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The Pale Blue Dot

On February 14, 1990, the Earth was being watched. 

The object watching Earth was small; small enough to fit inside a four meter-large cube.  And it was distant, being over 3,000,000,000 miles away.  It is even farther away now—in fact, it recently became the first man-made object in history to venture into interstellar space. 

It was the Voyager 1 spacecraft. 

Voyager 1 is a probe built by NASA, launched in 1977 to study the outer Solar System.  Its primary mission was to study the planets Jupiter and Saturn and their various moons.  Having accomplished this, the probe is now winding down its secondary mission, which is to study the distant regions beyond the planets before it loses power and becomes destined to drift through the Universe as a mute, lonely messenger until the end of time. 

But this post isn’t about Voyager.  It’s about Earth. 

On that date in 1990, Voyager 1 had completed its primary mission.  Carl Sagan, the famous astronomer, and author, asked NASA to turn the probe’s camera around to take one last photograph of Earth and the other planets.  Between February 1 and June 6, Voyager took sixty still images.  Each image contained about 640,000 individual pixels, and as the probe was so far away, it took about 5½ hours for each pixel to reach Earth. 

The most famous of these photographs was of our home planet—now just a pale blue dot amidst the infinite blackness of space. 

If you’ve ever seen this photo, you know what a stirring, thought-provoking image it is.  Imagine our great, grand planet … filled with life, oceans, mountains, deserts, forests, and cities, reduced to nothing more than a speck.  It serves to illustrate just how small we really are compared to the unceasing vastness of the Universe.  But it also serves another, more powerful purpose. 

April 22 is Earth Day, a celebration of our planet, of nature, and of the importance of protecting the environment.  Hundreds of thousands of people will observe the event in their own way, but many more will probably fail to remember that Earth Day exists at all.  After all, there are already so many holidays demanding our time, our attention, and our money.  Most of us probably don’t even get Earth Day off from work.

And yet, we wonder if we wouldn’t attach more importance to Earth Day if we all took a few minutes, once a year, to simply look at that pale blue dot.  Because there’s something else the picture illustrates, something we should all remember. 

Take a minute, to pull up the picture on your computer.  Search for “pale blue dot” on Google® or go to this address at to see it directly.  After you look at the single pixel that is our planet, gaze around the edges of the image.  What do you see? 


Of course, we know that the Milky Way galaxy isn’t empty.  It’s bursting with stars, cosmic rays, solar wind, clouds of dust, asteroids, comets, and even other planets.  But it contains no other life, not that we’ve found.  The closest planet potentially capable of supporting life is so far distant, it would take millions—millions!—of years to get there.  That’s longer than our species has even been alive. 

Until further notice, we are alone. 

Our pale blue dot is just one of billions in the night sky, but it is unique.  We are on an island amidst a dark, silent ocean.  An oasis inside the barrenness of space.  A single, precious garden surrounded totally by desert. 

What the pale blue dot photo really shows is that our planet is significant.  It’s all we have.  It shelters us, sustains us, provides for us, and entertains us.  If there is another world richer and more beautiful than ours, we’ve yet to find it. 

In short, we’ve been given the greatest gift of all. 

This is why Earth Day is important: because it’s our chance to reflect on what we can do to truly deserve that gift.  It is our chance to reflect on how we can protect it, because it certainly needs protecting. 

This April 22, we invite you to celebrate Earth Day.  Even if you do nothing else but feel the warmth of the Sun on your face, smell the flowers in bloom all around you, and ponder the depths of the night sky, it will be enough.

And as you celebrate Earth Day, ponder the words Carl Sagan left us about our precious, pale blue dot. 

Carl Sagan, Pale Blue Dot: A Vision of the Human Future in Space (Ballantine Books, 1994)

On behalf of all of us here at Minich MacGregor Wealth Management, Happy Earth Day! 

2024 Q1 Market Recap

Did you fill out a March Madness bracket this year? 

