July 9, 2025 In Investments, Miscellaneous

Navigating Market Volatility: Why Long-Term Investing Still Works

In recent months, financial headlines have been dominated by news of new tariffs and the resulting market volatility. For many investors, it’s easy to feel unsettled when the market takes a dip or the news cycle grows increasingly negative. But during times like these, it’s especially important to take a step back and focus on the bigger picture.

Volatility Is Normal—And Expected

Market ups and downs are a normal part of the investing journey. While short-term movements may feel dramatic in the moment, history has consistently shown that markets recover—and grow—over the long term. Emotional reactions and impulsive decisions based on current events can often derail long-term progress far more than the volatility itself.

The Power of Staying the Course

At Davis Private Wealth, our approach is rooted in long-term, disciplined investing. We build diversified portfolios tailored to your goals and designed to weather market fluctuations. Rather than trying to time the market or chase trends, we focus on strategies that prioritize steady progress and minimize unnecessary risk.

A Note for Retirees and Near-Retirees

If you’re retired or approaching retirement, you might feel even more sensitive to market swings—and understandably so. That’s why we take great care to structure portfolios with a mix of assets, including more stable, income-generating investments. These allocations are built to support your income needs and protect your financial plan, even during periods of market stress.

Our Commitment to You

While we continue to monitor economic developments—including tariff impacts—we remain confident in the resilience of the market and the value of long-term investing. Staying focused, disciplined, and diversified remains the most effective strategy to meet your goals.

If you have questions about your portfolio or want to talk about your investment strategy, don’t hesitate to reach out. We’re here to guide you through times like these and help keep your plan on track.

Final Thoughts

Market headlines will come and go, but a well-built plan is designed to last. Thank you for your continued trust in Davis Private Wealth, LLC.

 

January 16, 2025 In Financial Planning, Investments

Understanding Different Types of Investment Accounts: Which One is Right for You?

When it comes to investing, choosing the right type of investment account is just as important as selecting the assets to invest in. Your choice of account can impact your taxes, the flexibility of your investments, and how you save for specific financial goals. To make an informed decision, let’s break down the most common types of investment accounts and explore how they work.

  1. Tax-Advantaged Retirement Accounts

Tax-advantaged retirement accounts are designed to help you save for your future while offering significant tax benefits. Here are the primary options:

  • 401(k): Offered by many employers, 401(k)s allow you to contribute pre-tax income, reducing your taxable income for the year. Some employers also offer matching contributions, effectively giving you free money. However, withdrawals are taxed as ordinary income, and early withdrawals before age 59½ may incur penalties.
  • Traditional IRA: Individual Retirement Accounts (IRAs) also allow pre-tax contributions, with investments growing tax-deferred until withdrawal. There are income limits for tax-deductible contributions if you’re covered by a workplace retirement plan.
  • Roth IRA: Unlike traditional IRAs, contributions to Roth IRAs are made with after-tax dollars. The benefit? Qualified withdrawals in retirement, including both contributions and earnings, are tax-free. Roth IRAs are particularly attractive if you expect to be in a higher tax bracket during retirement.
  • Roth 401(k): Combines features of a 401(k) and a Roth IRA. Contributions are made with after-tax dollars, but qualified withdrawals are tax-free.
  1. Taxable Brokerage Accounts

A taxable brokerage account provides maximum flexibility. You can buy and sell a wide range of investments, including stocks, bonds, mutual funds, and ETFs. Unlike retirement accounts, there are no contribution limits or early withdrawal penalties. However, you’ll need to pay taxes on dividends, interest, and capital gains. Taxable accounts are ideal for goals that are not retirement-specific, such as saving for a home, building an emergency fund, or growing wealth.

  1. Education Savings Accounts

If you’re saving for education expenses, these accounts offer tax advantages:

  • 529 Plans: These state-sponsored accounts allow you to invest funds that grow tax-free, provided the withdrawals are used for qualified education expenses like tuition, room, board, and even K-12 costs in some cases.
  • Coverdell Education Savings Account (ESA): Similar to a 529 plan but with more investment options. However, annual contribution limits are relatively low, and income restrictions may apply.
  1. Health Savings Accounts (HSAs)

HSAs are a triple-tax-advantaged way to save for healthcare expenses. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. Additionally, after age 65, you can use HSA funds for non-medical expenses without penalties (though taxes will apply). HSAs are only available if you’re enrolled in a high-deductible health plan (HDHP).

