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Jan 15
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What to Do if You Become a Victim of Identity Theft

By Identity Theft

Advice from a Wealth Manager Who Has Experienced It Firsthand

As a wealth manager, my job is to help protect my clients’ wealth — not just from market risk or taxes, but from the very real and growing threat of identity theft. Unfortunately, this is not just professional advice I’m sharing — it’s personal. I’ve lived through identity theft myself, and I can tell you, it’s not just an inconvenience. It’s a violation that affects your finances, your sense of security, and even your peace of mind.

If you ever find yourself in this position — whether it’s fraudulent unemployment claims, unauthorized credit cards, or someone impersonating you — here are the critical steps you need to take immediately.

Step 1: File a Police Report

Your first call should be to your local police department’s non-emergency line to file a police report. This creates an official record of the crime — something creditors, financial institutions, and even credit bureaus may request as you work to clear your name.

Be sure to keep the case number they provide you. You’ll need this for the next steps, especially when placing fraud alerts with credit agencies.

Step 2: Notify Your Financial Institutions

Next, alert every financial institution you work with — banks, credit card companies, investment custodians, and even lenders. Let them know you are a victim of identity theft and ask them to flag your accounts for suspicious activity.

In some cases, you may want to request new account numbers or additional security measures like verbal passcodes when calling in.

Step 3: Report Unemployment Fraud (If Applicable)

If someone has fraudulently filed for unemployment benefits in your name — a common scheme I’ve seen — you’ll need to report this directly to your state’s Employment Security Department. Each state has its own process, and acting quickly helps prevent the payment from being issued in your name.

For quick reference:

Step 4: Review Your Credit Reports

This is critical. You need to review all three of your credit reports — from Experian, Equifax, and TransUnion — to check for any accounts, loans, or inquiries you don’t recognize.

The good news: you can get your credit reports for free at www.annualcreditreport.com. I recommend making this review part of your regular financial routine, even if you’re not a victim.

Step 5: Place Fraud Alerts on Your Credit File

Contact each of the three major credit bureaus and request a fraud alert on your file. This tells creditors to take extra steps before issuing credit in your name. It’s free and lasts for one year, with the option to extend if needed.

Here’s where to place fraud alerts:

Step 6: Freeze Your Credit (Optional but Highly Recommended)

If you want an even stronger layer of protection, you can freeze your credit with all three bureaus. A credit freeze completely locks down your credit file, making it impossible for anyone — including you — to open new accounts until you temporarily “thaw” the freeze.

It’s free to place and lift a freeze, and most credit bureaus offer easy-to-use tools to manage the process. Just be sure to keep your passwords in a safe place — you’ll need them if you apply for a mortgage, car loan, or any other type of credit in the future.

Step 7: Report the Theft to the Federal Trade Commission (FTC)

Finally, file a report with the Federal Trade Commission at www.identitytheft.gov. This creates an official record at the national level, and the site offers a wealth of resources to help you recover your identity.

Your FTC Identity Theft Report can also be used to help dispute fraudulent accounts with creditors and credit bureaus.

Final Thoughts — From Someone Who’s Been There

I know firsthand how overwhelming this process feels. When I discovered my own identity had been stolen, I felt a mixture of anger, confusion, and vulnerability that’s hard to describe. I also know that acting swiftly and decisively made all the difference in minimizing the damage.

As your wealth manager — and as someone who’s walked this road — my advice is this:

  • Be proactive. Review your credit regularly and set up monitoring alerts so you can catch issues early.
  • Be organized. Document every step you take — every call, email, and case number.
  • Be patient. Recovery is a process, not a single phone call.
  • And don’t be afraid to ask for help. Whether it’s your advisor, an attorney, or a trusted identity theft resolution service, having a professional advocate in your corner can make a world of difference.

If you’ve been impacted — or if you just want to know how to protect yourself before it happens — please reach out. This is part of what I do for clients every day, and I’m always happy to help.

Your wealth is important — and so is your identity. Let’s protect both.

Jan 07
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2025 Year-End Markets Overview and Outlook

By 2025 Year-End Markets Overview and Outlook

Markets have a way of humbling consensus views. Entering 2025, many investors expected a narrow path to returns—led once again by a small group of U.S. stocks, with little help from bonds or international markets. Instead, the year delivered something different: strong absolute returns, broader participation across regions, and a re-emergence of diversification as a meaningful contributor to results. It was a reminder that market leadership does not move in straight lines—and that patient, diversified investors are often rewarded when expectations are most one-sided.

U.S. Equities: Strong Results, Higher Expectations

U.S. stocks delivered another solid year. The S&P 500 finished 2025 at 6,846, generating a 17.9% total return per Bloomberg. Economic growth remained resilient, inflation continued to cool, and corporate earnings proved more durable than many had anticipated.

At the same time, optimism became increasingly reflected in prices. The S&P 500 ended the year trading at a forward price-to-earnings ratio of 22.0x, well above its 30-year average of 17.1x.

Valuations are not a reliable guide to short-term market movements, but they do matter over longer horizons. Historically, starting valuations have shown a much stronger relationship with five-year forward returns than with one-year results.

Market concentration remained elevated. The ten largest companies now represent roughly 40.7% of the S&P 500, near historical extremes.

The “Magnificent 7” again accounted for a disproportionate share of returns—about 46% of index performance in 2025—reflecting their scale, profitability, and earnings momentum.

