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Author: Minich MacGregor Wealth Management

State of the Economy

Big question: how’s the economy doing?

With the year more than half over and markets on a spree, it’s an important question to consider.

Let’s dig into the latest data and find out.

Inflation continues its downward spiral.

The latest data for June shows that inflation fell for the 12th month in a row to an annual rate of 3%.1

That’s a significant improvement from June of last year when inflation soared to 9.1%.

It also puts the Federal Reserve in the difficult position of deciding whether or not to raise rates again after pausing in June.

The odds are good that the Fed will hike rates again at least once more this year, though if inflation continues to decline, policymakers might choose to hold off.2

The economy continues to shrug off recession worries.

Despite concerns about how rising interest rates could eat away at economic growth, it doesn’t look like a recession is imminent.

Obviously, that could change.

However, a July 10 Federal Reserve model projects that the economy grew 2.3% in Q2.3

The job market is still robust, even in sectors sensitive to high interest rates.4

All told, the economy has added 1.67 million jobs in 2023 so far.5

That’s significantly less than the 2.67 million jobs added in the first half of 2022 but it shows that the labor market still has legs.

However, job growth may be cooling in the private sector, which could be a warning sign of a slowing economy.6

Market psychology has been trending toward optimism (and greed).7

The stock market generally tends to reflect expectations about the economy and business performance.

While economic data seems to support the optimistic view, markets might be a little overheated.

That means pullbacks and corrections are likely, even if we’re already in the early stages of a bull market.

Here’s some good news: They happen pretty regularly, as the chart below shows.8

You can see by the red dots that even years with strong market performance experienced some pretty big drops.

That’s normal and not a reason to worry.

So, what happens next in markets?

We see the potential for volatility ahead.

While the rally seems to have spread beyond tech stocks, sentiment could easily swing the other way.

Bottom line: We’re watching markets, we’re reading reports, and we’ll be in touch with our clients as needed.


Questions You Were Afraid to Ask #9

In our last writing, we broke down some of the most common terms associated with bonds and what they mean.  But there was one term we left unexplained – and often, it’s the one you hear the most about in the media.  We’re referring to a bond’s yield.  So, without further ado, let’s answer:

Questions You Were Afraid to Ask #9:
What are bond yields and why do they matter?

Super-quick refresher on four of the terms we defined last time, because they’ll play a role here, too:

Par Value: This is the amount that must be returned to the investor when the bond matures – essentially, the original investor’s principal. (Many bonds are issued at a par value of $1,000.)

Coupon Rate: This is the bond’s interest rate, paid by the issuer at specific intervals. For instance, let’s say you owned a $1,000 bond with a 10% annual coupon rate. The issuer would then pay you $100 in interest each year until maturity.  

Maturity: This is the amount of time until the bond is due to be repaid. A 10-year Treasury bond, for instance, matures 10 years from the date it was issued.

Price: This is the amount for which the bond is traded in the secondary market. Sometimes, bonds trade at their par value, but they don’t have to. For instance, imagine Fred bought a bond from the issuer for $1000, but trades it to Fran for only $950. The bond’s par value is still $1000.  The price, though, is $950, and is said to be traded at a discount. On the other hand, if Fred trades it for $1,050, then Fran would be buying it at a premium.  And if Fran buys it for the same price that Fred originally paid – $1000 – she would be buying it at par.   

Financial terminology can be slippery and hard to remember.  (It’s like mental soap.)  But keeping all these terms in mind, the definition of a bond’s yield is this: The return – or amount – an investor expects to gain until the bond matures. 

Simple, right?  Now we can wrap this up and go about our day.

Except, not quite.  While that may be the definition, the actual ramifications of yield go a bit deeper.  To understand this, we first need to understand the most basic way yield is calculated. 

A bond’s current yield can be found by dividing the bond’s annual interest rate payment (coupon rate) by its price.  For example, imagine Fran buys a bond with a 10% coupon rate for its original $1000 price.  The bond’s yield would be 10%, too. 

Now imagine that Frank buys that same bond from Fran a year later – but for $75 more. Since the bond is being traded for more than its par value – in this case, $1,075 – the yield would go down to 9.3%. After all, if Frank pays more than Fran for the same level of interest rate, he’s getting a lower return on his investment than Fran did, who paid less. However, if the bond trades for less than par – say, $975 – then the yield goes up to 10.25%. 

