October 17, 2025

WEEKLY TOUCHPOINT

Brown University professor emeritus Peter Howitt (joined Brown in 2000) was awarded the 2025 Nobel Prize in Economic Sciences, for his work on the theory of sustained growth through creative destruction. Howitt’s mathematical modeling formalizes the idea that innovation drives long-term economic growth, but also inherently “destroys” incumbent firms whose underlying technology or human capital becomes obsolete. He emphasized that while creative destruction fuels prosperity, its benefits are not automatic — entrenched incumbents or political power can block the process, stifling growth. 

Interpretation & Takeaways

• Growth is not guaranteed — This award underscores that innovation is central to economic progress, but it must be unlocked through mechanisms that allow new entrants to displace outdated incumbents.

• Winners and losers — In the world of business (and portfolios), disruptive innovation brings opportunity — but also risk. Companies tied to old paradigms may decline unless they adapt or get disrupted.

• Policy matters — The research reminds us that economic and regulatory environments play a key role: if powerful incumbents can block disruption (e.g. via regulation, lobbying), growth can stall.

• For investors & entrepreneurs — Aligning with emerging technologies, being vigilant about shifts in structural advantage, and maintaining agility are critical. This helps explain why some sectors flourish while others lag over long cycles.

What This Means for Clients

Peter Howitt’s Nobel recognition reinforces a truth we see in both markets and business transitions — growth follows innovation, not comfort. The same “creative destruction” that fuels economies also drives portfolio evolution and business value. Staying adaptable, investing in new ideas, and letting go of what no longer serves your future are the mechanics of long-term wealth.

 

Read the Full Article

 

• Bubble Fears Surface as Bull Market Turns Three
• JPMorgan Pledges $10 Billion Investment in US National Security
• Economists Bullish on US Growth Despite Rising Inflation, Shrinking Job Market

Rethinking Roth Conversions Under the “One Big Beautiful Bill”

A sweeping new tax law nicknamed the “One Big Beautiful Bill” is reshaping Roth conversion strategies for 2025 and beyond. While it doesn’t directly reference Roth IRAs, it makes permanent the lower income tax brackets introduced in 2018—opening a valuable window to convert traditional IRA assets at favorable rates. But timing and thresholds matter more than ever.

Key insights from tax strategist Robert Keebler:

• Lower brackets = opportunity, but a future Congress could change that, so acting sooner may make sense.

• Senior deduction alert: New $6,000 (single) / $12,000 (joint) senior exemptions can reduce taxable income—but phase out once income exceeds $175k (single) or $250k (joint). Large Roth conversions could unintentionally wipe out these benefits.

• Small business edge: The 20% Qualified Business Income (QBI) deduction is now permanent, with higher income thresholds ($75k single / $150k joint). Be cautious—big conversions could push income past these limits.

• SALT relief revived: The state and local tax deduction cap rises to $40,000, phasing out above $600k of taxable income. Again, Roth conversions can affect eligibility here.

Bottom line: Roth conversions remain a powerful long-term tax play, but the new law makes precision planning essential. Clients should coordinate with their advisor and CPA to balance today’s lower rates with tomorrow’s deductions, thresholds, and legislative unknowns.

 

Read Full Article

Source: Financial Advisor publication

 

Equities

• U.S. stocks rose as trade tensions with China eased and corporate earnings topped expectations.

• About 12% of S&P 500 companies have reported so far, with 86% beating estimates.

• The blended Q3 earnings growth rate stands at 8.5%, which would mark the ninth straight quarter of gains if it holds.

• Small-cap and value stocks outperformed larger growth names.

• All major S&P 500 sectors advanced, led by communication services, real estate, and information technology.

• Despite strong results from JPMorgan, Citigroup, and Wells Fargo, financials underperformed due to ongoing concerns among regional banks.

• Foreign equities were mixed, with emerging markets weaker amid lingering trade uncertainty.

 

Bonds

• Bond prices rose as Treasury yields declined across the curve.

• The 2-year yield dropped to 3.46%, while the 10-year yield fell to 4.02%, widening the 2–10 year spread to 0.56%.

• Longer-duration bonds outperformed as investors accepted more maturity risk.

• Lower-quality credit generally outperformed, though investment-grade corporates led gains on the long end.

• Yields declined to 4.72% for investment-grade and 7.18% for high-yield bonds.

