Daily Commentary

MarketMinder’s View: Beneficiary designation is rarely newsworthy and is, therefore, easy for many investors to overlook. But it is critical, as this frustrating tale of a family struggling to have their deceased relatives’ retirement assets divided according to their wishes illustrates. These people had an estate plan and powers of attorney, but because there appears to have been a simple mishap in beneficiary designation, the assets have sat in limbo for years. Take the lesson here to the bank. If you haven’t reviewed your retirement account beneficiaries, it is a good idea to put it on your “to do” list. That is doubly true if you have had a recent life event like marriage, divorce, death, birth of a child or grandchild. These seemingly minor and simple things can cause major issues if left unattended.

MarketMinder’s View: Many folks approaching or in retirement consider relocating. No longer tied down by a job, they might think it finally time to move to their cherished dream destination, get closer to the kids and grandkids or follow friends and find community elsewhere. No matter the reason, however, make sure you know what you are getting into before you up sticks. As this article sagely advises, the grass always seems greener on the other side, and “the focus tends to stay on the positives—better weather, how much you could save, and what kinds of new activities you’ll have available to you. Those upsides can absolutely be true, but they don’t tell the full story of what it’s like to relocate in retirement. Relocating can also bring new costs that could upend your retirement budget if you’re not careful.” With that in mind, be sure you know the nuts-and-bolts expenses about your potential new locale, e.g., the taxes there, travel costs, Medicare Advantage plan provisions, insurance premiums, access to services and local living costs, including for new activities and adventures you plan to undertake. “For example, if you’re someone who enjoys fishing and you plan to retire on a lake or near an ocean, you might decide you want a boat in retirement. But that means you’ll have to pay for the boat itself, gas, maintenance, boat insurance and possibly storage in the winter.” Doing your homework may not be fun, but getting your financial ducks in a row before you go can save you a lot of grief, making your time in any new place that much more enjoyable.

MarketMinder’s View: There is a whole lot of “it’s different this time” illogic in this piece documenting the University of Michigan’s Consumer Sentiment gauge hitting a record low, coupled with a skosh of “how will sentiment ever improve?” And it all seems very bullish to us. To summarize, the gauge hit 48.2 in May, the lowest reading since records start in 1952. Yes, consumers feel the economy is worse now than in 2008/2009. Or 2020. Or 2022. Or the 1970s, when inflation ran far hotter combined with a deep mid-decade recession. Pick your date. How folks feel now is worse. Some claim this pessimism is tied to high prices, after the hot inflation from 2022 and 2023 drove prices up quickly or the recent rise in gasoline. Others say it is the rolling “crises” like tariffs, war and inflation, and that consumers need a break from headline churn to feel better. We can understand frustrations with elevated prices, and today’s gas prices may pour salt in that wound. But all this misses a key driver of low sentiment: partisanship, which UMich data show has long skewed reads downward. Above all else though, and callous as this may seem, stocks couldn’t give a whit about what might make Americans feel better about the economy. As noted herein, “… despite what they tell pollsters, consumers, broadly speaking, have continued to open their wallets with abandon. Uber and Walt Disney last week reported strong customer spending, defying fears that shoppers would tighten their purse strings in response to price increases.” A separate report today showed US retail sales rose in April, too. This article couches consumers saying one thing while doing another as new. It isn’t. Sentiment has never been a reliable predictor of consumer behavior. It wasn’t in the early 2010s, when sour sentiment coincided with the strong start to history’s longest bull market. Or the early 1990s. Or the early 1980s. The “vibes” followed economic trends—they didn’t lead them—just as “vibes” today follow high prices from 2022’s inflation. People fight the last war. It is human. But per FactSet, US GDP, US ISM and S&P Global Manufacturing and Services purchasing managers’ indexes (and new orders), retail sales, projected corporate profits and revenues all point to growth. Only these consumer sentiment readings are so deeply dour. Should that continue, it is a pretty bullish disconnect and a strong backdrop for stocks.