May Market Recap
After a volatile April when major indexes hit their lowest marks for the year, May saw a powerful recovery led by the technology sector. The Nasdaq 100 has rallied over 25% since April 8, 2025, technically a “bull market,” amid renewed interest in artificial intelligence and better-than-expected earnings.
On the fixed-income side, the yield curve steepened with long-end Treasury yields hitting 5% after credit-rating agency Moody’s downgraded U.S. government credit by a notch. We continue to favor short-duration, high-quality bonds and strategies that have limited exposure to interest-rate and credit risks.
Warren Buffett's Timeless Investing Wisdom
Warren Buffett, the “Oracle of Omaha,” announced at Berkshire Hathaway’s annual shareholder meeting that he will step down as CEO at the end of the year. After more than six decades spent turning a modest textile firm into a global powerhouse, the 94-year-old investor leaves behind a legacy built on patience, discipline, and common sense. Here are seven timeless principles he followed – lessons for every investor!
- Buy Great Businesses at Fair Prices - focus on quality, not hype. Invest in companies you understand and believe in over the long term.
- Think Long-Term - avoid short-term panic or greed. Let time and consistency do the heavy lifting.
- Be Fearful When Others Are Greedy, and Greedy When Others Are Fearful - stick to your plan and see volatility as an opportunity, not danger.
- Don’t Overcomplicate It - you don’t need to be an expert in everything. Stay in your lane and invest in what you can explain in simple terms.
- Cash is a Tool, Not an Investment - keep enough cash for emergencies, but put your money to work through thoughtful investing.
- Avoid Debt for Investments - build wealth steadily, not by leveraging yourself into risk.
- Stay Rational - emotional discipline is more valuable than trying to predict the market.
Buffett’s wisdom is deceptively simple, but that’s its power. Discipline, rationality, and long-term focus are more important than trying to outsmart the market. As your advisor, our goal is to help you apply these principles to your personal goals, keep perspective, and grow wealth with purpose and clarity.
Roth Conversion Strategies for Every Season of Life
| Strategy | What It Is | Why It Works | Best For |
|---|---|---|---|
| Tax Bracket Fill-Up | Convert just enough to stay within your current tax bracket | Lets you take advantage of “unused” room in a lower tax bracket before hitting a higher one | People in a low tax year or expecting higher taxes later |
| Before RMD Window | Convert between retirement and age 73–75 (before Required Minimum Distributions begin) | Reduces future taxable income and RMDs. Helps avoid higher taxes and Medicare surcharges later | Retirees not yet taking RMDs, especially those delaying Social Security |
| Market Dip Opportunity | Convert during a market downturn when portfolio values are temporarily lower | Allows more shares to be converted at a lower tax cost; rebound growth becomes tax-free | Long-term investors with flexibility and a high tolerance for volatility |
An additional, outside-the-box conversion strategy regarding Roth assets is called a “pay-up” conversion. To use this strategy, parents in a lower tax bracket perform a Roth conversion, and their high-earning adult child pays taxes on the conversion amount. This helps the parents turn retirement savings into tax-free money without using their own cash for taxes. Instead of inheriting a Traditional IRA, the child inherits a Roth IRA at a future date and would benefit from its far more favorable tax treatment. This strategy can be an effective way to pass wealth to future generations.
Does the First American Pope Have Something to Teach Us about Tax Planning?
The Vatican conclave selected Robert Francis Prevost to be the next pope. Leo XIV was born in Chicago and became a naturalized citizen of Peru.
Like any other U.S. citizen, Pope Leo VIX is subject to U.S. laws, and the U.S. taxes its citizens on their worldwide income, regardless of where they live or work. However, there are several provisions in the tax code that can help alleviate his U.S. tax burden.
- Foreign Earned Income Exclusion (FEIE): He may exclude up to a certain amount of foreign earned income from U.S. taxation if he meets specific requirements, such as the bona fide residence or physical presence test.
- Foreign Tax Credit (FTC): If he pays income taxes to another country, he can claim a credit to offset U.S. tax liability on the same income.
These provisions are available to all U.S. citizens working abroad. So, if you plan on a working stint on a foreign soil, be sure to plan ahead and work with a well-qualified tax professional.
