Can you believe that it is almost February? We barely got to calm our animals down from the January fireworks and we are already gearing up for 1099 season. Next week, our team is headed out to Austin for the annual Kestra conference. The 2026 theme is NEXT IS NOW, which embraces that what once felt on the horizon is here now. That really could be my theme for getting all of you updated on your estate planning. (That was your weekly reminder to get wills, trusts, medical/financial powers, and insurance updated and reviewed). We also have a favor. We will be adding more videos to our YouTube channel. Please give us a look. While it's entirely up to you, we would love for you to subscribe and help us grow our channel. And of course, if you see anything that you would like to discuss, you know where to find us! Frederica Wealth Advisory YouTube channel
Last week, the markets wrapped up a short, but busy week modestly lower, weighed down by renewed geopolitical tension and fresh tariff chatter. Still, as the week went on, some more constructive economic data helped steady the mood. The S&P slipped 0.35%, the NASDAQ essentially finished flat (-0.06%) and the DOW fell 0.53%. Overseas equities told a different story with the EAFE gaining 0.91%, reflecting strength in developed international markets. Tariff TalkTariffs are essentially taxes placed on international goods. When one is announced (or threatened), it raises the cost of doing business for companied that rely on global supply chains and, of course, that expense gets passes down the line to us, the consumer in the form of higher prices. Or, it is passed to the shareholders in the form of lower profits. Markets are quick to react on such things, because a tariff usually doesn't affect just one company or industry. Forward looking, markets reprice stocks on what MIGHT happen, not just what is happening today. This of course creates short-term volatility, but long-term outcomes are still driven by fundamentals like earnings, growth, productivity, and corporate earnings. This is why disciplined investors should focus on the long-term strategy, diversification, and time horizon rather than the short-term headlines designed to frighten you in to tuning in tomorrow. |
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Source: YCharts.com, January 24, 2026. Weekly performance is measured from Friday, January 16, to Friday, January 23. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points. |
Eye-Catching Small CapsFor the 14 consecutive trading sessions through Thursday, January 22, David beat Goliath—the Russell 2000 Index of small-cap stocks outperformed the S&P 500. The last time that happened was May 1996. Small caps broke that streak on Friday. Small caps have historically outperformed large caps when interest rates have trended lower, but the 10-year Treasury rate has been rising since late October. |
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"Risk comes from not knowing what you are doing." – Warren Buffett This weekend, Mandy and I watched Alex Honnold, a world class rock climber, scale the Taipei 101 Skyscraper on Netflix. The Taipei 101 is a 101-story building. Did Alex take a risk? Yes, but he knew what he was doing, so it was a measured. Could I climb Taipei 101? Maybe the front steps! It would be a huge risk for me, because I have no idea what I am doing. It's the same building and same mode of ascent, but wildly different risk. The same can be said about investments and financial planning. What seems like a risk to one, may not be to others. |
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Don't automatically take the "Easy" deduction this year.Most people usually take the standard deduction because it is simple and works best for about 90% of the taxpayers. But 2025 is different. Because of new tax law changes:
This means more people could potentially save money by itemizing their deductions. Especially if you own a home, pay high property taxes, or live in a high tax state. Bottom line, have your tax professional do a quick check to compare standard vs itemized deductions. Source: Wall Street Journal, Ashlea Ebeling and Richard Rubin, January 26, 2026. |
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How much is enough?One of my clients, who happens to be my age and good friend, asked me this the other day. He has saved with discipline over the 20 years we have been working together. And he is nearing retirement. So, he asked, "How do I know when I have saved enough?" This is really great question. The short answer is, when you have enough saved that you could live off of that sum for 30 years, then you have enough. But what is that sum? That is where the magic is. For some, it is 50% of their current salary. For others, it may be 100%. The best thing to do is have a very real conversation with me (or your advisor) and discuss what this means. We use the word "clarity" a good deal. Having a financial plan that can give you this clarity you is the real right answer. In this client's case, we pulled up his plan and showed him where we are and discussed where we need to be and all of the stops in between. I think he slept a little better that night. |
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Fanad Head Lighthouse Donegal, Ireland |
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