  1. Employer Stock Purchase Plans (ESPPs)

Some employers offer ESPPs, allowing employees to purchase company stock at a discount. These can be a valuable way to invest, especially if your employer provides a substantial discount. However, be mindful of concentration risk, as holding too much stock in one company can be risky.

How to Choose the Right Account for You

When selecting an investment account, consider the following factors:

  1. Your Financial Goals: Are you saving for retirement, a home, education, or healthcare? Your goal will often determine the most suitable account.
  2. Tax Implications: Tax-advantaged accounts can help reduce your tax burden, but you’ll need to follow specific rules and contribution limits.
  3. Flexibility: If you need access to your money before retirement, a taxable brokerage account or an HSA may be better options.
  4. Employer Benefits: Take advantage of accounts like 401(k)s and ESPPs if your employer offers matching contributions or other perks.
  5. Income and Contribution Limits: Certain accounts, like Roth IRAs and Coverdell ESAs, have income limits that may affect your eligibility.

Final Thoughts

Understanding the different types of investment accounts and how they align with your goals can help you make smarter financial decisions. For many people, a mix of account types—such as a 401(k) for retirement, a taxable brokerage account for general savings, and a 529 plan for education—offers the best balance of tax benefits and flexibility. Consider speaking with a financial advisor to tailor your strategy and maximize your long-term success. Contact Josh Davis at josh@davisprivatewealth.com to discuss further.

October 16, 2024 In Financial Planning, Tax Planning

URGENT for anyone that has an LLC, S-Corp, Partnership, or other Entity

I wanted to share something very important and urgent with all of you. It applies to a lot of you (but not everyone). If you have any ownership over 25% or have any control over an entity (LLC, S-Corp, etc) this will most likely apply to you. This includes entities used as holding companies for real estate and some entities no longer in use.

There is less than 3 months (1/1/2025) before many of us need to file a BOI (Beneficial Ownership Information) Filing before penalties start.

The Corporate Transparency Act (CTA) was enacted on January 1, 2021 as part of the National Defense Authorization Act for Fiscal Year 2021. It represents one of the most significant changes in U.S. corporate law in decades. Here’s a breakdown of the key points regarding the CTA:

  1. Purpose

The Corporate Transparency Act aims to combat money laundering, terrorist financing, and other illicit financial activities by increasing transparency in corporate structures. It mandates that certain companies report their beneficial owners (those who actually control or benefit from the company) to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury.

  1. Reporting Requirements

Under the CTA, companies are required to disclose detailed information about their beneficial owners. This includes: Full legal name, Date of birth, Residential or business address (not PO Boxes), Unique identifying numbers, such as a driver’s license or passport number

The report must be filed with FinCEN within certain time frames:

  • For new companies (1/1/2024 and newer): 90 days upon formation or registration.
  • For existing companies: Companies formed before the effective date of the regulations (January 1, 2024) have one yearto report. The deadline is coming up on 1/1/2025!
  • For changes: Any changes to the reported information must be updated within 30 days.
  1. Who Needs to Report?

The reporting obligations apply to many U.S. businesses and foreign companies doing business in the U.S. Generally, any corporation, limited liability company (LLC), or similar entity formed in the U.S. or registered to do business in the U.S. must report. However, there are certain exemptions, such for nonprofits and larger companies.

  1. Penalties for Non-Compliance

Failure to comply with the CTA can result in significant penalties, including:

  • Civil penaltiesof up to $500 per day for each day the violation continues.
  • Criminal penalties, including fines of up to $10,000and/or imprisonment for up to 2 years for willful violations or unauthorized disclosures of beneficial ownership information.

If this applies to you (or may apply), then I urgently suggest you reach out to your attorney or CPA to help file this report or discuss it. You can also file it yourself. It takes approximately 10-15 minutes per entity for simple filings but could take longer for more complex ones. Here is the website to file: https://www.fincen.gov/boi

Our firm cannot file these beneficial owner filings for clients (guidance is only for attorneys and CPA’s) but we are here to give general information regarding these filings. There is also something called a FinCEN ID that is recommended to get and use for the BOI filing for the company (or give to the person filing it). A FinCEN ID will save a lot of time if you have multiple entities that need to be filed for.

