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Navigating wealth transfer: Insights from our panel discussion

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When it comes to passing down wealth, the biggest question isn’t just how—but when. Should you give while you’re alive to see the impact firsthand or structure your estate to provide for loved ones only after you’re gone? How do you navigate fairness, avoid creating dependency, and ensure your legacy aligns with your values?

Julia Tierney, CFP®, Director of Legacy Planning at Vista Capital Partners, and Emily Karr, Partner at Stoel Rives LLP and Chair of Benefits, Tax and Private Client Group, recently led a panel discussion titled “A Gift in Life or Death? The Tough Choices of Family Wealth.” Moderated by Rob Greenman, CFP®, Chief Growth Officer of Vista Capital Partners, the conversation unpacked the emotional, financial, and practical factors that shape decisions around giving now versus later.

What emerged was a broad spectrum of perspectives shaped by values, life stage, and family dynamics. While there’s no one right answer, it’s clear today’s families are looking for ways to make giving more intentional, aligned, and meaningful across generations.

Values and changing perspectives

Julia Tierney shared that her team is seeing clients come in with new perspectives about money. “More and more clients are thinking beyond the numbers—reflecting on how their values are expressed through their wealth and what message that sends to future generations.”

Tierney emphasized that not everyone thinks about money the same way. “Each generation has different values and experiences that shape their views on money.” For many, that includes a desire to do things differently than their parents, especially when it comes to openness. “We often hear from clients who grew up in households where money wasn’t talked about or it was a source of stress. Now, they want to shift that narrative by creating transparency, sharing values, and making intentional choices that reflect who they are.”

There is truly no right or wrong way to approach these conversations. Each person has to decide what works for themselves and their families.

Questions to consider:

  • Are your family members aligned in their financial priorities and values?
  • How might generational perspectives influence family discussions about wealth transfer?
  • How can you ensure that each generation understands your intentions and values?

The impact of rising costs and lifespan

Emily Karr addressed the practical concerns many clients face today, particularly regarding rising living costs and increasing lifespans. “People are living longer and want to ensure they have enough to take care of themselves, but they also want to support their children or grandchildren,” Karr said. “The challenge is finding a balance between providing support now and preserving assets for later.”

Karr also noted how living longer creates a timing dilemma where adult children could potentially be into their own retirements before receiving any money, which doesn’t always sit well with her clients.

Questions to consider:

  • How is flexibility built into my plan, given the uncertainty around life expectancy and future expense?
  • If I wait until death to pass on assets, will it still be useful—or meaningful—for my grown children?

Minimizing taxes through gifting

Karr offered practical insights on how clients can use lifetime gifting to reduce estate taxes and support their loved ones particularly in states like Oregon and Washington where estate tax exemptions are relatively low. “You can give $19,000 per person per year—or $38,000 as a couple—without having to file a federal gift tax return,” Karr explained. She also reminded attendees that certain payments, such as tuition or medical expenses made directly to the provider, don’t count as taxable gifts at all.

In addition to these annual gifts, Karr encouraged clients to think about the trade-offs: while lifetime gifts can reduce your taxable estate, they may also pass along a low-cost basis, potentially triggering capital gains for your heirs later. That’s why she emphasized the importance of working with a team of professionals to weigh both the tax implications and your long-term goals. “It’s not just about saving on estate taxes. It’s about making thoughtful decisions that reflect your values and your family’s needs.”

Questions to consider:

  • Am I using annual gifts or direct payments to support family members in tax-efficient ways?
  • Have I considered how capital gains could affect my heirs based on the assets I give?
  • What professional guidance do I need to ensure my gifting strategy supports both my tax goals and family relationships?

Fairness, communication and family dynamics

Fairness in wealth transfer is a deeply personal and nuanced decision—one that doesn’t always align with strict equality. While many families divide assets evenly, others choose to account for individual circumstances, such as giving more to a child with greater financial need. There’s no single “right” approach. As Tierney shared, “We really encourage clients to gain clarity on what fairness means to them and to their children.”

What matters most is that these decisions are made thoughtfully and, when possible, communicated clearly. Open dialogue can help ensure that loved ones understand the intent behind the choices, reducing the risk of hurt feelings or lasting resentment.

Questions to consider:

  • What does fairness mean to me? How might that differ from equality?
  • Are there meaningful differences in my children’s circumstances that I want to account for in my plan?
  • Have I clearly communicated my intentions to avoid confusion or unintended hurt feelings?

Avoiding dependency while providing support

One concern that came up throughout the panel was the risk of creating dependency through lifetime gifts. While many clients want to help their children or grandchildren, especially with rising living costs, they’re also mindful of preserving a sense of independence and purpose. Karr noted that many of her clients are worried about “not wanting to ruin my kids or grandkids through substantial annual gifting. They don’t want them to miss that opportunity for self-achievement.”

For that reason, Karr mentioned it’s rare to see families initiate significant gifts before their kids reach age 30, unless it’s tied to a specific event like tuition, medical expenses, or a first home purchase. Even financially responsible adult children often benefit from structure and guidance when receiving larger gifts. Some families are getting creative, making modest gifts of investments and then meeting quarterly to review and learn together, fostering both stewardship and connection.

