July Investment Tea: Trump did WHAT in that tax bill?! + market news

Episode & Show Notes @ https://www.sunnybranchwealth.com/blog/july-investment-tea 

On this episode of Heir Necessities, I'm launching my new "Investment Tea" series. 

First and foremost, I'm an investment advisor. But I *hate* the way most advisors talk. It's all jargon that goes way too deep into topics 99% of people don't care about.

I'm here for something different.

So every quarter, I'm bringing you the Investment Tea. 

You'll get a quick, understandable summary of market news, along with the biggest economic and tax changes you need to know about. 

Each episode wraps up with the story of one of the companies in Sunnybranch's impact portfolio: a behind-the-scenes look at a company creating REAL change.

In this episode of the Investment Tea you'll learn:

• Why international stocks are crushing the S&P500 
• What Trump's tax surprise means for you 
• How solar panels can help fight forced labor...seriously

Sunnybranch Wealth LLC (“Sunnybranch Wealth”) is a registered investment advisor offering advisory services in the State of Oregon, the State of California and in other jurisdictions where exempt. Registration does not imply a certain level of skill or training.

The information on this site is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This information should not be relied upon as the sole factor in an investment making decision.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any recommendations made will be profitable or equal any performance noted on this site.

Transcript

Heir Necessities Podcast Transcript - July 14, 2025

Introduction: Financial Planning for Gen X, Millennial, and Gen Z Inheritors

Katherine Fox (00:00)

Hey, I'm Katherine and thanks for joining me at Heir Necessities, the podcast that turns complex financial topics into real talk for Gen X, millennial, and Gen Z inheritors. I'm a certified financial planner, a financial advisor for inheritors, and an inheritor, just like you. Each episode of this podcast, I break down a different topic related to generational wealth and inheritance.

My goal is that you can come here for the real jargon-free advice you need and stop asking Google or ChatGPT how to manage your inheritance. On this episode of Heir Necessities, I'm really excited to launch a new feature.

Investment Stories: Making Portfolio Performance Personal and Engaging

My goal for this series is to bring investing topics forward in a way that actually makes sense to you. No jargon, no super technical deep dives, just facts that you need to know if you're interested about the markets and interested in knowing more about how your portfolio is performing, whether you're a Sunnybranch client or not, and then also the stories behind those investments. And that so often for me is the piece that's missing.

Because you can show me numbers on a spreadsheet and I'll understand what they mean, but I'm just not interested. But when you start talking about the stories and about what investing means beyond just the dollars and cents, that is when you can start to really grow your breadth of knowledge, because it becomes real and compelling instead of literally just numbers on a page.

I'm gonna start it off with just a little bit of market commentary. And then I'm gonna take a dive into some of the stories from Sunnybranch portfolios.

International Stocks Outperform US Markets in 2025: Why Global Diversification Matters

Two main areas that I'm gonna talk to you about on the market and economic side. The first is—if you've listened to me before, you know that I always talk about building long-term, globally diversified portfolios. And the market that we're in right now is one of the reasons that I talk so much about that. Because of the amount of political and tax uncertainty that there's been in the US with all of the changes and the tariffs and everything that Trump has been proposing, we have actually seen international stocks outperform this year. So the MSCI World Index, which is one of the primary global indices, is up around 10% year to date, and the S&P 500 is up just over 6.5%.

This is why you stay invested in international stocks, even when it feels like the US is outperforming. Because if you didn't have this international stock in your portfolio, you would have significantly underperformed in the first half of 2025.

US Economic Outlook 2025: Inflation, Fed Rate Cuts, and Trump Tariff Impact

While US stocks have lagged international stocks, the economic picture in the US for the moment seems to be a little clearer. Inflation has started to ease, the Fed has indicated that they're thinking about one or two rate cuts towards the end of this year, and it seems like the US economy has avoided a recession for now. There are a lot less of those flashing indicators for recessions now than there were earlier this year. That being said, we still haven't seen the full economic impact of these tariffs that Trump is enacting. We are probably gonna start to see that impact in the next quarter or two, and that is the point where I would really expect to see maybe some economic shifts and maybe some shifts in the stock market depending on what the impact of those tariffs actually looks like when the numbers are in front of analysts and other people who follow the market closely.

Trump's Tax Bill 2025: Major Changes to Estate Tax and SALT Deductions

The second bit of knowledge that you should know is about what happened on the tax front in the first half of 2025. If you were paying attention to the news at all over July 4th weekend, you probably saw that Trump's big beautiful bill passed. This is a horrible bill for many reasons. There are provisions in there that are going to drastically decrease the quality of life for many Americans. That's not what I'm talking about here. The only pieces I'm talking about here are what you need to know about what this bill did on the tax side of things.

First, we've been talking a lot about how the current estate tax exemption is going to sunset at the end of 2026. With the big beautiful bill, this is no longer going to happen. The current estate tax exemption will continue at the high level. It's at over $13 million now for an individual, $26 million for a married couple, and that's going to continue increasing every year.

Second, relevant to many inheritors who live in states with high state and local tax burdens, the SALT deduction, so that's the amount of state and local taxes that you can deduct, increased from $10,000 to $40,000 a year. So if you have a significant amount of state income taxes, state property taxes, whatever that you pay, this could potentially result in a significant tax savings for you.