Much of this dominance has been reinforced by the extraordinary surge in capital spending related to artificial intelligence. The largest U.S. technology companies are at the center of a massive investment cycle, committing hundreds of billions of dollars toward data centers, semiconductors, cloud infrastructure, and AI model development. Planned capital expenditures by the major AI hyperscalers have grown at a staggering pace and are expected to continue rising over the coming years.

This level of investment has naturally fueled investor enthusiasm around AI’s long-term potential, but it also raises reasonable questions about returns on invested capital. In 2025, investors periodically expressed concern around whether some companies—such as Oracle and Meta—would ultimately earn attractive returns on this spending, leading to periods of volatility. Even so, the data make clear that capital markets remain willing to fund this investment cycle, with AI adoption broadening across industries and corporate spending on AI tools continuing to accelerate.

As with past technology cycles, the long-term winners are likely to be those companies that can translate scale and innovation into durable cash flows, rather than simply the largest spenders.

Corporate fundamentals, however, remain supportive. Profit margins reached approximately 13.9% in the third quarter, well above long-term averages, and earnings expectations for 2026 remain constructive. Still, margins at these levels leave less room for error should growth slow or costs rise.

International Equities: A Long-Awaited Broadening

One of the most important developments of 2025 was the return of international equity leadership. Markets outside the U.S. did not simply perform well—they meaningfully outperformed U.S. equities despite strong U.S. returns. The MSCI All Country World ex-U.S. Index gained 32.39% in 2025 per MSCI, far exceeding the S&P 500’s advance.

This was notable because international equities outperformed the U.S. during a year when U.S. stocks themselves delivered strong, above-trend returns. Rather than a rotation away from U.S. assets, 2025 reflected a broadening of opportunity.

Valuations played an important role. International equities entered the year trading at a 30–40% discount to U.S. markets, a gap that remains wide by historical standards. Over the past decade, U.S. equity returns have benefited significantly from rising valuation multiples, while international returns have relied more on earnings growth, dividends, and currency movements. In 2025, those factors aligned more favorably outside the U.S.

Performance varied by region. Japan benefited from improved corporate governance and earnings momentum; Europe saw strong gains in the banking sector as growth stabilized; and emerging markets experienced strength in countries such as China, India and Taiwan. A weaker U.S. dollar further supported international returns, consistent with historical periods of non-U.S. outperformance.

For long-term investors, 2025 served as a reminder that international markets can play a meaningful role—not only as diversifiers, but as contributors to returns.

Fixed Income: A More Familiar Role Returns

After several challenging years, fixed income regained its footing. The 10-year U.S. Treasury yield ended the year near 4.2%, and the yield curve moved back into modestly positive territory following a prolonged inversion.

The Federal Reserve signaled that policy rates are likely to trend gradually lower over time, toward a long-run level near 3.0%, assuming continued progress on inflation. Credit markets remained healthy, with investment-grade and high-yield spreads near the lower end of historical ranges and default rates well contained.

Just as importantly, starting yields matter once again. With the Bloomberg U.S. Aggregate yield near 4.3%, history suggests five-year annualized returns in the 4–5% range, a meaningful improvement compared with much of the past decade.

Looking Ahead

The experience of 2025 reinforces several principles that continue to guide our approach:

  • Strong markets can coexist with rising valuation risk
  • Market leadership can remain concentrated longer than expected—but eventually broadens
  • Diversification often proves most valuable after periods when it has been least rewarded
  • Fixed income once again plays a meaningful role in balanced portfolios

As we look ahead, we remain focused on building portfolios that balance participation in growth with discipline around valuation, quality, and risk management. While short-term market outcomes are inherently unpredictable, history continues to favor patient investors who stay diversified, remain disciplined, and avoid reacting to headlines.

We are grateful for the trust you place in us and look forward to navigating the opportunities and challenges ahead together.

Nov 18
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Women, Retirement and Longevity

By Retirement

Funding a comfortable retirement has the potential to be a challenging process for anyone. But women, in particular, are especially likely to confront a number of financial risks during their 60s, 70s and beyond. The main reason: Women have a well-established history of living longer than men as well as building less wealth than men over their lifetimes. That one-two punch can make retirement feel like a bit of a minefield for many women—even those with significant wealth.

The good news: There are steps women can take that can potentially put them in a better position for retirement.

Women face some unique hurdles that make their march toward retirement that much steeper. For example:

Women live longer.

Women live almost six years longer than men, on average, to age 79 versus 73½ years old, respectively, according to the Centers for Disease Control and Prevention. The CDC has also forecast life expectancy at birth for women in 2019 at 81.4 years, versus 76.3 years for men. But at age 65, women are likely to live nearly another 21 years compared to men’s additional expected 18 years.

What’s more, affluent women tend to live even longer. One study found that women in the top 1% were expected to live to 88.9—10.1 years longer than those in the bottom 1%. Those extra years can boost the odds of women both running out money and spending some of their retirement years without a partner for support.

Living longer may lead to spending more money on health care. More than 70% of assisted living residents are women, and over half of nursing home residents are female, according to statistics compiled by Zippia.

Women build less wealth.

Women’s financial health is also generally less sound than men’s. U.S. Census Bureau data shows that just 22% of women have $100,000 or more saved for retirement, while 30% of men do. What’s more, U.S. women are projected to reach retirement with just 75% of the wealth accumulated by men, according to Willis Towers Watson.

