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August Market Commentary: Too Late, Again?
After weeks of Olympic-themed press reports about the Fed “sticking the (soft) landing” and safely guiding the economy to a place where inflation is coming down and growth is holding off recession, one very bad labor report flipped the script. The threat of recession is not just in the future, it may be here now, according to some reports. The VIX index, a measure of stock market volatility, spiked above 50 on the first market day after the non-farm payroll numbers came out, a level last seen in March of 2020.
Did Powell wait too long to begin cutting rates? Is a recession inevitable? What is the Sahm rule? There are a lot of points of view on the topic.
Did Powell wait too long to begin cutting rates? Is a recession inevitable? What is the Sahm rule? There are a lot of points of view on the topic.
Inherited IRAs: It’s Complicated
Several changes resulting from the SECURE Act and SECURE 2.0 Act in recent years have made inheriting an IRA more complicated. The estate planning and tax advantages conferred by the stretch IRA have been largely discontinued. New strategies and different tax planning are now required.
The stretch IRA was named because the tax code before the SECURE Act allowed account holders to name younger relatives, including even great-grandchildren, as the beneficiary of an IRA. The longer lifespans of these young beneficiaries meant that required minimum distributions (RMDs) could be very small. Taxes would also be minimal, and the bulk of the IRA could continue to grow on a tax-deferred basis.
Gen Z Is Getting an Early Start on Financial Independence
Gen Z, the generation born between 1997 and 2012, is making its presence – and preferences – known. As of 2023, The U.S. Census Bureau reports that about 20% of the U.S. population falls into this cohort. According to a 2023 trend forecast report by Glassdoor, It is expected that in 2024, the percentage of the U.S. workforce comprising its youngest workers (Gen Z) will outnumber its oldest workers (Boomers).
The older members of this generation are in their late twenties. They are becoming established in their careers, against a global and economic backdrop unlike any generations before them. They have faced the highest levels of inflation and interest rates seen in decades, at a point when they are at the most vulnerable stage of their careers and financial lives.
The older members of this generation are in their late twenties. They are becoming established in their careers, against a global and economic backdrop unlike any generations before them. They have faced the highest levels of inflation and interest rates seen in decades, at a point when they are at the most vulnerable stage of their careers and financial lives.
Fixer-Upper or Money Pit?
The combination of a strong housing market, high mortgage rates, and meager inventory is forcing some would-be homebuyers to settle for less in the home or neighborhood they prefer. But others are approaching the homebuying process with an entirely different mindset. Buying a home in less than move-in condition, or one that requires significant work, can result in a bargain. But there are very distinct trade-offs, and there’s a fair amount of risk involved. What seems like a way to save money or get a good deal could be very expensive in the long run. It’s not just money at stake – time, relationships, and mental health can all suffer from a long renovation process.
Entire streaming channels and social media feeds are full of DIYers doing everything from undertaking trash-outs in hazmat suits to uncovering hidden rooms and dealing with decades-old vegetation. Along the way, they seem to find historic fireplaces, vintage tiles, and all kinds of amazing treasures.
Understanding Self-Directed IRAs
The speed of change in the investment markets seems to be accelerating, and for many investors, traditional investments may not provide the risk-adjusted return they seek.
Investors who access the markets through a taxable brokerage account often may have access to investments outside traditional stocks and bonds. These alternatives such as real estate, private equity, private credit, infrastructure, and other asset classes can help to diversify a portfolio.
But what about retirement investing? Alternative asset classes may not be available through an IRA account. A self-directed IRA (SDIRA) may be the solution.
July Market Commentary A Disinflationary Trend Re-emerges
At the FOMC meeting in mid-June, the story was the drop in expectations for multiple rate cuts in 2024 to potentially only one rate cut later in the year. However, positive data around inflation and labor markets appears to have counteracted market pessimism about the cautious nature of the Fed’s messaging.
As we hit the mid-point of the year, the economy appears to have been able to sustain a soft landing so far. With a Fed still undecided on rate cuts and waiting on data, as well as continued heightened geopolitical risk and an election season that is already dramatic, what is in store for the balance of 2024?
As we hit the mid-point of the year, the economy appears to have been able to sustain a soft landing so far. With a Fed still undecided on rate cuts and waiting on data, as well as continued heightened geopolitical risk and an election season that is already dramatic, what is in store for the balance of 2024?
June Market Commentary A Fragile Balance at the Mid-Point of the Year
May saw a return to more confidence in the economy and the markets. The Fed met early in the month, and Chairman Powell managed to curb market pessimism by stating that it was unlikely that the Fed’s next move would be a rate hike.
The reversal of the upward mini-trend of inflation in February and March, as well as other slowing economic data released throughout the month, provided a backdrop that the economy was cooling and inflation would begin to trend down again.
