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Author: Minich MacGregor Wealth Management

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Happy Thanksgiving

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

🩃🍂 HAPPY THANKSGIVING 🍂🩃

Today, we pause to reflect on all we’re grateful for—family, friends, and the moments that bring us together.

Here at Minich MacGregor Wealth Management, we are thankful for our relationships with our clients and for the opportunity to help you however we can.

We wish you a day filled with love, laughter, and, of course, delicious food!

Honoring Our Heroes: A Heartfelt Thank You This Veterans Day

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

Most of us know somebody who’s served in the military or did so ourselves. For those who haven’t, it can be difficult to understand what it’s like to serve. It’s easy to forget the many sacrifices that our service men and women make. Hopefully, we all take the opportunity this Veterans Day to thank our soldiers, both past and present, for the courage they show(ed) in the face of the unimaginable. So, if you see a soldier, or someone who once was a soldier, please say:

Thank You.

Thank you for all that you do, and the sacrifices you’ve made. Thank you for leaving your friends and the comforts of home. Thank you for risking your lives, so that we can enjoy ours. Thanks for giving up the small moments in life: inside jokes, Super Bowls, backyard barbeques, and fishing trips. Thank you for allowing us to have our small victories, homecoming games, homeruns, touchdowns, dance recitals, first kisses, and first drinks. Thanks for giving us the opportunity to sleep soundly in our beds; to go to work and provide a life for our families.

Thank you for being dignified and respectful while representing our nation. Thank you for having your fellow soldiers’ backs; for suffering, bleeding, and in far too many cases, dying for our way of life. Thank you for being willing to endure cold nights, cold food, hard cots, and blisters. Thank you for coming home and doing your best to fit in, to not jump when a pot falls on the floor, or when the neighbors set off fireworks. Thank you for going through more than you thought possible. Thank you for your lost friends and comrades. Thank you for all the things we understand, and for everything we don’t.

Happy Veterans Day!

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Q4 Market Outlook for 2024

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

Our 2024 Q4 Market Outlook: looking back on the 3rd quarter, then looking ahead to what could impact the markets over the next few months.

Image of how the markets did and news impacting the market.

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Q3 Market Recap

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

It’s always great to start a message with the words, “The markets finished the quarter at an all-time high.”  Fortunately, that’s the case this time around.  The S&P 500 rose 2% in September, and 5.5% for the entire quarter.  The Dow, meanwhile, gained 8.2% in Q3.  Both indices set new records along the way.1 

So, let’s do a quick recap of why the markets performed the way they did over the last three months.  Then, we’ll tell you what we think might be the most interesting storyline from an investor’s perspective.  We’ll finish with a few things to keep an eye on as we draw closer to the end of the year. 

July

The quarter began with the markets already rebounding from a bout of volatility in early Q2.  This was driven by good news regarding inflation, with consumer prices dropping to 3% in June.2  That led to renewed optimism that the Federal Reserve would finally cut interest rates sometime in the summer.  But as July started making way for August, the skies over Wall Street began to turn cloudy.  The optimism of a future rate cut shifted into concern that maybe, just maybe, the Fed had already waited too long.  

August

This concern was primarily driven by rumblings in the labor market.  Unemployment has been trending upward for some time now, and in July, the jobless rate rose to 4.3%.3  While that’s not a high number in a historical context, it was still higher than most economists expected. And it prompted investors to wonder whether future rate cuts would be enough to prevent unemployment from rising higher still, which could trigger a recession. 

Just as investors were chewing over this unpleasant bit of data, the markets were hit by another interest rate whammy – this time, from overseas.  While our rates have been at 40-year highs in recent times, Japan has kept their rates extremely low.  Because of this, many investors were using a tactic called the yen carry trade.  This involves borrowing Japanese currency at an absurdly cheap rate, then converting that cash into a stronger currency.  With that stronger currency, investors could then buy U.S. securities, essentially at a discount.  It’s been a popular tactic, but it unraveled in early August with the news that Japan was finally raisinginterest rates at the same time the U.S. was preparing to decrease theirs.  That meant the yen was stronger in value than before.  As a result, many investors were forced to quickly sell off the assets they bought before having to pay higher interest rates on the money they borrowed.  This triggered a short but massive selloff across the entire globe. 

