December 1, 2024 It’s (almost) a Wrap! Thankful for a Year-End to behold! The final 3 For 3 for 2024 is here! A Black Friday boost, some January Effect nuggets and a dose of Year-End tax planning+ IRS 2025 updates are out. Join us in celebrating much to be thankful for and let the Alphavest Elves wrap a few of your most special holiday gifts at our Annual Wrap Party, Thursday December 5th. Drop in! Grateful, thankful and hopeful for a strong finish to 2024 and a solid follow-up in 2025. What’s going to make 2025 your BEST year yet?

3 For 3: 1-Black Friday shows a STRONG Consumer A Black Friday nod to our #1 darling of portfolio names; Walmart. Yes, that’s right—not NVIDIA or Apple, but Walmart is our #1 portfolio stock of the year–up +76% YTD. Walmart, our Alphavest Equity Income Model winner YTD and for the Month of November up an equally impressive 13.65% for the month as consumers anticipated a strong holiday buying season. In the news….Increased online shopping potentially favors e-commerce giants such as Amazon.com and Walmart. Walmart, which operates 4,700 U.S. stores, has invested heavily in store-to-home deliveries for the holiday season to boost e-commerce. U.S. spending online on Black Friday rose 10.2%, said Adobe, which keeps track of devices that use its software to help power more than 1 trillion visits  to  U.S. retail sites. The retail giant is having its best year since 1999. It has benefited as cost-conscious consumers, feeling the sting of inflation, increasingly shop more at the lower-priced retailer. Walmart’s investments in e-commerce and advertising are also starting to pay dividends, enabling it to grow its earnings faster than revenue. I can’t talk enough about the “sleepy” names that don’t up your holiday dinner party conversation skills—but maybe, just maybe, our sleepy Alphavest winners will!? Give it a try….Try this; “…Ex-Nvidia, what stock is the top performer of the Dow this year (Walmart)?” Follow it up with, “How much do you think the stock is up Year-To-Date (76.02% and almost 14% in November alone)?” I’d love to know just how many people knew the answer–and even came close to the level of returns the likes of Walmart and our other “sleepy”—ahem, high quality non-tech portfolio names have offered in 2024. Points, Alphavest Partners, I see points racking up to add to your fee reduction stocking stuffers. A few more Walmart sound bytes; The tailwinds benefiting Walmart and financial stocks should remain strong in the coming quarters, as long as the Federal Reserve successfully tames inflation without sending the economy into a recession. Because of that, these top-performing Dow stocks could continue to rise in the near term. And finally, after a day of thanks for all the wonderful things in our lives, there is nothing like going out and acquiring more things to be thankful for. With the holiday season just around the corner, many of us will look to take advantage of Black Friday Deals at the end of the week. While online retailers have done their best to lure more of our holiday shopping to the convenience of bed, brick-and-mortar shops like WMT have fought mightily to keep the in-person experience intact.  Besides Walmart…Thank you to our red-headed-runner up step children, BRO, NU, CTAS & PNR all in excess of 48% YTD. Our commitment to exceling in under appreciated portfolio spaces that effectively deliver clients superior risk-adjusted performance that outperforms has truly paid off… AND, I see long-legs to our portfolio efforts; diversification into small caps, dividend “aristocrats,”  and Alternative mangers. 2025 will continue to reward us in these areas. Below you’ll see our Alphavest Aristocrats Model and our Alphavest Equity Income Models outperforming our Dow Jones/DJIA benchmark, YTD, up 28.28% and 22.21% v. 21.11% (DJIA).

