News from the Home Team

We have officially entered the holiday season and year-end is upon us. We want to be sure and pause amidst the holiday fun and craziness and year-end time pressure to stop and give thanks to you all for putting your trust in us to help you on your financial journey. We greatly appreciate your business and friendship and look forward to another year of working with you. 

We wish you and your families the happiest of holidays and a great New Year!

This month's newsletter has a lot of helpful information—from personal finance tips, cybersecurity reminders, and market commentary, to a great Salted Caramel Pretzel Bark recipe and information on Big Bend National Park! We hope you find a few things within that are useful or interesting.

As the year winds down, we also wanted to share some important year-end reminders:

• Take your Required Minimum Distributions (RMDs) if applicable. Setting RMDs up on an automated plan can be a great way to ensure you do not forget these each year
• Review any inherited IRAs with your financial professional to confirm the timeframe for drawing down those assets
• Start considering when you need to make your retirement plan contributions
• If giving back is part of your financial plan, now is a great time to be intentional about your contributions. Whether you prefer direct gifts, donor-advised funds, or appreciated securities, year-end donations can support the causes you care about and create potential tax advantages.
• Market volatility throughout the year may offer an opportunity to offset capital gains by realizing losses in certain positions. Thoughtful tax-loss harvesting can help reduce your tax liability while maintaining your investment strategy.
• Take a moment to review your account beneficiaries. You'd be surprised how many people forget to update these, and you want to make sure everything still aligns with your current wishes!
• If you do not have bank instructions linked to your bank account, consider doing so.  This is a great convenience whether you need to take an RMD or simply withdraw from or add funds to your investment accounts.

We're here to help with all of these year-end details, and we're always happy to coordinate with your CPA, estate attorney, or other trusted professionals to make sure everything stays in sync.

Please don't hesitate to reach out if you have any questions or want to talk through anything in more detail!

Market Insights

Cambridge’s monthly market insights break down the latest economic trends, inflation data, and policy shifts shaping today’s investment landscape. 

The first week of December delivered a series of key U.S. economic indicators, offering a clearer picture of the nation’s growth trajectory as the year draws to a close. Markets and policymakers focused on fresh data from the manufacturing and services sectors, labor market trends, and inflation pressures, each providing important signals about the health and direction of the economy.

U.S. manufacturing activity remained in contraction during November, with the ISM Manufacturing Purchasing Managers’ Index (PMI) at 48.2, signaling ongoing softness in factory output and demand. Respondents cited weak new orders and cautious inventory management, underscoring persistent headwinds for the industrial sector despite some stabilization in supply chains.

The service sector continued to show strength, with the Services PMI registering 52.6 in November. This reading indicates solid expansion, supported by robust business activity and steady employment gains. Service providers reported healthy demand across consumer-facing and professional segments, helping to offset some of the softness seen earlier in the year. The resilience of services remains a key pillar for the U.S. economy, especially as manufacturing recovers.

Labor market conditions remained favorable, as initial jobless claims fell to 191,000 for the week. This is a notable decrease from the prior week and marks one of the lowest levels in recent months. The low number of claims signals that layoffs are limited and that employers are largely holding onto workers, even as hiring slows. This stability in the labor market supports consumer spending and underpins overall economic confidence.

Inflation pressures persisted but showed signs of moderation. The Core Personal Consumption Expenditures (PCE) Price Index — the Federal Reserve’s preferred inflation gauge — rose 0.2% month-over-month and 2.8% year-over-year in September (the most recent available data). These figures indicate that underlying price growth remains elevated but is gradually easing, aligning with expectations for a cautious approach from policymakers as they monitor inflation trends.

Economic and Capital Markets Dashboard
 

Week Ahead

This week’s economic calendar features several events that will offer valuable insights into the U.S. economy’s direction. On Tuesday, the Job Openings and Labor Turnover Survey (JOLTS) report and the 10-Year Note Auction will provide a window into labor market dynamics and investor sentiment toward government debt.

Wednesday is set to be a pivotal day, with the Federal Reserve releasing its latest economic projections, policy statement, and interest rate decision, followed by a press conference. These events will be closely watched for signals about the Fed’s outlook and future policy moves. Additionally, the weekly crude oil inventories report will shed light on energy supply trends, which can influence inflation and broader market conditions.

Thursday rounds out the week with the Initial Jobless Claims report, offering a timely update on employment trends, and the 30-Year Bond Auction, which will reflect long-term investor confidence and expectations for interest rates.

Together, these events will help shape market expectations and provide a clearer picture of the economic landscape as the year draws to a close. Investors and policymakers will be looking for clues about labor market health, monetary policy direction, and overall financial stability.

