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11.10.2023 by Annie Perley

November – A Time for Thanks

As the trees around you continue to shed their brightly colored leaves, and the ground beneath you begins to harden with anticipation of the first dusting of snow, you may be feeling a mix of stressful excitement for the holiday season. To-do lists, travel plans, shopping trips and yard cleanup may be filling up your free time. Try and take a few moments to add some gratitude to your day. Science of Gratitude

The Global Economy: It is easy to get wrapped up in the US Economy and forget that there is a larger world out there. We are not the only ones experiencing inflation, considering interest rate hikes or pauses and watching treasury yields. The Japanese yen, which is currently valued at a decades-low compared to the US dollar, may be setting the stage for the country to experience prolonged inflation. To combat the weakening yen, and continued inflation, the Bank of Japan recently purchased a large amount of its government debt to control the yield on the 10-year Japanese Government Bond, which hit 0.775%. That is the highest it has been since September 2013. Inflation in Japan has exceeded the Bank of Japan’s 2% target for 17 months and may result in a rate hike – sound familiar? How could this impact the US? Japan is the largest foreign holder of US Treasuries, at $1.1 trillion dollars. Treasury.gov Some believe that if Bank of Japan policy leads to higher yields and yen appreciation, we could experience increased market volatility, upward pressure on bond yields, and gains in Japanese stocks as capital returns to Japan, driven by the new strength of the yen. We will have to wait and see what happens. Yen-ever know! 😊 Schwab Asset Management/NYTimes - Bank of Japan Statement/CNBC - BOJ Increases Bond Purchase/Financial Times

Is Your Cash Working For You? The last year has been a challenging time for borrowers who have felt the pinch of high interest rates on their auto loans, mortgages and credit cards. On the flip side, however, we have seen a number of clients earn attractive bond yields, lock in high fixed rates on Treasuries and even compound their cash at high money market rates. Despite this attractive rate environment, some of you may still have cash sitting in a checking or savings account (or even under a mattress) that is doing little to nothing for you. You may want to research options to earn higher interest while there is still time. Please reach out to your local financial institution or financial advisor if you have questions. Not Too Late To Cash In

Financial Planning/Investment Strategy Corner:

RMD, QCD, and other EOY FYIs: “I’ll take ‘Fun with Acronyms for $400, Alex’!” All kidding aside, as we are nearing the end of the year (EOY) it is a good time to make sure that you have met or are planning to meet your Required Minimum Distribution (RMD), if applicable. If you are older than 70.5 and are charitably inclined, you may also be thinking of doing some Qualified Charitable Distributions (QCDs), which are distributions from your IRA that go directly to charities. These distributions not only meet your RMD requirement but do so tax free. If you have an Inherited IRA, you may or may not have to take an RMD as these rules have become more and more complex over the last few years. The penalty for not taking an RMD is lower than it used to be, but still a hefty 25% of the RMD amount. Year-end can be a busy time for everyone, so please reach out to us with your year-end intentions as soon as possible so that we can get the proper paperwork for you to sign.

November Notables:

‘Tis the Season Fun:

Dry Clean Only? Many of you enjoyed “Sweater Weather” in my previous newsletter – the link to the video clip had more clicks than any other newsletter item we’ve had in a while. What I found interesting was this piece in the Atlantic about how the state of American knitwear has really gone downhill over the years. Apparently, the phaseout of a key trade agreement in 2005, which limited textile imports and pushed the quality down to the lowest bidder with the cheapest labor and least regulations. Check the label for quality materials so you can experience sweater weather in style without the plastic aroma. The Atlantic - Your Sweaters Are Garbage Investopedia - Fiber Arrangement

Quote for your day: “Piglet noticed that even though he had a very small heart, it could hold a rather large amount of gratitude.” – A. A. Milne

Thank you for reading RSWA Financial Advisor Insights! We welcome feedback and please forward this to a friend! Be well, take care, and stay safe!

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