If you did, or if you ever have before, you know what a challenge it can be to predict what will happen during the annual NCAA Basketball Tournament.  Maybe you should just pick the higher-seeded team in every game.  After all, they’re seeded higher for a reason, right?  Or maybe you think a lower-ranked team will surprise everyone and beat one of the favorites.  It happens every year, doesn’t it?  Or maybe you’ll just look to see which teams enter the tournament on a “hot streak” and bet their winning ways will continue. 

Or maybe you’ll just pick whichever mascot you like best.

Whatever strategy you use, every decision forces you to question what you think you know.  Is that top-seeded team’s record for real, or does it hide the real story?  If that underdog David manages to slay the heavily favored Goliath, will it continue winning, or will its story end in the next round?  Does Team A’s superior shooting outweigh Team B’s better defense?  The fact is that there are a million ways to guess, but there’s no single way to know. 

The reason we mention all this is because many investors are facing a similar March Madness-style dilemma with the markets right now. 

Last year, the markets surprised many experts who had predicted a recession by going on a tear.  The S&P 500 finished 2023 up 24%.1  That hot streak continued through the first quarter of 2024.  The S&P gained 10.2% in Q1, its best start to a year since 2019.  The NASDAQ finished up 9.1%.  And the Dow saw a 5.6% gain.2 

This performance was largely driven by one thing: Expectation.

Now, expectation always drives the markets, more or less.  Market performance is dictated by what investors expect will happen in the future based on data they’re seeing now.  In a sense, every investor, expert or amateur, is filling out their own version of a March Madness bracket whenever they make a decision, but for individual companies rather than individual teams…or for the markets as a whole. 

What’s less common is when such high expectations are centered around two very specific things:

  1. That the Federal Reserve will lower interest rates sometime in the near future.
  2. That the potential of AI will yield major profits for companies down the road.

Because many investors expect that one or both things will happen, they want to be positioned to take advantage of them when they do.  So, more money flows into the stock market – especially into companies that would seem to benefit most from these developments – and we experience the kind of quarter that we just saw. 

But now, that leaves investors with questions.  Questions that are eerily like what sports fans ask themselves when filling out a bracket. 

  • Is this performance real…or is it a mirage? 
  • Is it sustainable, or just temporary? 
  • Are we in a bull market…or a bubble? 
  • Does Metric A matter more than Statistic B?  Or should I only pay attention to Indicator C? 
  • Should I just invest based on whichever company logo I like best?

Okay, that last one isn’t real.  But the rest are real questions that investors – expert and amateur – are asking themselves. 

And just like with your bracket, there are a thousand ways to guess the answers.  For example, here are a few arguments – all based on statistics – for why the market’s Q1 performance is “real.”  (Which is to say, sustainable.) 

Inflation is much lower than it was last year, and the Fed has specifically said it wants to cut rates this year.  By the end of February, the Consumer Price Index was at 3.2%, whereas in February of 2023, it was at 6%.3 

The economy remains strong.  Corporate earnings appear healthy, the most recent unemployment rate was 3.9%4, and the Fed’s latest estimate was a 2.5% increase in GDP during Q1.5 

The market’s performance is actually broadening.  It’s an open secret that a major portion of the market’s gains last year were driven by just a small handful of tech companies.  (Most of which are major players in the AI race.)  But that portion broadened significantly in Q1.  Approximately 23% of the companies in the S&P 500 reached 52-week highs.6  And if you gave each company in the S&P 500 an equal weight, the index rose 25% since October.6  (If you gave each company an equal weight in 2023, the index would have only gone up 12% for the year instead of 24%.7)  In other words, more companies are driving the markets rather than just a few.  And that’s good! 

But there are equally compelling arguments for why the market’s performance may not be sustainable.  For example:

Inflation ticked up in Q1 and the Fed has said they’re in no hurry to cut rates.  Consumer prices increased by 0.4% in February after rising 0.3% in January.8  This was largely due to seasonal factors – prices usually go up in winter, partially because fuel tends to be more expensive – but it means the Fed must be even more cautious about lowering interest rates prematurely.  If investors stop expecting rate cuts soon, the markets may well pull back. 

