Author: Minich MacGregor Wealth Management

Coming in for a Landing

Written by Minich MacGregor Wealth Management on August 29, 2023. Posted in Featured, News, Posts.

You are on a plane, currently descending gradually through the clouds. We are on the plane, too. In fact, everyone in the country is on board. Welcome to Flight 2023 of U.S. Economy Airlines. We know our destination: A normal rate of inflation. What we don’t know is how long the flight will take…nor what kind of landing to expect when we get there.

Will it be a hard landing, or a soft one?

This metaphor, silly as it is, accurately describes the central economic problem of the year: How to bring historically high prices down without also tanking the economy. (In other words, how to land the plane without crashing it.) It’s a puzzle that has plagued every economist who has ever sat in the cockpit during times of high inflation.

In this message, we want to give you an update as to where we are on our trip.

The Flight So Far

If you’re one of those people who can actually sleep on a plane – lucky you – then here’s a recap of what happened while you were out. In 2022, coming on the heels of a global pandemic, a global reopening, and a war in Europe, inflation in the U.S. peaked at 9.1%.¹ If you rewind back to the beginning of this year, prices fell but were still elevated at 6.4%.¹ This was partially achieved by higher interest rates, which had risen to just over 4% in January.²

At the time, it was widely expected among economists that the Federal Reserve would continue hiking rates to bring inflation down…but as a result, the economy would enter a recession sometime later in the year. (This would be the aforementioned hard landing.) Now, over eight months into 2023, we can say that the first part of the prediction held up. The Fed has continued raising rates, albeit at a slower pace, with rates currently sitting at 5.3%.² Consumer prices have cooled, too, with the most recent data showing inflation down to 3.2%.¹

The second half of the prediction, however, is yet to come true. The U.S. economy grew by 2% in the first quarter, and current data suggests it grew by 2.4% in the second.³ (That number may be revised later as more data becomes available.) In addition, the labor market has remained healthy, adding 187,000 new jobs in July alone.⁴ That has kept the unemployment rate to around 3.5%…the same rate we saw before the pandemic began in 2020.⁴

Over the summer, many of the same experts that were forecasting a recession began revising their predictions. Maybe, they say, we’ll avoid a recession this year. Maybe it is possible to bring down inflation without tanking the economy. Maybe we can land this bird softly after all.

Soft Landings vs Hard Landings

This is an important issue to ponder. How investors expect the landing to go plays an important role in how the markets perform. But to accurately think about the issue, we have to first understand what the difference is…and why it’s so hard to know which we’re in for.

First, let’s define these two terms. A soft landing is when inflation decreases to an acceptable rate without triggeringan unacceptable rise in unemployment. A hard landing, by contrast, is when prices come down so fast that most businesses experience a major drop in revenue, causing them to lay off workers. This would result in a surge in unemployment. Since unemployed people tend to spend less money, the economy would contract. When an economy contracts long enough – two straight quarters is a common measurement – we call it a recession.

Do you see why the plane analogy is actually a good one? When pilots land a plane, they must do so quickly enough to prevent stalling, but gradually enough to glide parallel to the ground, kissing the runway rather than slamming into it. That’s the goal, here, too. Inflation has to decline quick enough to overcome inertia, but not so fast the economy crashes.

The folks most responsible for doing this – the pilots in our metaphor – are the board members of the Federal Reserve. In fact, the Fed is mandated to “promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”⁵ When one of those three goals gets out of alignment – in this case, prices – it can be extremely difficult to regain balance.

The Fed’s track record in this area is…mixed at best. You might think that, as a society that has put people on the moon, cured smallpox, and invented robot vacuum cleaners, we’d be able to crack this code easily. Unfortunately, policymakers don’t really have many options, and the ones they do have all come with downsides.

For example, the simplest option for bringing down inflation without damaging the economy is to simply wait and hope prices come down on their own. But this risks the possibility that inflation will become entrenched. When this happens, the effects can be devastating. (Think of Germany in the early 1920s, when children stacked worthless cash as building blocks, or the 1970s here in the U.S.)

