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Carver Financial Services named to Forbes’ 2024 Best-In-State List of Top Wealth Management Teams

January 12, 2024 – Carver Financial Services was named to Forbes “Best-In-State Wealth Management Teams” for the state of Ohio. There were a total of 10,144 team nominations received. Carver Financial Services ranked #10 out of 167 in the state of Ohio. This is the second year that Carver Financial Services has been included on this prestigious list of top wealth management teams.   

While founder and President of Carver Financial Services Inc. has received numerous awards personally, he commented on the team recognition.

“I believe that our team is the reason for our continued success.  It’s an honor, and gratifying, that our entire team has been recognized by Forbes as part of this exclusive list of Best In State Wealth Management Teams’, commented Carver. He went on to say, “We are honored that Forbes has recognized the exceptional service and commitment that each member of our team provides to our clients and community”.

The 2024 Forbes ranking of America’s Top Wealth Management Teams Best-In-State, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone and in-person due diligence interviews, and quantitative data. This ranking is based upon the period from 3/31/2022 to 3/31/2023 and was released on 01/9/2024. Advisor teams that are considered must have one advisor with a minimum of seven years of experience, have been in existence as a team for at least one year, have at least 5 team members, and have been nominated by their firm. The algorithm weights factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Out of approximately 10,000 team nominations, 4,100 advisor teams received the award based on thresholds. This ranking is not indicative of an advisor’s future performance, is not an endorsement, and may not be representative of individual clients’ experience. Neither Raymond James nor any of its Financial Advisors or RIA firms pay a fee in exchange for this award/rating. Raymond James is not affiliated with Forbes or Shook Research, LLC. Please see https://www.forbes.com/lists/wealth-management-teams-best-in-state/ for more info.

What’s Really Important?

 

The New Year is often a time of reflection and goal setting. As we start 2024, we are being inundated with information, the pace of life and of change continues to accelerate and life seems to be more complicated than ever. 

In a world constantly driven by ambition, success and the pursuit of wealth, it’s easy to get lost in the mirage of material riches. Money undeniably holds power and enables a certain level of comfort and security. Yet beneath the surface, there lies a deeper truth: the essence of life transcends just the accumulation of wealth. Our firm is focused on helping people live their best lives — not just accumulate wealth. 

Wealth provides access to opportunities, comforts and a sense of stability. It’s the means to fulfill desires, experience new things and provide for oneself and loved ones. A correlation has been shown between net worth and health. However, pursuing wealth as the sole objective often leads to a tunnel vision that blinds us from the richness of life’s other facets. 

A study conducted jointly by Princeton University and the University of Pennsylvania and published in 2023 found that, on average, higher incomes are associated with ever-increasing levels of happiness. However, the research team found that within that overall trend, an unhappy cohort in each income group shows a sharp rise in happiness up to $100,000 annually and then plateaus. 

The researchers concluded that for most people, higher incomes are associated with greater happiness. The exception is people who are financially well-off but unhappy. In other words, if someone is miserable, more money won’t help. For the least happy group, happiness rises with income until an annual income of $100,000 and then shows no further increase as income grows. For those in the middle range of emotional well-being, happiness increases linearly with income, and for the happiest group, the association actually accelerates above $100,000. 

I have worked in the financial services industry for more than 35 years, with a focus on making people’s lives better. Over these decades, I have seen that in general, when people have a level of wealth that enables them to be free from worry about their cost of living, it creates peace of mind. Beyond a certain level of wealth, however, it’s clear that the happiest people are not the ones with the most material possessions or money.  

True fulfillment emerges from the richness of experiences, relationships, personal growth and the contribution we make to the world. 

  1. Experiences Over Possessions

The memories we create, the experiences we cherish and the moments that take our breath away weave  the true tapestry of our lives. While possessions can bring some joy, what really matters are the experiences that remain with us, and often who we share the experiences with.  Travel, learning, hobbies and adventures offer a wealth of memories and personal growth. 

This is why we started hosting client trips and fun events each year. Our goal is to help people have unique experiences and see new places.  We are building a community of people so that clients meet new friends and enjoy experiences they haven’t had before. You can see full list of upcoming trips and events on our website. 

