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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.

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The latest issue of our newsletter, The Retirement Road, is now available!

The May edition continues our series on retirement planning issues that often go unnoticed. This issue covers the following topics:

📒 Planning for your personal goals as well as your financial goals in retirement
💲 Handling unexpected expenses
🧑‍🧑‍🧒‍🧒 The importance of proper beneficiary designations
📈 Market recap for April 2025Loaning money in retirement

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war time rules golf

Rules for Getting Through Market Volatility

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

Like getting the flu or visiting the DMV, market volatility is one of those facts of life that never gets more pleasant no matter how many times we experience it.  As you know, the markets have been very volatile of late.  In large part this has been spurred on by the fears and uncertainty surrounding the tariffs that have been announced or discussed by the White House. This has many investors asking, “What should I do?” 

As financial advisors, we hear that question a lot.  While thinking about how to answer it, we came across an interesting story that illustrates exactly what investors should do.  It’s called: 

The War-Time Rules for the Richmond Golf Club

The year was 1940.  World War II was well under way, with France having fallen to Germany.  When the Germans began bombing England in preparation for an invasion, some of the bombs fell on the Richmond Golf Club in southwest London.      

Undaunted, the golfers, many of whom were veterans of World War I, devised a set of “war-time rules” to ensure they could keep playing even during a bombing raid.1  Decades later, the rules were rediscovered.  They are still as incredible now as they were then…and as amusing!   

  1. Players are asked to collect bomb and shrapnel splinters to save these causing damage to the mowing machines.
  2. During gunfire or while bombs are falling, players may take cover without penalty for ceasing play.
  3. The positions of known delayed action bombs are marked by red flags at a reasonably — but not guaranteed — safe distance therefrom.
  4. Shrapnel on the fairways or bunkers within a club’s length of a ball may be moved without penalty. No penalty shall be incurred if a ball is thereby caused to move accidentally.
  5. A ball moved by enemy action may be replaced, or if completely destroyed, a new ball may be dropped not nearer the hole without penalty.
  6. A ball lying in a crater may be lifted and dropped not nearer the hole without penalty. 
  7. A player whose stroke is affected by the simultaneous explosion of a bomb may play another ball from the same place.  Penalty, one stroke.

We love this story because it illustrates a very important point: Whenever we face uncertainty in life, whenever we’re not sure what to do, it’s valuable to have rules in place that can help guide us and stabilize us.  From the Golden Rule to the Fire Rule (stop, drop, and roll), rules make things easy to remember, easy to understand, and easier to get through.  So, with those golfers’ plucky example in mind, here are our rules for getting through even the roughest stretches of market volatility:

1. Continue to save and contribute to your retirement accounts.  Market volatility often means lower prices. That both lowers the financial barrier to invest and makes it easier to buy good companies.  It’s like shopping for Christmas lights after the holidays are over — the prices are lower, but the product is the same.  Furthermore, by continuing to save and invest even during volatility, you are positioning yourself for the rebound.  Remember, it’s time in the markets, not timing the markets, that matters. 

2. Examine your current risk level.  That said, there’s nothing wrong with looking at your portfolio and saying, “You know what?  Maybe I don’t want to deal with this level of risk.”  Many investors end up becoming overexuberant and taking on too much risk during bull markets, and changes in your life sometimes require a change in your investment strategy.  After all, even the Richmond Club golfers took cover when the bombs were dropping. 

3. Invert the problem.  One of the great investors, Charlie Munger, used to talk about how inverting his thinking was his most reliable form of decision-making.  In other words, during a time when other investors are trying to figure out the “smart thing to do,” replace that with, “What is the foolish thing to do?”  Or “What will I most regret doing in five or ten years?”  It’s often much easier to figure out what not to do than what you should do.  By starting there and working backwards, you will arrive at the correct decision — which is often much simpler than it first appeared! 

4. Focus on a different aspect of financial planning.  There is more to reaching your financial goals than investing.  When the markets are turbulent and the headlines are scary, there’s a simple solution: Stop thinking about them!  Instead, focus on something else that will help get you closer to your goals.  Look at your cash flow.  Update your will.  Start a rainy-day fund.  Get your tax planning done.  Concentrate on increasing your income.  There are lots of possibilities, all of which are far more important in the long-term than stressing about markets in the short-term.         

5. Commit to understanding why the markets are behaving the way they are.  Most people don’t spend their days scrutinizing the markets.  As a result, volatility can feel particularly stressful for investors who don’t immediately have an explanation for it.  But Marie Curie once said: “Nothing in life is to be feared, it is only to be understood.”  In my experience, when we take the time to understand the cause of volatility, the volatility itself becomes less unsettling.  Understanding brings clarity, and clarity brings confidence — that all volatility, no matter the cause, is temporary. 

The British were famous for their “keep calm and carry on” attitude during World War II.  The “War-Time Rules for the Richmond Golf Club” is a perfect example of this.  The rules they created helped those golfers make sense of a scary situation by continuing to do what they loved.  We can apply that principle to every area of our lives — including our finances and including the markets. 

One last point.  Sometimes, the media will try to get us to choose fear over rules like these.  When that happens, remember this.  During the War, the Richmond rules became famous even in Germany.  None other than Joseph Goebbels heard about them and publicly declared, “The English snobs try to impress the people with a kind of pretended heroism.  They can do so without danger, because, as everyone knows, the German Air Force devotes itself only to the destruction of military targets.”1 

Still, in the very next raid, German planes bombed the golf club’s laundry facilities. 