Stocks may be overvalued.  When you divide the size of the U.S. stock market against the size of the economy, you can see how fast the stock market is growing compared to GDP.  If the ratio is heavily skewed in favor of the stock market, it suggests stocks are overvalued relative to how much the economy is producing.  Right now, that ratio is near a two-year high.6 

The hype around AI may be overblown.  Recent technological advances have investors salivating at the possibility that AI will help companies produce more at lower cost…and by doing so, return more value to their shareholders.  But this hype has been going on for well over a year now.  How much AI has contributed in terms of tangible results is an open question.  Developing AI technology is extremely expensive, so if investors decide the return is not worth the expense, the hype may die out. 

So, like with a March Madness bracket, how do we decide what to predict?  Which argument, which statistics, matter? 

The answer: All of them…and none of them. 

Here at Minich MacGregor Wealth Management, we pay attention to all these statistics but are beholden to none.  We use statistics to be alert to any possible opportunities and to be wary of any potential pitfalls.  In other words, we use statistics to help us be prepared for possibilities…not to make predictions. 

You see, what really matters is that we don’t treat investing like March Madness. 

When you fill out a bracket, you are then locked into whatever choices you made.  If you make a wrong choice, you must live with it. It’s too late to change anything.  But our strategy is far more flexible.  Imagine you filled out a bracket but could then adjust in real time depending on how different games were trending.  Furthermore, imagine you could exit out of your bracket altogether, if necessary, and then start participating again later. 

That’s what we can do every day with the markets.  Furthermore, we’re able to focus on the metrics that are proven to matter: Primarily, the law of supply and demand.  As a result, we don’t have to make predictions, hope we’re right, and then hold on no matter what.  We measure how various stocks and sectors – or teams and regions, in March Madness parlance – are trending.  When they trend above a certain point, we play offense with your portfolio.  When they trend below, we play defense.  Experience has convinced us that this approach – being flexible and adaptable – is the surest way to your destination. 

As always, though, let us know if you have any questions or concerns.  While we’re hardly qualified to give bracket advice, our team is always here to help you with a different sort of Big Dance: The one that takes place where you want it, when you want it, with the people you want to share it with.  

1 “Stocks close out 2023 with a 24% gain,” CBS,
2 “The SP 500 just turned in its best first quarter since 2019,” CNN Business,
3 “12-month percentage change, CPI,” U.S. Bureau of Labor Statistics,
4 “The Employment Situation – February 2024,” U.S. Bureau of Labor Statistics,
5 “GDPNow,” Federal Reserve Bank of Atlanta,
6 “Warren Buffett’s favorite market indicator is flashing red,” CNN Business,
7 “S&P 500 Equal Weight Index”
8 “Consumer Price Index – February 2024,” U.S. Bureau of Labor Statistics,

Pre-Retirement Spring Cleaning Checklist

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?  If you’re preparing for retirement, the answer is “A lot!” 

These days, the term spring cleaning is often used as a metaphor for getting your affairs in order.  As you can imagine, getting your retirement affairs in order is critical if you intend to actually retire when and how you want.  There are many things to keep track of, many tasks that need doing, and 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 to organize, what needs to be mopped, vacuumed, dusted…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 better prepare for retirement. 

Pre-Retirement 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 2024, the annual IRA contribution limit is $7,000 up to age 49, and $8,000 for those 50 and older.1 
  • Review your 401(k) and increase your contributions 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?
  • Start looking at your existing expenses.  Which are likely to continue after retirement?  What expenses can you remove right now?  This is a good way to find extra ways to save for retirement, and it will make your life a lot simpler once retirement comes. 
  • 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 you see?  (For example, Critical Illness and Long-Term Care insurance are two types of policies many people don’t have but are often extremely valuable for retirees.)  

But most of all …

  • Make a list of your top retirement concerns.  Is there anything you are confused or nervous about?  If so, start getting the answers you need now instead of waiting till you’re already retired.  Remember, you want to enjoy your golden years, not stress over them. 
  • Similarly, make a list of any new goals or dreams you have for retirement.  What will it take to achieve or afford them?  Are you on track?  If you’re not sure, it’s time to start planning. 

