BUSINESS News Briefs – Hot Topics issue 88 – October-November 2026

Selling - Buying a Business or Practice?

I welcome the opportunity to assist clients with these practice or business decisions. I help with the expectations and the impacts to your business. First step is usually to calculate an Estimated Value. Then develop an approach to evaluate buyers or sellers, this may include Private Equity groups as well as other Optometrists who are buying practices in Colorado. 

I do have two practices for sale now. Please contact me If you are interested or know someone who might be. My contact details are at the bottom of this newsletter.

Dividend-paying stocks might support your portfolio's long-term growth goals

Uncertain markets test our convictions. Dividend income can sometimes help investors stay invested, generate cash flow, and keep their long-term goals within reach. Investors looking to help balance their income needs with long-term growth, dividend-paying stocks offer a practical way to assist with keeping money working in the market and to stay invested for the long time. The decision to take dividends as cash or reinvest them depends on what they need from your portfolio and what they are trying to build for tomorrow.

Key takeaways for your portfolio:

1. Dividend-paying      stocks offer one potential way to seek income while staying      invested in the long-term growth potential of the stock market.
2. Reinvesting      dividends puts income back to work, giving compounding more time to      potentially enhance long-term results.
3. A      dividend strategy works best when it fits your goals,      income needs, time horizon, and tolerance for risk, and should be      considered in the context of your broader investment portfolio.

Dividends payments made to shareholders, which are typically from earnings. Which can provide cash flow along the way while investors remain invested in the stock market. Cash flows can be paid out or reinvested. Indexes are unmanaged, and do not incur management fees, costs and expenses and cannot be invested in directly.  Income is often the main reason that investors consider dividend-paying stocks, but it's not the only one. Dividend-paying companies also can bring qualities that complement other equity investments and strategies. Many companies with a history of paying dividends are proven businesses with durable earnings and cash flows. For investors seeking a mix of income potential, equity exposure, and long-term growth, this can be an appealing combination.

• Income      potential. Dividends can provide cash flow that investors may use for      spending needs or reinvest for future growth.
• Equity      exposure. Dividend-paying stocks allow investors to stay invested in      the stock market, with the potential for both income and price      appreciation.
• Diversification      potential. Dividend-paying stocks can sit alongside growth-oriented      investments as part of a diversified portfolio, helping investors access a      broader mix of companies, sectors, and potential return drivers.

How to decide which techniques fit your plans

Dividend-paying stocks still involve risk, including the potential for share-price declines and dividend reductions. That's why they're often best considered as part of a diversified investment portfolio, not as a standalone solution. You can invest in dividend-paying stocks through individual securities or through investment vehicles such as exchange-traded funds (ETFs), mutual funds, or separately managed accounts (SMAs).

Possible steps for your portfolio

If dividend-paying stocks seem like a good potential fit for your needs and plans, these steps might help you decide how they can potentially work within your broader portfolio.

1. Check      with your investment or wealth manager.     Discuss whether dividend-paying stocks or funds might be a good fit for      your portfolio and work with your advisor to figure out the right      allocation for your unique situation.
2. Check      your overall allocations. Consider how dividend-paying      stocks would fit alongside your current mix of stocks, bonds, cash, and      other investments.
3. Be      certain of your income needs. Decide whether you need      dividends for current spending or whether reinvesting them may better      support your long-term financial hopes and dreams.
4. Choose      the right investment vehicles. Consider whether individual      stocks, exchange-traded funds, mutual funds, or a separately managed      account would best match how you would prefer to invest and the level of      diversification and active involvement that might be right for your      situation.
5. Look      beyond yields. Higher dividend yields can be      attractive, but they may also signal higher risk. Sometimes a stock has a      high yield because of a falling stock price and deterioration in the      fundamental outlook that could result in a dividend cut in the future. If      you're considering a fund or SMA, review how the strategy selects its      holdings.

For many households, the goal of keeping 3 to 6 months of expenses in liquid emergency fund is crucial. If you have large monthly expenses, this can mean excessively large reserves of cash. While many investors have significant portions of their wealth tied up in equities or in privately held businesses, which are not easily liquidated. This limits the ability to quickly convert assets into cash. Money on paper doesn't translate to easy liquidity. The challenge then is to keep access to funds without weakening potential returns or otherwise compromising your important illiquid assets.

One way to manage those needs, without turning to cash. If your cash reserves exceed the typical 3-to-6-month threshold, there are also other potential risks, including:

• Reinvestment      risk: Cash equivalents like U.S. Treasury bills and certificates of      deposit (CDs) must be rolled over when they mature, and if interest rates      have fallen in the interim, the lower rate of return on reinvestment can      prove insufficient.
• Inflation      risk: Current yields on cash and cash equivalents of about 3% look      adequate now, but rising prices could narrow the gap between cash yields      and inflation.
• Opportunity      cost: Over the past 20 years, a moderate-risk portfolio generated an      average annual return of 7.73%, while cash in a standard bank account      returned just 1%. "That diminished return from not being invested in      markets is perhaps the biggest risk, and it's the part most people miss.