The second option is for the government to impose price controls. (Essentially, dictating the price that industries can charge for their goods and services.) The U.S. has tried this before. It worked during the World War II years; not so much when President Nixon tried it in 1971. And politically, it would likely never fly today.

The final option is to do what the Fed is doing now: Hike interest rates to cool off the economy so that businesses have no choice but to lower prices. It definitely works, but it’s risky. Raise rates too high, too fast, and you drive the economy into a full-blown recession. This is what happened in the early 1980s. Back then, Fed Chairman Paul Volcker took a “forget the torpedoes, full speed ahead” approach, raising interest rates as high as 20%. It broke the cycle of inflation, but it also led to a deep recession. At one point, the unemployment rate rose to 10.8%!⁶

Mindful of this, the current Federal Reserve has been raising rates much more gently and gradually. The result is a very slow return to normal prices, but – so far at least – continued economic growth. So, a soft landing, right?

Well, not so fast. First of all, the plane hasn’t landed yet. Second of all, there’s no firm agreement as to what a landing actually is. How low does inflation have to get before we declare touchdown? Three percent? That’s in line with the kind of inflation we saw for much of the 2000s before the Great Recession hit. Or is it two percent, which is what the Fed prefers? And how much is unemployment permitted to rise? Four percent? Five? Higher? Actually, here’s a thought experiment for you: What if, over the next twelve months, unemployment and inflation both stay where they’re currently at? Is that a soft landing, or a hard one? Or is it no landing at all?

You can see why nothing keeps an economist up at night so much as inflation. It’s not a clear-cut issue. (And we haven’t even gotten into more nuanced topics, like what to actually measure when calculating inflation, whether the raw unemployment rate is really the best barometer of economic health, or the role consumer sentiment plays in all this.)

In our opinion, however, it’s still too early to proclaim a soft landing. That’s because there are still potential patches of rough air ahead. For one thing, while inflation is definitely cooling overall, it actually ticked up in July. And while unemployment is low, the pace of added jobs is slowing down, too. So, the numbers we’re seeing now might not be quite as rosy in the future.

Then, too, all these interest rate hikes are affecting other areas of the economy. They’re partially responsible for the weaknesses we’re seeing in the banking sector. They’ve also caused yields on long-term U.S. Treasury bonds to fall below those of shorter-term bonds. This is what’s known as an inverted yield curve, and it’s historically been a reliable – if imprecise – indicator of a future recession. (Here’s what this means in a nutshell: Typically, bond investors expect to be paid more interest for lending their money for longer periods of time, so interest rates for long-term bonds are higher than for short-term ones. When this flips around, it means investors expect interest rates to fall sometime in the future. This usually happens when the economy dips and needs propping up, forcing the Fed to cut rates. So, to put it simply, an inverted yield curve suggests that many investors are still expecting a recession in the not-too-distant future.)

For now, though, inflation is cooling down, the economy is not in a recession, and the Fed’s rate hikes are coming lower and fewer. This is good news! And it’s a major reason why the markets have performed so well this year. Should these factors continue in a positive direction, it’s perfectly reasonable to hope for a smooth final leg of our flight.

What This All Means For Us

Whew! We got really wonky in this message, didn’t we? But we wanted to make sure you got an up-to-date view of the situation. As the co-pilot on your financial journey, here’s our view. While the year has been positive, it’s possible that a “landing,” whether hard or soft, is still far away. Right now, we’re in a low-altitude glide. Therefore, the message from the cockpit is this: Feel free to move about the cabin, but for now, it may be best to keep the seat belt sign on.

In the meantime, our team will keep doing all we can to help our clients continue moving forward. Please let us know if you ever have any questions or concerns – and enjoy the rest of your flight!

