Each week, Scott will be sharing curated financial tidbits to help you stay informed and navigate the ever-changing financial landscape. Let us know your thoughts!

• Shortage of Advisor's as Demand Grows

McKinsey & Company Consulting issued a warning about the wealth management industry.

In its recent sector update it predicted there will soon be a “massive shortage of advisors to meet client demand.” The number of affluent households—defined as those with at least $500,000 in investable assets—will grow at an annual rate of 4% to 5% in the U.S. even with AI and the ability to use technology to manage funds, according to McKinsey - "Affluent households are willing to pay five times the amount to get human advice compared to using a customized digital service like generative AI even when the latter option is cheaper, according to McKinsey research." (mckinsey.com) (Fortune.com) February 2024

• Which individual American gives away the most money to charity?

Michael Bloomberg. Bloomberg was the top individual donor in the United States for the second consecutive year, contributing $3.7 billion to various charitable causes, including the arts, education, the environment, and public health. Notably, in July 2024, Bloomberg donated $1 billion to Johns Hopkins University to make medical school tuition-free for students from families earning under $300,000 annually. (APnews.com)

• Last Friday’s employment print showed the highest U6 rate since 2021 – 8%.

The U6 number is unemployment, including those working part-time but wanting a full-time job and those not looking for work but would take a job if offered. I never read too much into this number, but it is simply one of many numbers going the wrong way. (forbes.com) 

• If the Trump administration's proposed tariffs on international goods causes price increases on your favorite brands, how would you respond?

Unfortunately, most of the lower cost alternatives like store brands will be affected by the same tariffs. If a recession is coming, the typical “recession-proof” portfolios may not perform as expected.

• Safety Seeking?!

In a sign of seeking safety, assets in money-market funds reached a record $7.03 trillion last week. (financialtimes.com) 

That’s a lot of money to help the market bounce back after the next downturn… speculators trying to time the market, have fun! For the rest of you, allocate your portfolio properly and invest properly! Money market accounts are only for temporary placement. Those who need their money to fund retirement can’t afford to try to time it. The pandemic was a great investing lesson. Easy to sell everything but so hard to enter back in. Those who stayed in won. For your safe/stable portfolio lock in these higher interest rates for as long as you can to help you endure lower rates in the future…

• Recession Fears Loom

As we showed last week consumer spending growth has come from the wealthiest 10% of Americans. The same cohort is likely to own investments. If the stock market continues to pull back, many researchers argue we will be in for the “mother of all consumer-led recessions.” Quote of David Rosenberg of Rosenberg Research. (WSJ.com)

Let’s hope all that money market money (7.03 trillion) is speculative investors waiting for this to happen. Hmmmm... tariffs have less power if we consume less. This will be interesting to watch how this rolls out. Make sure your portfolio is ready for anything! Remember, a properly invested retirement portfolio allows you to enjoy retirement in good AND BAD times.

• Actively Managed Stock Portfolios vs. SP500

Barron’s reports only 10% of actively managed large-cap US stock funds beat the SP500 over the past 15 years. (barrons.com)

See, I told you so! Sorry, had to get that out. Stop getting sold by “managers” that say they can beat the market. This has been going on for too long now. Allocate properly, diversify, stay invested, enjoy!

• US Equity Performance

(investopedia.com)

Please don’t let the last 15 years lead to overconfidence that may result in a terrible collapse of your retirement. I have seen people relying on an 8+% withdrawal rate which obviously performed well when the market averaged 12.2% but how would this look at the average 5.9%? And please don’t forget that the order of returns matters when you begin your withdrawal phase.

• Retirement Rides

The ride-hailing company Lyft is working on a simplified version of its app aimed at elderly riders. Lyft Silver will have a new design and tools to make it easier for relatives and friends to pay for older users’ rides. (finimize.com)

Too little to late? In my experience, 70+ year old's are more tech savvy than they are giving credit for and the 50–60-year old's certainly have no problem navigating the app. My 80-year-old parents have been using it for years...

• China and US Vie for AI Supremacy: Education Takes Center Stage

The international war for AI dominance has been on for years now. China believes its AI rests with its children. Beijing is introducing artificial intelligence courses to primary and secondary schools requiring at least eight hours of AI classes per year.  (gov.cn) In the US tech entrepreneurs are starting colleges for AI, cybersecurity, and computing at several top universities.  (wusf.org)

• Home Sweet Home

Whealth™

The percentage of US adults reporting a decreased desire to leave the house has climbed to 35%. Surpassing pandemic levels in 2020 (28%) and 2021 (22%).

This may become a forward indicator of mental wellbeing and changes in communication dynamics in aging.  (civicscience.com)

 Wow, this seems scary. Maybe we just don’t like being told we have to stay at home so now that we aren’t being told to, we realize we prefer it. It’s kind of like when my wife comes up with a good idea that I shut down and later claim as my own…