November 2022 Newsletter

Greetings Friends,
We hope you had a spooktacular Halloween with more treats than tricks.  While many had to recover from the nasty trick that was hurricane Ian, last month was full of a lot of treats, so we will begin our little update with some good news.

​Social Security Benefits Going Up; Medicare Premium going down
As was announced during the summer, social security recipients will receive an 8.5% cost-of-living-adjustment (COLA) increase in their monthly benefits beginning January, 2023. Beneficiaries will be notified by mail in December of their exact amount.  For those of you wise consumers that have an online account with Social Security (as you all should), you will likely be notified sooner by text or email.​

​Additionally, The COLA notice going out to beneficiaries enrolled in Medicare will also provide Medicare premium information for 2023. We already know the Part B base premium will be $164.90, a decrease of $5.20 from the current $170.10. The IRMAA will range from $65.90 to $395.60, also a slight decrease from 2022 levels, while the first income tiers rise to $97,000 (from $91,000) for individuals and to $194,000 (from $182,000) for couples.
Speaking of Medicare, as many of you know from being inundated with mailers, phone calls and incessant TV commercials, Medicare open enrollment runs until December 7.  This is your annual opportunity to review and, potentially, make changes to your Medicare plans and, most especially, your Part D (drug plan) coverage.
We encourage clients annually to access the Medicare website and check to ensure that your Part D drug coverage is appropriate.  Drug plan formularies change annually, as do some of our prescriptions, so it may save you a few dollars in drug costs if there is a better plan that would meet your needs.  The Medicare site has a very useful tool that lets you input your drugs, pharmacy preference and location to find the plans available to you.

Zelle Payment Fraud on the Rise – What You Should Know
Peer-to-peer payment apps have made splitting dinner among friends quick and easy. With a few clicks, you send money from your bank account to a friend’s bank account all from the dinner table. However, with the ease that new technology brings, scams typically follow.
Zelle, a peer-to-peer payment (P2P) app, was created by the banking industry in response to the popular Venmo and Cash App used by consumers to transfer money easily to friends and family. Since Zelle was created by many of the most popular banks and is automatically available to customers, it has now become the most popular P2P app on the market.
With only an email address or phone number, funds can be transferred to another account. The money is sent instantly and can’t easily be reversed. This has made the app a vehicle for scammers to steal money from unsuspecting consumers.
A new Senate report has found that over 190,000 cases of Zelle fraud have been reported—costing consumers $213 million last year. The report also found that the banks only reimbursed consumers in about 3,500 of the 190,000 cases.
Most Zelle scams begin with a text message. In some cases, it will ask a user to confirm a fake Zelle payment. When the recipient says they did not make the purchase, the scammer will call pretending to be the bank and walk the victim through the steps of reversing the charge. However, in actuality, the money is being transferred to the scammer’s account.
In another common fraud, scammers impersonate a utility company. Victims receive an urgent message that their power will be shut off imminently without payment. They are instructed to send a Zelle payment, but the money really goes to a scammer.
If you have a Zelle account, be on the lookout for suspicious messages. It is unlikely that your bank will contact you via text or email and ask for a Zelle payment. If you receive a message and are unsure, call your bank directly and ask. The same goes for utility companies or any other business that reaches out with unsolicited messages.
Only use Zelle or any P2P app to transfer money to people or companies you know and trust.
If you do fall victim to a scam, contact your bank immediately. If they refuse to reimburse you, contact the Consumer Financial Protection Bureau. The CFPB is expected to issue regulations on this matter that would require banks to reimburse customers.

​Market Update
Most of us would probably regard the most recent corporate earnings reports as bad news: earnings in aggregate were below expectations, and nearly a quarter of companies missed the estimates that they, themselves, were largely responsible for signaling.  Last May, third quarter earnings for companies in the S&P 500 were forecast to rise by 9.7%.  The most recent expected gain was dropped to 2.5%.
So that should mean that stock prices went down, right?  Actually, the stock market responded with a significant rally last week (and the best month since 1976 for the Dow), which offers an important lesson about the news that most of us consume from the financial press.  The lesson is that all those corporate earnings announcements, shifts in interest rates, inflation and jobs data are terrible predictors of short-term market performance.
Come again?  All this financial data offers us clues to the long-term health of the economy, of corporations overall, of individual corporations, and whether we are likely to stay employed and earn a higher income in the future.  Good news is good for the long-term value of stocks; bad news means that companies are growing more valuable at a slower rate than they were before.  

​When people talk about an economic recession, it’s hard to know who to believe.  The U.S. economy experienced negative growth for two consecutive quarters, Q1 and Q2, according to the U.S. Bureau of Economic Analysis.  That means we have already managed to survive a recession, right?
Except that employment and consumer spending were high during that period, and prices were going up.  Those are not indicators of an economic pause.
Now we learn that the American economy’s gross domestic product (GDP) gained 2.6% in the third quarter, according to a recent release from the Bureau of Economic Analysis.  This was higher than the consensus forecast of 2.3%—and since forecasters were expecting economic growth, they clearly didn’t think we were mired in a recession.
None of this means that the economy won’t experience a recessionary decline at some point in the near—or far—future.  There is nothing wrong with periodic declines in growth; the role of a recession is to clear out the economy by exposing unprofitable investments and forcing companies to tighten their belts and make more productive investments with their retained capital.  But for now, the U.S. economy is experiencing increases in consumer spending, job and wage growth—and there is nothing wrong with that, either.
The most productive way to invest for the long term is to turn off the news and stop doing what is really difficult for all of us: trying to figure out what today’s news means for tomorrow’s (or next week’s) markets.

Final thoughts
As always, thank you for the trust and confidence you place in us. It is something we never take for granted and sincerely appreciate. Please do not hesitate to reach out whenever you have questions, concerns or whenever we may be of service to you. 

Sincerely,
Joe Downs, CFP® & John Cunningham, CFP®