Our latest discussion covered financial forecasting, the impact of tariffs, interest rates, and sector performance. Below are the key takeaways:

1. Macroeconomic Outlook & Forecasting

  • All insights were for educational purposes, not prescriptive financial advice.
  • Forecasts should come from diverse sources since markets price in expected corporate earnings and macroeconomic factors.
  • The current administration and global economic shifts play a role in shaping market trends.
  • (https://www.schwab.com/learn/story/us-stock-market-outlook)

2. Sector Performance Insights

  • The tech sector had an outstanding year, but heavy AI investments are straining profitability.
  • Rising energy costs for data centers and global environmental concerns could impact long-term growth.

3. Tech Sector & S&P 500 Analysis

  • A few large stocks drove much of the S&P 500’s gains.
  • There are concerns about overvaluation and potential pullbacks, particularly after consecutive 20% annual gains.

4. Diversification Strategy

  • Given the likelihood of uneven sector performance under the current administration, diversification remains critical for managing volatility.

5. Tariffs & Their Effects

  • Interest rate forecasts and potential tariff changes were key topics.
  • Tariffs could lead to short-term inflation as importers pass higher costs to consumers.
  • While tariffs may temporarily raise prices, businesses often find ways to adjust within months.

6. Interest Rates & Housing Market Trends

7. 401(k) to Roth IRA Conversions

8. ESG & Environmental Factors

  • Some ESG-related incentives are being rolled back, but sectors like electric vehicles remain strong due to corporate investment in sustainable technologies.

Securities and Advisory Services offered through Harbour Investments, Inc. Member SIPC & FINRA.

Join us for the next Ask Triangle!

Whether through inertia or trepidation, investors who put off important investment decisions might consider the admonition offered by motivational speaker Brian Tracy, “Almost any decision is better than no decision at all.”

This investment inaction is played out in many ways, often silently, invisibly, and with potential consequences to an individual’s future financial security.

Let’s review some of the forms this takes.

Your 401(k) Plan

One of the worst decisions may be the failure to enroll, although more and more companies are automatically enrolling workers into their retirement plans. Not only do nonparticipants sacrifice one of the best ways to save for their eventual retirement, but they also forfeit the money that any employer matching contributions represent. Not participating holds the potential to be one of the most costly indecisions one can make.1

The other way individuals let indecision get the best of them is by not selecting the investments for the contributions they make to the 401(k) plan. When a participant fails to make an investment selection, the plan may have provisions for automatically investing that money. And that investment selection may not be consistent with the individual’s time horizon, risk tolerance, and goals.

In most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73. Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10 percent federal income tax penalty.

Non-Retirement Plan Investments

For homeowners, “stuff” just seems to accumulate over time. The same may be true for investors. Some buy investments based on articles they have read or based on the recommendations of a family member. Others may have investments held in a previous employer’s 401(k) plan.

Over time, we can end up with a collection of investments that may have no connection to our investment objectives. Because of the dynamics of the markets, an investment that may have once made good sense at one time may no longer be advantageous today.

By not periodically reviewing what we own, which would allow us to cull inappropriate investments – or even determine if the portfolio reflects our current investment objectives – we are making a default decision to own investments that may be inappropriate.

Whatever your situation, your retirement investments require careful attention and may benefit from deliberate, thoughtful decision-making. Your retired self will be grateful that you invested the time… today.

1. CNBC.com, December 28, 2021
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.

Conquering Unique Retirement Challenges

Financial success is a goal for many, but women face unique barriers that can make that goal more difficult to achieve. Understanding today’s financial landscape can help women rise to the challenge, know their worth, and take control of their futures.

1. DOL.gov, 2023
2. SSA.gov, 2023
3. Prudential.com, 2023. Based on an 2019 landmark study. Latest data available.
4. CNBC.com, May 10, 2022
5. Investopedia.com, June 26, 2022
6. Bankrate.com, March 7, 2023
7. WhattoBecome.com, August 3, 2022
8. ML.com, 2023
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Your credit score may influence how much you pay for auto and home insurance.

While the vast majority of insurance companies use credit-based insurance scores to help determine the price of insurance, it is banned in the states of Massachusetts, Michigan, Hawaii, and California. Some states only allow it as a factor for property insurance like auto and homeowners insurance. Other states allow it to be used with any type of insurance.1

Several Factors

Generally, an insurance company will use a credit-based insurance score as just one factor in its underwriting process. Other factors may be considered, depending on the type of insurance. For example, with auto insurance, other factors could include your zip code, the age of the driver, the make, model and age of the car, and the number of miles you drive annually.

