Volume 2, Issue 6 | Fourth Quarter 2019

CELEBRATING 20 YEARS!

CONTENTS

| Market Commentary Words from our President

| Third Quarter Markets

| Associate Spotlight

| This Day in Stock Market History MARKET COMMENTARY WORDS FROM OUR PRESIDENT:

RICHARD HOLT, CFA®, PRESIDENT, CHIEF INVESTMENT OFFICER

Celebrating our firm’s 20-year anniversary provides This quarter’s newsletter focuses on one of these an opportunity to reflect on how our industry has milestone topics – how to navigate the cost of medical changed. Many improvements are due to technological insurance in retirement. It also gives me the opportunity advances that allow us to work more efficiently or that to formally announce our recent addition to the IMA enhance the services we bring to you. Our client portal Wealth team by introducing you to Leigh Bennett, our is one such innovation, giving you 24/7 access to your Medicare Insurance Program Director. We are so pleased account values, recent activity and current performance to be joined by a talented professional like Leigh who information. By the way, if you haven’t started using the specializes in an area of such importance to our clients. portal on a regular basis, please let us show you what If you have questions about supplemental insurance or you’re missing! any other matters that impact your financial plan, please call us to schedule a meeting! And, who would have guessed in 1999 that the day would come when our clients would no longer pay commissions on stock, ETF and options trading? That’s right - zero commission stock trading commences October 7th, 2019 due to this bold pricing move by Charles Schwab.

Other changes have more to do with the scope of services that we bring to you. There are many issues that impact a person’s financial well-being over the course of a lifetime; some of these are “milestone” decisions that are more complex than others and can affect the outcome of your long-range plans. Please keep in mind that we have designed our advisory services to change and grow with you, from the point that you start accumulating savings all the way through to retirement distribution planning and estate considerations – and everything in between. We are here to help you navigate RICHARD HOLT, CFA®, PRESIDENT, CHIEF INVESTMENT OFFICER these milestone events so you keep on track to reach your financial goals.

2 IMA WEALTH - THE FIDUCIARY THE MARKETS:

THIRD QUARTER THROUGH SEPTEMBER 30, 2019

The third quarter was full of ups and downs for stocks, Market Committee reduced short-term interest rates 25 much like the second quarter. Stock values moved in basis points, which sent stocks reeling. However, strong response to the rhetoric from the participants in the corporate earnings reports, low unemployment, and trade war between the United States and China. The higher wages helped ease investors’ concerns by the Federal Reserve lowered interest rates two times during end of the month. the quarter. More new jobs were added, but at a reduced August rate, while wage growth continued. Manufacturing and industrial production remain muted, influenced, in part, started with President Trump’s threat to impose by the waning global economy. Nevertheless, consumers additional tariffs on Chinese imports, which sent stocks were undaunted by economic developments, spending plummeting. Throughout the month, each of the at a steady rate throughout the quarter. benchmark indexes listed here continued to lose value. Even a final-week push couldn’t save stocks from posting July month-over-month losses. The small caps of the Russell kicked off the third quarter in a somewhat lackluster 2000 were hit particularly hard, falling over 5.0% in manner, as the benchmark indexes listed here posted August. The Global Dow lost almost 3.5%, and the tech- gains over June’s respective closing values. The Nasdaq heavy Nasdaq dropped more than 2.5%. The large caps gained over 2.0% for the month, followed by the S&P of the Dow and S&P 500 also fell close to 2.0%. Oil and 500, which rose 1.31%. The Dow and Russell 2000 inched gas prices at the pump fell in August, while long-term ahead by less than one percent, while the Global Dow bond yields plunged as prices soared. dipped by almost half a percent. The Federal Open Continued on page 4

