Wealth and Wisdom: Week of September 30, 2024
- Mike Brown
- Sep 30, 2024
- 5 min read
The Federal Reserve’s long-awaited pivot on interest rates is now official. After an aggressive half-percentage-point cut in its benchmark rate, the Fed is now sending strong signals that further reductions are coming.
The rate of inflation has fallen over the past two years, and the U.S. economy has continued to grow – something that has never happened before, according to Chicago Fed President Austan Goulsbee. (Translation: We may have finally pulled off a “soft landing.”)
What should you be thinking about in a falling-rate environment?
Fixed-income investments, such as bonds, become more attractive when interest rates decline, and there’s still time to lock in today’s yields.
Mortgage rates began falling even before the Fed’s decision, but don’t be in a hurry to refinance (see first item below).
The real estate and financial sectors stand to benefit from lower rates.
Yields on rising-dividend stocks are now more competitive with bonds, which could help their total returns.
Small-cap stocks have historically outperformed large-caps when interest rates are falling.
All in all, falling interest rates tend to be bullish for the financial markets – as long as inflation remains in check
Mortgage rates are falling – but more cuts are likely on the way. Here’s what to watch for if you’re thinking of refinancing. (Reading time: 4 minutes)
One of its jobs is to keep the U.S. economy stable and growing – and interest rate policy represents one of its most powerful tools. (Reading time: 2 minutes)
We work and save all of our lives so we can retire in comfort – but when that day approaches, the whole idea can be terrifying. (Reading time: 2 minutes)
Age-75-plus workers are now the fastest-growing segment of the labor force – and that can’t be good news for younger workers looking to advance. (Reading time: 3 minutes)
Today’s retirees face mounting financial challenges – regardless of their political preference – and they all want to know how their candidate will fix them. (Reading time: 5 minutes)
Automatic savings has been around since 2006 – but despite its popularity, it has only caused a tiny increase in retirement plan balances. (Reading time: 4 minutes)
If your retirement plan is based on the assumption that income tax rates will be lower when you stop working, you could be in for a rude surprise. (Reading time: 9 minutes)
What good is all the money in the world if you’re not happy? Here’s how to handle the emotional side of retirement. (Reading time: 5 minutes)
Despite what you may have heard, the data show that most of the world is living longer, more prosperous, and more enriched lives. (Reading time: 2 minutes)
North America is creating millionaires faster than any other global region. (Reading time: 3 minutes)
Words to the Wise
“If your only goal is to become rich, you will never achieve it.”
– John D. Rockefeller
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