¹ “Current US Inflation Rates: 2000-2023,” US Inflation Calculator, https://www.usinflationcalculator.com/inflation/current-inflation-rates/

² “Effective Federal Funds Rate,” Federal Reserve Bank of New York, https://www.newyorkfed.org/markets/reference-rates/effr

³ “Gross Domestic Product, Second Quarter 2023,” Bureau of Economic Analysis, https://www.bea.gov/news/2023/gross-domestic-product-second-quarter-2023-advance-estimate

⁴ “The Employment Situation – July 2023,” Bureau of Labor Statistics, https://www.bls.gov/news.release/pdf/empsit.pdf

⁵ “Monetary Policy Principle and Practice,” Federal Reserve, https://www.federalreserve.gov/monetarypolicy/monetary-policy-what-are-its-goals-how-does-it-work.htm

⁶ “Unemployment continued to rise in 1982 as recession deepened,” Bureau of Labor Statistics, https://www.bls.gov/opub/mlr/1983/02/art1full.pdf

State of the Economy

Written by Minich MacGregor Wealth Management on July 21, 2023. Posted in Uncategorized.

Big question: how’s the economy doing?

With the year more than half over and markets on a spree, it’s an important question to consider.

Let’s dig into the latest data and find out.

Inflation continues its downward spiral.

The latest data for June shows that inflation fell for the 12th month in a row to an annual rate of 3%.¹

That’s a significant improvement from June of last year when inflation soared to 9.1%.

It also puts the Federal Reserve in the difficult position of deciding whether or not to raise rates again after pausing in June.

The odds are good that the Fed will hike rates again at least once more this year, though if inflation continues to decline, policymakers might choose to hold off.²

The economy continues to shrug off recession worries.

Despite concerns about how rising interest rates could eat away at economic growth, it doesn’t look like a recession is imminent.

Obviously, that could change.

However, a July 10 Federal Reserve model projects that the economy grew 2.3% in Q2.³

The job market is still robust, even in sectors sensitive to high interest rates.⁴

All told, the economy has added 1.67 million jobs in 2023 so far.⁵

That’s significantly less than the 2.67 million jobs added in the first half of 2022 but it shows that the labor market still has legs.

However, job growth may be cooling in the private sector, which could be a warning sign of a slowing economy.⁶

Market psychology has been trending toward optimism (and greed).⁷

The stock market generally tends to reflect expectations about the economy and business performance.

While economic data seems to support the optimistic view, markets might be a little overheated.

That means pullbacks and corrections are likely, even if we’re already in the early stages of a bull market.

Here’s some good news: They happen pretty regularly, as the chart below shows.⁸

You can see by the red dots that even years with strong market performance experienced some pretty big drops.

That’s normal and not a reason to worry.

So, what happens next in markets?

We see the potential for volatility ahead.

While the rally seems to have spread beyond tech stocks, sentiment could easily swing the other way.

Bottom line: We’re watching markets, we’re reading reports, and we’ll be in touch with our clients as needed.

Sources:
1. https://edition.cnn.com/2023/07/12/economy/cpi-inflation-june/index.html
2. https://www.cnbc.com/2023/07/05/fed-minutes-july-2023-.html
3. https://www.atlantafed.org/cqer/research/gdpnow
4. https://www.cnbc.com/2023/07/07/heres-where-the-jobs-are-for-june-2023-in-one-chart.html
5. https://fred.stlouisfed.org/series/PAYEMS
6. https://finance.yahoo.com/news/hidden-recession-red-flag-hidden-100000573.html
7. https://edition.cnn.com/markets/fear-and-greed
8. https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/guide-to-the-markets/mi-guide-to-the-markets-us.pdf

Questions You Were Afraid to Ask #9

Written by Minich MacGregor Wealth Management on July 7, 2023. Posted in Uncategorized.

In our last writing, we broke down some of the most common terms associated with bonds and what they mean. But there was one term we left unexplained – and often, it’s the one you hear the most about in the media. We’re referring to a bond’s yield. So, without further ado, let’s answer:

Questions You Were Afraid to Ask #9:
What are bond yields and why do they matter?

