Broker Check

The Weekly Wealth Report

March 27, 2023


Modest gains in major market indices masked sharp volatility amid the uncertainty arising from mixed messages emanating from public officials and revived banking fears. The Dow Jones Industrial Average gained 1.18%, while the S&P 500 added 1.39%. The Nasdaq Composite index rose 1.66% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, advanced by 3.29%.


On March 29, 1929, President Herbert Hoover has a phone installed at his desk in the Oval Office of the White House. It took a while to get the line to Hoover’s desk working correctly and the president complained to aides when his son was unable to get through on the Oval Office phone from an outside line. Previously, Hoover had used a phone located in the foyer just outside the office. Telephones and a telephone switchboard had been in use at the White House since 1878, when President Rutherford B. Hayes had the first one installed, but no phone had ever been installed at the president’s desk until Hoover’s administration.


A Turbulent Week For Stocks
The stock market was unable to find sustained direction as investors weighed comments from Fed Chair Jerome Powell and Treasury Secretary Janet Yellen. Stocks initially rose as banking fears eased following a deal to acquire a troubled Swiss bank. Optimism was further fueled by Yellen, who said the government could intervene to protect depositors if more bank issues materialized. Enthusiasm faded, however, when Yellen subsequently testified that the Treasury was not working on any blanket insurance for bank deposits and by the Fed’s warning that banking turmoil could shrink lending access — the volatile week ended with sharp intraday price swings, shrugging off revived European banking concerns.

Rate Hike Cycle Ending?
Last week, the Federal Open Market Committee (FOMC) meeting was particularly noteworthy. Fed officials were placed in the difficult position of balancing the banking system's opposing risks of still-high inflation and stressors. The Committee had considered leaving rates unchanged given banking stressors but unanimously voted to raise rates by 0.25%, citing elevated inflation, resilient economic activity, and a strong labor market. The official announcement hinted that the Fed might soon be done with raising rates while also stating it was too early to ascertain the degree to which the economy could slow from the current banking strains.


Most Americans deal with debt at some point in their lives. According to some studies, more than 64 million Americans carry credit card debt, and 340 million Americans are currently carrying some form of debt. Debt can be a significant obstacle to overcome, especially when heading toward retirement.

Dealing with debt. Credit cards, car payments, and the mortgage are three common areas that can limit your flexibility in retirement. Let’s tackle them one by one.

Credit cards. Accumulating credit card debt most likely means you’re either spending over your means or don’t have a usable budget. Plan to pay off cards with the highest interest rate first (even if they don’t have the largest balance), then work your way through each additional card’s balance. After you’ve paid down your credit card debt, try to stick with only charging amounts to your cards that you can pay off in full when the bill comes around.

Car loans. Getting a new car is exciting, but consider stretching out the time before you need to replace your current car, or maybe go for a more economical model. Sometimes budget buyers can find real deals with a certified gently used car, too.

Your home. If you still have a mortgage, consider paying a little extra each month, or going on a biweekly mortgage payment plan. This method allows you to pay half your mortgage amount every two weeks, resulting in one extra payment each year to hack away faster at the principal you owe.

Any of these moves can help decrease your revolving debt, which should create flexibility in your budget to start funding your retirement dream. Not sure where to cut? Schedule time with us to discuss your budget and financial goals.

As always, we’re here to answer any questions or help with anything you or your family needs.