Oct
29
RGT Wealth Advisors (“RGT”) is pleased to announce that C. Price Wagner has joined the firm as a Managing Director.
Price brings a combined twenty-five years of experience in managing and overseeing commercial real estate developments and acquisitions along with investments and allocations for a large family office in Dallas. He has directed traditional long only, hedge funds, and private equity investments. This experience has led him to serve as a member of the RGT Investment Committee and as a member of the Business Development & Branding Committee.
Prior to joining RGT, Price served as a Senior Vice President with Lincoln Property Company and oversaw numerous initiatives involving large private banking relationships, new investments, outside money management relationships, direct hedge fund and private equity positions, as well as fund of fund positions. Prior to Lincoln, Price served as an Operating Partner with JPI Partners developing and acquiring collegiate student housing.
Price has comprehensive experience in directing development, construction, and property management from sourcing, entitlement, financing, building, leasing, and disposition.
Involved in both professional and charitable organizations, Price is part of the Salesmanship Club of Dallas and currently serves as a member of the Momentous Institute Board of Directors and the Salesmanship Club Foundation Board. Price is a Governor appointed Commissioner at the Texas Facilities Commission and the Partnership Advisory Commission.
Price earned his Bachelor of Science degree in Economics and Finance at Texas A&M University and his Masters of Business Administration at The University of Texas at Austin.
About RGT Wealth Advisors
Since 1985, RGT and its employees have dedicated themselves to serving as the advisors for individuals and families who desire a customized approach to their investment management and financial planning needs. RGT serves clients throughout the US from its office in Dallas, Texas and has approximately $4.8 billion in assets under management.
Oct
29
“Doubt is not a pleasant condition, but certainty is absurd.” – Voltaire (1694-1778)
After a strong second quarter for stocks and other risk assets, market volatility in the third quarter reminded us that markets could indeed go down, if only for a short while. Bond markets sold off a bit at the end of the quarter as rates rose following the Federal Open Market Committee’s statement on September 22 that indicated asset purchase tapering could begin soon. Chinese stocks sold off as the Chinese Communist Party continued its crackdown on private enterprise and concerns over a debt crisis at Evergrande, the large Chinese real estate development company, sparked some apprehension in capital markets around the world.
Equity markets were mixed in the third quarter. U.S. large cap stocks as measured by the S&P 500 ended the quarter in the black posting a gain of 0.58%, bringing the year-to-date return to 15.92%. Most other major markets struggled in the third quarter: U.S. small-cap stocks (Russell 2000) returned -4.36%, international stocks (MSCI-EAFE) returned -0.45%, and emerging markets (MSCI-EM) returned -8.09%. Bond market returns were muted in the third quarter. The Barclays Bloomberg U.S. Aggregate Index eked out a 0.05% return in the third quarter and is down -1.55% for the year-to-date. Municipal bond prices have been somewhat buoyed by concerns over rising tax rates. Despite the fears of rising tax rates, the Barclays Bloomberg Municipal 6-8 Year Index fell -0.03% in the third quarter and has returned a paltry, but positive, 0.15% for the year.
Economic indicators continued to send somewhat mixed messages in the third quarter. The August 12-month CPI was 5.3%. Inflation was especially acute in energy, which consists primarily of gasoline and electricity, where inflation ran at 25% over the previous year. Gasoline prices increased 42.7% over the previous twelve months. In addition to rising energy prices, a tight labor market and continuing supply chain bottlenecks contributed to rising prices. U.S. GDP grew 6.6% in the second quarter, providing additional support for the idea that the post-COVID recovery is still in full swing. In response to this evidence of the U.S. economy beginning to function at near full capacity, the Federal Reserve’s Open Market Committee indicated that they may soon begin tapering asset purchases, stating, “If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted.” This seemed to indicate that the Fed had moved beyond “talking about talking about” tapering the asset purchasing program to full on “talking about” tapering and it could be the first step toward a long-expected rise in interest rate policy. In response the 10-Year U.S. Treasury yield rose from 1.32% on September 22 to 1.52% on September 30. While we began to see a tiny glimpse of future monetary policy, fiscal policy continues to be uncertain, with President Biden’s signature $3.5 trillion stimulus bill and the bipartisan $1 trillion infrastructure bill languishing in Congress.
The art of portfolio management is, at least in part, dependent upon one’s ability to navigate an uncertain future, and position one’s portfolio accordingly. Admitting to living in a probabilistic world and using that as a basis for developing a well-balanced and diversified portfolio can be inherently uncomfortable, because at its core it is an admission that we do not know what the future holds. It is far more comforting in the moment to feign certainty and move forward with perceived clarity of vision that one has future events mapped out and has accounted for the consequences of those events to create a fully formed investment plan. Better to suffer the uncomfortable that accompany admitting to uncertainty and planning accordingly, than suffering the consequences of the illusion and absurdity of certainty.
As always, please let us know if you would like to discuss your portfolio or current market conditions in greater depth.
Oct
29
After months of negotiations between the White House, moderate Senate Democrats and progressive House Democrats, a tentative ‘reconciliation bill’ (aka the “Build Back Better” bill) has emerged. There is no guarantee of passage, but as of now it appears that many (but not all) of the prior tax proposals affecting individuals could be dropped in favor of increased enforcement of existing tax laws and increased taxation at the corporate level, among other changes.
At a high level, this could result in many of the tax changes enacted as part of the 2017 Tax Cuts and Jobs Act remaining in place until the end of 2025, including:
- Individual income tax rates, with the current top rate of 37% (was proposed to move to 39.6%)
- Capital gains tax rates, with the current top long term rate of 20% (was proposed to move to 25%)
- Estate tax exemption amount, with the current amount of $11.7 million (was proposed to be reduced by 50%)
Those proposals affecting individuals that remain in the new bill’s framework at this time include:
- The millionaire ‘surtax’ (newly proposed as a 5% increase in top individual rate for those making over $10 million per year (or only $200,000 for a non-grantor trust), and 8% above $25 million (or only $500,000 for a non-grantor trust)
- Increased funding for the IRS to focus enforcement efforts on wealthy individuals
- Continuation of limitations on deduction for business losses for wealthy individuals
- Expansion of the net investment income tax relating to business profits
- Limitations to the benefits of Qualified Small Business Stock (QSBS) for high income individuals
Perhaps most notably for those engaging in sophisticated estate planning, neither the proposal to change the rules surrounding ‘grantor trusts’ nor the proposal to eliminate many valuation discounts associated with transfers of family entity interests appear in the framework. If also left out of the final bill, this would allow individuals to continue to take advantage of many of the most effective estate planning techniques that have developed over the past several decades.
Finally, several proposals related to increased RMDs on large IRA balances and limitations on Roth IRA conversions have been left out of the latest framework.
We will keep you updated as events develop!
This report provides commentary for informational purposes only and should not be construed as legal, accounting, tax, investment, or other advice. RGT is neither a law firm, nor a certified public accounting firm. Each prospective investor should consult with its own counsel and advisors as to all legal, tax, regulatory, financial, and related matters concerning this matter. You should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized advice from RGT. Certain information contained herein may have been provided by sources we believe to be accurate, however, we do not warrant the accuracy of such information. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. No representation is made as to the likely outcome of the enclosed predictions.
ANY QUESTIONS: RGT Wealth Advisors’ Chief Compliance Officer remains available to address any questions regarding this Presentation.