Super-quick refresher on four of the terms we defined last time, because they’ll play a role here, too:

Par Value: This is the amount that must be returned to the investor when the bond matures – essentially, the original investor’s principal. (Many bonds are issued at a par value of $1,000.)

Coupon Rate: This is the bond’s interest rate, paid by the issuer at specific intervals. For instance, let’s say you owned a $1,000 bond with a 10% annual coupon rate. The issuer would then pay you $100 in interest each year until maturity.

Maturity: This is the amount of time until the bond is due to be repaid. A 10-year Treasury bond, for instance, matures 10 years from the date it was issued.

Price: This is the amount for which the bond is traded in the secondary market. Sometimes, bonds trade at their par value, but they don’t have to. For instance, imagine Fred bought a bond from the issuer for $1000, but trades it to Fran for only $950. The bond’s par value is still $1000. The price, though, is $950, and is said to be traded at a discount. On the other hand, if Fred trades it for $1,050, then Fran would be buying it at a premium. And if Fran buys it for the same price that Fred originally paid – $1000 – she would be buying it at par.

Financial terminology can be slippery and hard to remember. (It’s like mental soap.) But keeping all these terms in mind, the definition of a bond’s yield is this: The return – or amount – an investor expects to gain until the bond matures.

Simple, right? Now we can wrap this up and go about our day.

Except, not quite. While that may be the definition, the actual ramifications of yield go a bit deeper. To understand this, we first need to understand the most basic way yield is calculated.

A bond’s current yield can be found by dividing the bond’s annual interest rate payment (coupon rate) by its price. For example, imagine Fran buys a bond with a 10% coupon rate for its original $1000 price. The bond’s yield would be 10%, too.

Now imagine that Frank buys that same bond from Fran a year later – but for $75 more. Since the bond is being traded for more than its par value – in this case, $1,075 – the yield would go down to 9.3%. After all, if Frank pays more than Fran for the same level of interest rate, he’s getting a lower return on his investment than Fran did, who paid less. However, if the bond trades for less than par – say, $975 – then the yield goes up to 10.25%.

In other words, yields and bond prices are inversely related. If the price of a bond goes up, its yield will go down. If the price goes down, the yield goes up. Make sense?

Essentially, by comparing the current yield of different bonds, you can see which bonds are expected to give more or less of a return on your investment. The higher the yield, the better the expected return.

Now, that doesn’t mean an investor should just look for bonds with the highest yields and call it a day. That’s because high-yield bonds tend to come with more risk than low-yield bonds do. As we covered previously, issuers with lower credit ratings will often pay higher interest rates, since there is some risk they won’t be able to repay the principal by the time the bond matures. Investors must always balance risk versus reward when choosing where to put their money, and that holds true for bonds, too.

So, that’s yield in a nutshell. Now, you may be wondering, “Why do I hear so much about bond yields in the media?” Well, many analysts and economists use yields to project which direction interest rates will move in the future…and by extension, the overall economy. You see, when interest rates are expected to rise, bond prices tend to go down. (That’s because an existing bond’s coupon rate will no longer be as attractive as that of a new bond, meaning the owner would need to sell the bond at a discount.) And when interest rates are expected to fall, bond prices rise. For that reason, when yields rise across the entire bond market, analysts often see it as a signal that interest rates may rise soon, too. (Furthermore, when the yield on short-term bonds rises above that of long-term bonds, this can indicate that investors are concerned about a possible recession.)

Now, here’s the truly important thing:

We covered a lot of concepts in a very short amount of time. Hopefully, it all made sense. To be honest, we’re just barely scratching the surface of this topic – but this is precisely why we started writing this series on “Questions You Were Afraid to Ask.”

