January 2023 Letter

On behalf of the entire Ratio Wealth Group Team, I want to wish you and your loved ones an incredibly happy new year. While 2022 was an unusual year from a market perspective, we hope the areas of health and family good fortune were kind to you. Our wish is that you receive continued blessings through 2023.
As we reflect on the previous year and infer what the next twelve months will hold, many of the themes remain the same. Unfortunately, we do not hit the headline reset button every December 31st. The war in the Ukraine continues, inflation persists, recession fears are real, and the Federal Reserve seems to be the puppeteer for the economy. Certainly, there will be unforeseen additional issues to address going forward. Let us hope levity is the directional bias in 2023.

If there is a silver lining, many of the topics above are in their latter stages. Inflation peaked last summer and has been steadily declining, month over month. Recession, by defining measures (temporary economic decline as measured by two quarters of negative GDP growth) is plausible but potentially shallow based on a variety of factors, including an improving supply chain and a resilient consumer. Lastly, the Federal Reserve has acknowledged the lag affect to their unprecedented rate increases and anticipates a “slower” pace as we move forward.

This backdrop brings us to what is coming. Market pundits have a tradition of foreshadowing market returns based on a myriad of models and tarot card readings. Last January, 14 of the leading financial firms shared their forecast of what the S&P500 would return in the ensuing twelve months. On average, “The Street” expected a very boring 4% return. On December 31st, 2022, the S&P500 closed at 3839.50, a decline of ~19.5%, supporting the notion that there are only two types of forecasters… those who don’t know and those who know they don’t know.

Ratio Wealth group is in the latter group. We use a planning background to build a strategy that acknowledges that what happened in 2022 is possible at any given moment. We do not like down markets, but we expect them to happen. The market volatility that transpired last year is the price we pay for true long-term capital appreciation on assets that are designed to support your needs well into the future. It is a very healthy process for assets to “re-price” when conditions change as dramatically as they have. This year was simply exceptional in that both bonds and equites had negative returns which has only happened three times in the last 94 years.

History tells us that corrections are needed to re-establish a base for new fundamentals to assist in forward appreciation. Equities and bonds are no different than other assets. Look what is happening in your neighborhoods as home prices readjust to mortgage rates that have gone from a little over 3.0% a year ago to around 6.5% currently. The houses are structurally the same, what is different is what a buyer is willing to pay until the next upcycle begins. Keep in mind, that even with what transpired last year, the S&P500 is up over 40% since the worst of COVID. On an annualized basis, the index is up 9.5% over the last 5 years, up 12.6% over the last 10 years, up 8.8% over the last 15 years and up 9.8% over the last 20 years.

We continue to make tactical decisions around your portfolio allocations. Before the year began, we tilted portfolios to have a slightly more defensive posture. The thesis was driven on elevated valuations for certain sectors and industries, with technology being our biggest concern. We continue to believe in this approach. Now that the cost of capital is essentially greater than zero, valuation and the price we are willing to pay for assets matter. The momentum-market that was fueled by cheap money since the financial crisis is a thing of the past. As painful as last year was, the current environment is a more attractive platform for investors like us.

Additionally, we used the downward trends to tax-loss harvest in taxable accounts. If we are going to have these negative years, active management allows us to reduce future gains and potentially offset some of your ordinary income. As we enter 2023, you will see an increase within fixed-income allocations. At the next Fed announcement, small additions are called for with investment-grade fixed income rates now more attractive. Unfortunately, with an easy monetary policy over the last decade plus, investors had to go up the risk-curve to beat inflation. We are now in the early innings of bond allocations doing what they are intended for, which is to improve yield and reduce volatility. We are not at optimal levels, but the directional trend is positive.

I know 2022 created stress for you or people you care about. As your financial advisor, please lean on us for all your concerns and aspirations. We are here to help. Our foundation building process continues to center around financial stability with calculated growth to support savings strategies and efficient cash-flow generation when you have to fund the retirement years. We design plans to ensure that a balance exists between capital preservation on your balance sheet, safe strategies to support cash needs and longer-term growth for assets that benefit from time. Remember, time in the markets is your friend and timing the markets is a losing strategy. In 2023, stay healthy, stay focused on making your days productive and stay invested.