IMA WEALTH - THE FIDUCIARY 3 CONTINUED THE MARKETS

September 28 price. Gold closed the third quarter $66.00 higher saw each of the benchmark indexes listed here post than its second-quarter closing price. And the national solid gains, led by the Global Dow, which rode a solid average retail regular gasoline price, at $2.654 per gallon close to the month on encouraging economic data from on September 23, did not change from its average price China. The Russell 2000 climbed almost 2.0% ahead of at the end of the second quarter. its August closing total, while both the Dow and S&P Economic growth has slowed so far this year, as lagging 500 exceeded their respective August closing marks export orders have quelled manufacturing output. by respectable amounts. The Nasdaq gained about Wages continued to grow, while consumers ratcheted half a percent on the month. The Federal Open Market up their spending. The fourth quarter will likely ride Committee once again lowered interest rates 25 basis the ebb and flow of economic and world events, not points in September following July’s 25-basis-point cut the least of which is the ongoing trade war between (the FOMC did not meet in August). By the close of the world’s two economic giants: China and the United trading on September 30, the price of crude oil (WTI) States. was $54.37 per barrel, down from the August 30 price Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, of $55.16 per barrel. The national average retail regular inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management gasoline price was $2.654 per gallon on September (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg. 23, up from the August 26 selling price of $2.574 but com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple $0.190 lower than a year ago. The price of gold dropped commonly available international news sources (i.e. wire services) and are independently verifi ed when necessary with secondary sources such as government agencies, corporate press by the end of September, falling to $1,479.30 by close releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information of business on the 30th, off from $1,529.20 at the end nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any of August. For the third quarter, large caps performed securities, and should not be relied on as fi nancial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can better than small caps. The Dow and the S&P 500 each be no guarantee that any investing strategy will be successful. finished 1.19% above their respective second-quarter The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed closing values. The tech stocks of the Nasdaq broke of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the about even for the quarter, while the Russell 2000 and NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely the Global Dow lost value. For the quarter, the price of traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are crude oil (WTI) was $3.79 per barrel lower than its June unmanaged and are not available for direct investment September

4 IMA WEALTH - THE FIDUCIARY BUYING SUPPLEMENTAL HEALTH INSURANCE: MEDIGAP

Medicare won’t cover all of your health-care costs during If you don’t buy a Medigap policy during open retirement, so you may want to buy a supplemental enrollment, you may not be able to buy the policy that medical insurance policy known as Medigap. Offered you want later. You may fi nd yourself having to settle by private insurance companies, Medigap policies are for whatever type of policy an insurance company designed to cover costs not paid by Original Medicare, is willing to sell you. That is because insurers have helping you fi ll the gaps in your Medicare coverage. greater freedom to deny applications or charge higher premiums for health reasons once open enrollment WHEN’S THE BEST TIME TO BUY A MEDIGAP POLICY? closes. The best time to buy a Medigap policy is during open enrollment, when you can’t be turned down or charged WHAT’S COVERED IN A MEDIGAP POLICY? more because you are in poor health. If you are age 65 Under federal law, only 10 standardized plans can be or older, your open enrollment period starts on the fi rst offered as Medigap plans (except in Massachusetts, day of the month in which you’re both 65 or older and Minnesota, and Wisconsin, which have their own enrolled in Medicare Part B. A few states also require that standardized plans). The plans currently sold are Plans a limited open enrollment period be off ered to Medicare A-D, Plans F and G, and Plans K-N. Each Medigap plan benefi ciaries under age 65. off ers a diff erent set of benefi ts. All cover certain out-of-

Continued on page 6

IMA WEALTH - THE FIDUCIARY 5 CONTINUED BUYING SUPPLEMENTAL HEALTH INSURANCE: MEDIGAP pocket costs, including Medicare coinsurance amounts. DOES EVERYONE NEED MEDIGAP? Some plans also cover other costs, such as all or part of No. In fact, it’s illegal for an insurance company to sell Medicare Part A and Part B deductibles, foreign travel you a Medigap policy that substantially duplicates emergency costs, and Medicare Part B excess charges. any existing coverage you have, including Medicare coverage. You don’t need a Medigap policy if you join Medigap policies do not cover certain health-care a Medicare Advantage plan or a private fee-for-service expenses, including long-term care, vision care, dental plan, or if you qualify for Medicaid or have group care, or prescription drugs (to obtain prescription coverage through your spouse. drug coverage you can purchase a Medicare Part D Prescription Drug Plan). You may also not need to buy a Medigap policy if you work past age 65 and have employer-sponsored health You can buy the Medigap plan that best suits your insurance. If you find yourself in this situation, you needs. But it’s important to note that not all Medigap may want to enroll in Medicare Part A, since it’s free. plans are available in every state. Remember that if you enroll in Medicare Part B, your ARE ALL MEDIGAP POLICIES CREATED EQUAL? open enrollment period for Medigap starts. If you don’t Generally, yes. Although Medigap policies are sold buy a Medigap policy within six months, you may be through private insurance companies, they’re denied coverage later or charged a higher premium, so standardized and regulated by state and federal law. A you may want to wait to enroll in Medicare Part B until Plan B purchased through an insurance company in New your employer coverage ends. York will off er the same coverage as a Plan B purchased In addition, you may not need to buy a Medigap policy if through an insurance company in Texas. All you have to you are covered by an employer-sponsored health plan do is decide which plan that you want to buy. after you retire (e.g., as part of a retirement severance However, even though the plans that insurance package). In this case, your employer’s plan may cover companies offer are identical, the quality of the costs that Medicare doesn’t. If you have any questions companies that off er the plans may be diff erent. Look about your coverage, talk to your employer’s benefits closely at each company’s reputation, fi nancial strength, coordinator. and customer service standards. And check out what you’ll pay for Medigap coverage. Medigap premiums vary widely, both from company to company and from state to state. You can fi nd a tool on the Medicare website, medicare.gov, that will help you compare Medigap policies off ered in your area. You can also visit this website to fi nd other important information on how Medigap policies work with Medicare.

