In The Hopes Of A "Soft Landing", There May Be A Crack In The Foundation
The future of the housing market is uncertain, and its resilience will be a crucial factor in the broader economic landscape.
By Chief Investment Officer Tom Kelly, CFA.
The housing market is often viewed as a cornerstone of financial stability. The home signifies a sanctuary, a place where one can relax, enjoy, live, and grow. In the 2008 housing crisis, we experienced how fragile the economy can be when the cornerstone is shaken. While global stock markets have broadly recovered since high inflation and fed rate hikes caused a recessionary scare last year, the housing market has continued to face seismic shifts that may put the chances of a so called “soft landing” on shaky grounds.[1]
In 2023, mortgage rates reached heights not seen in two decades, with the 30-year fixed rate mortgage average hitting a recent high of 7.31% in September.[2] At the same time, potential homebuyers found themselves in a daunting landscape with the number of homes for sale dwindling to 1.1 million as of August, with inventory over the last couple years reaching the lowest levels since 1982.[3] In stark contrast to the pre-pandemic era, there are now only around two-thirds as many homes available on the market.[3] With mortgage demand hitting a 26-year low in September, largely due to the scarcity of available housing inventory and little incentive to refinance, there doesn't appear to be much opportunity for those looking to make a move.[4]
Source: “30-Year Fixed Rate Mortgage Average in the United States”. Federal Reserve Bank of St. Louis, 1971-2023, fred.stlouisfed.org. See Important Disclosure Information.
But the challenges don't stop there. Rental prices have also seen a steady rise. The average rent for primary residences in U.S. cities remains 7.8% higher than a year ago as of August.[5] These elevated rental levels represent the most significant increases we've witnessed since the early 1980s.[5] Additionally, the Federal Reserve Bank of Atlanta estimates that the amount of income the median household needs to spend yearly in order to own a median priced home in the U.S. is 43.8% as of July, significantly higher than the 28.5% amount in December 2019.[6] While many homeowners are locked in to 3-4% mortgages, the next generation of buyers and families may be renting for a little while longer.
The various factors contributing to these unsettling trends in the housing and rental markets are multifaceted and complex. Markets tend not to like extremes, and the quest for stability and security in housing has become more elusive. The future of the housing market is uncertain, and its resilience will be a crucial factor in the broader economic landscape.
Important Disclosure Information & Sources:
[1] “SJS Weekly Market Update”. SJS Investment Services, sjsinvest.com.
[2] “30-Year Fixed Rate Mortgage Average in the United States”. Federal Reserve Bank of St. Louis, 1971-2023, fred.stlouisfed.org.
[3] “United States Total Housing Inventory”. Trading Economics, 1982-2023, tradingeconomics.com.
[4] “Mortgage Applications”. Mortgage News Daily, 1991-2023, mortgagenewsdaily.com.
[5] “Consumer Price Index for All Urban Consumers: Rent of Primary Residence in U.S. City Average”. Federal Reserve Bank of St. Louis, 1915-2023, fred.stlouisfed.org.
[6] “Home Ownership Affordability Monitor (HOAM)”. Federal Reserve Bank of Atlanta, 2023, atlantafed.org.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Statements contained in this article that are not statements of historical fact are intended to be and are forward looking statements. Forward looking statements include expressed expectations of future events and the assumptions on which the expressed expectations are based. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Hyperlinks to third-party information are provided as a convenience.
SJS Outlook: Q3 2023
The SJS Q3 2023 Outlook includes our insights on gifting and charitable contributions as well as U.S. real estate. We also look forward to Q4 2023.
SJS Investment Services Recognized In CNBC's 2023 FA 100 List
SJS Investment Services has been recognized in CNBC’s 2023 FA 100 list, an annual ranking of registered investment advisory (RIA) firms within the United States.
SJS Investment Services has been recognized in CNBC’s 2023 FA 100 list, an annual ranking of registered investment advisory (RIA) firms within the United States.[1]
“This recognition is affirming to our Team, and we attribute this to the faith, commitment, and loyalty that our clients have demonstrated to SJS over the last 28 years,” says SJS Founder & CEO Scott J. Savage.
CNBC enlisted data provider AccuPoint Solutions to assist with the ranking of registered investment advisors for the 2023 FA 100 list. The methodology consisted of first analyzing a variety of core data points from AccuPoint Solutions’ proprietary database of registered investment advisors. This analysis started with an initial list of 40,646 RIA firms from the Securities and Exchange Commission regulatory database. Through a process by CNBC and AccuPoint Solutions, the list was eventually cut to 812 RIAs with those firms meeting CNBC’s proprietary criteria. CNBC staff sent an email survey to all those firms that met the initial criteria to gather more details. The CNBC team verified that data with the SEC regulatory database. CNBC and AccuPoint also considered additional information including total assets under management (AUM), years in business, accounts under management, regulatory / compliance record, number of certified financial planners, number of employees, number of investment advisors registered with the firm, the ratio of investment advisors to total number of employees, percentage of discretionary assets under management, and number of states where the RIA is registered. AccuPoint once again applied CNBC’s proprietary weighted categories to further refine and rank the firms, ultimately creating the list of the top 100 firms. There is no fee to apply or to secure placement within the ranking. Additionally, an advisor’s appearance on this ranking does not constitute an individual endorsement by CNBC of any firm. Further methodology information can be found on the CNBC website.[1][2]
If you would like to learn more about how we work with families and organizations, please reach out to us. We are always here to listen and assist.
Important Disclosure Information & Sources:
[1] “FA 100: CNBC ranks the top-rated financial advisory firms of 2023”. CNBC.com Staff, 12-Sep-2023, cnbc.com.
[2] “Here’s how we determine the FA 100 ranking for 2023“. CNBC.com Staff, 12-Sep-2023, cnbc.com.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. Past performance is no guarantee of future results. There is no guarantee investment strategies will be successful.
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
International Samaritan: Walking Hand-In-Hand With Families In Garbage Dump Communities
International Samaritan is a 501(c)(3) nonprofit organization that is working to break the chains of poverty and improving lives, particularly within garbage dump communities worldwide.
An interview with Investment / Compliance Associate Bobby Adusumilli. This interview is part of our Stories of Giving & Achievement Series, highlighting community involvement efforts. If you are interested in learning more about International Samaritan, please visit their website.
Bobby, can you tell us about International Samaritan and their mission?
International Samaritan was started by a group of students and faculty from St. John’s Jesuit High School, which is where I went to high school. In the early 1990s, Father Don Vettese, S.J., helped to lead St. John’s students on annual service trips to Guatemala. These students saw the conditions of how people were living near the garbage dump in Guatemala, which was and still is where a lot of people live.
