Shutdown Showdown & Market Jitters: Protecting Your Retirement with Pride

Episode 73: Audio automatically transcribed by Sonix

Episode 73: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the LGBTQ+ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of, a retirement you can take pride in, no matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.

Speaker1:
Hello and welcome to another edition of Take Pride in retirement. Matt McClure here with you, your host, your advisor, your friend, your pal and your confidant. Thanks so much for being a part of things as always. Got a great show coming up on today's episode. Gotta do a little bit of a market update here in just a bit. You know, this political uncertainty that we all find ourselves in has found investors seeking some safety, uh, for their 401. We'll talk about that rundown what that could mean for your portfolio. Then we're going to talk about the shutdown showdown. Uh, in just a while. Uh, we'll look at what's happening in Washington, or better yet, what's not happening in Washington. I guess I shouldn't say better yet, I should say more descriptively, what's not happening in Washington, this latest sort of budget standoff. We'll see what that could mean for your money and for your peace of mind. We'll also be joined in just a bit by a representative from the Christopher and Dana Reeve Foundation, and talk about some funding for disabled Americans that could be at risk. So a lot to get to here over the next little bit.

Speaker1:
Uh, as I say, sometimes I got £10 a show to cram into a £5 bag, so we're gonna get into it. But I really do appreciate you joining me. And if you would like to, you know, be a part of, um, you know, the, the revolution that we're trying to start here about getting LGBTQ plus people prepared for retirement, getting you to and through your retirement years. I would love to talk with you. Go to take pride in retirement. Com that's the website. Take pride in retirement. Com or give me a call at 855246921185524692 11. That is the number. You can set up a free consultation. And yes I said absolutely free. It's free of any cost, any obligation, no matter who you are, where you come from, who you love, how you identify or how much money you have, you deserve a retirement you can take pride in. And that is the goal for me to help you get there, right? So let's get into it. We're going to start with a little inspiration for our conversations this time around with our quote of the week.

Speaker3:
And now for some financial wisdom. It's time for the quote of the week.

Speaker1:
And this week's quote comes from Warren Buffett, who said this. Someone is sitting in the shade today because someone planted a tree a long time ago. Someone is sitting in the shade today because someone planted a tree a long time ago. It's so true. It's like it's all about being prepared right and preparing ahead of time. And that's the thing. As in retirement, you want to be sitting in the shade. You want to be sitting pretty. You don't want to be in the hot sun just melting and boiling away, right? It would be like, uh, the wicked Witch from The Wizard of Oz. I'm melting. I'm melting. No. You want to be in the shade. You want to be able to take it easy, right? Or do what you want to do. That's really the thing, is having that comfortability, that peace of mind. So you got to do that by preparing ahead of time. You know, if you want to sit in the shade Planting a tree. Now, uh, if you want to get in the shade now, you're not gonna have much shade. You know, like, 2 to 3 leaves on a on a little tiny baby tree, right? So what you can do is go ahead and plant that tree as far in advance as possible. Water it, nurture it, make sure it's got plenty of sunlight. All of those types of things. Fertilize it, um, make it grow, help it grow. And in this case, your money tree will be able to give you lots of shade and lots of peace of mind in retirement.

Speaker1:
If you just plan it now and take care of it now. Or if you planted it years ago and you're already well on your way. Good on you for that. That is, uh. That's amazing. So great words, uh, from Warren Buffett here. Uh, and I really appreciate how he puts that, because, you know, who doesn't like sitting in the in the shade? Um, all right, so, as promised, a bit of a market update here as we, uh, kind of start off, some political uncertainty leading folks to put more money that's inside their 401 K 01K into safer investments. This came from CNBC. They did a little analysis here. And this report shows that investors moved a lot of their investments in September into cash and bonds, especially if you're in a 401 K. And so it's kind of playing it safer right. The in moving into cash, moving into bonds, moving into safer investments. Because the stock market has been so volatile. The wild swings the ups and the downs. And so nervousness really is kind of creeping back in after a rocky few weeks. And really and truly you step back from it. That's understandable, right? Especially with the political tensions that have been rising up. There's was kind of that spat back and forth with China about are there going to be new tariffs, something to do with we have rare earth minerals and the tit for tat on that, um, that kind of thing rocks the markets and rocks investors and doesn't leave people feeling like there's much stability.