 

Macroeconomic Data

• Limited data due to the government shutdown shifted focus to the Fed’s Beige Book.

• The report described the economy as largely unchanged, but noted softening consumer spending in 5 of 12 districts and rising layoffs.

• Fed Chair Jerome Powell signaled that another rate cut is likely later this month.

• The Chicago Fed CARTS index rose 0.5% in September and 6.2% annualized in Q3, the fastest pace in two years.

• The Redbook Index showed same-store sales up 5.9% year-over-year, also the strongest in two years.

• Retail activity strengthened: The Chicago Fed CARTS index rose 0.5% in September and 6.2% annualized in Q3, the fastest pace in two years and the Redbook Index showed same-store sales up 5.9% year-over-year, also the strongest in two years.

(as of Monday’s Market Opening)

	Total Return (1D)	Total Return (1W)	Total Return (MTD)	Total Return (QTD)	Total Return (YTD)
S&P 500	0.53%	0.14%	-0.37%	-0.37%	13.30%
Dow Jones Industrial Average	0.52%	0.27%	-0.45%	-0.45%	8.57%
NASDAQ	0.52%	-0.06%	0.09%	0.09%	17.45%
NASDAQ 100	0.65%	0.27%	0.56%	0.56%	18.11%
Russell 1000	0.53%	1.72%	-0.25%	-0.25%	14.06%
Russell 2000	-0.67%	2.36%	0.60%	0.60%	11.03%
Russell 3000	0.42%	1.69%	-0.35%	-0.35%	13.85%
ACWI	0.40%	2.15%	0.28%	0.28%	18.89%

The 5 Stages of Value Maturity

Most business owners don’t realize that their company’s value doesn’t automatically mature with age. True value growth follows a disciplined framework called the Value Maturity Index, a roadmap that helps owners move from chaos to control—and ultimately to freedom.

1. Identify Value: It starts with a triggering event—a baseline business valuation that reveals the current worth of your company and its “value gap.” This stage answers: What is my business worth today, and what could it be worth?
2. Protect Value: Owners address risks that erode value: key-person dependence, outdated systems, lack of documentation, or poor cash flow management. Protecting value creates stability and prepares the business for future growth.
3. Build Value: Here, owners turn stability into scalability. This stage focuses on value drivers such as recurring revenue, strong management teams, operational efficiency, and customer diversification. These are the engines that boost both income and enterprise value.
4. Harvest Value: This is the moment of transition—whether selling to a third party, transferring to family or management, or simply taking chips off the table. The key is to exit on your own terms, with readiness and options.
5. Manage Value: Even after the sale, your business and personal wealth must be stewarded wisely. Managing value ensures the continuity of your financial, family, and philanthropic goals long after the business transition.

Bottom Line:

Value Maturity isn’t just about selling a business—it’s about building a transferable company that runs efficiently, creates options, and maximizes wealth. Whether you plan to exit in one year or ten, value maturity begins today.

 

SOURCE: The Exit Planning Institute

Global Client Survey

We’re inviting you to take part in a quick, anonymous client survey. Your feedback helps us fine-tune our process, elevate your experience, and ensure we’re delivering what matters most to you. This isn’t just about checking a box—it’s about shaping the future of how we serve you. Your voice helps guide our next steps. We’re listening. We’re learning. And we’re grateful for your trust.

 

Take Our Survey Now (click here)

---

Disclosures

1. Wealth Mechanics™ is a registered trademark of Cestia Wealth Management. Unauthorized use of the trademark, including but not limited to commercial use, reproduction, or imitation without explicit written permission from Cestia Wealth Management, is strictly prohibited.
2. Market commentary provided by NewEdge Advisors
3. Charts concerning market data are provided by Exhibit A.
4. Guides and other downloadable firm material respective to financial planning processes and data are provided and powered by fpPathfinder.
5. Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. Securities offered through NewEdge Securities, LLC. Member FINRA/SIPC. NewEdge Advisors, LLC and NewEdge Securities, LLC are wholly owned subsidiaries of NewEdge Capital Group, LLC.
6. Cestia Wealth Management is not a legal tax professional. We offer tax gap analysis for clients who desire to have a comprehensive financial plan, which requires in-depth tax strategy and planning as a distinct part of the overall customized solution. Please consult your tax professional on all matters addressed in this report.
7. Information about annuities are not to be considered a recommendation. The information provided should not considered a recommendation to purchase or sell any particular security.
8. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.