Milestone 2nd Quarter Newsletter

May 20, 2024

We’ve been busy with review meetings, monitoring investments, and continuing to grow our team! We’ve recently added a new financial advisor - Kristen Barker, CFP® and a new financial planning associate - Alex Jankowski, CPA. Kristen brings 15+ years of experience to Milestone and we are thrilled to have her! Alex previously worked at Ernst and Young and we are excited to have his accounting background on the team. We are excited for you to meet them!

 

 

Kristen Barker, CFP®Alex Jankowski, CPA

I started my career in the financial planning industry right after earning my business administration degree from Houghton University, working as a paraplanner for a solo advisor. Life took me in other directions as I married and started a family, but I never forgot how much I enjoyed this field... Read More

I was born and raised in Downingtown, PA. Ever since I could pick up a baseball bat, I was swinging every day until my last high school ball game. And since I earned my first dollar from doing chores, I loved to learn about money, building wealth, and its impact on our lives... Read More

 


 

Market Update

The stock market kicked off the year with strong gains, building on the momentum from 2023, buoyed by expectations that the Federal Reserve might soon lower interest rates. The prevailing high interest rates have made housing less affordable and increased the cost of borrowing across the board, which could ultimately hinder economic growth. Up to this point, the Fed has prioritized curbing inflation over fostering growth, a strategy that has managed to prevent major market disruptions so far.

As inflation showed signs of easing, economists at the start of 2024 projected between three to seven interest rate cuts for the year. This forecast was well-received by the global stock market, which saw an impressive 8.47% increase in the first quarter. Conversely, the bond market was more cautious, reacting tepidly to the optimistic prediction of seven rate cuts, resulting in a slight downturn as bond investors remained skeptical about the likelihood of rate reductions.

 

 

After some higher than anticipated inflation results in the first quarter, consensus has shifted from three to seven rate cuts to somewhere between zero and two cuts. This caused stock and bond markets to decline in April by 3.49% and 1.78%, respectively.

 

 

 

 

So, what will it be? Higher rates for longer or lower rates sooner? As new economic data emerges, we see the market oscillating between these two outcomes. It's evident that the Federal Reserve intends to wait until there's clear evidence of slowing inflation before adjusting rates. An examination of recent inflation data highlights three primary factors keeping inflation above the Fed's target: shelter/home costs, auto insurance, and dining/recreational services. Let's take a closer look at each of these areas:

 

 

1. Shelter Costs: While it’s well-known that home prices and rents have escalated in recent years, the data shows signs of change on the rental side. According to the New Tenant Rent Index, rents have begun to decrease, falling approximately 4.5% since September 2023 after a significant rise post-COVID. Meanwhile, home prices continue to climb, with a modest increase of 0.71% year-to-date as per the Case-Shiller Home Price Index, suggesting a relatively stable growth rate.

 

 

 

2. Auto Insurance: The spike in auto insurance premiums primarily stemmed from the soaring costs of vehicles. New and used car prices dramatically increased during the pandemic due to supply chain disruptions, evident from the empty car lots we once saw. However, as the situation stabilizes, vehicle prices are now on the decline, falling by about 3.95% year-to-date. Don’t be surprised if your next auto insurance renewal brings a hefty price hike with it. While it’s a good practice to shop periodically, we don’t suggest clients respond by cutting coverage limits, as protecting the assets you work so hard to accumulate is important.

 

 


3. Dining and Recreation: This broad category has seen inflation mostly driven by rising food prices and wages. Food prices edged up by 0.51% in the first quarter, hinting at a potential stabilization. Meanwhile, the labor market remains robust with the unemployment rate holding below 4%, while wages grew by 1.2% in the first quarter.

 

 

 

In summary, while rent, auto insurance, and food prices show signs of easing, home prices and wages continue to rise at a pace that concerns the Fed. Earlier this year, market expectations may have been overly optimistic about the Fed's actions, and now, perhaps, the pendulum has swung too far the other way, with expectations too low. We'll keep a close eye on these inflation trends and their implications for investment portfolios.

 


 

Milestone News

 

 

 

Milestone Financial Associates, LLC sponsored National MS Society's MS Walk in Allentown, PA in April! We had a wonderful time uniting with other teams to support the Society’s mission of curing MS while empowering people affected by MS to live their best lives. The event allowed us to meet those impacted by MS and hear their inspiring stories.

Enjoy a nice morning walk ✅

Support Team Lex who was a top fundraiser this year! ✅

One step closer to curing MS ✅

Our firm is already looking forward to next year’s walk.

 


 

 

 

We are excited to announce that Milestone has been named to the 2024 Forbes List of Best-In-State Wealth Management Teams! And... our very own, Dave Coult, has been named to the 2024 Forbes List of Best-In-State Wealth Advisors!

2024 Forbes Best In State Wealth Management Teams, created by SHOOK Research. Presented in Jan 2024 based on data from March 2022 to March 2023. 10,144 Management Teams were considered, approximately 1,412 Teams were recognized. Not indicative of advisor’s future performance. Your experience may vary. Click here for more award information., https://www.forbes.com/lists/wealth-management-teams-best-in-state/

 


 

Investor 360 App Update

 

A new and improved Investor360° mobile app has been unveiled. Please see the instructions below to begin enjoying the newly redesigned mobile experience.

Because this is a new application, you’ll need to first delete/uninstall your existing Investor360° app.

To delete/uninstall an app on an iOS device:

1. Touch and hold the Investor360° app on your device.

2. Tap Remove App, then tap Delete App to delete it from your iPhone.

To delete/uninstall an app on an Android device:

1. Touch and hold the Investor360° app on your device.

2. Tap Uninstall.

Once you have deleted the old app, you’ll need to download the new one from your App store (for Apple devices) or Play store (for Android devices). You can do this by searching for the term “Investor360°” or scanning the following QR code.