Others involve trusted advisors early on to help coach or mentor the next generation, ensuring that any wealth passed down supports, not sidelines, their personal growth.

Questions to consider:

  • How can I support my children or grandchildren without undermining their independence or ambition?
  • Are my loved ones ready, emotionally and financially, to receive a gift?
  • Should I consider strategies or structures, such as trusts, to help steward the gift?

Communicating legacy wishes

Legacy letters emerged as a valuable tool during the panel discussion. Unlike a legal will, a legacy letter conveys personal values, life lessons, and hopes for future generations. “A simple legacy letter can be a powerful tool,” said Tierney. “It doesn’t have to be perfect—it just needs to start a conversation.”

Karr agreed, highlighting that such letters can help avoid misunderstandings and emotional turmoil, particularly when dealing with assets like family vacation homes or closely held businesses.

If you’re ready to write your own, Vista created a Legacy Letter Kit to help you get started.

Conclusion: The power of planning

As the panel wrapped up, Greenman reminded attendees that planning is not just about financial strategies—it’s about aligning actions with values and creating a roadmap for family harmony.

If you’re looking for guidance on wealth transfer and estate planning, Vista Capital Partners is here to help. We encourage open conversations to help families make the most of their resources while strengthening their relationships.

Still the world’s safe haven: The strength of U.S. Treasury bonds 

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U.S. Treasuries remain the cornerstone of safety in diversified portfolios. 

Despite global uncertainties such as rising debt levels, geopolitical tensions, and a recent U.S. credit downgrade, Treasuries continue to offer unmatched liquidity, robust demand, and protection during market volatility. 

Unmatched liquidity 

The U.S. Treasury market is the most liquid market globally, with an average daily trading volume exceeding $910 billion.  

This depth ensures investors can transact in large volumes with minimal price impact, even during periods of market volatility. For instance, during the pandemic market downturn in early 2020, daily Treasury trading volumes surged past $1 trillion. 

By comparison, the SPDR S&P 500 ETF (SPY)—the world’s most actively traded individual security—averaged about $50 billion in daily trading volume in April 2025, a small fraction of the Treasury market’s activity.  

A global benchmark for safety 

U.S. Treasuries are widely regarded as a global risk-free benchmark, setting the standard against which virtually all other investments are measured. With $28.8 trillion outstanding, the U.S. Treasury market is by far the largest bond market in the world. Because of their risk-free status, U.S. Treasuries are deeply embedded in the global financial system—used as a base rate for other types of loans, discount rates in financial modeling, and benchmark rates for bond indices.

Despite recent headlines and political noise, demand for Treasuries remains strong. In April 2025, the Treasury auction—where the U.S. government issues new debt and investors bid for it—drew demand nearly three times the available supply. This was the strongest auction of the year. Notably, much of the issuance was absorbed by foreign central banks, confirming the global appeal of U.S. Treasuries. 

Who owns Treasuries? 

Ownership of U.S. Treasuries is broad and diverse. About 70% of existing outstanding Treasury debt is held domestically—by the Federal Reserve, mutual funds, pension plans, banks, insurers, and individual investors. The remaining 30% is held by foreign investors, primarily central banks and sovereign wealth funds.  

Top foreign holders include Japan ($1.1 trillion), China ($784 billion), the U.K. ($750 billion), Luxembourg ($412 billion), and Canada ($406 billion). While the share of foreign ownership has varied over time, it peaked near 60% of marketable debt in 2008 and has since declined. 

This widespread ownership across institutions and borders reinforces the global market’s assessment of U.S. Treasuries’ strength. 

Protection when you need it most 

Treasuries aren’t just liquid and well-owned—they have also provided meaningful protection when markets have turned volatile. 

In the graphic below, we examined the worst 10% of monthly returns for U.S. stocks between 1988 and 2024. While stocks sold off, Treasuries provided much-needed protection to portfolios. Meanwhile, riskier assets—such as dividend-paying stocks, commodities, hedge funds, and even high yield bonds—simultaneously lost value. 

Beyond U.S. Treasuries  

While data supports continued confidence in U.S. Treasuries, Vista’s bond approach includes diversification into other high-quality government bonds. We maintain exposure to government-issued bonds from countries with AA credit ratings or higher, such as the U.K., Germany, France, Canada, and Singapore. These bonds have provided additional portfolio diversification, without sacrificing the overall level of safety we seek.  

The bottom line on Treasury bonds 

We expect Treasury bonds continue to play a vital role for investors. They have provided ballast during market selloffs, offered liquidity when needed most, and remain the risk-free asset in the global financial system. And while concerns about U.S. deficits and debt levels are valid and may influence future fiscal policy, the Treasury market’s functionality and global demand remain robust. 

For Vista clients who maintain an allocation to bonds, exposure to U.S. Treasury bonds alongside other high-quality government bonds remains an essential source of portfolio stability across various market environments.  

Opinion: With the market a mess, the stock pickers are back

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With U.S. stock prices down and volatility up, some suggest it’s time for stock pickers to shine. But does the evidence support the claim? In the Portland Business Journal, Vista CEO and Chief Wealth Officer, Dougal Williams, CFA, unpacks decades of research and reveals why index investing still offers investors their best chance for success.

