Skip to main content

Author: Minich MacGregor Wealth Management

Q4 Financial Checklist

Written by Minich MacGregor Wealth Management on . Posted in Posts.

As we enter the fourth and final quarter of the year, it’s time once again to talk about checklists. Because if there’s any time to use them, it’s now!  After all, …   

He’s makin’ a list
and checkin’ it twice
He’s gonna find out if you’re naughty or nice.
“Santa Claus is Comin’ to Town” — J. Fred Coots & Haven Gillespie

Now, we apologize for putting Christmas music into your head when we’re still a couple of months away.  But we do it to make a point: Checklists are so important, even Santa Claus uses them!  And if they’re good enough for Kris Kringle, they’re good enough for us. 

As the year winds down, there are many things we can do to strengthen our finances and move closer to our long-term goals.  So, to help you close out 2024 with a flourish and build momentum to next year, we’ve created a short “Q4 Financial Checklist.”  It contains five tasks to accomplish before the end of the year. 

Now, don’t worry!  None of these items are difficult.  One or two may not even apply to you; others you may have done already.  But if you put them all together, we think you’ll find they will go a long way to making your finances — and your holidays — just a little merrier and brighter.

As always, please let us know if you need help or have questions about any of these.  In the meantime, we wish you a great fourth quarter!

Q4 Financial Checklist for 2024
Tip: Print this out and stick it on the fridge or somewhere else it will be seen.  That way, you can check off the items one by one as you complete them!
– – –  – – –  – – –  – – –  – – –
  •  Budget your holiday expenses
The upcoming holiday season is a great boost for morale as the days get shorter and the weather gets colder.  But they can also be a huge drain on our wallets. In fact, the average consumer spends $1,650 to celebrate the winter holidays!1 From presents to food to decorations, holiday expenses can pile up quickly, eat into savings, and even cause people to take on more debt. But all of that can be avoided with just a little planning. 
Take time to budget exactly how much you want to spend on each holiday by determining what your needs will be well in advance. Begin by looking at last year’s spending to figure out if there are ways to save or cut back.  Next, start determining how many people are coming to Thanksgiving dinner. And be sure to check that one box in the garage before buying yet another set of holiday lights. You get the idea. Then, decide exactly how you’ll pay for each holiday expense. Will you pull money from savings? Use a credit card? From there, you can set a specific spending limit for each expense, keeping costs down while also spending more on the things you truly care about around the holidays. 
  • Review your insurance needs
November is Open Enrollment season in the U.S.  That means it’s a good time to review your current insurance coverage and examine if you have any gaps in coverage that need to be filled or if there are less expensive alternatives out there.  For those nearing retirement, this is also an opportunity to look at additional types of coverage beyond standard health insurance, like Disability and Long-Term Care Insurance. 
  • Check for opportunities to harvest your tax losses
As we approach the end of the year, it’s wise to look back and see all the ups and downs we experienced in the markets this year — and the ups and downs you’ve probably experienced in your portfolio. As you know, when you sell an investment that has increased in value, you must pay taxes on your capital gains. But when you sell an investment that has decreased, you can declare a capital loss. A loss can often be used to offset the taxes you pay on your capital gains, thus reducing your overall tax bill. This is known as tax-loss harvesting, and when done accurately and consistently, it can increase your after-tax returns by 1%.2 Over time, this can make a big difference! So, as the year winds down, take time to review your outside investments for opportunities to harvest your tax losses. As always, let us know if you need any help.  
  • Consider your charitable contributions
These days, more and more people are starting to think of investing not just as a way to help themselves, but to help their communities.  That’s especially true around the holiday season.  But charity isn’t just about giving back.  It can bring tax benefits, too!  In fact, there are several charitable gifting strategies that investors can take advantage of.  But it’s important to start thinking about this sooner rather than later if you want to be savvy about it.  A few things for you to consider:
1) Have you maxed out your charitable donations for the year?
2) Are you planning on contributing cash, stock, or other assets? 
3) Can you take advantage of a Qualified Charitable Distribution (QCD)? 
If you have any questions about this or need help game-planning your own charitable contributions, please let us know. We would be happy to help. 
  • Review this year’s goals and plan for next year’s
It’s crazy to think that we’re only one quarter away from a new calendar year! Because 2025 is just around the corner, now is the time to review how you’ve progressed on your goals this year so you can accurately plan for what needs to be done next year. What goals are you behind on at that need to be reprioritized? What new goals do you have? By doing this now, you can finish 2024 strong and start 2025 hot out of the gate.   
 