  1. Relationships and Connections

The depth and quality of our relationships often define our happiness and well-being. The time we spend nurturing friendships, fostering family bonds and building connections within our communities creates a sense of belonging and purpose. These relationships serve as pillars of support during challenging times and amplify our joy during moments of celebration. 

At Carver Financial, we help connect people every chance we get, from Travel Buddies to the parties and trips just mentioned. You can read about the upcoming events on our website, and I am always happy to discuss these with you. 

  1. Personal Growth and Fulfillment

Life’s journey is a canvas for self-improvement and growth. Personal development, pursuing passions and exploring new interests contribute to a sense of fulfillment that transcends just monetary gains. Achieving goals, overcoming obstacles and discovering your true potential add a sense of fulfillment that money alone can’t replicate. 

It’s never too early or too late to acquire new hobbies, interests, or friends.  This is one of the reasons we host unique events and experiences.  

  1. Contributing to a Greater Good

The act of giving, whether through time, resources or expertise, carries immense value. Making a positive impact on the lives of others and contributing to causes larger than oneself creates a profound sense of purpose and fulfillment. The joy derived from helping others and making a difference in the world extends far beyond the boundaries of personal wealth. 

We could not fulfill our firm’s core value of making people’s lives better without the support of our clients. Four initiatives we have launched and maintained to contribute to the greater good are: 

  • In 1990, we launched our initial food drive. Thirty-three years later, the initiative has provided more than 400,000 meals to families in need. 
  • In 1997, we founded the Annual Tim Groves Memorial Charity Golf Event. To date, the event has raised more than $400,000 for local charities, with a focus on helping match those who need bone marrow transplants with donors. 
  • In 2013, we began an initiative called Carver Cares to highlight and support local charitable organizations. The goals are to raise awareness about the services available to the community and to help support the organizations monetarily. At selected events throughout the year, local organizations will provide a brief overview of their mission and services. Our company matches any donations to the highlighted organization — up to $4,000 — made in the month following the event. 
  • In 2023, we launched the New Beginning Initiative. The previous year, I had reflected on the fact that donating food can and has made a difference, yet we were treating only the symptom, not the root cause of hunger or homelessness. The question was, how to do we fix this? The answer was the New Beginning Initiative. 

The New Beginning Initiative is focused on permanently eliminating hunger and homelessness in Lake Country by helping individuals who want to help themselves. This effort focuses on those who want to work rather than giving handouts. This initiative is here to help those individuals work; earn an income to support themselves and their families; and provide dignity, independence and financial freedom. In turn, employment increases in our county. It benefits all of us with better property values, a more robust community and a higher tax base. 

  1. Health and Well-Being

A priceless asset often taken for granted is health — both physical and mental. No amount of wealth can guarantee good health. Investing in self-care, nurturing mental well-being and maintaining a healthy lifestyle are key components of a fulfilling life. Even though a correlation has been shown between better health and net worth in general, there is no guarantee that more wealth will lead to a longer life or better health. Ultimately, it is up to the individual to pursue a healthy lifestyle. 

For most wealth serves as a facilitator rather than the ultimate goal. The pursuit of wealth should ideally align with the pursuit of a life well-lived — one brimming with experiences, meaningful relationships, personal growth, contributions to society and a focus on well-being. This is not easy — if it were, everyone would be happy. 

Life’s true essence lies in finding balance between financial stability and the richness derived from non-material aspects. It’s about appreciating the intangible wealth that surrounds us — the laughter shared, the lessons learned, the love received, and the lives touched. 

Our firm was founded with the idea of making lives better. Our mission involves far more than simply financial planning or growing wealth. We seek to help build a strong, vibrant, well-connected community and enhance each person’s life with experiences, relationships and planning based on their personal vision and values. 

So, as we look forward to the year ahead and navigate an increasingly complex world, let’s remember that while wealth has its place, it’s the richness of life’s other treasures that truly defines the essence of our journey. My team and I wish you all the best for a healthy, happy and fulfilling 2024 and life. Please reach out any time we may be of service in helping you achieve your personal goals or vision and focusing on what’s important.