The members continued playing.    

1 “Our Famous War Time Rules,” The Richmond Golf Club, https://therichmondgolfclub.com/war-time-rules

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Weather Volatility

Q1 Market Recap

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

“If you don’t like the weather, just wait a minute.” That’s a common refrain in many corners of the country. You can hear it near the Great Lakes, on the prairies and plains, and in the mountain west. But it probably originated in New England, where the weather can go from sunny to snowy and back again in a heartbeat. Especially in the spring.

It’s also a line we like to remember whenever we experience a turbulent quarter in the markets.

Volatility was really the only constant during the first three months of 2025. As a result, all three major indices finished down for the quarter. But it’s important to remember that “volatility” doesn’t just mean “down.” It means changing in a sharp and unpredictable manner. In Q1, the markets rarely went in the same direction for more than a couple days in a row. (If you don’t like the weather, just wait a minute.) They were in a continual state of flux, which in some ways is the hardest state for investors to deal with. The good news is that just how today’s performance doesn’t necessarily dictate tomorrow’s, how the markets did in Q1 doesn’t necessarily predict the same for Q2.

To understand where we are, it’s always helpful to understand where we’ve been. So, let’s do a quick recap of why markets performed the way they did in Q1. Then, we’d like to share why volatility is a feature, not a bug, of investing.

There were three main storylines for Q1: new developments in artificial intelligence, inflation, and most importantly, tariffs. Let’s start with:  

Artificial Intelligence. As you know, the last two years have brought some stunning advances to the field of AI. There are now dozens of AI-related products, many designed to help companies become more productive and efficient. The more productive and efficient a company is, the more valuable it is to shareholders. As a result, the recent bull market has largely been driven by money flowing into tech companies participating in the AI boom.

But in January, a Chinese company known as DeepSeek revealed a new AI model meant to rival well-known services like ChatGPT. Because the company claims to have developed its AI with far less money and computing power, many chipmakers and AI companies have seen their share prices fluctuate dramatically in recent weeks. (If you don’t like the weather, just wait a minute.) So, just as those same companies were responsible for much of the market’s rise, so too are they responsible for some of the market’s recent slides.

Many of these companies are also being affected by the second storyline:

Tariffs. Over the past two months, President Trump has repeatedly announced and then often suspended tariffs on China, Canada, Mexico, and other countries across the globe. As of this writing, a 20% blanket tariff on all Chinese goods has actually been enacted, along with a 25% tariff on steel and aluminum imports from any country. Certain products from Canada and Mexico have tariffs, too. Dozens of other tariffs, though, have been either dropped, delayed, or merely proposed.1

The situation seems to change on a weekly basis. (If you don’t like the weather, just wait a minute.) It’s this unpredictability, more than anything else, that has the markets spooked. You see, tariffs make it more expensive for companies to import the supplies they need to create their own products. (For example, a tariff on imported computer chips and semiconductors impacts many tech companies that depend on those things to power the technologies they create.) But when investors aren’t certain exactly which companies will be affected, or when, or by how much, it creates massive uncertainty. And uncertainty is nearly always the chief cause of market volatility.

Tariffs also play a role in the third and final storyline, because they have the potential to cause:

Inflation. While inflation isn’t quite the same storyline it was last year, it’s still in the background, affecting almost everything around it. That’s because, after falling to 2.4% in September, the inflation rate steadily crept back up to 3% in January.2 (It then ticked down to 2.8% in February.)

Why does this matter? Because as long as inflation remains “sticky,” the Federal Reserve is likely to keep interest rates elevated. Higher rates act like ankle weights on stock prices, and investors have been waiting for years to see them decline. When the markets move by a larger-than-normal amount in a single day, it’s often because investors are rethinking what they expect the Fed will do with interest rates.

So, these are some of the prime causes behind all the volatility we’ve been seeing. And because all three are interconnected, the uncertainty each one creates is compounded by the others.

Make no mistake, volatility can be frustrating. As frustrating as a spring snowstorm when you were hoping for sun. Despite this, volatility can also be a positive — because it creates opportunity.

Here’s an example of what we mean. You remember how we said the phrase “If you don’t like the weather, just wait a minute” probably originated in New England? While he didn’t use those exact words, the famous author Mark Twain once alluded to them in a famous speech he gave to the New England Society in 1876.3 Here are a few excerpts of what he said:

“Gentlemen: I reverently believe that the Maker who made us all makes everything in New England — but the weather. In the spring I have counted one hundred and thirty-six different kinds of weather inside of four and twenty hours. I could speak volumes about the inhuman perversity of the New England weather. There is only one thing certain about it: You are certain there is going to be plenty of weather.

But…there are at least one of two things about that weather which we residents would not like to part with. If we hadn’t our bewitching autumn foliage, we should still have to credit the weather with one feature which compensates for all its bullying vagaries: The ice storm. When a leafless tree is clothed with ice from the bottom to the top — ice that is as bright and clear as crystal; when every bough and twig is strung with ice beads, frozen dewdrops, and the whole tree sparkles cold and white like [a] diamond plume. Then the wind waves the branches, and the sun comes out and turns all those myriads of beads and drops to prisms that glow and burn and flash with all manner of colored fires. The tree becomes a spraying fountain, a very explosion of dazzling jewels, and it stands there, the supremist possibility in art or nature, of bewildering, intoxicating, intolerable magnificence!

