Well Balanced

MP014: 2025 Market and Economic Outlook with Kara Murphy

Jason Ranallo and Kara Murphy discuss the economic and market outlook for the upcoming year. They explore various themes including market trends, the impact of U.S. debt, the performance of the Magnificent Seven stocks, and the influence of AI on productivity. The conversation also covers mergers and acquisitions, real estate investment considerations, and the effects of political administration on market dynamics. The session concludes with insights on planning for future investments and the importance of diversification.

Originally recorded and streamed on January 14^th, 2025.

Takeaways

• The best-selling Barbie was Totally Hair Barbie, illustrating market surprises.
• Chewbacca Barbie is the most valuable today, showing how perceived value can differ.
• S. large cap stocks had a strong return of 25% last year.
• Don't fight the Fed; monetary policy significantly impacts stock performance.
• The Magnificent Seven stocks have shown extraordinary performance, but earnings growth is crucial.
• Diversification is essential to mitigate some risks in investing.
• S. debt is a growing concern, requiring a mix of solutions.
• AI has the potential to boost productivity but may not benefit all workers equally.

Chapters

The following chapter titles and start times are provide for those wanting to quickly jump to sections of interest.

 

00:00

Introduction and Overview of Vector Wealth Management

 

01:16

Investing and Barbie

 

04:41

Looking Back: 2024 Returns

 

05:28

The Economic Dashboard

 

06:38

The Magnificent 7: Driving Performance

 

09:40

Mag 7 vs. S&P 500, Among Others

 

11:27

Zooming Out - 200 Years

 

12:24

Jason & Kara Discussion & Market Perspective

 

14:33

Q&A Section

 

14:43

Q&A: U.S. debt as a percentage of GDP

 

16:53

Q&A: Owning assets that outpace inflation

 

17:35

Q&A: Public debt as a percent of the economy

 

18:51

Q&A: M2, The money supply.

 

19:48

Q&A: Productivity gains from AI

 

21:31

Q&A: U.S. workers left out of economic recovery

 

22:01

Mergers and Acquisitions: Current Trends

 

23:42

Real Estate and REITs: Investment Considerations

 

24:59

Q&A: Political Climate and Market Implications

 

26:51

Software & Semiconductors - Post Election

 

28:16

Bitcoin – Post Election

 

29:32

Q&A: IRA & Roth IRA

 

30:20

Q&A: 529 & Roth IRA

 

31:22

Q&A: Insurance, Fires in California

 

34:11

Q&A: Time Horizons & Asset Allocations

 

36:04

Contact Vector with Questions

 

36:28

Regulatory

 

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Kara Murphy is the Chief Investment Officer of Kestra Investment Management. She and her team collaborate with Bluespring/Kestra partner firms, including Vector Wealth Management.

 

Kara is a keynote speaker at industry conferences and a regular contributor to many television and radio programs, including CNBC, Bloomberg TV, and Bloomberg Radio. She is also regularly quoted in financial publications like the Wall Street Journal, New York Times, and Barron's. And to top it all off, Kara was recently named chief investment officer of the year in 2024's Women in Finance Awards*.

 

Hosted by Jason Ranallo, who serves as Chief Operating Officer and Director of Portfolio Management at Vector Wealth Management.

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All content discussed in our podcasts, videos, or related blog articles are for informational purposes and should not be construed as individualized financial advice.

Opinions expressed herein are solely those of Vector Wealth Management, our staff, and guests. Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed directly and in detail with your financial advisor prior to implementation of a strategy or investment. This podcast and related content are not intended to render personalized investment advice, nor should it be viewed as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities or strategies discussed.

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Vectorwealth.com/regulatory

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FYR020: A Bucket-Based Approach to Navigating Market Uncertainty

When it comes to withdrawing from your portfolio, timing is everything. During your working and saving years, the average annual return over time is what matters most since you’re not actively withdrawing funds. However, as you approach retirement and begin drawing from your portfolio, the sequence of returns—the order in which market gains or losses occur—takes on much greater importance. Poor returns experienced early in retirement can significantly impact the longevity of your savings.

At Vector Wealth, we use a bucket-based approach to planning and investing. This strategy segments your investments into different “buckets” based on your time horizons and financial goals. By aligning withdrawals with specific investment buckets, this method helps mitigate the risks of a poor sequence of returns.

 

How It Works: A Practical Example

Imagine a recently retired 65-year-old couple with a $3 million portfolio. They plan to withdraw $120,000 per year for living expenses. Using our bucket-based approach, we would set aside three years’ worth of income needs—$360,000—into very conservative investments. This first bucket serves as a buffer for their immediate withdrawal needs.

Now, let’s examine two potential market scenarios: one good and one less favorable.