This Month’s Spotlight

Financial Planning – 5 Steps to Take Now

This is a great time of year to do a check-in on your financial situation. While it may not seem like it when you start, taking stock of where you stand financially helps reduce stress and gives you a stronger foundation to start the new year. In addition to the 5 tips we list below, don’t forget to ask your financial advisor if you have access to Cambridge’s CLIC Client financial planning tool. This is a free client-facing tool available to advisory clients and is a great vehicle to house and analyze some of the data you gather.

1. Organize Your Finances: Know Where Your Money Is Going

Review your income and expenses to identify where your money goes. This can be daunting, but it is less scary than not knowing where you stand. You might be surprised by how much is spent on small, recurring items like dining out or subscription services. Organizing your finances can help you align spending with your goals, whether it’s saving for a home, retirement, or paying off debt. We have budget worksheets that can help you organize this information. 

2. Build an Emergency Fund

Unexpected expenses are inevitable. If you don’t have an emergency fund, start small, then work toward covering 3-6 months of essential living costs. Set up automatic transfers to a dedicated savings account to make it easier to stay consistent.

3. Tackle High-Interest Debt

Eliminating high-interest credit card debt can free up significant cash flow. You may consider consolidating your debt into a lower interest rate loan or, depending on your credit score, you may qualify for a 0% introductory interest rate on a credit card for a period of time on balance transfers, which would allow you to pay down principal without incurring interest charges during the promotion period. Reducing this burden allows you to focus more on long-term financial growth.

4. Contribute to Retirement Savings

Check in on your retirement strategy. Aim to save at least 15% of your pre-tax income, including any employer match. If you're not there yet, consider increasing your contribution by 1% annually—especially after a raise. Small steps today can lead to big rewards later, thanks to the power of compounding.

5. Review and Rebalance Your Investments

If you are managing your own investments, make sure they are aligned with your goals. Market changes can shift your asset allocation over time. Rebalancing ensures you stay within your risk comfort zone while positioning yourself for long-term growth.

Did You Know?

Some holiday season and financial markets fun facts!

Did you know that Wall Street has a nickname for the market surge that often happens between Christmas and New Year's Day? It’s called the Santa Claus Rally. This historic pattern often sees the stock market finish the year with a strong climb, though reasons for the rally are still debated (tax-loss harvesting, holiday optimism, etc.).

Did you know that the gifts listed in the song "The 12 Days of Christmas" are tracked annually by a major bank? It’s called The Christmas Price Index (CPI). PNC Bank compiles this index every year, using it to demonstrate how inflation affects non-typical goods and services.

Did you know that one of the most tax-efficient ways to give during the holiday season doesn't involve cash? It's donating appreciated stock. Instead of selling appreciated stock (and paying capital gains tax), you can donate the shares directly to charity. The charity receives the full value, and you get a deduction for the fair market value.

Did you know that the total U.S. consumer debt related to holiday shopping usually peaks in January? This surge demonstrates the power of consumer credit and revolving debt. Analysts often watch these January numbers to gauge overall consumer spending habits and credit health entering the new year.

Tech Tips

Cybersecurity Check-Up: Protecting Your Assets from Evolving Scams

We wanted to take a moment to remind you of the critical importance of cybersecurity awareness and the need to stay vigilant. The threats targeting investors are growing more sophisticated, and the financial toll can be very serious.

The FBI’s 2024 Internet Crime Report revealed over 859,000 complaints and $16 billion in losses—a staggering 33% increase from 2023. Many incidents go unreported, meaning the actual losses are likely much higher. Of particular concern is the vulnerability of older adults: those over 60 lost nearly $5 billion, almost double the losses of those aged 50–59.

Current Threat Landscape

The ways cybercriminals operate are constantly evolving. Common threats targeting investors include: Phishing/Spoofing—attempts to trick you into revealing sensitive information by posing as a legitimate institution through fake emails or websites; Extortion—threatening to release sensitive information or compromise your systems unless a payment is made, often using cryptocurrency; and Personal Data Breaches—unauthorized access to your sensitive personal or financial records, often leading to identity theft.

The Cryptocurrency Risk

Cryptocurrency is increasingly popular for its fast payments and anonymity, but this anonymity is precisely what makes it a favorite tool for scammers. Unlike credit cards, crypto payments are not reversible unless the recipient voluntarily sends the funds back.

Common Crypto Scams: These include fake investment managers promising huge, guaranteed profits; job offers that pay exclusively in Bitcoin or other digital currencies; romance scams (detailed below) that ultimately involve requests for crypto or cash; and unsolicited texts or social media messages that lead to financial manipulation.

Immediate Red Flags: Look out for requests for upfront crypto payments for any reason, promises of guaranteed returns with little or no risk, pressure to move conversations to encrypted or foreign messaging apps, and claims of a sudden emergency requiring immediate money transfer.