Scrollable

A Long Expected Rate Cut

Written by Minich MacGregor Wealth Management on . Posted in News, Posts.

In just about every scary movie, there’s always that one scene near the end where the hero thinks they’ve escaped, or that the monster is dead — only for there to be one more “jump scare” in store. 

This is the scenario currently facing the Federal Reserve. 

Over the last two years, the Fed has been trying to do the seemingly impossible: Cool down consumer prices without starting a recession. To do that, the Fed turned to the only tool available to them: Interest rate hikes. Rates began gradually rising in early 2022 and had been at about 5.33% since August of last year.1 That was the highest they’d been in 23 years.1 

Higher interest rates serve as a kind of flame retardant on the overall economy because they make it more expensive for consumers and businesses to borrow money. This, in turn, reduces how much money people spend. Since a consumer spending is a corporation’s income, lower spending forces companies to lower their prices to attract new business. When this happens across the board, inflation will cool to a more manageable level.

This approach works, but the problem is that it’s applying a blunt instrument to a delicate situation. Since 1955, virtually every period of major rate hikes has led to a downturn.1  If prices cool down too much, too fast, businesses stop hiring. Next, they start laying off workers to make up for the decrease in revenue. The economy contracts, and we have a recession. Some of these recessions were very short, but every downturn is painful in its own way. So, bringing down inflation without bringing down the economy? History suggests it can’t be done. 

But the data we’re seeing now suggests that this time, the Fed may have just done it. 

Since the rate hikes began, inflation has fallen from a high of 9.1% in 2022 to 2.5% this past August.2 That’s extremely close to the Fed’s stated goal of a 2% rate of inflation. Meanwhile, the economy has so far avoided a recession. Our nation’s GDP grew by approximately 1.4% in the first quarter of this year, and 3% in the second.3

But in a scary movie, the characters who gloat or celebrate too soon…they never make it out, do they? It’s the ones who keep their heads and don’t get carried away who make it to the credits. 

So, the Fed can’t celebrate yet. Just in case the monster isn’t really dead. 

You see, while inflation has been going down this year, something else has been going up: Unemployment. After falling to a near-historic low of 3.4% in April 2023, the jobless rate has been slowly but consistently climbing. (The most recent jobs report, in August, showed unemployment was at 4.2%.)4 Now, this isn’t a large number. In historical context, it’s quite low. But what matters is the trend, and the trend has undoubtedly been going up. 

Because of these twin factors – declining inflation, rising unemployment — we’ve known for a while that the Fed must begin cutting interest rates. The question was when, and by how much. Well, now we know the answer: September 18, and 0.50%.5 It’s the first cut in over four years, and it brings rates down to a range of 4.75-5%. 

Investors have been waiting expectantly for this for pretty much the entire year. It’s one of the main reasons the S&P 500 has done so well in 2024. So, the move itself wasn’t a surprise. What was a little surprising, though, was that the Fed cut rates by 0.50%. That may not sound impressive, but it’s larger than the 0.25% cut many analysts expected. And it illustrates the new challenge our country faces: How do you cut rates in a way that prevents runaway unemployment without letting inflation climb again?

In other words, how do we ensure the monster’s truly dead? How do we avoid another jump scare?

You see, if the Fed cuts rates by too much, too fast, it could prompt a surge in borrowing and spending. That could overheat the economy and cause prices to spike again, undoing all the progress we’ve made. On the other hand, if the Fed cuts rates by too little, too slowly, it may be too little, too late for the labor market. Unemployment could turn into a runaway train, drawing the economy behind it. The war on inflation would still be won…but at what cost? 

As investors, one of the issues we face is that there’s no reliable way to know exactly what will happen. Right now, the economy appears to contain more positive signs than negative, and this new rate cut is a very welcome development. However, it’s worth remembering that rises in unemployment often precede a recession. Furthermore, many past recessions began just after the Fed began cutting rates, not while they were hiking them. When the Fed announced the rate cut on September 18, they also suggested that further, smaller cuts are in store this year. While the markets have embraced the news, and may well continue to rise, we must be mentally prepared for bouts of volatility as investors parse every bit of data for signs of either rebounding inflation or runaway unemployment. 

Fortunately, we are set up to respond appropriately to any signs of volatility. Moving forward, as the Fed begins cutting interest rates at last, we’ll continue to analyze how both the overall market – and the various sectors within the market – are trending. As you know, we have put in place a series of rules that determine at what point in a trend we decide to buy, and when we decide to sell. This enables us to switch between offense and defense at any time. If our technical signals indicate it’s time to play offense and seize future opportunities or play defense to protect your gains, we can do so without waiting to see what the overall markets will do.

