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Investment Planning

Playing The Waiting Game

When it comes to decisions about the market, many people are currently playing the waiting game. Waiting for a recession to start, waiting for the Fed to start lowering interest rates, waiting for the election to be over. As with anything in life, those whose attention is consumed by waiting on future events often overlook the opportunities and experiences right in front of them. Have you been waiting on any of the above? Here’s our analysis of what to expect while the world twiddles its thumbs.

If you’re waiting on a recession to start. . .

The S&P 500 gained over 15% in the first half of 2024, adding to the gains from 2023. Those worried about a recession or market pullback have missed out. But this rally has been different than past ones.  The gains in the S&P 500 and Nasdaq continue to be driven by just a few stocks. Current market breadth, the measure comparing stocks with gains versus those with losses, is the lowest it has been in 25 years, since before the tech bust in the early 2000s. Similarly, the performance gap between large-cap and small-cap stocks during the first half of the year is one of the largest ever.  The small-cap market, represented by the Russell 2000 Index, has gained slightly less than 2% – much less than the large-cap indices.   

Despite the momentum of the handful of stocks driving market gains, a cooling period may be on the horizon. While a major recession seems unlikely due to the absence of a significant catalyst, the narrow market breadth and the lack of strength in many stocks warrant caution. Should there be a rotation out of the mega-cap tech stocks, the indices could suffer, but this might present opportunities in other sectors.

There are certainly signs the economy is slowing with unemployment creeping higher, downward revisions to past payroll numbers, GDP readings slowing, and inflation cooling. However, none of these factors indicate a recession is imminent.

If you’re waiting on the Fed. . .

Current expectations are that if economic data continues its current path, the Federal Reserve will begin cutting interest rates at their meeting in September.  However, we would caution there is a great deal of data to be released and digested before then so, there is certainly no guarantee this will occur. Even if they begin cutting interest rates, current projections suggest a limited number of rate cuts, perhaps leading to a short rate cut cycle.  This scenario might be the one to pause upward market trajectory, as multiple rate cuts have been anticipated and priced in. For those reliant on income, this could be good news, but also indicates that inflation is expected to remain above pre-COVID levels.

If you’re waiting on the election. . .

The Presidential election in November could introduce political dynamics into the mix. As of this writing, there is some question as to who the Democratic nominee will be. While many people have concern over the election’s market impact, historically, elections tend to have very limited long-term impacts on the stock market. There might be a quick bump for a day or two after the election outcome is known, but over time, the usual fundamentals, such as corporate profitability, drive market returns. The market dislikes uncertainty, so once there is an election outcome, the market generally responds favorably, regardless of which political party is in power.

Acknowledging there are many factors outside of politics driving the markets, the best stock market returns have occurred during times when there is a division of power in Washington, D.C. with different political parties controlling the Presidency and Congress. This suggests that markets prefer when no single party has full control and our federal government’s enactment of laws and regulations is limited.

We remain cautiously optimistic about the stock market and think it will continue its upward march in the latter half of the year. However, we also warn that that future returns may not be as strong as those experienced over the past year and a half. It is important to position your portfolio accordingly so you can take advantage of opportunities while protecting yourself in order to enjoy a comfortable retirement.
When it comes to retirement planning, do not play the waiting game. There is no time better than the present to take action and put your plan in place.

Give us a call: 952-460-3290.

Nathan Zeller Secured Retirement

Nate Zeller

Chief Investment Strategist
Secured Retirement

Travel in Retirement: Tips to Finance Your Adventures

The opportunity to travel is something many people look forward to in retirement. All that time and freedom to explore the places you’ve always dreamed of visiting! We want to help you live your adventure. Here’s a few financial considerations to keep in mind before you plan your itinerary and pack your walking shoes.

Invest Appropriately

To best finance your retirement travels, you have to invest smart! Because of the market’s volatility and despite our best predictions, it’s important to protect the funds you’ve set aside for your jetsetting. Generally, one-time expenses, like a trip you plan to take within the next two years, should be held in cash alternatives, rather than portfolios.

To avoid the risk of market downturns affecting your travel budget, we would urge you to consider keeping these short-term funds in things like treasury bills, certificates of deposit (CDs), or money market funds. These options offer principal protection so you’ll have the funds for the travel you’re planning for the relatively near future.