Spotting Emotional Manipulation: Romance Scams

Scammers frequently pose as romantic interests online, building trust over weeks or months before making a financial plea. These manipulative relationships often share several key characteristics: They send model-like photos but refuse video calls; they profess love quickly despite never meeting in person; they attempt to isolate you from trusted friends and family who might warn you; and they frequently cancel planned visits due to dramatic 'emergencies' that require cash or crypto.

Bottom Line: Vigilance is your best asset. The most effective defense against these evolving threats is a healthy dose of skepticism. If you receive a communication that feels urgent, aggressive, or "too good to be true," stop and verify. Always pause to check sources, never share personal data with unverified contacts, and when in doubt, disconnect and contact a professional you trust. A few seconds of hesitation can save you a lifetime of savings.

Recipe of the Month

Salted Caramel Pretzel Bark:

• 4 cups pretzel sticks
• 1 cup butter (unsalted)
• 1 cup packed brown sugar
• 1/2 cup granulated sugar
• 1 teaspoon vanilla extract
• 1 cup semi-sweet chocolate chips
• Sea salt, for sprinkling

Step-by-Step Instructions:

1. Prepare Your Baking Sheet: Line a baking sheet with parchment paper. Make sure it’s large enough to hold all the pretzels in a single layer.
2. Melt the Butter and Sugars: In a medium saucepan over medium heat, melt the butter. Once melted, add the brown sugar and granulated sugar. Stir continually until it comes to a boil. Let it boil for 3 minutes without stirring.
3. Add the Vanilla: Remove the saucepan from heat and stir in the vanilla extract. Be cautious, as the mixture will bubble up.
4. Combine with Pretzels: Pour the pretzel sticks into a large bowl. Drizzle the caramel mixture over the pretzels and gently stir to coat.
5. Spread on Baking Sheet: Transfer the coated pretzels to the prepared baking sheet, spreading them out evenly.
6. Melt Chocolate: In a microwave-safe bowl, heat the chocolate chips in 30-second intervals, stirring between each until fully melted.
7. Drizzle Chocolate: Use a spoon to drizzle the melted chocolate over the pretzel bark.
8. Sprinkle with Sea Salt: Before the chocolate sets, sprinkle sea salt over the chocolate drizzles to enhance the flavor.
9. Let It Set: Place the baking sheet in the refrigerator for about 30 minutes or until the bark is set.
10. Break Into Pieces: Once set, simply break the bark into pieces and enjoy!

National Parks

If you’re looking for a great place to travel in the winter in the United States, National Parks in December are a great option to spend the holiday season!

Whether you want a sunny escape to a normally too-hot desert national park like you’ll find in Southern California or Texas, or you want a snow-covered winter wonderland like Yosemite, Acadia, or Great Smoky Mountains. Here is just one of many: Big Bend National Park, Texas.

You usually don’t think of traveling to the mountains in winter unless you’re skiing. Well, in Texas, that’s not entirely true. Big Bend National Park has a mixture of mountains, canyons, deserts, and rivers fit for exploring in the winter while still avoiding extreme weather. 

December is a great month to visit the park as the temperatures are mostly pleasant. Ranging from 60° for the highs and 40° for the lows, it holds a drastic difference to the temperatures seen in summer when it can be truly unbearable. 

Big Bend National Park has plenty to offer. If you like to hike, the Chisos Mountain Range can be a small challenge and provide great views across the desert. You’ll also find a whole variety of birds, and not to forget, you may even find some of the only bears in Texas. It’s worth mentioning that the range is much higher than the desert floor, so temperatures can be drastically different. 

If you’re looking for a little history, you’ll find many dinosaur exhibits scattered around the park, where many spectacular fossils have been found. The prehistoric giant alligator and the Bravoceratops are ones not to miss.

It may still be a little cold for water activities, but if you’re brave enough, you can also explore the Rio Grande for some spectacular views of the canyons and gorges. 

Visit Big Bend’s website to learn even more!

Source: Pinterest

The 13 Best US National Parks to Visit in December

Disclosures and Definitions

Economic Indicators:

