Love, Money, & Marriage: A Candid Video Conversation On Financial Values With My Wife
In last week’s FLiP weekly newsletter, I discussed Intersectionality and Money: Why Financial Planning Is More Personal Than Finance, referencing a thought-provoking exercise that my wife, Mika, and I did that was designed to unearth our individual money history and beliefs and create the context for us to have a productive conversation around money.
Well, before heading on a long weekend, we decided to just have that discussion live, for the first time—and no, we didn’t prep before hitting the record button. The video result is this week’s FLiP and Mika’s video podcast debut! I think she did amazing, but I’m biased.😍
In addition to that video, Tony brings us up to speed on a particularly wild market week, reminding us that there is never certainty in market investing.
Thanks for joining us!
Tim
Tim Maurer, CFP®, RLP®
Chief Advisory Officer
In this FLiP weekly you'll find:
Financial LIFE Planning:
Love, Money, and Marriage: A Candid Video Discussion With My Wife
Quote O' The Week:
W.E.B. Du Bois
Weekly Market Update:
There Is Never “Certainty”
Financial LIFE Planning
Money & Marriage: A Candid Video Discussion
This was definitely a bit of a leap for us, but it turned out to be a really life-giving conversation! Click HERE or on the image below to watch this week’s video podcast episode:
Mika and I hope that you find a touch of inspiration and encouragement to engage in your own financial conversation—or series of conversations, really—with your spouse or partner. And if you do, we’d love to hear back from you how it went!
Quote O' The Week
This week’s quote comes from the first Black Harvard PhD, earned in 1895:
W.E.B. Du Bois
"Children learn more from what you are than what you teach."
Weekly Market Update
Tarrif rumors and reality roiled US markets this week. Meanwhile, international stocks were up big:
- 3.10% .SPX (500 U.S. large companies)
- 2.42% IWD (U.S. large value companies)
- 4.05% IWM (U.S. small companies)
- 3.47% IWN (U.S. small value companies)
+ 4.71% EFV (International value companies)
+ 3.86% SCZ (International small companies)
- 0.62% VGIT (U.S. intermediate-term Treasury bonds
There Is Never “Certainty”
Contributed by Tony Welch, CFA®, CFP®, CMT, Chief Investment Officer, SignatureFD
One term that perhaps defines the past few months is uncertainty. We have heard it from clients, investment managers, and corporate executives. The Federal Reserve Board’s Economic Policy Uncertainty Index has spiked to higher levels than ever except for the early pandemic days.
Economic uncertainty is primarily being driven by trade uncertainty, but also the labor market as layoff plans have recently jumped, not just in the public sector but also among small businesses. Uncertainty may be the word du jour, but it doesn’t mean you should change your investment strategy. The reality is that the inverse of uncertainty – certainty – is never truly present. We have no way of knowing what investment conditions will be present in the days, weeks, months, even years ahead.
Certainty is, therefore, an illusion. The good news is that investors earn a premium to the risk-free rate precisely because they take on the risk of an uncertain future. If one attempts to offload that risk, they may likely find themselves with much weaker growth when the dust settles..
The Message from Our Indicators
Last week was all about the labor market and, on that note, there are some cracks. Payroll processor, ADP, reported a 77,000 increase in payrolls, about one-half the consensus estimates for payroll growth. Challenger layoff announcements jumped to 172,017 - the highest level since 2009. About 64,000 cuts were due to DOGE actions. The official Bureau of Labor Statistics Employment Situation report showed 151,000 new jobs, but there was some weakness under the hood.
The underemployment rate, measuring people who are unemployed, marginally attached to the labor force, and part-time for economic reasons, popped 0.5% to 8% in February. Average hourly earnings continue to slow, now down to 4% from the year prior. The labor market data does not imply that the U.S. economy has entered a recession, but it underscores that economic growth is slowing. As discussed above, economic and trade uncertainty have been additional headwinds. Our current read is that the U.S. economy is in the throes of a growth scare but not yet in recession. If economic uncertainty clears up, lower interest rates could help growth stabilize, remaining positive in 2025.
From a fundamental perspective, Q4 earnings were quite strong, growing about 19% from 2023. A strong profitability backdrop supports economic growth and stock prices. Valuations are relatively elevated, but solid fundamentals can go a long way toward justifying those prices. The risk for the rest of the year is that earnings fail to live up to lofty expectations, calling into question the current market valuation. But so far, so good from an earnings perspective.
Turning to the trend evidence, it is not abnormal for stocks to form a correction in the first months of a new Presidential administration. Often, these corrections resolve to the upside later in the year. We entered 2025 with extremely high investor optimism, which was quickly alleviated. The American Association of Individual Investors reported that about 60% of their members were bearish on stocks. That is a level of pessimism typically associated with bear markets, not 5% corrections.
The narrative has quickly shifted from growth associated with deregulation and tax cuts to stagflation associated with trade and immigration policy. The long-term trend evidence remains bullish but has weakened, especially for large-cap U.S. stocks. Some other market segments, especially international stocks, have been showing some trend improvement. This underscores our top theme of the year – we expect the benefit of diversification is likely to be more in play in 2025 than in the prior two years.
Have a great rest of your weekend!
Tim
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