So, as we move into October, we want you to focus on what really matters.  The fall colors.  Pumpkin lattes and pumpkin carving.  Go watch a real scary movie if that’s your thing. 

Are you doing everything you can to help your story contain the words, “Happily ever after”?

Let us help you.  For our clients, we monitor the markets, track the data, and adapt as necessary so they need never worry about jump scares. 

As always, please let us know if you have any questions or concerns. Have a great week!   

SOURCES
1 “Federal Funds Effective Rate,” Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/FEDFUNDS
2 “The Consumer Price Index rose 2.5 percent over the past year,” U.S. Bureau of Labor Statistics, https://www.bls.gov/opub/ted/2024/the-consumer-price-index-rose-2-5-percent-over-the-past-year.htm
3 “Gross Domestic Product (Second Estimate), Second Quarter 2024,” U.S. Bureau of Economic Analysis, https://www.bea.gov/news/2024/gross-domestic-product-second-estimate-corporate-profits-preliminary-estimate-second
4 “The Employment Situation — August 2024,” U.S. Bureau of Labor Statistics, https://www.bls.gov/news.release/pdf/empsit.pdf
5 “Federal Reserve issues FOMC statement,” Federal Reserve Board of Governors, https://www.federalreserve.gov/newsevents/pressreleases/monetary20240918a.htm

Join our newsletter

Written by Minich MacGregor Wealth Management on . Posted in Newsletter, Posts.

We send out our newsletter email monthly. We encourage you to join our newsletter to ensure you never miss an edition.

Please, subscribe now if you’re not receiving our newsletter in your inbox.

The latest issue of our newsletter, The Retirement Road, is now available! It is the 4th in a series of editions that look at the question, “I’m retired…now what?”  


The September edition covers the following topics:

Market recap and outlook for August/September 2024.  
Shifting Your Asset Allocation
Setting Your Withdrawal Strategy
The Importance of Keeping Active

Click to view and subscribe to our
most recent monthly newsletter!
Labor Day Scrabble tiles image

Labor Day – The Eight Hour Work Day

Written by Minich MacGregor Wealth Management on . Posted in Articles, News, Posts.

Happy Labor Day!

Most of us associate Labor Day with BBQs, parades, and weekend camping trips. But the more we learn about the holiday, the more we realize that it’s really a celebration of things we take for granted yet couldn’t imagine living without. And it’s a commemoration of the men and women who risked their lives, liberty, and reputations to secure them for us.

For instance, take the eight-hour workday, the current standard in the United States.1

Everyone has different careers and work schedules. Some are incredibly demanding and long. Others are on swing shifts. But for many Americans, the day looks like this: get up, eat breakfast, and see children off to school. Go to work, break for lunch, work through the afternoon, and then head home in time for dinner. It’s a simple thing, this schedule. But it’s a schedule that enables us to keep our bodies fueled, hydrated, and rested. A schedule that allows for time to attend our loved ones’ school plays and soccer games. A schedule that affords more time for recreation, relaxation, and self-improvement.

But it wasn’t always this way.

The year was 1835. The location: Philadelphia. Throughout this enormous city – indeed all throughout the country – workers knew only one sort of workday.

They called it “sun to sun.”

The moment the sun crested over the horizon each day; tens of thousands of laborers were already at work. Shoveling coal. Laying bricks. Painting houses, driving carts, unloading boats, and a hundred other tasks. They would work, often under hazardous conditions and for little pay until the sun finally went down. During the summer, this could mean up to 15 hours per day, leaving them no opportunity to see their families or do much of anything. The winter workday, in contrast, was comparatively short – at around 9 hours per day – but it also meant an enormous drop in pay or routine unemployment. Neither situation was acceptable for someone trying to feed their family. To make matters worse, the toil of a sun-to-sun day led to a laundry list of physical ailments. Workers routinely suffered “swollen ankles, nervous headaches, lung disease, stomach problems,” and much, much more.

Then, one day, a letter arrived from Boston. The city that helped launch the American Revolution was requesting help from the city that had declared American Independence. Laborers there – primarily carpenters, but soon masons and stonecutters, too – were done with this unfair system. They were demanding their rights as workers, citizens, and human beings for something better.

We have been too long subjected to the odious, cruel, unjust and tyrannical system which compels the operative mechanic to exhaust his physical and mental powers. We have rights and duties to perform as American citizens and members of our society, which forbid us to dispose of more than ten hours for a day’s work.2

Essentially, Boston workers were calling for a citywide guarantee of a 10-hour workday regardless of the season. And they were asking laborers in other cities to call for the same thing.

