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Donna Cournoyer

Donna Cournoyer
In Uncategorized

August 2025 Market Update: Good Times for Investors

One way to characterize “good times” in the financial markets is when prices go up and returns are positive. Based solely on these criteria, August was a good time: stockholders have recently enjoyed four consecutive months of good times.

Another gauge of good times is when stock market indices reach an all-time high point. This has happened twenty times so far in 2025 for the S&P 500 index of large company US stocks – and most recently on August 28.

In addition to stocks, bonds show evidence of good times, too. Credit spreads, which measure the extra yield above risk-free Treasuries that bond investors demand for holding riskier corporate bonds, are approaching all-time lows.

This means bond investors are demanding only modest compensation to hold riskier corporate obligations, when compared to safer government obligations.

For many investors, though, today’s good times are paired with worry.

Two articles published recently encapsulate this concern:

  • US Stocks Are Now Pricier Than They Were in the Dot-Com Era subtitle: The S&P 500 has never been this expensive, or more concentrated in fewer companies – Wall Street Journal
  • Credit Fuels the AI Boom, And Fears of a Bubble subtitle: Plenty more deals are coming – Bloomberg

Both articles question the ability of the stock and bond markets to continue to deliver exceptional returns – but interestingly, neither predict “the end is nigh” for the financial markets.

Many investors seem to be left with an unpalatable choice: either climb the wall of worry or stop climbing and get off the wall.

With this sentiment in mind, I started thinking more deeply about the idea of climbing the wall of worry, and if it was particular to periods where markets had strong momentum and stock indices were reaching ever-higher high points.

It turns out this does not seem to be the case. Rather, it seems that many investors tend to worry all the time.

A quick web search produced at least one article by a financial institution with the phrase “climb the wall of worry” written in each year of the past decade.

The most recent “wall of worry” article that I found, produced in July by JP Morgan, references an extensive study by their well-regarded investment strategist Michael Cembalest, who contends that markets rarely reward fear-based decision-making.

Cembalest catalogued the dates when well-known forecasters and fund managers issued apocalyptic warnings, and he charted what would have happened over time if an investor had acted on those warnings by selling stocks and buying bonds.

The long-term results of “listening to the Armageddonists” have been unfavorable, as shown below.

Source: JP Morgan Asset Management

The takeaway is not to never sell stocks, nor is it a case against owning bonds. Rather, the message is to refrain from letting one’s worries progress to actions that result in unbalanced or inappropriate portfolio allocations.

Volatility, and a measure of worry, is the price investors often must pay for satisfactory long-term returns.

In August, returns were good across the board. Large company US technology stocks delivered positive returns but surrendered their leadership status.

US small company stocks, slower-growing companies that prioritize paying dividends to shareholders, and foreign company stocks all generally outperformed US technology stocks last month.

Also, foreign currencies generally strengthened when compared to the US dollar, which gave an additional boost to foreign stock funds, when performance was measured in dollar terms.

US Treasury bond yields generally declined in August, which translated to positive performance for most bond funds, too.

One exception was longer-term bonds.

The yield of the 30-year Treasury bond, for example, climbed by 0.03 percentage points in August and settled at 4.92% at month end. This resulted in negative returns for some bond funds with holdings concentrated in long-maturity debt.

The chart below shows financial market performance for the month of August and Year-to-Date (YTD):

Source: Moore Financial Advisors & Morningstar

-RK

Donna Cournoyer
In College Planning

It Is Always a Good Time to Start College Planning

Beginning college planning can be an overwhelming thought for anyone. The thing about college planning is – the sooner you start, the better and calmer you will feel about the whole process.

So, I will say it again… it is ALWAYS a good time to start.

I have met with and counseled many families for their college planning needs, as a financial advisor, and while working at universities.

One common theme I have found in speaking with parents is that many are really overwhelmed and do not know where to start.

Also, many families delay taking the initial steps due to the paralyzing fear of paying the high price of a college education and finding the perfect school for their student.

Some basic strategies listed below are designed to help parents with students of any age as they begin (or continue) to plan and prepare for the college process.