This disparity can lead to some alarming outcomes. For example, women 65 and older are 80% more likely than men of the same age to be living in poverty, according to The National Institute on Retirement Security.

If you have significant assets, you may not be likely to become impoverished, of course. But the research highlights the risks that women, in particular, face when it comes to having adequate funds to live a comfortable lifestyle in retirement.

STRATEGIES TO CONSIDER

Some of the biggest systemic challenges for women—such as the gender pay gap—won’t likely be solved overnight. The good news is that a successful retirement is possible for women who harness these various strategies:

  1. Plan for a multistage retirement. The facts point to women in general living longer than men. Therefore, heterosexual women with a partner should consider what retirement will look like as part of a shared journey and, later, as a solo voyage. Each stage may have different financial requirements and costs as well as other issues to navigate. The solo stage, if it occurs, is likely to be more expensive and complicated as you age and potentially face increased health care costs and responsibilities you’ll need to address on your own instead of with a partner. Planning for a multistage retirement should involve honest discussions about investing and spending—as well as wishes and needs—with advisors, family members and others who might one day be involved in helping with caregiving.
  1. Get involved—and stay involved—with family finances. If you’re not already, look to be an active partner in investment decisions and other financial matters. That might mean learning more about aspects of financial planning and retirement spending (from your advisor, books, adult ed classes and other resources), as being financially literate can be crucial in making wise, confident decisions about wealth—or even simply understanding actions that people may want to take on your behalf.
  1. Work smarter. If you work, look for ways to increase your take-home pay. One idea is to job hop. Pew Research found that 60% of workers who changed jobs saw an increase in their real earnings, versus only 47% of those who remained with the same employer. Staying in the workforce for a longer period of time is another way to potentially arrive at retirement with more money saved up. It could also help you build up additional Social Security credits that result in more retirement income.

Another advantage to working longer: People with “post-retirement” jobs related to their previous careers reported better mental health than those who fully retired, according to research published in the Journal of Occupational Health Psychology.

  1. Allocate more money to retirement savings. An obvious move—one that could be easier said than done, of course—is to set aside more money in retirement-focused accounts. That might mean putting more into a 401(k) or Roth IRA, or a health savings account designed to help fund health care expenses. There are also spousal IRAs, which let a working partner open an IRA for a nonworking spouse to save for retirement. Consult with a professional about the rules, benefits and risks of any retirement savings option you’re considering.

Conclusion

Retirement can present some unique and tough challenges for women. But there are plenty of ways you can increase the likelihood of living the lifestyle you desire and remaining in healthy financial shape throughout your golden years.

 

ACKNOWLEDGMENT: This article was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2025 by AES Nation, LLC.

This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Advisory services offered through NewEdge Advisors LLC, a registered investment advisor. Anthony Baruffi is a registered representative of NewEdge Advisors LLC. Anthony Baruffi and NewEdge Advisors LLC are not affiliated with AES Nation, LLC. AES Nation, LLC is the creator and publisher of the VFO Inner Circle Flash Report.

Nov 05
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High Earners Face New Limits on 401(k) Catch-Up Contributions

By Changes to 401(k) Catch-Up Contributions

Originally published in The Wall Street Journal, September 24, 2025, by Ashlea Ebeling

What’s Changing

Starting in 2026, workers age 50 and older who earn more than $145,000 will no longer be able to make pretax catch-up contributions to their 401(k) plans. Instead, these contributions must be made on an after-tax basis into a Roth 401(k).

Key points:

  • The IRS finalized rules from a 2022 law mandating Roth-only catch-up contributions for high earners.
  • The income threshold is $145,000 in wages (indexed to inflation).
  • For those 60–63, the “super catch-up” of up to $11,250 will also fall under the Roth-only mandate if income exceeds the threshold.
  • Savers without a Roth 401(k) option could lose access to catch-up contributions entirely.
  • Pretax deductions will be lost—e.g., someone in the 35% bracket forfeits nearly $4,000 in tax savings on an $11,250 catch-up contribution.
  • This change could also increase taxable income, phasing out other deductions and potentially pushing some into higher tax brackets.

Why It Matters for High Earners

While the loss of upfront deductions may feel like a setback, Roth contributions bring long-term advantages:

  • Tax-free growth and withdrawals in retirement.
  • Diversification of tax exposure—balancing pretax, Roth, and taxable accounts.
  • Protection against rising future tax rates, since taxes are paid now.

Employers are rapidly adding Roth options to plans, but if yours does not, catch-up contributions may disappear until it does.

Recommendations for High-Earning Clients

To ensure you remain on track for a tax-efficient retirement:

  1. Confirm your plan offers a Roth 401(k). If not, encourage your employer to add one—most large providers already do.
  2. Review contribution strategy now. Consider gradually shifting a portion of regular 401(k) savings to Roth, not just the catch-up.
  3. Balance across account types. Maintain a mix of pretax, Roth, and taxable savings to provide flexibility in retirement withdrawals.
  4. Evaluate income thresholds. If you are close to $145,000, planning compensation and deferrals carefully could preserve pretax catch-up eligibility in certain situations.
  5. Coordinate with tax planning. Since Roth contributions increase adjusted gross income, review the potential impact on phaseouts of deductions and credits.

