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You’ve Noticed The Market Has Been Bumpier

We are just over a month away from the tax filing deadline, April 15th. The vast majority of tax documents from Schwab will have been sent at this point. However, if you contributed to a retirement account (IRA, SEP-IRA, SIMPLE, etc.) for 2024, you will have to notify your CPA of the amount. More on this below. 

MARKET UPDATE

For those of you that have been watching (and I applaud those who have refrained), I don’t doubt you’ve noticed that the market has been bumpier than we’ve grown accustomed. 

Given the ever-present uncertainty of the future (in today’s case: looming tariff wars, continued investment in AI, sticky inflation, and so on) I do not know what the market has in store. What I do know, is at some point (there is virtually no way to know when) the value of mainstream equities will decline. With this in mind, a few friendly reminders: 

  1. The average intra-year decline (biggest market drop peak to trough in a given year) since 1980, is 14.1%. Year to date, the largest drop has been 5%. Per JPMorgan’s “Guide to the Markets, as of February 28, 2025.
  2. Yet, the S&P 500 has averaged an annual return of 12% over the same time period, with dividends reinvested. 

Downturns are frequent, should be expected, and are part and parcel of the equity investor’s experience. These downturns, for clients in the accumulation phase (i.e. the “saving” phase), are opportunities to buy shares of high-quality companies at cheaper prices. For clients in the distribution phase (i.e. retirement), we have planned for this. Your allocation, along with our strategy to fund your monthly withdrawals, is built to withstand sustained periods of market decline. We are in this for the long run.

For further insight and guidance, I recommend reading this month’s “Client’s Corner,” by Nick Murray. He is one of our favorite financial experts, and his article will be sent to you following this email. This month, he has a provocative challenge for all clients. I hope you enjoy. 

FRIENDLY REMINDERS

  • Roth and Traditional IRA Contributions – The deadline to contribute to a Traditional or Roth IRA for 2024 is April 15, 2025. Each individual may contribute a max of $7,000 with an additional $1,000 for those over the age of 50.
  • Tax Documents – As I mentioned, the majority of tax documents from Schwab should be posted. However, if you contributed to an IRA, SEP-IRA, or SIMPLE for 2024, you will need to let you CPA know the exact amount. Tax documents reporting these contributions (Form 5498) will not officially come out until May (given that contributions are allowed up until the April 15th deadline). If you did not take a withdrawal from your retirement account you will not receive a 1099. Please give us a call if you have any questions.
  • PWA Portal – Here is a link to your PWA portal login. This portal is your one stop shop to view your accounts, balances, and quarterly statements. If you are unable to login, please let us know and we will get you set up.

We’re always here to answer your questions or address your concerns. It is a privilege to serve you.  

On behalf of your PWA team,  

Brock Hedgecoke, CFP® 

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