In contrast to landfills, garbage dumps are dangerous, poorly regulated areas, with trash spilling into the surrounding communities. These garbage dump communities are home to refugees, lepers, abuse victims, orphans, and other extraordinarily vulnerable groups. As a result, the average life expectancy in garbage dump communities is around 35 years old, and the majority of children drop out of school by seventh grade, often in order to work in the garbage dumps to provide for their families.[1]
The St. John’s students wanted to do something to help the people in these communities break the cycle of generational poverty, and Father Vettese challenged them to create a plan. Together in 1994, they created International Samaritan, which is a 501(c)(3) nonprofit organization that is working to break the chains of poverty and improving lives, particularly within garbage dump communities, where an estimated (probably significantly underestimated) 15 million people are confirmed to live worldwide. International Samaritan does this in a few primary ways, tailoring services to each community:
Holistic scholarships for students from preschool through college, helping to cover school fees, medical expenses, and other living expenses so that students don’t have to drop out of school.
Support schools so that they can operate efficiently and hire excellent staff.
Safe water and safe spaces for students, their families, and community members.
Build homes for families that don’t have them through volunteer work and contracting local businesses.
Strategic partnerships with local leaders to identify and serve community needs.
Originally focusing on Guatemala, International Samaritan now works within 7 communities / countries: Ethiopia, Guatemala, San Pedro Sula in Honduras, Tegucigalpa in Honduras, Jamaica, Kenya, and Uganda. Today, International Samaritan supports nearly 900 students through its scholarships and partnerships with schools.
2022 - Francisco Coll School in Guatemala
How did you get involved with International Samaritan?
International Samaritan hosts service immersion trips for high schools, universities, organizations, and other interested groups of people to experience the communities and volunteer while there.
In 2011, entering my senior year of high school, St. John’s organized a weeklong service immersion trip to Guatemala with International Samaritan. Along with over a dozen classmates, we spent a few days seeing the garbage dump community in Guatemala and volunteering at the Francisco Coll School, such as doing maintenance work and spending time with the students.
While the trip did have a service element, its biggest goal was educating us about the conditions and difficulties that people living in garbage dump communities face and demonstrating ways we could help. Particularly for us high school students growing up in the United States, it was shocking to see the conditions that these students - similar to us - had to grow up in, and how they continued to come to school every day with joy and ready to study. While seeing the conditions saddened us, it also made us want to help as well as have more gratitude for what we had back home.
2011 - A classmate and I with two young students from the Francisco Coll School
In 2022, I had the opportunity to travel back to Guatemala for a five-day trip with a group of people interested in becoming more involved with International Samaritan. We saw a lot of the same places that I had seen over a decade prior. Compared to what I remembered from 2011, International Samaritan had really improved their schools and expanded to serve ages from toddlers through high school students, with college age students receiving scholarships to attend local universities. For example, International Samaritan bought a building near the garbage dump which they converted to a Family Life Center to provide a safe space with good resources for students to come to before and after school to complete their schoolwork as well as relax. Additionally, I could tell the garbage dump community in Guatemala had improved, though there is still a lot more work to be done.
What probably most impressed me during this trip was seeing the care and enthusiasm of the program leaders, teachers, and other staff members. A lot of these caretakers live in the community, and they seem to really want to help these children succeed. We arrived at the end of the school year, and some of the teachers told us that they are sad for the upcoming break because they enjoy being with the students each day. To me, having educators who really care about the students gives the children a better chance of breaking the cycle of poverty.
2022 - Teachers, staff members, and group members at the Francisco Coll School
How can people get involved with and support International Samaritan?
Financial limitation is the number one reason why International Samaritan is not able to support more students. Unfortunately, International Samaritan has to turn away students each year. Since 2019, 100% of donations to International Samaritan go towards services in the developing nations, as all other overhead costs are covered by their endowment fund. If you are interested in financially supporting International Samaritan, you can visit intsam.org/donation-redirect.
If you are interested in attending a service immersion trip or participating in their Learn, Serve, Grow program, book clubs, or other projects, you can visit intsam.org/lsg-program. While I have learned a lot about International Samaritan through conversations with their team members as well as via their written materials and videos, actually seeing the Guatemala community and their work has made me feel strongly about how important their services are.
Finally, every October, International Samaritan organizes a global 5K, which you can participate in by visiting intsamglobal5k.com. You can run with your own small team wherever you are, or you can join a larger team. Additionally, some cities are organizing events for people to meet up and run together - for example, I am helping to organize a 5K run in the Toledo, Ohio area in early November, with more details to follow. This year, International Samaritan’s goal is to raise $150,000 in order to provide 50 students with scholarships.
I am grateful to know the International Samaritan team, and hope more people are able to learn about the amazing services that they are providing around the world!
2022 - International Samaritan 5K run with students in Guatemala
2011 - My classmates and I at the Francisco Coll School in Guatemala with Juan Carlos, who drove us around during the trip
2011 - Painting at the Francisco Coll School
2022 - Students at the Family Life Center in Guatemala
2022 - Watching a grade school graduation ceremony practice in Guatemala
Important Disclosure Information & Sources:
[1] “International Samaritan“. International Samaritan, intsam.org.
[2] “IntSam Global 5K”. International Samaritan, runsignup.com.
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
SJS Investment Services Recognized In Financial Advisor Magazine’s 2023 Registered Investment Advisor Ranking
SJS has been recognized in Financial Advisor Magazine’s 2023 Registered Investment Advisor (RIA) Ranking, an annual ranking of independent investment advisory firms within the United States.
SJS Investment Services has been recognized in Financial Advisor Magazine’s 2023 Registered Investment Advisor (RIA) Ranking, an annual ranking of independent investment advisory firms within the United States.[1]
“Recognition by one of the financial industry’s most respected publications is humbling, and simply reflective of the faith, commitment, and loyalty our clients have demonstrated in SJS over the last 28 years,” says SJS Founder & CEO Scott Savage.
Financial Advisor (FA) Magazine’s 2023 RIA Survey & Ranking is a ranking based on assets under management as of December 31, 2022. FA Magazine orders firms from largest to smallest, based on AUM reported by firms that voluntarily complete and submit FA Magazine’s survey by the given deadline. To be eligible for the ranking, firms must be independent registered investment advisors and file their own ADV statement with the SEC, and provide financial planning and related services to individual clients. The survey did not apply to hybrid RIAs and corporate RIAs. SJS completed the survey in April 2023 using data as of December 31, 2022. There is no fee to apply or to secure placement within the ranking. Additional information regarding the 2023 RIA Survey & Ranking can be found on the Financial Advisor Magazine website.[1][2]
If you would like to learn more about how we work with families and organizations, please reach out to us. We are always here to listen and assist.
Important Disclosure Information & Sources:
[1] “FA’s RIA Survey & Ranking 2023”. Financial Advisor Magazine, July/August 2023, fa-mag.com.
[2] “2023 RIA Survey & Ranking: Consolidation Crunch Hits Rate Reality”. Eric Rasmussen, 14-Jul-2023, fa-mag.com.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. Past performance is no guarantee of future results. There is no guarantee investment strategies will be successful.
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
Empowering Our Team To Build Up Our Community
The SJS Mission is to empower you to build a better life. That extends to our teammates, clients, and community members.
By Founder & CEO Scott J. Savage.
At SJS, one of our treasured values is Giving Back. When you have a great team (and we do!), it means you have the privilege of not only taking care of your clients, but also the communities where we all live, work, and play.