In other words, yields and bond prices are inversely related.  If the price of a bond goes up, its yield will go down. If the price goes down, the yield goes up.  Make sense?    

Essentially, by comparing the current yield of different bonds, you can see which bonds are expected to give more or less of a return on your investment. The higher the yield, the better the expected return. 

Now, that doesn’t mean an investor should just look for bonds with the highest yields and call it a day. That’s because high-yield bonds tend to come with more risk than low-yield bonds do. As we covered previously, issuers with lower credit ratings will often pay higher interest rates, since there is some risk they won’t be able to repay the principal by the time the bond matures. Investors must always balance risk versus reward when choosing where to put their money, and that holds true for bonds, too.

So, that’s yield in a nutshell. Now, you may be wondering, “Why do I hear so much about bond yields in the media?” Well, many analysts and economists use yields to project which direction interest rates will move in the future…and by extension, the overall economy. You see, when interest rates are expected to rise, bond prices tend to go down.  (That’s because an existing bond’s coupon rate will no longer be as attractive as that of a new bond, meaning the owner would need to sell the bond at a discount.) And when interest rates are expected to fall, bond prices rise. For that reason, when yields rise across the entire bond market, analysts often see it as a signal that interest rates may rise soon, too. (Furthermore, when the yield on short-term bonds rises above that of long-term bonds, this can indicate that investors are concerned about a possible recession.)         

Now, here’s the truly important thing:

We covered a lot of concepts in a very short amount of time.  Hopefully, it all made sense.  To be honest, we’re just barely scratching the surface of this topic – but this is precisely why we started writing this series on “Questions You Were Afraid to Ask.” 

The world of investing can be a complicated one.  Sometimes, it’s more complicated than it needs to be.  You will often see terms like “yield” thrown about in the media without any explanation or context. Many investors, even experienced ones, can find all this lingo to be confusing, even intimidating.  That’s not how investing should be! You don’t need a PhD to understand this stuff.  You just need to break it down and translate it into plain English.  Everyone, regardless of their level of education or experience, has the right to invest with confidence in their own future.  (Furthermore, smart investors don’t actually need to think about terms like “yield-to-worst” that much.  Far more important is understanding what you want to accomplish, and what steps you need to take to get there.

Next time, we’re going to move away from bonds and answer some questions many investors have regarding modern investing trends.  In the meantime, have a great day!

The Ultimate Vacation

Retirement can be the ultimate vacation … IF you plan ahead

As we get further into summer, we’ve had several friends tell us about their vacation plans. Listening to them, it’s clear they’ve put a lot of thought and effort into planning for their trip.

That got us thinking: what if people put as much time into planning their retirement as they do for their vacations?

Unfortunately, this isn’t usually the case. That’s a problem because the average vacation only lasts a few weeks. Retirement, on the other hand, can span decades.

We think one reason for this is because many people don’t know how to start planning for retirement … or they’re a bit intimidated by the thought of it. But planning isn’t what should intimidate anyone. Retiring without a plan is what’s really scary.

We spend a lot of time and effort on our clients’ retirement plans. But it occurred to us that there may be folks out there who can’t say the same thing.

Fortunately, it’s easy to get started—and some aspects of retirement planning are actually fun! When you get right down to it, all you really must do is apply the principles of good vacation planning to your retirement. We’ll give an example. Before writing this, we looked at several different travel websites. Most of them gave tips on how to go on vacation. We were amazed at how similar these tips were to planning for retirement. So, we’ve listed some of them below, along with how to make them suitable for a person’s golden years:

Vacation PlanningRetirement Planning
Tip #1 – Make a list of places you want to visit. Write down the activities you want to do in each location, and what you like about them.Tip #1 – Make a list of goals you want to pursue during retirement. Write down why they’re important to you.
Tip #2 – Rank these places in order of how important each one is to you.Tip #2 – Rank these goals in order of how important each one is to you. Have fun with these first two steps.
Tip #3 – Determine your budget. Factor in travel, hotel, and food costs. Then determine how much it will cost to do the various activities you listed in Tip #1. Don’t forget to include how much you plan to spend on souvenirs and things like that.Tip #3 – Determine your budget. First start with expenses; where do you want to live, and how much will it cost to live there? What are your utilities like? What medical costs do you anticipate having? What debts do you owe? Finally, estimate how much it will cost to pursue the goals you listed in Tip #1. (It’s okay if it’s a rough estimate.)
Tip #4 – After determining what your vacation will cost, calculate your current budget by adding up your income minus expenses. Whatever’s left is what you have, to put towards your retirement on a monthly basis. vacation.Tip #4 – Calculate your current budget by adding up your income minus expenses. Whatever’s left is what you have, to put towards your retirement on a monthly basis.
Tip #5 – Go online, consult with a travel agent, or check out a travel book and try to find ways to bring your costs down. Savvy vacationers can find deals, coupons, and tour companies that really make a trip easier on your wallet.Tip #5 – Get together with me and bring everything you’ve written down so far. We can discuss possible ways to further fund your retirement, whether it’s through investing or something else.
Tip #6 – Book your vacation!Tip #6 – Set your retirement date!

Planning a vacation and planning for retirement aren’t exactly the same, but they’re not too far apart, either. In the end, what’s important is that people devote the same energy to their retirement as they do their summer excursions. For both, the solution is the same: Plan, don’t wing it.

If you or someone you know are “winging” your retirement planning, we’d like to offer our help. If you have doubts or concerns about your retirement, please feel free to give us a call. We’d be happy to help you create a plan that shows not only how to fund your retirement, but enjoy your retirement, too!

Remember: planning a vacation is great for spending a few weeks in the sun. But planning for retirement can lead to a holiday that lasts for years. Please let us know if there is anything we can do to help.

Will the Rally Keep Going?

Markets have been hitting some very positive milestones lately, but it’s not clear that we’re in a bull market yet.1

Is the bear market actually over?

Are the bulls back or are we seeing another “bear market rally” that will eventually lose steam?

Let’s discuss.

When stocks are caught between surges and pullbacks, and we’re not entirely sure what’s going on, it’s useful to go back to the fundamentals.

What bullish factors support the rally?

1. Despite all the worrying, it doesn’t look like a recession is here yet.2

The labor market is still extremely strong and the housing sector is showing signs of optimism again.

More positive signs of a strong economy will support a rally.

2. Inflation seems to be under control and the Fed has (finally) paused interest rate hikes to see how the economy responds.3

Investors are more likely to stay optimistic if the Fed holds to its plan to limit future rate increases.

3. FOMO. Some of the greedy sentiment behind this rally is due to a legitimate fear of missing out on the next bull market. No one wants to be on the sidelines when markets move.

What bearish factors could kill the rally?

1. The current surge has been largely driven by technology stocks and hasn’t broadened across all sectors.4

That means any negative sentiment about these tech high-flyers is likely to have a disproportionate effect on the overall rally.

2. We still can’t be certain that a recession won’t hit this year and the economy is still facing headwinds that are likely to impact corporate earnings.2

3. Growth may be hard to come by for U.S. businesses.5 Since stock prices reflect the value of their underlying companies, earnings misses or negative surprises could tank sentiment.

Bottom line: For the rally to keep going, investors will not only have to stay positive about technology stocks but also gain confidence in the overall state of the economy.

Here’s some good news: Whether or not the bear market is actually, finally over, the overall picture is looking brighter.

We’re watching closely.



Pros and Cons of Working in Retirement

After retirement, many individuals consider going back to work. Whether it’s because they want a little extra income or just need something to keep themselves busy.

There are benefits to working after retirement besides the obvious financial ones. Having a job, even part-time, allows you to slowly ease into retirement. It also helps you feel a sense of fulfillment and purpose. But there can also be some negative aspects to returning to work after retirement.

 Here are a few pros and cons to consider before you commit to starting a post-retirement position:


  • Provides a sense of purpose
  • Extra income
  • Freedom and flexibility of your schedule
  • Social activity and health
  • Better health insurance options


  • Less free time
  • Ageism in the workplace
  • Possible impact on social security benefits
  • Risk of higher taxes
  • Less job security

New bull market? (caveats inside)

A new deal finally put the debt ceiling issue to rest (for now, anyway), and stocks are rallying.

Are we on the brink of a new bull market?

