I talk a lot of shit about annuities. But honestly, it’s not because annuities are inherently bad. I've used them - I don't anymore but they have a purpose. While you read this, try to remember: The problem is how and why they’re sold, not the product itself. Farm and rural families, in particular, seem to fall into this “risk-free” trap more often than most. They want gains but no risk. They want growth but no losses. I think it comes from the same mindset that says, " land is the only real investment. " There’s a deep-rooted conservatism in rural life - work hard, avoid debt, trust what you can see and touch. That kind of thinking can make folks skeptical of the markets and eager for things that feel safe, secure, and guaranteed. But sometimes “guaranteed” ends up meaning “tied up,” and “safe” becomes a slow financial bleed. Let Me Share a Couple of Real-World Stories. Case  #1 : Nothing Left to Inherit I met with a man who was trying to settle his brother’s trust. He had a few old statements and what looked like check stubs but couldn’t figure out where the rest of the money had gone and the advisor on the statements wasn't returning the family's calls. After a closer look, we discovered his brother’s advisor had placed the majority of his assets into immediate annuities. These annuities take your money and convert it into income which means you lose the cash value but receive a steady payment. Unfortunately, when his brother passed, there was hardly anything left to distribute but a checking account. Case  #2:  Over $1 Million, Completely Tied Up Another couple came in, excited to start gifting and preparing to transition the farm to their kids. We sat down, looked at their statements, and realized they had over a million dollars locked up in annuities. Most were long-term contracts still in their early years. Some as long as 10-year terms. These annuities made up nearly 100% of their investable assets. What made it worse? The advisor who sold the contracts used the value of the farm - assets that weren’t even part of the family's personal liquid net worth - to justify the sale. On paper, it looked fine. In reality, it was a disaster. When I explained what had happened, they shut down completely and I became the bad guy. They didn't become clients and in the years that have followed, they've never returned my call... come to think about it, I probably could have handled that better. What is an Annuity and What Does it Do? Annuities are insurance contracts designed to protect assets and provide income. That’s the pitch. You give a lump sum to an insurance company, and in return, they give you a combination of: A guaranteed rate for a period (often sold as a "CD replacement" by financial advisors in banks) A capped return with downside protection (you can’t lose money, but you also can’t earn more than a certain percentage) A participation rate (you get some percentage of the market upside with no maximum) Income guarantees like “period certain,” “life income,” or “joint with survivor” At first glance, that probably doesn’t sound too bad. And that’s exactly what the people selling them are counting on. Here’s Why You Should Think Twice Your money gets locked up. Most annuities limit you to withdrawing 10% of your account value per year. If you invest $100,000, that means you can only access $10,000 without triggering penalties. Go over that limit, and you could be looking at a surrender charge as high as 9%. Some contracts lock you in for up to 10 years. They're not tax friendly. Many of my farm clients hold most of their liquid wealth outside of retirement accounts. That means investment income is taxed annually. If you have to pay tax, capital gains tax is the one you want. But annuities? They typically only  build up ordinary income tax exposure. And if you pass away holding them, your heirs get stuck with the full tax liability. No step-up in basis, no tax break. Just a tax bomb for your beneficiaries. Returns often fall short. The investments inside many annuities are tied to proprietary indices that don’t track real market benchmarks. I’ve reviewed dozens of these, and most aren't worth the paper they're printed on. Commission run high and fees are buried deep. At Harvest Horizon Wealth, we don’t charge commissions, take referral fees, or receive product bonuses. What we charge is on our website, in our agreement, and reviewed with every client. Our client is the only one that pays us. But in the annuity world, you often have no idea how your advisor is getting paid or why. I’ve seen commissions on annuities as high as 6%, plus layered fees like rider costs, “mortality and expense,” account maintenance, and subaccount fees. I’ve reviewed annuities with total annual fees over 4%. For reference, our highest fee is 1.10%. The Worst Part? It’s Not Just the Math What pisses me off most isn’t just the fine print. It’s how easily these products end up in portfolios, especially for families in the rural areas like where I grew up. It starts with a seminar invitation, or a visit to the local bank advisor. It’s packaged with a friendly face and the promise of peace of mind. But what it turns into is a binding, long-term commitment that often wasn’t fully explained and without much help or support from the advisor who put the family into it in first place. Telling the Truth Isn’t Always a Win These are hard conversations. But I didn’t get into this business to make people feel good with half-truths. I became a planner because people deserve to understand what they’re getting into. Sometimes, telling the truth means I don’t win the client. That’s okay. It’s still my job to tell them what they need to hear, whether they’re ready or not. So, What Should You Watch For? When you hire an advisor, you’re not hiring them for access to products. You’re hiring them for experience, knowledge, and commitment to you . If someone leads with a product - especially something you don’t fully understand, it's okay to pause. Ask how this is in your best interest. Ask how they’re compensated. Ask what it costs you. Ask what happens if you want out. Ask what their continued financial planning process is. Ask if this is a fiduciary  recommendation. Your future is too important to get trapped in something you didn’t fully understand . If you’ve been sold something that doesn’t feel quite right, or just want a second opinion, I’m happy to take a look. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies  a Meeting The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The author may hold positions in any securities discussed in this blog. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational, entertainment, and educational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

I had a meeting recently with a long-time client, someone I’ve really come to know over the years. We’ve talked about and built a plan that works with investments, but also centers around the care, impact, and longevity of himself, his wife, and his farm - the life’s work he’s poured himself into - along with their insurance policies, their grandkids, their taxes, their church, their politics...the whole picture. And, because I’m around the same age as their kids, we’ve built a connection that’s honest and mutual. It’s not just finance. It’s a relationship. But I’m not his only advisor. He also works with another advisor at one of the national chains that appears to value quantity of clients vs. quality of relationships for a lot longer. That relationship? It’s what you’d expect - one meeting a year, pleasantries, a quick look at performance, a polite “things look great” when the markets are going up, and a “don’t worry, we’ve seen this before” when the markets are going down - followed by a subtle ask for more assets or a referral. Then they move on. During our last meeting, I asked why he still keeps the other advisor. And he said, “Well, everyone says don’t put all your eggs in one basket.” Now, you’ve probably heard or even said that before too - especially when it comes to investing. And while I appreciate his commitment to diversification… that's not actually what that saying means. Let’s clear this up. "Don't put all your eggs in one basket" is about investment concentration - not your choice of advisor. It means you shouldn’t throw all your money into one stock or one company. Putting everything into any one stock, regardless of company, like Apple, or Exxon, or Facebook might feel exciting, but it’s risky. If that company hits a rough patch (or worse) you’ve got a problem. That’s why we diversify: to reduce “unsystematic risk,” or risk that’s specific to a single company or sector. We spread things out across industries, geographies, and asset classes. That’s what diversification is really about. But splitting your money across multiple advisors? That’s something else entirely and frankly, it can work against you. This is what can happen when you try to “diversify” your advisors: Your plan starts working against itself. When you have multiple advisors, you get multiple sets of opinions, strategies, and assumptions - often conflicting ones. That can throw your plan off course. One might focus heavily on growth, another on income, and another on preservation - all without knowing what the others are doing. If you were building a house, you wouldn’t hire three different general contractors to work on the same structure. Financial planning is no different. You could be leaving money on the table. Most fee structures scale down as your asset size increases. For example, at Harvest Horizon Wealth, households under $1 million pay 1.10%. At $1 million or more, it’s 1.00%. So, for example, if you’ve got $500,000 with me and $500,000 elsewhere that has the same fee schedule, your total fee (without accounting for market changes) would be $11,000 in the year. By consolidating, you'd be down to $10,000. That 10% difference adds up quickly. Over five years? That’s a ~$5,000 gap - money that could’ve stayed working for you. You lose tax efficiency. Tax strategy is a huge part of what I do - especially for business owners, farmers, and folks preparing for a sale or transition. If I’m working to harvest losses for you, but your other advisor is triggering gains or using high-turnover funds, the tax efficiency strategy breaks down fast. Even a few mismatched trades can create an unintentional tax bill, and once that happens, undoing it is unlikely. Income planning gets messy. Retirement income is more than just “take some money out when you need it.” Where it comes from, how it’s taxed, and how it impacts Social Security, Medicare, gifting, or donations - it all matters. When advisors aren’t coordinating, it’s easy to run into unintended tax bills or income gaps. I’ve seen people over-withhold, under-spend, or lose out on tax-saving opportunities simply because no one had a full view of the plan. Here’s the bottom line If you’re talking about your portfolio, then you should keep those eggs in multiple baskets. But if you’re talking about your advisory relationships? You should be putting all of your eggs in one basket. One relationship, one strategy, one team with eyes on the whole picture. And if you’re reading this and thinking, “Yeah... that feels familiar,” you’re not alone. Most folks don’t realize how fragmented their financial world has become until they zoom out. That’s why these conversations matter - and it’s why I love having them. If that’s where you are right now, let’s talk. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The author may hold positions in any securities discussed in this blog. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational, entertainment, and educational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