6 IMA WEALTH - THE FIDUCIARY SPOTLIGHT IMA WEALTH WELCOMES LEIGH BENNETT, MEDICARE INSURANCE PROGRAM DIRECTOR!

Leigh has been part of IMA (previously Waldman Bros) for 8 • Medicare vs. Medicaid years, and now she’s a member of the IMA Wealth Team! Her • Original Medicare expertise in Medicare Supplemental Insurance will provide • Medicare Supplements invaluable guidance and solutions for all who are approaching • Medicare Advantage or in retirement! We look forward to introducing you to Leigh, but if you are eager to meet with your advisor and Leigh, • Prescription Drug Plans please let us know! • Enrollment Periods • Myths CONTACT LEIGH • Additional Options [email protected] | 972.759.3760

PROPERTY Guaranteed replacement cost Temporary living expenses Cash payment option AUTO Agreed value coverage Choose your own repair shop UMBRELLA $5M & up limits MORE THAN JUST INSURANCE available IMA Select helps you protect everything that is important to you and your family. FIND COVERAGE TODAY imacorp.com/select

The IMA Financial Group, Inc. (“IMA”) IMA is the parent company of IMA Wealth and IMA Select. IMA has subsidiary corporations which are engaged in retail and wholesale insurance operations, including IMA Select. If you need professional insurance services for yourself or your business, IMAW Wealth will refer you to IMA and its subsidiaries. Should insurance products be purchased as a result of this referral, IMA Wealth’s associated persons could be eligible to receive a percentage of the commissions generated by these sales. You are not obligated in any way to use IMA and its subsidiaries to purchase insurance products. Referrals made by IMA Wealth’s associated persons will be made in accordance with our privacy policy under SEC Regulation S-P. CHARITABLE CONTRIBUTIONS:

WRITTEN BY MARGARET HORNBECK, CCO & COO

The 2017 tax reform legislation brought substantial on certain deductions that were not previously capped, changes for almost all our clients. The most important such as state and local taxes, caused many taxpayers to changes will vary depending upon your individual lose the ability to itemize their deductions. circumstances. One of the changes that we can help you Since taxpayers are required to itemize to claim a manage more effectively concerns your ability to deduct deduction for charitable gifts, this means that you may charitable contributions. no longer receive a deduction for charitable donations... The charitable contributions deduction itself was left unless you plan ahead. One strategy you may wish to intact for taxpayers who itemize their deductions consider is using a “bunching” strategy to consolidate rather than taking a standard deduction. However, the charitable gifts into a single year. This could allow you to new standard deduction is $12,200 per individual and cross the standard deduction threshold so that you can $24,000 per married couple. This change, plus new limits itemize your deductions in certain years.

FOR EXAMPLE: if you typically donate $15,000 per year to charity, you may want to consider donating $30,000 in 2019 and forgoing the donation in 2020. You would then be entitled to claim the itemized deduction in 2019, rather than potentially missing out on the deduction in both years.

8 IMA WEALTH - THE FIDUCIARY We can help you structure your charitable giving with a simple, tax-smart investment solution of a donor-advised MAKING A account. Offered by Schwab Charitable™, an independent 501(c)(3) organization, you can use a Schwab Charitable DIFFERENCE account to support the causes that mean the most to you today or to leave a legacy of giving.

