Zacks Investment Management

In today’s Steady Investor, we look at key factors that we believe are currently impacting the market and what could be next for the markets such as:

• What’s the “magic number” for retirement?
• The U.S. economy grew 2.6% in the third quarter
• Update on S&P 500 corporate earnings

The “Magic Number” for Retirement – One of the most common questions retirees and future retirees ask themselves is: how much money will I need to retire comfortably? Everyone’s answer is different, depending on individual circumstances and preferences. But a new survey from Northwestern Mutual provides some insight into where the average American stands, in terms of how much they think they’ll need. This so-called “magic number” is $1.25 million, but perhaps the most interesting finding from the survey is that the magic number is up 20% from where it was just one year ago. Inflation is up slightly less than 10% over the same period, which speaks to other anxieties many folks are having about the economic environment and the future. Meanwhile, the average balance in retirement accounts in the U.S. fell to $86,869 this year, marking a decline of -11% from a year ago. The expected retirement age also rose from 62.6 to 64, signaling that Americans expect to have to work longer to become retirement-ready. The disconnect between how much the average American has saved and how much they think they’ll need is somewhat harrowing, and also underscores why 40% of Americans surveyed do not think they will have enough money when they retire.¹

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Are You Protecting Your Retirement Investments?

Imagine working hard to build up your retirement, only to have events cause market volatility that could wipe out half of your portfolio. This is why it’s important to have an effective strategy in place to account for the market’s ups and downs.

Our free guide, How Solid Is Your Retirement Strategy? canhelp you build a retirement strategy that takes the “what ifs” into account.

This guide also offers our views on some key retirement investment strategies that may help you preserve your financial security in retirement, including:

• The importance of flexible portfolio allocation
• Why keeping some liquid assets can potentially help you preserve more wealth
• Understanding your risk tolerance in case of a market downturn
• Plus, more strategies to help you protect your retirement assets

If you have $500,000 or more to invest, get our free guide by clicking on the link below.

Get our FREE guide: How Solid Is Your Retirement Strategy?²

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The U.S. Economy Grew 2.6% in the Third Quarter – Following two consecutive quarters of GDP declines in Q1 and Q2 of this year, the U.S. economy posted annual growth of 2.6% in Q3, according to the Commerce Department. Interestingly enough, one of the bigger detractors of U.S. GDP—the trade deficit—reversed course in Q3 with exports far exceeding imports. The U.S. exported a much greater quantity of oil and natural gas in Q3, driving the figure higher. Consumer spending, which accounts for close to two-thirds of total economic activity, also edged up slightly in the quarter, underscoring the U.S. consumers’ resilience in the face of rising inflation. Another key metric that measures underlying demand in the economy, called the final sales to private domestic purchasers, moved 0.1% higher in Q3 as compared to Q2. This data point has been in steady decline, however, after moving 2.1% higher in Q1 and 0.5% higher in Q2. The boost from exports in Q3 is not likely to persist in Q4 and beyond, as the stronger dollar makes U.S. exports more expensive overseas.³

S&P 500 Corporate Earnings: Good, But Not Great – Many economic forecasters had been anticipating an earnings “cliff” sometime in the back half of 2022, but we aren’t seeing signs of it yet. Q3 earnings season to date has largely been a replay of what we saw in the Q2 reporting cycle when estimates and sentiment had weakened so much that the actual results ended up looking a lot better in comparison (a mismatch that stocks tend to respond positively to). Having seen results from about a third of S&P 500 members by now, we can see that results are by no means great, but they are not bad either. For the 170 S&P 500 members that have reported Q3 results as we write, total earnings are down -3.2% from the same period last year on +9.7% higher revenues, with 76.5% beating EPS estimates and 67.6% beating revenue estimates. The earnings and revenue growth rate for these 170 companies compare modestly favorably to what we had seen from the same group of companies in the first half of the year. Looking at the calendar-year picture, total S&P 500 earnings are expected to be up +6.3% in 2022 and +5.1% in 2023. Not so bad for an economy that many thought would be in freefall by now.⁴

How to Protect Your Retirement in This Economy – While there is no way to prevent market volatility, there is a way to protect your retirement assets through market ups and downs. We recommend finding a retirement strategy that takes the “what ifs” into account. Our free guide can help you to prepare for what’s to come as you plan your ultimate retirement.

If you have $500,000 or more to invest, get our free guide, How Solid Is Your Retirement Strategy.⁵ You’ll get valuable and practical ideas to help build a “weatherproof” retirement strategy that can potentially protect your retirement nest egg from any storm that could threaten your financial security.

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