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 retirement, it’s that a little organization today can make for a much happier retirement tomorrow. 

Of course, if you need help with any of the items on this checklist, please let us know.  For example, if you aren’t sure how your 401(k) is doing, we’d be happy to help you analyze it.  If there’s a valuable estate planning document you don’t have, we can point you in the right direction.  And if you have any questions or concerns about retirement, the chances are good that we have the answers. 

In the meantime, we wish you a happy spring—and a happy spring cleaning! 

1 “401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000” Internal Revenue Service, accessed November 9, 2023.

Your Q2 Financial Checklist

Did you know that trees have checklists?

Okay, so maybe they’re not written checklists attached to a clipboard, but it’s true all the same.  Every year, when winter slowly makes way for spring, there are several criteria that trees must “check off” before they start to bloom. 

The first item on their checklist is more sunlight.  Trees can detect when spring is near because the days get longer, meaning they receive more sunlight each day.  Sunlight, of course, is what trees store and convert into sugars via photosynthesis. 

The second is moisture.  This isn’t a problem in most parts of the country, where spring rains or melting snow contribute plenty of water.  But if the area is going through, say, a massive drought, then trees will often delay blooming.

Finally, trees wait for the temperature to rise.  Even if the day is longer, trees know that a sudden blizzard or even overnight frost can wreak damage to any new growth.  So, they wait until the average temperature is high enough before dazzling the world with a riot of color.

Why are we telling you all this?  As financial advisors, we love checklists, too.  After all, if they’re good enough for nature, they’re good enough for us!  And with spring – and a new quarter –arriving, it’s time for us to make like a tree and leaf through our own checklist.  These are the steps we must take to keep growing closer to our financial goals. 

The tasks on this list are all things that should be taken care of in the second quarter.  Don’t worry –they’re not difficult!  In fact, some may be completed already.  But each is important in its own way. If you need help or have questions about any of these, please let us know.  In the meantime, we hope you have a great second quarter…and a wonderful spring!

Q2 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! 

Review All 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 about 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 by the way, when we say, “review your holdings,” we mean all of them.  That includes any and all institutions you do business with!  (Many investors sometimes forget where all their assets are kept and thus fail to review them. Or they review them separately and don’t ensure they work together.)     

Review Your Exposure to Volatility

At the same time, it’s important to be sure that you are prepared to weather any market volatility that may happen in 2024.  As you know, we’re in an election year.  We’re also still contending with higher-than-normal inflation and much higher-than-normal interest rates.  All these factors can contribute to increased turbulence in the markets.  For that reason, we need to be sure you are not overexposed to certain sectors that may be particularly vulnerable to volatility this year.  If you would like a second opinion on investments held in other places, we would be happy to provide one. 

Determine Your Insurance Needs

In many parts of the country, the return of spring means the imminent return of storm season.  It also means new opportunities for outdoor recreation.  While it may be unlikely, that means an increased chance of both property damage and/or personal injury.  While you don’t need to go out and start buying more insurance, this is the time when you should review where you are covered and where you are not.  That way, you can determine if there are any critical gaps that are simply too risky to leave unfilled.  For example, while most mortgage lenders require customers to have home insurance, few people have property insurance.  For those with property in areas where major storms, wildfires, hurricanes, or tornados are common, that’s a type of gap that really should be filled.  

Budget For Your Summer Vacation Plans

This one’s more fun.  If you have plans for a big cross-country road trip, a long-awaited tour of Europe, or family fun in Disneyland, take time now to set a budget, purchase tickets, and make reservations.  It can save you a lot of money if you do it early.  Money you can use for further adventures in the future! 

Decide 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.1  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. 

Get Your Tax Planning Done Early

Finally, once your taxes are filed and the rush is behind you, consider pivoting from tax preparation to tax planning.  While tax prep is the process of filing taxes you already owe, tax planning is the process of minimizing taxes you will owe in the future.  By doing this early, you can potentially reap great rewards in the near future.   