The letter quickly gained traction in Philadelphia, circulating from worker to worker with astonishing speed. (These days, we’d call it “going viral.”) For them, the demands in the letter were not just about having more time off. They were about ensuring the means to become better citizens and more productive members of society. As the letter from Boston had proclaimed — and as the Philadelphia workers then repeated — “We have taken a firm and decided stand to obtain the acknowledgement of those rights to enable us to perform our duties to God, our country, and ourselves.”3 So, in May, three hundred coal workers decided to go on strike. Together, they marched on the coal wharves and announced that no coal would be unloaded until a 10-hour workday was established.

This was not an easy decision. For any worker to go on strike was to risk not just their current job, but their entire future. Livelihoods and reputations could be ruined forever if the strike was not successful – and up to that point in American history, few strikes had been. In many cases, strikes could lead to injuries and even death. Nevertheless, the coal workers were quickly joined by almost every other laborer and tradesman in the city. The words in the Boston letter became a topic discussion in every tavern and meeting house. Altogether, over twenty thousand workers began marching around the city, carrying banners that said, “From 6 to 6, ten hours work and two hours for meals.”

The movement was so organized, united, and swift that within three weeks, the old sun-to-sun system was out. The ten-hour day became standard throughout the city. In addition, many workers also gained an increase in their wages. But the movement didn’t stop there. The news quickly spread to every corner of the country, and by the end of the year, workers from New England to the Carolinas had conquered the old system. A system that “left no time for mental cultivation and kept people ignorant by keeping them always at work.”3 A system that was “destructive of social happiness and degrading to the name of freemen.”3 In its place was a new system. One that had “broken [people’s] shackles, loosened their chains, and made them free from the galling yoke of excessive labor.” 3

The rights won in 1835 laid the foundation for the rights we enjoy today. An eight-hour workday. The right to take vacations or medical leave. To care for our bodies properly. To see our families. To learn, live, and worship however we see fit. Rights we cannot live without…and which were secured for us by people who simply wanted a better future for themselves and their children.

And that, to us, is what this holiday is all about. We wish you a happy Labor Day!

Open Suitcase image

Q2 Market Recap

Written by Minich MacGregor Wealth Management on . Posted in Posts.

One of our favorite metaphors for investing is that it’s like packing a suitcase.

Let’s say you’re preparing for a summer trip to the beach. What would you put in your suitcase?  A swimsuit, probably. Sandals. Sunscreen. Plenty of shorts and t-shirts. Sunglasses and a hat. Then, when you take a step back, you realize you still have space for a few more items. What do you choose?  More beach gear?  Makes sense – after all, it’s the middle of summer, and your destination is famous for being the perfect place to work on a tan.

Or would you pack a pair of pants and a long-sleeve shirt because you guess it might get cold at night?  Would you tuck in an umbrella and fold up a poncho…just in case it rains?

In our experience, some investors are like the tourist who packs for one kind of weather and one type of activity. To illustrate what we mean, let’s recap how the markets performed last quarter.

When 2024 began, inflation was near its lowest point in two years. As a result, many investors figured prices would continue to drop, and the Federal Reserve would lower interest rates sooner rather than later. (And possibly even several times throughout the year.)  In other words, they “banked” on warm weather and sunny skies, then packed their suitcase accordingly.

Well, there’s nothing more frustrating than when unexpected rain ruins fun in the sun. Instead of falling, inflation ticked up through Q1, rising from 3.1% in January to 3.5% in March.1

As a result, when the second quarter began, the mood on Wall Street had shifted substantially. Suddenly, there was no more talk of the Fed cutting rates early and often. Instead, investors began to wonder if the Fed would cut rates at all in 2024. Some economists even speculated that the Fed might raise rates again. So, investors re-opened their suitcases. Out went the swimwear; in went the coats and gloves. It’s no surprise, then, that the S&P 500 dropped 4.2% in April.2

What these investors didn’t realize was that the sun was already starting to peek out from behind the clouds.

Fast-forward to the beginning of July. Looking back, we now know that inflation dropped to 3.4% in April, 3.3% in May, and a surprising 3% in June.1

A big reason for this slide is due to gas prices, which fell by 3.6% in May and 3.8% in June.3 (Energy prices in general fell by 2% in both months.3)  This helped negate the fact that food and housing prices – two of the most stubborn and volatile drivers of inflation actually went up slightly in June.