At Baruffi Private Wealth, we view this change not as a loss but as an opportunity to strengthen long-term retirement planning. By embracing Roth strategies, high earners can build a more resilient and tax-efficient income stream for the future.

Oct 09
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In the Flow

By State of the Markets - 3Q 2025

When an athlete is performing at their highest level, it is often said that they are “in the zone” or “in the flow.” This state of complete focus and harmony—where effort feels effortless—is a goal pursued by professionals and weekend athletes alike. Legendary figures such as Kobe Bryant, Serena Williams, Tom Brady, and Mikaela Shiffrin are renowned for consistently reaching this state. Teams, too, have experienced it—think of the 1985 Chicago Bears, the Boston Red Sox of the 2000s, or the Red Bull Formula 1 team. (With some luck, perhaps the 2025 Seattle Mariners will one day join that list.)

At the risk of tempting fate, financial markets over the past quarter have also seemed to find their rhythm. Every major sector delivered positive returns, with markets rewarding good news and, for now, brushing off less favorable headlines. While this kind of synchronized momentum is encouraging, we know from both sports and markets that staying “in the flow” is not a permanent state.

U.S. Equities – Strong Earnings and AI Momentum

As of October 1, the S&P 500 reached a record high for the 29th time in 2025, even briefly moving above 6,700. The positive returns were underpinned by solid fundamentals: second-quarter operating earnings rose 10.55% year over year, according to Standard & Poor’s.

Growth companies led the way, with the Vanguard Growth ETF up 12.50% in the quarter. Value-oriented companies and small caps also advanced, though more modestly, at 6.85% and 3.50% respectively. Investors continue to reward companies tied to artificial intelligence, though the question of when those substantial investments will begin to deliver measurable returns remains open.

International Equities – Positive but Uneven

International markets also contributed to gains. Emerging markets climbed 10.11% for the quarter, and Asian developed markets advanced 7.62%. European equities trailed these regions but still managed a respectable 3.24% return.

While the breadth of international gains is encouraging, regional performance continues to diverge, underscoring the importance of diversification and careful allocation.

Fixed Income – Support from the Fed

Bonds also enjoyed a strong quarter. Signs of a softer labor market, combined with steady inflation, prompted the Federal Reserve to lower short-term interest rates by a quarter point in September. Yields moved slightly lower, and both corporate bonds and mortgage-backed securities outperformed U.S. Treasuries, helped by healthy corporate balance sheets and reduced volatility in interest rates.

Economy – Growth Signs Mixed

Consumers, for the most part, looked past tariff-related concerns, as many companies absorbed costs rather than passing them along. Still, revisions to labor data raised new questions: the Bureau of Labor Statistics cut its estimate of 2024 job growth by more than 900,000 positions. Forecasts for job growth in 2025 are trending below 2024 levels. Consumer spending, however, has remained resilient. High-income households, which account for over half of all consumer spending, continue to support economic activity. Whether this spending power can offset broader labor market weakness is a key trend to monitor.

Looking Ahead – Staying in Rhythm, Aware of the Clock

Corporate profits continue to expand, consumers remain willing to spend, and businesses are investing for future growth. Technology continues to dominate headlines and portfolios, with the ten largest companies in the S&P 500 now representing more than 40% of the index’s market capitalization. Such concentration highlights both the power of innovation and the importance of vigilance.

The overall backdrop remains constructive: inflation is moderating, interest rates have eased slightly, and spending is steady. Yet, just as an athlete cannot stay in the flow forever, markets eventually face disruptions. For now, the momentum is intact—but we remain mindful that the positive fundamentals that have led to this virtuous cycle will change over time.

As always, we appreciate your trust and partnership. Our focus remains on helping you navigate markets with clarity, discipline, and perspective. Please don’t hesitate to reach out with any questions.

 

Source: JP Morgan, Bloomberg.com, Bureau of Labor Statistics, and https://investor.vanguard.com/Vanguard

Oct 02
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When Financial Uncertainty Rears Its Ugly Head

By Financial Uncertainty

Key Takeaways:

  • Most Americans experience an event that causes their income and/or net worth to drop significantly.
  • After a financial shock, review your situation and plan with a trusted professional.
  • You can manage both your money and your mental state with a few smart moves.

As much as we like to think we’re on top of our lives, unexpected setbacks and challenges can occur at any time. A sudden job loss, a terminal diagnosis or death in your family, a lawsuit directed at you, or a major disaster that wrecks your home or other property may cause significant distress that throws you off your game—and puts your financial future in question.

And while having significant savings or an extensive resume might mitigate much of that uncertainty, affluence and experience don’t guarantee that you’ll completely sidestep financial issues that can turn your world upside down.

For example, by age 70, nearly all workers (96 percent) have experienced four or more major life events such as a layoff, illness or divorce that cause their incomes to drop 10 percent or more. What’s more, at least once over the course of their working lives, six in ten workers go a full year or more without earnings, according to a study commissioned by the National Endowment for Financial Education.

Depending on your circumstances, troubling moments such as these may not actually pose a true threat to your financial stability and security. But they can certainly make you feel like you’re facing a crisis—which in turn can cause you to make money mistakes that can leave you in worse shape. And if an unexpected event actually does put you at financial risk, you’ll want to deal with the situation right away.

With that in mind, here’s a look at how you can navigate those (probably inevitable) periods of financial uncertainty and come out the other side in one piece.