Month after month I lay up my hate and grudge against the New England weather, but when the ice storm comes at last, I say: “There, I forgive you now. The books are square between us. You don’t owe me a cent. Your little faults and foibles count for nothing; you are the most enchanting weather in the world!”

In other words, all the frustrating unpredictability — or volatility — of the New England weather was worth it to Twain…because it gave him the sublime sight of a tree after an ice storm.

While it’s not so poetic, something similar is true about the markets. All the frustrating volatility is worth it to investors, because when the dust settles, it shows us which companies are truly strong. It’s that same volatility that gives us the opportunity to own those companies at lower prices. It’s that volatility that gives us the chance to be patient when others are restless. Without volatility, we wouldn’t have experienced the rallies that followed afterward.

Of course, if you ever have any questions or concerns about the markets, that’s what we’re here for. Please let us know if you would ever like to chat. But in the meantime, remember this: While no one can say when the current market conditions will change, we do know that they will. The storylines of tomorrow will be different than the ones of today.

Sometimes, all we have to do is just wait a minute.

1 “See all the tariffs Trump has enacted, threatened and canceled,” The Washington Post, March 27, 2025. https://www.washingtonpost.com/business/interactive/2025/trump-tariffs-enacted-effect-threatened/
2 “12-month percentage change, Consumer Price Index, selected categories,” U.S. Bureau of Labor Statistics, https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
3 “Speech to the New England Society,” The Letters of Mark Twain, https://www.marktwainproject.org/letters/supplementary/mtdp00229/

Spring Cleaning Image

Financial Spring Cleaning

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

Spring is in the air, and that means it’s time for spring cleaning. But wait! Before you pick up that dustpan, give a thought to your financial spring cleaning first.

What do finances and spring cleaning have to do with each other? Well, if you have financial goals you’re planning for, the answer is “A lot!” These days, the term spring cleaning is often used as a metaphor for getting our daily affairs in order. As you can imagine, getting your financial affairs in order is critical if you intend to check off all the items on your personal bucket list. There are many things to keep track of. Many tasks that need doing; many decisions to make.

So how do you begin? Well, when many people do their actual spring cleaning, they make a checklist. What supplies they’ll need, what rooms need to be cleaned, what needs to be mopped, vacuumed, dusted, or organized… it’s the most efficient way to clean. We suggest doing the same for your finances. So, without further ado, here is a sample Spring Cleaning Checklist to help you stay organized and on track to your financial goals.

Financial Spring-Cleaning Checklist

[ ] Contribute the maximum amount to your IRA if you have one. Remember, an IRA is a valuable way to save for retirement in a simple, tax-advantaged way. For the 2024 tax year, the annual IRA contribution limit is $7,000 if you’re under 50, and $8,000 for those 50 and older.1

 [ ] Review your 401(k) and rebalance if necessary. How has your 401(k) been performing? Do you understand how your money is being invested, and why? Are you contributing enough to take advantage of any employer matching? Do the investments inside your 401(k) need to be rebalanced to match your original allocation?

[ ] Review your holdings. These days, many investors adopt a “set it and forget it” mentality with their investment portfolio(s). That’s certainly better than stressing over the markets daily, but it’s critical to review your holdings at least once or twice a year to make sure everything is in order. Is your allocation still where it should be? Is your portfolio still in line with your tolerance for risk? Are your holdings providing the kind of return you need to reach your financial goals? Do you understand everything you own and why? If the answer to any of these questions is “No” or “I don’t know,” then it’s time for us to sit down and take a closer look at things. And when we say, “review your holdings,” we mean all of them. That includes all institutions you do business with! (Many investors sometimes forget where all their assets are kept and thus fail to review them.)  

[ ] Review your cash flow and examine your expenses. Which are likely to continue for the long-term? What expenses can you remove right now? This is a good way to find extra ways to save for your goals, and it will make your life a lot simpler once retirement comes.

[ ] Decide now what to do with your tax refund. If you’re getting a tax refund this year, think about how you want to use it. Approximately 1/3rd of Americans use their refund to pay off debts; others stick it in a savings account.2 One underrated and oft-underused option: Invest it instead. It can help you catch up on saving for retirement, pay for a loved one’s college expenses, or enable you to achieve one of your long-term goals even sooner.

 
[ ] Make sure you know where all your estate planning documents are. You should have a copy of your will, power of attorney, advance medical directives, letter of instructions, and other documents in a secure but easily accessible place. Make sure your spouse (or other loved ones) knows where these documents are kept.

[ ] Review your current insurance policies. Are there any potential gaps? (For example, Disability and Long-Term Care insurance are two types of policies many people don’t have but are often extremely valuable for retirees.)

[ ] Check your credit reports. Credit reports aren’t just for getting loans. They’re also a handy early-warning system for fraud and identity theft. A good rule is to check your credit at least once per year. Be on the lookout for 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 up to two years. They can also be a red flag for thieves trying to use your information illicitly.

[ ] Reprioritize your goals. As you think about getting your finances in order, also think about the goals your finances are designed to help you achieve. Do you have new goals? If so, write them down. Are there older objectives that need more attention? If so, determine where they need to be placed on your schedule. By doing these things, you can ensure your finances are not only organized but getting you closer to the places — and person — you want to be.

Spring cleaning is never the most fun thing in the world, but it’s often one of the most beneficial. Just as you probably enjoy living in a clean, organized home, you’ll enjoy the peace of mind that comes with getting your finances in order. Trust us: if there’s one thing we’ve learned in all our years of helping people plan for their goals, it’s that a little organization today can make for a much happier tomorrow. In the meantime, we wish you a happy spring — and a happy spring cleaning!

