Steady Hands During All-Time Highs

Welcome to this month’s update! As we ease into fall, I want to take a few minutes to talk about the current market environment, some housekeeping tips to make your financial life easier, and a few opportunities we see on the horizon. Grab your favorite pumpkin spiced beverage and let’s go!

🌦 Market Conditions – What To Do Now

Have you checked your investment balance lately?  If so, you might be feeling pretty good. The stock market is at all time highs and continues to break new ground.  However, between interest rate changes, mixed earnings reports, and ongoing global uncertainty, we’ve seen plenty of headlines that can make investors uneasy. But rather than chasing every twist and turn, this is a good reminder of the value of financial stability at home.  So here are two things that you need to do right now and one thing I’m doing for you in the background.

The first one is to make sure that you are managing your emotions and that you aren’t setting future expectations too high.  We’ve had a few good years in the market and this year is turning out to be decent as well, but history is not a good predictor of the future.  Do not let your emotions become too attached to the current results.  Volatility in the other direction may still yet come.  

The second is to examine your cash reserves for the next downturn.  If you don’t yet have six months of living expenses set aside in cash, with the markets doing so well, now is an excellent time to make that a priority. Why?

• Peace of mind: No matter what markets do, you’ll know you’re covered for the unexpected.

• Flexibility: Having cash reserves allows you to make smart long-term investment decisions without feeling pressured to sell at the wrong time.

• Rates are still attractive: Even with the Fed’s recent rate cut, cash accounts are yielding much better than they did a few years ago.

• Selling hurts less right now:  With the markets performing well lately, if you need to sell your investments to raise some cash, it’s not a bad idea to capture some of those gains.

  
  

If your emergency fund is light, let’s work together to build it up over the next few months. Think of it as strengthening your financial “immune system” before cold and flu season hits.

On my side, your investments have been rebalanced as stocks continue to rise.  Earlier this year, stocks were bought during the downturn in March and April.  Now, as stocks make new highs, some of the growth has been trimmed to ensure we aren’t taking on too much risk.  This is not me saying that this is the top of the market and that we will go down from here.  We will continue to participate in the gains if the stock market continues to grow.  It is simply a part of the portfolio risk management strategy to help you reach your long-term financial goals at your specific risk level.  

💵 Cash Account Update and What’s the Right Amount?

Speaking of cash… the Federal Reserve recently lowered interest rates, which affects savings accounts and money markets across the country.

Our Cash Account rate is now 3.7%, which is significantly higher than the national average of 0.40%. Altruist also sent an email about this, but I wanted to make sure you saw it.  While it’s a little lower than before, the good news is:

• Yields are still much stronger than they were just a few years back.

• Cash remains a smart part of a diversified portfolio, especially for those building emergency reserves.

  
  

If you’ve been keeping too much idle in checking accounts that pay next to nothing, this could be a good time to optimize. I generally recommend having only 1-2 months of your expenses in your checking account.  

If you need some additional incentive to make your cash work harder, Altruist is currently giving an additional 0.30% for the first 3 months on new accounts.  This brings the interest rate to 4.0%.  This offer is good until November 11, 2025.  

Let’s make your cash work harder (without taking on extra risk).

However, it is possible to have too much cash. Generally, having 2 years of monthly expenses in total cash reserves is sufficient to ride out any unexpected expenses or prolonged market downturns.  This need is further decreased if you have reliable sources of income coming in such as Social Security or pensions.  Talk to us if you are fortunate enough to have this “problem”.  

💸 Roth Conversions Before Year-End

In a previous newsletter, I highlighted the fact that individuals aged 65 and older will each receive an additional $6,000 tax deduction ($12,000 for couples) from 2025-2028.  This creates a larger window of opportunity to realize taxes without an increased tax impact.  This means that if a Roth conversion is right for you, then we can convert even more these next few years. 

With rates slightly lower and markets off their highs, this may be a tax-savvy opportunity to consider partial Roth conversions.  We will be reaching out to you directly to work on this in October and November.

📑 Teamwork Makes Your Life Easier – Authority to Share

Taxes and investments go hand-in-hand, and good communication between your advisors is key. If you work with an accountant or tax preparer, we recommend filling out an Authority to Share form.

This simple document gives us permission to share relevant financial information directly with your CPA. The benefits?

• Fewer back-and-forth emails during tax season.

• Reduced chance of missing deductions or planning opportunities.

• A smoother, more seamless client experience for you.

  
  

If you’d like us to set this up, just let us know — it takes only a few minutes.

🕒 Other Timely Topics to Consider

• Max out retirement plans: If you’re still working, consider contributing the maximum to your retirement plan before year-end. For 2025, that means:

• $23,500 standard contribution limit

  • $7,500 catch-up if you’re age 50 or older

  • an additional $11,250 if you’re between ages 60–63

• Year-end planning sneak peek: We’ll be reaching out this fall to schedule review meetings, so we can look at tax moves, portfolio risk, and 2026 goals well ahead of deadlines.

✨ Final Thoughts

September often feels like a “reset” month — kids back to school, routines back in order, and the final stretch of the year ahead. It’s the perfect time to check in on your finances, build up that cash cushion if needed, and position yourself for a strong finish to the year.

As always, we’re here to answer questions, strategize, or simply be a sounding board. Don’t hesitate to reach out — we love hearing from you.