As you can imagine, the talk has turned once again…to whether the Fed will cut rates sometime in the summer. This renewed optimism, combined with another factor that we’ll get to, helped lift the markets out of the doldrums. For the quarter, the S&P 500 gained 3.9%, while the Nasdaq rose 8.3%.4  

A 3% inflation rate means that consumer prices are up only 3% compared to this same time last year, not that prices have fallen lower.  Inflation is the rate at which prices are increasing.  A lower inflation rate means that prices are rising more slowly; deflation is when prices actually drop…and it’s usually the sign of an unhealthy economy.

So, what does this mean going forward?  Is it time to repack the suitcase?

The answer is no – because we believe we packed it correctly the first time.

Any savvy traveler knows that when you pack a suitcase, you don’t just factor in what you think will happen. You pack for what could happen. If your goal is to hit the beach, you pack a swimsuit…but since you know it could rain, you also pack a poncho. Your plan is to feel sand between your toes, but if the beach is too crowded, you’ll go for a hike instead…which is why you pack shoes as well as sandals.

The way inflation has gone (up and down) and the way the markets have responded (ditto) shows exactly why investing isn’t about predicting what will happen. It’s about planning for what may happen. You pack a suitcase in a way that ensures your vacation will be fun no matter what. We base our investment strategy in a way that helps you keep working toward your goals, regardless of what short-term market conditions are like.

The fact of the matter is we don’t know whether the Fed will lower interest rates in Q3. Of course, it’s certainly possible that they will. Three straight months of declining consumer prices is certainly a good sign. Even better is that the economy has continued to be solid. (GDP grew by 1.4% in Q1.5 As of this writing, many economists are predicting a 2% rise in Q2.6)  But it’s also possible that a rate cut is still many months away. Trying to guess what will happen in the short-term – and then making moves that could impact you in the long-term – is bad packing.

Then, too, inflation and interest rate expectations are not the only drivers of the markets. Tech stocks – specifically those companies most involved in the development or utilization of AI – helped the markets regain momentum in Q2. Any investor who decided to sit on the sidelines because of pessimism over inflation would have missed out on the optimism surrounding AI. Sure, it’s always a bummer to go to the beach and find it raining…but there are often plenty of other fun things to do on your vacation even when the sun isn’t out

When you think about it, the markets really are like going on a trip. There will always be reasons for enthusiasm and reasons for caution. Everyone who goes to Disneyland can look forward to amazing rides and horrendous crowds. The view from the Grand Canyon is spectacular; the weather can be abysmally hot. The flowers in England are spectacular; the rain can feel oppressive.

And for every factor that can pull the markets down, there will be factors that could push the markets up. Our job is to help you pack a suitcase – and implement an investment strategy with an eye on the long-term forecast – that keeps you prepared for all of it.

So, as we move further into a new quarter, that is just what our team will continue to do. We’ll be keeping an eye on many things this quarter. Inflation, the breadth of the market, the upcoming election – you get the idea. And whenever we feel there’s something on the horizon that could affect the items in your suitcase, we’ll let you know immediately.

In the meantime, if you ever have any questions or concerns, please let us know. And if you have any upcoming summer travel plans, well…be sure to send us pictures!

Have a great week!

1 “Inflation falls 0.1% in June from prior month,” CNBC, https://www.cnbc.com/2024/07/11/cpi-inflation-report-june-2024.html
2 “S&P 500 falls 4.2% in April,” S&P Global, https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/s-p-500-falls-4-2-in-april-as-market-momentum-loses-steam-81466397
3 “Consumer Price Index Summary, U.S. Bureau of Labor Statistics, https://www.bls.gov/news.release/cpi.nr0.htm
4 “Stops dip as investors digest inflation data,” Reuters, https://www.reuters.com/markets/global-markets-wrapup-1-2024-06-28/
5 “Gross Domestic Product,” U.S. Bureau of Economic Analysis, https://www.bea.gov/data/gdp/gross-domestic-product
6 “GDPNow,” Federal Reserve Bank of Atlanta, accessed July 10, 2024. https://www.atlantafed.org/-/media/documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf

Bucket List image

Financial Planning Bucket List

Written by Minich MacGregor Wealth Management on . Posted in Posts.

How is your summer going? We hope you’ve been able to find ways to beat the heat while still having fun in the sun!

Summertime is when many people, retired or not, focus on checking items off their personal bucket list. Visiting that country you always wanted to visit. Hiking that trail that’s been calling your name for years. Mastering the art of gardening, competing in a local BBQ contest, getting to a 15 handicap in golf. The goals that bring you the most satisfaction. The milestones by which you measure personal progress. The activities that add true richness to your life.