The important thing to note about this increase in cap is that it only applies to certain taxpayers. If you make too much money, if you have a combined income of over $500,000, then you still are going to have that $10,000 SALT cap.

Trump Savings Accounts: New $1,000 Government Contribution and $5,000 Annual Limits

The other fun piece in this bill from a financial planning perspective is these new Trump savings accounts. I wish someone would give them a different name. I don't know what it is. But if you had a baby born between 2025 and 2029, so even if you've already had a baby so far in 2025, the government is going to give you a thousand dollars for that kid. But they're not just going to write you a check, right? Because why would the government ever do something so simple? They are going to put it in one of these new Trump accounts. These are restricted accounts, so you're not going to be able to access funds in these accounts until your kid turns 18. And once they turn 18, they don't turn into a regular savings account. Again, because why would the government do something that makes sense? They turn into basically an IRA.

For wealthy taxpayers, people who want to put more money into tax deferred savings vehicles, and especially people who want to seed retirement funding for their kids, this is potentially a game changer because you can contribute up to $5,000 a year in these accounts without your kid having earned income. So if your child is born in 2025, you could be putting $5,000 into this account every year until they turn 18. When they turn 18, they are going to have tens of thousands of dollars sitting in that account that's just going to grow over time and compound until they're ready for retirement.

Values-Aligned Investing: ESG and Impact Investing for Inheritors

Moving on from the market and the economic side of things, I wanna dive specifically into what it means to invest as a client at Sunnybranch. If you follow the podcast, if you follow me on Instagram, if you've looked at my website, you'll see that I talk a lot about doing good with your wealth. And one of the most important ways that you could do that is through values aligned investing. You might call it ESG investing, socially responsible investing, impact investing, whatever. Honestly, the name does not matter.

For clients invested in actively managed impact portfolios at Sunnybranch, it boils down to the belief that our society will be better. We will build a more strong, a more resilient, and a more functional and caring society if our investment dollars are funneled into companies that have business practices that are socially and economically stable over the long term. That means, yes, a focus on profit, but also a focus on sustainable profit. And if you're doing something right now that's making you a lot of money, but it's bleeding society or our earth dry, is that really a sustainable long-term business practice? No.

Investing in businesses that promote responsible business practices both now and in the future is critical to facing some of the biggest challenges that we have today and supporting thriving communities around the world. This could mean avoiding some companies whose business practices you don't agree with, like tobacco companies or weapons manufacturers. Or it could mean investing more in companies that are actively doing good and promoting the change you want to see with your investment dollars. Think about companies that are creating climate solutions for the planet, that are opening and making their supply chains more transparent to reduce dependence on forced labor, that pay their CEOs less and hire more women.

First Solar Stock Analysis: Long-Term Growth Despite Trump Energy Policy Changes

I wanna tell you one story about what that looks like for clients invested in the actively managed impact portfolios at Sunnybranch. The story I'm gonna tell you is about First Solar. First Solar is a US based solar company. They manufacture solar panels and they create large scale solar power plants. You might think, why are you telling me this story about First Solar? I know that Trump is cutting all of these subsidies to the solar industry and to clean energy in general. These industries are going to die because of what Trump and Republicans are doing. And that's true that First Solar hasn't necessarily had the best start to 2025. But remember that we are investing for the long term. We're not investing for today or tomorrow. And long term, solar adoption across the globe is significantly increasing. Even if you might see some decreased domestic demand, even if you might see tariffs harming solar, there are still global orders that outstrip their ability to fill those orders. There's demand backlog. They are moving more and more of their production overseas, moving into India, moving it closer to the places where they're actually creating these large scale solar power plants. This is a company that is positioned well for long term growth and for the long term shift from traditional fuel sources to alternative energy. Ultimately the cost to manufacture these items continues to drop as technology increases. And the demand in a hotter world is not subsiding.

First Solar's Ethical Supply Chain: Avoiding Forced Labor in Solar Manufacturing

I wanna tell you something else about First Solar, something that you, if you were just looking at the companies, the names on a list in your portfolio, wouldn't even know. And that is the benefit of Impact investing with Sunnybranch. First Solar is one of the only solar panel manufacturers that doesn't use polysilicon. If you ask me to tell you what that means from a technical perspective, I could not do it. But I can tell you that the majority of the world's polysilicon, which is mined from extracted quartz, is produced in the Xinjiang region in China, which is where China has created a huge system of coercion and forced labor to suppress people of Uyghur descent.

By not using polysilicon in its solar panels, First Solar has removed a dependency on forced labor in its supply chain, a dependency that exists for almost all of the other solar panel manufacturers in the world. That's the kind of thing that we like to see when we look at impact investing, is a company not only that's technologically savvy, a company that has a long-term mission that's focused on reducing the effects of climate change and reducing dependency on oil and gas, and also a company that is doing better in terms of other aspects of its business practices.

Contact Information: Learn More About Impact Investing at Sunnybranch

If you're interested in learning more about what impact investing means at Sunnybranch, I would love to chat. You can send me a DM on Instagram, shoot me an email at Katherine at sunnybranchwealth.com. And if you have any other questions, want to read a transcript of this, save it for later, whatever, all that information is in the show notes below. I'll talk to you on the next episode of Heir Necessities.