Time, talent, and treasure are the three ingredients, along with desire, that can drive tremendous change. Many companies choose one cause to support, and that’s great! At SJS, we have chosen one cause too: our local communities. That allows us to focus on a variety of organizations and projects that are near and dear to our team, our families, and our clients.
One such organization is Metroparks Toledo. Just last month on the east side of downtown Toledo along the shoreline of the Maumee River, we dedicated the 19th park in our diverse and award-winning park system, the Glass City Metropark. This dedication was the first major step in building the Glass City Riverwalk, a brand new 300-acre contiguous park that will connect five miles of trails and one-of-a-kind amenities on both sides of the Maumee River, connecting the east and west sides of the central city like never before and turning it into the best riverfront park in the country!
With the help of my fellow commissioners and neighborhood kids, I had the great privilege of "throwing the switch" on the transformational park in east Toledo (pictured below). In my 20 years of involvement as a volunteer for Metroparks Toledo, I can’t recall a more rewarding feeling! We are looking forward to the positive impact from this project on our local community for years to come.
Glass City Metropark Phase 2 Grand Opening. Photo: Metroparks Toledo.
SJS also has dozens of clients that are nonprofit organizations whose assets we manage. We advise them on topics of good governance and planning, guided by their clear Mission and inspired by their Vision that is grounded in their institutional Value system. In turn, these organizations can thrive and grow and be more effective and deliver bigger impact. We are proud and grateful for the relationships we’ve formed with these organizations over the years.
The SJS Mission is to empower you to build a better life. That extends to our teammates, clients, and community members. I have deep gratitude for my teammates at SJS who created the supportive culture that allows me and my fellow colleagues the opportunity to be part of improving our respective communities.
Important Disclosure Information:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
SJS Outlook: Q2 2023
The SJS Q2 2023 Outlook includes our insights on building up our local communities as well as market performance so far in 2023. We also share even more members of the SJS family and look forward to Q3 2023.
Unexpected Good News: Market Performance So Far In 2023
It’s important to recognize how difficult it is to predict what will happen in the short-term for investment markets, and how much margin for error there should be for any prediction.
By Chief Investment Officer Tom Kelly, CFA.
If you looked at economic and market forecasts at the beginning of the year, you may have expected a lot of volatility and negative returns in stock and bond markets for 2023. For example, the headline for J.P. Morgan’s 2023 Market Outlook is, "Stocks Set to Fall Near-Term as Economic Growth Slows".[1] Additionally, on the first page of UBS' 2023 US Equities Outlook, UBS writes, "With pressure on corporate profits for the next few quarters, equity markets could slip in the near term. However, the outlook should improve later in the year and into 2024."[2]
Contrary to these headlines, most global stock and bond markets are up to start 2023. While some markets (like U.S. bonds) are modestly positive based on their increased yields, others (such as U.S. stocks) are up significantly more than even we could have reasonably optimistically expected. We have experienced a lot of events to start 2023 (persisting core inflation, U.S. debt ceiling negotiations, the expansion of artificial intelligence, corporate job layoffs, etc.), and it would have been difficult for us to predict this market performance given these events. While it is easy to look back at the headlines from the beginning of 2023 and point toward their inaccuracies, it’s important to recognize how difficult it is to predict what will happen in the short-term for investment markets, and how much margin for error there should be for any prediction.
Source: Morningstar, as of June 30, 2023. The asset classes are represented by the following indices: U.S. Stocks - Russell 3000 Index (measures performance of the 3,000 largest U.S. companies representing roughly 96% of the investable U.S. stock market); International Stocks - MSCI All Country World Ex USA IMI Index (Gross Div.) (measures performance of approximately 99% of the global stock opportunity set outside of the U.S.); U.S. Bonds - Bloomberg U.S. Aggregate Bond Index (tracks performance of the U.S. investment-grade bond market); International Bonds - Bloomberg Global Aggregate Ex-USD Bond Index (Hedged To USD) (measures the performance of international investment grade bonds, with currency exposure hedged to the U.S. dollar); Global Real Estate - S&P Global REIT Index (Gross Div.) (tracks performance of publicly traded equity REITS globally). The index performance figures assume the reinvestment of all income, including dividends and capital gains. See Important Disclosure Information.
When it comes to investment markets, it’s easy to look back positively on the past and worry about the future. This is part of human nature, written about extensively through research on biases such as the availability bias (over-emphasizing news that is readily available to us) and negativity bias (focusing on negative aspects of a situation). This makes sense, because most people are more negatively impacted by losses than they are positively impacted by gains.[3] But we’re always here to help take the worry away!
Over the long-term, we expect positive returns from global stock, bond, and alternative markets. Positive returns will not occur every year, but over a long enough time period, we expect these asset classes to continue to have positive returns.[4] We don’t know what will happen for the rest of 2023 or even in the coming years, but we remain optimistic about investment returns over the long term for the future. Staying invested and remaining disciplined in your investment allocation is often the best way to avoid psychological pitfalls and achieve your desired outcomes.
Important Disclosure Information & Sources:
[1] “2023 Market Outlook: Stocks Set to Fall Near-Term as Economic Growth Slows”. J.P. Morgan, 05-Jan-2023, jpmorgan.com.
[2] “US equities 2023 outlook: From inflation to growth“. UBS, 16-Dec-2022, ubs.com.
[3] Thinking, Fast and Slow. Daniel Kahneman, 2011, Farrar, Straus and Giroux.
[4] "Historical Returns on Stocks, Bonds and Bills: 1928-2022". Aswath Damodaran, January 2023, stern.nyu.edu.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Statements contained in this report that are not statements of historical fact are intended to be and are forward looking statements. Forward looking statements include expressed expectations of future events and the assumptions on which the expressed expectations are based. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Indices are not available for direct investment. Index performance does not reflect the expenses associated with management of an actual portfolio. Index performance is measured in US dollars. The index performance figures assume the reinvestment of all income, including dividends and capital gains.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.
Hyperlinks to third-party information are provided as a convenience.
Leadership Toledo: Inspiring Community Involvement
Leadership Toledo is an organization that connects individuals with the community, engaging and involving them with initiatives that make the Toledo region a great place to live, work, and enjoy.
An interview with Investment / Compliance Associate Bobby Adusumilli, who recently completed the 2022-2023 Signature Program with Leadership Toledo. This interview is part of our Stories of Giving & Achievement Series, highlighting community involvement efforts. If you are interested in learning more about Leadership Toledo, please visit their website.
Bobby, can you tell us about Leadership Toledo and their mission?
Leadership Toledo is an organization that connects individuals with the community, engaging and involving them with initiatives that make the Toledo region a great place to live, work, and enjoy. Their mission is driven by four goals:[1]
Lead - Become a more confident leader
Connect - Become more connected to your community
Grow - Grow stronger in self-awareness
Serve - Identify service that is meaningful to you
Leadership Toledo offers various programs for both students and adults focused on getting more involved in the community. Their Youth Leadership Toledo for high school sophomores as well as their Signature Program for adults involve day-long sessions throughout the year focusing on different community involvement and leadership topics around the Toledo-area. The Youth in Philanthropy Encouraging Excellence (YIPEE) for high school Juniors and Seniors as well as the Spark program for adults aim to inspire philanthropic action. Leadership Toledo also hosts a Youth Conference and a Community Leadership Series.[1]
How did you get involved with the Signature Program? What did you do throughout the year?