1. CPI: Consumer Price Index measures the average change in prices paid by consumers for goods and services over time. Source: Bureau of Labor Statistics.
2. Core CPI: Core Consumer Price Index excludes food and energy prices to provide a clearer picture of long-term inflation trends. Source: Bureau of Labor Statistics.
3. PPI: Producer Price Index measures the average change in selling prices received by domestic producers for their output. Source: Bureau of Labor Statistics.
4. Core PPI: Core Producer Price Index excludes food and energy prices to provide a clearer picture of long-term inflation trends. Source: Bureau of Labor Statistics.
5. PCE: Personal Consumption Expenditures measure the average change in prices paid by consumers for goods and services. Source: Bureau of Economic Analysis.
6. Core PCE: Core Personal Consumption Expenditures exclude food and energy prices to provide a clearer picture of long-term inflation trends. Source: Bureau of Economic Analysis.
7. Industrial Production: Measures the output of the industrial sector, including manufacturing, mining, and utilities. Source: Federal Reserve.
8. Mfg New Orders: Measures the value of new orders placed with manufacturers for durable and non-durable goods. Source: Census Bureau.
9. Durable New Orders: Measures the value of new orders placed with manufacturers of durable goods. Source: Census Bureau.
10. Durable Inventories: Measures the value of inventories held by manufacturers for durable goods. Source: Census Bureau.
11. Consumer Confidence (CB, 1985=100): Measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. Source: Conference Board.
12. ISM Manufacturing Report: Measures the economic health of the manufacturing sector based on surveys of purchasing managers. Source: Institute for Supply Management.
13. ISM Non-Manufacturing Report: Measures the economic health of the non-manufacturing sector based on surveys of purchasing managers. Source: Institute for Supply Management.
14. Leading Economic Index: Measures overall economic activity and predicts future economic trends. Source: Conference Board.
15. Building Permits (Mil. of Units, saar): Measures the number of new residential building permits issued. Source: Census Bureau.
16. Housing Starts (Mil. of Units, saar): Measures the number of new residential construction projects that have begun. Source: Census Bureau.
17. New Home Sales (Mil. of Units, saar): Measures the number of newly constructed homes sold. Source: Census Bureau.
18. SA: Seasonally adjusted.
19. SAAR: Seasonally adjusted annual rate.

Market Indices & Indicators:

1. S&P 500: A market-capitalization-weighted index of 500 leading publicly traded companies in the U.S., widely regarded as one of the best gauges of large U.S. stocks and the stock market overall.
2. Dow Jones 30: Also known as the Dow Jones Industrial Average, it tracks the share price performance of 30 large, publicly traded U.S. companies, serving as a barometer of the stock market and economy.
3. NASDAQ: The world's first electronic stock exchange, primarily listing technology giants and operating 29 markets globally.
4. Russell 1000 Growth: Measures the performance of large-cap growth segment of the U.S. equity universe, including companies with higher price-to-book ratios and growth metrics.
5. Russell 1000 Value: Measures the performance of large-cap value segment of the U.S. equity universe, including companies with lower price-to-book ratios and growth metrics.
6. Russell 2000: A market index composed of 2,000 small-cap companies, widely used as a benchmark for small-cap mutual funds.
7. Wilshire 5000: A market-capitalization-weighted index capturing the performance of all American stocks actively traded in the U.S., representing the broadest measure of the U.S. stock market.
8. MSCI EAFE Index: An equity index capturing large and mid-cap representation across developed markets countries around the world, excluding the U.S. and Canada.
9. MSCI Emerging Market Index: Captures large and mid-cap representation across emerging markets countries, covering approximately 85% of the free float-adjusted market capitalization in each country.
10. VIX: The CBOE Volatility Index measures the market’s expectations for volatility over the coming 30 days, often referred to as the "fear gauge."
11. FTSE NAREIT All Equity REITs: Measures the performance of all publicly traded equity real estate investment trusts (REITs) listed in the U.S., excluding mortgage REITs.
12. S&P U.S. Aggregate Bond Index: Represents the performance of the U.S. investment-grade bond market, including government, corporate, mortgage-backed, and asset-backed securities.
13. 3-Month T-bill Yield (%): The yield on U.S. Treasury bills with a maturity of three months, reflecting short-term interest rates.
14. 10-Year Treasury Yield (%): The yield on U.S. Treasury bonds with a maturity of ten years, reflecting long-term interest rates.
15. 10Y-2Y Treasury Spread (%): The difference between the yields on 10-year and 2-year U.S. Treasury bonds, often used as an indicator of economic expectations.
16. WTI Crude ($/bl): The price per barrel of West Texas Intermediate crude oil, a benchmark for U.S. oil prices.
17. Gold ($/Troy Oz): The price per troy ounce of gold, a standard measure for gold prices.
18. Bitcoin: A decentralized digital currency without a central bank or single administrator, which can be sent from user to user on the peer-to-peer bitcoin network.

This content was developed by Cambridge from sources believed to be reliable. This content is provided for informational purposes only and should not be construed or acted upon as individualized investment advice. It should not be considered a recommendation or solicitation. Information is subject to change. Any forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The information in this material is not intended as tax or legal advice.

Investing involves risk. Depending on the different types of investments there may be varying degrees of risk. Socially responsible investing does not guarantee any amount of success. Clients and prospective clients should be prepared to bear investment loss including loss of original principal. Indices mentioned are unmanaged and cannot be invested into directly. Past performance is not a guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange.