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3 Creeks Capital - 2024 Q1 Newsletter

Navigating Economic Waters

Navigating Economic Waters

As we reflect on the economic and stock market landscape of 2023, it's evident that the year was marked by unexpected gains, defying the predictions of market forecasters. Contrary to initial projections of a lower market, we witnessed a remarkable upswing, with the stock market posting an impressive gain. This serves as a reminder that timing the market is a challenging endeavor, and last year's surprising performance underscores the importance of a diversified and long-term investment strategy.


Looking ahead to 2024, we anticipate a certain level of volatility, influenced in part by the upcoming election year and the significant gains realized in the previous year. While it's challenging to precisely predict market movements, our outlook suggests that we may experience mid to upper single digit returns. 

In this environment, we believe as the Federal Reserve lowers interest rates that sectors traditionally considered interest rate-sensitive should perform well. Examples of such sectors include Health Care, Consumer Staples, Utilities, Real Estate, and Bonds. These sectors have historically demonstrated resilience during periods of market uncertainty and interest rate cuts.

As we navigate the potential challenges and opportunities in the coming year, we remain committed to closely monitoring market conditions and adjusting our strategies to align with your financial goals.

The Ohio Pension Pulse

The Ohio Pension Pulse

While 2023 was nothing short of news headlines when it came to the Ohio pension systems, the reality is that all the Ohio pension systems have good funding ratios.  The exception here is OP&F, who maintains the lowest ratio.

  • STRS Ohio - 81.3% Funding Ratio - Great!
  • OPERS - 83.6% Funding Ration - Awesome!
  • OP&F - 69.7% - Not So Good!

STRS continues to face a PR problem while OPERS lays low, and OP&F goes to the public asking for more money in 2024. 

STRS Ohio

The most asked question by STRS Ohio members in 2023 was….Should I worry about my STRS Ohio pension benefits.  My answer was a resounding NO. The STRS OH pension has an 81.3% funding ratio. When I left STRS in 07' STRS had a much lower funding ratio. STRS has a PR problem, not a funding problem.  Stay focused on the long game and ignore the noise. 

OPERS

OPERS clients aren't asking me about the stability of their pension, however they were the group that wanted out the most in 2023!

I suspect this was due to in-office mandates.  Regardless, many OPERS members faced the prospect of when to retire, which payment plan to select or should they take a PLOP. 

In addition, the OPERS health care process within via benefits was difficult for some to navigate.

OP & F

The biggest concern we have for OP&F is whether or not HB 513 Will pass, which will increase the contribution rate to the pension system.  OP&F's current funding ratio will continue to decrease, jeopardizing the pension payments and benefits offered to members.

Most OP&F members asked us about healthcare in 2023.  When I retire from OP&F, become reemployed and have access to healthcare coverage through my new employer, do I still receive my healthcare stipend?

                Unfortunately, you are not eligible to receive the OP&F healthcare stipend if health coverage is available with your new employer. When you decide to quit your post-retirement job, it will be considered a qualifying event resulting in eligibility for OP&F healthcare stipend. Don't forget to sign up for OP&F healthcare within 60 days of losing coverage.

Election Year Stock Market Trends

Election Year Stock Market Trends

The presidential election year always brings surprises. Know what to expect.  As we enter a new presidential election year, it is essential to appreciate the enduring resilience of the market, irrespective of the political landscape. Throughout history, the market has demonstrated its ability to adjust and overcome challenges, regardless of the election outcome.

Tech Talk

Tech Talk

In the spirit of keeping, you in the tech loop, we continue to highlight numerous resources on our website tailored for Ohio Public Employees as well as our non-public pension clients.

  1. Download the AdviceWorks app from Google and Apple App stores to effortlessly view account details, statements, and financial plans.
  2. Expand your knowledge with our growing Knowledge Library featuring E-guides and informative videos.
  3. Connect with us on YouTube and LinkedIn for insights on financial topics and Ohio pension issues.
  4. Stay tuned for an engaging Podcast experience as we explore new ways to connect.
  5. Look forward to our presence on Facebook and Instagram, coming soon!

Excitingly, our user-friendly new website is set to launch in Q1 – 2024, promising enhanced features and accessibility.

Client Highlight – Chuck Paros, AIA, MArch, LEEDap

Client Highlight – Chuck Paros, AIA, MArch, LEEDap

We are thrilled to share an inspiring success story from one of our clients, Chuck Paros, who recently embarked on a sustainable journey by integrating a 4.8 kW "Solar Garage" into their home in Columbus. Chuck is an architect that specializes in retro fitting homes for less energy consumption.  He and his wife Laura are enjoying the results of this recent project, which are nothing short of remarkable!

In 2023, Chuck's solar investment yielded an impressive 5.72 MWh of clean energy. Despite falling slightly below the estimated 6 MWh/yr, the minor deviation can be attributed to the unique challenges posed by the Canadian wildfires' smoky haze during the peak daylighting months of June and July.

Fascinating Details:

Fascinating Details:

  • Home/Studio Size: Spanning an expansive 3652 square feet, Chuck and Laura’s living and working space showcases how solar power can efficiently meet the demands of a sizable residence.
  • Heating and Cooling: With gas heating and a 3.5-ton AC system, they enjoy a comfortable living environment while minimizing the environmental footprint.
  • Electric Water Heater: Prioritizing sustainability, they use an electric water heater, further aligning their energy sources with eco-friendly practices.
  • Electric Vehicle Charging: Chuck charges his electric vehicle overnight, making their transportation choices as sustainable as their home energy solutions.
  • Financial Impact: Remarkably, Paro’s achieved a zero bill for both June and October, showcasing the financial benefits of solar energy. The total electric bill for 2023 amounted to a mere $614, a testament to the long-term savings potential.

Podcast Pick  /  Book Club

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