September 4, 2024 In Financial Planning, Investments

Why Your Long-Term Passive Investment Strategy Shouldn’t Change Based on Presidential Elections

Why Your Long-Term Passive Investment Strategy Shouldn’t Change Based on Presidential Elections

As election season approaches, it’s easy to get caught up in the political drama and feel pressured to adjust your investment portfolio based on who you think will win the presidency. However, when it comes to long-term passive investing, this kind of short-term thinking can do more harm than good. Whether it’s a Democrat or Republican taking office, your approach to investing should remain steady and focused on the bigger picture. Here’s why sticking to your long-term passive investment strategy is the best course of action, regardless of the election outcome.

  1. The Stock Market’s Long-Term Growth

The stock market has a proven track record of growth over the long term, regardless of who occupies the Oval Office. While there may be periods of volatility or downturns following an election, the market tends to recover and continue its upward trajectory over time. The S&P 500, a broad measure of the stock market, has grown significantly over the past several decades under both Democratic and Republican administrations. This historical trend highlights that the market’s long-term growth is driven more by the broader economy and corporate earnings than by the political party in power.

  1. Policy Changes Take Time

Even when a new president takes office with a bold agenda, implementing significant policy changes takes time. Legislative processes are slow, and many proposed policies are subject to extensive debate, amendment, or even complete obstruction in Congress. This means that the immediate impact of a new president’s policies on the economy and markets is often less drastic than the campaign rhetoric might suggest.

For long-term passive investors, this slow pace of change reinforces the importance of staying the course. Short-term market reactions to election results are often driven by speculation rather than substantive changes to economic fundamentals.

  1. The Power of Diversification

A core principle of long-term passive investing is diversification—spreading your investments across different asset classes and sectors to reduce risk. This strategy is designed to help you weather market fluctuations, including those that might be triggered by political events. By maintaining a diversified portfolio, you’re better positioned to absorb the impact of any short-term market volatility that might arise during election season.

Diversification allows you to focus on the long-term growth potential of your investments rather than reacting to short-term political events. Over time, this approach has been shown to be effective in achieving steady, reliable returns.

  1. Focus on What You Can Control

In long-term passive investing, it’s essential to focus on the factors within your control: your asset allocation, your contribution rates, and your investment horizon. Trying to predict how elections will affect the market is a form of market timing, which is notoriously difficult and often counterproductive. Instead of attempting to guess the market’s reaction to a new president, concentrate on maintaining a consistent investment strategy that aligns with your long-term financial goals.

By regularly contributing to your investments and staying disciplined in your approach, you increase your chances of reaching your financial objectives, regardless of short-term political changes.

  1. Avoid Emotional Reactions

Investing based on emotions—whether it’s fear of a particular candidate winning or excitement about another—is a common pitfall that can lead to poor decision-making. Emotional investing often results in buying high and selling low, the exact opposite of what long-term investors should aim to do.

Sticking to a passive investment strategy helps mitigate the risks of emotional reactions. By following a disciplined, rules-based approach, you can avoid the temptation to make impulsive changes to your portfolio based on election outcomes or political headlines.

Conclusion: Stay Committed to Your Long-Term Strategy

While presidential elections can create noise and uncertainty in the markets, they should not dictate your investment strategy. The principles of long-term passive investing—such as diversification, focusing on what you can control, and avoiding emotional decisions—remain sound regardless of who wins the presidency. By staying committed to your long-term goals and maintaining a consistent investment approach, you can confidently navigate the uncertainties of election cycles and continue building your financial future.

October 1, 2018 In Financial Planning, Investments

Fee-Only vs. Fee-Based Financial Advice

Fee-Only

Financial Advisors that are Fee-Only are paid directly for their services by their clients. They can be paid either as a percentage of assets they manage, a fixed planning fee, or hourly fees. Fee-Only planners are only paid from their clients. They can charge a one-time fee or an ongoing fee for their services.

