Keeping Up with Back Cove Financial | Q1

Our quarterly newsletter photos are courtesy of Maine Audubon, a statewide environmental organization committed to conserving Maine’s wildlife and wildlife habitat through education, conservation, and action.

Back Cove Financial is a proud Corporate Partner of Maine Audubon.

Happy New Year! We are officially past the holiday season and into 2025. We hope everyone is settling into the winter, and that any resolutions or dreams for the year ahead are emerging.

To kick off 2025: We are thrilled to announce the newest addition to Back Cove Financial: Connor Scofield, Client Relationship Manager. Connor comes to us with an extensive client service background and will primarily be based out of the Brunswick office.

We pride ourselves on our client experience, which is why we are so happy to say we have been named a Forbes Best-In-State Wealth Management Team. Back Cove Financial team members proudly emphasize a shared commitment towards values that promote growth, flexibility, mutual respect, and community support. You can find our ranking here.

Source: Forbes.com (Awarded Jan 2025) Data Compiled By Shook Research LLC Based On Time Period From 3/31/23-3/31/24.* *2025 Forbes Best In State Wealth Management Teams*, created by SHOOK Research. Presented in Jan 2025 based on data from March 2023 to March 2024. 11,674 Management Teams were considered, approximately 5,300 teams were recognized. Not indicative of advisor’s future performance. Your experience may vary.

Back Cove Financial offices came together for our annual holiday charitable giving lunch. Supplies for 150 mini warmth kits were collected and assembled by team members, then donated to Maine Needs.

Kits provide a quick and easy way to get daily essentials to people across Maine. We suggest checking the Maine Needs website for donation hours, guidelines and what they are in short supply of.

The Back Cove Financial team at this year’s Falmouth Memorial Library Ugly Sweater 5K and Merry Mile. We brought our ugly sweaters, gloves and hand warmers, and had the best time supporting our local library and community.

Nearly 400 runners and walkers showed up and braved the cold to participate this year! Thank you to the volunteers and organizers of this event, it’s one of our offices favorite yearly sponsorships.

Tax season is upon us! Monday, January 27 is the start of the season and all individual returns for the 2024 tax year should be filed ahead of the Tuesday, April 15 federal deadline.

Even with December’s pullback, 2024 ended the year with solid performance in the capital markets. Looking ahead, economic fundamentals remain healthy with steady growth and consumer spending while employment numbers remain strong. However, risks are present:

• US stock valuations remain high and the US market remains concentrated. In 2024, The Magnificent Seven (Alphabet ,Meta, Amazon, Tesla, Apple, Microsoft, and Nvidia) contributed 53 percent of the S&P 500’s total return.

• A new administration could change policy decisions in a way that increases inflation.

• Uncertainty in fiscal and tariff policies are pressuring fixed income markets.

As we look ahead, the Federal Reserve’s mandate of full employment will continue to dictate rates. Job numbers continue to reassure the Fed that the economy remains healthy. The capital markets are coming to the realization that rates will remain higher for longer. These factors will result in more normal market volatility in the months and quarters ahead. A long-term perspective and allocation remain the most prudent course of action. To paraphrase Commonwealth’s most recent market commentary:

Looking ahead, we believe the most likely path forward for the economy and markets is further growth and appreciation in the upcoming months. With that being said, December’s mixed results are a valuable reminder that we may face headwinds along the way. Given the potential for short-term turbulence, a well diversified portfolio that matches investor goals and timelines remains the best plan for most.

As always, we are here to answer questions and concerns regarding your particular circumstances.

The S&P 500, Dow Jones, and Nasdaq Composite finished the quarter and year in positive territory. Bonds fell as the Federal Reserve updated guidance and Decembers economic updates continue to point towards solid economic growth. Read the Commonwealth Financial Q4 Market Recap through the following link.

On January 5th, President Biden signed the Social Security Fairness Act. Its changes will ensure that workers who have earned both Social Security benefits and public pensions will no longer face unfair reductions in their retirement income. This is an impactful change to the financial lives of those affected. Read the key takeaways on what to know about the Social Security Fairness Act.

We are also including an article for SIMPLE IRA participants regarding new catch-up limits for 2025. Lastly, if you are planning on traveling to Europe, be aware of the new entry requirements for US Citizens and check out the provided reading.

Stay warm and safe this winter, and reach out anytime.