1“IRA Contribution Limits,” IRS, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
2 “Over a third of Americans plan to spend their tax refund right away, mostly to pay bills,” CNBC, https://www.cnbc.com/2022/04/02/most-americans-plan-to-spend-tax-refund-on-essentials.html

Tending a garden

Tariffs, Fear, and the Investor’s Dilemma: The Right Questions to Ask

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

The tariff-related questions that investors should be asking

“What should we do about tariffs?” It’s a question we’ve heard a lot lately, often with a note of fear in the voice of whoever is asking it. In this message, we want to answer that question. We also want to talk a little about fear, how we handle it…and how we can benefit from it.

If you’ve been following the financial news at all, you know that a feeling of anxiety has dominated the markets for the past month or so. But in the last few days, that anxiety has turned into fear. You see, on March 4, a 25% tariff on Canadian and Mexican imports went into effect.1 This requires U.S. companies that purchase goods from these countries to pay a 25% tax. At the same time, President Trump also imposed an additional 10% tariff on Chinese goods on top of the original 10% duty that began last month.1 As expected, all three countries have retaliated with their own tariffs on U.S. goods. That means the U.S. is now officially in a trade war.

The markets have not reacted to this news well. On March 4 alone, the Dow plunged over 600 points.2 The NASDAQ has been creeping closer to correction territory since late February.

When fear strikes, investors often start asking themselves the following questions:

Are the markets going into a correction?
Will the economy go into a recession?
Should I change my allocation?
Is it time to get out and move everything to cash?

You can probably hear them around the water cooler at work. You can see them online. They’re questions we frequently get from acquaintances of ours. But they are not the questions investors should be asking.

To be clear, tariffs — especially at these levels — are not a small thing. While they can be used to generate revenue or bring countries to the negotiating table, they also can increase business expenses and cut into corporate profits. When this happens, many companies will pass on these costs to regular people like you and me in the form of higher prices.

In other words, tariffs can be inflationary, at a time when we are still dealing with higher-than-normal inflation.

Investors know all this. What investors don’t know is how long these tariffs will last, how high they will go, or how big of an economic impact they will have. We don’t know whether they will trigger a major downturn in the markets. We can make reasonable assumptions and educated guesses, but we don’t know for sure. And that uncertainty, more than anything else, is why the markets have been so volatile lately. As the author H.P. Lovecraft once put it, “The oldest and strongest kind of fear is always the fear of the unknown.”

When fear grips the markets, many investors feel an intense urge to do something. After all, it seems so natural: When you know it might rain, you pack an umbrella. When you know you’ll have to drive in rush hour, you give yourself more time to reach your destination. As human beings, we always want to avoid the possibility of future pain. And since volatility can be painful, many investors start asking themselves: Should I change what I’m doing? Should I get out of the markets? The thinking is that if they can somehow avoid market turmoil, they can then get back in later when things are calm. Like skipping the freeway and taking service streets until you’re past the traffic jam.

But there’s a major problem with applying these metaphors to investing: They are short-term solutions for short-term problems. Investing, on the other hand, is for the long-term…and one of the biggest mistakes in investing is making a short-term decision that has long-term consequences. This is true in life as well. It’s why we pack an umbrella when it looks like rain, but we don’t move to another state. It’s why we may try to avoid driving when there’s heavy traffic, but we don’t sell our car.

That’s why a better metaphor for investing is planting a garden. With a garden, we don’t decide to uproot all our tomato plants and switch to squash after a month. We don’t put everything into pots because we hear distant thunder and know it might hail. We don’t overwater our plants just because we feel the need to constantly do something to help them grow. Instead, we choose the best possible soil. We plant with care. We water only when necessary. We harvest when things are ripe. And while we know the zucchinis might sometimes do better than the peppers, or the rosemary plant might fail, we always patiently give the seeds still in the ground all the time they need to sprout.

When volatility strikes, when fear and uncertainty dominate, we must always remember to treat our investments like a garden. Volatility, whatever the cause, is a short-term problem. Just as we want our garden to bear fruit for years, not months, it’s crucial that we make no short-term move that could harm our long-term plan.

Here’s how Peter Lynch, one of the most successful investors of all time, explains it: 

“A market calamity is different from a meteorological calamity. Since we’ve learned to take action to protect ourselves from snowstorms and hurricanes, it’s only natural that we would try to prepare ourselves for corrections. [But] far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves. Skittish investors, fearing the correction is imminent, sell…their stocks and stock mutual funds. Or they put off buying stocks in companies they like and sit on their cash, waiting for the crash. But once the market reaches bottom, the cash sitters are likely to continue to sit on their cash. They’re waiting for further declines that never come, and they miss the rebound. They may still call themselves long-term investors, but they’re not. They’ve turned themselves into market timers, and unless their timing is very good, the market will run away from them.”3

For these reasons, here are the questions investors should be asking themselves:

  1. If I get out of the market now, how will I know when it’s time to get back in?
  2. Would I rather miss a correction that could last for a few months, or a rebound that could last for years?
  3. If I own investments I like, would I really want to sell them and risk buying them back at a higher price later?

To be clear, tariffs are an important story, and one that will quite possibly be with us for a long time. And market volatility is painful, make no mistake about that. But while we here at Minich MacGregor Wealth Management don’t welcome volatility, we don’t fear it, either. That’s because we know it’s an opportunity. An opportunity to be even more patient, even more disciplined, even more consistent than before. And it’s those qualities — patience, discipline, consistency — that make the most difference in the long run.

