THE WEEK ON WALL STREET
Stocks were mixed last week as investor concerns over inflation and trade policy combined to produce another volatile trading week. The Dow Jones Industrial Average rose 0.95 percent, while the S&P 500 Index lost 0.98 percent. Meanwhile, the tech-heavy Nasdaq Composite Index dropped an eye-catching 3.47 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 1.03 percent.
FACT OF THE WEEK
Yellowstone National Park is a national park of the United States located in the northwest corner of Wyoming and extending into Montana and Idaho. It was established by the 42nd U.S. Congress through the Yellowstone National Park Protection Act and signed into law by President Ulysses S. Grant on March 1, 1872. Yellowstone was the first national park in the U.S. and is also widely held to be the first national park in the world. The park is known for its wildlife and its many geothermal features, especially the Old Faithful geyser, one of its most popular. While it represents many types of biomes, the subalpine forest is the most abundant. It is part of the South Central Rockies forests ecoregion.
MARKET MINUTE
Trade Talk
The week began under pressure after the White House said 25 percent tariffs on Mexico and Canada would begin after the 30-day pause ends in early March.
On Tuesday, S&P and Nasdaq stocks continued their slide on news that consumer confidence weakened more than expected. Concerns about inflation and tariffs merged with investors fretting over economic growth and global trade. It was the fourth straight day of declines for the S&P 500 and Nasdaq. The Dow, however, advanced for its third consecutive session.
After a quiet Wednesday, stock fell broadly on Thursday after the White House announced additional tariffs on goods from China and Europe. A large chipmaker prominent in artificial intelligence (AI) matters produced a mixed corporate report for Q4, which put some pressure on the broader market.
Friday’s news that inflation moderated boosted stocks, with prices accelerating higher into the close of trading. The Fed’s favorite core inflation measure hit 2.6 percent in January, which aligns with forecasts.
Getting a Read on Tariffs
Markets dislike uncertainty, so steady trade talk produces volatile intra-week trading. Investors don’t know what tariffs will be enforced versus which ones are part of an ongoing negotiation, which can produce unsettling price swings.
S&P 500 companies echo some of that uncertainty. At last check, 146 have mentioned the term “tariff” or “tariffs” on Q4 conference calls with shareholders–the highest level since Q2 2019.
FINANCIAL STRATEGY OF THE WEEK
Does Your Portfolio Fit Your Retirement Lifestyle?
Most portfolios are constructed based on an individual's investment objective, risk tolerance, and time horizon.
Using these inputs and sophisticated portfolio-optimization calculations, most investors can feel confident that they own a well-diversified portfolio, appropriately positioned to pursue their long-term goals.
However, as a retiree, how you choose to live in retirement may be an additional factor to consider when building your portfolio.
Starting a Business?
Using retirement funds to start a business entails significant risk. If you choose this path, you may want to consider reducing the risk level of your investment portfolio to help compensate for the risk you're assuming with a new business venture.
Since a new business is unlikely to generate income right away, you may want to construct your portfolio with an income orientation in order to provide you with current income until the business can begin turning a profit.
Traveling for Extended Periods of Time?
There are a number of good reasons to consider using a professional money manager for your retirement savings. If you are considering extended travel that may keep you disconnected from current events (even modern communication), investing in a portfolio of individual securities that requires constant attention may not be an ideal approach. For this lifestyle, professional management may suit your retirement best.
Rethink Retirement Income?
Market volatility can undermine your retirement income strategy. While it may come at the expense of some opportunity cost, there are products and strategies that may protect you from drawing down on savings when your portfolio's value is falling—a major cause of failed income approaches.
If you have questions regarding your retirement planning, give my office a call, and let's schedule some time to talk. We are here for you.