A lot of people in the Toledo-area have been involved with Leadership Toledo in some way. My sister as well as a couple of my friends were in Youth Leadership Toledo when they were in high school. Additionally, my colleagues Andrew Schaetzke and Rachel Keesey were part of the Signature Program in the past. Because they enjoyed the program so much and met many people through the program, they encouraged me to apply for the 2022-2023 class.
With nearly 50 people in the program, we met as a large group once a month from August to June, with each day focusing on a particular topic:
August: Meet & greet
September: Opening retreat
October: Project selection
November: SIMSOC - Simulated society
December: Servant leadership
January: Health & human services
February: Criminal justice
March: Education
April: History & regional development
May: Cultural arts
June: Closing retreat
Additionally, each person was part of a small group (4-6 people) that worked on a project with a local non-profit organization. In my case, five of us worked with the Cherry Street Mission Ministries to develop employment training and work opportunities for guests of the organization.
2022-2023 Leadership Toledo Signature Program Cohort at the Opening Retreat at Oak Openings Preserve Metropark. Source: Leadership Toledo.
Did you have a favorite program day?
One of the great things about the Signature Program is that each month has a different focus, so I learned about a wide variety of topics. Even though I grew up in the Toledo-area, I was surprised at how little I knew about the city’s history and all the interesting things going on today.
While there were a lot of great days, I probably most enjoyed the Education Day. That morning, eight of us toured the Toledo Pre-Medical and Health Science Academy, which is a Toledo Public Schools (TPS) high school designed in partnership with ProMedica to help prepare students for careers in a medical profession while still fulfilling their general education requirements. The school is new, but it was very evident that the students have already learned a lot about medical-related topics. Two underclassmen led us through the tour, and we were very impressed by their communication skills and knowledge. This school seems like a good education path to keep students engaged, learning, and moving along to careers that they are looking forward to.
We spent that afternoon at Rogers High School, where we heard a panel of superintendents speak about their daily lives, successes, and challenges of their jobs. Each superintendent serves a different community, so hearing the variety of challenges and the solutions was fascinating to me. We also learned more about Connecting Kids to Meals, which offers after school and summer programs to provide hot, nutritious meals at no cost to kids in low-income and underserved areas throughout the entire year. This day further confirmed to me that there are really great organizations in Toledo serving children and education.
2022-2023 Leadership Toledo Signature Program Cohort at the Criminal Justice Day. Source: Leadership Toledo.
What was your project? How did it go, and what was the outcome?
Cherry Street Mission Ministries (CSMM) is a downtown Toledo-based organization committed to delivering solutions that will reverse the cycle of poverty for people in our communities through providing meals, temporary housing, working development training, and employment opportunities.[2] In order to further enhance their workforce development training and employment opportunities, CSMM is looking to create social enterprise intervention (SEI) businesses for their guests. Their first SEI business - a food truck - is expected to go live this year. Cherry Street Mission Ministries asked our five-person Leadership Toledo team to help come up with the idea and business plan for their second SEI business.
Our team met every few weeks to work on this project. We first discussed potential ideas for the specific business. Once we decided on the business idea, we put together a 14-page business plan covering the products, services, training curriculum, equipment, target market, marketing, organizational structure, potential revenue, expenses, key metrics, and milestones. We presented our business plan to the CSMM team, which they seem very enthusiastic about and feel that this is an SEI business that they could sustain. I don’t want to spoil their plans, but stay tuned to Cherry Street Mission Ministries for their next SEI business within the next year or so!
Team for the Cherry Street Mission project. Source: Cherry Street Mission Ministries.
How can the community get involved with Leadership Toledo?
Leadership Toledo has a variety of events for people around Toledo to attend. Their Community Leadership Series spotlights exceptional leaders and organizations within the greater Toledo region. Additionally, each Fall, Leadership Toledo has an Annual Breakfast where you can meet the team, students, adults, and alumni of the programs to learn more about the organization. I think the team at Leadership Toledo - Anna, Arika, Danielle, Elizabeth, and Nicole - is really spectacular, and it’s amazing to me how well they run the Signature Program; you can reach out to them via the website if you would like to learn more about Leadership Toledo.
I am really grateful to have been part of the 2022-2023 Signature Program. My hope is that one person from the SJS Team is able to participate in the Signature Program each year as a way to further connect us with and support the Toledo community.
2022-2023 Leadership Toledo Signature Program Cohort at the Closing Retreat. Source: Leadership Toledo.
Important Disclosure Information & Sources:
[1] “Leadership Toledo“. Leadership Toledo, leadershiptoledo.org.
[2] “Our Mission“. Cherry Street Mission Ministries, cherrystreetmission.org.
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
SJS 2022 Annual Report
The SJS Annual Report provides updates on the SJS Team, MarketPlus Investing®, SJS purpose, mission, & values, multi-family office services, and SJS community involvement.
Please click on the image below.
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SJS Outlook: Q1 2023
The SJS Q1 2023 Outlook includes our insights on planning for your legacy, tomorrow’s headlines today, how the SECURE 2.0 Act may impact your finances, and looking forward to Q2 2023.
Please click on the image below.
Suggested Reading
Your Legacy
If you are lying awake asking yourself in the quiet of the night, “What should we do with our wealth when we die?”, please read on because in this article you will find potential answers, next steps, and resources.
By Founder & CEO Scott J. Savage.
Estate Planning, Multi-Generational Planning, Legacy Planning, Gifting Strategies, and Philanthropy Planning. Have you checked these boxes yet in your financial plan? If you are lying awake asking yourself in the quiet of the night, “What should we do with our wealth when we die?”, please read on because in this article you will find potential answers, next steps, and resources.
It's natural to have this nagging question appear out of the blue and then fade for a time, only to resurface when you least expect it. Often it’s the part of the financial plan that you will “get to later.” With this article, my hope is that “later” turns into today once you see how approachable and meaningful this process can be. Here is some encouragement to get you started:
Be intentional – As you tackle the question of your legacy, take time to contemplate what is important to you and your family. Thinking in terms of purpose instead of people first is often very clarifying and exciting.
Create a legacy plan – The best answers to the question of legacy come in the form of a plan, not a single answer. You have options. Consider them and decide which ones are best for you. I believe in the saying, “Failing to plan is planning to fail.”
It’s not one-and-done – This can be a very freeing reality. The plan you create today does not have to be your forever plan. In fact, it likely will not be your forever plan. Revisit your plan every few years and adjust it as your life changes.
Procrastination is the enemy – Now that you know your plan can and will shift over time, it takes the pressure off of the need for life-long perfection. Waiting only makes the task loom larger. There’s peace of mind in knowing that you have set forth guidance for heirs and beneficiaries.
Benefit society sooner than later – Why wait until you’re gone to put your wealth to use in a meaningful cause? Many people take great joy in seeing the impact their wealth is making while they are living. Well-conceived and well-executed philanthropic advice can make an astounding impact right now as well as later.
