March Momentum: Markets, Money, and Making Smart Moves

As most of you may know, last year we welcomed Keith Embree, CFP® Practitioner, MBA, Financial Advisor, to our team. Here’s a synopsis of thoughts he assembled as of March 4, 2026. Enjoy!

State of Economy and Markets

1. Iran Conflict – As you’ve seen on every news outlet, the U.S. and Iran have escalated tensions the past few months – why exactly? To oversimplify it a ton, it mostly revolves around Iran’s nuclear program. The U.S. and Israel view it as a threat, while Iran insists its program is for civilian energy. These disputes have been central to attempted negotiations and military tensions between the parties for years. Iran is now significantly weakened militarily, and global efforts center on preventing a renewed nuclear threat.

U.S. and Israel military strikes on Iran will continue to cause shortterm market volatility. We remain focused on long-term fundamentals such as earnings, growth, and innovation rather than headlinedriven reactions.

Fortunately, the U.S. shifted from a “justintime” to a “justincase” oil strategy. The additional oil supply from Venezuela should help offset potential disruptions. U.S. vulnerabilities are more about refining capacity than dependence on the Strait of Hormuz. China, however, would face greater economic strain. According to Congress.gov, our Strategic Petroleum Reserve (SPR) holds 416 million barrels, with capacity for 714 million. Rebuilding reserves continues following prior drawdowns.

Limiting China’s access to Iranian and Venezuelan oil adds strategic pressure. China has condemned recent actions but avoided military engagement. Russia, despite being an Iranian ally, is unlikely to offer support due involvement in Ukraine.

2. New Federal Reserve Chair – President Trump has nominated Kevin Warsh as the next Federal Reserve Chair. Leadership changes influence key economic factors. Kevin Warsh signals more flexibility on rates and is more hawkish regarding inflation. This could be an interesting dynamic given inflationary pressures resulting from the Iran conflict.

Financial Planning Opportunities – With the 2025 Income Tax Filing Season in full swing, here are some tax-related opportunities to consider as you begin to file, whether you self-file or use a CPA.

1. One Big Beautiful Bill Act (OBBBA) – With the passing of this bill in 2025 from the Trump Administration, there are key provisions and changes to consider relating to your 2025 and future years’ income taxes.

     a. State and Local Income Tax (SALT) Deduction – historically, state tax (including property taxes) was limited to a $10,000 deduction. Now, that limit is up to $40,000, subject to income phase outs. This is especially helpful for folks who live in a state with state income tax.

     b. Standard Deduction Increase – an extra deduction for seniors (65+) of $6,000 is now in effect for years 2025+. Like many of these benefits, the big caveat is that it’s subject to income thresholds.

     i. Important Note – this additional $6,000 deduction was basically a consolation prize for those hoping Social Security Benefits would no longer be taxable. Social Security Benefits are very much still taxable (85% of the benefit in most cases)

     c. Charitable Deductions – you now can deduct up to $1,000 (or $2,000 if married filing jointly) for cash donations made to charitable organizations, without having to itemize your deductions.

2. Mutual Fund Capital Gains – Be aware of capital gains taxes within any mutual funds you own. This is tricky – YOU may not have sold any mutual fund shares, but there are instances where the manager responsible for managing the fund may sell securities within the fund at a profit. These capital gains are passed on to shareholders (you). These can create very unexpected tax consequences. You can typically find these on Line 13 on Form Schedule D (See Diagram #1).

3. 401(k) Catch-Up Contributions – As of January 1st, 2026, 401(k) catch-up contributions for high earners ($150k+ income from prior year) must be made on a Roth (after-tax) basis. This means you cannot receive a tax deduction up front for this catch-up amount; however, you will be able to distribute in retirement tax-free.

4. Safe Harbor / Tax Withholding – Ahhh, the psychology of owing the IRS money versus receiving a refund! The goal for any taxpayer should be to avoid underpayment penalties. You can do this by achieving “Safe Harbor.” This means you have paid 110% of last year’s total tax liability or 90% of your expected liability this year. Once you accomplish this, my belief is to not give the government an interest-free loan. In other words, owing a little more to the government when you file your taxes is a good thing! Getting a significant refund, in my opinion, not so much! Stay focused and plan accordingly.