The use of credit scores to determine insurance rates is rooted in research that has shown individuals with lower credit scores tend to file more claims.2

You can ask your insurance company if a credit-based insurance score was used to underwrite and rate your policy, and in which risk category you were placed.

If you want to improve your credit-based insurance score, you should consider taking the same steps you would to improve your credit rating: make timely debt payments, clear up past disputes, and keep credit card balances low.

1. Forbes, June 10, 2024
2. ValuePenguin.com, May 14, 2024
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Learn how to address the challenges that women face when planning for retirement.

Preparing for retirement can look a little different for women than it does for men. Although stereotypes are changing, women are still more likely to serve as caretakers than men are, meaning they may accumulate less income and benefits due to their time absent from the workforce. One study estimates that 66% of caregivers are women. Women who are working also tend to put less money aside for retirement. According to one report, women contribute 43% less to their retirement accounts than men.1,2

These numbers may seem overwhelming, but with a little foresight, you can start taking steps now that may help you in the long run. Here are three steps to consider that may put you ahead of the curve.

1. Talk about money. Nowadays, discussing money is less taboo than it’s been in the past, and it’s crucial to taking control of your financial future. If you’re single, consider writing down your retirement goals and keeping them readily accessible. If you have a partner, make sure you are both on the same page regarding your retirement goals. The more comfortably you can talk about your future, the more confident you may be to make important decisions when they come up.

2. Be proactive about your retirement. Do you have clear, defined goals for what you want your retirement to look like? And do you know where your retirement accounts stand today? Being proactive with your retirement accounts allows you to create a goal-oriented roadmap. It may also help you adapt when necessary and continue your journey regardless of things like relationship status or market fluctuations.

3. Make room for your future in your budget. Adjust your budget to allow for retirement savings, just as you would for a new home or your dream vacation. Like any of your other financial goals, you may find it beneficial to review your retirement goals on a regular basis to make sure you’re on track.

Retirement may look a little different for women, but with the right strategies – and support – you’ll be able to live the retirement you’ve always dreamed of.

1. Caregiver.org, 2023
2. TRowePrice.com, March 13, 2023
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Most women don’t shy away from the day-to-day financial decisions, but some may be leaving their future to chance.

Nearly 60% of women take the lead in managing their household finances, yet only 19% of women feel very confident in their ability to fully retire with a comfortable lifestyle.1,2

These figures suggest that most women don’t shy away from the day-to-day financial decisions needed to run a household, but when it comes to projecting and strategizing for retirement, some women may be leaving their future to chance.

Women and College

The reason behind this disparity doesn’t seem to be a lack of education or independence. Today, women are more likely to go to college than men. So what keeps them from taking charge of their long-term financial picture?3

One reason may be a lack of confidence. One study found that only 48% of women feel confident about their finances. Women may shy away from discussing money because they don’t want to appear uneducated or naive and hesitate to ask questions as a result.4

Insider Language

Since Wall Street traditionally has been a male-dominated field, women whose expertise lies in other areas may feel uneasy amidst complex calculations and long-term financial projections. Just the jargon of personal finance can be intimidating: 401(k), 403(b), fixed, variable. To someone inexperienced in the field of personal finance, it may seem like an entirely different language.5

But women need to keep one eye looking toward retirement since they may live longer and could potentially face higher healthcare expenses than men.

If you have left your long-term financial strategy to chance, now is the time to pick up the reins and retake control. Consider talking with a financial professional about your goals and ambitions for retirement. Don’t be afraid to ask for clarification if the conversation turns to something unfamiliar. No one was born knowing the ins and outs of compound interest, but it’s important to understand in order to make informed decisions.

Compound Interest: What’s the Hype?

Compound interest may be one of the greatest secrets of smart investing. And time is the key to making the most of it. If you invested $250,000 in an account earning 6%, at the end of 20 years, your account would be worth $801,784. However, if you waited 10 years, and then started your investment program, you would end up with only $447,712.

This is a hypothetical example used for illustrative purposes only. It does not represent any specific investment or combination of investments.

1. Yahoo.com, March 21, 2023
2. TransAmericaCenter.org, November 7, 2023
3. Statista, 2024
4. Bankrate.com, April 10, 2023
5. Distributions from 401(k), 403(b), and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.
css.php