Assessing the damage

Regardless of what the unexpected financial shock is, quite often the best first step after it occurs is to reach out to a trusted financial professional with whom you currently work—such as a wealth manager or accountant.

The reason: When there are major changes in the status of your personal or professional situation, it’s important to assess how those changes could likely impact your financial outcomes—and determine whether any changes or adjustments should be made to your existing financial plan and strategies.

The specifics of a financial review will depend on many factors, including the details of the new development itself as well as the complexity of your current financial picture and strategies. That said, some discussion points that are likely to be raised include:

  • Your budget. If there’s suddenly a lot less money coming into your household, it’s imperative to examine the money that’s flowing out—where it’s going, how much and so on. If you already track spending, you’ll probably see quickly which categories are musts and which ones are luxuries. If, like many people, you haven’t watched your inflows and outflows closely for a while, gather up your spending records and get that information down on paper (or spreadsheet) so you can see if any changes need to happen.
  • Your cash cushion. Chances are, you have some sort of emergency or “stuff happens” fund in place. But is it adequate given the situation you’re now facing? Cash cushions often rise and fall depending on how confident we feel at a given moment. If yours needs to be bigger, it might make sense to consider ways to raise cash or borrow to meet the demands of the moment—for example, by selling some equity holdings at a loss in order to offset future taxable gains.
  • Your insurance coverage. If your house burns down or suffers some sort of catastrophe, you’ll want to clarify—fast—what your insurance policy does and doesn’t cover.
  • Your asset protection plan. If someone gets hurt on your property and sues you, are you sufficiently protected? Many people aren’t sure until they’re in this type of predicament. Likewise, if your company or someone associated with it is sued, what (if any) asset protection strategies are in place—and how strong are they?

When good news doesn’t cut it

Let’s say the news is good: Your current wealth planning has you well positioned to ride out the financial shock.

But while that may be true objectively, it might be difficult to feel it’s true psychologically. When our lives are upended in a big way, the loss of control we experience can make it tough to believe we’re okay—and that we’ll stay that way.

The upshot: Often a big part of dealing with financial uncertainty is managing your emotional response and the resulting behaviors that response can elicit. If you find yourself feeling uncertain and anxious despite reassurances that you’re in good financial shape, consider these action steps:

  1. Tap the usual suspects. Do something you know can help calm the body and mind—yoga, meditation, running, weightlifting and so on. Seek out counseling or even a friend who is willing to listen to your concerns. The obvious moves are obvious for a reason: They tend to work!
  2. Control what you can. When something like a death or job loss pulls the rug out from under you emotionally, you can look to exert control in other areas of your life to compensate. Say your financial worries persist even though you know you have a big enough emergency fund. Consider cooking more at home and reducing your restaurant spending, replacing some pricey excursions with hikes or visits to nearby parks and nature preserves, and being more price conscious when shopping. Actively choosing to take such money-saving actions, even if they’re not necessary, can potentially be reassuring.
  3. Reframe the situation. A sudden financial problem can make you feel like a failure—especially if it involves losing a job or business that you feel defines you. Try to remind yourself that most people experience exactly what you’re going through (see those statistics above). Brush up on the many stories of hugely successful people who stumbled (or fell on their faces) along their journey. Put pen to paper and write down three things from each day that you’re grateful for—a practice that can help your brain notice the good and not just the bad. When you’re not feeling buried under a mountain of stress, you may very well be able to make better choices that get you back on track faster.

If the news is bad

That said, you might be confronted with not-so-good news about your situation. Perhaps you never put that asset protection plan into action, or you are taking a big financial hit right when college tuition payments are coming up.

In that case, it might be vital to adjust and regroup—getting help and guidance from one or more financial professionals along the way. Here are some potential action steps that could make sense:

  1. Prioritize, prioritize, prioritize. What has to happen so you can pay the bills and, at the very least, get by for the next few months? Focus on those key tasks and press the pause button on the rest. If you are newly jobless, that could mean filing for unemployment or tapping into select assets for quick cash. If your spouse has died, get the ball rolling on survivor benefits from Social Security, his or her employer, and insurance policies. And if you’ve been putting extra money toward a mortgage or other debt payment, cut that payment down to the minimum required amount for now.
  2. If you need help, ask for it. Some say the four most powerful words in the English language are “I need your help.” Family members who can loan or give you money may jump at the chance to do so. Likewise, lenders, health care providers and others are often willing to work with people by adjusting payment terms and setting up extended payment plans—assuming you reach out to them before you’ve missed months of payments. Remember that most people experience some kind of financial hardship—so chances are that your relative, or even that person at the credit card call center, will be willing to work with you.

Conclusion

It would be ideal if we were always perfectly prepared for an unexpected financial hardship—and it’s certainly possible that you’re set up for such a situation better than many other people out there. But it’s also wise to recognize that we can be blindsided at any time by news that makes it hard to know whether we’re still on solid financial ground. If you’re faced with such uncertainty, know that there are ways to regain much-needed clarity—and steps you can take to get back on track.

___________________________________________________________________________________

VFO Inner Circle Special Report

By John J. Bowen Jr.

© Copyright 2023 by AES Nation, LLC. All rights reserved.

No part of this publication may be reproduced or retransmitted in any form or by any means, including but not limited to electronic, mechanical, photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees.