Read the article

Donor-advised fund vs private foundation: Choosing the right giving vehicle for you

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Many high-net-worth families seek our guidance on the best way to expand their charitable giving. They’ve often heard about donor-advised funds (DAFs) and are also curious about other giving vehicles, such as private foundations.

Private foundations are often seen as a tool reserved for the ultra-wealthy. While a foundation certainly needs a sizeable amount of assets to be cost-effective, the threshold is often lower than people expect.

How do we help clients decide whether to give through a DAF or set up a private foundation? The key decision factor isn’t necessarily the amount of wealth, but rather the tradeoff between flexibility and simplicity.

The basics of giving through DAFs vs. private foundations

DAFs and private foundations operate similarly: You donate assets during your lifetime or at passing, and the funds are distributed to support charitable causes. In return, you (or your estate) receive a tax deduction depending on the gift amount, type, and timing.

The difference between DAFs and private foundations lies in how each vehicle is governed and permitted to support charitable endeavors. Let’s look at both vehicles a bit closer.

Donor-advised funds (DAFs)

DAFs have gained popularity for their streamlined approach, offering a turnkey solution for philanthropy without administrative complexity. Their appeal lies in simplicity: donors make a contribution to the DAF, receive an immediate tax deduction, and can recommend grants to charities over time while remaining assets in the DAF potentially grow tax-free.

Since DAFs are administered by large sponsoring organizations, such as Charles Schwab, Fidelity, and Vanguard, many operational headaches are minimized, and there are typically no annual minimum distribution requirements and no excise taxes on investment income to track. The sponsoring organizations handle all administrative details, regulatory compliance, and due diligence on recipient organizations.

Relative to private foundations, DAFs offer higher tax deduction limits. Donors can deduct up to 60% of adjusted gross income (AGI) for cash donations and 30% for appreciated assets. Private foundations allow for 30% and 20%, respectively.

The trade-off relates to control. DAF grants must be made to 501(c)(3) organizations based in the U.S., not individual persons or foreign organizations. Also, when you contribute to a DAF, you’re technically making a donation to the sponsoring organization. The sponsor maintains legal control, so donors “recommend” where they would like their donations to go. In our years of helping clients establish DAFs, we’ve never seen a DAF sponsor decline a donor’s recommended grant.

Private foundations

For donors seeking more control and broader charitable options, establishing a private foundation is worth considering. Private foundation founders can create their own board structure and provide directives perfectly aligned with their charitable vision. They also offer more flexibility in their charitable activities; while DAFs can only contribute to 501(c)(3) organizations, foundations can implement scholarship programs, create and operate original charitable initiatives, compensate staff, and make direct expenditures toward causes. For example, a private foundation could purchase coats for another charity’s winter coat drive — something a DAF couldn’t do.

Private foundations are sometimes viewed as complex to manage, particularly when it comes to distribution rules and compliance. However, there are well-established support organizations that can take on these administrative duties, enabling donors to stay focused on their philanthropic goals.

Donor advised fundPrivate foundation (non-operating)
Charitable focusPrimarily grant-making to public charities, churches, hospitals, or universitiesGrant-making, operating original programming or scholarships
GovernanceDonors can recommend grants, but sponsors are not legally obligated to follow donors requestsFull control; founders can create board and provide directives
Tax & estate reduction60% AGI for cash
30% AGI for appreciated assets		30% AGI for cash
20% AGI for appreciated assets
Distribution requirementsNone5% annually
TaxesExempt public charity1.39% excise tax on investment income

Making your philanthropic vision a reality

There’s no one-size-fits-all answer to whether a DAF or private foundation is better for your family. Each has advantages to suit different donors’ needs and philanthropic goals.

For those primarily focused on efficient charitable giving with minimal administrative involvement, a DAF offers simplicity and favorable tax treatment. For donors seeking maximum control, broader charitable options, and a vehicle for family legacy, a private foundation offers increased flexibility despite slightly higher administrative requirements.

At Vista, we specialize in helping clients navigate these important philanthropic decisions. Contact our team today to explore which charitable vehicle best aligns with your values, goals, and overall wealth management strategy.

April 17, 2025: (Webinar) What today’s markets mean for investors

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Recent volatility has highlighted the unpredictable nature of markets and investing. While unsettling, these periods help underscore the importance of a disciplined approach. In this webinar, Dougal Williams, CFA and Alex Canellopoulos, CFA, CFP®, share perspective on what’s driving markets, how Vista is responding, and what this means for your portfolio and financial plan.

Redefining purpose and productivity in retirement

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For decades, your daily routine likely revolved around deadlines and meetings. Maybe you spent your time shuttling your kids to activities or caring for an aging family member. Your days were filled with to-dos and must-completes. At the end of the day, you felt like you’d accomplished something.

Then retirement arrives – and the structure that once defined your days is gone. When this happens, many retirees find themselves asking: “What now? How do I find new ways to be productive? What’s my purpose now that my primary job is gone?”