Blaise Pascal, the great mathematician and philosopher, once said, “All of humanity’s problems stem from man’s inability to sit quietly in a room alone.” We think there’s a lot of wisdom in that! So, while we will continue keeping a close eye on the markets — and while we will certainly send you more information in the future on tariffs and their effects — what matters most is this: We cannot do anything about tariffs, or how the markets react to them.

But we can do something about ourselves.

We can be gardeners.

So, as spring rolls in, as the flowers bloom and the trees begin to blossom, take this opportunity to focus on whatever garden you may grow at home. And know that as you do, our team is constantly tending the one you’ve entrusted us with. It’s a garden we intend to last a lifetime.

1 “Trump puts tariffs on thousands of goods from Canada and Mexico,” CNBC, https://www.nbcnews.com/politics/economics/trump-puts-tariffs-thousands-goods-canada-mexico-risking-higher-prices-rcna194542
2 “Dow tumbles again, loses more than 1,300 points in two days,” CNBC, https://www.cnbc.com/2025/03/03/stock-market-today-live-updates.html
3 “From the Archives: Fear of Crashing,” Worth.com, https://worth.com/from-the-archives-fear-of-crashing/

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Types of Stock

Questions You Were Afraid to Ask #16

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

The only bad question is the one left unasked. That’s the premise behind many of our posts. Each covers a different investment-related question that many people have but are afraid to ask.

In recent posts, we’ve been breaking down some of the more common bits of financial jargon that you are likely to hear in the media about the stock market.  In this message, let’s look at: 

Questions You Were Afraid to Ask #16:
What do terms like blue-chip, value, and growth stocks mean?

If you ever tune into the financial media, you’re likely to encounter terms for different types of stocks.  Blue-chip is a frequent one; so are value and growth.  But what do these terms mean? 

Terms like these are a kind of shorthand description of a stock’s size, history, or risk profile.   With a single word, experienced investors can learn a lot about a company’s size, potential, and risks.  And since every investor has different goals to consider when selecting their investments, some may choose to focus on one type of stock over another.   

Let’s break down each term so you know what they mean if you ever hear them mentioned. 

Blue-Chip Stocks. This term refers to stocks from large, financially stable companies with good reputations.  (The name comes from high-valued chips in poker, which are often blue in color.) 

Typically, these companies have a sizeable market capitalization. (As you may remember from my last “Questions” letter, this is the total market value of a company’s available shares of stock.)  Blue-chip stocks are often household names that everyone would recognize.  If you look at the credit card in your wallet, the soda in your fridge, or the labels in your medicine cabinet, you will likely see examples of blue-chip companies. 

Investors often prefer blue chip stocks for a variety of reasons.  First, because these companies are well-established, they are often seen as less volatile.  While not guaranteed, blue chip companies tend to last for decades and can often weather recessions. 

Another reason many investors like blue chip companies is because they often pay regular dividends.  A dividend is when a company pays a percentage of their profits to shareholders, usually on a quarterly basis.  These dividends can either be reinvested or used as a source of income. 

Value Stocks. Imagine there were two fine dining restaurants in your area.  One is famous— the kind of place that gets mentioned in travel guides and where people go to propose.  The other, located a few blocks away, is a tiny spot that hardly anyone knows about.  But it tastes just as good as the touristy place, and best of all, it’s so much cheaper.  So, you decide to go there more often than not, aiming to enjoy it for as long as you can before the word gets out. 

Value stocks are similar.  The term refers to companies that appear to be undervalued — meaning they are trading at a lower price than they’re potentially worth.  Investors looking for value usually focus on companies with experienced leadership, steady revenue, a strong competitive advantage, and a low share price relative to their earnings.

Value stocks aren’t always easy to find, and the very concept of “value” is a subjective one.  But the idea is to find companies that could give you great bang for your buck and the potential for long-term growth.  Because, like that neighborhood restaurant, once the word gets out and the stock gets more popular, it could rise significantly in price. Of course, the risk of a value stock is that it could stay “undervalued” for a long time.

Growth Stocks. This term refers to stocks that have the potential to skyrocket in price over time.  Often, growth stocks are younger companies seeking to set new trends or shake up an industry.  These companies focus on growing rapidly and reinvest their earnings entirely into expansion.  Since technology is constantly changing, many investors look to up-and-coming tech companies for growth stocks, hoping to score the “next” Apple or Microsoft. 

But with this potential for growth comes the potential for more volatility.  Growth companies are often much riskier than value or blue-chip stocks, because they are younger, unproven, and have less stable finances.  For every growth company that succeeds and matures, there may be a handful that fail and disappear.

As you can see, each of these types have their own pros and cons. Blue chips tend to be reliable, stable, and often pay dividends — but they can be expensive and their potential for growth may be limited.  Value stocks have the potential to grow, and are typically not as risky as growth stocks, but may be hard to find.  Growth stocks could have the highest upside, but also the most risk and volatility.  For these reasons, many investors often seek to diversify by holding all three types, depending on their specific needs and goals. 

In our next post, we will look at a few other terms you’ll often hear in the media: Dividends, buybacks, and stock splits.  Until next time! 

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MLK Memorial

Honoring Dr. King’s Legacy: Inspiring Words for Today and Every Day

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

Happy Martin Luther King Jr. Day!

Dr. King’s words have always been a source of inspiration to many. Even though they were written decades ago, they continue to resonate deeply and remind us of the power we all have to make the world a better place.