Any opinions are those of Randy Carver and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we do not provide tax or legal advice. You should discuss tax or legal matters with the appropriate professional.

2023 Year in Review

The primary vision for Carver Financial Services, Inc. is to have an enduring firm that will serve to make the lives of our team, our clients, and our community better for generations to come. Take a look at 2023 to see our milestones and achievements during this extraordinary year.

How “Fair” Is the U.S. Tax System?

 

There continues to be ongoing debate about how fairly the U.S. tax system taxes individuals based on their income. One of the most hotly debated issues is how much tax the top 1 to 10 percent of America’s income earners should pay. This is something that we have written about for more than a decade. Moreover, we have discussed the counterintuitive, yet historically proven, idea that reducing the top marginal tax rates increases government revenue. It can also shift the burden of tax from lower- and middle-income citizens to the highest earners.

According to the Tax Foundation, in 2017, the top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent. The top 1 percent share of federal individual income taxes rose to 38.5 percent, from to 37.3 percent in 2016. In contrast, the top 1 percent of all taxpayers (taxpayers with adjusted gross income of $515,371 and above) earned 21.0 percent of all AGI in 2017 and paid 38.5 percent of all federal income taxes. In 2017, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined.

The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent). The top 1 percent of taxpayers paid a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent).

As the country faces a mounting national debt it is important to grow the overall economy and also increase tax revenues. The debate is how to do this – yet we have seen that by reducing the highest tax brackets both can be achieved.

Our progressive tax system taxes people at different rates based on their income; and adjusts the annual tax brackets each year to account for inflation. Your taxable income and filing status determine which rate applies to you.

Typically, the income thresholds that determine the tax brackets are adjusted each year to reflect the rate of inflation. The purpose behind these changing levels is that they can help prevent taxpayers from ending up in a higher tax bracket as their cost of living rises, and they can lower taxes for people whose compensation has not kept up with inflation.

However, the U.S. federal tax rates will remain the same until 2025 as a result of the Tax Cuts and Jobs Act of 2017. In 2023 and 2024, there are seven federal income tax rates: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent.

Different Types of Taxes

The U.S. government collects many different types of taxes as sources of revenue. Individual income taxes are the largest source of tax revenues, representing more than half (54 percent) of total annual receipts. Income taxes are levies on wages and salaries, income from investments and other income.

The issue of tax “fairness” can be confusing because the taxes that Americans pay differ at various points in the income distribution. For example, affluent Americans pay a larger share of their income in individual income taxes, corporate taxes and estate taxes than lower-income groups do. In contrast, lower-income groups owe a greater portion of their earnings for payroll and excise taxes than those who earn more money. In fact, taxpayers whose incomes are in the bottom 80 percent of all incomes pay, on average, more in payroll taxes than they do in income taxes.

Because of the U.S. system of tax benefits and transfers, such as taxpayer-funded programs like Medicaid and public housing assistance, the lowest-earning Americans actually receive more from the government than they pay in income taxes, according to a recent analysis of tax data from the Tax Foundation.

The Laffer Curve: A Counterintuitive Paradox

Sometimes, when the conversation turns to making sure the top 1 to 10 percent pay “their fair share,” people argue that the solution is to increase the marginal tax rates. However, that’s not true. Ironically, and somewhat counterintuitively, increasing the marginal tax rates will lower the effective amount the government collects. This phenomenon is illustrated by the Laffer Curve.

The Laffer Curve is a theory that supply-side economist Arthur Laffer (who is from Youngstown) developed in 1974 to show the relationship between tax rates and the amount of tax revenue collected by governments. The curve is used to illustrate Laffer’s argument that sometimes, cutting tax rates can increase total tax revenue. The Laffer Curve was used as a basis for tax cuts in the 1980s, with apparent success. However, some people criticized the theory on the basis of its simplistic assumptions and on the economic grounds that increasing government revenue might not always be optimal.