The news tends to emphasize the market's inevitable ups and downs, which can make cash feel more rational than it actually is. The investing difference: Over the past 20 years, $200,000 invested in a moderate-risk portfolio would have grown to nearly $797,000, while that same amount held in a standard bank deposit account would be worth just $244,000. A moderate-risk portfolio is about 35% large-cap equity, 10% small-cap equity, 15% international equity, 35% fixed income, and 5% cash. The standard bank account assumes a 1% interest rate. Fees and expenses would lower returns. A two-pronged approach - although the 3-to-6-month benchmark stays a reasonable starting point, not all liquidity needs demand immediate access to cash. Instead of simply holding a specific dollar figure in cash, consider the types of liquidity events you could face and how best to meet them. That means having a plan that accounts for both unexpected and expected expenses.

• Unexpected      expenses: These true financial emergencies, while rare for affluent      households, should still figure in your plan. Sudden long-term care      expenses, a precipitous decline in a concentrated asset position, and even      legal liabilities can happen to the best of us. Having a cash cushion you      can tap at once with minimal tax consequences, including cash equivalents      such as U.S. Treasury bills, money market funds, and CDs, is what you're      looking for.
• Expected      expenses: Liquidity needs you can expect: a child's tuition, a home      purchase or renovation, or seed money for a new business venture. Can be      invested more strategically, with an eye toward higher yields without      sacrificing principal preservation or easy access to funds. For example,      you could use taxable brokerage accounts with a mix of liquid and      conservative investments, including intermediate-term bond funds and bond      ladders, to cover anticipated but irregular expenses.

If you have a large equity position or a private business is serving as your long-term wealth engine, this two-pronged approach becomes especially important. That's because drawing on a concentrated position prematurely, or under duress, can be detrimental to the underlying asset, which is precisely the outcome that a plan is designed to prevent. The goal is to create flexibility before the cash is needed, so you are not forced to sell an important asset at an inopportune time or in a tax-inefficient way.

Flexible liquidity

There are several options that can provide liquidity while also preserving your longer-term positions. Your choice depends on your comfort with borrowing and how you plan to use the money:

• A      securities-based line of credit (SBLOC) allows investors to borrow against      the value of their non-retirement investment portfolio, usually at a      variable interest rate. The position stays intact without triggering a      taxable event, and the investor gains access to funds that can be deployed      for emergencies, large purchases, and other needs. Keep in mind that an SBLOC      cannot be used to invest in securities. "An SBLOC can provide      on-demand capital for both unexpected and planned expenses without      disrupting your long-term investment strategy.
• A home      equity line of credit (HELOC) works in a similar way to an SBLOC, allowing      homeowners to borrow against the equity in their primary or secondary      residence at rates typically lower than those offered by credit cards or      personal loans. HELOCs are often the best choice for home-related      expenses, whether expected or not, because of the potential tax      deductibility of the interest when used for substantial home improvements.
• A bond      or CD ladder involves buying multiple bonds or CDs with different maturity      dates. "Rather than waiting for an emergency and then deciding what      to sell, you can structure your portfolio so maturities line up with known      expenditures like tuition or tax payments, helping to ensure the cash is      available exactly when you need it.
• Strategic      sales from a taxable portfolio can raise cash in a way that not only      limits the damage to your overall portfolio, by, say, selling positions      with the lowest tax impact first, but also potentially improves it by      harvesting losses or trimming overweight exposures to rebalance back to      your target allocation. This approach is ideal for upcoming expenses, as      it allows you to strategically time sales to maximize tax efficiency and maintain      your target risk profile.

A liquidity plan is important and investors should be mindful that borrowing-based solutions come with tradeoffs. HELOCs and SBLOCs involve costs and conditions, including variable interest rates, collateral requirements, and terms prohibiting the borrower from taking specific actions, which could inhibit repayment of the debt or lower the investment's value. Working with an experienced wealth strategist can help ensure you have a cost-conscious, flexible, and tax-efficient plan. Everyone needs to revisit their cash needs regularly, and not just defensively in response to market moves but also proactively due to life events. A layoff, an inheritance, a marriage, a divorce, or a business transaction can all shift your financial picture. It is recommended, that at least one annual review for self-directed investors, and quarterly reviews for those working with an advisor. Ideally, you should be neither cash starved nor cash heavy. Strive to have enough liquidity to handle life's unexpected turns without sacrificing the potential long-term growth that wealth makes possible.