All this was unpleasant, but thankfully, short-lived.  By the end of August, the markets had completely regained what they had lost.  Still, a sense of uneasiness remained, because September had arrived – historically, the worst month of the year for the markets. 

September

True to form, the markets began the month with another dip.  Besides worrying about unemployment, investors were also mulling over the future of artificial intelligence.  (More specifically, the companies that have invested heavily in it.)  AI-related hype has been one of the biggest drivers of the current bull market, but far more money has been poured into AI than has flown out of it.  Some analysts raised the question of whether the new technology is all it’s cracked up to be, and whether it will truly return enough value to shareholders to justify its costs. 

But then came the news everyone had been waiting for. The August jobs report was modestly positive, indicating that unemployment was basically unchanged.  (In other words, still higher than anyone would like, but not picking up momentum, either.)  And the latest inflation report was even better: Inflation had fallen to 2.5%.4  The lowest mark since early 2021
and very close to the Fed’s goal of 2%.  A rate cut was now all but certain.  And on September 18, it finally happened.  The first cut in over four years, to the tune of 0.50%.4  Based on this, the markets continued to climb, finishing the quarter at record highs. 

So, an action-packed quarter, with plenty of twists and turns.  But as much fun as it is to say, “record highs,” that may not even be the best news to come out of Q3. 

Warren Buffett once said that interest rates act like gravity on valuation — meaning they pull stock prices down, or at least prevent them from rising too high.  But despite higher rates, stocks have been in a bull market for the past two years.  How can this be? 

When we talk about “the stock market,” we tend to think of it as a single entity.  But that’s far from the truth.  As its name implies, the S&P 500 is made up of five hundred different companies, and the broader stock market contains thousands.  At any given time, some of those companies are rising in value while others are falling.  When more companies rise than fall, the markets do well, and vice versa.  But sometimes, you don’t need a lotof companies to rise in value. You just need a handful to rise so much, they drag the overall value of the index along with it.  That’s been the case for much of the past two years.  Most of the market’s rise has been driven by a handful of tech giants, thanks to the AI boom we mentioned.  But for the majority of companies on the stock market, growth has been much more modest.  Interest rates act like gravity, remember?

One of the most interesting storylines is that this trend reversed last quarter.  More than 60% of companies in the S&P 500 rose higher than the overall index in Q3.5  (For the previous quarters, it was only around 25%.)  And the Russell 2000 index, which contains lots of smaller companies, rose by 9.3% for the quarter.5  All this suggests that the bull market is widening in breadth, which is a positive indicator for the future.  (The broader a market incline, the longer that incline tends to last.) 

Now, with all that said, there are still some question marks on the horizon that we need to keep an eye on.  While geopolitics rarely has a sustained impact on the markets, conflict in the Middle East could inject turbulence into oil prices, which do affect the markets to a degree.  Volatility can always spike in the weeks before and after a presidential election.  And the biggest question mark is unemployment.  Can the Fed actually achieve a soft landing, avoiding a recession as they continue cutting rates?  These are the questions that only the future can answer. 

For these reasons, it’s important we remain prudent with our investment decisions in the short-term
while always keeping our focus on the long-term.  In the meantime, enjoy the upcoming holiday season!  And as always, please let us know if you have any questions or concerns.  Our door is always open.   


SOURCES:
1 “S&P 500 ekes out record closing high,” Reuters, www.reuters.com/world/us/wall-st-eyes-lower-start-data-loaded-week-powells-comments-awaited-2024-09-30/
2 “Inflation falls 0.1% in June from prior month,” CNBC, www.cnbc.com/2024/07/11/cpi-inflation-report-june-2024.html
3 “Job growth totals 114,000 in July,” CNBC, www.cnbc.com/2024/08/02/job-growth-totals-114000-in-july-much-less-than-expected-as-unemployment-rate-rises-to-4point3percent.html
4 “Fed slashes interest rates by a half point,” CNBC, www.cnbc.com/2024/09/18/fed-cuts-rates-september-2024-.html
5 “Broadening gains in US stock market underscore optimism on economy,” Reuters, www.reuters.com/markets/us/broadening-gains-us-stock-market-underscore-optimism-economy-2024-09-30/

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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.   
 

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