Monday, January 29th was the first day you could file your 2023 tax return. While you must make many decisions as you file your taxes, one of the biggest questions is “When do you file?” It is best to do your taxes as early as possible, but not all investors can do so as they need to wait for tax documents like 1099s, K-1s, and business returns. It will likely be the middle of February before Schwab sends out your 1099s, but to be safe, you should wait until the end of February as often a corrected copy is needed.

Why should you file early? Get it filed before everyone else and you are likely to get a refund faster. But the most important reason is to avoid fraud that occurs when bad actors have access to your Social Security number and file a bogus return before you file your own. It happens more often than you would think, and it causes big issues that can linger for several years.


Recent Gross Domestic Product (GDP) results show that the U.S. didn’t just avoid a recession in 2023, it actually grew. The fourth quarter’s real GDP growth of 3.3% was the last exclamation point of a year that saw the economy grow 2.5% (after stripping out inflation) and confounded many. Economists and investment strategists had a stronger conviction of a recession heading into 2023 than any other year in U.S. history, yet the calls for recession grew strangely dim as we marched through a year that saw two global conflicts, an aggressive Fed monetary stance, a stagnant China, and continued economic struggles in Europe.

How were they so wrong? How did 2023 become the year of the economic RINO (Recession In Name Only)? First, economists are never “wrong,” they’re just “early” and that might have some credence this time around. The definition of a recession itself is somewhat vague and one could argue that recession really is in the eye of the beholder, but we wouldn’t be surprised to see the U.S. economy slow this year. So maybe they were just a little early.

Looking back, the calls for a recession in 2023 overlooked some important factors. Consumers still had excess savings, job and wage growth were strong, and maybe most importantly, both consumers and corporations were not as sensitive to rising interest rates. This year brings its own set of challenges, some new and some old, but the U.S. economy continues to prove its stubborn resiliency to defy the odds and American ingenuity is nearly impossible to factor into any economic model.


The first trading of bitcoin occurred in 2008 and over 12 years attracted $1 trillion. It only took 11 years for the SEC to finally approve an ETF for Bitcoin. In 2013, Grayscale filed the first request to the SEC who kept saying “no” until January 10, 2024. On the very first day of trading, the 11 ETFs that were approved attracted $4.6 billion. Many were trying to attract money by lowering their fees with many going to zero cost for a limited time. The eventual costs, however, have a wide range from 0.2% to 1.5%. These ETFs will make it easier for more people to include cryptocurrencies in their portfolios…but should they?

It will come as no surprise that we have not been and are not big fans of cryptocurrencies. They produce nothing:  they do not provide a dividend or pay interest. The value of all cryptocurrencies is in the eye of the beholder. That is to say, the more people who want to own it, the higher the price since there is a limited supply of coins. Supply and demand. As a result, bitcoin has been a VERY volatile asset to own with it being four times more volatile than the S&P 500 over the past five years. There have been four times during this five-year period when it declined by at least 45%.

Despite it increasing 155% in 2023, it is still about 38% below its all-time high. But there are other risks to consider. These ETFs are only approved for cash creation and redemption, and therefore may be less efficient tracking Net Asset Value (NAV) than ETFs in general and may continue to reflect larger than normal discounts or premiums. Custody of, or “virtually holding”, a cryptocurrency means that an owner is either in possession or in control of the digital asset’s private key. In the case of these ETFs, the fund maintains “ownership” of bitcoin by maintaining control of their bitcoin private keys through non-compliant crypto trading platforms such as Coinbase, Gemini, BitGo, or Fidelity Digital Asset Services. If you just want to have some bitcoin upon which you want to speculate, think of it as Las Vegas money because in our opinion that is what it is.