The world of investing can be a complicated one. Sometimes, it’s more complicated than it needs to be. You will often see terms like “yield” thrown about in the media without any explanation or context. Many investors, even experienced ones, can find all this lingo to be confusing, even intimidating. That’s not how investing should be! You don’t need a PhD to understand this stuff. You just need to break it down and translate it into plain English. Everyone, regardless of their level of education or experience, has the right to invest with confidence in their own future. (Furthermore, smart investors don’t actually need to think about terms like “yield-to-worst” that much. Far more important is understanding what you want to accomplish, and what steps you need to take to get there.)

Next time, we’re going to move away from bonds and answer some questions many investors have regarding modern investing trends. In the meantime, have a great day!

The Ultimate Vacation

Written by Minich MacGregor Wealth Management on June 29, 2023. Posted in Uncategorized.

Retirement can be the ultimate vacation … IF you plan ahead

As we get further into summer, we’ve had several friends tell us about their vacation plans. Listening to them, it’s clear they’ve put a lot of thought and effort into planning for their trip.

That got us thinking: what if people put as much time into planning their retirement as they do for their vacations?

Unfortunately, this isn’t usually the case. That’s a problem because the average vacation only lasts a few weeks. Retirement, on the other hand, can span decades.

We think one reason for this is because many people don’t know how to start planning for retirement … or they’re a bit intimidated by the thought of it. But planning isn’t what should intimidate anyone. Retiring without a plan is what’s really scary.

We spend a lot of time and effort on our clients’ retirement plans. But it occurred to us that there may be folks out there who can’t say the same thing.

Fortunately, it’s easy to get started—and some aspects of retirement planning are actually fun! When you get right down to it, all you really must do is apply the principles of good vacation planning to your retirement. We’ll give an example. Before writing this, we looked at several different travel websites. Most of them gave tips on how to go on vacation. We were amazed at how similar these tips were to planning for retirement. So, we’ve listed some of them below, along with how to make them suitable for a person’s golden years:

Vacation Planning	Retirement Planning
Tip #1 – Make a list of places you want to visit. Write down the activities you want to do in each location, and what you like about them.	Tip #1 – Make a list of goals you want to pursue during retirement. Write down why they’re important to you.
Tip #2 – Rank these places in order of how important each one is to you.	Tip #2 – Rank these goals in order of how important each one is to you. Have fun with these first two steps.
Tip #3 – Determine your budget. Factor in travel, hotel, and food costs. Then determine how much it will cost to do the various activities you listed in Tip #1. Don’t forget to include how much you plan to spend on souvenirs and things like that.	Tip #3 – Determine your budget. First start with expenses; where do you want to live, and how much will it cost to live there? What are your utilities like? What medical costs do you anticipate having? What debts do you owe? Finally, estimate how much it will cost to pursue the goals you listed in Tip #1. (It’s okay if it’s a rough estimate.)
Tip #4 – After determining what your vacation will cost, calculate your current budget by adding up your income minus expenses. Whatever’s left is what you have, to put towards your retirement on a monthly basis. vacation.	Tip #4 – Calculate your current budget by adding up your income minus expenses. Whatever’s left is what you have, to put towards your retirement on a monthly basis.
Tip #5 – Go online, consult with a travel agent, or check out a travel book and try to find ways to bring your costs down. Savvy vacationers can find deals, coupons, and tour companies that really make a trip easier on your wallet.	Tip #5 – Get together with me and bring everything you’ve written down so far. We can discuss possible ways to further fund your retirement, whether it’s through investing or something else.
Tip #6 – Book your vacation!	Tip #6 – Set your retirement date!

Planning a vacation and planning for retirement aren’t exactly the same, but they’re not too far apart, either. In the end, what’s important is that people devote the same energy to their retirement as they do their summer excursions. For both, the solution is the same: Plan, don’t wing it.

If you or someone you know are “winging” your retirement planning, we’d like to offer our help. If you have doubts or concerns about your retirement, please feel free to give us a call. We’d be happy to help you create a plan that shows not only how to fund your retirement, but enjoy your retirement, too!

Remember: planning a vacation is great for spending a few weeks in the sun. But planning for retirement can lead to a holiday that lasts for years. Please let us know if there is anything we can do to help.