Fee-Only advisors have fewer conflicts of interest because they are only paid by the client and their interests are aligned with the client. They only worry about the client’s needs as a result. Fee-Only advisors cannot accept any compensation because of product sales and therefore makes working with them more transparent for clients.

 

Fee-Based

Fee-Based financial planning may sound like Fee-Only but is significantly different. The main difference is that Fee-Based advisors can accept commissions from financial products, annuities, and insurance products that they sell their clients. There tend to be a lot of conflicts of interest for the financial advisor. Fee-Based advisors may do some fixed fee planning but also sell commission-based products alongside the planning fee. There tends to be less transparency with Fee-Based advice.

 

*Davis Private Wealth is a Fee Only Financial Planning firm in Wellington, Florida. As a Registered Investment Advisory firm, we have a fiduciary duty to all of our clients.

September 1, 2018 In Budgeting, Miscellaneous

New Amazon Prime Credit Card!

As I have been meeting with clients lately, I have continuously brought up the Amazon Prime Credit Card that I recently signed up for. I feel that the benefits of this card are fantastic and worth sharing. If you shop at Amazon and/or Wholefoods a significant amount, then you would benefit the most from this card.

Here are some of the benefits of using this card:

5% back on purchases at Whole Foods and Amazon (3% if you don’t have Amazon Prime)

2% back on purchases at restaurants, gas stations, and drugstores

1% on all other purchases

No foreign transaction fees

Here is a link to all the card benefits on Amazon: https://www.amazon.com/b/?ie=UTF8&node=16070413011

I’m anticipating that our family will spend around $12,000 this year at Whole Foods (since this is Melissa’s favorite grocery store😊). So, with 5% cash back we will get back $600 each year versus the 1% we were getting on our previous card. Of course, I advise that you pay off any credit card balances each month.

 

*Financial Planning, Wealth Management, & Investment Management firm in Wellington, FL.

August 1, 2018 In Miscellaneous

Wellington History – A Wealth Management firm in Wellington Florida

Wellington was once all swampland. Things got started in the 1950s when Charles Oliver Wellington, a successful accountant from Massachusetts who graduated from Harvard acquired 18,000 acres of swampland. Mr. Wellington named the land south of Southern Boulevard, and west of 441 “Flying Cow Ranch.” C.O.W. were his initials, and “flying” as he was an aviator. There was even once a landing strip for Wellington’s planes at Flying Cow Ranch Road.

Soon after, legislation was passed by the State of Florida to create the Acme Drainage District. This was designed, in 1953, to provide drainage and flooding measures to make the land more accessible for farming. This would later transform into the Acme Improvement District, adding parks and recreation to its duties.

In the 1960’s parts of Flying Cow Ranch were sold or leased to farmers. 2,000 acres soon became devoted to strawberry patches, even claimed to be the world’s largest strawberry patch. In 1953, there was recorded to be only 100 people residing in Wellington. However, it soon became one of the quickest growing areas in Florida, expanding residential areas, as well as service industries.

Major construction began when 7,200 acres of land were sold from the ranch to the Investment Corporation of Florida (ICOF) in 1972. Another developing company, Alcoa Florida joined ICOF to develop a golf course, the 150 acres Lake Wellington, and the Wellington Club. Next, Gould Florida bought out the project and added the Palm Beach Polo and Country Club, as the chairman of Gould Inc., William Yilvisaker was an active polo player. These developments would have lasting impressions on the culture of Wellington, as it is widely known that Wellington is an international hot spot for Equestrian sports.

Officially, the Village of Wellington was created on December 31st, 1995, and act inspired by a group of zealous Wellington residents that was necessary in order to qualify for state funds. Today, the Village is home to nearly 50,000 residents, offering a unique identity as a home for equestrian, golf, polo, aviation, and more. Wellington offers a friendly charm, full of beautiful neighborhoods, and boasts 11 A-rated Palm Beach County schools. The Village of Wellington’s history is far from complete, as it continues to steadily grow today.

Our firm, Davis Private Wealth, is happy to be located in such a great community as Wellington. We pride ourselves in being one of the premier Wealth Management firms in the Wellington area and all of South Florida. Located right on 441 we are in a great central location with easy access from the turnpike.