These questions aren’t just philosophical. They’re central to finding fulfillment in retirement. The good news is that you can redefine what productivity and purpose mean to you.

Why productivity feels tied to purpose

Whether you led a company, managed a household, or anything in between, over the years your sense of identity may have become intertwined with your work. We introduce ourselves by our job titles or where we work. Our social circles frequently include others in similar roles.

Work provides structure and routine that organizes our days. Goals and challenges keep us engaged. We frequently get validation and feedback (both good and bad) to measure our progress. A built-in network of like-minded peers offers community and connection we may not get elsewhere.

When retirement removes these external frameworks, many people experience what psychologists call “role loss.” This loss can happen when you retire, lose a job, or launch a child into the world. This transition can trigger feelings ranging from relief to disorientation, freedom to anxiety.

Redefining your role

Retirement presents a rare opportunity to step back and reconsider what productivity truly means to you. It’s also the chance to redefine your purpose.

This redefinition begins with a crucial first step: shifting into neutral. Many new retirees benefit from taking time to decompress without immediately filling their schedule with new commitments. This pause allows time to process the emotional transition from “worker” to “retiree.” You can also stop to reflect on what truly matters to you, which activities naturally energize you, and rediscover the things that bring you joy.

Through this reflection, you’ll likely begin to see productivity in a new way – one centered on purpose rather than output. Productivity might now mean nurturing important relationships, pursuing personal growth, or finding ways to support your friends, family, and community.

Measuring progress in new ways

Once you’ve reshaped your view of productivity, the next step is figuring out how to recognize progress. Rather than through external validation – such as promotions, awards, or bonuses– retirement invites you to look inward to find fulfillment.

What measures can you use to gauge whether you’re living out your purpose in retirement? Here are just a few:

  • Purpose fulfillment: Do your activities connect to what matters most to you?
  • Engagement: Are you fully present and absorbed in meaningful activities?
  • Relationship quality: Are you developing and deepening important relationships?
  • Personal growth: Are you continuing to learn and evolve?
  • Balance: Does your life include variety and sufficient time for rest?

You could also set personal, trackable benchmarks every week. Perhaps you aim to have lunch with one friend each week, read one challenging book per month, play pickleball twice a week, or volunteer one day a month with a charitable organization.

How you choose to track and celebrate your progress should reflect what matters most to you, rather than society’s definitions of achievement.

From making a living to making a life

Finding purpose in retirement is an ongoing journey, not a destination. As you explore various activities, you’ll discover which ones truly resonate while maintaining the ability to adapt as life changes or unexpected interests emerge.

The transition from output-based to purpose-driven productivity requires patience but yields substantial rewards. By redefining productivity according to what brings genuine fulfillment, you create a retirement that’s not just active but deeply meaningful.

Ultimately, the most productive investment in retirement focuses on what matters most to you personally. These returns are measured not in dollars but in meaning, connection, and fulfillment.

Related:

Is the S&P 500 playing an April Fool’s joke on investors?

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The S&P 500 has been the world’s best-performing stock market for the past 15 years, making “diversification” seem like an outdated concept. Despite returns far in excess of their historical averages, investors can’t seem to get enough of the U.S. stock market.

Net flows into U.S. stock funds eclipsed their previous records in 2024, with investors adding nearly $600 billion last year. More than one-third of that total went into just two S&P 500 exchange traded funds. What’s more, sixty percent of Goldman Sachs’ clients believe the S&P 500 will be the best market region in 2025. That’s nearly double the percentage of any past survey the firm has conducted.

But what if the market is playing the ultimate April Fool’s joke—tricking investors into believing that chasing recent returns is, in fact, a sound strategy?

Have investors forgotten the lost decade?

It’s been nearly 15 years since the so-called “Lost Decade,” the period between January 2000 and December 2009 when $1 invested in the S&P 500 Index turned into 91 cents. That same dollar invested in emerging markets small cap stocks grew to $2.77, as did a dollar invested in U.S. real estate investment trusts (REITs). It’s no wonder investors were clamoring for more international, emerging market, and REIT stocks back then—anything “but” large cap U.S. stocks.

Those who resisted the temptation to abandon U.S. stocks after the Lost Decade were rewarded with one of the best 15-year runs the S&P 500 has ever experienced. And yet, here we are in 2025, and investors have been again piling into the asset class that has done the best most recently—as if history hasn’t taught us anything.

If we look back thirty-five years, we can see just how unpredictable asset class performance can be by breaking results into shorter 5-year time periods.

The graphic below illustrates that no single asset class has dominated every period, and market leadership rotates in ways that often surprise investors. Emerging market value (EMV) stocks, for example, topped the charts in the early 1990s and mid-2000s yet have lagged significantly in recent years. The S&P 500 soared in the late ’90s then suffered through the Lost Decade. Meanwhile, small cap value stocks topped the charts just once yet delivered the strongest returns over the full period.

Why do investors chase returns?

Investors have short memories. Our view of the future is clouded by results from the recent past. While we all know market returns don’t work this way, let’s face it: our behavior is perfectly normal.