This publication should not be utilized as a substitute for professional advice in specific situations. If legal, medical, accounting, financial, consulting, coaching or other professional advice is required, the services of the appropriate professional should be sought. Neither the author nor the publisher may be held liable in any way for any interpretation or use of the information in this publication.

The author will make recommendations for solutions for you to explore that are not his own. Any recommendation is always based on the author’s research and experience.

The information contained herein is accurate to the best of the publisher’s and author’s knowledge; however, the publisher and author can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof.

This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Advisory services offered through NewEdge Advisors LLC, a registered investment advisor. Anthony Baruffi is a registered representative of NewEdge Advisors LLC. Anthony Baruffi and NewEdge Advisors LLC are not affiliated with AES Nation, LLC. AES Nation, LLC is the creator and publisher of the VFO Inner Circle Flash Report.

Aug 05
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Washington Capital Gains & Estate Tax Update: What High Net Worth Families Need to Know

By Capital Gains & Estate Taxes

On May 20, Washington State Governor Bob Ferguson signed Engrossed Substitute Senate Bill 5813, reshaping parts of Washington’s capital gains and estate tax regimes. The new tax law affects families with a net worth of over $5 million and may require additional tax and estate planning to minimize Washington state tax exposure. The following is a summary of the changes in the law and Washington State’s Department of Revenue guidance.

Capital Gains Tax—New 9.9% Top Rate

Washington’s 7% excise tax on long‑term capital gains is now paired with an additional 2.9% on annual gains above $1 million, bringing the top rate to 9.9%. The capital gains tax rate change applies retroactively to sales on or after January 1, 2025. The existing 7% tax still applies to gains over $250,000; the surtax only applies once total long‑term gains cross $1 million in a year.

Estate Tax—Higher Exemption, Higher Top Bracket

For decedents dying on or after July 1, 2025, the estate tax exemption increases to $3 million (from $2.193 million). Beginning in 2026, the exemption will index annually to CPI. Estate tax rates remain progressive, ranging from 10% to an increased top rate of 35%, with the 35% top rate applying when the taxable estate exceeds the exemption by more than $9 million.

Additional changes include:

  • The qualified family‑owned business deduction increased to $3 million.
  • Certain non‑family heirs of farms can now access farm‑related estate tax deductions.

Key Washington Distinctions

  • No portability of the state exemption between spouses.
  • No Washington gift tax (lifetime gifts remain a federal—not state—issue).

Planning Considerations for $5–$50 Million Estates

  • Transaction pacing in 2025: With retroactivity now set, focus on loss harvesting, charitable strategies (including donor‑advised funds and CRTs), and basis management ahead of major liquidity events.
  • Estate liquidity: Revisit life insurance, buy‑sell arrangements, and trust distributions to fund potential state liabilities at higher brackets.
  • Lifetime transfers: Strategic gifting of appreciating assets can reduce the Washington taxable estate without triggering a Washington gift tax (mind federal limits and basis trade‑offs).
  • Closely held businesses and farms: Confirm eligibility for the enhanced $3 million deduction and the new farm‑heir provisions; entity structure and valuation methodology matter.
  • Spousal planning: Because there is no portability, credit‑shelter trusts and community/separate property titling should still be utilized to maximize the state exemption.

This summary reflects ESSB 5813 as passed; administrative guidance and technical corrections may follow. To understand how the new tax laws may affect you, we can model scenarios and coordinate with your tax advisor and estate planning attorney.

Sources: Statute / Session Law (ESSB 5813, Chapter 421, Laws of 2025), Washington Department of Revenue, Washington Policy Center

Jul 24
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Seven Ways To Make Better Decisions

By Decision- Making Strategies

Every day—all day, it seems—we make decisions. Many are minor and made almost automatically. Some are far more important. And a select few may be crucial to the outcomes that occur in our lives.

So wouldn’t it be nice if we could take steps that might help us consistently make better decisions?

Of course, “a good” or “the right” decision may depend on the circumstances. Are you trying to make a decision as fast as possible with the main goal of moving forward? Or are you more focused on ensuring your choice today leads to an optimal long-term result? Consider these seven strategies and ideas to use when assessing situations and considering what to do next.

1. Really think about what you want.

What are you truly seeking to achieve or accomplish? Only by getting clear on that can you make a wise decision. That sounds painfully obvious, of course, but too often we make choices based on our reactions to what currently is instead of what could be and what we want there to be. Yes, decisions sometimes must be made around what’s going on at the moment—but when possible, think about the outcomes you most desire going into the process.

That means, in part, setting aside time to think about the goal and how various possibilities may push you either toward it or away from it. Depending on the complexity of the situation, this might take ten minutes—or it might require many hours over several weeks.

2. Define the decision.

Also get clear on the implications of the choice you’re making. A new career, for example, may hold the promise of a higher income—but it could also impact your commute, how often you travel and your availability to your family. This is where a traditional pros and cons list (or matrix) can potentially help you see the situation you’re considering at both a very high level and an extremely granular level. Weigh your options in the context of what’s most important to you.

3. Consider which decision-making technique to use.

Exploitation decision-making involves choosing options that are already familiar and comfortable on some level. Exploration decision-making means seeking out and choosing unfamiliar routes. Both methods can be useful and “the right” approach, depending on the situation. For example, exploitative decision-making often can be effective in low-stakes scenarios, where the potential risks and rewards are both well known and not particularly impactful. Exploration decision-making can work well when there’s enough time and flexibility (financially, managerially) to test out novel ideas with bigger (or perhaps more uncertain) risks and rewards.