2-January Effect? Ho Ho How about a Santa Claus Rally? As we wrap up 2024, we have just 21 trading days left in the year. You’d be late to the party if we started stocking the portfolio for January, today. Rest assured we began our Santa Claus Rally and January Effect “shopping” all the way back in August with a 35% move to small caps (outperforming all major indices since we committed) in our Dynamic Core Equity Model. Familiar with the small-cap biased January Effect?  First things first, lets cover a few refresher Santa Claus Rally stats. From our data geeks at Nasdaq Dorsey Wright & Associates:Data from 1979 through 2023 will offer that December has the third-best average total returns of any month, at a gain of 1.49% (behind November and April). That effect is amplified for the small cap Russell 2000 Index, which shows December has the second-best returns of any month on average since 1979, with a 2.37% improvement (ahem, why we shopped early in August). It is often believed that much of December’s positive returns occur in the latter half of the month. The Stock Trader’s Almanac mentions the strong end-of-month performance as part of the Santa Claus Rally Study, stating, “Santa Claus tends to come to Wall Street nearly every year, bringing a short, sweet, and respectable rally within the last five days of the year and the first two in January.” We will explore the Santa Claus Rally in more detail later next month, but today, our focus is on the historical performance dispersion between the first and second halves of December. We have gathered data below for the total return of SPX and RUT over three different periods: the first half of the month, the second half of the month, and the entire month. The performance comparison for each index confirms that almost all the average net gains for large-caps and small-caps occur in the second half of the month. Noteworthy observations from the yearly performance comparison are provided below, along with the average return summary. Historical December Performance Observations:The S&P 500 has shown a positive return in December over 75% of the time since 1979. However, the index has been positive in the first half of the month just 58% of the time, compared to 80% in the second half.The Russell 2000 has been positive 76% of the time from 1979 forward, but the small-cap index has been positive only 47% of the time in the first half of the month, compared to 84% in the latter half.The S&P 500 has seen the second half of the month outperform the first in 60% of instances.The Russell 2000 has seen the second half of the month outpace the first in 76% of instances.As evident from the data above, the effect of outperformance in the second half of December is more pronounced for small-caps than for large-caps. This was observed in our Modified January Effect study last week, which examined the outperformance of small-caps during holding periods from mid-December through mid-January each year. One possible explanation for this trend is that small stocks, often sold for tax-loss purposes, begin to rebound toward the end of December and into January as investors become more willing to accept risk in their portfolios. Notably, December has recorded the highest average excess return between the RUT and SPX of any month since 1979. Considering these December biases within the current market context, the S&P 500 is entering December with strong tailwinds from November adding onto consistent improvement over the past two years. Small caps have also shown significant improvement, with RUT outpacing SPX by nearly 5% so far through November. Should that hold over the next few trading days, it would mark the third largest monthly excess return for RUT over SPX since the beginning of 2021. Consistency has been the issue for small caps in recent years. Sharp improvements have been swiftly followed by retracements lower. We will continue to monitor the markets for any significant changes in supply and demand relationships, but the December return tendencies could be especially important for small caps as we approach 2025. As noted, we’ve allocated 35% to small caps in our Dynamic Core Equity Model–this marks the first time ever that we’ve diversified this Model away from Large Caps in favor of smaller company stocks. Declining interest rates and over heated equity valuations in Large cap names, among several of Alphavest’s reasons–and, so far so good with our position up over 11%–again, outperforming all major indices since August, when we moved to commit to this diversifying–risk reduction measure in our 6 Year Equity Allocation darling, our Alphavest Dynamic Core Equity Model. While the Dynamic Core Model is underperforming on a 1-year basis returning 28.58% v. 33.10% (S&P 500) the Model handily outperforms on a 3-Year basis and every time period, since inception, 1/1/2000 (back tested performance). This is due to our proprietary switching/risk reduction exits from the market at overvalued/critical times. While our timing is never perfect, we think a 3 Year Standard Deviation–a key measure of volatility/risk of 10.33% v. 16.07% (S&P 500)–an almost 60% reduction in risk over that of our benchmark index/S&P 500 is all the whipped cream to our hot cocoa that we need to find it sweet. See Below: 3- Year-end tax loss harvesting and IRS/tax updates for 2025 Have you had a material event this year outside of your portfolio that has created a reportable gain or loss for your 2024 Income? While we have completed most of our standard and customary realized gain/loss balancing for year-end, please reach out if you have any additional or material information that can help us help you pay less to the IRS next year.  Newly announced IRS 2025 updates: Individual Retirement Accounts (IRAs) IRA contribution limits remain unchanged in 2025 at $7,000. Catch-up contributions for those over age 50 also remain at $1,000, for a total limit of $8,000.  Roth IRAs The income phase-out range for Roth IRA contributions increases to $150,000-$165,000 for single filers and heads of household, a $4,000 increase. For married couples filing jointly, the phase-out will be $236,000 to $246,000, a $6,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000. Workplace Retirement Accounts Those with 401(k), 403(b), 457 plans, and similar accounts will see a $500 increase for 2025, the limit rising to $23,500. Those aged 50 and older will still be able to contribute an extra $7,500, bringing their total limit to $31,000. A NEW catch up provision was announced for those age 60-63 in 2025; catch-up contributions are increased to $11,250. THIS IS A BIGGIE if you fit this tiny population of age 60-63 in 2025. Let’s discuss! SIMPLE Accounts A $500 increase in limits for 2025 gives individuals contributing to this incentive match plan a $16,500 stoplight. The Internal Revenue Service released the updated income tax brackets, standard deduction, and retirement contribution limits for the 2025 tax year. While these changes won’t impact you for some time, it may benefit you to start thinking ahead.The top rate remains 37%, but remember that 2017’s Tax Cuts and Jobs Act expires at the end of 2025. Overall, more than 60 provisions have changed at the federal level. Here are a few of the most critical changes in the federal tax bracket and retirement contribution limit. While the IRS has highlighted its changes, keep an eye out for any changes to individual and business taxes that may be pending in your state. Tax Bracket Inflation Adjustment Overall, tax brackets have been adjusted upwards for 2025. This adjustment is based on the Consumer Price Index and primarily accounts for inflation. Standard Deduction The standard deduction has increased to $30,000 for married couples filing jointly, up $800 from the previous year. For single filers, this number increased by $400 to $15,000. Marginal Rates Marginal tax rate brackets are also increasing. Gift Tax The annual gift tax exclusion for 2025 is $19,000, an increase of $1,000 from the previous year. Estate Tax Credit Individuals receiving an inheritance in 2025 will be able to exclude $13,990,000 from federal taxation, up from $13,610,000 in the previous year. All information sourced from IRS.gov.