For travel plans further into the future, you can afford to take on a bit more risk with your investments. For instance, expenses planned three or more years in the future might be better financed by a mix of fixed-income investments and stocks. This balanced approach can provide higher returns over time, helping your travel savings grow, grow, grow.

Building a Budget

Having some semblance of a plan for what kind of travel you’d like to do can help you best budget for it. If you imagine you’ll go on a few major trips a year, allocating a lump sum at the beginning of the year can be most helpful as you plan out your retirement withdrawal strategy. If you think you’ll be taking shorter, more frequent trips, maybe to visit loved ones, it might be better to incorporate those anticipated costs into your monthly budget. With an idea of your travel-style in mind, you can best tailor your budget to your lifestyle!

Quick Tips To Keep In Your Rucksack

And now it’s time for the portion of our show when we hand out some quick tips to maximize your travels. Whether you’re planning your Alaskan cruise adventure or a relaxing stay in the south of France, these smart strategies will serve you well:

  • Secure Travel Insurance: While it does add a little to your travel expenses, travel insurance is an investment that’s well worth it in the event of the unexpected – illness, injury, or otherwise. It can also cover lost luggage and trips to the emergency room, potentially saving you from substantial financial setbacks and protecting you abroad.
  • Maximize Credit Card Rewards: Many credit cards provide points, miles, or cashback on travel-related purchases, along with perks like rental car insurance discounts and airport lounge access. There are so many ways to get a greater bang for your buck with reward cards, especially while traveling. If one of your main goals for retirement is travel, we highly recommend learning the ins and outs of the world of travel credit cards. Of course, to avoid interest charges and get the most out of these rewards, it’s essential to pay off your balance each month.
  • Leverage Senior Discounts and Travel Groups: Take advantage of senior discounts available through various travel companies, airlines, and accommodation providers. They are designed to allow you to celebrate your golden years! Joining travel clubs for retirees can also offer unique group travel experiences at reduced rates. Who knows – you might even make some new friends along the way.
  • Stay Flexible: You know this already, but when planning a trip, shop around for the best prices on flights, hotels, and activities. Even better, staying flexible with your travel dates and destinations can lead to significant savings. If you’re able to travel mid-week when others aren’t, do it! Additionally, consider traveling during off-peak seasons to stretch your travel budget further.

Investing in experiences, like that dream trip to Italy or a cross-country road trip, is a significant part of enjoying your retirement. Planning ahead ensures that you won’t have to worry about financial setbacks, allowing you to enjoy your experiences to the fullest. If you want to learn more about planning out your finances for travel in retirement, give us a call: 952-460-3290. Bon voyage!

Rethinking The Classic “60/40” Portfolio

The “60/40” portfolio, made up of 60% equities and 40% bonds, has been a staple of investment management for several decades. The strategy gained mainstream acceptance after William Sharpe and Harry Markowitz won the Nobel Prize in Economics in 1990 for this portfolio optimization model. Mutual funds further popularized the investment strategy in the late 1990s and early 2000s. And it worked well for the better part of the past three decades, but is it still relevant today?

So, Why 60/40, Anyway?

The 60/40 portfolio has become the generic term for a diversified portfolio, with the mix between stocks and bonds varying based on the investor’s risk tolerance and goals. Stocks are held in hopes of capital appreciation growing the portfolio and maintaining purchasing power against inflation, but they also carry varying amounts of risk. Bonds, used in conjunction with stocks, provide safety and reduce volatility. Bonds worked well in portfolios in the 45-year period leading up to 2020, at which time interest rates steadily decreased. This period saw bond prices rise (as bond prices move inversely to yields), providing investors with income and rising values. Government bonds, in particular, acted as a strong equity hedge during the Great Financial Crisis of 2008 as interests quickly dropped while investors sought safety in U.S. Treasuries.

Recent Underperformance and Challenges

However, things have changed. Over the past few years, portfolios with a mix of stocks and bonds have underperformed due to rising interest rates pushing down bond prices. In response to inflation spikes post-COVID, the Federal Reserve raised short-term interest rates, resulting in some of the most significant bond losses of the last hundred years. The so-called “safe money” in bonds has not fared well over much of the last three years. While stocks have generally performed well, bonds failed to provide the expected protection during the stock market downturn of 2022.