1 “Over a third of Americans plan to spend their tax refund right away, mostly to pay bills,” CNBC,

Last Minute Reminders for Tax Planning

We’re well into tax season now!  Of course, some people have already finished filing their returns by this point.  If you haven’t yet, here are a few simple, last-minute tips to remember. 

1. Have all your necessary documents and information in place before you start

Have you ever heard the phrase mise en place?  It’s a French term professional chefs use that means “putting in place.”  You see, a good chef ensures that all ingredients and equipment are set up and in place before they start cooking.  This type of mindset is invaluable.  It reduces mistakes and accidents and makes the entire cooking process less stressful! 

You can practice mise en place with your taxes as well.  Before you do anything else, gather every receipt, invoice, bit of paper, and piece of data that may relate to your taxes.  Have it organized and close to hand.  That way, when you start the actual filing process, you never have to interrupt your progress to look for something.  Nor will you be likely to forget anything important.  It just makes the entire affair easier, quicker, and less stressful. 

Specifically, the IRS recommends that you have the following information before filing:

  • Social Security numbers for everyone listed on your tax return.
  • Bank account and routing numbers.
  • Any W-2s, 1099s, 1098s, health insurance statements, and records of digital asset transactions.  (Think bitcoin, NFTs, and things like that.)
  • Any notices from the IRS citing an amount received for a certain tax deduction or credit. 

2. Remember to report all types of income

In the rush to file, it can be easy to forget all the various ways you generated income last year.  These days, many people have second jobs and side hustles that bring in money.  Then there’s investment income, property, and even yard sales to consider!  So, as you file, remember to report all income from:

  • Any goods or items you have sold, whether online or in person
  • Investments
  • Part-time, seasonal, or gig work
  • Rental properties
  • Self-employment or other business activities
  • Foreign accounts and assets

This will help you avoid any notices or bills from the IRS – something no one wants! 

3.  Contribute to your IRA if you haven’t already done so. 

If you haven’t yet contributed to your IRA in the last year, there’s still time to do so.  The deadline to contribute for the 2023 tax year is April 15, 2024.  (Remember that if you do decide to contribute, you must designate the year you are contributing for.)  For 2023, the maximum amount you can contribute is $6,500 if you are under 50, and $7,500 if you are age 50 or older.1

4. Get a written acknowledgment from charitable organizations you have contributed to. 

If you gifted $250 or more to any charitable organization last year, the recipient must send you a written acknowledgment of the gift upon request.2  This should also state whether the recipient provided any goods or services in consideration for the contribution.  (If so, the acknowledgment must include a good faith estimate of the value of those goods or services.) 

5. Tell the IRS to direct deposit your refund to get it faster. 

These days, eight out of ten taxpayers get their refunds via direct deposit.3  There’s a good reason for this – it’s the fastest and most secure method available!  The IRS actually issues nine out of ten refunds in less than 21 days, but getting your refund via check adds unnecessary time to the process.3 

Many people are unaware they can have their refund directly deposited into as many as three different accounts.  That’s handy because it can help you allocate the funds in a more targeted way.  For example, let’s say you want to use part of your refund to pay off a debt, another part to go into your rainy-day fund, and the leftovers to go on vacation.  With direct deposit, you can ensure all three boxes get checked.  Just have the refund portioned into the appropriate accounts! 

Finally, you can track the status of your refund using the IRS’s Where’s My Refund Tool.  You can find that here:

We hope you found this helpful.  Wishing you a smooth, stress-free tax season! 

1 “IRA Contribution Limits,” IRS,
2 “Substantiating Charitable Contributions,” IRS,
3 “Get Your Refund Faster,” IRS,

4 Common Tax Mistakes

mistake 1

MISTAKE #1: Filing Too Early

It may be surprising to hear, but many people are so anxious to get their filing done ahead of time, they file their taxes before receiving all the proper documentation they need to ensure their information is accurate. This can lead to mistakes and processing delays.

mistake 2

MISTAKE #2: Missing Eligible Credits and Deductions

There are many credits and deductions you may be eligible for. But some of these, like the Earned Income Tax Credit, the Child Tax Credit, energy tax credits, and various itemized deductions, can be difficult to figure out, causing some to skip out on them entirely. This is why working with a good tax professional can really pay off.

