January 6, 2025
What’s going to make 2025 your BEST year yet?
STOP—Think: If you did one thing, consistently, if even just for this month, what will make this January the best start to a new year for you? VALUE, THAT.
You may know by now I’m not a resolutions gal–but I am a huge subscriber of purposeful INTENTION–and what better time to do that then in January each year? A fresh start breeds new perspectives. So, too, it is with relationships, wellness, portfolios, markets and planning, to name a few.
2024 was the year of Courage and yielded much for Alphavest and our clients. In 2025 we are intent on VALUE being our central focus. As we look to hone and deepen our evergreen commitment to exceptional portfolio management and driving value to our clients, these priorities will prevail as we enjoy the fruits of 2024’s courageous efforts in the areas of new technologies, partnerships, capabilities and staff. In Q32023 we said “NO” to Wall Street’s lure of higher payouts and roads most travelled in the Financial Services arena; this set the tone for a courageously focused re-build in 2024. Now, its time to offer MORE to clients as we do “less.” Less tech-software building, less email, less words. MORE “Smart Brevity,” more client-centric value. Time will reveal Alphavest’s successes in our 2025 VALUE focus; from portfolio value to valued client engagements; we have already begun our ’10 Words Campaign’ in search of what YOU value most. We look forward to your feedback in this endeavor and encourage you to evaluate what you value most in life; personally, professionally and in your most treasured relationships.
So, what’ll it be? What will your time and money show that you VALUE the most in 2025?
3 For 3:
1-Time to Pump the Brakes?
The bull market enters 2025 under threat from our oft mentioned “higher for longer” and yet again, rising interest rates. READ MORE
2-The Year of the Snake: The “Year of the Snake” is serving up a slew of positive possibilities for 2025. The snake brings with it wisdom, transformation, calmness and creativity. Want to see what that looks like when applied to your planning and investment endeavors?
Despite the negative press that snakes sometimes generate, the Year of the Snake is serving up a slew of positive possibilities for 2025. The snake brings with it wisdom, transformation, calmness and creativity.
Wisdom:
3-6-10. You probably could’ve guessed that I’d squeeze in some 3-6-10 here, right? There is wisdom in taking gains off the table and airing to the side of caution, when appropriate. Cash is still KING & QUEEN right now with equity valuations at record highs. Safeguard your portfolio with adequate cash. This means 12% of your investable assets for most portfolios/clients who are in retirement or a distribution phase of their portfolio. Embrace a formulaic approach to your portfolio’s allocation with Alpahvest’s 3-6-10 Allocation. Navigate markets with wisdom by keeping emotions at bay, this is the 3-6-10 deliverable. New to 3-6-10? Need your personalized 3-6-10 updated or a refresher?
Grab a FREE consult here.
Transformation:
What transformation do you seek with your finances? Transformation takes courage and effort. Engage with the many new software and tech based tools Alphavest offers for a deeper understanding of your portfolio; hone new capabilities that connect you to your financial plan and investments. Ask us what tool or new capability from budgeting tool Rocket Money to our Morningstar Alphavest returns portal, connect to your hard earned and invested dollars for a dose of connected transformation.
Calmness:
Be Early and get your Calm ON! Be proactive with the IRS’s annual deadlines; take RMD’s in Q1 of 2025 as opposed to withdrawing at the end of the year. Fund IRAs NOW vs. April at the last minute. Have plenty of cash/emergency funds on hand (see WISDOM/3-6-10) for market downturn opportunities or for life’s surprises. What will you do welcome the calm into your planning and investments this year? Don’t let Q4 sneak up on you like a snake in the grass (couldn’t resist).
Creativity:
Explore Alternative investments, and/or perhaps implement a values-aligned investment portfolio. Say yes to more Structured Notes for peace of mind and say no to “market noise.” The way of the “vanilla” 60/40 balanced portfolio is being challenged in current markets–get creative, don’t settle for Wall Street “norms.” Portfolio creativity is my jam–let’s connect and paint your plan/portfolio chartreuse!
Embrace the Year of the Snake–it could be life-changing for many, say zodiac experts. And if you’re lucky enough to find a snake in your yard this year, you may have just discovered a harbinger of favorable luck.
3-Thrive Zones:
Flourishing through the right combination of people, resources, and opportunities….these are the components of a THRIVE ZONE. Lots of “thriving” being tossed around here and there as we enter a new year and human nature (and the media!) encourages us to a renewal of spirit–to better ourselves–to want to THRIVE. Grab a Perfect Day dose of the 5M’s, in this great read and say yes to a thrive-forward approach to planning and investing versus that of a financial-forward approach. Experience the Perfect Day Process/Approach to your investments, your money, your time, your relationships and Thrive ON in 2025!
Alphavest Portfolio Update:
The fourth quarter and 2024 are now officially in the record books. Despite a lackluster ending that saw it fall 2.5% in December, the S&P 500 finished the quarter up 2%, on its way to a gain of more than 20% for the year; this is the first time the S&P has gained more than 20% in consecutive years since 1997-98. Stocks began the quarter sluggishly as the S&P fell 1% in October, snapping a five-month streak of gains. However, things turned around quickly following the presidential election which sent equities climbing once again. While every sector finished November in the green, banks were among the biggest beneficiaries of the post-election rally on expectations for less regulation under the incoming administration. Alphavest clients are enjoying this bank rally with our holdings in Truist, and Key bank holdings up both nearly 20% in 2024. The rally was also a boon for small cap stocks as the Russell 2000 gained more than 10% in November and recorded its first record high since 2021. You may recall from last month’s update that Alphavest took an unprecedented position in small caps–first time ever in our Dynamic Equity Model– and not a small one at 35% of the model.