The Outlook for Interest Rates and Bonds

Current expectations suggest that interest rates will drop, pushing bond prices higher, and enabling the traditional stock/bond portfolio to regain its strength. However, we are not fully convinced that this will be the case. The yield curve has been inverted (short-term rates higher than long-term rates) for nearly two years. When (if) the Fed does lower rates, the yield curve will likely normalize, with short-term rates dropping and intermediate to long-term rates holding steady or even rising. Short-term bonds will likely provide a positive return but those gains may be somewhat limited since gains in bond prices may be offset by the reduction in interest received as a result of lower rates. Long-term bonds offer limited upside, outside of interest paid, if long-term rates hold steady and create potential for further losses if rates rise.

Despite these challenges, fixed income yields are at their highest levels in nearly 20 years, so investors get “paid to wait” and collect interest. However, after accounting for taxes and inflation, real returns on many fixed income instruments are minimal and barely maintain purchasing power.

Adapting With Changing Markets

A diversified asset portfolio still makes sense to lower volatility and preserve capital. However, asset allocation should be dynamic and adjusted according to current economic and market conditions. Modern Portfolio Theory, introduced by Markowitz in 1952, was based on three asset classes: stocks, bonds, and cash. Today’s investment landscape offers considerably more strategies and options for generating income and protecting against stock market losses than there were in the past.

Secured Retirement Will Explore Your Options

If you haven’t already, it may be time to look beyond the traditional 60/40 portfolio and consider alternative strategies. There isn’t a single right or best way to build an asset allocation, but mistakes can lead to poor outcomes. With the help of a knowledgeable professional, each investor needs to find the balance that best aligns with their unique goals and objectives. If you’re struggling to find your balance, give us a call: 952-460-3290.

Nathan Zeller Secured Retirement

Nate Zeller

Chief Investment Strategist
Secured Retirement

Investment Strategy Insights

When I was growing up in the 1980s, I remember the all-too-real threat of having my mouth washed out with soap for using a naughty word. Recently, a naughty word has been making the rounds among economists and market observers who claim we’ll all suffer from its bad taste. That word is “stagflation” – a cycle characterized by slow growth, high unemployment, and high inflation. So, is there real cause for concern? Or is this another instance of the media selling fear? Let’s see what the numbers have to say:

April Showers. . .

In April, the stock market saw a downturn, attributed in part to diminishing hopes of interest rate cuts by the Federal Reserve. While The Fed has acknowledged inflation remains stubbornly above their target rate of 2% and short-term interest rates will be maintained, there have also been murmurs of an interest rate hike. The Consumer Price Index (CPI), reported higher-than-expected inflation rates in April, while first-quarter GDP was lower than expected. Both reports seem to be trending in the wrong directions with higher inflation and lower growth fueling stagflation worries.

May Flowers?

May’s start eased inflation concerns with the help of positive earnings reports lifting spirits. Two defensive sectors – utilities and consumer staples– led the rebound after being some of the S&P 500’s worst performers over the past year. In the long term, the stock market is driven by earnings growth. Despite the economic slowdown’s potential impact, the market’s resilience and overall strength remain evident, with the S&P nearly 30% higher than October’s woes.

Valuation Adjustments Incoming

In terms of stocks, analysts are raising their eyebrows over the continued burgeoning valuations of certain growth stocks, particularly in tech. Recently, some hot stocks have cooled, providing opportunities in other, previously-overlooked sectors. It seems as if stock valuations do indeed matter again. While the S&P 500 trades slightly above historical averages in terms of valuation measures, the expectation is for valuations to adjust as earnings continue to grow.

These Things Alone Do Not A Recession Make

Many economists predict that the long-anticipated recession will arrive with a “soft landing”, rather than a deep recession. The recessions of the last 25 years were all caused by large-scale events – tech crash, financial crisis, and COVID. Higher inflation, ballooning deficits, and geopolitical events can make the economy more vulnerable in combination but are likely not enough to cause a recession. The normal state of the economy is growth and expansion; only when an event occurs does it contract. For this reason, we at Secured Retirement do not believe a recession is inevitable.