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Winners & Losers

YTD, 30-day Portfolio Winners:YTD Winners: While we’ve covered portfolio darling, Walmart, quiet enough—our portfolio runner ups, below are worth applauding. Nu Holdings/NU a member of our Alphavest 10 Year High Conviction Model +62.43% YTD (vs. 26.47% S&P 500) takes second place in overall Portfolio winners, despite topping our MTD loser-board (below). A Brazilian Fin-tech play, Nu appears to be a much better fintech opportunity than its peers like PayPal. The company has superior revenue growth and rapidly growing profitability and Free Cash Flow–add an improving Brazilian economy and call us bullish investors would who find the high valuation in the stock, justified. MTD Winners: Exchange Traded Fund/ETF, MLPX grabs the overall MTD win, as this underappreciated Energy play moved higher this month by over 12%. Banking, Retail and Pharma joined the top ranks for November, all up over double-digits. YTD, 30-day Portfolio Losers: YTD Losers: EDV remains as a 15% allocation in our Dynamic Core Equity Model as we anticipate the yield curve to flatten as the Fed continues to lower interest rates. We see the trade as one of diversification away from Large cap tech and a structural play that will benefits portfolios in the next several quarters. Fixed income (EDV, VCLT) and Drug/Pharma (AMGN, MRK, SNY) led our YTD losers. MTD Losers: Nu, cooled off this month, and despite, still landed our overall Portfolio’s #2 YTD winner spot. Drugs (LLY, AMGN, SNY) and Semis followed suit as our month-to-date losers. With LLY up

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