One of Dr. King’s most impactful writings, Letter from Birmingham Jail, was penned in 1963 while he was imprisoned for participating in nonviolent protests against segregation in Birmingham, Alabama. In the letter, King responds to criticisms from local clergymen who called his actions “unwise and untimely.” Rather than retreating, Dr. King used the opportunity to explain why he felt it was not only necessary but urgent to fight for justice. Though his words were shaped by the challenges of his time, they still hold incredible relevance today.

This year, as we honor Dr. King’s legacy, we took some time to revisit this powerful letter. It’s not an easy read. It’s a letter born of frustration, written in the face of incredible injustice. But it’s also a letter filled with hope, resilience, and a call to action that still rings true today.

There were a few quotes that stopped us in our tracks as we read, and we wanted to share them with you—not just for what they meant then, but for what they can mean to us now.

“Any law that uplifts human personality is just. Any law that degrades human personality is injust. Segregation…substitutes an “I it” relationship for an “I thou” relationship and ends up relegating persons to the status of things.”

This line reminded us of how easy it can be to lose sight of someone’s humanity. It’s something we see every day, whether in the rush of our busy lives or in moments of conflict and misunderstanding. Dr. King’s words challenge us to slow down, to really see the people around us—not just as roles or labels, but as individuals with their own stories, struggles, and dreams. Small acts of kindness, even something as simple as a smile or a kind word, can remind someone (and ourselves) of that shared humanity.

“Injustice anywhere is a threat to justice everywhere. Whatever affects one directly affects all indirectly.”

This is such a powerful reminder of how connected we are. When someone in our community is struggling, it isn’t just their burden—it’s something that ripples out and affects us all. But the same is true of hope and kindness. When we choose to lift each other up, those small actions can grow into something much bigger. They create a ripple effect that brings us all closer together and makes our communities stronger.

“So the question is not whether we will be extremists, but what kind of extremists we will be. Will we be extremists for hate or for love?  Will we be extremists for the perseveration of injustice or for the extension of justice?”

This quote makes us pause and reflect on the importance of taking a stand for our values. Dr. King wasn’t advocating for division or conflict; he was challenging us to think deeply about what matters most to us. It’s easy to stay neutral, to avoid uncomfortable conversations or hard decisions—but there are moments when silence isn’t an option. Whether it’s standing up for fairness, supporting a friend, or choosing kindness in the face of disagreement, we all have the power to leave a meaningful impact through the principles we choose to uphold.

As we reflect on these quotes, we’re struck by how relevant Dr. King’s words remain. They inspire us to approach the world with more compassion, to act with intention, and to believe that even small, everyday choices can make a difference.

On this Martin Luther King Jr. Day, we hope his teachings inspire you as much as they inspire us. Let’s honor his legacy by carrying forward his ideals—not just today, but every day. Let’s find ways to connect, to uplift, and to act with the courage and love he so powerfully demonstrated.

On behalf of everyone here at Minich MacGregor Wealth Management, we wish you a meaningful and reflective day. May Dr. King’s vision inspire us all to keep building a brighter future together.

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2024 Year in Review: Lessons Learned & Navigating Uncertainty in Investing

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

Every January, we here at Minich MacGregor Wealth Management look back on the year that was. What were the highlights? What were the “lowlights”? What events will we remember? Most importantly, what did we learn? Then, we send a Year in Review message to our clients that encapsulates it all. We thought you might be interested in seeing it this year, too.

When we ponder the last twelve months, the theme of 2024, to us, is the importance of being able to operate under uncertainty. Here’s what we mean.

When the year began, there were several question marks hanging over the economy, the markets, and the nation as a whole. Each question mark, on its own, was important. Putting them all together made it extremely difficult for investors to know how the year would play out, which way the markets would go, or how the economic climate would evolve. In other words, there was a great deal of uncertainty. Let’s go through a few of the most important question marks one by one.

Which Way Will Inflation Go? The New Year kicked off with a positive outlook. Consumer prices had fallen significantly toward the end of 2023, and the expectation was that the trend would continue. But inflation rarely moves in a straight line. The inflation rate hovered around 3.1% in January, but by March, it was back to 3.5%.1  Inflation, it seemed, was still “sticky.”

This wasn’t pleasant news for the markets, because it dashed any hope that the Federal Reserve would cut interest rates in the spring. And the longer interest rates remained elevated, the more people worried about the possibility of a recession. As a result, the markets experienced a short-but-sharp dip in April.2 

Fortunately, the angst was short-lived. Over the next six months, inflation fell to 2.4% — the lowest since February of 2021, and awfully close to the Fed’s goal of 2%.1  That led to a long-awaited event in September, when we finally got some clarity on the second question mark:             

When Will Interest Rates Start to Come Down? Interest rates — the Fed’s primary tool for combatting inflation — began the year at 5.3%.3  That was the highest they’d been since early 2001. But while higher rates are effective at bringing prices down, the reason is because they cool down the economy. But if rates remain too high for too long, that coolant can ice over — and freeze the economy with it. Because of this, and because lower rates tend to juice the stock market, investors had been waiting with bated breath for any signs that rates were on the verge of coming down. Finally, in September, it happened: The Fed announced the first rate cut. Another one followed in October, and a third in November. By the end of the year, rates were down to 4.6%.3  That’s still historically elevated, but it’s a step in the right direction. That’s because we were also getting a positive answer to the third question mark:

Will the Economy Grow, or Slow? Predicting a recession has become something of a parlor game for economists. It’s not hard to understand why. Historically, raising rates to pull down inflation has almost always led to a recession. It’s called a hard landing, and it happens when prices come down so much that most businesses experience a major drop in revenue, causing them to lay off workers. Since unemployed people tend to spend less money, the economy contracts and enters a recession.

