As the year draws to a close, we’re finalizing Roth conversions for many of our clients, taking their income and tax situation into account. We sent out a value-add piece in October to assist with the decision of whether to do a conversion and how much to convert.

Over the past few weeks, the media has attributed November’s financial markets volatility to an “overvalued stock market”. In other words, the current price of company stocks exceeds their intrinsic value when measured using metrics such as Price-to-Earnings ratio and investor sentiment. Layered on top of this discussion is the forewarning of an “AI bubble” given that so much of the market cap-weighted S&P 500 is concentrated in seven companies.

It was late into the evening on December 31, 2019. Fireworks lit up the sky in Honolulu as revelers partied into the new year. I had celebrated with my family earlier in the evening, but now I sat in my apartment with an Excel spreadsheet open on my laptop. I know it sounds very nerdy. But this was something important.

Roth IRAs can be a tax-efficient way to save for retirement, but they also come with one major drawback for many high-income earners: the ability to contribute to a Roth IRA is phased out once you exceed a certain level of income.

Much of the work we do as financial advisors deals with numbers, charts, and projections about the future. Diving into data is necessary to help our clients make good financial decisions. In my view, however, the numbers are secondary to our greater purpose as advisors, which is to understand our client’s wishes and instill in them confidence that our recommendations and guidance will get them where they want to go.