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The Weekly Wealth Report

July 05, 2023


Stocks posted gains for the week to close out a stellar month, aided by positive economic data and reports that all major banks had passed the Federal Reserve’s annual stress test. The Dow Jones Industrial Average gained 2.02%, while the Standard & Poor’s 500 rose 2.35%. The Nasdaq Composite index added 2.19%. The MSCI EAFE index, which tracks developed overseas stock markets, increased by 0.76%.


Gear up for the holiday with some history knowledge! The Fourth of July is the perfect opportunity to read up on the Founding Fathers of the United States, a term coined by a speech given by Warren G. Harding in 1916. Here are a few fascinating but lesser-known facts about the influential few who qualify for the designation of Founding Father.

Thomas Jefferson and John Adams died on the same day. Both men passed on July 4, 1826 – right on the 50th anniversary of the signing of the Declaration of Independence. Jefferson succumbed to several ailments he had been fighting; Adams passed due to congestive heart failure.

Jefferson kept two bears as “pets.” While serving his term as third president of the United States, Thomas Jefferson kept a pair of grizzly bears in a cage on the White House lawn! The bears were a gift from Captain Zebulon Pike, an early explorer of the Louisiana Territory.

Ben Franklin was a prodigious inventor. Franklin played many roles in life – printer, postmaster, ambassador, author, Founding Father, and inventor. Some of his notable inventions include the lightning rod, bifocals, swim fins and the catheter.

Samuel Adams’ debatable connection to beer. While Samuel Adams is often associated with brewing, there is some debate among historians regarding his actual involvement in the brewing industry. Some historians suggest that Adams primarily focused on political and revolutionary activities, and any connection to brewing may have been exaggerated or romanticized over time. This much we know is a fact. Adams was a well-known statesman and political philosopher before assuming the Founding Father mantle.

John Hancock was one of the wealthiest Founding Fathers. Before becoming one of the wealthiest men in the thirteen colonies, John Hancock began his career as a protégé to Samuel Adams. One estimate puts his wealth at $350,000 upon his death, or about $9.5 million today. That was enough to represent 1/714th of the fledging America’s gross national product!

Did George Washington have a fiery temper? The question of whether George Washington swore at Charles Lee during the Battle of Monmouth remains debated. While some accounts suggest Washington confronted Lee with profanity, there is limited concrete evidence. Historians differ in their conclusions, and the lack of solid proof and the passage of time make it difficult to determine the truth.


Stocks Climb As Recession Fears Ease

Investors shrugged off weekend news of a short-lived insurrection in Russia and calls later in the week for more restrictive monetary policies from global central bankers. What powered early-week gains? New home sales, durable goods orders, and a rise in consumer confidence proved influential. More so were Thursday’s reports of a drop in initial jobless claims and an upward revision in first quarter Gross Domestic Product growth, which helped allay recession fears. The results of the Fed’s annual bank stress tests, which all major banks passed–further emboldened investors. Stock prices rallied Friday following an encouraging inflation report, capping the end to a solid week, month, and first half.

Global Central Bankers Meet

At last week’s European Central Bank Forum, central-bank governors from around the world gathered to discuss their monetary outlook and the policies needed to manage inflation amid unexpected economic strength. Fed Chair Powell reiterated that more rate hikes were coming owing to a robust labor market. He added that he wouldn’t dismiss the idea of hiking rates at consecutive Federal Open Market Committee (FOMC) meetings. While saying there is a possibility of an economic downturn, Powell didn’t believe it was the most likely case. Meanwhile, bankers from the European Central Bank and the U.K. echoed Powell’s comments, declaring that further rate hikes are needed to tame their still-elevated inflation rates.´╗┐


Educational attainment is a bedrock of the American Dream. We all want our kids to do better than us, and we'll do anything to help them achieve that! But unfortunately, there are dreams, and then there's reality: college costs have exploded over the last twenty years. As a result, most parents and some grandparents find themselves fighting a battle on two fronts: saving for retirement and college at the same time.

You might be eyeing your individual retirement account (IRA) for help. Is it worth tapping your IRA to help pay for college?

You can use IRA money for qualifying educational expenses. One advantage of an IRA withdrawal is that the funds can be used for any qualifying educational cost (tuition, student fees, etc.). Importantly, the withdrawal amount cannot exceed the amount of your qualifying expenses. But the disadvantages are obvious. You're taking away from future retirement savings, and you're reducing the amount of earning power you previously held. You're also faced with IRA annual contribution limits ($6,500 for 2023), making it hard to restore your previous savings level!

There are ways to replace what you take out. For people over 50, the law allows you to contribute an extra $1,000 through a "catch-up contribution," for a total of $7,500. While this isn't a lot, it can help restore some of your withdrawal. Withdrawing from an IRA to pay for college has many unseen consequences that can harm your retirement plan and make your golden years leaner. One of your best bets is to plan carefully for college as soon as possible for your children or grandchildren so you're not forced to decide between retirement or college.

No matter what you do, seeking input from a financial professional is usually wise. So give us a call, and let's discuss your unique situation.
´╗┐Have a great week!