Recently, though, several new clients have come to us with a similar frustration: They don’t feel like they have the resources — or the time — to actually do what’s on their bucket list. They don’t feel like they’re on track to reaching their goals.

This is a very common feeling for people of all ages and walks of life. Often, those who feel this way fall into one of three groups.

The first group is those who feel like they must wait for retirement to do almost anything on their bucket list. They are so busy hustling, so busy trying to work, save, and invest for the future, they often wonder if the future will ever come. They wonder if their most cherished dreams will have to be put off until an age when they are less physically able to enjoy them.

The second group is those who have very specific retirement goals – but retirement always seems to be moving further away even as they get older. They wonder when and whether they’ll actually be able to retire. They wonder if retirement is just an illusion.

The final group is those who are retired…but have found that, so far, retirement isn’t everything they thought it would be. Maybe their expenses in retirement are higher than they anticipated. Maybe they feel wary and unsure of spending any more money than they absolutely have to, because they’re afraid of outliving their savings. Either way, they are not spending their golden years traveling the world, cycling on that new electric bike they’ve always wanted, or even learning new skills.

As financial advisors, let us say it unequivocally: No matter what your goals are or what group you fall in, nobody should have to feel this way.

Fortunately, you don’t have to. There are always methods for ensuring you remain on track to your dreams. Savings and investment strategies for both short-term and long-term goals. Having a good financial plan, when you come right down to it, is about finding ways to achieve the items on your bucket list….and leaving no stone unturned in your efforts to do so. Before and after retirement.

You use, when it comes to your bucket list, there is something we fervently believe:

“If you can dream it, we can help you do it.” 

For instance:

Create a beautiful garden. Start a new career. Ski for 100 days a season. Volunteer in the inner-city neighborhood where you grew up. Finally, finally use all your frequent flyer miles. Create a world that consists of nothing but a hammock, a pitcher of lemonade, and a stack of John Grisham novels. Raise horses, goats, or chickens. Participate in guided tours of all the ancient wonders of the world. Open your own bed and breakfast. Trek to the Himalayas. Visit every national park. Learn to scuba dive. Visit every major-league ballpark. Relax. Go on a Safari in Africa. Move to a college town and take all the classes you skipped 40 years ago. Write movie reviews for the local weekly. Climb a mountain. Rent a barge for a canal tour in Europe. Invest in startup companies. Coach youth soccer, baseball, and basketball. Drive from Alaska to Patagonia. Run the Boston marathon. Play as many of Golf Digest®’s top-100 courses as possible. Play in a garage band. Play bridge for money. Just play! Go on at least three cruises a year. Act in community theater. Learn to play the piano. Read Russian novels. Run for local political office. Absolutely nothing. Give back to all of those who helped you. Do all the things you’ve been afraid of—skydiving, bungee jumping, and hang gliding. RV along Route 66 with your spouse and your dogs.

You get the idea. The point is that your bucket list shouldn’t just be an idle dream. It should be active pastime.

So, as we move into the second half of the year, ask yourself:

Am I doing any of the items on my personal bucket list this summer?
Do I feel like I’m on track to reaching my goals?

If the answer to either of these is “No,” or if you feel like you fall into any of the three groups we mentioned, here’s what we propose: Let’s chat. We can look at your goals, and what you’re currently doing to achieve them. We’d be happy to give a second opinion on how to make your bucket list part of your present instead of letting it languish in the distant future.

Financial planning is about more than just throwing money at the stock market. It’s about living the life you want to live. It’s about dreaming a dream…and then finding ways to actually do it.

Please let us know if we can ever provide more assistance in helping you achieve the items on your personal bucket list. In the meantime, we hope you have a great rest of your summer!

Checklist

Q3 Financial Checklist

Written by Minich MacGregor Wealth Management on . Posted in Posts.

In 2004, a NASA pilot named David Oberhettinger was flying himself and two passengers toward Palm Springs in California.  Just as he was about to radio the nearest airport for permission to land, a “dense black smoke” began to fill his cockpit.1  It was immediately clear what was wrong: An electrical fire had broken out in his plane.

Nobody wants to panic at 8,000 feet above the ground.  Luckily, Oberhettinger kept his head and immediately swapped his Descent for Landing checklist for the In-Flight Electrical Fire checklist.  It listed five specific steps for averting disaster: (1) Master Switch to Off (2) Other Switches (Except Ignition) to Off (3) Close Vents/Cabin Air (4) Extinguish Fire (5) Ventilate Cabin.

