Strong Earnings, Resilient Markets: Why 2024 is Breaking Records
Capital Investment Advisors
Helping Families Find Happiness in Retirement | Retirement Planning | Income-Oriented Investment Portfolios
It’s been a busy past few weeks. Think about everything that has happened lately: the U.S. presidential election, the Federal Reserve meeting, fresh inflation data, the jobs report, and we are wrapping up corporate earnings season. There’s been a lot going on lately, yet we continue to see new all-time highs in the market. Just this year alone we have already seen over 50 new all-time highs for the S&P 500. Remember, we did not hit any new all-time highs in 2023 and only saw one new all-time high in the market in 2022.
Earnings season is coming to a close as well. We just got quarterly results for the largest component of the S&P 500, NVIDIA. While NVIDIA earnings results dominate financial headlines, the overall earnings results from the S&P 500 have largely been impressive this earnings season. Almost 95% of S&P 500 companies already announcing earnings, and of those companies that already reported over 80% beat or met earnings expectations and almost 70% beat or met revenues/sales expectations. This is good news for investors, and it reflects an overall healthy economic environment.?
- Retire Sooner Team at Capital Investment Advisors
Q&A
Q:?"Hi Wes, I’m 62, newly retired, and feeling good about our $1.2 million in retirement savings, which we currently have in a target date fund. My wife and I love traveling and staying active, but now that we're officially in retirement, I'm wondering if keeping our savings in this fund is still the best move. Should we stay the course with the target date fund, or is there a better, safer way to allocate our investments now to ensure stability and keep up with inflation?"?
A: Congratulations on your retirement! It’s a great milestone, and it sounds like you’ve done an excellent job saving and planning. A target date fund is designed to adjust your investment mix as you approach and enter retirement, but it may not fully address your needs: generating steady income while protecting your savings and combatting inflation. This is where an income-focused investing strategy can shine. By shifting part of your portfolio to income-generating investments such as dividend-paying stocks, high-quality bonds, and other investments offering distributions like real estate investment trusts (REITs), you can create a reliable cash flow to support your lifestyle.
Income investing allows you to maintain a balance between growth and stability. Dividends, bond interest, and other distribution streams can provide consistent income, giving you more predictability and peace of mind. Additionally, this strategy helps mitigate the impact of market volatility because you're earning income regardless of fluctuations in the stock market. While a target date fund is convenient, it’s worth evaluating if a customized income portfolio might better align with your retirement needs and give you greater flexibility
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Retirement Life Map
After a recent episode, we received a heartfelt email from a longtime listener. She was so inspired by what she heard that she started sketching out her retirement plans and even came up with some exciting new ideas to include!
If you feel inspired to do draw out your life map for retirement we'd love to see it!
The Overlooked Secret to a Happy Retirement: Social Connections
While financial planning often takes center stage, the role of social connections in retirement happiness is equally critical—and frequently overlooked. Research consistently shows that happy retirees have more social connections than unhappy ones, highlighting the need to prioritize friendships alongside financial goals.
Declining Social Connections
An American Perspectives Survey (APS) revealed a troubling trend: nearly half of Americans in 2021 reported having three or fewer close friends, compared to just 27% in 1990. Even more concerning, 12% reported having no close friends at all—up from 3% in 1990. The number of people with 10 or more close friends also dropped significantly, from 33% in 1990 to just 13% in 2021.
This decline underscores a growing challenge: Americans are becoming less socially connected over time.
What Happy Retirees Do Differently
Data from What the Happiest Retirees Know shows a clear link between the number of close connections and happiness in retirement. The magic number? Between three and four close friendships. Retirees with at least three close friends are twice as likely to be happy, and those with five close connections are four times more likely to thrive.
More connections equate to more happiness—without a ceiling effect. Unlike income, which plateaus in its impact, friendships continue to boost happiness.
How to Foster Connections
The Compounding Effect of Friendships
Social connections are like compound interest for happiness—they grow exponentially when nurtured. Investing in relationships by spending quality time with friends, joining groups, and planning trips can significantly impact your retirement satisfaction.?
Start prioritizing your friendships today to create a richer, happier retirement tomorrow.
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A Quick Reminder
This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. There will be periods of performance fluctuations, including periods of negative returns and periods where dividends will not be paid. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. There are many aspects and criteria that must be examined and considered before investing. Investment decisions should not be made solely based on information contained in this article. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. The information contained in the article is strictly an opinion and it is not known whether the strategies will be successful. The views and opinions expressed are for educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions.The S&P 500 Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks. The Dow Jones Industrial Average is one of the oldest and most commonly followed equity indexes, it is a stock market index that tracks 30 large, publicly-owned blue-chip companies traded on stock exchanges in the United States. The Consumer Price Index (CPI) measures the overall change in average prices paid by consumers over time. Please note an investor cannot invest directly in any index. Performance results are for informational purposes only, moreover, index performance does not reflect the deduction of advisory fees, transaction charges, and other expenses. Past performance is not indicative of future results.