Why? Because we’re human! Psychologists have documented several of our behavioral biases, three of which are particularly relevant to investors:

• Loss Aversion—The pain we feel with losses is about twice as aggravating as is the joy associated with gains. This means we need to win about $200 to offset the pain of losing $100. So, ditch those losers and load up on past winners!

• Recency Bias—We believe what’s done well/poorly in the past will continue to do well/poorly. The Lost Decade illustrates the perils of “rear-view investing” are real. Will history repeat?

• Hindsight Bias—The inclination to believe, after an event has occurred, that we could have foreseen it. With all the attention that’s been paid to the S&P 500 over the past fifteen years, it’s natural to fool ourselves into believing we “saw it coming” or “knew it all along.”

Expensive valuations = lower future returns?

These biases may be partly to explain for the extreme valuations at which U.S. stocks—particularly large cap growth stocks– are trading. Earlier this year, U.S. stocks were trading at roughly four times their net asset value, which is roughly the same multiple Japanese stocks commanded at the height of the 1980’s. On a trailing price to earnings (PE ratio) basis, the S&P 500 is still trading above 28. Consider that the median price-to-earnings ratio since the 1920’s has been about 15.

What do high valuations like this portend for future returns? While no one knows for certain, let’s just say history has not been kind to high prices. While there is always a positive expected return on embracing market risk, high valuations have historically led to lower than average future returns, while lower valuations have led to higher long-term returns.

The good news is, there are plenty of asset classes within our globally-diversified portfolios which are trading at much more attractive valuations, namely international stocks.

Don’t get fooled again: diversify & stay disciplined

The key to long-term investing success isn’t found in riding the hottest trend or betting everything on last decade’s winner. Instead, investors should:

  • Invest Globally – Diversification is said to be the only “free lunch” in investing—the opportunity to increase return without increasing risk.
  • Rebalance regularly – Trim winners and buy underperforming assets to manage risk.
  • Avoid emotional biases – Don’t let recent performance dictate long-term strategy.

The temptation to chase recent returns will never go away—it’s human nature. But the best-performing asset class of the last ten years is rarely the best choice for the next ten. Tune out the noise and let the April Fool’s joke be on those who insist on chasing recent winners.

Related:

A New Year: Same Old Lousy Predictions

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A New Year is upon us, which means Wall Street’s “Where to Invest Now” guides are in full circulation. Strategists will be making their predictions for where the S&P 500 will end the year and news headlines will blare “10 Best Stocks for 2025” and “Top Picks from Top Pros.”

While many investors frantically shift their portfolios in response, we encourage you to do nothing but to sit back, relax, and chuckle as we review the results of last year’s prominent Wall Street forecasts.

Flawed Forecasts

Forbes “10 Best Stocks for 2024”1 featured winners Taiwan Semiconductor (+92%), Booking Holdings (+41%), and tech giant, Apple (+30%). But those gains were offset by losses from Monster Beverage (-9%), Zoetis (-17%), and software leader Adobe (-25%). Collectively, Forbes’ ten picks returned 14%, a full 10% less than the return of the U.S. total stock market index.

Barron’s recommended its “10 Favorite Stocks 2024,”2 which included the rising shares of Alphabet (+35%), Berkshire Hathaway (+27%), and MSG Sports (+24%). But in a strong year for the stock market, four of Barron’s favorites lost money, including U-Haul (-4%), PepsiCo (-7%), and Barrick Gold (-12%). What dented the collective return of Barron’s picks most, however, was the performance of car rental giant Hertz, which crashed -65%. All told, Barron’s ten favorites gained just 2%, while the U.S. stock market surged 24%. 

Kiplinger guided investors to Japan in its “Stock Picks for 2024,”3 to find bargain stocks that were “really cheap” relative to U.S. companies. Collectively, Kiplinger’s favored picks Toyota (+9%), Honda (-4%), and Tokyo Electron (-14%) fell -3%, far worse than a broad index of Japanese stocks (+7%), which itself far underperformed the 18% gain of the global stock market. The silver lining for followers of Kiplinger’s advice? Their recommended picks would seem to be even more of a bargain now.

A Consensus Failure

The financial media’s inability to offer accurate predictions shouldn’t come as a surprise. Decades of academic research have shown how difficult it is to outperform the broader market by “stock-guessing”. Yet each year, analysts and financial media double down on the idea that they can outsmart the market.

Last year was a particularly rough one for Wall Street’s major investment strategists. Below, we review twenty major firms’ 2024 S&P 500 targets, issued in late 2023.

The average Wall Street forecast suggested a modest 2% gain in the S&P 500 Index—wildly off from its realized 23% price return. The worst forecast, issued by since-fired JP Morgan Strategist, Marko Kolanovic, missed the mark by 35%!

No Crystal Ball Required

Whether it’s stock picks, sector tilts, or country recommendations, Wall Street’s track record of predictions is woeful at best. Yet the cycle continues. Last year’s misses fade from memory, only to be replaced by a fresh batch of predictions and new “experts” to follow.

The financial industry encourages investors to be active, to chase the latest hot stock, or to outsmart the market with “tactical” moves. So, as you encounter this year’s batch of Wall Street experts urge you to “act now” on their predictions, remember the best way to win the investing game is to avoid playing theirs altogether.