The reversal of the upward mini-trend of inflation in February and March, as well as other slowing economic data released throughout the month, provided a backdrop that the economy was cooling and inflation would begin to trend down again.
Growing Wealth Means Managing Spending, Saving … and Debt
Getting serious about reaching your financial goals means keeping a handle on what you’re spending, so you can maximize what you’re saving.
Budgeting focuses on your outflows and can help you ensure you are meeting your obligations and not overspending. Building savings into your budget keeps your savings goals front and center, so you can consistently increase the amount you save.
Budgeting focuses on your outflows and can help you ensure you are meeting your obligations and not overspending. Building savings into your budget keeps your savings goals front and center, so you can consistently increase the amount you save.
Marriage and Money: A Newlywed’s Guide to Joint Finances
Getting married is a milestone unlike any other. It signifies partnership and shared responsibility, now and in the years ahead. Joint decision-making on everything from dinner plans to where you will live, and what your family will look like in the years to come, is at the core of a successful marriage.
Money, budgeting for your life now, and financial planning for the future are a big part of your new shared life. Marriage brings many advantages, but it also requires you to decide how to spend, save, and invest during your life together.
Money, budgeting for your life now, and financial planning for the future are a big part of your new shared life. Marriage brings many advantages, but it also requires you to decide how to spend, save, and invest during your life together.
May Market Commentary: A New POV Takes Hold
April had it all, and most of it was not so great. Inflation is proving sticky again, which forced the market and the Fed to reassess the timing of interest rate cuts.
Conflicts intensified in Ukraine and the Middle East, and in the U.S., protests on college campuses hit a crisis point as police were called in to clear building takeovers and encampments. The protests recall the summer of 2020 and may have an outsize impact on policy in an election year.
Although equity markets struggled, the S&P 500 remained over the 5,000 level, usually a key psychological as well as market threshold.
Conflicts intensified in Ukraine and the Middle East, and in the U.S., protests on college campuses hit a crisis point as police were called in to clear building takeovers and encampments. The protests recall the summer of 2020 and may have an outsize impact on policy in an election year.
Although equity markets struggled, the S&P 500 remained over the 5,000 level, usually a key psychological as well as market threshold.
Keeping Seniors Safe From Financial Scams
The “Sandwich Generation” are Gen-Xers and older Millennials who are raising children while also helping their Boomer parents navigate aging.
There’s a lot to think about, plan for, and organize, but one of the things that can be overlooked is keeping them safe from financial pitfalls. This older generation has embraced technology in amazing ways, but the combination of incredibly rapidly changing technology and a desire to remain independent and not be a burden on their children can result in increased financial vulnerability.
There’s a lot to think about, plan for, and organize, but one of the things that can be overlooked is keeping them safe from financial pitfalls. This older generation has embraced technology in amazing ways, but the combination of incredibly rapidly changing technology and a desire to remain independent and not be a burden on their children can result in increased financial vulnerability.
Required Minimum Distribution Rules Are Updated – Again
Similar to the limits placed on contributions to retirement savings plans when you are working, the IRS also has regulations for how to take money out.
Because contributions are made with pre-tax dollars, the government doesn’t get their bite until you withdraw funds in retirement. Required minimum distributions (RMDs) were created to ensure that the funds are withdrawn, so the taxes can be paid.
Because contributions are made with pre-tax dollars, the government doesn’t get their bite until you withdraw funds in retirement. Required minimum distributions (RMDs) were created to ensure that the funds are withdrawn, so the taxes can be paid.
April Market Commentary What a Long, Strange Trip It’s Been
In his comments at the press conference at the March FOMC meeting, he affirmed that we will see rate cuts this year, even if the timing is, as of now, uncertain. If rates do fall, it will mark the end of a monetary policy tightening regime that started out weird as Powell delayed rate increases in the face of spiking inflation, and then quickly became almost surreal as the Fed raised rates higher and quicker than has been seen in decades. All of this has been accompanied by intense speculation around rates, which led to a lot of market volatility.
529 Plans and SECURE 2.0: More Flexibility
The cost of college has skyrocketed, and it raises the question of whether the cost/benefit assumptions of a college education should be revisited. The Federal Reserve did just that, with a web feature called “The Labor Market for Recent College Graduates.” This is an interactive, consistently updated series of charts that look at 20 years of economic data for unemployment, underemployment, and wages and outcomes by major.
March Market Commentary Perspective on the Economy: Telescope, Microscope, or Kaleidoscope?
February Recap and March Outlook
Depending on your focus, the story the recent economic data is telling may be different. But one point of view has been remarkably consistent this year: the market does not seem to care about any of it.
February saw the S&P 500’s first break through the 5,000 ceiling, and there were eight new closing highs during the month.
Depending on your focus, the story the recent economic data is telling may be different. But one point of view has been remarkably consistent this year: the market does not seem to care about any of it.
