Dave – Private equity is a direct investment in a company or real estate that is not traded on an exchange and, therefore, would not have the same liquidity as common stock that trades on an exchange. In addition, common stocks are public companies subject to Securities Exchange Commission disclosures. These disclosures include requirements to issue audited financial statements, file quarterly reports, and other regulatory filings and obligations. Private equity investments are not subject to public company disclosures and pose a higher risk. Before investing in private equity, you should be familiar with the party issuing the investment. You should consult with a financial advisor to help determine a private investment's risk.

Dave – The most significant risk to the stock market in the near term is the economy moving into a recession. The Federal Reserve has begun reducing short-term interest rates to avoid a recession. The Fed has successfully lowered inflation to near its 2% target level. They are focused on reviving a weakening labor market to combat the recession risks. Lower interest rates can provide businesses the confidence to ramp up hiring. The upcoming election will likely produce short-term market volatility or “noise” in the financial markets. We do not recommend making any significant portfolio moves to capitalize on election results.

Dave – Most investors who own stocks should have an allocation to small company stocks. Small company stocks historically pose higher risks and returns than large company stocks. Many of these small companies are not widely known by novice investors; therefore, investing in an actively managed mutual fund run by a seasoned professional is generally the best course of action. Depending on your specific risk tolerance, a 5-10% allocation of your stock exposure may be adequate. You should consult a financial advisor to determine your recommended small company allocation.

Suppose you have realized any significant capital gains throughout the year. In that case, you may want to calculate if you should make an estimated tax payment to avoid an underpayment penalty for your 2024 taxes. The final estimated payment for 2024 taxes is due by January 15, 2025.