Early Planning and Saving

  • Open a 529 College Savings Plan account: This will give you tax advantages, as well as compounding growth over time- even with small contributions. And especially if you can start early.

Start Talking About College – Frame It as a Goal

  • Begin conversations about education after high school and explore all options.
  • Keep it positive, age-appropriate, and flexible. This approach will help keep you all informed on perspectives as time goes on.

Focus on Academics and Study Habits

  • A strong academic foundation is important; it will support the student and allow for further growth during their college career.
  • Encourage strong study skills, reading habits and time management early on.
  • Good grades and test scores help improve chances of admission.

Get the Student Involved

  • Teach the basics of a budget, and the value of saving.
  • Encourage part-time work or a summer job to contribute to expenses or savings.

Have Students Get Involved in Interests

  • Hobbies, extracurricular activities, volunteering and sometimes sports will help a student develop and find areas of interest.
  • This will help build character and leadership skills and prepare for future college applications.
  • This also helps a student’s potential for acceptance and merit scholarships. Many schools take a holistic approach to reviewing applications, and involvement and leadership roles are highly valued.

Understand Total College Costs

  • Begin looking at a variety of public and private schools online and review total Cost of Attendance. It may be shocking when you start out, but it is necessary to be informed before you begin.
  • As your student gets older, start to use Net Price Calculators on school websites for estimates of financial aid and possibly merit scholarships.
  • Also, when you approach the planning stages in high school, learn how the FAFSA and CSS Profile work.
  • FAFSA
  • CSS Profile
  • Understand the different types of aid, grants, scholarships, loans, work study, etc.

Understand your financial situation and what you can afford

  • Be realistic about your budget, what you can contribute and avoid unnecessary debt.
  • Start family discussions on expectations early. Be clear on what you are willing and able to contribute to college for your student. This avoids big disappointments late in the decision-making process.
  • Apply for private scholarships early and often.
  • Here are a few:
  • Fastweb
  • RISLA
  • Scholarship America

College Selection and Prep

  • Focus on fit, not prestige.
  • Consider multiple types of schools, including in-state schools which offer lower tuition.
  • As you get further into the process and start your list, be sure to focus on academic programs, size, campus location and culture, and student activities and support resources.

Prepare Your Student with Good Life Skills

  • Help your student with organization for college application season but let them own the process.
  • Help by being supportive and help them explore options rather than choosing for them.
  • Foster independence by teaching life skills- the basics include laundry, budgeting, and problem-solving.
  • Discuss self-care and mental health and how to stay healthy while at college.

While there is much more detail to the college process, if you are beginning to think about college for your student, or you are just starting to get into the steps in the process, hopefully you find some good takeaways here.

Remember this really is a marathon, not a sprint, so try to stay calm and focused but remember to enjoy this time and have some fun as well. It will all go by so much faster than you imagined!

Donna Cournoyer
In Financial Planning

The Outlook for Social Security

In this article, MFA founder Susan Moore demystifies the headlines and hype around Social Security, and answers questions that are on the minds of many people who are approaching, or already in, retirement.

With Social Security often in the headlines, many of you have asked: Will it still be there when I retire? Will my benefits be cut?

These are valid concerns—and we’d like to share where things currently stand, what’s being discussed in Washington, and how it could impact your planning.

When Will the Social Security Trust Fund Run Out?

According to the 2025 Trustees Report, the Social Security Trust Fund is projected to be depleted by 2033. At that point, the program would rely solely on ongoing payroll taxes to pay benefits, which are expected to cover about 77% of scheduled payments.

If no changes are made, benefits would be automatically reduced by roughly 23% starting in 2033.

What Would Benefit Reduction Mean?

If reductions occur across the board, here’s what the estimated impact could look like by income tier:

Source: Moore Financial Advisors

Will Cuts Affect Current Retirees?

This is one of the most frequent questions we’re asked. So far, Congress has never reduced benefits for current retirees

Most proposals focus on future beneficiaries or apply gradual changes, such as adjusting the retirement age or benefit formulas for younger workers.