Economic activity generally responds to tax changes. If you increase the tax on cigarettes, for example, some people will smoke less, while others will shift to smoking illegal, untaxed cigarettes. Income taxes also trigger a response. If you increase the tax rate on wages and salaries, some people will work less. (Some will also work more to recoup lost after-tax income, but evidence suggests that the disincentive effect dominates.) Similarly, if you increase tax rates on returns to saving and investing — such as through interest, dividends and capital gains — some people will save and invest less. (Here, too, some people may save more to maintain the same after-tax savings, but evidence suggests that the disincentive effect, though small, still dominates.)

In many cases, lowering taxes can actually increase government revenues. If new businesses, new investments and new hiring are spurred by the prospects of better after-tax returns, the taxes paid by these new or growing businesses and employees can more than make up for the lower rates of taxation.

The Effective Tax Rate vs. the Marginal Tax Rate

Misunderstandings about two different types of tax rates — the effective tax rate vs. the marginal tax rate — often create confusion in discussions about taxes.

A taxpayer’s average tax rate, or effective tax rate, is the share of income that he or she pays in taxes. In contrast, a taxpayer’s marginal tax rate is the tax rate imposed on his or her last dollar of income.

Taxpayers’ effective tax rates are usually much lower than their marginal rates. People who confuse the two can end up thinking that taxes are much higher than they actually are. There is a big difference between these two rates. In fact, it has been the case that by cutting income tax rates for the top 1 percent of income earners, tax revenues go up, and these folks pay more tax.

According to the Tax Foundation, the top federal income tax rate was 91 percent in 1950 and 1951 and also between 1954 and 1959. However, the top 1 percent paid an effective tax of only 16.9 percent. In 2019, the top marginal rate was 37 percent, yet the effective tax rate was 26.8 percent.

Politics Drive Tax Rates

Intuitively, it makes sense that if you raise tax rates, tax revenue will go up and that if you raise tax rates on the wealthiest Americans, they will pay a larger share of the income tax. But it doesn’t work that way. In fact, policies meant to help lower- and middle-income Americans often end up hurting them. This is not an economic debate; the facts stand for themselves. This is simply and, unfortunately, politics. Never before have we seen such extremes proposed as we are seeing now.

Yet the debate continues about raising tax rates in the face of mounting government deficits. History objectively shows us the impact of lowering tax rates. Thus, any debate about their efficacy is purely political.

Some of today’s issues — such as health-care reform, Social Security and immigration — are often difficult to quantify objectively because we have not had experience with proposed changes. On the other hand, we do have objective experience with income tax cuts and their impact.

The Historical Impact of Tax Cuts

Tax cuts have historically shifted the tax burden from middle-income people to the wealthiest Americans, while creating jobs and increasing government revenue. Critics, often with the best of intentions, have said that extending tax cuts and further reducing income taxes will benefit the rich over the poor and will lead to more deficit spending. This simply is not the case.

The only reason any informed person would propose raising income tax rates is to gain votes or to intentionally hurt lower- and middle-income Americans.

Bernie Sanders proposed a 97 percent tax on the wealthiest Americans in his Corporate Accountability Plan. Elizabeth Warren has proposed a 70 percent marginal tax rate. The Biden/Harris tax plan would increase the effective tax on those making more than $400,000.

But the reality is that today, the wealthiest Americans are paying the bulk of all income tax already.

Critics of Tax Cuts Ignore History

The public is told that the country cannot afford tax cuts due to government spending on entitlements, defense and all the other important things the government does. While cutting taxes in the face of mounting deficits may seem counterintuitive, critics are ignoring history. Past income tax rate cuts have increased government revenues, boosted our economy, created jobs and shifted the tax burden away from low-income families to the middle- and upper-income folks.

There is no doubt that we will have to deal with excessive government spending to balance the federal budget. Independent of that, extending and expanding the recent tax cuts, while closing loopholes, is a proven way to increase government revenue and benefit all Americans. This strategy shifts the tax burden to those who can most afford it.

The Economic Recovery Act of 1981, also known as the Reagan tax cuts, was the biggest reduction in U.S. taxes of the past 70 years — possibly even the biggest ever. These cuts were then followed by a series of tax increases that, if you add them all together, were almost as big as, or even bigger than, the 1981 cuts, depending on the measure you use.