The Final Word On That “Naughty Word”

Inflation remains stubbornly higher than we’ve experienced over the past couple of decades, so it is important to account for this in your retirement planning. And there is a chance, albeit relatively small, that we will experience a period of that naughty word stagflation. However, the ongoing growth of our population and access to more disposable incomes, coupled with rapid technological advancements continue to contribute to the great American growth story. For now, we remain optimistic about the stock market’s prospects and foresee sustained growth in the long term. 

To learn more about stagflation-proofing your retirement planning, give us a call today at 952-460-3290.

Nathan Zeller Secured Retirement

Nate Zeller

Chief Investment Strategist
Secured Retirement

Investment Strategy Insights

After a hot first quarter, we’re left feeling that the market has begun to cool off just as the weather warms up here in the upper Midwest. With a mix of rising interest rates and tempered expectations for Federal Reserve rate cuts, we’ve begun to feel a slight market chill. Nevertheless, and despite some hubbub over inflation and interest rates, we believe the market will remain healthy. Our very own Chief Investment Strategist, Nate Zeller, breaks down why.

Q1 and Q2 In A Few Recording Breaking Numbers

Wall Street continued its hot streak in March, extending its rally to a fifth straight month.  The S&P 500 returned over 10% in the first quarter of the year; the best first-quarter performance for the index since 2019!

The second quarter has gotten off to a cool start for stocks as interest rates moved higher. Following comments from officials at the Federal Reserve, expectations for the number of interest rate cuts this year were damped, sending bond yields higher. Yields on 10-year U.S. Treasury bonds recently touched their highest point in 2024. 

What’s To Come of The Fed’s Hold Steady?

Investors remain cautious about the pace of the Fed’s rate-cutting timeline this year and how soon central bankers will be able to meet their 2% inflation target. As expected, the Fed held interest rates steady at their March meeting and officials have indicated they are in no hurry to cut as economic growth remains strong and inflation remains above target. 

Many “experts” and prognosticators on television and the internet would lead us to believe that if the Fed does not cut rates this year it could spell disaster for the stock market. We do not think this is the case, and, in fact, believe the opposite to be true. If the Fed does not cut rates, it is because economic activity and the labor market remain strong. Economic growth generally leads to corporate earnings growth, helping provide a tailwind for stocks. The Fed cutting rates as a result of slowing economic growth could be a bad omen for the stock market. 

An ideal scenario would be lower inflation while the economy remains healthy, but this may be unlikely since robust economic growth typically leads to inflation. There is also the prospect that inflation reverses course and moves higher, forcing the Fed to raise rates. While this may seem doubtful, it does remain a possibility, especially in light of the recent rise in commodity prices – namely oil.  

An Overvalued Stock Market and Broadening Momentum

Indications signal the overall stock market is overvalued when compared to historical measures. The question is whether earnings will continue to grow to support lofty share prices or if prices will fall to be more in line with long-term averages. Nothing mandates that stock prices must trade at certain valuations and, as we know, the market can remain irrational for a very long time. However, over time, the market always seems to “revert to the mean”, so eventually, we are likely to see either a pullback in prices or an acceleration in earnings growth.

The emergence of the “Magnificent Seven” stocks last year led markets higher but not all stocks and sectors participated in the rally. The performance of the major market indices was primarily driven by these seven stocks which now make up a large concentration of cap-weighted indices.  Currently, there is added risk in investing in passive strategies that track these indices, since they are heavily weighted to this small handful of stocks. 

We are not necessarily expecting a pullback in these names, since most are very strong companies with solid and rapidly growing earnings, but we do anticipate a broadening of the upward momentum to include a wider array of stocks in sectors outside of technology which will provide opportunities for active management strategies.   

Protection Strategies To Mitigate Your Investment Risk

With the stock markets trading near all-time highs and a sense the market is overbought, we fully understand there may be some trepidation amongst investors when it comes to putting new money into the market. Remember, stock market investing is a long-term endeavor and there are times of volatility.  Historically, patient and disciplined investors have been rewarded.  There are many protection strategies available which provide stock market participation while protecting against downside risk. If you’re interested in learning more about how various strategies might make sense for you, give us a call at 952-460-3290.

