August 2026 Newsletter

Dear Valued Clients,

As we step into August, we find ourselves navigating a market environment that continues to test traditional income strategies. The search for reliable yield—without triggering immediate tax inefficiency—remains a top priority for many of you, and therefor us. This month, we want to focus on structural solutions for income and highlight some industry-leading developments that can impact your long-term planning and porftfolio management

Market Commentary: A New Income Strategy‍

.As we discussed in our July update, our philosophy of "Disciplined Agility" remains paramount. We are currently seeing sustained volatility, which, while challenging, creates unique opportunities for specific income-generating strategies. For many high-net-worth investors, the challenge has been finding S&P 500-level equity exposure that generates consistent income without the heavy tax drag often associated with ordinary dividends or traditional covered call distributions. We have been conducting research on newer, actively managed ETF structures, and have recently added the Calamos Autocallable Income ETF (CAIE) to the equity portion of our portfolio. The distribution yield in this fund as of 06/30/2026 is 14.23%. While that yield is impressive, what we like most about this ETF structure is the majority of the income is classified as "return of capital" rather than ordinary income. This may be ideal for taxable accounts with 1099 reporting.

Industry Perspectives: AI and the Future of Advice

‍We continue to monitor the intersection of technology and wealth management. Recently, Mark Casady, a leader in our industry, shared insights on the Exceptional Advisor Podcast regarding the actual impact of AI in wealth management. His key takeaway aligns with our own: while AI is an incredible tool for data synthesis and streamlining processes, it cannot replace the complex, human-centric judgment required for estate, philanthropic, and multigenerational wealth transfer planning. We remain committed to leveraging technology to improve your experience while keeping our focus on the high-level strategy that matters most to your family.

August Planning Checklist

As we move through the third quarter, we recommend scheduling a brief touch-base if you would like to:

• Review Investments and Cash Flow: Evaluate your current income requirements and determine if your strategy needs adjustments to improve tax efficiency.
• Beneficiary Review: Make sure your beneficiary designations are still accurate and match your current estate planning
• Estate Review: With the current tax landscape, a mid-year check on estate planning objectives ensures you are positioned correctly before year-end.

Our commitment remains focused on delivering research-driven insights to help you navigate these markets. As always, please reach out to us directly if you wish to discuss your specific portfolio or any of the items covered in this update.

Sincerely,

Stephen Heitzmann

Bauer Wealth Management, Inc

‍Office: 719-575-9000

Web: www.bauerheitzmann.com

Address: 5755 Mark Dabling Blvd, Suite 245, Colorado Springs, CO 80919

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