mistake 3

MISTAKE #3: Forgetting to Contribute to an IRA

Some taxpayers forget to contribute to an Individual Retirement Account each year. These contributions are tax-deferred, meaning they can help reduce your taxable income. For the 2023 tax year, the contribution limit is $6,500 for those under age 50 and $7,500 for those over.*

mistake 4

MISTAKE #4: Not Reporting All Income

Many taxpayers only think of their paycheck when reporting income, forgetting to factor in dividends, bank interest, and other income sources. This information is critical for both calculating the credits and deductions you can take as well as the refund you are entitled to.

* “IRA Contribution Limits” – Internal Revenue Service

Your Q1 Financial Checklist

As financial advisors, we are big believers in checklists. They help us stay organized, keep our priorities straight, and ensure that everything we need to do for you gets done.

One of the items on our personal checklist this month is to send a checklist to you.

It’s 2024! A new year means new opportunities, new adventures, new goals to achieve. But doing all that requires some housekeeping. There are certain financial steps we highly recommend you take early in the year in order to make the rest of 2024 as enjoyable and stress-free as possible. So, to that end, we are including a short “Q1 Financial Checklist” with this letter.

The well-known surgeon Atul Gawande said in his book, The Checklist Manifesto: “Checklists cannot be lengthy. A rule of thumb is to keep it between five and nine items, which is the limit of working memory.”With that in mind, we’ve chosen seven items that are especially important.

The tasks on this list are all things that should be taken care of in the first quarter. Don’t worry – they’re not difficult! In fact, you may have handled most of them already. Some may not even apply to you. But each task is important in its own way. Put them all together, and you will find yourself more financially organized…and several steps closer to your financial goals.

If you need help or have questions about any of these, please let us know. In the meantime, we hope you have a great first quarter…and a wonderful 2024!

Q1 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!

Replenish – or Add to – Your Rainy-Day Fund

If you had to dip into your “rainy-day” fund last year, begin this year by adding to it as soon as possible. Knowing you have the funds to cover an emergency is probably the single best way to remove financial anxiety from your life. You don’t have to do it all at once – even just adding a little bit each month is helpful. A good rule of thumb, though, is to have enough saved to cover three-to-six months’ worth of living expenses.

Contribute to Your IRA for 2023

If you haven’t yet contributed to your IRA in the last year, there’s still time to do so. The deadline to contribute for the 2023 tax year is April 15, 2024. (Remember that if you do decide to contribute, you must designate the year you are contributing for.) For 2023, the maximum amount you can contribute is $6,500 if you are under 50, and $7,500 if you are age 50 or older.1 Your tax preparer should be able to help you fill out the necessary forms, but please feel free to contact me if you need any help. 

Rebalance Your 401(k)

The beginning of the year is a great time to check if your 401(k) needs to be rebalanced. When you originally set up your 401(k), you likely selected a specific asset allocation. (So much in domestic stocks, so much in foreign stocks, so much in bonds, etc.) But over time, your 401(k), like any portfolio, may get overly weighted in one type of asset over others due to how the markets perform. This means your 401(k) will no longer be allocated in the way you originally set. “Rebalancing” your 401(k) means to realign the investments so they match your current allocation. Let me know if you need any help with this!  

Get Your Taxes Done Early

This one’s easy to understand! Starting sooner means mistakes are less likely, available deductions or credits are taken advantage of, and headaches are reduced. An important note regarding Schwab 1099 tax forms: digital tax exports and mailings are scheduled for February 16th. Please allow 7 to 10 days for the mailing to arrive.

Buy Any Discounted Items That You Need

After the national spending spree that is the holiday season, many stores will offer discounts on products. Even big-ticket items like furniture, electronics, and exercise equipment can sometimes be found for relative bargains. So, if there’s a major purchase in your future, look into doing it earlier in the year, if possible – you may just find a great deal!  

