Managing wealth in 2024: advice from the pros

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By Dan Sears

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The start of a new year is an ideal time for resolutions, renewal and resetting, even from a financial perspective.

Many private wealth managers begin the year with client reviews: taking a deep dive into their clients’ portfolios, considering what areas might be fine-tuned or even drastically changed in light of prevailing market conditions, mortgage rates, Consumer Price Index and other relevant economic indicators.


Start with a goal

JENNIFER MARKS: ‘You can continue to make a lot of money in the S&P owning USA equities in 2024, and we’re going to see strengths in the equity market across the U.S. in this calendar year.’

When considering 2024 market trends, first decide what you’re trying to accomplish, factoring in retirement, new business opportunities, moving or other major happenings in your life, advises Jennifer Marks, managing director, head of Long Island for J.P. Morgan Private Bank in Greenvale.

“Those may impact how you think about market and your allocation and the risk you can take,” Marks said.

Since 2023 was a big year for the equity market, increasing over 24 percent from 2022, many people may think they “missed out” on market value.

“Our view is that you can continue to make a lot of money in the S&P owning USA equities in 2024, and we’re going to see strengths in the equity market across the U.S. in this calendar year,” said Marks, adding that two areas of continuous strong growth worth exploring are AI technology and healthcare, particularly GLP-1 weight loss drugs.

Those with fixed income and cash benefited last year from the Federal Reserve raising rates. This year, the Fed is projected to cut rates instead.

“A really big theme for us is to lock in that yield by investing in high quality bonds that pay you a fixed coupon and don’t have a maturity date for a number of years,” Marks said.

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Investing in commercial real estate, either multifamily, industrial, or warehouses are other areas she says are on the move.

“That’s an area of the market that we’re excited about, and that coincides with interest rates becoming more attractive as they go down,” Marks shared.

She also notes that barring new regulation, the $13.6 million exemption for estate and gift taxes for couples is expected to plummet to about $5 million at the end of 2025, so people should focus on long-term estate planning.

“For our clients that are able to make gifts during their lifetime, which means move assets off their balance sheet into a trust, we are focused on them utilizing that exemption before it runs out,” Marks said.


Lock in interest rates

JOYCE STREITHORST: ‘People are now able to get over 5 percent on money markets and CDs, and as the Fed does lower rates, those short-term rates are going
to go down.’

In an election year, you can expect more market volatility, notes Joyce Streithorst, principal and wealth advisor at Frisch Financial Group in Melville.

“The market likes certainty, and we certainly are not going to have certainty,” said Streithorst, who advises keeping a diversified equity portfolio, allocating portions for stocks, fixed income and high yield interest money markets.

Currently, Streithorst said, short-term rates are higher than long term, representing an inverse yield curve, “which means people are now able to get over 5 percent on money markets and CDs, and as the Fed does lower rates, those short term rates are going to go down.”

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Now would also be a good time to move cash and money market funds into longer- term fixed income, such as bonds, to lock in those interest rates for a longer period.

As mortgage rates are slated to come down, it’s also prudent to invest in a home and if the rates drop even lower, refinance at that time.

Noting the growing prevalence of scamming, Streithorst suggests checking that your credit is in good standing through, which covers all three credit reporting agencies: Equifax, TransUnion and Experian.

“It’s just a good thing to monitor,” she said.

In case of an emergency or unforeseen circumstances, Streithorst advises keeping three to six months of available funds.


Run your household like a business

For Barry Shapiro, president and financial planner for Jericho-based Bshapiro Financial, keeping a year’s worth of income in the event of job loss or a sudden big home expense would be prudent.

When seeking businesses to invest in, Shapiro said, “you’re looking for things like strong earnings, free cash flow and low debt. Those principles are more important now than ever.”

If Congress doesn’t take action, the 2017 Tax Cuts and Jobs Act will sunset in 2026, which means people will revert back to higher tax brackets.

“Even though the Federal Reserve boosted interest rates on mortgages and loans, this is an ideal time to get your house in order before you have to pay more in income tax,” Shapiro said.

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When investing, avoid trends and don’t jump at “flavors of the month.” Look instead for strong companies with quality earnings and good cash flow.

“People need to check their risk tolerance and not have that fear of missing out,” said Shapiro, adding: “As long as you’re outperforming taxes and inflation, you win. You always want your money to have real purchasing power.”

Whether you’re engaged in growth investing (buying high, expecting stocks to go higher) or value investing (buying undervalued stocks), look at losses that will offset future gains and be mindful of the tax consequences of capital gains.

Practical advice Shapiro shares with all his clients:  Treat your household as though it were a business. Regularly document net household income versus fixed and discretionary expenditures to assess whether your household is cash-flow positive.

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