There are many advantages to a Schwab Charitable account. It offers a flexible way to manage your charitable giving and realize same-year tax benefits if you can itemize your deductions. The proceeds can then be gifted to the IRS- approved public charity of your choice And, because you can donate highly appreciated securities, you can potentially eliminate capital gains taxes on securities you contribute.

You can contribute cash and publicly traded securities, including stocks, most mutual fund shares, and bonds. Schwab Charitable also accepts non-cash asset such as restricted securities, private business interests, real estate and private equity. By contributing non-cash assets to a charity, including Schwab Charitable Giving, you generally do not pay capital gains tax on the sale of assets that have been held more than one year. This can increase the amount available for your charities by up to 20% compared to selling the assets and donating the after-tax proceeds.

There is a $5,000 minimum to establish a core Charitable Giving account. The tax deduction applies in the year that Since IMA Wealth’s doors opened in 1999, it has been our mission to make a difference you fund your Charitable Giving account. You can then direct serving in the local communities where we gifts to be made in the same year and/or in subsequent years. work and live. As our company has grown, so We are here to help! Please ask us for more information on has our impact on those communities. the advantages of a Schwab Charitable Giving account. IMA Wealth was proud to have been part of The IMA Financial Group’s total of 9,232 volunteered hours in 2018. In 2019, we are even more proud to have partnered even closer with our markets to make a difference in the IMA Foundation’s fundraising events. We helped to raise money for the Down Syndrome Society of Wichita at his year’s Pickle Jam Pickleball event. And for Big Brothers and Big Sisters of Texas in the Sandblast event in Dallas.

Thank you to those who partnered with us to help make a difference and positively impact our communities!

IMA WEALTH - THE FIDUCIARY 9 THIS DAY IN STOCK MARKET HISTORY OCTOBER 22ND

1962 October 22nd This Day in Stock Market History – Cuban Missile Crisis Begins. President Kennedy announces a blockade on Cuba and confirms rumors that the Soviets are setting up missile sites in Cuba. The Dow Jones Industrial Average would drop 1.85% the next day on the news, and would eventually decline 24% from peak to through during the Cuban Warren was afraid. He was Missile Crisis. interested in studying the attitudes Source: The Market’s Measure: An Illustrated History of America Told Through the Dow Jones Industrial Average that led to extreme nationalism, and how wars could be prevented. He was always trying to calculate the odds of the world’s blowing up.” -Buffett’s friend Dick Holland as quoted in Roger Lowenstein’s Buffett: The Making of an American Capitalist

10 IMA WEALTH - THE FIDUCIARY 2008 October 22nd The Dow Jones Industrial Average closes down 526 points, at the time its 7th worst point decline in history as the 2008 financial crisis intensifies.

During the day the Dow was down as much as 698, but recovered slightly before the close. The cause of the decline seemed to be centered around earnings releases that day, and the general fear within the market during this period in the financial crisis: 1906 Best Worst October 22nd Wachovia Bank issued its quarterly earnings, reporting in Dow Jones Industrial Average History a staggering $24 billion loss (Wall St was expecting a 1.96% | 133 Points slight profit from the bank!)

Boeing, Amazon and AT&T all released earnings that were less than expectations. 2008 After this decline, the Dow has lost 40% since the Worst October 22nd financial crisis began, the S&P 500 has lost almost 43% in Dow Jones Industrial Average History and the Nasdaq has fallen 43.5%. Markets would still 5.82% | 526 Points have 5 months of declines before they found a bottom in March 2009.

IMA WEALTH - THE FIDUCIARY 11 LET’S CONNECT

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IMA Wealth, Inc. is a Registered Investment Advisor, broker-dealer, and an insurance agency. This communication is not a solicitation or offer to sell investment advisory services, securities, or insurance except in states where we are registered or where an exemption or exclusion exists.

Investment advisory services are off ered through IMA Wealth, Inc., an investment advisor registered with the U.S. Securities and Exchange Commission (“SEC”). IMA Wealth is also an SEC registered securities broker-dealer, Member FINRA, and an insurance agency. This is not a solicitation or off er to sell investment advisory services, securities, or insurance except in states where we are registered or where an exemption or exclusion from such registration exists. All written content is for general informational purposes only. Investing in securities involves risk, including the possible loss of principal. No investment strategy, such as diversifi cation or asset allocation, can guarantee a profi t or protect against loss. Upon liquidation, your account may be worth more or less than your original investment. Past performance IMAW0719 is not indicative of future results.