Disclosure

Ratio Wealth Group, LLC (RWG) is a registered investment advisor located in Colorado. RWG and its representatives are in compliance with the current filing requirements imposed upon registered investment advisors by those jurisdictions in which RWG maintains clients. RWG may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. RWG’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment related information, publications, and links. Accordingly, the publication of RWG’s web site on the Internet should not be construed by any consumer and/or prospective client as RWG’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by RWG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of RWG, please contact the SEC, FINRA or the state securities regulators for those states in which RWG maintains a filing. A copy of RWG’s current written disclosure statement discussing RWG’s business operations, service, and fees is available from RWG upon written request. RWG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to RWG’s web site or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended or undertaken by RWG) made reference to directly or indirectly by RWG in its web site, or indirectly by a link to an unaffiliated third party web site, will be profitable or equal the corresponding indicated performance level(s). Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client’s investment portfolio. Historical performance results for investment indices and/or categories generally do not reflect the deduction of transaction and/or custodial charges, the deductions of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. Certain portions of RWG’s web site (i.e. newsletters, articles, commentaries, etc.) may contain a discussion of, and/or provide access to, RWG’s (and those of other investment and non-investment professionals) positions and/or recommendations of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendations(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from RWG, or form any other investment professional. RWG is neither an attorney nor an accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice.

To the extent that any client or prospective client utilizes any economic calculator or similar device contained within or linked to RWG’s web site, the client and/or prospective client acknowledges and understands that the information resulting from the use of any such calculator/device, is not, and should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from RWG, or from any other investment professional.

Shawn Wallace, CLTC
Managing Director

720.420.4866 Direct
shawn@RatioWealthGroup.com

“The first time I meet with prospective clients I love getting to know them, exchanging life stories and learning about their goals and dreams. The best moment is when they realize that we’re a great fit and that we are the advisors they have been looking for. I like to think my people skills rival my financial skills! At Ratio, I’m proud that everything we do revolves around our client’s plan. Our goal is for them to trust us as their advisor and planning resource for decades to come.“

Shawn has been a dedicated planning agent for the over seven years, focusing on the comprehensive insurance and investment needs of affluent clients throughout the country. He offers expertise in optimization tactics during the accumulation phase, as well as tax efficient distribution strategies for clients. Shawn also brings a unique perspective and industry knowledge to the table as a United Airlines pilot and Boeing 787 instructor.

After graduating from Indiana State with a Bachelor’s of Science Degree in Aerospace, Shawn flew for the United States Air Force and is a proud veteran of Desert Storm.

Work : Life

Shawn lives in Denver with his wife and two sons and they all love to travel and are avid sports fans. Shawn is also an avid microbrew fan and will happily tell you his favorites. He is also a Board Member of the Wings Over the Rockies Air and Space Museum.

Nancy Kimball
Executive Assistant

720.420.4860 Direct
Nancy@ratiowealthgroup.com

“Helping people find happiness in the little things, moments or even daily miracles brings me joy! I thrive to make sure the Team at Ratio is prepared for all of their clients’ needs in and out of the office. Patience, appreciation, research and knowledge are key to my success at Ratio. I love helping our ratio Team thrive every day.”

Nancy brings a long career in advertising sales where she worked for Blair Television in various cities including New York. She came to Denver where she worked at the NBC News Affiliate, Channel 9. After leaving the Television Industry, Nancy changed career paths to a more administrative supportive role. She worked for mortgage and real estate CEOs and supported various other CEOs as a Consultant. Nancy is well versed in planning, communication and anticipating the needs of the Ratio Team and their clients. She received a Bachelor of Arts in Speech Communication and Broadcasting from Colorado State University. She is also a Certified Yoga Instructor.

Work : Life
Outside of Ratio, Nancy enjoys spending time with her husband and cheering her son on during his many sports, especially hockey. Her favorite hobbies are Pilates and playing the piano. She enjoys volunteering wherever she is needed at her son’s school, on her HOA Board in her neighborhood, and serving the homeless in the Denver community.

Michelle E. Buquet Director Of Business Development

720.420.4860 Direct
michelle@ratiowealthgroup.com

“Life is most rewarding when you enjoy what you do. I truly love meeting new people and discovering what connects us; whether that is mutual friends, goals or passions. The one common thread throughout my career is helping other people attain their vision. Ratio Wealth Group does just that for their clients. I can personally speak to this as a client who believes in the process so much, I wanted to become a member of the team. Here, we take a holistic approach to helping individuals turn their financial aspirations into reality. As a client of Ratio and now a team member, I am confident in our services, candor and appreciation of the people we serve.”

As Director of Business Development at Ratio, Michelle brings a wealth of talents and experience to our team thanks to her varied background in sales and marketing. One of her most rewarding experiences was working for Colorado Ski County where she instituted the 5th Grade Ski Passport which allowed 5th graders to ski at almost every mountain in Colorado three times for free. Luckily for us, Michelle discovered her true passion is bringing people together and creating synergist partnerships.