4. Keep fear in check.

As humans, we’re naturally loss-averse—so it’s easy to feel stressed when there’s a decision you need to make. It’s common for some to experience catastrophic thinking, in which they imagine the worst possible outcomes if they should make the “wrong” decision. It’s essentially scenario thinking taken to the extreme. In such instances, remind yourself that while the worst imaginable result could occur, the likelihood of it happening is probably very low, and that you’re essentially “telling yourself a story” that is very unlikely to play out. Basic mindfulness training and breathing techniques can help you stay calmer when stress wants to short-circuit your brain.

5. Give your gut a seat at the table.

Clearly, logic—goal-setting, pros and cons lists, etc.—is vital to wise decision-making. But the most successful people, in our experience, don’t stop with the cold, hard facts: They also bring their intuition into the mix. And indeed, research suggests they’re onto something. Several well-known studies show that people who suffered damage in the part of the brain that handles logic were still able to make sound decisions. But in stark contrast, people with damage to the area of the brain that regulates emotions found it difficult to impossible to make decisions.

The upshot: The idea that a decision may be good or bad based on a “gut feeling” has some merit. Our intuition may be better at spotting the decisions that will take us in the direction we really want to go—while logic may be better at pulling us toward what other people (parents, peers, etc.) think we should do, or what we believe those outside forces expect from us.

6. Don’t ignore your values.

It can be easier to make tough choices when you examine them through any strong values by which you aim to live your life. Taking a job that will make you wealthy but requires you to devote nearly all your time to it might be the right decision if you value money and status, but it might be the wrong option if family and community are at the top of your list of values.

7. Gather other viewpoints carefully.

Getting other people’s opinions and insights can help you arrive at a better decision—but the devil is in the details. For example, in a business environment, seeking broad consensus and across-the-board agreement from everyone can quickly result in a decision that promotes lukewarm, lowest-common-denominator results that no one around you is particularly thrilled with. A potentially better approach is to consult with the people who can contribute the most meaningful ideas. Often, those people aren’t your immediate peers—they’re the “in the trenches” employees who do the work.

Conclusion

Strong decision-making skills don’t stop there, of course—there’s also gaining buy-in and communicating your decisions clearly and compellingly. But none of that can happen until you’ve chosen a path. By getting that foundational step right, you set yourself up to move forward with maximum effectiveness.

 

ACKNOWLEDGMENT: This article was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2025 by AES Nation, LLC.

This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Advisory services offered through NewEdge Advisors LLC, a registered investment advisor. Anthony Baruffi is a registered representative of NewEdge Advisors LLC. Anthony Baruffi and NewEdge Advisors LLC are not affiliated with AES Nation, LLC. AES Nation, LLC is the creator and publisher of the VFO Inner Circle Flash Report.

Jul 10
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Focusing on the Fundamentals

By State of the Markets - 2Q 2025

“The art of being wise is the art of knowing what to overlook.” – William James

When I first started out as a credit analyst, one of my mentors counseled that of all the risks that investors face when making an investment, legislative risk is one of the most difficult to quantify.  It is challenging to predict what a group of legislators will enact into law and how that will impact companies and the economy.  Legislative risk was front and center in the second quarter, as the first half of the quarter was focused on legislative risk in the form of daily changes in tariff policy, and the second half of the quarter focused on legislative risk in the form of new tax legislation.  Part of the challenge of being a good investor is being able to sift through the vast amount of news stories that we are bombarded with each day to focus on what truly matters.  The second quarter served as a timely reminder that, while negative news stories of rising tariffs, Middle East flare-ups, and credit rating downgrades may seem daunting, strong earnings, moderate inflation, and resilient consumer spending, along with a surprise late-June ceasefire in the Israel-Iran conflict, can lead to a strong market performance.

Equities – Reduced Fears of High Tariffs Lead to Focus on Strong Fundamentals
The tariff-induced downturn in April, which left the US equity markets on the brink of a bear market, was quickly forgotten, allowing the S&P 500 and Nasdaq notch fresh records, while most overseas bourses participated in the relief rally.

News that large tariff increases would be paused caused investors to tiptoe back into risk, with small and midcap stocks as well as large cap stocks performing well.   By late June, growth stocks had erased their year-to-date deficit versus value and nine of eleven S&P 500 sectors were in positive territory for the quarter.

Fixed Income – a Round-Trip in Yields
Interest rates ended the quarter largely unchanged, as news stories that would have led to higher or lower rates were largely balanced.  Rates climbed out of the gate after a solid May payrolls report. A downgrade of the U.S.  credit rating by Moody’s from Aaa to Aa1, as well as fears of higher oil prices, pushed the yield on the US 10-year Treasury note to 4.58%.  Then in June, cooler inflation readings, along a dovish tone from the Federal Reserve and fading geopolitical risk pulled yields lower, with the yield on the 10-year Treasury note ending below where it ended last year at 4.23%, according to the Board of Governors of the Federal Reserve System (US) via FRED..