Scenario One: A Positive Market Sequence

In the first scenario, the stock market rises for two consecutive years. During this time, the withdrawals occur, and the first bucket begins to be spent down. As markets moved higher, we rebalanced the portfolio and “reloaded” the first bucket to maintain the three-year buffer for future withdrawals.

Scenario Two: A Negative Market Sequence

In a less favorable scenario, markets decline during the couple’s first few years of retirement. Withdrawals still occur, and the conservative bucket is drawn down. However, since markets are down, we delay reloading this bucket, giving the longer-term investments time to recover. By not selling stocks during a market downturn to fund withdrawals, we avoid locking in losses. Once markets recover, we resume rebalancing and reestablishing the three-year buffer.

 

The Benefits of a Bucket-Based Approach

Why do we use this strategy?

1. Market Unpredictability – Stock markets are volatile in the short term, and no one can predict their movements. A bucket-based approach helps you plan for uncertainty.
2. Peace of Mind – Withdrawal needs are thoughtfully planned and matched to specific investments, providing clarity and confidence.
3. Limit Emotional Decisions – Having a structured plan in place helps prevent making emotionally charged decisions.

By aligning your withdrawal strategy with a bucket-based approach, you can maintain your lifestyle while safeguarding your portfolio against the risks of a poor sequence of returns.

To learn more about the sequence of returns and other financial planning topics, visit us at vectorwealth.com.

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vectorwealth.com/regulatory for more about our relationship with you and this informational and educational content.

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FYR019: Financial Planning Tips for a New Year with Chris Wagner

As we approach 2025, it’s great time to plan for a financially strong year ahead. In this podcast, Vector Advisor, Chris Wagner discusses Required Minimum Distributions (RMDs), Qualified Charitable Distributions (QCDs), and explores Roth conversions.

Chris also reminds us to review beneficiary designations to ensure they align with your wishes.

Did you know:

• The gift tax exclusion increases to $19,000 in 2025.
• For charitably inclined individuals, a donor-advised fund may offer tax benefits and flexibility.
• Higher limits on HSA’s may help maximize health savings.

Chapters:

• 0:03 - Introductions & 2025 Planning
• 0:16 - Required Minimum Distribution
• 1:15 - Qualified Charitable Distributions
• 2:31 - Roth Conversions
• 3:16 - Beneficiary Designations
• 3:52 - Gift Planning
• 4:20 - Donor Advised Fund
• 5:04 - HSA - Health Savings Account
• 5:22 - Wrap Up
• 5:55 – Regulatory

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All content discussed in our podcasts, videos, or related blog articles is for informational purposes and should not be construed as individualized financial advice.

Learn more: vectorwealth.com/regulatory

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MP013: Consumer Confidence, Holiday Spending, and Market Trends with Kara Murphy

In this episode of our podcast, Jason Ranallo and Kara Murphy discuss the current state of the markets and consumer behavior, particularly in the context of the holiday spending season. They explore the complexities of consumer confidence, the impact of inflation on spending habits, and the performance of the stock market, including the potential for a Santa rally. Kara shares insights on the health of consumer balance sheets, the labor market, and the overall economic outlook for the coming year.

 

Who is Kara Murphy?

Kara Murphy is the Chief Investment Officer of Kestra Investment Management, where she and her team collaborate with Bluespring/Kestra partner firms, including Vector Wealth Management. Kara is a regular contributor on CNBC and Bloomberg TV. She is also active within financial publications including The Wall Street Journal, The New York Times, and Barron’s.

 

Takeaways from the conversation

• The labor market is healthy with low unemployment.
• Consumer confidence is relatively low, in part due to the impacts of inflation.
• Holiday sales are expected to be up about 3%.
• Earnings growth among large companies is strong.
• Santa rallies (strong year-end market performance) have been less reliable in recent years.

 

Save the Date – January 14^th at 3 pm (CST)

Kara will join us again for a livestream on the market and economic outlook. We will follow up with additional details about this event. Stay tuned.

 

Chapters

00:00 - Introduction to Kara Murphy

03:11 - Current Trends in Consumer Behavior

06:33 - Understanding Consumer Confidence

08:12 - The Impact of Inflation on Spending

09:32 - Market Trends and Santa Rallies

11:34 – Regulatory

 

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vectorwealth.com/regulatory

All content discussed in our podcasts, videos, or related blog articles is for informational purposes and should not be construed as individualized financial advice.

FYR018: The Art of Business Valuation & Exit Readiness: A Conversation with M&A Attorney Matt Hartranft

In this engaging conversation hosted by Vector’s Jason Ranallo, Matthew Hartranft, an experienced M&A attorney with Brutlag Trucke & Doherty, shares practical strategies for business owners navigating the mergers and acquisitions (M&A) landscape. With a background in banking and inspiration drawn from his early legal and volunteer experiences, Matt emphasizes the importance of understanding your business’s value and being prepared for potential exits, even if they aren’t imminent.