Plan, Budget, and Save For Your Vacation(s) Now

Similarly, airfare and hotel costs can sometimes be found for less if booked very early. Plus, when you determine where you want to go and what you want to do well in advance, it gives you more time to set aside money specifically for your trip…so you may not need to dip into your long-term savings!

Take Advantage of Higher Interest Rates While They Last

As you know, interest rates are historically high right now. That’s not so great for consumers, but it’s good for savers. If you have more short-term goals you want to save for – like a trip or major purchase, for example – consider taking advantage of higher rates. There are many potential ways, including Certificates of Deposit, Treasury Bills, and money market accounts. Give me a call if you’d like more information!

[1] “IRA Contribution Limits,” Internal Revenue Service,

Why are New Year’s Resolutions So Hard To Keep?

As you know, this is a time of year when many people make New Year’s resolutions.  Lose weight, stop smoking, save more, learn a new skill, get more sleep, visit a new place, get finances in order, etc.  You name it, chances are, someone has resolved to do it.

As financial advisors, people often come to us for help with any financial resolutions they have – or resolutions that require some change in their financial situation to achieve.  But often, people come only after they have tried and failed to keep those same resolutions on their own.  

This got us thinking: Why are New Year’s resolutions so hard to keep?  In most cases, our resolutions are good for us.  We want to do them.  So why aren’t they easier?

There are many reasons for this, but one of the most important can be best explained by Aesop’s classic fable about…

The Dog and His Reflection

It happened that a Dog, after much hunger and long labor, had finally procured for himself a chunk of meat, and was carrying it home in his mouth to eat in peace.  On his way home, the Dog had to cross a fallen tree trunk lying across a running brook.  As he crossed, he looked down and saw his own reflection in the water beneath.  Thinking it was another dog with an equally large piece of meat, he made up his mind to have that also.  So, he snapped at the reflection in the water.  But as he opened his mouth, his own meat slipped out, fell into the brook, and was never seen by the Dog again.      

While some have interpreted this fable to be a warning against greed, we look at it a little differently.  Despite being halfway to his goal – enjoying a nice meal – the Dog became distracted by a different goal, and in pursuing that, lost sight of his own.  

In our experience, this happens to most of us every year.  We set a goal we want to achieve, something we truly care about.  But it takes time to accomplish our resolutions, and it’s very easy to get distracted by the newest, shiniest things.  For example, imagine someone resolves to save $200 per week, so that they can finally take that trip to the Caribbean they’ve always dreamed of.  But after doing this for three months, they see another person enjoying the latest iPhone that came out, so they decide to go for that instead.  After all, the Caribbean will always be there.  So, they spend all the money they’ve saved – and suddenly, they’ve sabotaged their own resolution.  

This happens on a larger scale, too.  we’ve seen people who dream of a retirement spent in the sun…only to go chasing shadows instead.  We’ve seen people with grand plans to start their own business one day…only to spend their time watching television.  

Of course, there’s nothing wrong with buying a new iPhone or relaxing in front of the TV.  But to truly change our lives for the better, we must learn discipline.  We must hold ourselves accountable.  We must keep our eye on what’s truly important, and not be distracted by reflections. 

There are several ways we can do that.  Here are a few we’ve found to be especially helpful:

  1. Be specific with your resolutions. People who set specific goals are more likely to achieve them.  For example, instead of resolving to save money, resolve to save $200 per week.  
  2. Put it in writing.  Write down your resolutions and post them in a place where you will see them every day.  This will help remind you of what you’re working towards, so you won’t end up like the Dog in the fable.  
  3. Set realistic goals.  Set goals that are within your reach, and don’t try to take on too much at once.  Be mindful of your finances and schedule.  Account for the fact that sometimes, you need to kick back and relax or spend money on a whim.  In addition, take your time.  There’s no prize for finishing first, and anyway, to quote another one of Aesop’s fables, slow and steady wins the race.  
  4. Develop a plan.  This is so important.  Create a timeline with steps toward your goal.  Set deadlines for each and cross them off as you go.  This will help you generate both the momentum and the motivation you need to continue.
  5. Ask for help.  Whether it’s with a financial professional or a life coach, if you find yourself struggling to reach your goals, don’t think you need to do it alone!  Find someone who can help keep you focused and accountable.
  6. Reward yourself.  Acknowledge even the smallest of achievements. Keeping resolutions is hard work, and you should be proud of everything you accomplish!  