Nathan Zeller Secured Retirement

Nate Zeller

Chief Investment Strategist
Secured Retirement

Navigating the Most Dangerous Decade: How To Thrive In Transition

In terms of retirement, there’s one particular span of 10 years that is the most critical. Known as
the “most dangerous decade,” the five years prior and the five years post your retirement are
the greatest predictors of retirement outcome. The term “most dangerous decade” was coined
by retirement researcher Wade Pfau who found that over 80% of retirement outcomes are
determined during these ten years. Reasons for this include the general shift in lifestyle,
spending, and investment management.

As you navigate this fragile phase, careful planning and strategic decision-making become
important to ensuring long-term financial security and health in retirement. It’s key to receive the
advice of a trusted expert in this period especially; however, there are a few things you can do
to best position yourself for this crucial time.

Rethinking Income Strategy

Many people think that achieving a savings goal is the single most important element of
preparing for retirement. The truth is that it’s even more important to create a strategy around
generating income in retirement. You simply don’t know how long savings will last. Creating an
income strategy in retirement equips you with an action plan that continues on. The more
diversified your income streams are, the better off you’ll be. Dividend-paying stocks, i-bonds,
real estate investments, annuities, and more all provide additional income streams. Diversifying
income streams enhances financial resilience and ensures a steady cash flow even as you
move out of the workforce.

Prepare for Healthcare Costs

Healthcare just keeps on improving! As medical advancements continue to progress, people are
living longer. That means retirement income has to stretch further as a result. Planning for
healthcare expenses is crucial, but it’s hard to anticipate these big things that haven’t happened
yet. Additionally, inflation for healthcare services continues to outpace the general economy. So,
costs for care are only going up, up, up.

A lot of people make the mistake of assuming Medicare will cover all of their medical bills in
retirement. But that’s simply not true. Medicare will cover some medical expenses. You’ll still be
on the hook for important things like vision, dental, and long-term care. While it’s difficult,
planning healthcare expenses early on is essential to mitigate financial strain in later years.
Even with the level of uncertainty, insurance premiums and medication costs are things you can
better plan for in advance.

Consider Your Investments

In retirement, your system of adding new money to your savings will shift and you’ll more
regularly be taking money out of your accounts. If the stock market is doing well, the money you take out might be balanced by new gains. But if the market is down for a while, every time you
take money out, it could be more like taking a slice from a shrinking pie. This is called sequence
of returns risk, and it’s something that all investors have to contend with.

If you retire when the market is up, you might be okay even if it goes down later. But if you retire
when the market is down, your savings might not bounce back. This risk is heightened during
the first decade of retirement when your portfolio balance is at its highest, and withdrawals may
have a more substantial impact on its sustainability. The market’s timing is beyond your
control, but you can take steps to minimize the risk. Regularly checking and adjusting your
investment mix every 6 to 12 months can help. Make sure your portfolio is diverse and matches
your age, goals, and how much risk you’re comfortable with. The important thing is to have a

Stay Active, Stay Healthy, and Stay In Touch

Beyond financial considerations, it’s extremely important to prioritize your health – mental and
physical – throughout the period right before and right after retirement. It’s a time of major life
shifts, disruption, and, frequently, some stress – no matter how welcome your retirement may
be! Staying active, engaging in meaningful activities, and maintaining social connections are
vital to a fulfilling retirement. By cultivating a healthy lifestyle, you not only enhance your quality
of life, you also reduce the risk of costly medical interventions in later years.

The most dangerous decade certainly sounds scary! And the truth is, it can have a huge effect
on your overall retirement. However, with planning and proactive strategies relative to your
income planning, healthcare costs, and investment portfolio, you will be well-positioned to
weather the storm. Your journey through retirement is not only about financial security; it’s about
living a fulfilling and purposeful life. Our comprehensive retirement planning aims to equip you
with the full package so you can do just that. To review the strategies for your “most dangerous
decade”, call us today at 952-460-3290.

Danielle Christensen


Danielle is dedicated to serving clients to achieve their retirement goals. As a Paraplanner, Danielle helps the advisors with the administrative side of preparing and documenting meetings. She is a graduate of the College of St. Benedict, with a degree in Business Administration and began working with Secured Retirement in May of 2023.

Danielle is a lifelong Minnesotan and currently resides in Farmington with her boyfriend and their senior rescue pittie/American Bulldog mix, Tukka.  In her free time, Danielle enjoys attending concerts and traveling. She is also an avid fan of the Minnesota Wild and loves to be at as many games as possible during the season!