As Oberhettinger later described it, completing the checklist “took maybe 90 seconds.” 1  The rest of the flight was a smooth, uneventful landing.  For Oberhettinger, the crisis “hardly caused a significant increase in heart rate, because I just followed the checklist.” 1 

There is a real power in checklists.  They can prevent us from panicking, or from having to rely on our memory more than we have to.  They prevent us from making the wrong decision at the worst time.  And while the checklists we create as financial advisors don’t usually involve the life-or-death drama of a pilot checklist, they are vital all the same.

With that in mind, we’ve created a new checklist specifically for the third quarter of the year.  This checklist has six steps.  Don’t worry, they’re not difficult!  You may have handled some already.  Others may not even apply to you.  But each task is important in its own way.  Put them all together and you will be more likely to enjoy a smooth and uneventful flight towards your financial goals.  And while you won’t be able to complete the checklist in 90 seconds, 90 days should be more than ample.  As always, if you need help or have questions about any of these, please let me know.  In the meantime, we hope you have a great third quarter…and a wonderful summer!

Q3 Financial Checklist for 2024

Tip: Print this out and stick it on the fridge or somewhere else it will be seen.  That way, you can check off the items one by one as you complete them! 

  • Reprioritize Your Goals

    With the year now half over – where did the time go? – you may find that you have already accomplished some of the goals you set for yourself this year.  Others may be behind schedule; some may still just be words on paper.  That’s okay!  Working towards our goals should always be a marathon, not a sprint.  That makes this a good time to reprioritize your goals.  Do you have new goals that you didn’t have in January?  If so, write them down. Are there older objectives that need to be given more attention?  If so, determine where they need to be placed on your schedule.  By doing these things, you can ensure that the back half of 2024 is as productive and fruitful as possible. 

  •  Fund Your Child/Grandchild’s Education

    It’s summer vacation now, but Back-to-School season will be here before you know it.  If you have any children or grandchildren whom you want to ensure receive a higher education, use Q3 to either set up a new education funding account or contribute to one you already have.  From 529 Plans to Coverdell Education Savings Accounts, you have many options to choose from.  The key is choosing the right one for you, and then contributing to it consistently.  Please let us know if you need any guidance on this – we’d be happy to help!

  •  Check Your Credit Reports

    Credit reports aren’t just for getting loans – they’re a handy early-warning system for fraud and identity theft.  A good rule of thumb is to check your credit reports at least once per year.  If you haven’t checked yours yet in 2024, now is the best time to do so.  Be on the lookout for recent changes that don’t look familiar to you as well as “hard inquiries.”  This is when a business checks your credit report because they received a new application for credit or services.  These can impact your score and stay on your reports for two years or so.  They can also show you when people are trying to use your information illicitly. 

  •  Review Your Beneficiaries

    If you’ve had any major life changes – or if anyone in your family has – it’s a good idea to conduct a “beneficiary audit.”  Is everything still accurate and up to date?  If not, adjust your will and estate plan now so that your loved ones will always be taken care of, and your legacy ensured. 

  •  Pay Off Any Debts Incurred Earlier This Year

    It’s not uncommon to rack up debts during the first half of the year.  From vacations to home renovations to new purchases, it’s easier than ever to reach for the nearest credit card.  There’s nothing wrong with that – so long as those debts don’t linger and grow.  Pay them off now, if possible — or at least make a dent — so they don’t weigh you down as you work toward your long-term goals. 

  •  Evaluate Your Auto-Pay Bills

    Finally, if you’ve placed bills on autopay, be sure that the card or bank account the various companies have on file is correct.  Review whether certain bills have gone up, and whether there are less expensive options to consider.  And be sure to cancel any subscriptions you no longer need!

“Why do I love checklists? Because in 2004 a checklist helped avert what could have been some serious unpleasantness. And because rather than letting my imagination run amok to my detriment (otherwise known as “panicking”), effective use of checklists allow me to direct my imagination to more productive purposes.” 

— David Oberhettinger, former NASA Pilot and Chief Knowledge
Officer Emeritus at the Jet Propulsion Laboratory1

1 David Oberhettinger, “Why I Love Checklists,” NASA, appel.nasa.gov/2015/08/26/my-best-mistake-david-oberhettingers-why-i-love-checklists/

Whitehouse photo

Election Misconceptions

Written by Minich MacGregor Wealth Management on . Posted in Posts.

The noise can be deafening. It seems to come from everywhere, all the time. It can cause headaches, frustration, even anxiety. Sometimes, you wish you could turn it off altogether.