Will the Rally Keep Going?

Written by Minich MacGregor Wealth Management on June 22, 2023. Posted in Uncategorized.

Markets have been hitting some very positive milestones lately, but it’s not clear that we’re in a bull market yet.¹

Is the bear market actually over?

Are the bulls back or are we seeing another “bear market rally” that will eventually lose steam?

Let’s discuss.

When stocks are caught between surges and pullbacks, and we’re not entirely sure what’s going on, it’s useful to go back to the fundamentals.

What bullish factors support the rally?

1. Despite all the worrying, it doesn’t look like a recession is here yet.²

The labor market is still extremely strong and the housing sector is showing signs of optimism again.

More positive signs of a strong economy will support a rally.

2. Inflation seems to be under control and the Fed has (finally) paused interest rate hikes to see how the economy responds.³

Investors are more likely to stay optimistic if the Fed holds to its plan to limit future rate increases.

3. FOMO. Some of the greedy sentiment behind this rally is due to a legitimate fear of missing out on the next bull market. No one wants to be on the sidelines when markets move.

What bearish factors could kill the rally?

1. The current surge has been largely driven by technology stocks and hasn’t broadened across all sectors.⁴

That means any negative sentiment about these tech high-flyers is likely to have a disproportionate effect on the overall rally.

2. We still can’t be certain that a recession won’t hit this year and the economy is still facing headwinds that are likely to impact corporate earnings.²

3. Growth may be hard to come by for U.S. businesses.⁵ Since stock prices reflect the value of their underlying companies, earnings misses or negative surprises could tank sentiment.

Bottom line: For the rally to keep going, investors will not only have to stay positive about technology stocks but also gain confidence in the overall state of the economy.

Here’s some good news: Whether or not the bear market is actually, finally over, the overall picture is looking brighter.

We’re watching closely.

Sources

Pros and Cons of Working in Retirement

Written by Minich MacGregor Wealth Management on June 16, 2023. Posted in Uncategorized.

After retirement, many individuals consider going back to work. Whether it’s because they want a little extra income or just need something to keep themselves busy.

There are benefits to working after retirement besides the obvious financial ones. Having a job, even part-time, allows you to slowly ease into retirement. It also helps you feel a sense of fulfillment and purpose. But there can also be some negative aspects to returning to work after retirement.

Here are a few pros and cons to consider before you commit to starting a post-retirement position:

PROS

Provides a sense of purpose
Extra income
Freedom and flexibility of your schedule
Social activity and health
Better health insurance options

CONS

Less free time
Ageism in the workplace
Possible impact on social security benefits
Risk of higher taxes
Less job security

New bull market? (caveats inside)

Written by Minich MacGregor Wealth Management on June 8, 2023. Posted in Uncategorized.

A new deal finally put the debt ceiling issue to rest (for now, anyway), and stocks are rallying.

Are we on the brink of a new bull market?

We might be. The S&P 500 has soared in 2023 and is up nearly 20% from its October 2022 low.¹

That’s pretty surprising given the concerns about interest rates, recessions, banks, and a war in Europe, so some analysts are wary.

How do we know when we’re in a bull market?

First, let’s acknowledge that the terms “bull” and “bear” are just shorthand for general market trends and don’t necessarily mean anything scientific.

Generally, a 20% decline from a market high defines a bear market.

(You might remember all the headlines from 2022 when the current one started.)

However, bull markets are a little harder to call.

A 20% increase from a bear market low doesn’t necessarily kick off a bull market.²

Since a 20% increase still leaves you shy of your original market high, many analysts don’t consider it a proper bull market yet.

They want to see stocks achieve a new historic high before officially calling an end to the bear market.³

We’re not there yet.

But, it’s probably fair to say that we’re flirting with a bull market.

What’s driving the recent rally?

Here’s where analysts have some concerns.

The recent rally centers around a few big tech stocks and seems to be energized by enthusiasm for artificial intelligence.