A Bloomberg analyst believes the 1981 tax law was a positive, if perhaps overdone, change in direction. He says, “Cutting the top tax rate to 50 percent from 70 percent may well have increased the amount of money coming into the Treasury, as incentives to avoid taxes were reduced and incentives to make lots of money increased.” He adds, “The positive economic and behavioral effects of the 1981 cuts recouped about a third of the revenue losses. So it also took spending cuts and tax increases to move the federal budget into surplus territory.”

TEFRA Increased Taxes and Revenue

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) is a law passed in 1982 that was designed to reduce the federal budget deficit through a combination of tax increases, spending cuts and tax reform measures. The legislation reversed some elements of the Economic Recovery Tax Act of 1981 (ERTA), also known as the Kemp-Roth Act. Both pieces of legislation were passed early in the presidency of Ronald Reagan.

Republican Senator Robert Dole, who was the chair of the Senate Finance Committee at that time, was the legislation’s architect. TEFRA was meant to raise more revenue by closing loopholes in the tax system, introducing stricter compliance and tax-collection measures, increasing excise taxes on cigarettes and telephone services and increasing corporate taxes.

TEFRA was the biggest tax increase in U.S. history, when adjusted for inflation, and quickly followed the Economic Recovery Tax Act (ERTA) of 1981, which, as mentioned, was the biggest tax cut in U.S. history. Following the passage of ERTA, the United States fell into the second half of a “double-dip” recession, and the U.S. budget deficit soared.

According to a paper published in 2006 by the U.S. Department of the Treasury, most of the bills enacted before 1982 were tax cuts. During that period, inflation was relatively high, and the individual income tax parameters were not indexed for inflation. Without indexation, inflation can push taxpayers into higher tax brackets without any increase in real income. This phenomenon is called “bracket creep,” and it increases federal revenue as a percentage of GDP without any legislative action. In fact, when inflation is relatively high and bracket creep is particularly intense, as it was through much of the 1970s, policymakers have to cut taxes repeatedly to maintain the desired level of taxes.

TEFRA was created in response to the recession at the time. The legislation faced fierce opposition from those who felt that taxes should be increased, not decreased, to offset government shortfalls. Sounds like a familiar debate, doesn’t it?

Revenue Increases Typically Come from the Wealthiest Americans

The highest-income Americans generally pay more of their income in taxes than the rest of the population. The top one-fifth of households earn 54 percent of all income and pay 69 percent of federal taxes, and the top 1 percent earn 16 percent of the income and pay 25 percent of all federal taxes, according to the Congressional Budget Office (CBO).

Across-the-board tax cuts were implemented in the 1920s as the Mellon tax cuts and in the 1960s as the Kennedy tax cuts. In both cases, the reduction of high marginal tax rates actually increased tax payments by “the rich.” It also increased their share of total individual income taxes paid. According to the IRS, in 1981, the top 1 percent of income earners paid 17.6 percent of all personal income taxes. But by 1988, their share had jumped to 27.5 percent—after the top tax rate had been cut from 69.13 percent in 1981 to 28 percent in 1988.

Reagan’s detractors point to his lack of sensitivity for social issues and the legacy of his deficit spending — yet his legacy is a positive one. In the seven years following the Reagan tax cuts, almost 20 million well-paying jobs were created. Moreover, the tax burden was shifted from low- and middle-income families.

According to the Joint Economic Committee for the US Congress report (1996), the share of the income tax burden borne by the top 10 percent of taxpayers increased from 48 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.

The middle class also benefited — “middle class” being defined as those between the 50th percentile and the 95th percentile for income. The income tax burden of the middle class declined from 57.5 percent in 1981 to 48.7 percent in 1988. This 8.8 percentage point decline in middle-class tax burden is entirely accounted for by the increase borne by the top 1 percent.

If the so-called experts would channel all the intellectual energy, they are using to debate historically established facts into other subjective issues, and not promoting partisan rhetoric, all Americans would benefit.

Our team focuses on net returns for clients — what you make after income taxes and expenses. We take a very proactive approach for tax-smart investing to minimize the income taxes our clients are subject to. Every financial move you make has potential tax implications. We are here to guide you as you plan for the future to ensure that you are not paying more than your fair share of taxes.