Increasing Treasury yields have pushed higher as markets respond to a more hawkish Fed, still-elevated inflation, solid nominal growth, and long-running fiscal concerns. Treasury buybacks may offer some near-term relief, but the program appears too small to meaningfully reverse the forces driving yields higher.

Higher yields can pressure stocks and long-term bonds, so investors may want to be patient before aggressively adding longer-maturity fixed income exposure.

Long-term Treasury yields have continued their march higher in recent times, lifting borrowing costs for consumers and pressuring equity markets. It's a trend that has spooked investors and drawn attention from Washington. Late last month, the Treasury Department even announced plans to expand its buybacks of long-term government debt in an attempt to bring yields down.

However, despite the Treasury's efforts, yields have continued to rise. Several factors, such as a hawkish Federal Reserve, persistent inflation, and mounting fiscal concerns, continue to fuel a major Treasury market sell-off.  This has raised questions about whether the recent rise in yields has further to run and what, if anything, might ultimately reverse it.

Why Treasury yields are rising: 

The biggest catalyst behind the recent rise in yields is somewhat straightforward. Most of the moves appear to be driven by a hawkish Fed and a higher expected short-term rate. With inflation proving difficult to tame, Federal Reserve officials have struck an increasingly hawkish tone in recent weeks. Chairman Kevin Warsh reinforced that message at the late-August Jackson Hole Economic Policy Symposium. While this summer's [inflation] readings were better than expected, they do not tell me that underlying trends have meaningfully improved. We must be confident that underlying inflation is moving to our goal, clearly and at sufficient speed. Otherwise, we have work to do. Treasury yields might not be a problem that needs to be fixed. They are indicative of the economic environment we're in. Nominal economic growth has remained robust and inflation remains well above the Fed's 2% target. Although there have been some signs of labor market cooling, nominal economic growth came in at 6.6% in the second quarter, while the personal consumption expenditures price index rose 3.7% from a year ago in July. The yield curve should be positively sloped given a Fed funds rate that seems to be at neutral or slightly accommodating and a resilient economy, In short yields don't appear too high given economic fundamentals.

Other forces have put upward pressure on yields, though they vary in how much they explain the recent move. Some are relatively new developments, while others have been building for years.

Renewed military conflict between the U.S. and Iran has helped drive oil prices higher once again this week, reigniting inflation fears and lifting government bond yields worldwide. A massive wave of corporate borrowing to fund AI infrastructure has also added fuel to the fire by potentially pulling capital away from Treasuries. Meanwhile, fiscal concerns have been mounting for years, pushing the term premium, or the extra return investors demand for the risk of holding Treasuries over the long term, gradually higher. The term premium on a 10-year zero coupon bond, for example, hit 0.88% this month, well above the negative or near-zero figures seen during and immediately after the pandemic. However, this long-term trend doesn't appear to be a key driver of the recent rise in long-term yields.

Where yields could go from here

Predicting where yields will go are nearly impossible. It requires a great deal of forecasting everything, from the path of the economy and inflation to Fed policy and the conflict in the Middle East. There appears to be more upside than downside with long-term Treasury yields, given the hawkish Fed, strong nominal growth, inflation uncertainty, and lingering fiscal concerns. The upside may be somewhat limited, however. Although inflation stays stubbornly above the Fed’s 2% target, it's still well below its post-pandemic highs. And any Fed rate hikes appear more likely to be modest adjustments to get the disinflationary process back on track rather than the start of an aggressive hiking cycle.

What do higher yields mean for investors

Higher Treasury yields can create headwinds for equity markets and the broader economy. Rising borrowing costs tend to weigh on consumer spending and business investment, while more attractive yields on relatively safe government debt can pull capital away from stocks. For bond investors, however, higher yields present both opportunity and risk. But while today's yields may look attractive, Martin cautioned against adding long-term bonds while the risk of further yield increases remains. It is not believed, now is the time to aggressively add long-maturity bond investments to a portfolio just yet. Long maturities mean higher interest rate risk, so any additional upside in long-term Treasury yields would likely result in steeper price declines for bonds with long maturities than for those with short- or intermediate-term maturities. Importantly, fixed income investors will likely have plenty of time to add long-term bonds paying high yields in the current environment. We expect many Treasuries yields to hold in this elevated range for the near term, so investors likely won't miss the opportunity.

I have heard from a great many of you who have purchased my book, and I sincerely thank you for doing so. It warms my heart and soul with the feedback I am receiving. Especially when someone says they loaned the book to X and X loaned the book to Y.

This QR code is a link to my book’s website. I love to tell and share my testimony to groups. I recently did such in California and have one scheduled for Iowa, early January 2027.

The feedback is great and please keep adding your review to Amazon. Thank you again for purchasing my book. 

https://inhisheavenlyhands.wixsite.com/inhishands