We might be. The S&P 500 has soared in 2023 and is up nearly 20% from its October 2022 low.1

That’s pretty surprising given the concerns about interest rates, recessions, banks, and a war in Europe, so some analysts are wary.

How do we know when we’re in a bull market?

First, let’s acknowledge that the terms “bull” and “bear” are just shorthand for general market trends and don’t necessarily mean anything scientific.

Generally, a 20% decline from a market high defines a bear market.

(You might remember all the headlines from 2022 when the current one started.)

However, bull markets are a little harder to call.

A 20% increase from a bear market low doesn’t necessarily kick off a bull market.2

Since a 20% increase still leaves you shy of your original market high, many analysts don’t consider it a proper bull market yet.

They want to see stocks achieve a new historic high before officially calling an end to the bear market.3

We’re not there yet.

But, it’s probably fair to say that we’re flirting with a bull market.

What’s driving the recent rally?

Here’s where analysts have some concerns.

The recent rally centers around a few big tech stocks and seems to be energized by enthusiasm for artificial intelligence.

That means the rally lacks breadth. Your average S&P 500 company has only seen gains of less than 3% this year.3

The fact that the rally relies on the performance of a few high-flying stocks could spell volatility ahead.

What should I expect in the weeks ahead?

Hard to say. Markets seem to have momentum and we could see the rally continue.

However, recession and interest rate concerns are still bubbling under the surface, so let’s not break out the party favors yet.4

Let’s celebrate just how far we’ve come since the bear market began last year, but stay flexible enough to accept any pullbacks and volatility that might lie ahead.

1 Yahoo Finance. S&P 500 closing price performance between October 12, 2022 and June 5, 2023.

The Springs of Inspiration

Every Memorial Day, we as Americans take time to remember the soldiers who died serving our country.  We lay flowers at their graves. We touch the monuments erected in their memory. Sometimes, we even walk on the same battlefields where they fought and fell. Knowing all the while that we wouldn’t be here without them. 

In our opinion, this is an American tradition as patriotic as singing the national anthem or reciting the Pledge of Allegiance. And it makes Memorial Day as important as Independence Day or Thanksgiving. Saluting our fallen, honoring their sacrifice, and vowing to build on the ground they broke is the least we can do. Furthermore, we believe it inspires us all to be greater citizens ourselves.

Recently, we came across a speech given by President Woodrow Wilson on May 30, 1914, at the National Cemetery in Arlington. At the time, Memorial Day already had a long history, but it was not yet as standardized as it is today. But with the last veterans of the Civil War passing away, and new storm clouds gathering over Europe – World War I would break out a few months later – more and more Americans were realizing the importance of giving thanks to those who gave their lives. 

Wilson’s speech – which he apparently gave without any preparation – perfectly describes why this is such a vital tradition. In honor of the holiday, we thought we would share some excerpts from it with you. We hope the words touch your heart as much as they have ours. 

We are so grateful for this nation. We are so humbled by the knowledge others died so that our country might live. Now, it is our job to ensure their memories forever live on, too.

On behalf of everyone here at Minich MacGregor Wealth Management, we wish you a safe and peaceful Memorial Day.

Memorial Day Address
Given by Woodrow Wilson, 28th President of the United States, on May 30, 1914

Ladies and Gentlemen, I have not come here today with a prepared address. But I will not deny myself the privilege of joining with you in an expression of gratitude and admiration for the men who perished for the sake of the Union. They do not need our praise. They do not need that our admiration should sustain them. There is no immortality that is safer than theirs. We come not for their sakes but for our own, in order that we may drink at the same springs of inspiration from which they themselves drank.

Whenever a man who is still trying to devote himself to the service of the Nation comes into a presence like this, or into a place like this, his spirit must be peculiarly moved. A mandate is laid upon him which seems to speak from the very graves themselves. Those who serve this Nation, whether in peace or in war, should serve it without thought of themselves. I can never speak in praise of war, ladies and gentlemen; you would not desire me to do so. But there is this peculiar distinction belonging to the soldier, that he goes into an enterprise out of which he himself cannot get anything at all. He is giving everything that he hath, even his life, in order that others may live, not in order that he himself may obtain gain and prosperity. And just so soon as the tasks of peace are performed in the same spirit of self-sacrifice and devotion, peace societies will not be necessary. The very organization and spirit of society will be a guaranty of peace.  Therefore, this peculiar thing comes about; that we can stand here and praise the memory of these soldiers in the interest of peace. They set us the example of self-sacrifice, which if followed in peace will make it unnecessary that men should follow war anymore.

We are reputed to be somewhat careless in the use of the English language, and yet it is interesting to note that there are some words about which we are very careful. We bestow the adjective “great” somewhat indiscriminately. A man who has made conquest of his fellow-men for his own gain may display such genius in war, such uncommon qualities of organization and leadership that we may call him “great,” but there is a word which we reserve for men of another kind and about which we are very careful. That is the word “noble.” We never call a man “noble” who serves only himself; and if you will look about through all the nations of the world upon the statues that men have erected, you will find that almost without exception they have erected the statue to those who had a splendid surplus of energy and devotion to spend upon their fellow-men. Nobility exists in America without patent. We have no House of Lords, but we have a house of fame to which we elevate those who, forgetful of themselves, study and serve the public interest, who have the courage to face any number and any kind of adversary, to speak what in their hearts they believe to be the truth.

We admire physical courage, but we admire above all things else moral courage. I believe that soldiers will bear me out in saying that both come in time of battle. I take it that the moral courage comes in going into the battle, and the physical courage in staying in. There are battles which are just as hard to go into and just as hard to stay in as the battles of arms, and if the man will but stay and think never of himself there will come a time of grateful recollection when men will speak of him not only with admiration but with that which goes deeper – with affection and with reverence.

So that this flag calls upon us daily for service, and the more quiet and self-denying the service, the greater the glory of the flag. We are dedicated to freedom, and that freedom means the freedom of the human spirit. All free spirits ought to congregate on an occasion like this to do homage to the greatness of America as illustrated by the greatness of her sons.

It has been a privilege, ladies and gentlemen, to come and say these simple words, which I am sure are merely putting your thought into language. I thank you for the opportunity to lay this little wreath of mine upon these consecrated graves.

You can find the full version of this speech here:

Correction Incoming?

Markets are doing their thing again, so let’s discuss.

Markets tumbled, heading into negative territory, and then bounced back. And then promptly fell again.1

We’re caught in a whipsaw pattern of uncertainty.

Is this weird?

Not really. These things happen pretty regularly when investors get jittery.

Let’s talk about what’s going on.

(Scroll to the end if you just want our takeaways.)

What led to the selloff?

Phew. There’s a lot going on.2

There’s yet another debt ceiling deadlock between Congress and the White House.

Worries about the banking sector continue.

Sticky inflation is still on everyone’s radar.

And then there’s the endless speculation about recessions and what the Federal Reserve might do next.

All these stressors lead to jumpy investors and nervous markets.

Could we see another serious correction?

Absolutely. If the debt ceiling standoff drags on or more bad headlines appear, markets could react negatively.

And, corrections and pullbacks happen very frequently because there’s always something going on.

How often? Let’s go to the data.

Here’s a chart that shows just how often markets dip each year. (You may have seen this chart before because it’s an oldie and goodie.)

Take a look at the red circles to see the market drops each year.

The big takeaway? In 15 of the last 23 years, markets have dropped at least 10% each year.3

Market pullbacks happen all the time.

We’re dealing with a lot of uncertainty and investors are feeling cautious.

However, that doesn’t mean that we should panic and rush for the exits.

Markets are going to be turbulent this year and knee-jerk reactions can be costly.

We don’t have a crystal ball, so we don’t know how it’s all going to play out, but this situation isn’t surprising.

We expected volatility and we’re prepared.

We’re watching markets closely. Any questions or concerns we can address? Let us know. We’re here to help.



The Duality of the Markets

Have you ever noticed how so many idioms refer to the duality of life?  Consider:  There are two sides to every coin.  Life is a double-edged sword.  You can see the glass as half-full or as half-empty.  Every cloud has a silver lining. 

Each of these sayings refers to the fact that almost everything in life can be seen as either good or bad; it’s all based on what we focus on. Sometimes, it can even depend on which “side” we see, hear, or learn about first.  Even science has found this to be true.  For example, in 2014, two psychologists named Angela Legg and Kate Sweeny ran an interesting study.  Two groups of people filled out a personality inventory.  The first group was told they would get feedback, some positive, some negative.  The second group learned that they would be the ones to give it. 

The study found that 78% of the people in the first group wanted to hear the negative stuff first.1  That’s because they believed that if they got the bad news out of the way, they could end on a good note, and their day wouldn’t be ruined. 

The second group – the ones giving the feedback – were divided.  Roughly half focused on what they thought the recipient would want to hear and decided to give the bad news first.  The other half focused on their own feelings and decided to give the good news first, because they felt it would be easier to start off with something positive.  Either way, just about everyone in the study was preoccupied with the order in which to face both sides of the situation.  It didn’t matter if both the good and bad were roughly equal.  What mattered was mindset.    

We were thinking about this recently while pondering our next market message.  The very message, in fact, that you are reading now.  You see, there is a real duality to the markets at the moment.  Storylines pulling the markets down, storylines pushing them back up.  But which to focus on?  Which to start with? 

Given what we learned from that study we mentioned, we think we’ll start with the “bad” news before sharing the “good.”  Then, we’ll explain why, when you think about it, it really doesn’t matter. 

Interest Rates and Bank Failures

Perhaps the biggest drag on the stock markets – not just now but over the last year – has been the steady rise of interest rates.  The most recent hike came on May 3rd, bringing rates to a 16-year high of 5.25%.2  Essentially, the Fed has spent the last year trying to combat inflation by cooling down the economy.  When rates are low, consumers and businesses are incentivized to borrow and spend.  But when rates are high, it’s meant to reward saving overspending.  If people spend less and demand for goods and services goes down, companies have little choice but to lower prices if they’re to attract new business.

Unfortunately, these rate hikes are very much a – wait for it – double-edged sword.  Because while they do serve as a deterrent against inflation, they can depress economic activity to the point of a recession.  This fear of a recession, accompanied by lower earnings from many companies as a result of higher interest rates, has triggered some of the volatility we’ve seen in recent months. 

But rising interest rates have done something else, too: Threaten the solvency of America’s banks.  

On March 10, federal regulators seized Silicon Valley Bank, the sixteenth largest in the country.  Two days later, New York’s Signature Bank collapsed.  And on May 1st, First Republic Bank in San Francisco was seized, too, with most of its assets promptly sold to JPMorgan Chase.  Given how suddenly – and consecutively – these regional banks fell, many investors have been gripped by fear of contagion spreading across the entire banking industry.

While none of these situations were exactly the same, all three banks had certain things in common.  For one, all made long-term investment bets that turned out to be far too risky.  In the case of Signature Bank, this was in cryptocurrency, the value of which has plummeted in recent months.  In the case of Silicon Valley and First Republic, it was placing far too much money in U.S. Treasury bonds.  When interest rates began rising, the value of these bonds fell.  Suddenly, these banks held most of their money – their depositors’ money – in assets that no one wanted.  Furthermore, all these banks had an unusually high number of uninsured deposits.  As a result, customers began withdrawing their money in droves.  No bank can survive without deposits, forcing the government to step in and take over before everyone lost everything. 

Now, three banks – out of the thousands that exist in the U.S. – may not sound like much.  But since this started, investors have been combing the industry with a magnifying glass, trying to find which other firms might have hidden weaknesses.  This has caused many banks’ stock prices to fluctuate wildly in recent weeks, acting as a further drag on the markets as a whole.  It’s also added to recession fears.  That’s because regional banks like these play a vital role in helping families, local businesses, and startups participate in the broader economy.     

In each of these cases, the government has acted quickly in order to prevent any contagion from spreading.  So, if all this banking turbulence stops with First Republic, well and good.  But if other regional banks experience more credit shocks or a fire sale on their stock prices, this may well be a case of getting out of the frying pan only to fall into the fire.  Stay tuned. 

So, that’s the “bad news”.  Now, let’s turn to a new subject that could be seen as either good or bad, depending on how you look at it.


Since 2021, inflation has been the root cause of almost every bit of economic uncertainty.  But the role inflation plays has changed over time.