He highlights actionable steps, including conducting a gap analysis to determine what’s needed to meet personal financial goals post-sale and ensuring financial advisors and accountants are on the same page. Matt stresses the need for readiness, as external factors like interest rate shifts or market conditions can quickly influence opportunities.

A key takeaway is the importance of preparation in negotiations, including gathering robust financial evidence to support valuations and leveraging timing to secure better deals. Matt underscores the principle that “time kills deals,” advocating for clear planning and collaboration to streamline the process.

Sharing a success story of nearly doubling a client’s deal value, Matt illustrates how strategic negotiation, competitive analysis, and attention to details like restrictive covenants can unlock hidden value in transactions. He concludes by encouraging business owners to approach deals with diligence, collaboration, and foresight, ensuring they achieve their long-term financial and business goals.

Get this podcast as video or audio on our blog along with a transcript and chapter start times.

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vectorwealth.com/regulation

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The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Be sure to consult first with a qualified financial advisor and or a tax professional before implementing any investment strategy.

 

WB004: Inside Senior Living - A conversation with Melissa Fritz & Joe Grochowski

Senior living is more than just a place—it’s a journey, and this episode explores how to navigate it with intention and empathy.

In this engaging podcast episode, creator and executive producer of the groundbreaking PBS docuseries Inside Senior Living, Melissa Fritz explores the important and often complex topic of senior living with Joe Grochowski, Senior Wealth Advisor at Vector Wealth Management. Inside Senior Living (website) is a show that provides a relatable and educational perspective, following eight families as they navigate aging-related decisions, transitions, and challenges over the course of the series.

Together Joe and Melissa discuss the emotional, practical, and cultural dimensions of aging and senior care, offering listeners valuable insights into a topic that, will at some time, touch many families.

Melissa shares her personal and professional journey into the senior living space, driven by her passion for helping older adults and their families navigate this phase of life. With her depth of experience in senior living communities and her personal connection as a caregiver for her father, Melissa brings both expertise and empathy to the conversation.

The conversation sheds light on common misconceptions about senior living. From aging in place to independent and assisted living communities, Melissa talks through a wide range of options available and the importance of starting conversations about aging early.

Podcast listeners (or viewers) can expect a heartfelt discussion about the emotions, struggles, and opportunities that come with making senior living decisions. Joe and Melissa highlight the benefits of planning ahead, the power of focusing on what can be gained through transitions, and some cultural differences in how we approach aging.

Whether you’re currently navigating senior living decisions or preparing for the future, this episode is filled with insights and perspective that can help you and your loved ones.

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vectorwealth.com/regulatory

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MP012: All-Time Highs, Recession, and Long-Term Investing with Jason Ranallo

With major stock indices at record highs, some investors are asking, ‘Is now the time to pull back?’ In this podcast we dive into the numbers, address recent market movements, and explain why a long-term perspective remains essential.

 

Key discussion points:

 

Market Milestones in 2024

• 51 all-time highs, the Dow at 44,000, and the S&P 500 above 6,000

What Happens After All-Time Highs?

• Looking back: Discussion of all-time highs and historical growth over time.

The Recession Question: Is It on the Horizon?

• Low unemployment, continued economic growth, and the Fed’s rate cuts lead us to believe we won’t see a recession in the near term.

Why Long-Term Investment Is Key

• It can be a bumpy road to the long-term average. Setting aside short-term investments to cover immediate needs so that long-term investments can weather market downturns.

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Regulatory

vectorwealth.com/regulatory

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The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed.

FYR017: Mortgages, Market Trends, and Real Estate with Mike Nesheim

In a recent conversatior, Vector senior wealth advisor Mike Nesheim hosts mortgage expert Tyler Wiltse from Cambria Mortgage. Tyler shares his insights into the current mortgage landscape, focusing on everything from interest rate trends to strategic refinancing.

Tyler emphasizes that while recent interest rate hikes may deter some buyers, real estate remains a strong investment. For those unsure about timing, he advised that consulting a mortgage expert early on is essential, especially when planning major moves. For individuals transitioning between homes, Tyler highlighted options like "rent-back" arrangements and bridge loans, which provide both flexibility and financial security during the buying and selling process.

Another focal point was the importance of a holistic approach to mortgage planning. Tyler and Mike discuss how mortgages can be a critical piece of an individual’s overall financial strategy. They talk about refinancing strategies, with Tyler recommending consideration of an option to delay closing-cost in cases where rates might decrease before too long. Additionally, as rising home prices push more buyers into the jumbo loan category, Tyler discussed alternatives, which may offer better terms. This discussion underscores the need for proactive, well-informed planning in today’s evolving market.

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vectorwealth.com/regulatory

All content discussed in our podcasts, videos, or related blog articles are for informational purposes and should not be construed as individualized financial advice.

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