Speaker1:
And so then they're going to move to what they know is stable. And so that political tension, uh, in the spotlight leading a lot of people who are especially those closer to retirement, looking for that peace of mind, looking for that stability. And so the numbers actually show this equity exposure in 401 S fell from 72.9% in August to 72.2% in September. So, you know, about 7/10 of a percent. That's actually the lowest level since early this year when there was a lot of, you know, political uncertainty as well and a lot of uncertainty in the markets. Bond and stable value funds saw the biggest, uh, inflow of money, the biggest money coming into them, equities, US equities and target date funds saw money moving out. Those are the ones that tend to be more volatile. Uh, the uh, most popular moves in September. Well, moving into money market funds and bond index funds. That's a clear signal, according to this report, of people taking risk off the table. And still, overall trading activity remained light, though, um, meaning that most investors really kind of did what you should do. They didn't panic. I guess they they didn't do the thing that you shouldn't do. So they did the right thing by doing not this thing.

Speaker1:
If that if that makes any sense at all. Uh, investors didn't panic. They just made maybe some small strategic adjustments along the way. And that really is the smarter move here, generally speaking. And the thing is, you know, even even if you're not making big changes, it's a great reminder to kind of check that balance that you have between risk and safety, making sure that it's appropriate for you. And that's why I am if you're watching the video version of the show on YouTube. Yes. It's, uh, it goes up on YouTube, um, every week, so do that please. Like and subscribe. Um, I'm pointing at myself. That's why you need to work with a professional and, uh, you know, come up with a plan that works for you and come up with rebalancing strategies that work for you, monitor that growth that's inside of your portfolio, monitor what the performance is, see how much risk you're taking. Take a look under the hood. See how much risk you're taking, and see if that's appropriate for you at your stage in life, at your risk tolerance, how much risk you're willing to take. Are you actually taking that amount of risk or not? Um, or if you're, you know, maybe getting close to retirement, but you're still willing to take some risk to reap that reward? Um, let's let's balance that. Let's balance that with some safety as well. So that is my generalized advice to you as a listener to the show.

Speaker1:
Of course, I am held to a fiduciary standard. So that means that I, when I work with people one on one, have to customize their plans for them. And so the right mix of stocks, bonds and cash really depends on you. It depends on your goals, your time horizon, your personal comfort level, all of those things. And I have to say, as members of the LGBTQ plus community, a lot of us have had to really build our financial lives kind of on our own terms. Right. That makes planning ahead protecting what you've built all the more important for our community. So if you haven't reviewed your 401 K or your retirement plan recently, now is the time. If you don't have an actual written plan, now is the time to get one. Let's make sure that you have the right mix of all the different kinds of things inside that portfolio that are going to be right for you. Balance that for protection and for growth. Go to take pride in retirement. Com or call 8552469211855246 92. 11. Also, if you go to the website, take pride in retirement, you can go there and you can see a little button at the top right hand side of the home page there, and it says schedule a consultation. You click on that and what can you do? Schedule a consultation. You can do it directly in my calendar. It takes you right to me, to my calendar.

Speaker1:
My real calendar shows you my real time availability, and you can make an appointment with me either in person. If you happen to live in the metro Atlanta area, or if you want to do it via zoom no matter where you live. I'll be glad to do that with you as well. All right, so what's happening in Washington these days? Not a lot. Um, at least as far as getting any legislation done or anything like that. Because as we know, Congress has not passed a budget, so there's no funding for the day to day operations of much of the government. So there is this lovely thing that we call a government shutdown. So what does it mean for you? Well, huh. It's kind of like deja vu all over again. Because every few years, it seems like we talk about this Washington gridlock back in the headlines. And Congress missed that latest budget deadline. As I said, the word shutdown is everywhere this time. The sort of argument is about the Affordable Care Act subsidies and whether those are going to continue or go away. Um, if they do go away, which would be the plan now, according to, uh, the Republican majority in Congress, we could see your healthcare if you're on the ACA, if you're on an ACA, Obamacare, you know, plan your prices, your monthly, uh, outlay, to use a wonky term, uh, the amount of money that you have to pay every month in that premium is going to have to go up.

Speaker1:
It will skyrocket. It could double in a lot of cases. So that is going to be, um, not a good thing for a lot of people, especially people who are living on a tight budget. Medicaid funding. Also another big sticking point here. Both are major political flashpoints that will be, um, you know, coming to a head as well in the 2026 midterms. And for everyday Americans, you know, especially those of you who are already in or maybe getting close to retirement. So retirees or pre-retirees, it's easy to worry about how all this might affect you in the day to day. The truth is, and kind of the good news is, history shows that the shutdowns here are just kind of more noise than real damage to the everyday person. Unless you happen to be right now a federal employee who is not getting paid. Um, that is real damage, at least in the short term. But there's at least usually, um, and I use that word on purpose. There is usually some good news for those, uh, types as well, and I'll get there in a second. But Showdown showdowns. Showdowns and shutdowns actually happen more than you think. Since 1976, there have been 20 shutdowns. This is according, by the way, um, to a, uh, report that came out. Morgan Stanley actually sent this to their investors here recently. Um, since 1976, there have been 20 shutdowns.