Regardless of what you do, always remember The Dog and His Reflection.  It can make all the difference.  

Good luck and Happy Holidays!  

Questions You Were Afraid to Ask #11

The only bad question is the one left unasked. That’s the premise behind many of our recent letters. Each covers a different investment-related question that many people have but are afraid to ask.  In the next few messages of the series, we want to address some questions we’ve been hearing lately about recent investing trends.  We’ll start with…

Questions You Were Afraid to Ask #11:
What does it mean to invest in cash? 

Sometimes, an investor will see a headline that mentions the word “cash.”  Here are some examples just from the last year or so:

“Cash is king again.”

“Warren Buffett sits tight on cash.”

“No more ‘cash is trash’ billionaire hedge fund manager says.” 

“How much of an investment portfolio should be in cash?”

Headlines like these often bewilder new investors.  But even experienced investors sometimes wonder: “What does it mean to invest in cash?”  After all, we don’t usually think of the word “cash” in relation to investing.  For most people, cash is the stuff you keep in your wallet.  So, what gives? 

This is a textbook example of an intelligent question people are often afraid to ask. 

Fortunately, “investing in cash” is a fairly simple concept.  It means to invest in a type of short-term security for a set period of time in exchange for one or more interest-rate payments. 

Certificates of deposit (CDs), money market accounts, and treasury bills are three examples.  These securities are known as “cash equivalent” investments, but the word “cash” alone is often used as an umbrella term to cover all the various types.  That’s because these types of investments are very liquid.  That means the funds inside them can be converted to actual cash – money you can spend at a moment’s notice – quickly and easily compared to stocks, bonds, or investment accounts like a 401(k) or IRA.  (Stocks and bonds aren’t always easy to sell, and depending on the timing, you may sell for a lower amount than what you paid for.  Meanwhile, withdrawing the money from an IRA or 401(k) before you retire can trigger financial penalties from the government.) 

That’s why these types of securities are referred to as “investing in cash.”  They still provide a return – hence the investing part – but also a level of liquidity close to actual, physical currency. 

Cash investments are handy if you have money that you:

  1. Want to keep safe.  Money markets and certificates of deposit are historically stable investments and are often insured up to a certain point by the federal government.
  2. Want to earn a return on. In the form of interest rate payments, which are generally higher than with a basic savings account.
  3. Want easy access to within a relatively short period of time.  Most money markets have a maturity of six months or less.  Treasury bills mature within one year or less.  CDs, meanwhile, usually have a maturity of 6 months to a few years.

That said, there are some downsides to investing in cash.  For one thing, if your focus is on growing your money, there are usually much better options.  That’s why many investors often shun putting too much money into cash. They feel there are more productive ways to invest.  And while they are very liquid compared to other securities, there are still penalties if you withdraw the money from a CD before maturity.  (Money markets don’t have an early withdrawal penalty, but many banks and credit unions will charge monthly fees if the balance falls below a certain minimum.) 

With all this in mind, why have we seen so many headlines about “cash” in recent years?  It all has to do with interest rates.  As you probably know, the Federal Reserve has been gradually hiking rates for much of the past two years to bring down inflation.  When the Fed raises rates, banks and credit unions usually follow suit.  As a result, some cash investments have been paying higher interest rates than normal.  This, coupled with a volatile stock market, has caused cash to gain in popularity with some investors.

How long this trend continues is impossible to know.  And it’s worth emphasizing that cash, like all securities, is an investment that is sometimes right for some people in some situations…not always right for all people all the time.  So, if you’re interested in cash investments, be sure to talk about it with a qualified financial professional first to make sure it’s right for you. 

In the meantime, now you know what it means to “invest in cash.”  In our next post, we’ll discuss another recent investing trend.  Have a great month!