Despite years of dire predictions, this worst-case scenario never came true. Our gross domestic product, which measures our country’s total economic activity in a given period, grew by 1.6% in the first quarter, 3% in the second, and 3.1% in the third.4  As of this writing, we don’t have firm data for Q4 yet, but it’s estimated to be around the same.5 

Against all odds, for now, it seems we’ve achieved something rare: A soft landing.  

What About the Election? The fourth question mark was perhaps the least important as far as the markets were concerned, but it was also the one that got the most headlines: The November election.

Elections always create uncertainty, of course. Who will our next president be? What policies will they enact? How will they help or hurt my personal situation? History suggests that it doesn’t really matter which party controls Washington as far as the markets are concerned, but despite that, we do often see volatility leading up to the election itself. But that didn’t really happen this year. Other than a slight, brief dip at the very end of October, there was not a lot of volatility before the election, nor right after.6  Which brings us to our final question mark:

How Will the Markets React to All This? For investors, this was the biggest question mark of all. It’s always the biggest question mark of all. How would the markets react to the roller coaster of inflation? How would they react if it took longer for interest rates to drop? What about the election?

Well, now we know the answer to that, too. The S&P rose over 23% for 2024.7  When you couple that with the 24% gain we saw in 2023, it’s the best two-year performance in the index since 1997-98. The Dow, meanwhile, gained nearly 13%, and the NASDAQ over 28%.7   

Because we are looking back, because we know the answers to all these questions, it’s hard to remember the uncertainty that crept up at different points in the year. Nevertheless, uncertainty existed — and the investors who could handle it, benefited. The ones who could not, did not. We’re very happy to say that our clients belonged to the first group, but we know many people who didn’t.

Throughout the year, especially early on, we would often hear acquaintances of ours say things like, “I’m not getting into the markets until after the election.” Or “I’ll wait until interest rates come down to make a decision.” “Inflation is still too high for me, so I’ll think about it next year,” also popped up from time to time. In other words, many investors find it difficult to operate under uncertainty. Any question mark causes them to defer decisions and delay actions. Uncertainty can cause people to shut down, circle the wagons, and “turtle up.” As a result, two things happen:

  1. They miss out on the kind of year we just experienced in the markets.
  2. They don’t move forward to their financial goals.

Uncertainty is a fact of life, and as investors, we will always be dealing with question marks. Some years, there are more question marks than others, and that can certainly make things stressful. Of course, when we’re faced with uncertainty, it’s always good to slow down, take our time, and consider our options carefully. But it’s not good to become stagnant, hesitant, or fearful. It’s never good to procrastinate.  

Scientists have often held that one of the hallmarks of intelligence is the ability to make judgments under uncertainty. The ability to plan ahead even with limited information, and then adjust your plan as you learn. This is something that our team strives to do every day for our clients. We consider what we know and what we don’t. We try to identify possible outcomes and events, not to predict which will happen — which is impossible — but to prepare for as many as we can. From there, we determine what choices must be made now, which choices can be made now, and which should not be made now. Finally, we review the options that come with each choice, and which work best for each client based on their specific goals, needs, and situation.

It doesn’t mean everything will always go the way we want it to. It doesn’t mean we won’t occasionally experience setbacks. It does allow us to operate under uncertainty…which means we can always help our clients continue to work towards their dreams and financial goals.     

That’s what financial planning is all about. And that, to us, is the lesson to take from 2024.

Of course, there will be question marks in 2025, too. Here are just a few:

  • Is the inflation roller coaster truly over? Consumer prices ticked back to 2.6% in November, and there are some indications that they may rise higher still in the coming months.
  • President-elect Trump has promised to levy across-the-board tariffs against China and many other countries. What effect will those tariffs have on the economy, especially inflation?   
  • Will interest rates continue to fall, or will they remain where they are for a while? In its most recent statement, the Fed projected only two cuts for 2025.8 
  • Much of the market’s performance over the last two years has been generated by tech companies, especially those investing in AI. However, to date, many AI companies are valued far above what they are actually earning. Will that change in 2025? Will the hype continue?     

Here at Minich MacGregor Wealth Management, we’ll continue to study these issues…and even though you are not currently a client, we will update you as we get answers. But while there will always be question marks, we remain confident in our direction and in our ability to keep moving forward — whether the horizon is clear or blurry, the sky blue or gray.

So, that’s 2024! We hope it was a wonderful year. On behalf of our entire team, we look forward to making 2025 even better. As always, please let us know if you have any questions, or if we can ever help you and your family the way we help our client families. Have a Happy New Year!