The current spike in inflation started due to an explosion of economic activity after the COVID-19 lockdowns.  Buoyed by historically low interest rates, Americans were shopping again, and not just for distractions to keep them busy while they were stuck at home.  But this pent-up demand far exceeded supply, causing prices to skyrocket.  Later, inflation became more driven by snarls in global supply chains.  Then, it became exacerbated by the war in Ukraine.  All these factors simply made it very difficult – and expensive – to get goods where they needed to be. 

Lately, though, inflation has changed again.  Now, the single biggest factor is not the price of goods, but of services.  People aren’t just buying things again; they’re doing things again.  Eating out at restaurants, going to sporting events, putting their children in daycare, and traveling.  Meanwhile, a strong labor market has led to extremely low unemployment and rising wages.  This has caused businesses to raise prices to compensate. 

For these reasons, inflation remains stubbornly high, even after a year of rising interest rates.  But here is where you can see the glass as either half full or half empty.  The half-empty view would be that inflation remains high, meaning the Fed could keep raising rates.  But the half-full view is that these same factors keeping inflation high are also keeping us out of a recession.  (More on this in a moment.)  Then, too, prices are coming down…just very, very slowly.  (Back in March, prices were up 5% compared to the same time last year; that’s down from the 6% mark we saw in February.3)

Finally, let’s get to the “good” news…unless, of course, you’re the Federal Reserve, proving that even good news can be a double-sided coin.     


For months, analysts have predicted the labor market would slow down.  Because of higher interest rates, companies would stop hiring, or even lay off workers.  To be frank, this is what the Federal Reserve wants – at least to a degree.  Because it’s this sort of economic cooldown that will tamp down prices.  But it’s also been a main source of recession-based fears.  When unemployment starts rising, a recession is often not far behind. 

To date, however, it hasn’t happened.  In April alone, the economy added 253,000 jobs.  That’s far more than what most economists predicted.  In fact, it’s brought the unemployment rate even lower, to 3.4%.  That matches a 53-year low!4 

This is terrific news.  The more jobs there are, the more spending there is.  The more spending there is, the more the economy will grow…or at least, not contract to the point of a recession.  But unbelievable as it may seem, there is a counterargument.  These job numbers may prompt the Fed to keep raising rates if they believe the economy can handle it…thereby injecting more uncertainty into the stock market and bringing us closer to a recession.  Only time will tell which way investors decide to spin it.

The Takeaway

So, what are you thinking right now?  Are you feeling positive or negative about the markets?  On the one hand, we devoted more words to the “bad” news.  On the other, we finished with a (mostly) positive note, with lower inflation and higher employment. 

To be honest, however you react to all this says more about you – and more about how we wrote this message – than about the markets themselves.  And that is exactly the point.     

Positive and negative.  Good news and bad.  Yin and yang.  Jekyll and Hyde.  Dark side and light side.  Half-full and half-empty.  The fact is, there are two sides to almost every storyline impacting the markets right now.  And most investors are picking and choosing what they react to, and how they react, based on which side of that duality they fall on.  They choose one side of the coin, one edge of the sword.  They turn investing into one big psychology experiment. 

But we’re not most investors. 

Moving forward, we need to accept that there are forces pushing the markets up and forces pulling the markets down.  We can’t control which of those forces wins.  Nor can we predict, day to day, which force will prove stronger.  This is precisely why we have chosen a long-term strategy for investing.  We don’t have to decide whether the glass is half-full or half-empty.  We don’t have to stress over whether we hear the good news or the bad news first.  We acknowledge both as important…but neither as everything.  We don’t have to worry about guessing right because we never guess.  Instead of guessing, we take a measured approach of analyzing the data, identify the areas of strength and weakness and make portfolio changes as necessary.  As always, our team will keep watching all these storylines closely.  In the meantime, our advice is to not stress about whether tomorrow’s news will be good or bad.  We are always here to help you hope for the one and plan for the other…while remembering the words of one of our favorite idioms: Slow and steady wins the race. 

1 “Why Hearing Good News or Bad News First Really Matters,” PsychologyToday, June 3, 2014.

2 “Fed increases rates a quarter point,” CNBC, May 4, 2023.

3 “Inflation Cools Notably, but It’s a Long Road Back to Normal,” The NY Times, April 12, 2023.

4 “US labor market heats back up, adding 253,000 jobs in April,” CNN Business, May 5, 2023.