I met with a client a couple of days ago - 3rd-generation farmer, smart guy, runs a tight dairy operation. He’d read one of my blog posts about common financial mistakes in agriculture, and he wanted to talk more about how to diversify from the farm. It wasn't really making sense to him given that farms tend to run at or near $0 net profits annually. He said, “That’s great advice if you’re making good money. But when you’re running at break-even most years? How does that work?” That’s the reality for a lot of farm families so the idea of carving out consistent investments can feel completely unrealistic. But I told him the truth: the reason it feels unrealistic is the same reason it’s so important. 1. The Farm Isn’t a Retirement Plan A lot of farmers I meet still think of their land or their operation as their retirement. But that assumes a few things: That the farm will keep producing profitably. That someone else - usually a son or daughter - will want to take it over and keep it running. That you'll be able to sell it or draw from it indefinitely. None of those are guaranteed. And many farm tax returns don’t show enough net profit to create meaningful Social Security income when retirement age rolls around. One of the biggest risks I see in agricultural families is farmers getting into their 60's or 70's with no outside investments, no secondary income, and no backup plan. I told my client, “Alright...You don’t feel like you can spare the money. But frankly, the mental shift is usually a bigger hurdle than having the cashflow for it." 2. Diversified Investments Buy You Freedom I asked him a simple question: “What happens if you get sick? Or your kids decide they don’t want to farm? They don't farm now, why would they start? What’s the plan?” He said, “Well, I’d probably have to sell some land.” That’s exactly what I try to help my clients avoid. You don’t want to be in a situation where you're forced  to sell something you love, at a time you didn’t choose, under pressure you didn’t create. That’s how wealth gets lost. The most common phrase I hear from farmers when working on this is, "land is the only real investment." While land can absolutely be a valuable investment, it is certainly not the only investment. This mindset is so deeply engrained into farmers that it's incredibly difficult to overcome and is partially at fault for the decline in family-farms, large and small. When you have even a modest outside investment account - something not tied to weather, commodity prices, or equipment breakdowns - it buys you time. It buys you options. It buys you the ability to say, “not yet” or “not this way.” That freedom is worth more than any machine in your shed. 3. You Can Still Invest Without Starving the Operation Now, I’m not saying starve your operation to fund a brokerage account. What I am saying is this: be intentional. A couple of years ago, I worked with a client that spent about $100,000 on a tractor that was new to him. He justified it because it reduced his tax bill, and he really liked the machine. But saving $10,000 (on an example 10% marginal income tax rate) doesn't compare to the benefit he could be setting himself up for on a planned, targeted investment/exit/income strategy. This is something that happens all the time - and he knew it. Not always, but too often farmers find a reason to buy a new thing, leverage it, take the deduction, pay the debt down, and then restart the cycle without ever looking at themselves. It's noble but not setting them and their family up for success later on when they can't work the farm anymore, don't want to work the farm anymore, or are forced to leave the farm. Thankfully, financial planning is flexible and can be molded to your specific needs. There’s a time to reinvest in the farm. And there’s a time to reinvest in yourself. Let’s Make a Plan That Respects the Farm - and Your Future The point is to get started. Carving out a line item for diversification and accepting the fact that capital markets will do what they do (same as commodity prices) is key - the size of the carveout is less important. Make a simple commitment to start small, stay consistent, and meet regularly to update, tweak, and continue. You don’t have to go it alone. If you’re wondering how to build flexibility, freedom, and long-term income outside the farm - while still respecting what the farm provides - let’s talk. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies Schedule a Me The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The author may hold positions in any securities discussed in this blog. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational, entertainment, and educational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

Providing financial planning for farmers isn't easy. It's a complex, emotional relationship that often comes with a long history of doing things a certain way. But when I get the chance to work with farmers who’ve built large, successful farms, there’s a real opportunity to make a difference - not just for them, but for their next generation, too. There are two big mistakes I see again and again: Trying to avoid taxes by running up year-end expenses Forgetting to pay themselves These two are usually tied together. Here's how. Mistake #1: Avoiding Taxes by Spending Too Much A common situation looks like this: It’s the end of the year and your farm turned a profit. Great news, right? But then I hear: "Well, I don’t want to pay taxes, so I need to buy something." That "something" is usually another tractor, a truck, a trailer, a barn addition, or a fix/update in the parlor. It’s