Work : Life
Michelle is the proud mom of four kids. She is an adventurer, traveler and art lover. Her true passion is being with friends and family. She also loves taking advantage of all that Colorado offers; skiing, live music and hiking.

Lauren S. Young, CFP® Vice President, Client Advisor

720.420.4873 Direct
lauren@RatioWealthGroup.com

“I’m passionate about helping people determine their financial goals and then working with them to make sure they can achieve them. I enjoy helping our clients understand “financial language” so that they feel confident when making financial decisions. An important role I play is reminding clients of their goals and helping them stick with them. The difference between us and other financial advisors is our focus on getting to know our clients and connecting with them. That’s as important to us as performance results.”

Lauren has earned a Certified Financial Planner™ designation and has been working in Wealth Management industry for nearly 15 years. She has extensive experience in trust administration, estate planning, retirement planning, and education planning. She has a degree in Business Administration with concentrations in Marketing and Finance from Gonzaga University.

Lauren also created a Kids and Money workshop and is passionate about empowering teenagers with the knowledge and expertise to create their own financial futures.

Work : Life
Lauren is a sports fanatic and loves to ski, bike, go to the mountains, cheer on the Denver Broncos and Colorado Avalanche and spend time with her husband and two kids.

Josh Freedman, CFA
Chief Operating Officer

720.420.4863 Direct
josh@ratiowealthgroup.com

“After 30 years in the finance industry, I have seen many different investment strategies employed by multiple firms.  I am thrilled to be at Ratio Wealth Group because I believe that the firm’s holistic approach, our investment philosophy, and the services we provide are the best way to ensure our clients’ financial well-being and peace of mind.  It gives me great pleasure and satisfaction to work with such talented people – both coworkers and clients.”

Josh has worked in just about every aspect of the asset management business – from trading and securities research to compliance and operations. Before joining Ratio Wealth Group, Josh was Chief Operating Officer and Chief Compliance Officer for several independent investment advisors, most recently Ballast Equity Management, LLC. He has experience in investment research and portfolio management in both the equity and fixed income markets and began his career in client service and sales and marketing.

Josh holds a Bachelor of Business Administration degree from the University of San Diego and a Masters in Business Administration, with a specialization in Finance, from the University of Denver. Josh is a CFA charterholder and a member of the CFA Institute and CFA Society Colorado.

Work : Life
Josh and his wife enjoy traveling and being in the mountains to ski, ride and hike whenever they can. Josh is also a dedicated, if slow, swimmer and runner. His favorite pastime is annoying his grown sons with the worst dad jokes he can find.

Dominique Caraveo
Client Relations Manager

720.420.4867 Direct
dominique@RatioWealthGroup.com

“Money is an incredibly vulnerable subject. At Ratio, money can be discussed without fear of judgement or pressure all within a space that ensures trust and care. As a first-generation college graduate, I have learned what it’s like to not have been provided with the tools to make yourself financially successful until much later in life. At Ratio, financial advice is coupled with education to ensure that each of our clients has the tools and resources to write their own financial story.”

Dominique focuses on client relations management at Ratio Wealth Group. She has 5 years of client service experience helping clients navigate their financial planning needs. Dominique holds a B.A. in Liberal Arts and an M.S. in Marketing both from Regis University.

Work : Life
During her free time, Dominique enjoys playing tennis, pickle ball, cooking and spending time with her family.

Darren Spreeuw, PhD
Portfolio Manager

720.420.4879 Direct
darren@RatioWealthGroup.com

“I am an educator at heart. I love talking with clients about the economic theories that underlie financial markets, and helping to clarify their understanding about how things work. I’m also a musician, and a little known fact about me is that I pick up foreign languages easily – accents and all. I’m proud to work at Ratio because we are a true fiduciary, putting our clients first, while practicing and promoting best ethical practices with kindness, empathy, and respect.”

Darren has approached the capital markets from a myriad of angles over the last 22 years. At Ratio Wealth Group, he focuses on portfolio management, portfolio analytics, planning integration and client relations. He works closely with the entire Ratio team to insure complimentary investment strategies are thoughtfully integrated into tailored financial plans.

As an academic economist, Darren taught graduate level econometrics, finance and economic theory at several universities, and conducted firm-theory research in Eastern Europe as a Fulbright Scholar. In the private sector, Darren has provided thoughtful strategic analysis to a range of firms, from small family offices and RIAs, to big-data firms overseeing portfolios of mortgage-backed securities.

