The focus today is on retirement. We either look forward to retirement or dread the day that it comes. It comes down to how much you have planned for it, saved for it and accepted that it will happen ready or not. Some hope it will all work out in the end, so they didn’t think much about it. Well hope is not a strategy. We will also talk about handing off your wealth to the next generation. 

Before we start a discussion into what seems like science fiction made real, let’s look into the past. Artificial Intelligence (AI) is a term that was coined by John McCarthy, a legendary American computer and cognitive scientist, in the 1950s. He is widely regarded as one of the "founding fathers" of AI. Alongside other luminaries like Alan Turing, Marvin Minsky, Allen Newell, and Herbert A. Simon, McCarthy played a pivotal role in shaping the field.

McCarthy, a Stanford professor and Turing Award recipient, developed the programming languages known as LISP and ALGOL. LISP was pivotal in AI development and research while ALGOL popularized the concept of time-sharing in computing, allowing multiple users to interact with a computer at the same time – a key concept for those that would expand McCarthy’s work in the decades to come.

Outside of financial reporting, articles on inflation rates usually quote the Consumer Price Index, or CPI. But financial writers in-the-know will reference “the Fed’s preferred measure of inflation,” the Personal Consumption Expenditures price index, or PCE. Today we’ll take a look at the two measures of inflation, how they are determined and why the Federal Reserve prefers one over the other.

But before we dive in, let’s take a look at some of the economic news released last week. Punxsutawney Phil, the famous weather-casting groundhog, didn’t see his shadow last Friday, and so predicted an early spring. Let’s see if the economy looks as rosy.

In money management you always reap in a different season than you sow. And by the way, not all fruit ripens at the same time. When you have a peach tree, they’re not all ripe at once. They come in little by little. Investments can take time to grow too. Instant success is rare. 

When I started in this business, everything was dominated by stocks, bonds, mutual funds, buy-and-hold strategies, and basic equity-bond diversification. In general, this worked well before this century.

A lot has changed since I started in the business. Technology has had a big impact on how markets and investors operate. The interest rate and fixed income environments have changed dramatically. We have seen an increase in risk-managed strategies that can deliver competitive returns while seeking downside protection during volatile periods or in bear markets.

I have been in the investment business for 28 years. This will mark my seventh Presidential election cycle over that period. Without fail, clients have questions and concerns about market performance during each presidential election cycle.  It is a common question and I always give the same answer – it varies but in general performance is pretty good.

Wall Street is clearly eager for interest rate cuts. Since the Federal Reserve released the minutes of their latest policy meeting earlier this month, the conversation on the street isn’t IF rates will be cut in 2024, but WHEN. Here are a few of the latest headlines I’ve seen:

Three Stocks to Buy Before the Fed Cuts Interest Rates in 2024

Investors Expect Fed to Cut Rates Soon

The Fed Will Cut Interest Rates Six Times in 2024

These headlines and plenty others reflecting the same line of thought are overly hopeful and misguided. As Fed Chair Jerome Powell likes to say, let’s take a look at the data to get a hint of what the FOMC is thinking, and why I believe interest rate cuts won’t happen until the second half of 2024.

Happy New Year! A new year is a great opportunity to reflect on the past and look forward to the future. Perhaps you are already working on some new goals or are revisiting some past goals that didn’t quite progress as you’d planned.

Have you made any new resolutions for 2024? I really don’t understand why people would wait until the start of a new year to resolve to do something different in their life, especially if they have known for some time the need for a change. If you recognize anytime in the year that something needs to change in your behavior, why wait? Get it done and be the person you know you should be in 2024.

I know we have been writing a lot about the Federal Reserve lately. Like it or not, the Fed is the single most influential financial entity on the planet. Period. No other central bank comes close to the sheer scope and global impact of the Fed. What they do and how they do it shapes virtually all global financial markets.

Of the tools the Fed has at its disposal, the most esoteric (and that is saying something) and most stimulative, is the balance sheet. But what is it?

I must first disclose I have never been to a fortune teller. But I understand there are some who are fascinated by the art of tasseography or identifying symbols and interpreting messages found in the shapes formed by tea leaves at the bottom of a cup.

Some might say the famous “dot plot” made by members of the Federal Open Market Committee (FOMC) is the economist’s version of reading tea leaves. Take a scoop of economic data, add them to a cup of prognostication, swirl three times, then close your eyes and pick your dot location. I’m sure it’s far more complicated and intentional than that. At least I hope it is.

The FOMC released its quarterly Summary of Economic Projections (SEP) last week, which includes the “Dot Plot” used by the Federal Reserve to communicate its policymakers' economic projections and expectations for the future. This chart provides a visual representation of individual committee members' forecasts, helping market participants, economists, and the public to gauge the central bank's outlook on key economic indicators. Today we will take a look at what the FOMC dot plot is, how to interpret the latest chart and what the FOMC is predicting for the economy.

You may already be retired, so you might not think this article is for you. You already have your investment plan in place and what could go wrong anyway. Well politicians change, policies change, laws change, social norms change and the economy changes.  Your health also changes. In my life getting older hasn’t been the problem, it is the side effects. For those not retired yet, hopefully these topics will help you in planning your retirement.