The most effective strategy is often the simplest: stay diversified, keep costs low, and stick with a prudent plan. No crystal ball required.

———-

Sources:

1Brock, Catherine. “10 Best Stocks for 2024.” www.forbes.com/sites/investor-hub/article/best-stocks-for-2024/

2Bary, Andrew. “Barron’s 10 Favorite Stocks for 2024.” https://www.barrons.com/articles/alibaba-berkshire-chevron-alphabet-favorite-stocks-to-buy-b018c686

3Constable, Simon. “Stocks To Consider For The New Year.” www.kiplinger.com/investing/stocks/stocks-picks-for-2024

How to Involve Family in Charitable Giving

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Your passion for giving reflects your deep sense of purpose and commitment. To make your philanthropy even more meaningful, consider involving your adult children in the process, creating a family legacy of generosity.

Including your family not only amplifies the impact of your giving, but also fosters lasting memories and instills important values about giving back. Here’s how you can engage your family in this rewarding journey.

Setting the Stage

Before discussing charitable giving with your children (and possibly grandchildren), it’s important to identify what you hope to convey.

Some people wish to share why they support the causes they support simply to inform their family. Others seek to inspire future generations to get involved in family giving or carve their own path. Still others want to expand and enrich their giving by tapping into the interests of their children or grandchildren.

No matter your purpose, it’s important to find the right time and place to hold these money conversations.

Assembling the Players

As you contemplate your approach, identify the goals and purpose for your gathering.  Determine ahead of time what you hope to achieve — and communicate this to your family.

If your family regularly gets together, think about your traditions and when a conversation about giving might fit into your activities.

Select a time when everyone is available and in a reflective mindset — perhaps during the holiday season, when gratitude is already top of mind.

Writing Your Script

There are many ways to engage family members in a conversation about giving. Where you start and how you approach the conversation will depend on your goals and how much your family already knows about the charities and causes you support.

Here are some ideas for getting started.   

Share your story. Bring your family up to date on the causes you support and why. If you’re continuing to support causes or organizations championed by your parents or grandparents, share that connection — it could serve as a meaningful foundation for building a legacy of family giving.

Ask family members about their values. Encourage conversation around the organizations or causes important to your children. They may be drawn to causes you had not considered — and these new ideas could amplify the joy you get from giving while uniting your family around a common cause.

Develop a family mission statement. Strengthen family bonds and align thinking around giving by creating a family mission statement. While it will take some effort to boil down diverse thoughts and ideas into a few sentences, a clear mission statement can become the north star that guides your family’s legacy of giving.

Some examples: “Our family supports children for whom daily life is a struggle” or “We believe education is essential to creating a better tomorrow, so we support institutions of higher education that nurture entrepreneurs and leaders.”

Establish a framework for decisions. Should you choose to give as a family, discuss in advance whether everyone needs to agree on organizations and causes to support or whether family members can donate to any cause they wish. Disagreement doesn’t necessarily mean a disconnect. It can be a path to honoring divergent values through a shared heart for giving.

Closing Thoughts

Family charitable giving is about more than writing checks — it’s about building a legacy of compassion and shared purpose. Together, you have the power to create meaningful change in the world while strengthening your family bonds. By collaborating on philanthropy, your family can inspire future generations to continue the tradition of giving back.

In the words of Ralph Waldo Emerson, “The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well.” Let your family’s charitable giving reflect that timeless wisdom.

Beyond Stocks and Bonds: The Case for REITs in Your Portfolio

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Real estate is the third largest asset class in the world, behind stocks and bonds. It is a diverse asset class, including office buildings, apartments, storage facilities, industrial warehouses, hospitals, and cell towers, to name a few.

It can be difficult for everyday investors, however, to obtain diversified exposure to real estate. This is why publicly traded mutual funds and exchange-traded funds that hold real estate investment trusts, or REITs, can play an important role in a diversified portfolio.

REITs are legal entities that own, finance, and manage real estate properties. REITs are required to distribute 90% of their taxable income to shareholders, helping generate income for portfolios while allowing for capital appreciation. Because their historical returns have not always been closely correlated with either stocks or bonds, REITs can also dampen overall portfolio volatility.

Just like stock and bond mutual funds can hold hundreds or thousands of securities, REIT funds — often comprised of many individual REITs — offer diversified exposure to thousands of properties around the world.

Location, Location, Location

Today, there are more than 900 publicly traded REITs operating in more than 40 countries around the world, with a combined market capitalization of roughly $2 trillion. In the U.S. alone, there are approximately 580,000 REIT-owned properties in 17 different sectors, as outlined below:

Through our portfolios, Vista clients gain exposure to a diverse range of properties, from Washington Square Mall in the Portland metro area to the Empire State Building in New York City, as well as data centers in Asia, hotels in Europe, and many more.

Performance in Perspective

REITs have faced performance headwinds the past several years. Inflation hit a 25-year high in 2022 at 9%, leading many central banks to increase their benchmark interest rate. Higher interest rates can lead to financing challenges and drive property values lower.

The COVID-19 pandemic also negatively impacted office and retail REITs, with the transition to remote work pushing vacancies to record highs.

