What's Investing Got To Do With It?

June 13, 2022

With so much bad news in the market, with talk of a global recession and a no growth decade for the stock market, what are we to do about investing?  What has served us well since 2008 may not work in this market now.

The CPI report on Friday showed that inflation rose 8.6%, the highest rate since 1981, with shelter inflation high, which is one third of the index.  Easing supply chain restraints and releasing oil reserves are key to the government’s response.  Selling was widespread.

The Atlanta Fed’s GDP Now tracker shows the U.S. economy could be headed for a second consecutive quarter of negative growth, meeting the technical definition of a recession.

The likelihood of a global recession, first in Europe seems more likely, as the war in Ukraine continues to tighten a chokehold on the world’s food supply and slow productivity worldwide.

What does this mean for investing?

Due to elevated valuation metrics and serious geopolitical risks, as well as a higher household ownership of stocks, supply chain disruptions and margin and regulatory risk will affect the markets dramatically - more so than in the last twenty years.

After the Dot Com bubble and through the Great Financial Crisis of 2008, we saw 20% downward counter trends. The average annual return of 13% in the 2010’s (makes us feel old, right?) may not be attainable and note that the average annual return during the 2000’s was -0.9%.

What to do?

Make no mistake, passive investing will suffer.

Buy and Hold portfolios, will not increase the likelihood of success, even with the advantage of the baskets of issues in Exchange Traded Funds. We have been selling into these rallies consistently, actively moving assets into cash and income generating securities for safety during this volatile and unpredictable time. V

Who should worry?

Twenty-year market cycles tend to do better than ten-year cycles. If you are one of our younger Emerging Investors (sign up for information about our Emerging Investor program here ) your portfolio will be able to stand the test of time and investing comes with the added benefit of dollar cost averaging. Retirement account investing such as 401(k)’s will require special attention and should not be allowed to sit passive in fund choices.

Our clients closer to retirement still have a growth component to their portfolios but great attention is paid to hedging the portfolio for market downturns and will be more heavily invested in select income producing securities. This itself requites diligence as the choice for fixed income is not as simple as it once was. Decisions such as present and future tax brackets, the impact of rising interest rates and future income needs must be carefully considered.

Every one of our portfolios is put through rigorous risk metric testing where we assess the client’s lifetime risk as well as the expenses charged on every level in the portfolio. For many clients, we use planning software to gauge the impact of potential market returns and risks in the future. This is available to all clients.

Many of our clients are choosing to either age in place or move to facilities when they may require more assistance in everyday living. In both cases, special attention is paid to providing for the continued and often expensive cost of care. We work closely with many families to ensure that their loved ones are safe, both financially and personally. Elder Abuse fraud is rampant and getting worse and we collaborate with clients to minimize this risk for our older clients.  We have resources to assist you with assessing elderly client risk.

Our tag line ‘Wealth Management for Life” reflects this comprehension of the parts of clients lives as it pertains to the whole. This is the definition of holistic that we see in many places related to financial advising. Its more than a term - it is a way of life for us, of interacting with our clients and their families on a meaningful level.

What a Noisy World Means for Your Portfolio

March 26, 2026
If it feels like the news cycle has been louder than usual lately, that's because it has been. Geopolitical tensions across multiple regions, shifting U.S. trade relationships, and a rapidly changing domestic political landscape are all contributing to elevated market volatility. We want to take a moment to share our perspectives on what this means for your portfolio and for the broader inflation picture. What's Happening Globally We are in an extraordinary moment. The U.S. is reshaping its economic and geopolitical relationships in ways that are accelerating global fragmentation and creating real uncertainty for businesses and investors alike. Energy markets have been particularly sensitive to these developments, with commodity prices responding sharply to supply disruptions and shipping route concerns. Most forecasters believe current disruptions are short-lived and expect prices to moderate as conditions stabilize, but the range of outcomes remains wide. Closer to home, affordability has become the defining political issue heading into the midterm cycle. The administration is rolling out consumer-focused measures around housing costs, prescription drugs, and credit, which could benefit some sectors while creating headwinds for others. What This Means for Inflation The inflation picture is nuanced right now. If current disruptions prove temporary, the impact on consumer prices should remain limited. However, if tensions persist and energy prices stay elevated, we expect to see some upward pressure on inflation over time. It is worth keeping in mind that energy prices, while attention-grabbing, are historically less influential on long-term inflation than factors like wage growth and domestic demand. The broader U.S. picture reflects a tension between tariff-driven price pressure on one side and softening economic momentum on the other. The Fed is navigating this carefully, balancing inflation concerns against labor market signals. For now, rates appear likely to hold steady near term, with modest cuts possible later in the year if conditions warrant. How We're Thinking About Your Portfolio Volatility is uncomfortable, but it is not the enemy of long-term wealth building. History has demonstrated consistently that market disruptions driven by geopolitical events tend to be temporary in nature. Long-term investors are best served by staying anchored to their goals and risk parameters rather than reacting to the news of the day. This environment does reinforce several principles we apply in managing your portfolio: maintaining thoughtful diversification, ensuring fixed income allocations reflect your actual income needs, and being intentional about where inflation and energy exposure sits within your overall strategy. We are monitoring developments closely and will continue to adjust positioning as the picture becomes clearer. As always, if anything here raises questions specific to your situation, please reach out. That conversation is exactly what we are here for.