________

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 $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

Any opinions are those of Randy Carver and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we do not provide tax or legal advice. You should discuss tax or legal matters with the appropriate professional.

The Big 3

Don’t Let a Century of the “Big Three” Issues Take Your Focus Off Your Personal Vision

We continue to hear about ‘breaking news regarding the war in Israel, economic problems at home and the latest pandemic. The reality is that the world has grappled with this trio of seemingly intractable challenges for more than 100 years. These three issues have persisted through generations, shaping the global landscape, and leaving their indelible mark on the course of history. Despite the passage of time and numerous attempts to address them, they continue to be significant concerns and the media continues to make it seem like they are something new. They are not.

While we cannot predict the future, understanding the historical roots and enduring nature of these issues can help us develop more effective strategies to mitigate their impact and ignore the media hype. We must not let these ongoing issues distract us from our long-term vision for the future. Our team is here to help you navigate your financial journey with these challenges.

War in the Middle East: A Century of Turmoil

The Middle East has been a hotspot for conflict for more than a thousand years. The roots of the more recent conflicts can be traced back to the dissolution of the Ottoman Empire after World War I. The division of the region into new states, often with arbitrary borders drawn by colonial powers, laid the foundation for decades of instability. The Arab Israeli conflict, the Iranian Revolution, the Gulf Wars and the ongoing Syrian Civil War are just a few examples of the enduring conflicts in the region.

The Arab–Israeli War of 1948 broke out when five Arab nations invaded territory in the former Palestinian mandate immediately following the announcement of the independence of the state of Israel on May 14, 1948. The Iran–Iraq war from 1980 to 1988, the more recent Syrian civil war that began in 2011 and the ongoing struggle against extremist ideologies are just a few examples of the relentless turmoil.

One reason for the persistence of Middle Eastern conflicts is the strategic importance of the region. Its vast oil reserves have made it a battleground for global superpowers, with the United States, Russia and China vying for influence. Religious and sectarian divisions, coupled with nationalist aspirations, have further fueled these conflicts. The Middle East remains a complex web of geopolitical rivalries and ethnic tensions, making it challenging to find lasting solutions.

Economic Troubles at Home: A Centenary of Financial Flux

Economic troubles at home have been a constant backdrop to the past century, with periods of economic prosperity often followed by downturns. The Great Depression of the 1930s, the 2007–09 global financial crisis and, more recently, the economic fallout from the COVID-19 pandemic are testament to this enduring issue. Factors like inflation, unemployment and fiscal policy continue to influence the economic landscape.

In more recent times, the global financial crisis of 2008 and the challenges brought on by the COVID-19 pandemic have been stark reminders of our vulnerability to economic shocks.

Adapting to changing economic conditions requires investors to take a proactive approach — to not only maintain wealth but also to take advantage of short-term uncertainty and volatility to and grow their assets. Again, it’s important to stick with the plan your advice team has tailored for you; regardless of what’s happening in the economy or media. We utilize a combination of current income and cash for near term needs to ride out volatile periods with longer term growth investments to combat inflation. The overall allocation is specifically tailored to your personal needs, situation, and vision.

Pandemics: A Century of Health Crises

Pandemics have also been a recurring threat for more than a century. Various plagues, the Spanish flu of 1918, the HIV/AIDS pandemic, SARS, Ebola and the COVID-19 pandemic that began in 2019 are just some of the infectious diseases that have periodically surged to the forefront of global consciousness.

While advances in medicine and global cooperation have improved our ability to respond to pandemics, these health crises continue to disrupt societies and economies worldwide. The emergence of new infectious diseases, the interconnectedness of the modern world and challenges in coordinating a global response all contribute to the ongoing threat of pandemics. As long as human populations are vulnerable to infectious diseases, pandemics will remain a significant concern. As with the other issues this can present an opportunity for savvy investors.

The Endurance of the Big Three Issues

The “big three” — war in the Middle East, economic troubles at home and pandemics —are deeply interwoven with the complexities of our modern world, making them difficult to resolve completely. Despite concerted efforts to address them, they continue to shape the course of history and pose ongoing threats to global stability.