not that these aren’t needed - they usually are - but they’re often bought quickly, with financing, and too often, just to shrink the tax bill. Yes, the loan interest may be tax-deductible. But that new debt still eats into your cash flow. And when cash is tight, guess who doesn't get paid? You. This is part of why agriculture makes up just 1% of the U.S. economy - many farms operate at or near break-even for decades. Mistake #2: Not Paying Yourself Look, having a farm you’re proud of and can pass down is an honorable goal. But if you’re financially tied to it because you never built income outside of the farm, passing it on and getting to enjoy your "work optional" years gets much, much harder. As someone who runs both a financial planning firm and a beef operation, I get it. The desire to build something that lasts is real. But you still need to pay yourself in a way that builds security for your future. Let’s talk about how. Shift Your Mindset First It’s okay to pay taxes. Really. Reducing taxes can be a financial goal - but not if it leaves you broke later. Having a profitable, well run farm mean paying some tax. Why? Because those profits build your Social Security record , which directly impacts how much social security income you get in retirement. Many farmers retire with tiny Social Security checks because they ran at a loss or break-even for most of their lives. That can hurt when it's time to step away from the farm. Then, Start Paying Yourself Right You can do this a few ways: 1. Set up a retirement plan There are several options available depending on your farm’s size and setup: SEP IRA  – Simple, flexible, good for small farms SIMPLE IRA  – Easy to manage, good if you have a few employees Defined Benefit Plan (Pension)  – Ideal for older farmers who want to supercharge retirement savings late in the game SIMPLE 401(k)  – A step up in complexity but gives you more control 401(k)  – Good for larger farms or those structured as co-ops You don’t have to figure this out alone. A professional can help you choose the right plan and keep it running smoothly. 2. Open a taxable brokerage account This one's underused in agriculture. A brokerage account gives you flexibility, growth potential, and access to your money without retirement-age restrictions. It can also be powerful if you're thinking about selling the farm someday. Why? Because you can accumulate capital losses  in that account over time to help offset capital gains  when you sell the farm. It’s not a retirement account, but it helps with tax planning  and wealth building . Diversify Your Financial Life If all your wealth is tied up in the farm, you're in a risky spot. What if land values drop? What if input costs surge? What if you can't find a successor? You wouldn’t put all your money into one stock. Don’t put all of it into your business either. Diversification isn’t just for Wall Street - it applies to farmers, too. I’ve seen too many families get to retirement and realize they can’t afford to leave the farm, even when their bodies can barely take the work anymore. They didn't pay themselves, they didn’t save, and now they’re stuck. That’s the kind of outcome I want to help you avoid. Let’s walk the property. Let’s talk through your operation. Let’s build a plan that honors your work and  takes care of your future. Reach out to schedule an introduction meeting and farm visit. You’ll be glad you did. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The author may hold positions in any securities discussed in this blog. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational, entertainment, and educational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

Let’s talk about something not-so-fun, but super important: Capital Gains Tax when you sell your home. Listen, I get it. Taxes are about as exciting as a fiber cookie - not a treat, but good for you. Still, if you're planning to sell your home, or even thinking about it in the next few years, this is something you should know. Often, this conversation only comes up when something big (and usually emotional) happens - retirement, divorce, the death of a spouse - and that’s what makes it even more important to get ahead of. The Capital Gains Exemption on Your Primary Residence Here’s the basic rule: when you sell your primary residence, you can exclude up to $250,000  of the gain if you’re single, or $500,000  if you’re married and filing jointly. That’s the IRS being generous - or at least reasonable. To qualify, two things need to be true: You’ve owned the home and lived in it as your primary residence for at least two of the past five years . You track your basis  - that’s your original purchase price, plus investments in the property (does not include regular maintenance). Let’s Walk Through a Basic Example You and your husband bought your home for $35,000 back in 1975. Back then, your neighborhood was quiet and modest. Now? The area’s booming, and your house is worth $500,000. You didn’t do major renovations - just the usual stuff like a new roof, paint, furnace, and carpet. So, for the most part, it’s the same house. At first glance, you might say, "Holy hell, look at that growth! Owning a house really is a great investment."  But slow your roll - that’s about a 5.5% compounded return per year, not even factoring the cost of taxes, insurance, repairs, or utilities. If you did, it'd be closer to 3%. Still good, but let’s not act like its magic money. Alright, so you bought the house in 1975 and now it’s 2025, and you’re ready to sell and move to a beautiful condo on the Gulf Shores of Alabama. Scenario 1: You're Happily Married, Both Alive Easy math here: Selling Price:  $500,000 Purchase Price (Basis):  $35,000 Exemption:  $250,000 (you) + $250,000 (husband) = $500,000 Result:  $500,000 - $35,000 - $500,000 = $0 taxable gain You walk away clean. No capital gains tax. Nice. Scenario 2: You’re Divorced An unfortunate reality of life and marries is divorce. So, let’s say you got divorced when the house was worth $350,000, and you kept it by buying out your ex-husband's half - $175,000. Your new basis (your cost) is: $17,500 (your original half) + $175,000 (buyout) = $192,500 So now: $500,000 (selling price) - $192,500 (adjusted basis) = $307,500  gain Subtract your $250,000 exemption = $57,500 taxable Capital gains tax at 20%, you could end up with a capital gains bill that's about $11,500. Not devastating, but definitely worth knowing in advance. Scenario 3: You’re Widowed Now let’s talk about something harder - you’ve lost your spouse. There’s a special exception called the Survivor Rule  you should know about. If you sell the home within 2 years  of your spouse passing away, you can still claim the full $500,000  exemption. Within 2 Years: $500,000 - $35,000 - $500,000 = $0 taxable After 2 Years: Now it’s trickier. Say your spouse’s half stepped up in value when they passed (common in community property states): $17,500 (your half of original basis) + $175,000 (his stepped-up basis [$350,000/2]) = $192,500 adjusted basis Now: $500,000 - $192,500 - $250,000 = $57,500 taxable Again at 20% capital gains tax, you might owe about $11,500. That two-year window makes a real difference. So... When Should You Sell? That’s the million-dollar question, right? Whether you’re thinking about moving for health reasons, downsizing, or dealing with a major life change, the timing matters. But more than that — your readiness  matters. Are you emotionally ready to leave the home? Are you financially ready to handle the taxes and transition? Are you prepared for what comes next? There’s no “right” answer in finance. There’s just what you’re comfortable living with. It’s all about the impact  a decision will have on your life — financially, emotionally, and even spiritually sometimes. So, if you're thinking about selling, let’s have a conversation. Not just about the numbers, but about you  — where you’re at in life, and what you want from the next chapter. Because your house might be just a house — but the decision to sell it is never just a transaction. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The author may hold positions in any securities discussed in this blog. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational, entertainment, and educational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

Depending on where you stand, you might not love this take but one of the current administration's big talking points is about bringing manufacturing jobs back to the U.S. Sounds great, right? I can be good, but I’m not totally sold on it. Manufacturing jobs have been on the decline in the U.S. since the ’70s and ’80s. Today, manufacturing and industrials makes up about 19% of the economy, agriculture accounts for roughly 1%, and the remaining 80% is services - that's your internet providers, teachers, accountants, nurses, realtors, lawyers, landscapers, and your favorite chef. Now, there are areas where boosting manufacturing domestically absolutely makes sense. Take national defense and security, for example. The CHIPS Act, pushed by the previous administration, is a great case in point - it’s crucial for us to make critical components like semiconductors right here at home. And Boeing’s current troubles with China withholding plane deliveries show exactly why we need to control our own manufacturing capabilities for defense tech, aircraft, and vital infrastructure. America needs to be strong on the world stage and, while you might disagree, I have personally seen, first-hand, why the world needs a strong United States. Allowing others to control a vital part of our security can be detrimental; let's bring it home. With farm families being a big focus of my work, I think agriculture also deserves a lot more love domestically. Switzerland - a country obviously much smaller than ours - has nailed this: they keep farming viable by imposing tariffs on cheaper, inferior imports. Does this mean pricier groceries? Yep, but adopting a similar stance carefully tailored to our national differences, may also mean superior quality food and better health outcomes for Americans. Plus, it could encourage more families to return to farming, strengthening our own agricultural backbone and keep American farmland American-owned. But here's where the "bring all the manufacturing back" argument turns to shit me: why the hell would we want to bring back menial manufacturing like clothes, toys, low-skill ceramics and metal stamping, etc.? What’s the upside? Some things, like near-shoring some auto production makes sense, sure - but so does keeping final assembly, finishing, and delivery in the States. The rest? It’s honestly better off overseas. Having manufacturing move abroad isn’t a failure - it’s a sign of a mature, developed economy. As economies advance, they naturally shift labor-intensive work to developing countries. That’s not bad; it’s growth. It lets us focus more on services, which - by the way - offer something manufacturing can’t: price elasticity. Quick macroeconomics refresher: price elasticity measures how rapidly prices respond to shifts in demand without causing major harm. Industrial and manufacturing economies just don’t have that flexibility. Think about it - when cars, tractors, TVs, and other manufactured goods sit unsold, their value tanks, forcing retailers into desperate markdowns or losses. Services, on the other hand, are nimble. Professionals in service industries can swiftly adjust their pricing, adapting quickly to economic conditions then bounce back once their conditions have recovered. The payoff? Service-based economies tend to experience shorter, less severe recessions. Sure, downturns might happen faster, but they don’t stick around as long or cut as deep. In a digital age that thrives on rapid information flow, this flexibility is a massive advantage. Bottom line: America needs manufacturing. America needs agriculture. For me, I'd pay more for healthy, high-quality fruits, vegetables, and meat from a family I know and wear a cheap t-shirt while watching The Last of Us on an equally cheap tv. Going full steam ahead to "bring back" a bunch of manufacturing jobs? That’s not forward-thinking - it’s stepping backward. Let's focus on what we're already good at and leave the nostalgia at the door. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The author may hold positions in any securities discussed in this blog. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational, entertainment, and educational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

Well...with the Great Tariff Scare behind us (for now), I'm noticing more folks reconsidering the importance of managing risk in their portfolios. Not surprising. We may have dodged the tariff bullet for now, but market volatility still exists. So, is managing risk suddenly sexy again??...No... but frankly, it's overdue. The bull market of the 2010s and the steep recovery after COVID made people a little too comfortable with investment risk. Sure, it's appealing to chase returns of 9% or 10%, but with that kind of return potential, you better be ready for a -20% or more potential drawdown in any given year. When it comes to managing investments, I strongly believe in steady, dependable progress. This comes with a primary objective of maintaining manageable ups and downs rather than taking risks that might lead to those significant setbacks. But how exactly do we - as client and advisor - handle risk in a way that actually makes sense? It starts with genuinely understanding your risk tolerance. There are different ways of doing this - I've even heard of advisor asking, "how fast do you like to drive?" as method to gauge risk tolerance. This is total garbage. Your financial future deserves better. If your advisor still relies on superficial methods like these, you might want to reconsider who you're trusting with your hard-earned savings. Real risk tolerance means honestly assessing how much investment risk you can genuinely endure. Advisors typically approach this in two ways: Historical Crash Simulations:  Sometimes you'll see how your portfolio would have fared during the Great Recession. But, honestly, imagining a 30% - 50% loss doesn't usually help - it mostly just scares people into avoiding investing altogether. Comprehensive Stress Testing:  A better approach is to examine how your portfolio performs through various scenarios, from the Dotcom bubble to the bull market of the 2010s, and even the recent inflation spikes, and interest rate hikes. This method gives you a clearer, more realistic view of your comfort with different market conditions. For those who like a deeper dive, we'll explore metrics such as the Sharpe Ratio, Treynor Ratio, Standard Deviation, and Beta. These aren't just technical jargon - they're tools to measure precisely how your investments balance risk and reward. Another critical aspect to consider is the very real financial risk you're taking by avoiding investment risk entirely. While playing it safe might feel reassuring, being too safe could mean being unable to have the retirement lifestyle you envisioned, possibly going back to work, and even potentially running out of savings entirely. We call this "Retirement Failure" and is something far too common among farmers who sell for their retirement. Ultimately, investing involves accepting that risk comes in two forms: potential short-term volatility through market investments or avoid market investments and run the risk of falling short of your long-term goals or not living up to the expectation. The key question is: are you more comfortable riding out some market fluctuations in pursuit of growth, or would you rather avoid market stress, even if it means risking your future financial security? Given the recent market ups and downs, now is the ideal moment to revisit your risk tolerance. Let's talk openly and honestly about your real comfort level and find a strategy that genuinely aligns with your financial aspirations. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

To My Clients, You’ve probably noticed the after-hours craziness in the stock market related to tariffs. Heading into the election, markets were optimistic, reflecting strong returns. Yet, now markets seem overly negative, despite corporate earnings remaining high, consumer spending staying solid, and household savings still robust. What's changed? Right now, the main issue is uncertainty. You may have heard me say before: markets react mainly to two things - corporate earnings and surprises. Currently, investors and businesses aren't clear on what to expect. Businesses just want clear rules so they can plan, protect, invest, and grow reliably. When uncertainty prevails, it’s hard for investors and businesses to stay confident. On what President Trump has labeled "Liberation Day," tariffs officially kicked in, and the market reaction has been severe. After-hours trading saw sharp drops: the S&P 500 down nearly 3%, NASDAQ down 4%, and the Dow down 2% (as of this writing). While the President campaigned promising an "Economic Golden Age" AND tariffs, the market seemed to underestimate how disruptive tariffs could actually be. More than tariffs themselves, it’s the inconsistent messaging that's driving confusion and volatility. Despite the current stress, I remain cautiously optimistic - and here's why: 1. Tariff Fairness: Previously, the tariffs other countries placed on the U.S. were higher than what we imposed in return. Now, that imbalance is shrinking, leveling the playing field. 2. Consistency Brings Stability: If the administration maintains clear and consistent messaging, markets can adapt and stabilize. Corporate earnings are strong; the missing piece is predictability. 3. Self-inflicted Pain Can Heal: The turmoil we're experiencing now is largely self-induced, like touching a hot stove. This pain can quickly ease - provided political pride doesn't delay needed adjustments and cause deeper harm. To be clear, I haven’t always agreed with every policy or approach of any administration, past or present. However, I genuinely hope the administration succeeds in their plan of bringing manufacturing back to America, lowering the cost of imported goods, reducing taxes, and improving the standard of living for all Americans. It can be hard to see the plan or the sense but sometimes we just need to trust it’ll work out. But the real question remains: How long will our hand stay on the hot stove? Here's the good news for you, my clients: most of you hold moderate to conservative investment portfolios. This means you have significant investments in bonds and fixed income. While stocks face volatility, bond markets remain stable and even positive right now - doing exactly what they’re designed to do (unlike in 2022). My key advice today: Don't let scary headlines steal your happiness. If you're feeling anxious or uncertain, let's review your plan and investments together to make informed, rational decisions. Don't let the evening news derail the careful planning we've put into place. Stay confident, stay informed, and let’s talk soon if you have concerns. Regards, Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

With markets bouncing around and headlines in full panic mode, it’s no surprise some people eyeing retirement are second-guessing their timing. Totally normal. What you’re bumping into is called "sequence of return risk" - the risk of retiring (or needing to start pulling money) right when the market decides to act up. But should soon-to-be retirees be worried? Kind of... but not really. First, if you’ve worked with a good advisor, this kind of thing should already be baked into your plan. The timing, the withdrawals, the market dips - it’s all part of what gets modeled before you ever pull the retirement trigger. Second, a lot of retirement plan dollars these days are invested in target date funds. Cerulli Associates expects that by 2027, 66% of all retirement plan contributions will flow into target date funds [1]. These funds automatically adjust your investments based on your age - more aggressive when you're younger, more conservative as you near retirement. So why does this matter? Because despite the S&P 500 (SPY) being down around -5.6% year-to-date [2], many 2025 target date funds are actually up. The Fidelity Freedom 2025 Fund (FFTWX) is up 1.39% [3], Vanguard’s 2025 Target Retirement Fund (VTTVX) is up 0.59% [4], and Schwab’s 2025 Target Fund (SWHRX) is up 0.63% [5]. If you’re just going off the morning or evening news, you’d think everything’s on fire. But real-life investment results - especially in well-structured portfolios - tell a different story. There’s a lot of noise out there. But the right planning, the right investments, and the right context can keep you focused when the headlines don’t. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies I do not own any of the investments discussed in this article. Data is accurate as of the time of the writing. [1] Franck, Thomas. “Target-Date Funds, the Most Popular 401(k) Plan Investment, Don’t Work for Everyone.” NBC Chicago , March 11, 2024. https://www.nbcchicago.com/news/business/money-report/target-date-funds-the-most-popular-401k-plan-investment-dont-work-for-everyone/3639009/. [2] "SPDR S&P 500 ETF Trust (SPY)." Yahoo Finance . Accessed March 31, 2025. https://finance.yahoo.com/quote/SPY/. [3] "Fidelity Freedom 2025 Fund (FFTWX)." Yahoo Finance . Accessed March 31, 2025. https://finance.yahoo.com/quote/FFTWX/. [4] "Vanguard Target Retirement 2025 Fund (VTTVX)." Yahoo Finance . Accessed March 31, 2025. https://finance.yahoo.com/quote/VTTVX/. [5] "Schwab Target 2025 Fund (SWHRX)." Yahoo Finance . Accessed March 31, 2025. https://finance.yahoo.com/quote/SWHRX/. The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

After the recent election, investor confidence rose sharply - this was reflected in stock prices. The markets were excited about fewer regulations, reduced government spending, and promises of renewed economic growth. However, in recent weeks, the stock market has experienced significant volatility, dropping near correction levels (-10%). So, what's behind this sudden instability? Markets typically react to two main factors: corporate earnings and surprises. Interestingly, the president's campaign clearly outlined his plans, including significant cuts to government spending, increased deportations, and tariffs of up to 60% on trade partners. Despite these promises being well-known, they seem to be at the root of the current market turbulence. I believe the core issue causing today's market uncertainty is the president’s shifting stance on tariffs that could subside with a clear message. This week tariffs are active, suspended the next, only to return again soon after. Although the tariffs actually implemented were less than half of those initially proposed, this inconsistency creates uncertainty and surprise. Given the speed of information and digital access to our investments, that uncertainty and surprise are reflected instantly in market prices. Leading up to the election, many investors and business leaders probably focused too much on positive expectations, like reduced regulations and promises of economic growth. They overlooked the very real negatives associated with the president’s promises. Those negative factors are now becoming clear, and investors aren't thrilled with the outcome, despite the president’s promise of this being an economy "in transition" and economic prosperity just over the horizon. It seems that many who were initially thrilled with the election outcome are now experiencing some buyer’s remorse. Whether or not you agree with the president's actions, this isn't meant as praise or condemnation. What's clear, however, is that he's delivering on the promises the American people voted for in November. Ultimately, four years will come and go, and I firmly believe presidential action tend to have temporary impacts. However, if current market fluctuations make you anxious, it might be time to review your financial plan. Sometimes an adjustment can help; other times, staying the course is wiser. Either way, let's talk about it. Don't let market volatility rob you of your peace. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

Social Security is often misunderstood, especially when it comes to taxes. Let’s break it down simply: Your Social Security can be taxable at 0%, 50%, or up to 85%. But hold on—this doesn't mean you're actually paying a tax rate of 85%. It means that portion of your benefit could be subject to taxation at your ordinary income tax rate. When Social Security began, it was never meant to fully cover retirement costs. Instead, it was created as a safety net, supplementing your personal savings and investments accumulated during your working years and co-care provided by family members. Yet today, about 40% of American retirees rely entirely on Social Security for their retirement income [1]. We've all seen the quotes highlighting why investing on your own matters: "Someone who consistently invested even a modest portion of their paycheck privately throughout their career could retire with significantly more wealth—and financial security—than relying on Social Security alone." There's some truth to that, although these quotes typically overestimate returns and assume perfect consistency and contribution levels. But even so, should Social Security be taxed? I don't really believe so. The most a retiree can earn at full retirement age is about $4,000 per month. That's an investment equivalent value of roughly $1,500,000*. To me, that seems achievable since you need to make about $176,000 per year to reach the highest Social Security payout level [2]. Given this significant level of discount, it doesn't necessarily sit well with me that we tax Social Security benefits—but hey, here we are. Ultimately, as we come to the end of tax season, don't forget: While Wisconsin doesn't tax your Social Security payments, the federal government certainly does, and the thresholds are fairly low. Combining this income with retirement account income, earnings on savings/CDs, and other income like farmland rent can add up quickly. If you feel you're paying too much in tax, this time of year is the perfect time to review your tax returns and optimize your tax strategy. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies * Assumption based on a 4% annual distribution rate, "The 4% Rule" Bond, Tyler, Joelle Saad-Lessler, and Christian E. Weller. "New Report: 40% of Older Americans Rely Solely on Social Security for Retirement Income." National Institute on Retirement Security. January 14, 2020. https://www.nirsonline.org/2020/01/new-report-40-of-older-americans-rely-solely-on-social-security-for-retirement-income/. Social Security Administration. "What are the maximum Social Security retirement benefits payable?" Accessed March 17, 2025. https://www.ssa.gov/faqs/en/questions/KA-01897.html. The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.

If you've spent any time on the finance side of social media lately, you've probably seen countless charts reminding us that recessions, market corrections, and even bear markets (-20%) are part of normal market cycles. These posts typically urge investors to stay calm, reminding us that recessions and corrections are common, saying, "we've been here before." But let's be honest: today's worries aren't exactly the same as yesterday's. The current situation has its own unique complexities, making it completely understandable to feel uneasy about the markets and economy. It's perfectly okay to be worried. It's normal to feel anxious or even scared. Most importantly, it's essential—and healthy—to discuss these troubles openly with your financial advisor. When clients share their worries and concerns, they're placing a unique trust in their advisor. If an advisor immediately pulls out a chart and recites the standard lines about how "we've been here before," they're not truly listening. They're typically defaulting to what feels comfortable instead of addressing the real issues and questions you have. Here are some practical steps to consider during uncertain times: Meet with your advisor to express your concerns and create a clear action plan for different market scenarios—whether things worsen or start to improve. Review your financial plan and make it's on track. Get an opinion from your advisor, not just charts and numbers. Aim for mutual understanding and clarity—this helps with both the advisors understanding of you and you of your advisor. Eventually, this leads to better recommendations and a better relationship. Next time you encounter one of those posts, remember: it's okay to feel concerned...regardless of what the fancy charts say. Jose Alvarez Founding Advisor Harvest Horizon Wealth Strategies The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.