Prepare for the transfer of wealth – Ideally, the capital that you pass on to the next generation grows, surpassing your own impact on society. On the other hand, it can be a minefield if inheritors aren’t prepared for the responsibility. You can help prepare them now for the potential bias against “silver spoon” wealth, or the guilt and shame that can come from unearned riches.
When you’re ready to begin the journey of a well-conceived legacy plan, please let us know if we may be of help. In the meantime, here are some books and references to prepare you for what you’ll encounter. These are not hypothetical situations. We see the stories in these books play out often.
Worthy Reading:
Engaged Healthy, Wealthy & Wise by Coventry Edwards-Pitt
This book imparts lessons from inheritors and their significant others on how to navigate love, family wealth, and forging their own paths. Edwards-Pitt writes about experiences I have encountered advising many SJS clients through the years. Parents and grandparents instinctively want to help their kids and grandkids, and unwittingly “rob” them of the need to “figure it out” on their own. Emerging adults gain a sense of identity by getting a job, paying their bills, renting an apartment, and often, falling in love. When these emerging adults are shielded from these experiences, they never build their own identities. They aren’t prepared, often lack the tools, and therefore hide from the burden of responsibility. Edwards-Pitt also heroically challenges the status quo in most planning circles that prenuptial agreements are a necessary risk management box that those with inherited wealth must check. Through her experience, she concludes that the human risks of prenuptial agreements outweigh the legal risks. Based on my experience, I agree with her conclusion.
The Myth of the Silver Spoon by Kristin Keffeler
In her book, Keffeler tackles the emotional realities of inherited wealth. Better still, she offers up tactics to transcend negative thinking and behaviors that can come from wealth and money. These include putting words to difficult feelings and gaining a healthy sense of identity. She also delivers experiences and insight into how affluent parents can raise children to avoid entitlement and helplessness while helping them discover and sustain their own personal vision for a fulfilling, impactful life. If you are at the child-rearing or grandchild-enjoying stage of life, this book is a must-read because it not only provides identifiable stories that teach, it gives you methods that, as a family, you can talk about and practice. It’s an ounce of prevention that is worth a pound of cure.
I’d like to say that I "followed all of the parenting rules," and did all this right. But as a parent of four grown children and two young grandchildren, I admit to violating some of the advice offered by these two authors. But their guidance to establish a plan and prepare a vision for “when I’m gone,” that I have done. It can be an amazing journey when done with the right advisor. I’d love to help you and guide you and make it a positive, rewarding experience in your life. If you are open to the offer, let’s get started by understanding your unique circumstances, and having an open, honest discussion. That’s the backdrop, and from it can come the best advice.
Important Disclosure Information:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.
Statements contained in this article that are not statements of historical fact are intended to be and are forward looking statements. Forward looking statements include expressed expectations of future events and the assumptions on which the expressed expectations are based. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
Tomorrow's Headlines Today
The market’s reaction to tech in the first quarter is another reminder of how hard it is to time and predict the market, even if you “know” what is going to happen.
By Chief Investment Officer Tom Kelly, CFA.
What if you could get the headlines of the market before everyone else? Do you think it would make you a better investor? Provide you with an edge to get that “superior return” you’ve always wanted? In some cases, perhaps, but in others, I suspect the market’s ability to move unexpectedly could leave you worse off.
What if I told you at the beginning of the year that the largest tech companies would continue their string of layoffs, the bank most tied to serving Silicon Valley technology firms would suffer a bank run and collapse, and central bankers would continue to raise interest rates? Would you have guessed the technology sector in the global stock market (as measured by the MSCI All Country World Index (Gross Div.)) would be up over 20%? Doubtful.
Source: Morningstar, as of March 31, 2023. The MSCI ACWI Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets, consisting of 47 country indices comprising 23 developed and 24 emerging market country indices. Indices are not available for direct investment. Index performance does not reflect the expenses associated with management of an actual portfolio. Index performance is measured in US dollars. The index performance figures assume the reinvestment of all income, including dividends and capital gains. See Important Disclosure Information.
Certainly, there are other factors at play than the ones above (the expectation of an end to Fed interest rate hikes is likely a large contributor to technology outperformance), but that’s how the market operates. The variables we think matter often don’t (or matter less), and outside events often disrupt or complement even the most well researched thesis.
The market’s reaction to tech in the first quarter is another reminder of how hard it is to time and predict the market, even if you “know” what is going to happen. The moral of the story is that we need to remain diversified and invested, even if we think we know how the story might end.
Important Disclosure Information:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.
Statements contained in this report that are not statements of historical fact are intended to be and are forward looking statements. Forward looking statements include expressed expectations of future events and the assumptions on which the expressed expectations are based. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Hyperlinks to third-party information are provided as a convenience.
How The SECURE 2.0 Act May Impact Your Finances
In efforts to further improve retirement plan saving and investing, the SECURE 2.0 Act was signed into law in December 2022. We want to highlight how this act may impact your finances.
By Investment Associate Bobby Adusumilli, CFA.
In 2019, the SECURE Act was signed into law with the goal of helping people to save and invest for retirement.[1] In efforts to further improve retirement plan saving and investing, the SECURE 2.0 Act was signed into law in December 2022.[2][3] We want to highlight how this act may impact your finances.
Option For Roth Matching & Non-Elective Employer Contributions To Retirement Plans
Beginning in 2023, employer retirement plans (such as 401(k)s and 403(b)s) will be able to offer the option for employees to receive matching and non-elective employer contributions as Roth contributions, which are immediately vested. The Roth employer contributions would be added to the employee’s taxable income for that year.
It is important to recognize that this is optional for your employer, and this feature may not be available yet on your employer's retirement platform.
Increasing The Beginning Age For Required Minimum Distributions (RMDs)
Currently, owners of retirement accounts including Traditional 401(k), 403(b), 457(b), and IRA accounts are required to begin taking RMDs from these accounts starting at age 72. Based on birth year for people who have not already begun taking RMDs, the SECURE 2.0 Act changes the beginning age for RMDs to the following:
Required Roth Catch-Up Contributions For High Wage Earners For Employer Retirement Plans
Effective in 2024, for employees age 50+ who made at least $145,000 in wages (will be adjusted for inflation going forward) in the previous year from an employer, any catch-up contribution to that employer’s retirement plan must be a Roth contribution. If an employer retirement plan doesn’t offer a Roth catch-up contribution option, then catch-up contributions are not allowed for anyone for these employer retirement plans. Roth catch-up contributions do not apply for self-employed individuals, nor do they apply to IRAs such as SIMPLE IRAs.
Higher Catch-Up Limits For Employer Retirement Plans For Participants Age 60-63
Currently for employer retirement plans, participants age 50+ may make catch-up contributions of $7,500 to a 401(k) or 403(b), or $3,500 for SIMPLE IRAs. Starting in 2025, individuals age 60-63 will have the ability to make larger catch-up contributions. For a 401(k) and 403(b), the annual catch-up contribution limit for people age 60-63 will increase to the greater of $10,000 or 150% of the regular catch-up amount for 2024. For a SIMPLE IRA, the annual catch-up contribution limit for people age 60-63 will increase to the greater of $5,000 or 150% of the regular catch-up amount for 2025. These catch-up contribution limits will be indexed for inflation beginning in 2026.
Ability To Offer Roth Option For SIMPLE IRA & SEP IRA Plans Beginning In 2023
Limited Ability To Transfer A 529 Balance To A Roth IRA
Starting in 2024, a 529 plan beneficiary whose account has existed for at least 15 years may be able to use their balance to make Roth IRA contributions cumulatively up to $35,000 throughout their lifetime, subject to conditions.
Annually, the total amount you contribute to a Roth IRA - both via money earned as well as through a 529 account - cannot exceed the Roth IRA contribution limits.
You must have earned at least corresponding income within the year to contribute 529 account money to your Roth IRA.
Any contributions and associated earnings made to the 529 account within the previous five years are ineligible to be transferred to a Roth IRA.
This aspect of the SECURE 2.0 Act is complicated, and we expect further rule clarifications in the future.
Employer Matches For Student Loan Payments
Effective in 2024, employers will be able to to offer employer matches for eligible federal student loan payments made by participants. The student loan payments will be treated as salary deferrals for vesting and matching purposes.
It should be noted that this is an option for employers, but not an obligation.
For IRAs, The Catch-Up Limit As Well As Qualified Charitable Distributions (QCDs) From Traditional IRAs Will Be Indexed To Inflation Starting In 2024
As always, if you would like to discuss how the SECURE 2.0 Act may impact you and your family, please reach out to us.
Important Disclosure Information & Sources:
[1] “H.R.1994 - Setting Every Community Up for Retirement Enhancement Act of 2019". United States Congress, 2019, congress.gov.
[2] “SECURE 2.0 Act of 2022". United States Senate Committee on Finance, 19-Dec-2022, finance.senate.gov.
[3] “SECURE Act 2.0: Later RMDs, 529-to-Roth Rollovers, And Other Tax Planning Opportunities“. Jeffrey Levine, 28-Dec-2022, kitces.com..
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Statements contained in this report that are not statements of historical fact are intended to be and are forward looking statements. Forward looking statements include expressed expectations of future events and the assumptions on which the expressed expectations are based. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.
Hyperlinks to third-party information are provided as a convenience.
The Not So Wonderful Bank Run
On the recent bank distress and investment markets.
“I’ve never really seen one, but that’s got all the earmarks of a run.”
The events of this last week reminded me of that famous scene from It’s a Wonderful Life. When my wife asked what was happening in layman’s terms, I said, “It’s like the It’s a Wonderful Life bank run scene, but with venture-backed startups instead of Bedford Falls’ residents and houses.”
“You’re thinking of this place all wrong. As if I had the money back in a safe. The money’s not here.”
Depositors hold money in a bank for perceived security and to earn interest on their money. Banks then lend out the deposited money, or in some cases, purchase high-quality securities when they are unable to originate enough loans. Loans are often held at book value, or the price it was issued at, and thus are considered held-to-maturity (HTM) assets. While held-to-maturity securities may have unrealized losses, banks typically have other sources of liquidity and likely won’t need to sell them prior to maturity (as the name implies).
“Your money’s in Joe’s house, right next to yours. And in the Kennedy house, and Mrs. Macklin’s house, and a hundred others. Why, you’re lending them the money to build, and then, they’re going to pay it back to you as best they can.”
During the COVID crisis, bank deposits shot up to historic levels, due in-part to both the massive government stimulus as well as cutbacks on expenditures for both households and organizations.[1] It takes time for banks to originate loans, and banks were often unable to put these deposits to work for them in such a short period. As a result, banks broadly increased their securities portfolios, buying Treasury securities, mortgage-backed securities, and other assets that were sensitive to interest rates, hoping to earn a yield.[2] Pair that with the sharp rise in interest rates throughout the past 18 months (generally, as interest rates rise, existing bond prices fall), and many banks marked large unrealized losses on their securities holdings, particularly on bonds with longer maturities / durations.[3] The unrealized losses were not only unprecedented from a historical context, but also happened concurrently with negative deposit growth as depositors left banks to seek higher yields elsewhere.[1][4]
Source: “Deposits, All Commercial Banks“. Federal Reserve Bank of St. Louis, 15-Mar-2023, fred.stlouisfed.org.
“I got two hundred and forty-two dollars in here, and two hundred and forty-two dollars isn’t going to break anybody.”
The psychology of a bank run has similarities to the Prisoner’s Dilemma, where cooperation leads to a mutually beneficial albeit slightly suboptimal outcome, but self-interested action from all parties leads to mutual destruction.[5] As depositors take their funds from a bank, part of that bank’s funding goes away, forcing them to sell assets. The Bailey Building and Loan (from It’s a Wonderful Life) nearly went under, had it not been for the honeymoon savings and the kindness of the depositors to take only what they needed.
Contrarily, the depositors at Silicon Valley Bank (SVB) weren’t quite as patient, and nearly caused a collapse of the entire bank.[6] In It’s a Wonderful Life, the Baileys were able to survive the day and close up shop, but in the era of digital banking and instant money movement (not necessarily bad things), SVB depositors could withdraw all their money with a click of a button instead of waiting in line. Fortunately for SVB depositors, they were backstopped by the Federal Deposit Insurance Corporation (FDIC) beyond just the $250,000 insurance, and the FDIC took over leadership of SVB as an FDIC-operated ‘bridge bank’.[7]
“We made it! Look, (as George holds up two bills) look, we’re still in business!”
While a massive crisis seems to be averted, at least for now, the overall dilemma has not been solved by the Federal Reserve’s intervention in recent weeks. While SVB had a concentration of depositors in the venture and technology space, and likely had mismanaged risk by buying too many long-dated securities, the asset-liability balancing act is the core tenant for how a bank works. Trust in the system and rational behavior is ultimately what keeps the banks solvent.
That does not mean that you should rush to the bank, pull out all your money, and stuff it under the mattress. The FDIC for bank accounts and Securities Investor Protection Corporation (SIPC) for brokerage accounts provide moderate levels of insurance.[8][9] Nevertheless, sound financial management from both the banks and depositors as well as regulatory protections are vital.
For example, Charles Schwab - one of our preferred custodians for client assets - has both banking and brokerage businesses, which are required to be held separately.[10] Their brokerage assets are segregated from Schwab assets, and are not comingled with assets at Schwab’s bank.[11] Customer securities - such as mutual funds and ETFs - are segregated in compliance with the SEC's Customer Protection Rule and protected against creditors’ claims.[11] There are also reporting and auditing requirements in place by government regulators. As a result, we believe that there are prudent risk management policies and practices in place at Schwab that help to limit the risk of what happened at Silicon Valley Bank.
We understand the events of the last week may have led to questions, and we are always willing lend an ear and discuss any concerns.
Important Disclosure Information & Sources:
[1] “Deposits, All Commercial Banks“. Federal Reserve Bank of St. Louis, 15-Mar-2023, fred.stlouisfed.org.
[2] “Treasury and Agency Securities, All Commercial Banks“. Federal Reserve Bank of St. Louis, 15-Mar-2023, fred.stlouisfed.org.
[3] “Federal Funds Effective Rate“. Federal Reserve Bank of St. Louis, 15-Mar-2023, fred.stlouisfed.org.
[4] “Historical Returns on Stocks, Bonds and Bills: 1928-2022“. New York University - Stern School of Business, 15-Mar-2023, stern.nyu.edu.
[5] “Prisoner’s Dilemma“. Stanford Encyclopedia of Philosophy, 02-Apr-2019, plato.stanford.edu.
[6] “What Happened With Silicon Valley Bank?“ Telis Demos, 14-Mar-2023, wsj.com.
[7] “FDIC Acts to Protect All Depositors of the former Silicon Valley Bank, Santa Clara, California“. The Federal Deposit Insurance Corporation, 13-Mar-2023, fdic.gov.
[8] “Deposit Insurance“. The Federal Deposit Insurance Corporation, 15-Mar-2023, fdic.gov.
[9] “What SIPC Protects“. Securities Investor Protection Corporation, sipc.org.
[10] “About Schwab - What We Do”. Charles Schwab Corporation, aboutschwab.com.
[11] “Your assets are protected at Schwab“. Charles Schwab Corporation, schwab.com.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.
Statements contained in this report that are not statements of historical fact are intended to be and are forward looking statements. Forward looking statements include expressed expectations of future events and the assumptions on which the expressed expectations are based. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Hyperlinks to third-party information are provided as a convenience.
Word Of The Year? Gratitude!
The SJS word of the year for 2023 is GRATITUDE! Gratitude for our health, families, friends, faith, country, the SJS Team, and most importantly You, our loyal client who trusts us to do what’s in your best interest day-in and day-out.
By Founder & CEO Scott J. Savage.
The SJS word of the year for 2023 is GRATITUDE! Your Team at SJS arrived at the word of the year during an early January huddle, which is a weekly check-in with all of our Team Members that has been a tradition for most of the 27-year history of SJS.
Why Gratitude? As we collectively process the trauma of the past three years triggered by a global pandemic, economic lockdowns, Russia’s invasion of Ukraine, the death of George Floyd, double-digit inflation, significantly higher interest rates, and the resulting financial market volatility, it seems to us that getting back to basics of being grateful is a prescription that will enable us to move forward in an optimistic way.
Gratitude for our health, families, friends, faith, country, the SJS Team, and most importantly You, our loyal client who trusts us to do what’s in your best interest day-in and day-out. We are so grateful to work with you, your family, and your organization to achieve our purpose: “Empowering You to Build a Better Life.” We do this by providing major money center management experience while maintaining our small-town values and putting you first, all the time, every time.
Accountability – We own the results, and are responsible to help you achieve your goals.
Client-Centric – We seek to understand and put you at the center of all we do.
Collaborative – We win as One.
Forward-Thinking – We are attentive, adaptive, and agile. Change is everywhere.
Giving – We give back to make our world a little better than we found it.
Integrity – Without honesty and high standards, we have nothing.
Servant Leadership – We serve you with confidence and humility, always striving to be better.
Finally, none of this works without old-fashioned hard work. We won’t go home until the day’s tasks are done. Period!
Reflecting on the privilege to work with you, learn from you, and we hope at times to inspire you leaves us feeling grateful.
Thank you,
SJS
Important Disclosure Information:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training.
Suggested Reading
Courageous Community Services: Promoting Healthy Lifestyles
The mission of Courageous Community Services is to provide meaningful, inclusive opportunities for individuals with disabilities and their families through advocacy, education, and engaging recreational experiences.
An interview with Kirk Ludwig, who is a Senior Advisor at SJS Investment Services as well as the Treasurer of the Board of Directors of Courageous Community Services (CCS). This interview is part of our Stories of Giving & Achievement Series, highlighting community involvement efforts. If you are interested in learning more about Courageous Community Services, please visit the CCS website or contact Kirk Ludwig.
Kirk, can you tell us about Courageous Community Services (CCS) and their mission?
Most people might know CCS by the former names of Camp Courageous or The Arc of Northwest Ohio. Through a merger between agencies, today the agency is known as Courageous Community Services (CCS). The mission of CCS is to promote healthy lifestyles and better quality of life for persons with developmental disabilities and their families by providing support, education, advocacy, socialization, and outdoor recreational experiences which foster inclusiveness and independence. Our campers have limited social and outdoor recreational activities as part of their normal routines. Camp is designed to deliver these experiences while providing life skills, advocacy, and respite for family members and caretakers!
Source: “A Day in the Life of a Camper“. Courageous Community Services, ccsohio.org.
What is your involvement with Courageous Community Services? How did you originally get involved / what do you do within the organization?
Currently, I serve on the Executive Board as Treasurer as well as chair of the Finance Committee. Additionally, I’m on the Strategic Planning and Facilities Committees. 2023 is my 12th consecutive year participating on the board and second round as an active board member.
Many years ago, I coached Special Olympics, through which I met several families who were members of the Arc of Northwest Ohio Board. At the time, I couldn’t fully comprehend the challenges that the athletes and their families dealt with on a daily basis. It didn’t take long to understand the struggles and needs that these families faced. It was very easy for me to want to get involved in a way that advocated for a better way of life. One that provided respite for the caregivers as well as fun social interactions and outdoor activities for our campers.
When the Arc and Camp Courageous merged, I was very excited about the opportunities that the camp experience would have for the community that we serve. Camp delivers experiences that so many people take for granted. Spending time outside in a wooded park-like setting, playing games and laughing with other campers and counselors, swimming or wading in the zero-depth entry pool, participating in arts and crafts, gardening, and so many other camp activities.
Source: “Peer Buddies“. Courageous Community Services, ccsohio.org.
What is your proudest moment or biggest accomplishment since you’ve been involved?
One of the major challenges for CCS is consistent annual funding. For many years, the agency received funding support from the Lucas County Board of Developmental Disabilities, but the funding ended several years ago. Approximately 95% of the campers use Medicaid waivers to pay for camp, which only covers a fraction of the total cost that it takes to operate the agency and maintain the pool and campus. The shortfall is typically covered by grant writing, fundraisers, and private donations.
Recognizing the challenging budget and the desperate need to repair and upgrade the 50-year-old camp facilities, the agency was in need of raising capital. CCS owned about 84 acres of wooded property adjacent to the Oak Openings Preserve Metropark, which is well known in the park district community because of the diverse number of species that occupy the land.[1] With this in mind, we received the assistance of Metroparks Toledo to explore the unused property of CCS. They discovered populations of at least 15 plant species listed as endangered, threatened, or potentially threatened in Ohio.[2] This qualified the property for conservation purposes, and allowed Metroparks Toledo to be eligible for a grant to purchase about 64 acres of the CCS property.[2]
The timing was (accidentally) perfect! The property sale closed near the beginning of the pandemic. Camp was closed for 2020, a limited hybrid version occurred in 2021, and there was a slower “back-to-normal” opening for 2022. During the down time, CCS was able to use some of the proceeds from the sale to do the necessary upgrades to the dining hall as well as the boys and girls cabins. Additionally, we were able to build a new administration building, add a new walk-out viewing terrace, repair major cracks in the pool, and add a sensory-friendly walkway.
