THE WEEK ON WALL STREET
Stocks edged lower last week despite a powerful end-of-week rally. The S&P 500 Index lost 0.48 percent, while the Nasdaq Composite Index slid 0.51 percent. The Dow Jones Industrial Average fell 0.60 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, dropped 0.90 percent.
FACT OF THE WEEK
On January 6, 1838, Samuel Morse’s telegraph system is demonstrated for the first time at the Speedwell Iron Works in Morristown, New Jersey. The telegraph, a device which used electric impulses to transmit encoded messages over a wire, would eventually revolutionize long-distance communication, reaching the height of its popularity in the 1920s and 1930s.
MARKET MINUTE
Selling Then Buying
Stocks were under pressure right out of the gate on Monday for no apparent reason other than worries over the loss of year-end momentum. By the end of trading on Monday, markets recovered some losses, but the selling picked up again on Tuesday. After being closed for the New Year’s holiday, stocks opened higher for the first trading day of 2025. But sellers gained the upper hand by the end of trading. On Friday, Investors perked up with tech stocks leading a recovery rally that erased most of the week’s losses.
Megacap’s Mega Influence
Megacap tech stocks have captured many headlines over the last two years as the S&P 500 posted double-digit returns (24 percent for 2023 and 23 percent for 2024).
And for a good reason—megacap tech stocks were doing most of the work. For example, during the past 12 months of trading, more than half (53 percent) of the S&P 500’s return can be attributed to the Magnificent Seven–the seven megacap tech companies that most investors would consider household names.
FINANCIAL STRATEGY OF THE WEEK
Building a Solid Financial Foundation
When you read about money matters, you may see the phrase “getting your financial house in order.” What exactly does that mean?
To some, when your financial “house is in order,” it means it is built on a solid foundation. It means that you have the “pillars” in place that are designed to support your long-term financial well-being.
#1: A banking relationship. Having a relationship with a bank can play a role in many financial strategies. You have many different choices when deciding which bank is right for you. Some banks are larger and nationally based, while others are smaller and community-based. Different banks may have unique advantages and disadvantages, so it’s important to look around and see what each one can offer you.
#2: An emergency fund. You know that label you see on fire extinguisher boxes – “break glass in case of emergency?” Only in a financial emergency should you “break into” your emergency account. What is a financial emergency? Everyone’s definition varies, but it can range from a broken water heater to major car repairs to unemployment help.
#3: A workplace retirement strategy. At some point, you may want to consider when is the right time to start saving for retirement. Workplace retirement plans can offer you a convenient way to get started, if one is available.
#4: An eye on Insurance. Like the other decisions you’ll need to make while building your financial foundation, choosing the appropriate insurance program is going to be influenced by your own individual life circumstances. For example, if you’re supporting a family, you may want to look into an insurance program that is designed to protect you in the event that something happens to you or prevents you from working for a period of time.
#5: Estate Strategy. It’s never too early to start thinking about your legacy. For some, this can mean providing some financial support to your loved ones. For others, it might mean creating a program that supports charities and organizations. Whatever your aspirations, it’s important to ensure that your assets transition smoothly in accordance with your wishes.
If you have questions about these topics or anything else, please call Amanda at the office and let's set up some time to talk. We are here for you.