February saw the S&P 500’s first break through the 5,000 ceiling, and there were eight new closing highs during the month.
Women and the Changing Financial Landscape
Wealth transfers from one generation to the next don’t usually make the news, but everything about the baby boomers has always been newsworthy because of the sheer size of this mid-20th-century generation.
The unique circumstances they were born into included societal change and financial opportunities to build wealth through better jobs, pensions, a burgeoning stock market, and widespread property ownership. The result is an unprecedented amount of money changing hands. McKinsey and Co. put the amount at $30 trillion by 2030. McKinsey goes on to say that much of it could end up being controlled by women, due in part to longer life spans.
The unique circumstances they were born into included societal change and financial opportunities to build wealth through better jobs, pensions, a burgeoning stock market, and widespread property ownership. The result is an unprecedented amount of money changing hands. McKinsey and Co. put the amount at $30 trillion by 2030. McKinsey goes on to say that much of it could end up being controlled by women, due in part to longer life spans.
February Market Commentary: Will A Booming Economy Stay Powell’s Hand?
January Recap and February Outlook
As goes January, so goes the year.
That old stock market canard has a double-edged meaning this year, as the stock market as measured by the S&P came in strongly positive. But the path to getting there included dashed expectations for lower rates in March and a slew of data that would seem to indicate a booming economy but with some cracks beginning to show.
As goes January, so goes the year.
That old stock market canard has a double-edged meaning this year, as the stock market as measured by the S&P came in strongly positive. But the path to getting there included dashed expectations for lower rates in March and a slew of data that would seem to indicate a booming economy but with some cracks beginning to show.
Managing Your Tax Risk – with Diversification
Managing the volatility of investment assets by creating a diversified portfolio is one of the basic principles of investing. Dividing up your investments by asset classes can help you create the income stream you need, once you become dependent on your savings and investments in retirement.
Is Your Home Part of Your Retirement Plan?
Retirement planning is all about making sure you have enough assets, and that they are handled prudently, so they can provide you with the income you want throughout your retirement.
But what about the asset you live in? Factoring your home into your retirement planning has an impact on your lifestyle choices, your available income, your late-stage retirement, and even your estate plan.
But what about the asset you live in? Factoring your home into your retirement planning has an impact on your lifestyle choices, your available income, your late-stage retirement, and even your estate plan.
January Market Commentary: Is Rate Relief In Sight?
December Recap and January Outlook. The drama around the timing of the Federal Reserve’s first cuts to the key short-term interest rate continued in last few weeks of the old year and into the first week of the new year.
December Market Commentary Rates: Lower and Sooner?
After a year in which Federal Reserve Chairman Jerome Powell managed to hold everyone’s attention – again – here we are waiting for the outcome of the last FOMC meeting of the year. A few weeks ago, with the narrative of rates being higher for longer taking firm hold, the upcoming December meeting would likely have been less of an attention-grabbing event. But that was last month.
What’s New With the FAFSA?
It’s been a multi-year process, but the FAFSA Simplification Act (FSA) passed back in 2021 is finally showing results, and the new FAFSA has been promised to be rolled out online by December 31, 2023.
Even with a new, simpler version available, some families choose not to submit a FAFSA as part of their plan for paying for college.
Planning for Taxes 2024: Inflation Edition
The inflation rate has come down from the forty-year highs we saw in 2022, but it is still elevated. While we are seeing relief on prices, there are some positive impacts of higher inflation.
The IRS sets tax brackets, tax deductions, 401(k), and other tax-efficient retirement savings account contribution amounts by pegging them to inflation.
The IRS sets tax brackets, tax deductions, 401(k), and other tax-efficient retirement savings account contribution amounts by pegging them to inflation.
November Market Commentary Powell on Rate Cuts: Nope.
The Federal Reserve’s November meeting went as the market expected: no change in rates. What wasn’t expected was the October and early November rollercoaster of bond yields. And by rollercoaster, think Kingda Ka.
The ten-year U.S. Treasury yield was briefly above 5.00% during the month. The last time it hit that level was July 2007.
The ten-year U.S. Treasury yield was briefly above 5.00% during the month. The last time it hit that level was July 2007.
Are You Confident About Your Financial Future?
Northwestern Mutual’s annual Planning and Progress Study is out, and the results this year are very interesting. The study examines U.S. adults by generation to understand attitudes and behaviors toward money, financial decision-making, and financial security.
Given the volatility of the last year, the results reflect more uncertainty. But they also indicate that while each generation has different goals, needs, and attitudes towards money, getting financial advice from a trusted resource is a constant.
Given the volatility of the last year, the results reflect more uncertainty. But they also indicate that while each generation has different goals, needs, and attitudes towards money, getting financial advice from a trusted resource is a constant.
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