No, we’re not referring to whatever music the kids are listening to these days. We’re referring to the noise surrounding the upcoming presidential elections.

Election season is one of the most important aspects of our political system, but there’s no doubt that getting through it can be stressful. All of us, at some point, will wonder things like, “What if my preferred candidate doesn’t win?” “Who is my preferred candidate, anyway?” “Does so-and-so really mean this?” “Did so-and-so really say that?” “What’s fact and what’s fiction?”

One thing you shouldn’t have to worry about is how the elections will affect the markets. Every four years, many misconceptions arise about the impact of presidential contests on your portfolio. These often lead to unnecessary anxiety for investors. As financial advisors, our goal is to ensure our clients feel confident about their financial future, not worried. That’s why we send educational messages like this one. Let’s explore three common misconceptions about election season and the markets.

The first misconception is that presidential elections lead to down years in the markets. It’s understandable why we might feel this way. When we look back at past elections, the first things we remember are probably the controversies, uncertainties, and negativity. Election years feel volatile in our minds and memories, usually because there’s so much drama and so much at stake.

But statistics prove this misconception is a myth. Since 1944, there have been twenty presidential elections. In sixteen of those, the S&P 500 experienced a positive return for the year.1 In fact, the median return for presidential election years is 10.7%.1 Of the four election years that saw a negativereturn, two did occurin this century – in 2000 and 2008 – but on both occasions, the nation was either entering or in the midst of a significant recession.

Now, we do sometimes see increased volatility in the months leading up to an election. If we just look at how the S&P 500 performed from January through October in a presidential election year, the median return drops to 5.6%.1 That’s not bad, but it is nearly 50% lower. This suggests the uncertainty over who will triumph in the election – and the debate over what each candidate’s policies will mean for the economy – does tend to have at least some effect. Then, as the victor is announced and the picture becomes a little clearer, volatility tends to subside, and investors move on to other things. So, in that sense, election season does matter, but nowhere near what the media may have you believe. Elections are just one of the many ingredients in the gigantic stew that is the stock market…and they’re far from the most important.

The second misconception is that if one candidate wins, the markets will plummet. This narrative is, frankly, driven by pure partisanship. The fact of the matter is that the markets have soared under both Republican and Democratic presidents. Naturally, they’ve occasionally soured under both parties, too. Since 1944, the median return for the S&P 500 in the year after a presidential election is 9.8%.1 Since 1984? The median return rises to over 24%.

The reason for this is because of that gigantic stew we mentioned. You see, the markets are driven by the economy more than by elections. By the ebb and flow of trade, the law of supply and demand, by innovation and invention, by international conflict and consumer confidence. And while the president does have an influence on all this, it’s just one of many, many influences. As a result, the markets are far more likely to be affected by inflation and whether the Federal Reserve will cut interest rates than by the election.

When you think about it, the markets are like life. The course our lives take isn’t determined by one gigantic decision, but by the millions of small decisions we make every day. The same is true for the markets. We don’t know about you, but we find this comforting.

The third misconception is that we have no control over any of this, and thus, no control over what happens to our portfolio.

It’s true. We can’t dictate who the president will be. We can’t determine how the markets will react. But what we can control is what we will do. And that, is a mighty power indeed.

There’s a reason we began this email by referencing noise. As investors, one of the keys to long-term success is filtering out the noise and focusing on what reallymatters. You see, the goal of all political campaigns – and the media that covers them – is to create noise. That’s because noise provokes emotions. Fear. Anxiety. Anger. A greater emotional response leads to more clicks, more views, more shares, more engagement…and, yes, more money. It’s understandable why campaigns and the media want these things. But what we must guard against is letting those emotions drive our financial decisions. Emotions promote the urge to do something – buy, sell, get in, get out, take on more risk, less risk, you name it. They prompt us to make short-term decisions to alleviate what is, when you think about it, a short-term concern.

A presidential term lasts four years. But the goals you have saved for, and the time horizon you have planned for, lasts much longer than that. That’s why our investment strategy is built around the long-term. It’s designed to help you not just tomorrow, or next month, but years and years from now. It’s designed so that the president of the United States, as important as he or she may be, is only a passing mile-marker on the much longer road to your goals and dreams.

As we approach another election, keep this in mind: tune out the noise. Be aware of these misconceptions and avoid them. Our team is here to answer your questions and provide any assistance you need. If you’d like help planning for your financial future, give us a call. We’re always here to help.

Have a great summer!

1 “Election year market patterns,” ETRADE, us.etrade.com/knowledge/library/perspectives/daily-insights/election-stock-patterns