Economy – Moderating but Resilient
Most price gauges surprised on the downside, with May core CPI rising just 0.1%, bringing year-over-year inflation to 2.8%. Core Personal Consumption Expenditure Price Index, the Federal Reserve’s preferred inflation gauge, advanced a modest 2.5% year over year in the second quarter, per the US Bureau of Economic Analysis.  Softer data allowed the Fed to keep the funds rate steady at 4.25–4.50%, with officials now penciling in two rate cuts before the end of the year. Cooling labor markets may also give the Fed reason to lower short-term interest rates, as weekly jobless claims crept higher at the end of June.

Looking Ahead: Things Look Good, and Markets Reflect It
While headlines have been volatile, underlying trends are encouraging: inflation is edging lower, monetary policy is likely to shift from restrictive to neutral, and earnings expectations are stabilizing at a strong growth rate. We will be watching to see how the recently passed tax bill affects consumer and business spending. Our investment strategy enables us to remain invested in a diversified portfolio, benefiting from market upturns.

As always, we appreciate your trust and partnership, and we remain focused on helping you navigate markets with clarity and discipline. Please reach out with any questions.

 

Jun 10
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Unmasking AI’s Hidden Biases: A Practical Guide for Investors, Business Owners, and Everyday Power-Users

By Artificial Intelligence

Introductory note from Anthony Baruffi, Founder, Baruffi Private Wealth…

Over the past year, I’ve reviewed and utilized generative AI tools to assist me with tasks ranging from portfolio research to day-to-day firm operations.  They’re astonishingly powerful—and, if used carelessly, astonishingly dangerous. The CFA Institute article summarized below cuts through the hype and shows exactly where hidden model biases lurk and how to neutralize them. I’m sharing the key points—with a few prompt “shields” and workflow tips—so you, your business, and even your personal life can enjoy the upside of AI while steering clear of costly missteps.

The following article is based on “AI Bias by Design: What the Claude Prompt Leak Reveals for Investment Professionals,” Dan Philps, PhD, CFA & Ram Gopal, CFA Institute Enterprising Investor, 14 May 2025.

Generative AI—ChatGPT, Claude, Gemini, Copilot—can digest 50-page contracts before lunch and brainstorm a marketing plan on the drive home. But a leaked 24 000-token “system prompt” (the invisible rule book Claude follows) shows these tools also hard-wire human biases into their answers.

Below is a plain-English tour of the risks, plus simple prompts and habits you can use—whether you’re valuing a company, running a shop, or planning next weekend.

Why this matters beyond Wall Street

If you are a … Hidden AI risk Real-world impact
Investor Over-confident summaries skip footnotes Mispriced risk in your portfolio
Business owner AI clings to first framing (“launch ASAP!”) Blind spots in market or compliance checks
Everyday user Tool favors newest over best sources Advice that ignores durable facts (tax rules, safety standards)

The seven biases revealed—and how to disarm them

Quick fix: Copy each Mitigation Prompt into chat before your real question.

Bias What the leak showed Mitigation Prompt
Confirmation Model echoes your wording, even if wrong “If my framing is inaccurate, correct it before answering.”
Anchoring Clings to first impression “Challenge my assumptions and offer alternative views.”
Availability Overweights recent docs “Rank sources by evidential strength, not recency.”
Fluency Smooth tone hides uncertainty “Include probability ranges or confidence levels.”
Simulated reasoning Neat logic that’s really post-hoc “Show only reasoning actually used, no decoration.”
Temporal gap Implies it knows events after Oct 2024 “State your knowledge-cutoff date clearly.”
Truncation Trims nuance to stay short “Be comprehensive unless I ask for a summary.”

Four habits that keep AI helpful—and honest

  1. Double-loop your queries.
    Run the same question twice—once without mitigation prompts and once with them—then compare. Gaps highlight hidden bias.
  2. Log the entire exchange.
    Export the chat or copy it into your CRM/notes. The paper trail matters if auditors, regulators, or future-you asks, “Where did this number come from?”
  3. Mix human and machine insight.
    Investors: Pair AI earnings-call recaps with primary filings.
    Owners: Let a colleague vet AI-drafted contracts.
    Consumers: Cross-check AI health or legal tips with professionals.
  4. Run quarterly “bias drills.”
    Feed the model a historical case (a stock that imploded, a product recall) and see whether it surfaces key red flags. Adjust prompts or tool choice accordingly.

Copy-ready “Master Prompt”

“Use an analytical tone. Correct inaccurate framing. Present dissenting as well as consensus views. Rank evidence by relevance, not recency. Quantify uncertainty with ranges or probabilities. Be comprehensive—do not truncate unless asked. State your knowledge-cutoff date and avoid simulating events after it.”

Paste this at the top of a new chat; you’ll feel the rigor immediately.

Big picture: Scale ≠ wisdom

Today’s AIs are optimized for usability—short, fluent answers that make us feel smart—not for truth or completeness. Bigger data alone won’t fix that. Progress requires sharper human oversight—the same qualities that separate disciplined investors, savvy owners, and smart everyday users from the pack.

Final takeaway

AI is like a power tool: enormous leverage in skilled hands, dangerous shortcuts in careless ones. Layer a few targeted prompts and disciplined review habits, and you’ll harvest AI’s speed without paying the price of hidden bias.

Source: Dan Philps, PhD, CFA, and Ram Gopal, “AI Bias by Design: What the Claude Prompt Leak Reveals for Investment Professionals,” CFA Institute Enterprising Investor, 14 May 2025. (≈840 words)