Sources:
1 “12-month percentage change, Consumer Price Index,” U.S. Bureau of Labor Statistics, https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
2 “U.S. Equities April 2024,” S&P Dow Jones Indices, https://www.spglobal.com/spdji/en/documents/commentary/market-attributes-us-equities-202404.pdf
3 “Federal Funds Effective Rate,” Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/FEDFUNDS
4 “Gross Domestic Product,” U.S. Bureau of Economic Analysis, https://www.bea.gov/data/gdp/gross-domestic-product
5 “GDP Now,” Federal Reserve Banks of Atlanta, https://www.atlantafed.org/cqer/research/gdpnow/archives
6 “S&P 500 ends 5-month rally with October downturn,” S&P Global, https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/s-p-500-ends-5-month-rally-with-october-downturn-86066097
7 “S&P 500 posts 23% gain for 2024,” CNBC, https://www.cnbc.com/2024/12/30/stock-market-today-live-updates.html
8 “Fed cuts key interest rate but signals elevated inflation is likely to persist,” https://www.nbcnews.com/business/economy/federal-reserve-interest-rate-cut-december-2024-much-economy-rcna184586

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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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Buy Sell Hold image

Questions You Were Afraid to Ask #14

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

The only bad question is the one left unasked. That’s the premise behind many of our posts. Each covers a different investment-related question that many people have but are afraid to ask.

To begin this post, we’d like to ask you a question: Have you ever seen an episode of Star Trek?  If so, you know the writers often use something called “technobabble.”  You’ll hear terms like dilithium core, temporal convergence, tachyon fields, and more.  It’s obvious, of course, why the writers would do this.  As the show takes place in the future, technobabble is a quick and easy way to make the characters seem smarter and more technologically advanced than we are today.   

The media has its own form of technobabble.  If you’ve ever watched CNBC, for example, you’ve probably heard many instances of “financial jargon.”  Words that sound complicated and intimidating, and that you almost never hear in everyday conversation.  Many do have meanings, and some are very important – but they can often be bandied about by professionals in order to sound sophisticated. 

Sophistication is all well and good, but not when it comes at the expense of clarity.  So, over the next few posts in this series, we want to break down some common bits of financial jargon that you are likely to hear in the media, what they mean, and why they do — or do not — matter. 

Questions You Were Afraid to Ask #14:
What do stock ratings mean?   

Buy.  Sell.  Hold.  Overweight.  Outperform.  Strong, weak, reduce, accumulate.  These are just some of the ratings you’ll often see attached to specific investments, usually stocks.  Financial websites love to list them.  Talking heads on TV love to recite them.  But what are they?

A rating is an analyst’s recommendation on what to do with a particular stock.  Typically, an analyst will research a company by reviewing financial statements, talking with leadership, and surveying customers.  Some analysts will also study broader economic trends to try and estimate how the company will be affected by the overall economy.  Other analysts may rely heavily on algorithms and mathematical models.  Whatever their method, these analysts then prepare a report that discusses how they see the company’s stock performing in the near future. 

Inside that report is a rating.  Their advice, distilled down to a single word or phrase, on what their clients should do with the stock in question.  The three most basic ratings are: buy, sell, and hold. 

Buy and sell are fairly obvious.  They are recommendations to buy the stock — or buy more of it — or to sell whatever shares you already own.  “Hold” essentially means to sit tight.  If you already own shares in the stock, don’t buy any more, but don’t sell, either. 

So far, so simple.  But here’s where things can get a little tricky.  Since there is no standardized way to rate stocks, pretty much every financial firm will have its own system.  That’s why you’ll often see many variations and degrees of those three basic ratings.  For example, think of buy, sell, and hold as umbrella terms.  Beneath the buy umbrella, you may sometimes hear terms like moderate buy, overweight, outperform, market perform, add, or accumulate.  Under sell, you may see reduce, underweight, underperform, weak hold, moderate sell. 

“Moderate” essentially means to buy or sell more shares of the stock, but not too much.  Same for add/reduce.  Over/underweight and over/underperform means the analyst believes the stock will perform somewhat better or worse than the overall market.  Weak hold is basically a push – it’s probably fine to hold onto your shares, but you can sell if you want to. 

Sometimes, if an analyst uses all these variations, then a simple buy or sell can then take on a new meaning.  That’s why you’ll sometimes see the terms strong buy or strong sell.  This indicates the analyst believes you should either buy or sell as much of the stock as you possibly can. 

So, now you know what stock ratings mean.  But do they matter? 

Imagine you’re shopping online for a new coffee maker.  What’s the first thing you’d see?  Likely, it would be a list of coffee makers with some sort of numerical rating next to each based on all the customer reviews.  Now, would you buy the first machine that has a good rating?  Probably not.  What you would do is look at the first machine with a good rating, and then go from there. 

For regular investors, that’s essentially what stock ratings are good for.  They provide a handy place to start.  A quick reference.  A way to weed out the stocks you don’t want to look at immediately versus those you do.  But you shouldn’t ever make decisions based solely on those ratings.  Because, like the customer ratings online, they don’t tell the whole story. 

It’s important to remember that a stock rating is just the opinion of one analyst.  Others may have different opinions.  Also, because there’s no standardized rating system, one analyst’s “buy” might be another’s “hold.”  An “underperform” at one place might be a “strong sell” at another.  And while analysts can be very smart and experienced, rating is not an exact science and can be often used more as a marketing pitch than as a truly objective evaluation. 

Finally, stock ratings are not specific to you.  Consider the coffee maker analogy.  One machine might have a rating of 4.3 stars; a second might be 4.0.  But when you read the reviews closely, you might see the higher-rated machine is versatile but complicated.  The lower-rated machine can’t do as much, but it’s fast and easy – perfect for that quick cup before work.  If that’s what you want, the “lower-rated” machine might be better.  Stock ratings are similar.  They don’t address your goals, your risk tolerance, your timeline.  And that’s why they should never be used as a substitute for having your own customized investment plan. 

So, that’s the skinny on stock ratings.  Next month, we’ll look at another stock term: Big Caps vs Small Caps.  Have a great month!