That means the rally lacks breadth. Your average S&P 500 company has only seen gains of less than 3% this year.³

The fact that the rally relies on the performance of a few high-flying stocks could spell volatility ahead.

What should I expect in the weeks ahead?

Hard to say. Markets seem to have momentum and we could see the rally continue.

However, recession and interest rate concerns are still bubbling under the surface, so let’s not break out the party favors yet.⁴

Let’s celebrate just how far we’ve come since the bear market began last year, but stay flexible enough to accept any pullbacks and volatility that might lie ahead.

Sources:
¹Yahoo Finance. S&P 500 closing price performance between October 12, 2022 and June 5, 2023.
² https://www.axios.com/2023/06/06/us-stock-market-bullish-vs-bearish
³ https://www.nytimes.com/2023/06/05/business/stocks-bull-market.html
⁴https://finance.yahoo.com/news/recession-talk-rages-on-despite-robust-jobs-market-191308453.html

Estate Planning Primer

Written by Minich MacGregor Wealth Management on June 1, 2023. Posted in Uncategorized.

There are many aspects to a successful estate plan, but four documents are especially important: Your Power of Attorney, your, Advanced Medical Directive, your Letter of Instructions, and of course, your Will.

Wishing a safe and peaceful Memorial Day.

The Springs of Inspiration

Written by Minich MacGregor Wealth Management on May 26, 2023. Posted in Uncategorized.

Every Memorial Day, we as Americans take time to remember the soldiers who died serving our country. We lay flowers at their graves. We touch the monuments erected in their memory. Sometimes, we even walk on the same battlefields where they fought and fell. Knowing all the while that we wouldn’t be here without them.

In our opinion, this is an American tradition as patriotic as singing the national anthem or reciting the Pledge of Allegiance. And it makes Memorial Day as important as Independence Day or Thanksgiving. Saluting our fallen, honoring their sacrifice, and vowing to build on the ground they broke is the least we can do. Furthermore, we believe it inspires us all to be greater citizens ourselves.

Recently, we came across a speech given by President Woodrow Wilson on May 30, 1914, at the National Cemetery in Arlington. At the time, Memorial Day already had a long history, but it was not yet as standardized as it is today. But with the last veterans of the Civil War passing away, and new storm clouds gathering over Europe – World War I would break out a few months later – more and more Americans were realizing the importance of giving thanks to those who gave their lives.

Wilson’s speech – which he apparently gave without any preparation – perfectly describes why this is such a vital tradition. In honor of the holiday, we thought we would share some excerpts from it with you. We hope the words touch your heart as much as they have ours.

We are so grateful for this nation. We are so humbled by the knowledge others died so that our country might live. Now, it is our job to ensure their memories forever live on, too.

On behalf of everyone here at Minich MacGregor Wealth Management, we wish you a safe and peaceful Memorial Day.

Memorial Day Address
Given by Woodrow Wilson, 28^th President of the United States, on May 30, 1914

Ladies and Gentlemen, I have not come here today with a prepared address. But I will not deny myself the privilege of joining with you in an expression of gratitude and admiration for the men who perished for the sake of the Union. They do not need our praise. They do not need that our admiration should sustain them. There is no immortality that is safer than theirs. We come not for their sakes but for our own, in order that we may drink at the same springs of inspiration from which they themselves drank.

Whenever a man who is still trying to devote himself to the service of the Nation comes into a presence like this, or into a place like this, his spirit must be peculiarly moved. A mandate is laid upon him which seems to speak from the very graves themselves. Those who serve this Nation, whether in peace or in war, should serve it without thought of themselves. I can never speak in praise of war, ladies and gentlemen; you would not desire me to do so. But there is this peculiar distinction belonging to the soldier, that he goes into an enterprise out of which he himself cannot get anything at all. He is giving everything that he hath, even his life, in order that others may live, not in order that he himself may obtain gain and prosperity. And just so soon as the tasks of peace are performed in the same spirit of self-sacrifice and devotion, peace societies will not be necessary. The very organization and spirit of society will be a guaranty of peace. Therefore, this peculiar thing comes about; that we can stand here and praise the memory of these soldiers in the interest of peace. They set us the example of self-sacrifice, which if followed in peace will make it unnecessary that men should follow war anymore.

