Sponsored by

Wait a second, so things are actually good? Well, kinda

F. Scott Fitzgerald once said, “[t]he test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” Well, you’ll have to do that after reading this. Financially, things look good when analyzing data. But the data doesn’t tell you the whole story. Inflation is still running hotter than the Fed’s target and hotter than it did between 2010-2020. The stock market took a bit of retrenchment late last week but is slowly creeping back up. And lastly, the geopolitical picture remains perilous with more money on the way to support ongoing military operations by Ukraine and Israel in their respective wars.

An intelligent investor is an informed investor

We are once again sponsored by the Bay Area Times. Would you like to join more than 250,000 other subscriber receiving the best daily newsletter on business and tech? An informed investor wouldn’t want to be left out. Check out their publication below and see if it’s another source of valuable information that can help your intelligence and bottomline.

Visual-based newsletter on business and tech

We explain the latest business, finance, and tech news with visuals and data. 📊

All in one free newsletter that takes < 5 minutes to read. 🗞

Save time and become more informed today.👇

Is the economy having a good time? The data points to yes

US GDP came in strong at 1.6%. With inflation still high—coming in at 3.5% in March—the economy shows no signs of slowing down. Unemployment remains under 4%. Couple these numbers together and we are seeing one of the best economic pictures for this country in quite some time.

All this growth is actually putting pressure on the Federal Reserve who claimed previously that we’d see rate cuts this year. The Fed typically cuts rates when the economy is in need of a boost, but with unemployment remaining low and inflation and GDP remaining high a cut may be something the Fed will have to push back to later this year or rule out entirely. Any rate cut may reaccelerate inflation and bring us back to the rampant price spirals we saw throughout 2022 and into 2023.

A word of caution, good economic data doesn’t mean the gains are felt evenly across the nation. Things may look very different for a wealthy family compared to a young individual with little to no asset ownership.

OK, so what about the stock market?

The stock market took a bit of a hit last week, and after a bit of a rally earlier this week, have dropped down even more dramatically as of Thursday night. Stocks may see a boost next week as companies begin to release their earnings reports, which so far have looked largely favorable. Early earnings reports out of GE Aerospace, General Motors, and Huggies—to name a few—paint a rosy picture for Q1 earnings.

You know who isn’t having a good time?

Tesla’s profitability declined in Q1. Net income fell 55% compared to last year as other automakers are catching up in both China and the US. However, Tesla stock saw a boost on Wednesday after announcing the upcoming production of a more affordable EV. The Tesla story never stops… or perhaps it’s the Elon story.

Is the world a more dangerous place?

Well it sure seems like it. The US, while not directly participating formally in any of the hostilities, will likely be bankrolling two countries engaged in the hottest wars around the world as the Congress passed military aid bills to Ukraine and Israel. The passage of this bill was held up due to Republican reluctance mainly around sending additional aid to Ukraine. However, Congressional Speaker of the House Mike Johnson was able to rally enough votes on his side of the aisle along with almost total Democratic Party support to get this bill across the finish line. Interesting enough, 112 Republicans—the majority of Republican members of the house—voted against the bill.

Johnson’s future might be in jeopardy if enough members of his party decide it’s time for him to go, but Democrats in the chamber can decide to save Johnson—but they likely won’t do it without some major concessions from Johnson. However, if Johnson is stuck relying on Democrats support he might lose favor with the rest of the Republicans who view him as more of a tool of the Democrats than the Republicans. It’s kind of a damn if you do, damned if you don’t situation. Tough luck.

Money Tip of the Week

It’s no secret Americans are having less children than previous decades. The fertility rate now stands at 1.71, lowest since 1971. Part of the challenge of having children is the sheer cost of it all. However, did you know you are able to withdraw funds penalty free from one of your retirement accounts? Well, the answer is yes.

Technically, you are able to withdraw from your 401(k) or Traditional IRA at any moment, but withdrawing under age 59 ½ will lead to a 10% penalty. The Secure Act of 2019 added an exception where newborn parents or those who adopt children are able to withdraw $5,000 from either their 401(k) or Traditional IRA without a tax penalty. Even better is the fact each parent can withdraw $5,000 from their respective retirement account for a total of $10,000. This withdrawal must take place within the year that the baby is born or adopted. Be aware that the distribution will be counted as part of your income for the year, meaning it will be taxed. However, your state may have special tax credits or deductions that will help lower the tax rate your withdrawal is subject to by your state.

Work with Hoskin Capital

Knowing is half the battle, we help you get it done.

We manage your entire financial life for a fixed annual fee.

Meet our team of experts, peep our services, and learn why we exist.