As of November 2024, the performance of both U.S. and international REITs was negative for the trailing three years and was significantly lower than the U.S. stock market over the prior decade. It’s no wonder investors are asking if REITs still deserve a place in their portfolios.

It is important to remember, however, that extended periods of underwhelming performance aren’t unique to REITs or real estate; in fact, many other important asset classes have periodically disappointed investors.

For example, U.S. small cap value stocks — the highest returning major asset class since 1926 — posted an annualized loss of 10% for the 10 years ending in 1938. Similarly, long-term U.S. government bonds — historically one of the safest asset classes — returned just 0.5% per year from 1960–1970. Even the S&P 500 Index has suffered several decade-long periods of negative performance in its history.

While the recent period of REIT underperformance has been challenging for investors, it wasn’t too long ago that investors were clamoring for more REITs. At the end of 2019, U.S. REITs had returned 11.1% per year over the prior 20 years, dramatically outpacing the S&P 500 Index by 5% per year.

REITs’ more recent performance woes have led to lower valuations and more attractive yields. Their continued lack of correlation with stocks and bonds, and potential for inflation protection, are additional reasons to remain optimistic.

Vista’s Approach to REITs

At Vista, we use highly diversified, low-cost mutual funds and exchange-traded funds to provide clients with broad exposure to REITs across U.S. and international markets.

A globally diversified portfolio that allocates to different asset classes, sectors, and geographies can help effectively manage risk and capture the attractive returns markets have historically delivered. U.S. and international REITs are a small, yet important, part of that effort.

The key to successful investing isn’t about predicting which asset class, industry, or geography will perform best next year.  It’s about sticking to an appropriate asset allocation, minimizing costs and taxes, and maintaining long-term perspective when it inevitably seems uncomfortable to do so.

Make These Money Moves Before the Ball Drops

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The end of the year is quickly approaching, which means you’ve likely got a lot on your to-do list. But don’t forget to wrap up your financial planning tasks for 2024.

Year-end financial housekeeping is a gift that keeps giving well after the tinsel and toys are tucked away. Not only does it ensure you end the year strong, it also helps start the new year on the right financial note.

Here are our top moves for putting a bow on your 2024 finances.

#1: Mind Your RMDs

Did you reach age 73 this year? If so, don’t forget to take annual required minimum distributions (RMDs) from your IRA, SEP IRA, SIMPLE IRA, and retirement plan accounts.

If your 73rd birthday was in 2024, you technically have until April 1, 2025, to take your first RMD. But since RMDs are counted as taxable income—and you must also take your second RMD in 2025—it’s often better to take your first RMD in 2024 to avoid paying taxes on two RMDs next year.

Anyone who turned 74 or older this year must take their RMDs by December 31, 2024.

The required withdrawal rules for inherited IRAs can differ, so be sure to reach out to your Vista team if you have questions.

#2: Make the Most of Giving

Gifts to family or friends must also be made by December 31 to take advantage of the annual gift tax exclusion. Individuals can give up to $18,000 ($36,000 for married couples filing jointly) this year to any number of recipients with no federal gift tax consequences.

Charitable donations must also be made by December 31 to count on your 2024 tax return. Remember, donations of appreciated stock can often be more tax-savvy than direct cash gifts. Individuals with retirement accounts can also redirect up to $105,000 in RMDs to a charitable organization. Known as a qualified charitable distribution (QCD), this is a great way to reduce taxable income and fulfill your giving goals.

#3: Max Your Retirement Plan Contribution

Are you still working? It’s always a good idea to double-check your retirement plan contributions and ensure you’re maximizing your savings.

Savers under age 50 can sock away $23,000 in a 401(k), 403(b) or Thrift Savings Plan this year. Individuals aged 50 and older can also make a catch-up contribution of $7,500 for a total contribution of $30,500.

Contribution limits will increase in 2025 to $23,500 ($31,000 for individuals aged 50-59). And good news for those approaching retirement: 60-, 61-, 62-, and 63-year-olds can take advantage of an additional “super catch-up” contribution of $3,750 for a total contribution of $34,750 in 2025.

#4: Use Up Your Flexible Spending Account

A flexible spending account is a savings vehicle that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. While you can carry $640 in flexible spending funds into 2025, you must spend the remainder or risk losing it.

To use up surplus funds, refill prescriptions, get new glasses or contacts, replace hearing aids, or purchase other reimbursable items. (Get the full list of IRS-approved expenses.)

 #5: Maximize IRA, 529 Plan, and HSA Contributions

Sure, you have until April to contribute to your IRA, 529 college savings plans, and Health Savings Accounts (HSAs). But a little pre-planning never hurts.

This year, people under 50 can contribute $7,000 to an IRA. Those 50 and older can contribute an additional $1,000 ($8,000 total).

Many states offer tax deductions or credits for residents’ contributions to 529 college savings plans. Oregon, for example, provides a refundable credit of up to $340 for married taxpayers who fund a state-sponsored 529 plan.

Maximum HSA contributions in 2024 are $4,150 for individuals and $8,300 for families, plus a $1,000 catch-up for those 55 and older.

