If you are an avid reader of our blogs (if avid readers of our blogs even exist!), you may recognize this blog’s title from a previous post years ago. For those who aren’t aware, it refers to the song Changes by David Bowie. One of my favorite lyrics in that song is “turn and face the strange,” which I think is an appropriate commentary on the current state of affairs of the markets in general. Here are just a few of the strange statistics:


  • Year to date 10-year treasury bond total return = -19.5% – that’s on pace for its worst year in history (credit: @CharlieBilello)
  • The average 30-year mortgage rate is 6.94% vs. 3.05% this time last year
  • The current inflation rate is 8.2% as of September 2022
  • Year-to-date equity (stock) market returns –
    • The Dow Jones (which annoys me as an index in general – it’s 30 companies!) = -12.56% (bolstered by energy)
    • The S&P 500 (a better measure than the Dow) = -19.28%
    • The Nasdaq = -28.72% (hurt by technology companies)


It goes without saying that this has been a historically tough year for investment managers to make sense of and navigate. The persistently high inflation numbers continue to garner all of the headlines and will be the main signal for the markets to recover (when the inflation rate comes down).


In a search for a silver lining in the high inflation numbers, I came across a forgotten rule change that occurred way back in 1985 (after an even higher inflationary period). Individual federal tax brackets and other limits are automatically indexed for inflation.


From Janet Novack at Forbes, “The point of the adjustments is to make sure that people aren’t artificially pushed into higher tax brackets by inflation. Those whose income hasn’t increased with inflation could end up paying taxes at lower rates in 2023 than in 2022—in other words, they could get a tax cut that makes up for some of what they’ve lost. The well-paid can also give themselves a 2023 tax cut by increasing the amount they contribute pre-tax to retirement accounts. The maximum 401(k) pre-tax employee contribution for younger workers will rise to $22,500, while the amount those 50 and older can shelter will jump to $30,000.”


Married Individuals Filing Joint Returns and Surviving Spouses (Joint) Tax Rates 2023

If Taxable Income IsThe Tax Due Is
0 – $22,00010% of taxable income
$22,000 – $89,450$2,200 + 12% of the amount over $22,000
$89,450 – $190,750$10,294 + 22% of the amount over $89,450
$190,750 – $364,200$32,580 + 24% of the amount over $190,750
$364,200 – $462,500$74,208 + 32% of the amount over $364,200
$462,500 – $693,750$105,664 + 35% of the amount over $462,500
over $693,750$186,601.50 + 37% of the amount over $693,750

Table: By: Gabriela A. Lopez Gomes  Source: Internal Revenue Service  Get the data  Created with Datawrapper



This is certainly not a comprehensive list of things that are affected by inflation, but it is worth taking a look at your particular tax brackets as well as how much you are contributing to your workplace retirement accounts and/or your own IRAs. While these adjustments will do little to offset our investment returns for this year, they are still worth paying attention to.


Speaking of turning and facing the strange, my family now has a teenager in our midst! All three of our kids had birthdays over the past month, and our oldest is now 13. Thanks to our great friend Jen Dowell for taking our most recent company pictures (which also serve as great Christmas cards!).





And, you’re welcome for putting the song Changes in your head. At least it’s a good one!


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