In this week\u2019s issue of Steady Investor, we explore current events impacting the market, such as:<\/p>\n\n\n\n
\u2022 The U.S. credit downgrade
\u2022 The fall of the American mall
\u2022 The shifting environment in small business loans<\/p>\n\n\n\n
The U.S. Gets a Credit Downgrade<\/a><\/strong> \u2013 The ratings giant Fitch Ratings made a splash this week when it downgraded the U.S. government\u2019s credit rating from the highest possible AAA to AA+, which is a single step down. In stark terms, Fitch said the downgrade reflects an \u201cerosion of governance\u201d in the United States, pointing to infighting over important measures like raising the debt ceiling, and also the government\u2019s decades-long track record of running budget deficits. Fitch spelled out in fairly harsh terms that the U.S. government has spent too much and also cut taxes too much, making the problem with creditworthiness very much a bipartisan issue. This is the first downgrade by a major ratings firm since the brinksmanship tied to the 2011 fiscal cliff, where the U.S. came close to defaulting on obligations much like it did earlier in the year. This downgrade likely seems like a big deal on its face, but a bit of context is needed. First, when the U.S. received a downgrade following the fiscal cliff fiasco, government bond yields went down in the ensuing months \u2013 not up. This speaks to the lack of power a ratings agency has over the market\u2019s interpretation of the United States\u2019 creditworthiness. The second is that ratings agencies are much better at telling us what has already happened versus what is likely to happen in the future. The clearest example of this was in 2008, when ratings agencies failed to see any problems with Bear Stearns, Lehman Brothers, and others even as those banks were collapsing. Ditto for the recent stress in regional banks, which ratings agencies seemed to have no handle on. In short, ratings agencies tell the market what it already knows, well after the market already knows it.1<\/sup><\/p>\n\n\n\n Are You Unsure How to Make Your Retirement Last?<\/a><\/strong><\/p>\n\n\n\n Retirement means living the life you want, in the place you want, with activities you enjoy. Of course, making all that happen means spending some of the money you\u2019ve worked so hard to accumulate.<\/p>\n\n\n\n If you want to ensure your money will last, it’s essential to understand some strategies and best practices. Our free guide, 4 Strategies for Spending Money in Retirement2<\/sup><\/a><\/em><\/strong> offers some common-sense guidelines to help ensure your retirement nest egg lasts as long as possible. You\u2019ll also get insight on:<\/p>\n\n\n\n \u2022 Spending 101: Understanding Tax Buckets If you have $500,000 or more to invest, download our guide 4 Strategies for Spending Money in Retirement.2<\/sup><\/a><\/em><\/strong> Simply click on the link below to get your copy today!<\/p>\n\n\n\n Download Zacks Guide, 4 Strategies for Spending Money in Retirement2<\/sup><\/a><\/strong><\/p>\n\n\n\n The Fall of the American Mall<\/a><\/strong> \u2013 It wasn\u2019t long ago that malls were the social and consumption centerpiece of many cities and communities. Today, many have shuttered and others usually have more empty parking spots than full ones. This has meant plummeting real estate valuations for many of these sprawling properties with large buildings. Older, lower-end malls are worth about half of what they were at their peak in late 2016, and about 20% of malls with commercial mortgage-backed securities are underwater. According to Moody\u2019s Analytics, some $14 billion of loans backed by these malls are coming due in the next year, and many are expected to default \u2013 especially given that higher interest rates mean refinancing will make them less affordable. Major department stores are also becoming a thing of the past. Large stores like Macy\u2019s, JCPenney, and Sears closed nearly 1,000 stores between 2018 and the end of 2020, which was several times more than the 175 that closed in 2016 and 2017.3<\/sup><\/p>\n\n\n\n The Shifting Environment for Small Business Loans<\/a><\/strong> \u2013 Major shifts are underway in how small businesses can access loans needed for investment and growth. According to a recent survey published by the Federal Reserve, lending officers at U.S. banks said they were tightening their standards for lending and also saw weaker demand for commercial and industrial loans in Q2. The Small Business Administration is a key part of small business lending, as it is a federal program that is authorized to guarantee $34 billion in loans annually through its main lending program. Small businesses can generally borrow as much as $5 million to start, buy, expand, or run their small business, and they access the funds through banks. In the most recent fiscal year, lenders issued $26 billion of the guaranteed $34 billion, meaning there was $8 billion in unused loan dollars. That\u2019s where some of the key changes could make a difference \u2013 starting this month, the SBA is simplifying loan requirements and allowing more nonbank lenders (via expanded licensing) to issue SBA loans. This means more fintech companies will be allowed to provide loans to small businesses, which could ultimately expand their reach.4<\/sup><\/p>\n\n\n\n 4 Strategies for Spending Money in Retirement<\/a><\/strong> \u2013 You’ve worked hard and planned carefully to build your retirement nest egg \u2013 where do you begin when it comes to spending it?<\/p>\n\n\n\n There are many different strategies related to spending in retirement, and some of them are more complex than others. In our exclusive guide, 4 Strategies for Spending Money in Retirement5<\/sup><\/a><\/em><\/strong>, we explore some effective strategies and best practices that investors should consider when developing a retirement spending plan. You\u2019ll get insight on:<\/p>\n\n\n\n \u2022 Spending 101: Understanding Tax Buckets If you have $500,000 or more to invest and are ready to learn more, click on the link below to get your copy today!<\/p>\n\n\n\n
\u2022 The 4% Rule
\u2022 Dynamic Spending with the 5% Rule
\u2022 And more\u2026<\/p>\n\n\n\n
\u2022 The 4% Rule
\u2022 Dynamic Spending with the 5% Rule
\u2022 And more\u2026<\/p>\n\n\n\n