Speaker1:
Now 21, I guess, lasting an average of just eight days. Obviously, we're past that with this one. But the record 35 day shutdown in 2018 and 2019 made headlines. But even that really only caused minor, uh, long term effects. Federal workers do eventually get their back pay. That's the thing that I say usually, uh, because there have been threats to not do that. Can that legally happen? Probably not. But they should get that back. Pay and agencies do eventually catch up on any work that's been missed and all of that. So the economy should bounce back quickly, at least according to what we've seen in the past. Um, economic impact, usually minimal. As a matter of fact, the economy has actually grown about 2.2% on average during past quarters that there has been a shutdown in that quarter. Even the longest one only shaved about 0.02% off of GDP that year. So not a huge impact. Yeah, an impact, but not a huge one. And that's because essential programs like Social Security, Medicare, Medicaid those types of things do continue running. The biggest short term impacts, though come from furloughed workers. Right. As I was saying, and delayed reports. So, you know, those delayed inflation reports, jobs reports, that type of thing. Um, so those are more things that we look at in the short term. We're not necessarily looking at deep financial damage in the long term. The market's actually usually shrug off shutdowns.

Speaker1:
So that's good news. 4.4%. That's how much the S&P 500 has risen on average during previous shutdowns. Bond markets can be a little wobbly. But, you know, the Treasury yields tend to fall as investors seek safety. Um, that is something to keep in mind. And remember, the shutdown is not a debt ceiling crisis. Right. Two different things. We talk about debt ceiling crises a lot as well. Um, those, though, are something where the federal government could default on its on its debt could could not pay its bills. This is not that case. The government will still pay its bills here. Um, so we won't see that the full faith and credit of the US government not really at stake in this. And so, you know, some buying opportunities for long term investors are there as well. Some people buy the dip when there's a dip obviously. And the bottom line here is that a government shutdown. You know it might make the headlines but it's rarely a lasting threat to your retirement. The key is stay diversified. Keep your eyes on the prize on that long term. And don't let the political drama shake your confidence. I was just talking to somebody this past week who is a potential client and said, well, you know, I've heard about this, that or the other going on. Should that concern me about this investment or that investment? And I said, well, you know, in this particular case, no, because the full faith and credit of the US government is not at risk here in this particular scenario.

Speaker1:
And don't let just the political drama get you down as far as your finances go. The political drama, yeah, it can have an effect on your finances, but that's when working with an advisor comes in handy, because then you can make changes. You can make those adjustments to your portfolio to make sure that you have, again, the right amount of protection and the right amount of growth built in to that plan. Right. So that is what you need. I would love to help you get there. Take pride in retirement. Com is the website. Once again it's take pride in retirement.com. Or give me a call 85524692178552469211. Well, thousands of people in the country with paralysis and their families as well, they could lose access to some critical services that help them live independently, manage caregiving needs, connect with support that really is essential. And this all has to do with congressional budgeting and that whole process that we see taking place or not taking place these days in DC. And this funding for um, one particular resource is really at risk of being eliminated here. To talk about that is Sherman Gilliam's junior senior director of public policy and advocacy at the Christopher and Dana Reeve Foundation. Um, thank you so much for taking some time to talk about this. I mean, it's a very, very important issue. So I appreciate your time, sir.

Speaker4:
Well, I appreciate the opportunity, and I have to do a friendly correction. It's not thousands. There are 5.4 4 million people who are affected by paralysis in any number of ways. And so we're talking about a lot of people who, um, who may at any given time require the support that we offer and we want to see continue.

Speaker1:
Yeah, definitely that it's a huge number there. And talk about, you know, the the, um, National Paralysis Resource Center and, um, that, you know, the funding and why it's so essential for those people.