More importantly, the proceeds provided the necessary support to keep camp operating with all the new and improved grounds. My involvement in assisting with the transaction has been my biggest accomplishment to this point, but I hope my proudest moment is yet to come. There are endless joyful stories from our campers and their wonderful experiences, which makes all the time and energy worthwhile!
Source: “Agreement Will Preserve Natural Area While Enhancing Services for People With Disabilities“. Metroparks Toledo, 18-Aug-2020, metroparkstoledo.com.
How can the community get involved with CCS?
According to the CDC, approximately 1 in 6 individuals between the ages of 3 and 17 lives with one or more developmental disabilities.[3] Though this is a staggering percentage of the population, it doesn’t include the family members and caregivers also impacted by the individual with the disability. There is a tremendous need in our area for respite services as well as opportunities for socialization and outdoor activities for many of the members of our community.
People can help CCS by volunteering their time by participating in social walks, joining in camp clean-up days, or sharing their knowledge and skills serving in a board position. Making introductions to other agencies with similar missions is also helpful. And of course, all financial support is greatly needed and appreciated.
CCS is providing so many exciting opportunities for hundreds of campers and their families, but there is so much more to do. We’ve been very fortunate and grateful to maintain and improve camp during these extremely difficult times, but now it’s time to thrive and take camp to the next level!
Source: “Advocacy“. Courageous Community Services, ccsohio.org.
Important Disclosure Information & Sources:
[1] “Oak Openings“. Metroparks Toledo, metroparkstoledo.com.
[2] “Agreement Will Preserve Natural Area While Enhancing Services for People With Disabilities“. Metroparks Toledo, 18-Aug-2020, metroparkstoledo.com.
[3] “Health Needs and Use of Services Among Children with Developmental Disabilities“. Centers for Disease Control and Prevention, cdc.gov.
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
SJS Welcomes Rachel Keesey!
We would like to welcome Rachel to the SJS Team in Sylvania, Ohio! Rachel is an Advisor working closely with multi-generational families and individuals.
We would like to welcome Rachel Keesey to the SJS Team in Sylvania, Ohio!
Rachel is an Advisor on the SJS team working closely with multi-generational families and individuals. She specializes in investment strategy and financial plan development to help clients achieve goals. She also plans to contribute to SJS’ efforts that tailor services to women’s segments based on their profession, life-stage, and primary interests.
Rachel joins SJS in 2023 with over 7 years of experience in wealth management. Prior to SJS, Rachel was a Financial Advisor at UBS, where she worked closely with business owners, executives, and families.
She is active in the Toledo community supporting various non-profit organizations including Cherry Street Mission, Metroparks Toledo (Good Natured), and the Greater Toledo Community Foundation. She is President of Miami University Alumni Association of Northwest Ohio, a Leadership Toledo alumni, and a member of North Cape Yacht Club and The Toledo Club.
Rachel earned her B.S. degree from Miami University’s Farmer School of Business, majoring in finance and minoring in marketing. After graduating from Miami University, Rachel coached sailing for Sailing Australia in Melbourne, Australia and Larchmont Yacht Club in New York. In addition to competitive sailing, she enjoys downhill skiing, reading, and spending time outdoors. A native of Sylvania, Ohio, Rachel is a proud graduate of St. Ursula Academy and currently resides in Downtown Toledo.
We are very grateful that Rachel decided to join SJS. Please join us in welcoming Rachel to the SJS Team!
Important Disclosure Information:
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
SJS Outlook: Q4 2022
The SJS Q4 2022 Outlook includes our insights on the U.S. bond market over the past year, steps to help you plan financially for the new year, a thank you to Bev Langley, and looking forward to Q1 2023.
Please click on the image below.
Suggested Reading
What A Difference A Year Makes: Bonds
For 2022, the bond asset class started the year with extremely low yields and less desirable return expectations. Going into 2023, the higher yields provide bond investors with a brighter outlook!
By Senior Advisor Kirk Ludwig, CFIP, AIF®.
The past year presented the financial markets with high volatility and change. Many of the imbalances caused by the pandemic continued to disrupt segments of the global economy and markets. From inflation soaring to a multi-decade high of 9% in June 2022, to lumber prices plummeting by nearly 65%, to global stocks trading in bear market territory for much of the year, volatility was widespread throughout financial markets.[1][2][3]
Given the complexity of the economic landscape, and the higher uncertainty that came with it, the volatility was not unusual from a historical perspective. However, one market that DID surprise many investors was the U.S. bond market. As one of the largest and most heavily traded financial markets in the world, the U.S. bond market was caught off guard as the Federal Reserve ramped up its campaign to battle inflation by aggressively raising short-term interest rates.[4]
The following chart puts perspective on the changes in Treasury rates across the yield curve. The one-year U.S. Treasury note started the year yielding 0.39% and ended with a yield of 4.73%. As illustrated, it wasn’t just short-term rates that were impacted - rates for all other maturities across the yield curve rose as well.
Source: “Daily Treasury Par Yield Curve Rates“. U.S. Department of the Treasury, treasury.gov.
It's not uncommon for the Federal Reserve to raise or lower interest rates to control economic growth and inflation. However, in this case, the surprise was the speed and magnitude of the rate hikes. With the starting point of short-term interest rates near 0%, bonds didn’t stand much of a chance to generate enough income to offset the change in prices associated with the rapid increase in yields. As a result, the general U.S. bond market suffered one of its worst years in recorded history.[5]
There is a silver lining to higher yields! Over the past decade, conservative investors holding short-term bonds, CDs, money market vehicles, or cash in checking & savings accounts have suffered historically low returns.[6] Now, the spike in interest rates is providing yields on conservative ultra-short-term investments such as one-month Treasury bills at 4% or better. Those willing to extend Treasury maturities to a year can expect to see yields north of 4.5%.
As the Federal Reserve continues its mission of driving inflationary pressures lower, while attempting to avoid a recession, the Fed may continue to raise interest rates further in the near future. We believe further interest rate increases are less concerning compared to a year ago because the risk and return tradeoffs are more favorable for bond investors today.
At SJS, we are consistently monitoring all segments of the markets and assessing the risk and return characteristics of each asset class. For 2022, the bond asset class started the year with extremely low yields and less desirable return expectations. Going into 2023, the higher yields provide bond investors with a brighter outlook!
Important Disclosure Information & Sources:
[1] “Consumer Price Index for All Urban Consumers: All Items in U.S. City Average“. Federal Reserve Bank of St. Louis, fred.stlouisfed.org.
[2] “Lumber (LBS)". Nasdaq, nasdaq.com.
[3] “SJS Weekly Market Update“. SJS Investment Services, 2022, sjsinvest.com.
[4] “Money, Banking, & Finance“. Federal Reserve Bank of St. Louis, fred.stlouisfed.org.
[5] The general U.S. bond market is represented by the Bloomberg U.S. Aggregate Bond Index, which measures the performance of investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. Data source: Morningstar, 1976-2022.
[6] “Interest Rates“. Federal Reserve Bank of St. Louis, fred.stlouisfed.org.
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Statements contained in this article that are not statements of historical fact are intended to be and are forward looking statements. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
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