What the New Tax Legislations Mean for Your Tax Plan in 2026

March 12, 2026
If you’ve been paying attention to the tax landscape this year, you already know the ground has shifted. New tax legislations signed into law last July made sweeping changes to the federal tax code—and for high-net-worth individuals and families, the implications are significant. Let’s cut through the noise and share what we think matters most. First, the seven-bracket individual rate structure from the 2017 Tax Cuts and Jobs Act is now permanent. That means the top marginal rate stays at 37 percent. For years, many of us were planning around the possibility that rates would snap back to 39.6 percent in 2026. That’s off the table. If you’d been accelerating income into prior years to avoid a potential rate increase, it’s time to reassess that strategy. Second, the standard deduction was made permanent at its elevated level. For most of our clients, this doesn’t change the calculus—you’re likely itemizing anyway—but it’s worth noting if you have family members in simpler tax situations. Third, and this is the big one for estate planning: the federal lifetime gift and estate tax exemption is now permanently set at $15 million per individual, indexed for inflation. No more sunset. For married couples, that’s $30 million you can transfer free of federal estate tax—and that number will only grow with inflation adjustments. If you’ve been hesitating on gifting strategies because of uncertainty around the exemption, that uncertainty is gone. There are also new wrinkles in the charitable deduction rules. Starting this year, itemized charitable deductions are only available for amounts exceeding 0.5 percent of your adjusted gross income, and the deduction is capped at 35 percent for taxpayers in the top bracket. That’s a meaningful change from the prior 60 percent AGI limit for cash gifts. If philanthropy is part of your wealth plan—and for many of our clients, it is—we need to rethink how and when you give. The SALT deduction cap has also been adjusted, rising to roughly $40,000 with phase-outs starting around $500,000 in modified AGI. For those of us in Texas, the lack of a state income tax softens this blow, but if you hold property in high-tax states, it’s still relevant. Here’s our takeaway after thirty years of doing this: certainty in the tax code is rare. When you get it, act on it. The permanent nature of these provisions gives us a genuine planning window. Let’s not waste it. If you haven’t reviewed your tax plan since last summer, let’s schedule a conversation.

Caught in the Middle: Sandwich Generation Financial Advice for Families Under Pressure

February 10, 2026
Caring for children and aging parents at the same time has become the reality for millions of families. The financial and emotional weight of this responsibility often arrives gradually — and then all at once. Those navigating this stage of life are known as the sandwich generation. What makes it uniquely challenging is not just the cost, but the constant pull on time, attention, and long-term planning. Effective sandwich generation financial advice must address all three pressures together: time, money, and estate considerations. The Hidden Cost: Time Caregiving demands time long before it demands money. Between medical appointments, school schedules, work responsibilities, and daily logistics, financial decisions are often pushed aside until they become urgent. This reactive approach increases stress and limits options. Proactive Elder Care planning helps families anticipate needs, organize responsibilities, and avoid crisis-driven decisions. With a clear structure in place, time becomes a tool rather than a constant source of pressure. Financial Pressure from Both Directions For many in the sandwich generation, every dollar is already spoken for. Supporting children through education and activities while helping parents with healthcare or living expenses can strain even well-managed finances. The challenge is maintaining momentum toward long-term goals while meeting immediate needs. A thoughtful Wealth Management strategy helps families: Prioritize cash flow intentionally Protect retirement savings Align short-term support with long-term security Preserve flexibility as circumstances evolve Without this coordination, it is easy to sacrifice future stability for today’s demands. Estate Planning Moves to the Forefront Caring for aging parents often forces conversations families have postponed for years. Questions around decision-making authority, asset coordination, beneficiary designations, and legacy planning become unavoidable. Addressing these matters early reduces uncertainty and helps protect family relationships during emotionally charged moments. Estate planning is not only about transferring assets — it is about clarity, dignity, and continuity across generations. A More Sustainable Way Forward The sandwich generation does not need perfection — it needs structure. With the right guidance, families can reduce stress, gain clarity, and create plans that reflect real life rather than idealized assumptions. Coordinating Elder Care and Wealth Management allows families to support loved ones without compromising their own future. At Affinity Capital, we help families navigate this complex season with perspective, intention, and care.