Speaker4:
The Christopher and Dana Reeve Foundation established the National Paralysis Resource Center in 2002. This was shortly after nine over 11, uh, to ensure that no one who lives with paralysis is denied the opportunity to achieve healthy living and good quality of life. These are people who were impacted by spinal cord injury, multiple sclerosis, Lou Gehrig's disease, children with developmental disabilities such as cerebral palsy, or aging adults who may have had a stroke. And what happens in just about all of those situations. If someone becomes a caregiver, someone becomes responsible for this individual's livelihood, dignity and quality of life. And most of the time they're not prepared for it. And so we exist as a resource that didn't exist before 2002 to ensure that people don't feel alone and abandoned when these, uh, when these circumstances impact their lives. And so we've done this work with, um, IFC focus areas, uh, as features of the program. The first is an information specialist hotline where a caregiver or a person with paralysis can receive one on one support, uh, and information that will help guide their their decision making early on.

Speaker4:
We also have a military and veterans program that helps veterans who have to navigate, uh, all the red tape they find themselves in. I'm a marine veteran myself with a spinal cord injury. So I've lived that reality and received the support of the Reeve Foundation to get through it. We also have the Peer and Family Support Program, which pairs individuals and families with trained peers to help reduce isolation, which is a big problem in that community. And then the Quality of Life grants enable us to provide support to local, community based organizations that create things like adaptive sports programs and recreation opportunities, with the benefit of national standards of excellence and best practices that they can apply. And then finally, the Paralysis Resource Guide is the sort of Bible that covers every dimension of living with paralysis. For me at least, and it was one of the first resources placed on my rack when I was recovering at the San Diego V.A.. So I've had a long relationship with the Reeve Foundation, which is why it's a privilege now to do that work.

Speaker1:
Yeah. And very important work and obviously very important funding as well. I mean, what would it mean if this, uh, funding were to just go away?

Speaker4:
Well, While the National Paralysis Resource Center has historically enjoyed bipartisan support, and our effort here is to ensure that it continues for fiscal year 2026. We are pleased that the House and Senate committees have recommended funding for the center to continue, which also reflects the faith that the American people have in our work and years of trust across every presidential administration since 2002. So this isn't a partisan issue, but as you know, nothing is final until Congress passes a bill and the president signs it. And during the shutdown, we want to use this time to, uh, first of all, to work through the fact that the approval process is on pause, but also to educate folks about what we do so that they can, in turn, support the work that we do and ensure that our elected leaders do the same.

Speaker5:
Yeah, no, it's a very good point there for people to, um, keep in mind that even during the shutdown.

Speaker1:
Right now, they can let their elected leaders know how they feel about this. If people want to do that, what can they what can they do? How can how can our listeners, you know, speak up and really just make sure that they get their voices heard on this issue?

Speaker4:
Yeah. Our best advice is to have them go to Christopher Reeve. Org. Um, there's a lot of information there that talks about the work that we do, but first and foremost, we want to make sure that they understand what they're supporting and if they want to get involved, there are a number of ways they can do that, either through volunteerism, getting involved in fundraisers, things like that. Uh, and then from there, we want them to be guided by their conscience and do what they believe is the right thing. Uh, we're not a political organization, so we don't get into that. But we do want people to know what we do, to know that we're here to support them. If they know somebody who's in a situation that we can address, uh, and then let that guide their conscience in terms of what to do next.

Speaker1:
Very good. So we'll send our listeners in that direction. Well, um, Sherman, just about time for us to wrap things up here, but anything else that you wanted to mention that we haven't touched on that comes to mind?

Speaker4:
Well, we our work doesn't stop just because there's a shutdown. And we've done this work for an awful long time. Christopher and Dana Reeve, uh, went through this experience. Even with all of their vast resources. They went through the experience of of not having the support that they felt would have been required for Superman, the Superman of my youth, to enjoy quality of life. Uh, they're no longer with us, but their work continues and we continue. Uh, with their legacy, uh, by ensuring that people with paralysis can live a good quality of life, uh, despite all the challenges that come with it.

Speaker1:
Yeah, definitely. All right, well, Sherman Gilliam's Jr is a former marine. He's also a senior director of public policy and advocacy at the Christopher and Dana Reeve Foundation. Um, Sherman, thank you so much. Once again, really do appreciate your time.

Speaker4:
Thank you sir. Appreciate it.

Speaker1:
Well, that's going to do it for this edition of Take Pride in Retirement. Thank you so much for being a part of things this time around. Once again, we really do appreciate it. And again go to take pride in retirement. Com schedule that consultation. I would love to meet with you and help get you on track for the retirement that you deserve, a retirement that you can take pride in. And until next time, take pride in yourselves and take care of each other. We'll see you then.

Speaker2:
Thanks for listening to Take Pride in Retirement. Members of the LGBTQ+ community deserve to work with the financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call (855) 246-9211 or go online to take pride in retirement. Com investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor, BCM and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM, but are offered in sold through individually licensed and appointed agents.

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