We are reputed to be somewhat careless in the use of the English language, and yet it is interesting to note that there are some words about which we are very careful. We bestow the adjective “great” somewhat indiscriminately. A man who has made conquest of his fellow-men for his own gain may display such genius in war, such uncommon qualities of organization and leadership that we may call him “great,” but there is a word which we reserve for men of another kind and about which we are very careful. That is the word “noble.” We never call a man “noble” who serves only himself; and if you will look about through all the nations of the world upon the statues that men have erected, you will find that almost without exception they have erected the statue to those who had a splendid surplus of energy and devotion to spend upon their fellow-men. Nobility exists in America without patent. We have no House of Lords, but we have a house of fame to which we elevate those who, forgetful of themselves, study and serve the public interest, who have the courage to face any number and any kind of adversary, to speak what in their hearts they believe to be the truth.

We admire physical courage, but we admire above all things else moral courage. I believe that soldiers will bear me out in saying that both come in time of battle. I take it that the moral courage comes in going into the battle, and the physical courage in staying in. There are battles which are just as hard to go into and just as hard to stay in as the battles of arms, and if the man will but stay and think never of himself there will come a time of grateful recollection when men will speak of him not only with admiration but with that which goes deeper – with affection and with reverence.

So that this flag calls upon us daily for service, and the more quiet and self-denying the service, the greater the glory of the flag. We are dedicated to freedom, and that freedom means the freedom of the human spirit. All free spirits ought to congregate on an occasion like this to do homage to the greatness of America as illustrated by the greatness of her sons.

It has been a privilege, ladies and gentlemen, to come and say these simple words, which I am sure are merely putting your thought into language. I thank you for the opportunity to lay this little wreath of mine upon these consecrated graves.

You can find the full version of this speech here: www.presidency.ucsb.edu/documents/memorial-day-address

Correction Incoming?

Written by Minich MacGregor Wealth Management on May 17, 2023. Posted in Uncategorized.

Markets are doing their thing again, so let’s discuss.

Markets tumbled, heading into negative territory, and then bounced back. And then promptly fell again.¹

We’re caught in a whipsaw pattern of uncertainty.

Is this weird?

Not really. These things happen pretty regularly when investors get jittery.

Let’s talk about what’s going on.

(Scroll to the end if you just want our takeaways.)

What led to the selloff?

Phew. There’s a lot going on.²

There’s yet another debt ceiling deadlock between Congress and the White House.

Worries about the banking sector continue.

Sticky inflation is still on everyone’s radar.

And then there’s the endless speculation about recessions and what the Federal Reserve might do next.

All these stressors lead to jumpy investors and nervous markets.

Could we see another serious correction?

Absolutely. If the debt ceiling standoff drags on or more bad headlines appear, markets could react negatively.

And, corrections and pullbacks happen very frequently because there’s always something going on.

How often? Let’s go to the data.

Here’s a chart that shows just how often markets dip each year. (You may have seen this chart before because it’s an oldie and goodie.)

Take a look at the red circles to see the market drops each year.

The big takeaway? In 15 of the last 23 years, markets have dropped at least 10% each year.³

Market pullbacks happen all the time.

We’re dealing with a lot of uncertainty and investors are feeling cautious.

However, that doesn’t mean that we should panic and rush for the exits.

Markets are going to be turbulent this year and knee-jerk reactions can be costly.

We don’t have a crystal ball, so we don’t know how it’s all going to play out, but this situation isn’t surprising.

We expected volatility and we’re prepared.

We’re watching markets closely. Any questions or concerns we can address? Let us know. We’re here to help.

Sources