Josh Norris, CFP®, CPA LeFleur Financial

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About Josh Norris, CFP®, CPA

Josh started his career with Ernst & Young in Memphis. In 2010, he bought a small accounting firm in Jackson, MS and moved back to his hometown. Over the next few years, he developed the firm into a more narrowly focused tax practice and began expanding the client base and tax services. Through building relationships and serving clients, Josh began to see a need for more than just tax planning. As a result, he obtained the Certified Financial Planner (CFP) designation and created LeFleur Financial to better serve his clients.

Now he provides individuals and small businesses with tax-conscious financial advice and investment management services so that they can efficiently accumulate wealth for retirement.

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Recently Published

Who Cares About Bonds?

October 3, 2022

If the stock market is Paul McCartney, then the bond market is Ringo Starr. It’s traditionally seen as boring and stable, but this year, it might as well be Harry Styles selling out his 15-night residency at Madison Square Garden. Every day, headlines are filled will stories about Treasuries, interest rates, the yield curve, and a myriad of other bond related issues.

So what does it all mean? And why should you care? It all comes back to inflation. Interest rates are one of the Fed’s primary tools to bring it back under control—in August the consumer price index was 8.3% while target inflation is 2.0%. Higher interest rates make borrowing more expensive, reducing the appetite for spending and thereby curbing inflation.

While the Fed can only directly influence the Fed Funds Rate (the rate banks pay to borrow money overnight), that rate indirectly influences every other rate from Treasuries and corporate bonds to mortgages and car notes. In other words, there’s a trickle-down effect from the rate banks pay to every other rate in the market.

The most obvious example is mortgage interest rates. Through September of this year, the Fed Funds Rate has increased from 0% to 3.25%, and average mortgage rates have risen from 3.22% to 6.70%. While it may not seem like a huge difference, for a $300,000 mortgage, that creates a $635 increase in monthly payments.

But higher interest rates also affect your portfolio—both stocks and bonds. For stocks, the direct effects are twofold. First, companies must borrow at higher rates, which creates higher interest expenses and lower earnings. Second, higher interest rates lower the present value of future earnings, decreasing the value of the corporate stocks. Indirectly, lower consumer spending also lowers earnings.

For bonds, higher interest rates are good for new bond purchases, but bad for bonds already in your portfolio. For example, if you own Bond A from a company that pays 3%, but the same company later issues Bond B that pays 5%, Bond A will drop in value because it’s paying less in interest. This reality is why bond yields and bond prices move in the opposite direction, which can be counterintuitive to the casual observer.

Bonds are far from boring, and actions by the Fed and other central banks along with reactions from pension funds and major financial institutions can create tremendous volatility in both the stock and bond market—something we observed in the last week of September with the UK. Unfortunately, this volatility will likely continue as the Fed battles inflation, the war in Ukraine disrupts the European economy, and tensions between China and Taiwan create uncertainty.

However, investing is an endurance endeavor, and bad news won’t last forever. A recent poll from the American Association of Individual Investors showed that expectations that the stock market will fall over the next six months recently reached its highest level since March 2009. Interestingly, March 2009 was also the bottom after the 2008 Global Financial Crisis.

Josh Norris is an Investment Advisory Representative of LeFleur Financial. Josh can be reached at wbfu@YrSyrheSvanapvny.pbz.

Josh Norris, CPA, CFP, CFA is the managing member of LeFleur Financial, a wealth management and tax advisory firm.

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Investing is Hard

July 8, 2022

The great philosopher Mike Tyson once said, “Everybody has a plan until they get punched in the mouth.” After three years of double-digit gains in the S&P 500, a 20.58% drop through the first half of 2022 feels like a knockout punch. How did you react? Did you stick to your investing plan? Did you even have one?

Successful investing requires a plan—a portfolio allocation that meets your long-term risk and investment objectives. But you have to stick to the plan, which has been a challenge for investors over the last six months. Your ideal allocation can certainly change over time with age and evolving financial priorities, but market moves should not drive that decision.

Unfortunately, emotion and cognitive biases related to changes in the market can cloud judgement and cause investing missteps. Most notably, loss aversion, which is a cognitive bias that causes individuals to feel the pain from loss more than pleasure from gain, makes many investors buy high and sell low—a recipe to lose money 100% of the time.

We’ve all collectively forgotten that investing is hard. Stocks don’t always go up, and you can lose money. Yes, over the long-term stocks have historically provided great returns for investors, but that long-term narrative gets lost when speculators achieve outsized short-term gains like they did in the three years prior to 2022.