In the age of 24/7 news coverage and digital media, sensationalism often takes precedence over objective reporting. The media has an undeniable influence on public perception, and when it comes to covering the “big three” issues, it’s not uncommon for sensationalism to drive fear and panic. While these issues are not new, the way the media present them can contribute to public unease and anxiety. This also creates an opportunity.

A buy-and-hold strategy can result in quicker loss recuperation, than trying to time markets. By being proactive you may even benefit from the volatility.

For example if you had invested $10,000 in the S&P 500 on January 1, 2008. You might recall that in 2008, the S&P 500 lost 37 percent of its value. At the end of 2008, your investment would have been worth $6,300. If you had kept your money where it was, you would have recouped your losses by 2012, even if you made no additions to your original stock market investment. If you had chosen instead to reinvest that $6,300 in a savings account with a 3 percent interest rate, compounded monthly, it would have taken 16 years for you to recoup your losses and cross that $10,000 threshold. Had you been tactical you could have enjoyed tax benefits and grown you assets via the portfolio versus trying to time the market.

Our planning seeks to protect you from short-term volatility while guiding you to benefit from the uncertainty. We take a proactive approach based on your vision rather than market timing.

As we reflect on a century marked by the persistent challenges of war, economic instability, and pandemics, it is clear that our ability to adapt and innovate has been our greatest strength. The media would have us believe that “this time it’s different” and that the latest crisis is “breaking news” — but it’s not.

Those who panic will ultimately hurt themselves financially, and possibly emotionally, while those who have a plan and are steadfast can benefit. We are here for you and are always happy to answer any questions or concerns. Times of uncertainty can present an opportunity for longer term investors. We believe that is true today as it has been over the last 100 years.

We will continue to offer updates via video and our live events. You can access more information on these via our web site https://carverfinancialservices.com/.

Please reach out to me personally, or to any of our team, with questions or if we can otherwise be of service. 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. 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 $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

The information contained in this blog 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 opinions are those of Carver Financial Services and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. Past performance does not guarantee future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary.

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 $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

Any opinions are those of Randy Carver and not necessarily those of Raymond James.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

Navigating a New Financial Landscape

 

Our panelists will discuss the challenges and opportunities that lie ahead and provide practical advice on how to navigate this complex landscape. Whether you are a seasoned investor or just starting out, this event hopes to provide valuable insights and actionable advice to help you achieve your financial goals. Don’t miss out on this opportunity to learn from some of the best in the business and connect with like-minded individuals who share your passion for financial success.

 

 

The Big 3

Throughout history, we have witnessed countless wars in the Middle East, pandemics, and economic uncertainties. The media always tells us this time it’s different – generally it’s not.

Building a Legacy of Financial Services

Since founding our firm in 1990, life continues to be more complex and the pace of change continues to accelerate. We remain dedicated to helping our clients simplify their lives and enhance their lifestyle. The mission of helping people lead their best life possible remains our guiding value.

Breaking Noise

 

Following economic news, and trying to make sense of the big picture, can be a challenge. While some indicators are rising, others are decreasing, some pundits are calling for inflation, and others a recession.  There’s always “breaking news” or perhaps we should call it breaking noise.

As usual, some of the information you receive may be a little confusing, incomplete, or misleading. The following discussion offers clarification and our insight into recent developments in the news.

The Cap Weighted and Equal Weighted S&P 500

As of September 25th,, the cap-weighted S&P 500 was up 12.5 percent year to date, yet the S&P 500 equal weight index was up just 1 percent. Many stocks are below their 52-week high or are negative for the year.

“Wait a minute,” you may be thinking. “How could a market index be up when most of its constituents are down? ”The S&P 500 is weighted by market capitalization. Essentially, the bigger a company is, the more room it takes up in the index. As a result, these indexes can get top-heavy. Currently, the top seven stocks in the S&P cap S&P-weighted index account for approximately 30 percent of its value.

The top seven stocks — Microsoft, Apple, Alphabet, Amazon, Tesla, Meta Platforms and NVIDIA — have seen significant gains after a bleak 2022, and the collective gains have kept the S&P 500 in positive territory in 2023. When the holdings of the S&P are equally weighted, the returns are flat.