The Federal Reserve reduced the target for the federal funds rate by another ½ percent in the fourth quarter. However, at their December meeting, FOMC members raised their projections for the level of interest rates in 2025 and beyond, which combined with concerns about the inflationary effects of potential tariffs helped push longer-term rates higher. Despite cuts by the Fed, the 10-year US Treasury yield finished 2024 about ½ percent higher than it started the year. It wasn’t all bad news for bondholders, however, as high yield spreads, which are a gauge of the market’s appetite for credit risk, fell to their lowest levels in more than 15 years. Rising interest rates and strong economic data helped fuel a rise in the US dollar; the US Dollar Index gained more than 7.5% in the fourth quarter and now sits at its highest level since November 2022.
The historic rally in precious metals fizzled out in the fourth quarter as rising interest rates and a strengthening dollar were headwinds for gold and silver. Gold fell more than 10% from the high it reached in October to finish the quarter down slightly, while silver lost more than 7%. Both metals held on to significant gains for the year, however, as gold advanced 27.5% while silver was up more than for than 21%.
As we begin 2025, stocks are on strong footing as US equities remain at the top of the asset class –this asset class “heatmap” of where strength resides across as well as within asset classes. From a sector perspective, leadership resides in financials and technology, which sit first and second in the Asset Class sector rankings, respectively. As always, we continue to monitor closely for any shifts in the market landscape as we recognize that most stocks find themselves in overvalued territory. Point of information to reiterate from past updates: Walmart/WMT up nearly 74% in 2024. Say no more.
What’s NEW: Alphavest took a 5% position in Blackrock’s Bitcoin ETF: IBIT in our 10 Year Core Equity Model. Since addition/inception the position is up nearly 5% vs. S&P500 -1.62%.
What’s OLD: Structured Notes + Alternative investments. More allocations to come for clients in 2025 as we diversify further from the Mag 7/overvalued tech areas in search of quality portfolio VALUE elsewhere.
What’s Working: Alphavest Bond Models. Not exactly the most exciting topic du jour, yet when the US Core Bond Index is +2.4% for 2024 and our Alphavest Fixed Conservative Model is +6.80% for 2024, and with almost 40% less risk/volatility on a 3 YR basis with 3YR returns of +3% v. -5.96% on the Index. It’s definitely a nod to what’s working.
What’s NOT: Schwab client portal–do you agree? While technically, its working, most clients do not like the login/interface. Good news! We have received great feedback from clients about our Alphavest Morningstar Client portal that delivers net of fees performance to your inbox or your screen, quarterly and on demand! Text “Morningstar” to us @ 866-662-5742, and we will get you set up!
Partner with Alphavest! Inquire about Alphavest Partner POINTS for Events, Reviews, and Referrals!
Winners & Losers
YTD, 30-day Portfolio Winners:
2024 Winners:
Walmart takes the prize for YTD portfolio winning positions for 2024. Both Alphavest Equity Income and Aristocrats Models have winners on the 2024 leader board and all returned higher than their Benchmark return/Dow Jones Industrial Average 2024 return of 12.90% and also above that of the S$P 500 of 23.30% for 2024.
December Winners:
For the month of December, it was a tough month for winner and losers with broad markets mostly off in December -2% to -5%. So, December winners, for the first time in all of 2024 includes some negative positions, like those of WMT and Broad Market S&P 500 Exchange Traded Fund (ETF), VOO off -2.34%.
YTD, 30-day Portfolio Losers:
2024 Losers:
Semi-Conductor play, NXPI and biotech Amgen/AMGN top the loser board for 2024 with single digit losses for 2024. Both 4 Star rated stocks undervalued at -30% and -17%, respectively–we are holding, and adding to these Alphavest Aristocrats Model positions. Despite the performance of these two Aristocrats holdings, our Aristocrats Model outperformed the Dow Jones Industrials Average benchmark of 12.90% with a 2024 return of 16.30%.
December Losers:
Again, December was a tough month, and the double digit declines were pretty pronounced with -19.08% losses in Uniform market leader, Cintas/CTAS. Cintas has grown its dividend each year since its IPO in 1983, making it a worthy member of our Alphavest Aristocrats Model. Again, despite the under performance of CTAS, and Grainger/GWW also an Aristocrats Model holding, the Alphavest Aristocrats Model outperformed the Dow Jones Industrials Average benchmark of 12.90% by over 26% with a 2024 return of 16.30%. We will be reducing the size of these positions due to low current yields for CTAS and GWW (yields lower when prices surge) in the Aristocrats Model. As for Sherwin Williams/SHW, on account of low current yield, 1 STAR status, 39% premium/valuation, underperformance to Model benchmark and with a 2024 return of 8.99%, we will sell SHW in search of more attractive, under/fair valued Aristocrat names like Chevron/CVX and alternative energy star Atmos Energy/ATO (has raised its dividend for 40 straight years!).
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