Warren Buffett once said of his company, Berkshire Hathaway, “Our favorite holding period is forever.” That doesn’t mean you should never sell--even Buffett sells some of his positions from time to time. But it does mean that you should buy a portfolio you are comfortable keeping for a long-term duration, riding out the ebbs and flows of the market.

Every investor should be aware of what’s going on in the stock market. But day-to-day obsession will lead to poor investment decisions. Check you emotion and remember that investing is a long-term endeavor.

Josh Norris is an Investment Advisory Representative of LeFleur Financial. Josh can be reached at wbfu@YrSyrheSvanapvny.pbz.

Josh Norris, CPA, CFP, CFA is the managing member of LeFleur Financial, a wealth management and tax advisory firm.

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What Will the New Year Bring?

January 3, 2022

The prospect of a new year is always exciting, but with the cloud of Omicron and inflation hanging over us, it’s hard not to feel like caffeine pill-addicted Jessie Spano in the iconic episode of Saved by the Bell when she dramatically proclaimed, “I’m so excited. I’m so… scared.” That meltdown seems a bit absurd now, but as a kid, it was traumatizing. So maybe some perspective will keep us from feeling scared about economic uncertainty heading into 2022.

Omicron

The new spike in some ways is reminiscent of March 2020 with bowl games and other events being cancelled. But we’ve largely learned to live with COVID as it slowly becomes endemic. More and more individuals have some level of immunity, Omicron seems to be less severe, and our medical community has greatly improved treatment. All these factors should mean each new wave will be less and less disruptive to our economy.

COVID has undoubtedly changed our world forever. We’re all a bit traumatized and exhausted, but our collective genius has created a revolutionary vaccine, made the possibility of work-from-home permanent, and inspired a wave of entrepreneurs to open new businesses—4.3 million in 2020 according to the Census Bureau, which is a 24% increase from the year before. All these developments are positive indicators for the future as we ease in to our “new normal.”

Inflation

Inflation is all over the news, and everyone is making comparisons to the 1970s, an era marked by double digit inflation. And it’s with good reason—any trip to the grocery store or gas station will result in a bigger hit to your wallet that it would have twelve months ago. Even Fed Chair Jerome Powell has abandoned hopes of “transitory” inflation and set the Federal Reserve on course to speed up tapering of its asset purchase program and begin increasing interest rates in 2022.

There’s no way to know how long it will last. But in addition to the Fed’s adjustments, there are three big reasons inflation should not have the same staying power as it did in the 1970s:

  1. As COVID becomes endemic, labor and supply chain issues should resolve.

  2. Consumers will most likely ease spending as cash reserves from government stimulus runs out.

  3. Perhaps most importantly, the psychology of inflation has not yet set in, meaning consumers still don’t expect huge price increases year-over-year.

Summary

We still face the economic headwinds of COVID and inflation, but we have every reason to believe that we will emerge stronger on the other side. In fact, we’ve already seen tremendous improvements. According to data from the Federal Reserve, US households increased their net worth by $13.5 trillion in 2020.

In addition, unemployment numbers have improved drastically, the stock market has handily outpaced inflation, homeowners have seen dramatic appreciation in property values, and borrowers have taken advantage of rock-bottom interest rates. So while there’s still plenty of uncertainty, there’s a lot to be thankful for.

We should absolutely pay attention to the evolving effects of Omicron and inflation on our economy, but let’s not panic. Focus on a long-term investment strategy and long-term returns.

 

Josh Norris is an Investment Advisory Representative of LeFleur Financial. Josh can be reached at wbfu@YrSyrheSvanapvny.pbz.

 

Josh Norris, CPA, CFP, CFA is the managing member of LeFleur Financial, a tax services and wealth management firm.

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  • Business Owners
  • Inherited Wealth
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Fee Options

  • Hourly Fee: $300+/hr
  • AUM: 1.00%

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Disclosure

The annual XYPN membership fee paid by this firm is in consideration of a variety of services and benefits provided by XYPN to its advisor members - including the ability to be listed in this Directory. For a complete description of current XYPN member benefits, please refer to the Membership Benefits section of this website. For current membership pricing, please refer to the Pricing section.

XYPN, due to the compensation it receives from advisors in the form of the annual membership fee, has an incentive to list only these such advisors in the Directory. This creates a material conflict of interest.

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