattern has been observed in various stock markets around the world, including the United States.

There are many theories about why the January Effect occurs. Here are just four of many:

1. Some believe the January Effect is the result of smaller stocks outperforming larger stocks at the start of the year.
2. Another theory is that the rebalancing of portfolios and tax-loss selling at the end of the previous year can lead to increased demand for stocks when people rebuy in January.
3. A third theory is that some investors may be more optimistic about the market at the beginning of the year, which could contribute to the increase in stock prices.
4. Still another belief is that the January Effect is caused by people getting year-end bonuses and investing them in the market, or by end-of-year contributions to employee pensions and 401(k) plans.

Is It Fact or Fiction…Or Some of Both?

It appears that there have been some confirmed cases of the January Effect actually taking place. However, there is no clear consensus that the January Effect is a reliable hypothesis, and it certainly isn’t true on a consistent basis. Some studies have confirmed it has been documented primarily in the small-cap world, but the same studies found that the effect has decreased in magnitude over time. In January 2022, The Wall Street Journal reported that this theory applies to bonds more than to stocks.

Analysts at Investopedia ran some numbers to find out if there is any credence to the January Effect. They found that since the start of the 2009 market rally through January 2022, January months showed eight winners vs. six losers, a split of 57 percent to 43 percent. Given the strong rally from 2009, we might expect a higher number of January winners, but that is not the case.

You’ve probably heard the saying, “If it’s so easy, everyone would be doing it.” We believe that’s the case here. If, in fact, if there are always strong returns in January, then why isn’t everyone taking advantage of this phenomenon?

As with many “arbitrage opportunities,” the devil is in the details. (Arbitrage simply means taking advantage of price differences across markets — buying a cheaper version and then selling it at a higher price to make money.) Even when the January Effect does appear, it does not produce additional returns when accounting for risk. The same is true for other calendar-based trading strategies.

To put it simply, most anomalies, especially those based on relatively simple trading strategies, have been exploited over time. While the market is not perfectly efficient, given the evolution of digital and low-cost trading, abnormalities are easily arbitraged away — or never really existed in the first place. This has been increasingly the case for the January Effect.

In our view, the January Effect is mostly fiction, with an occasional instance of truth — just enough to make people believe it’s a given!

Focus Instead on Your Family and Your Personal Goals

As always, and as we’ve maintained over the past 30 years, we do not believe markets can be timed — especially with very short-term trading strategies. There’s a lack of evidence, especially modern evidence, to suggest that retail investors can benefit from short-term trading around the January Effect or any other time.

We believe this time of year is better spent on many other, more important aspects of life, including spending time with friends and family, rather than looking at your portfolio. If you insist on looking at your portfolio, we encourage you to focus on the long term and to judge your success by your ability to do what you want today and in the future.

Regardless of what happens in any given month, there’s plenty of evidence to suggest that buying and holding great companies over the long term is one of the most effective ways to achieve your financial goals. We are here to review and update your planning and portfolio, adjust your asset allocation, minimize tax implications and take advantage of market volatility for you.

As always, we are here for you…

________

Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Randy has more than 32 years of experience in the financial services business. Carver Financial Services, Inc,. was established in 1990 and is one of the largest independent financial services offices in the country, managing $2.2 billion in assets for clients globally, as of December 2021. Randy and his team work with individuals who are in financial transition as a result of divorce, retirement or the sale of a business. You may reach Randy at randy.carver@raymondjames.com.

The information contained in this post does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

Returns are based on the S&P 500 Total Return Index, an unmanaged, capitalization-weighted index that measures the performance of 500 large capitalization domestic stocks representing all major industries. Indices do not include fees or operating expenses and are not available for actual investment. The hypothetical performance calculations are shown for illustrative purposes only and are not meant to be representative of actual results while investing over the time periods shown. The hypothetical performance calculations are shown gross of fees. If fees were included, returns would be lower. Hypothetical performance returns reflect the reinvestment of all dividends. The hypothetical performance results have certain inherent limitations. Unlike an actual performance record, they do not reflect actual trading, liquidity constraints, fees and other costs.

Also, because the trades have not actually been executed, the results may have under- or overcompensated for the impact of certain market factors such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. Returns will fluctuate and an investment upon redemption may be worth more or less than its original value. Past performance is not indicative of future returns. An individual cannot invest directly in an index.