Darren is a Founding Executive Board Member of the Colorado Student Leader’s Institute, an affiliate of The National Conference of Governor Schools. He holds degrees from San Francisco State University (BA Econ) and The American University (PhD Econ).

Work : Life

Outside of the office, you’ll find Darren fixing anything that breaks at one of his many rental properties, cheering on his kids’ soccer teams, skiing, climbing, cycling, and playing beer-league hockey.

Beth Steininger Wraga
Managing Director

720.420.4865 Direct
beth@ratiowealthgroup.com

“I believe that taking a holistic approach to your financial well-being paves the way to a life abundant in success, happiness and meaning. I have a deep background working with financial institutions and a strong desire to serve others with empathy and integrity. This combination gives me an ideal foundation to aid individuals and families in planning and achieving their life goals.”

Beth brings twenty-five years of institutional financial services experience in sales, research, and operations to her role as Managing Director. Prior to Ratio Wealth Group, Beth worked as the Director of Investor Relations and Marketing for two different hedge fund advisors that were focused on the technology, media, and telecom sectors in the public and private markets. Previously, she worked for Goldman Sachs as a Vice President in Institutional Equity Research Sales and in the Global Investment Research Technology Group. She also worked at Paine Webber (now UBS) in Investment Research and started her career in its Management Audit and Controls analyst program. In addition, Beth is a Certified Life Coach – she uses this training and passion to help clients identify core motivations, values, and goals in their wealth management discussion. Beth received her Bachelor of Business Administration from the University of Texas at Austin.

Work : Life

Beth lives in San Francisco with her husband and three sons. She is passionate about travel, theater and cheering on her boys.

Graham C. Gerlach, CFP®, AEP®
Co-Founder, Owner, Partner

720.420.4871
Graham@RatioWealthGroup.com

Graham brings a varied and highly valuable combination of expertise to Ratio Wealth Group, advising on all aspect of our business. Graham is also a Co-Founder and Chief Revenue Officer of Inclined Technologies, a SaaS software company focused on driving better long-term outcomes for whole life policyholders.

Graham holds a (BA) from Denison University (Religion and Psychology) and is a member of the Denver Estate Planning Counsel.

Work : Life
Outside the office, you’ll find Graham enjoying American and European Football, cooking outside and fine tuning esoteric knock-knock jokes with his kids.

Derek J. Scarth
Co-Founder, Owner, Managing Partner

720.420.4872 Direct
derek@RatioWealthGroup.com

“I am incredibly grateful to assist families in developing a thoughtful strategy for their specific needs and imparting trusted advice. I truly subscribe to a life in service for others. At Ratio, we take a team approach to caring for our clients. I want individuals and families to know that we take tremendous pride in providing confidence and harmony around estate and financial objectives. We know that assets are only valuable as part of an prearranged mosaic and are truly dedicated to being a dependable resource at every turn.”

Derek’s professional experience began in public/private equity analysis and institutional portfolio management. He is well versed in business development and operational management for both for-profit and not-for profit entities. Prior to co-founding Ratio Wealth Group, Derek was a Portfolio Manager and Managing Director for Inspire Capital Partners. Previously, he was a Partner at Denver Investments LLC, where he served as Co-Portfolio Manager for Large-Cap Growth institutional clients and on the Westcore Large-Cap Growth Fund. In 2003, he assisted the investor relations team of Newmont Mining Corporation (NEM -NYSE) in a public offering capital raise. Derek began his investment career as an Analyst and Assistant Portfolio Manager for Berger Funds, which was acquired by Janus Capital Management in 2002.

Derek received his bachelor’s degree from Regis University and holds a master’s degree from the University of Denver – Daniels College of Business.

Work : Life

When he’s not actively engaged in the Ratio community, you will find Derek spending time in the Colorado mountains with his wife and their three sons. Derek is very proud to give back to his alma mater as the Regis University Board of Trustees Chair. He also is an assistant boys soccer coach and mentor at Regis Jesuit High School.

Disclaimer

No client or potential client should assume that any information presented should be construed as personalized financial planning or investment advice. Personalized financial planning and investment advice can only be rendered after engagement of the firm for services, execution of the required documentation, and receipt of our disclosure documents which we will provide upon request. For more regulatory information regarding Ratio Wealth Group please visit the SEC’s website at www.adviserinfo.sec.gov

Licensing

Investment advisory services offered through Ratio Wealth Group, a Registered Investment Adviser.

Graham Gerlach CA Insurance License #0C37975, State of Domicile, Colorado
Shawn Wallace CA Insurance License #0G59657, State of Domicile, Colorado

Ratio CRD: 6705290