This Week’s Takeaways:
- The ceasefire has market bulls excited, pointing to the reduced recession risk coming from oil prices dropping, inflation improving overall, and the stock market rally broadening.
- Gold is tough to value and has historically generated its returns in short windows. If you want to own it, consider a fixed position in your portfolio versus trading it.
- Bull and bear markets don’t change your investment abilities, although they make you feel more confident when things are going well and concerned when things aren’t. Your abilities haven’t changed, so don’t change your plans in either environment.
- We have six years to shore up Social Security through a combination of higher payroll taxes and future benefit cuts before the system is only able to pay out 78% of benefits.
- Long-term care is a significant retirement risk that can create substantial expenses for many retirees, making advance planning around insurance, asset allocation, and funding sources important.
- Plus, my latest book recommendation and this week’s Boston Corner provides a detailed look at the regional economy.
Falling Oil Prices Reinforce Bullish Outlook by Professor Jeremy Siegel
The ceasefire and Hormuz reopening help lower oil prices, which reduces recession risk. Gas prices should drop, which helps consumers. We should see disinflation the second half of the year. The broadening of market leadership beyond a handful of mega-cap technology stocks is another encouraging sign.
How I’m Talking to Clients About Investing in Gold by Investopedia
My latest article for Investopedia looks at how investors should think about owning gold in their portfolio. Given that it is tough to value and has historically been volatile, it may make sense to own a small allocation consistently versus trading it if you want the position and focus on owning through a liquid ETF.
Smart Investors vs. Dumb Investors by A Wealth of Common Sense
Performing well during a bull market doesn’t make you a good investor, any more than doing poorly in a bear market makes you a bad one. What those environments do provide is opportunities for mistakes as you get overconfident in your abilities in the bull markets and second guess your plan and strategy in bear markets.
Social Security’s Financial Outlook: The 2026 Update in Perspective by Center for Retirement Research at Boston College
In 2032, the program will be able to pay out only 78% of scheduled retirement benefits. According to this analysis, lower fertility and less immigration contribute to this future gap, as does the recent tax cut on Social Security benefits. We have six years to close the gap, which will likely come through a combination of higher payroll taxes and future benefit reductions.
How Likely Are You to Have an Extended Long-Term-Care Need? by Morningstar
About half of retirees will incur no long-term care costs, while roughly one-quarter will experience extended care needs that result in substantial expenses, making long-term care one of the largest and most unpredictable retirement risks. The financial impact can be significant, particularly for higher-net-worth households seeking greater choice and flexibility in care options, making advance planning important even if care is never needed. The key decisions involve evaluating self-funding, insurance, and asset allocation strategies before a health event limits available options.
5 Financial Milestones That May Signal You’re Ready for Financial Independence by Savant Wealth
Financial independence is about more than reaching a specific net worth target; it often becomes evident when several financial building blocks are in place. Key milestones include having a clear understanding of spending needs, maintaining a strong emergency reserve, carrying manageable or no high-interest debt, consistently saving and investing, and accumulating assets that can support future lifestyle goals. The framework encourages investors to focus on financial readiness and sustainability rather than viewing financial independence as a single number or date.
Book Recommendation
The Banker Who Made America: Thomas Willing and the Rise of the American Financial Aristocracy, 1731-1821 by Richard Vague
If you haven’t followed the money, chances are you don’t know the real story of America and its Revolution. Nothing gives a clearer insight into this history than the life of early America’s dominant merchant trader, first bank president, and first central banker, Thomas Willing.
In this book, Richard Vague shows how Willing bankrolled – and in the process helped save – the Revolution and then fundamentally shaped the financial architecture of the young Republic. So powerful was Willing that President John Adams complained that George Washington and Alexander Hamilton were governed by him. Yet at a decisive moment in Willing’s life he voted against independence, as conflict between Pennsylvania’s moneyed elite and the emergent lower and middle classes embroiled the politics of 1776 in bitter class conflict. This dynamic would continue after independence, as Willing and his associates attempted to tame the democratic forces unleashed by revolution and thereby set up a tension that has never stopped shaping US politics.
Boston Corner
Mass. has new limits on insurers’ much-hated prior authorizations. Here’s what to know. by The Boston Globe
Who’s hiring? Not the industries that made Massachusetts rich. by The Boston Globe