Because most portfolios are not overweighted in the “magnificent seven,” the equal-weighted index is the better benchmark to look at. The equal-weighted version of the S&P 500 Index was launched in December 1989.  While the Equal Weight index is lagging the cap-weighted in 2023 it has it has outperformed the cap-weighted S&P 500 Index by an annualized 100 basis points per year since its inception. It’s important to note that it is not possible to invest directly in an index. When comparing a portfolio return to an index, we must consider expense and other factors.  Moreover, a portfolio may be managed for tax efficiency and can provide a higher net after-tax return for you, even if the total return pre-tax is lower than the index.

Ultimately, we believe that the most important benchmark for clients is meeting their individual needs — not outperforming a random index.

The Fed’s Rate Hikes

Another looming question is whether the Federal Reserve is finished raising rates.

The Fed took a pause on interest-rate increases in September. There are economic signs to support the proposition that the Fed’s rate-hike cycle has done its job — slowing the economy enough to cool inflation —and can be ended. Whether the central bank still sees the need for another increase is a key question as we head into the final months of 2023 and the beginning of 2024.

As always, we are not market forecasters or timers — nor do we believe that you need to be, either, to meet your overall goals. We do believe you should have enough cash for any anticipated expenses in the next 6 to 12 months so you can ride out any market volatility. Currently, many money market funds are yielding 5.25 percent or greater, and we are seeing FDIC-insured CDs that are one year or less that are paying 5.6 to 5.75 percent. If you have excess cash in the bank, you may want to consider these vehicles.

The Opportunity in Volatility

Financial markets kicked off 2023 with renewed volatility amid persistent inflation concerns, expectations for Fed rate hikes and escalating geopolitical tensions over Russia and Ukraine. The pace of change and overall media negativity has never been greater. Although this constant onslaught of negative news can be annoying, we believe it presents an opportunity for you. Market corrections can cause a lot of anxiety, and we expect continued volatility in the months and years ahead.

Heraclitus, a Greek philosopher, is quoted as saying, “Change is the only constant in life.” That is true of the markets as well. Because we know volatility is a given, we can leverage it to buy into potential opportunities that might have been out of reach at other times.

Consider that financial markets have historically seen a significant pullback at some point during most years while still delivering positive returns over the full year. For example, in 2018, the S&P 500 saw a market correction of more than 10 percent in the first quarter of the year and again in the fourth quarter, followed by a rebound of more than 13 percent in the first quarter of 2019.

Pullbacks have historically been followed by rebounds. Since 1974, the S&P 500 has risen an average of more than 8 percent one month after a market correction bottom and more than 24 percent one year later. These market corrections may be more common than you might think. Over the seven years since March 2015, there have been five corrections and one bear market. A bear market is a pullback of at least a 20 percent decline from a recent high.

It’s important to remember that market pullbacks are not uncommon — and occur in most years. These market corrections can be healthy in resetting stock valuations and investor expectations within a longer-term market advance. Having a long-term, strategic asset-allocation plan and sticking to that plan through periods of market volatility can help keep you on the right track. We design your portfolio to provide broad diversification across up to 20 asset classes, including defensive asset classes such as cash that can help you withstand these inevitable periods of volatility. This broad diversification, along with a proactive rebalancing process, can help provide you with the discipline to remain calm during periods of short-term volatility while helping you achieve longer-term objectives.

The goal is to meet your needs and risk profile — not to beat a random index. So, while the economy, the markets and the world itself continue to change at dizzying speeds, we focus on your personal vision.

We Are Different

Thousands of firms sell investments and/or offer financial planning from an investment-centric view. We are not one of them. We view investments and planning merely as tools for truly helping you live your best life possible.   We are not a financial planning organization; we are a personal vision organization.  We are always here to provide advice on anything that matters to you and that is consistent with your personal goals and vision; whether it is about a trip to take, a tax strategy or an investment. The more we understand what’s important to you, the better we can design and implement a plan that will help you get there — regardless of what’s happening in the media, markets or economy.

Please reach out to me personally, or to any of our team, with questions, concerns or if we can otherwise be of service.

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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 $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

The information contained in this blog 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 opinions are those of Carver Financial Services and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. Past performance does not guarantee future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary.