Client Newsletter 2Q25
Dear Ambassador Family,
The first quarter of the year has reminded us how quickly markets—and headlines—can shift. While volatility often grabs attention, we remain focused on the fundamentals that drive long-term success: thoughtful planning, strategic portfolio management, and clear communication with each of you.
In this issue, we share some context around recent market activity, including how we position portfolios in light of new developments. We also revisit some key principles of how we manage your investments—what guides our decisions, what we look for in both risk and opportunity, and how you can get the most value from working with us.
As always, our goal is to help you stay informed and grounded through all market seasons. Thank you for your continued trust and engagement.
Navigating Early April Market Swings
President Trump announced a series of higher tariffs on imports on April 2. The following day China announced retaliatory tariffs. Fears ensued about the impact to consumers and company profits as well as risk of recession. Financial markets disliked the news as US stock indices declined nearly -10% in 2 days. Your diversified portfolios thus far have held up better.
As mentioned in our previous newsletter in January, we approached 2025 with caution, though seeing select opportunities. Over the first quarter, we raised cash and precious metals and reduced equities. Just as in January, we still held concerns on high market valuations and pressures on consumers from sustained high interest rates and inflation (peaking but not coming down fast enough for Fed to cut rates further).
The recent market decline poses risk and opportunity. Earnings estimates for major companies were already declining and could fall further. Hence, valuations have corrected moderately, but it might be early to call a bottom just yet. The first signs of AI overinvestment along with overseas competition have also emerged. Retail investors remain heavily invested in stocks relative to history.
The opportunity might come if interest rates were to decline on a weaker economic outlook and/or fiscal retrenchment. Deregulation and AI growth (indigestion, not famine) might lead to a more favorable outlook next year. Certain investments might have been excessively penalized given reasonable fundamentals remain.
We are monitoring the situation for both risk and opportunities.
As always, the more we collaborate, the better we can serve you.
Qualified Charitable Distributions (QCDs) can be a great way to satisfy required minimum distributions (RMDs) while supporting a cause you care about. A common question is what “sending funds directly to charity” actually means. Some custodians issue checks made payable to the charity but mail them to the account holder’s address—often with “FBO” (for the benefit of) the client’s name. This still qualifies as a QCD, as long as the check is made out to the charity and is received and deposited by the charity before year-end.
Inherited Roth IRAs: No RMDs During the 10-Year Window
For those who’ve inherited Roth IRAs: If the original account holder passed in 2023, and you’re a non-spouse beneficiary subject to the 10-year rule, there’s no need to take annual RMDs. The entire balance just needs to be withdrawn by the end of year 10. Until then, the funds can continue to grow tax-free.
Keeping an Eye on Taxes—So You Don’t Have To
April 15 has passed, and most of us would prefer to forget about taxes until next year. While our clients might enjoy that option, we at Ambassador cannot lose focus.
Federal tax proposals continue to emerge from Washington, DC, and we’re also seeing increased activity at the state and local levels. Our job is to stay ahead of these changes and work with you to help minimize their impact on your family—whether it’s related to income tax or estate planning.
How We Manage Your Money
A client recently asked how I manage their investments—especially when markets are unpredictable. How do I decide what to buy or sell, and when?
You may occasionally notice more activity in your accounts. Market cycles can shift quickly, and sometimes we need to be agile, thoughtful, and forward-looking to respond to changing conditions. What worked before might stop working—and new opportunities often emerge.
Behind the scenes, I’m constantly evaluating investments through the lens of your individual goals and circumstances. Every decision we make is personal to your situation, based on the information you’ve shared with us. My goal is always to keep you moving in the right direction, even when the market doesn’t cooperate.
When I manage money, I’m often asking myself these four questions:
- Do you need to draw income from your investments?
- What is your personal comfort with risk?
- What’s happening in the markets, and where might we be headed?
- Are there other unique factors that should influence our strategy?
The more we understand about your full financial picture, the more proactive we can be. Many of our clients have a financial plan in place, which helps guide expectations—both during strong market years and
more challenging periods. If you haven’t gone through the planning process yet, I encourage you to consider it. It’s a collaborative effort that allows us to align more clearly on your needs, and it gives you confidence knowing we’re prepared to respond on your behalf.
Who Gets the Most Out of Our Relationship? (Hint: It’s Not About Account Size)
The clients who tend to get the most value from our relationship do three key things:
- You engage with us regularly and treat this as a partnership.
- You share relevant information—goals, changes, or concerns—so we can act with clarity and care.
- You connect us with your other professionals (CPA, attorney, etc.), enabling us to coordinate strategies on your behalf.
This deeper level of engagement allows us to explore and implement impactful strategies, such as tax-loss harvesting, Roth conversions, or optimizing your Required Minimum Distributions (RMDs). If you’re not already taking advantage of these opportunities, we’d love to talk.
When Communication Slows, So Can Progress
From experience, clients who step back from the planning process often end up feeling uncertain or hesitant. Without a clear plan, it’s easy to let fear and emotion influence investment decisions—often leading to missed opportunities or overly conservative choices.
When we don’t have enough information, we err on the side of caution—even if you might be in a position to take on more risk or act more decisively. We serve you best when we can be proactive and forward-thinking, not just reactive.
Q: I plan to roll over my 401(k) to an IRA. Do I need to take an RMD from both accounts this year?
A: No. You must take the RMD from your 401(k) before completing the rollover. Once that’s done, no additional RMD is required from the IRA in the same year. This is because the new IRA had a balance of $0 on December 31 of the previous year. The IRS calculates RMDs based on the prior year-end balance—so no balance means no RMD for that year.
Q: I have multiple retirement accounts: IRAs with different firms, a SEP IRA, and a 457(b) plan. Can I take all of my RMDs from one account?
A: It depends on the type of account:
- IRAs and SEP IRAs: These can be combined for RMD purposes. You must calculate the RMD for each account, but the total amount can be withdrawn from any one—or a combination—of the IRA or SEP IRA accounts.
- 457(b) plan: This account must be handled separately. The RMD for a 457(b) plan must be taken directly from that account and cannot be combined with your IRAs or SEP IRA.
What We’re Watching—and Why It Matters
There are always moving pieces—markets fluctuate, tax laws evolve, and economic priorities shift. We’re staying focused on investment fundamentals, diversification, and strategies that can help take advantage of a dynamic environment. We’re also watching closely for areas that may be vulnerable to inflation or interest rate changes, so we can make informed decisions for your portfolio.
As always, the more we collaborate, the better we can serve you.
Sincerely,
Petr Burunov, CFP®
President / Wealth Strategist