Dougherty Dispatch: August in Review
Economic and Market Updates
August was a stable, rising month for markets with the S&P 500 up by 2.6%. Corporate earnings have shown great strength, with roughly 86% of S&P 500 companies beating expectations for their results through the second quarter of this year, including an excellent beat by NVIDIA Corporation.
This strength has also carried over to future earnings expectations, as analysts continue to raise their estimates for the S&P 500’s earnings during the third quarter of the year.
Currently, expectations are that we will see 23% growth in total earnings for S&P 500 companies compared to last year. Average earnings growth for the S&P 500 usually ranges from 5.5-7%, so this figure is truly exceptional.
There has also been a great deal of news covering indicators of what the federal reserve will do with interest rates and covering how the market has priced long-term bonds. Interest rates for bonds maturing in 10 or more years continue to reflect investor concerns surrounding inflation, government spending, and future monetary policy.
Despite this, we have not seen interest rates in the short-term rise significantly and the Federal Reserve has continued to hold policy rates steady so far.
For a more in-depth look at government spending and how it impacts inflation, our future interest rates, and the economy, reference our recent Special Dispatch on the topic.
Trump Accounts
Trump Accounts are a new form of tax-deferred retirement account created specifically for children under the age of 18.
Our firm has been helping families to take advantage of Trump Accounts where possible.
These accounts function much like a traditional IRA account for minors, and that Eligible U.S. citizen children born between January 1, 2025, and December 31, 2028, may receive a
one-time $1,000 contribution from the U.S. Treasury, subject to eligibility requirements and the required election.
These accounts can have up to $5,000 of additional contributions per year from outside sources including parents or other family members.
Parent’s employers can also potentially contribute up to $2,500 per year as a workplace benefit, so long as the total contributions to the account does not go above $5,000 each year.
These funds are locked until the beneficiary turns 18, after which the account is generally treated like a traditional IRA.
A parent, guardian, or other authorized individual can establish the account by submitting IRS Form 4547 and providing the required verification information.
For questions regarding this new form of retirement account, contact our firm and we will be happy to assist you.
Financial Path Update
We have been recently checking in with many of our families to make any necessary adjustments to their portfolios and financial plans.
This uses a document we call your “Financial Path Update,” which gives us a clear picture of your financial situation, identifies any necessary adjustments, and helps establish your path forward.
Our goal is to ensure that your financial path is clear, and to account for any life events ranging from welcoming a new young family member, fixing up the house, or planning an upcoming vacation.
Let us know either by calling our office or with a quick email response if you would like to schedule an appointment and have our office prepare a financial path update for you if we have not already.
Thank you for reading!
We love hearing how so many of you are enjoying your lives, and we are always honored to assist you in planning for a healthy financial future.
Warmest regards,
Dougherty Investment Advisors
A Tradition of Excellence
4048 Deltona Blvd | Spring Hill, FL 34606