On September 29th, the S&P 500 set a record high of 4839.41 beating the old record set in early 2022. This was led by four of the Magnificent Seven – NVIDIA, Meta, Microsoft, and Alphabet. The record setting continued into the rest of the month as everyone was chasing anything with “AI” potential. At this time of the year, we always look back at the first five days of trading which have a high correlation with year-end results for the markets. Those five days showed a negative 0.5% return. The next indicator is the month of January, which did produce a positive result and is another leading indicator of yearly market returns. If you believe in the Super Bowl theory, you want the NFC Champion San Fransico 49ers to win. Being a presidential election year, it too has a high correlation to being positive. We will have to wait and see about these last two. Even with this continued performance, we expect volatility with a bias to the upside. It is very unlikely that the Fed will cut rates sometime this summer at the earliest. It is also very unlikely that they will lower or raise rates the closer we get to the election. As we continue to take the disciplined slow and steady approach to our investment management, we remain positive about the long-term success of the American free enterprise system.


Not surprisingly, the Federal Reserve held interest rates at its meeting this past week (the fourth meeting in a row that they have done so). The next change is much more likely to be lower than higher, but we still do not expect any change until the summer.  Though the Fed is pleased with the progress that is being made, it is still convinced that its work is not done. The December Personal Consumption Expenditures price index (the Fed’s preferred inflation index) was up 0.2% for the month and up 2.9% year over year, the first time it has been below 3% since March of 2021 – almost three years ago.

There was also good news about the December income number, which was up 0.3% after a very strong 0.4% in November. These higher income numbers led to consumer consumption up 0.7%. We are far from out of the woods, but the picture is a little brighter. It is important to keep things in perspective. Much is going on in the US and the world in general. Just a little loss of confidence in the economic news could cause multiple problems. We still feel good about the markets this year, but we are remaining cautious.


The House Budget Committee approved the Fiscal Commission Act of 2023 by a vote of 22-12. This legislation sets up a bipartisan fiscal commission to fast-track changes to Social Security and to address our national debt. All kinds of suggestions to reform Social Security, including cuts, are on the table. While it is unlikely that cuts would come to current beneficiaries of Social Security, they might significantly change the system for future beneficiaries. Expect most Democrats to decry this Act and vote against it on the House floor, but we expect it to pass with Republicans in control. Needless to say, Social Security Reform will be a hot topic in an election year.


We know you will find this hard to believe, but there is some bipartisanship going on in Congress. Earlier this month this bill passed out of committee on a bipartisan basis and went to the House floor. What is contained in this bill that seems to have almost everyone cheering?

On an individual basis it has a Child Tax Credit providing a maximum refundable (means you get a check if you can’t use all of it to reduce your taxes) of $1,800 in 2023, $1,900 in 2024 and $2,000 for 2025 with inflation adjustments for 2024 and 2025. In an effort to help small and mid-size businesses, the bill will raise the 100% expense cap from $1 million to $1.29 million. The bill restores the 100% depreciation, R&D expensing for domestic R&D and greater deductibility of interest provisions that ended last year. These have been extended for only one more year. The bill contains many “fixes” to previous bills that are supported on both sides of the isle. What are the chances of this passing the House? Pretty good, but the Senate might be a challenge.


Please join us in congratulating ProVise Financial Planner, Peter Seriano, CFP®, for completing his studies to become recognized as a Certified Divorce Financial Analyst®.  With this training, Peter has gained greater insights into helping clients and prospective clients understand how the decisions made during divorce impact their financial futures.

Peter’s training gives him greater perspective and guidance on some of the following matters:

  • “Understanding the short-term and long-term effects of dividing property.
  • Analyzing pensions and retirement plans.
  • Determining if the client can afford the marital home, and if not, what he or she can afford.
  • Recognizing the tax consequences of different settlement proposals.” 1

Most people are familiar with the high divorce statistics so when a marriage ends it is important to have the proper professional team to help you navigate this emotional time. As financial planners, we view Peter’s extra layer of expertise as invaluable as clients face important financial decisions that may be irrevocable. Remember divorce has many issues from spousal and child support to tax law to property and financial issues. Feel free to reach out to Peter with any questions at seriano@provise.com.

1 https://institutedfa.com/


We hope you continue to stay safe and well.

Proudly and successfully serving our clients for over 38 years. As always, we encourage you to call or email us if you would like to discuss anything.


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