#6: Consider a Roth Conversion

In a lower-income year, a Roth conversion may make sense. Here’s what to consider:

  • Tax bracket: If you expect to be in a higher tax bracket in the future, it might make sense to “prepay” taxes today by converting to a Roth IRA instead of paying a higher tax rate on future IRA withdrawals.
  • Time horizon: Ideally, you’ll want to wait 10 to 15 years before taking withdrawals from a converted Roth IRA. This enables tax-free account growth that may exceed the amount you pay in taxes to convert.
  • Cash flow: Be sure you have enough cash outside the IRA to pay conversion taxes.

The deadline to convert to a Roth IRA is December 31. While Roth conversions don’t make sense for everyone, it’s worth checking in with your Vista team to see if a conversion is a fit for you.

Looking Forward to a Prosperous 2025

With your financial housekeeping out of the way, a last task is to take stock of the year before setting goals for 2025.

What did you achieve this year, and what lessons will you take with you into 2025? Holidays are a good time to reflect on the year’s highlights and challenges and to contemplate how these experiences shape your journey. Please consider sharing these with us in our next conversation.

Remember, your Vista team is here to help you live a happier and more prosperous life!

Beyond Borders: The Benefits of International Diversification

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As humans, we’re drawn to the familiar — we follow the same routines, take the same routes, and frequent the same places. This natural inclination to stick with what we know extends to our investment choices, resulting in a phenomenon known as home bias.

What Is Home Bias and Why Does it Exist?

Home bias is the tendency of investors to favor the stocks of companies based in their home country, even when similar or more attractive opportunities may exist beyond their borders.

Consider the automotive industry: Ford and General Motors are household names for American investors, while international giants like Toyota or Volkswagen may receive less attention despite their global scale and history of innovation.

In the U.S., several factors may contribute to investors’ home bias:

  • Familiarity and comfort: Investors often feel more confident investing in companies and industries they understand, particularly those that enjoy widespread media coverage.
  • Perceived risks: Concerns about political instability, currency issues, or other economic uncertainty abroad can deter investors from diversifying internationally.
  • Barriers: Certain foreign markets have less developed exchanges, higher transaction costs, and more complex tax implications for U.S. investors.

It’s also natural to want to participate in local successes; it’s why we sometimes jump on the bandwagon when our sports teams win in the postseason. When the home country’s market performs well, investors may regret allocating their money internationally.

Home Bias Is a Global Phenomenon

While loyalty to the home team is stronger in America than in other countries, Americans are not alone in exhibiting home bias. A 2021 study by Martin Wallmeier and Christoph Iseli revealed that:

  • U.S. investors allocate nearly 82% of their stock holdings to domestic companies, the highest share among developed nations.
  • Japanese investors follow close behind, with 81% of their stock portfolios held in Japanese companies. Japan comprises just 7% of the world’s total stock market capitalization.
  • Investors in Norway and the Netherlands have the lowest levels of home bias, with domestic investments making up just 18% and 33% of their stock holdings, respectively.
  • Investors in India, Egypt, and the Philippines allocate close to 100% of their stock portfolios to companies based in their respective local markets, despite those countries’ tiny share of aggregate global market capitalization.

The Risks of Home Bias

Overweighting a portfolio with domestic investments can significantly impact its expected return and risk.

The chart below shows performance for the top five and bottom five countries in international developed markets from 2014–2023, ranked by calendar year returns. For comparison, we’ve also included the U.S. among these best and worst performers.

Interestingly, the average return of the worst-performing countries over this period was -17.4%, while the average return of the best performers was 28.6% — a difference of 46% per year. Clearly, the benefits of picking “the best” and avoiding “the worst” have been significant.

But distinguishing the best from the worst is only clear with the benefit of hindsight.

Who would have guessed that Austria, the top-performing market in 2017, would have been the worst just a year later? Or Finland, the best performer in 2018, finishing as the worst-performing developed market in 2019?

The chart above clearly shows how well the U.S. stock market has performed over the past decade. While never “the best,” i the U.S. has been among the top five performers in eight of the past 10 years. This is also why valuations for U.S. stocks are near their highest levels since the early 2000s.

This contrasts sharply with the global stock performance in the 10 years from 2004 to 2013 (not shown), when the U.S. was among the top five performing countries just four times — and among the worst performing countries five times! These years coincided with the “lost decade” for U.S. stocks, the stretch from 2000 to 2009 during which $1 invested in the S&P 500 turned into just 91 cents.

Overcoming Home Bias

These period-to-period fluctuations and changes in country leadership highlight the risks of attempting to pick next year’s winner and of home bias in general. While loading up on domestic investments might feel familiar and comfortable — particularly after a period of stellar recent performance — doing so can leave portfolios vulnerable to the volatility of a single economy.

Home bias may be a global phenomenon, but the solution is universal. Diversifying internationally can help protect investors in times when their home country’s stock market disappoints.

A typical Vista portfolio owns over 15,000 stocks across 46 global economies. By expanding the opportunity set beyond U.S. stocks, we increase our expectation of harnessing returns where they materialize, while reducing the risks inherent to investing solely in one’s home country.