However, if lawmakers do nothing, all beneficiaries—current and future—would face automatic cuts in 2033 due to the trust fund running dry.

What Is Being Proposed to Fix This?

There are several ideas on the table, but no consensus yet. Here are a few commonly discussed options:

  1. Raising the Full Retirement Age (FRA) Budget proposals supported by the Republican Study Committee and Project 2025 have called for increasing FRA from 67 to 69; some versions of these proposals would roll out before 2033. This effectively cuts benefits for many, especially low- and middle-income workers, even if reductions aren’t framed as “cuts.”
  2. Lifting the Payroll Tax Cap Currently, wages above $176,100 (2025) are not taxed for Social Security. One proposal would apply payroll taxes on income up to $250,000.
  3. Targeted Cuts for Higher Earners Some reform plans propose benefit reductions for higher earners while preserving or increasing them for lower earners. These reductions would go into effect around 2029 for new beneficiaries with higher incomes, phasing reductions up to 50% for individuals earning over $180,000 in modified adjusted gross income (MAGI) or joint earners over $360,000.
  4. Increasing Payroll Taxes Slightly Raising the 6.2% payroll tax to 6.4% or higher to bring in more revenue.
  5. Means Testing Some proposals suggest reducing benefits or slowing the cost of living adjustment (COLA) for retirees with high net worth or income from other sources.
  6. Backdoor Privatization Plans Recently Treasury Secretary Scott Bessent said that “Trump baby accounts” or child savings accounts are a back door for privatizing Social Security, although he later back-peddled on that statement. This raised concerns about eventually shifting FICA payroll tax funding into private investment vehicles—undermining Social Security’s defined-benefit structure and reducing program coverage over time—even if not explicitly cutting current benefits.
  7. Alternative Funding Models Republican Senator Bill Cassidy and Democratic Senator Tim Kaine have proposed an alternative funding model for the safety net program, which would supplement the program’s Trust Fund with a new diversified pool of investments. Their proposal would create a new, parallel investment fund for Social Security. They estimate that the fund would require an up-front federal investment of $1.5 trillion, and propose that it be given 75 years to grow. The Treasury would shoulder the burden of supporting current benefit levels through borrowing during those 75 years. At the end of 75 years, the fund would pay the Treasury back and supplement payroll taxes to help fill the future gap.

Important: No plan has been signed into law yet—but there is broad bipartisan agreement that something must be done before 2033.

If I’m Eligible, Should I Start Benefits Now?

If you’ve reached Full Retirement Age (FRA, currently 67) and are waiting until age 70 to claim your maximum benefit, you may be wondering if you should claim now to avoid possible benefit reductions in the future.

Here’s our advice:

  • There’s no clear reason to change course—yet.
  • For now, the rules remain unchanged. By waiting until age 70, you still earn delayed retirement credits, increasing your benefit by up to 8% per year between FRA and 70.
  • Current beneficiaries are the least likely to face reductions.
  • Starting benefits now doesn’t necessarily “lock in” protection against cuts—but neither does waiting expose you to significantly more risk. Historically, any benefit reductions or reforms have applied to future retirees, not those already collecting. Some proposals (see below) include making changes before 2033, but none to date include cuts for current beneficiaries before 2029.
  • Cuts (if they happen) would likely be phased in or income-based.
  • Congress has options. For example, they could preserve full benefits for those already collecting, or protect lower earners while modifying formulas for higher-income individuals.
  • We recommend continuing to base your claiming decision on longevity, tax, and income needs, not on speculation. If your plan supports delaying until 70, it likely still makes sense to do so—unless there’s a sudden policy change (which we will monitor closely).

What Does This Mean for Your Financial Plan?

While the uncertainty surrounding Social Security is real, it’s important to remember:

  • Cuts are not guaranteed, and changes are likely to be phased in
  • If you’re already collecting—or soon will be—you are less likely to see reductions
  • For younger clients, we plan with a margin of safety—factoring in modest benefit reductions as part of our retirement projections

As always, we are monitoring developments and will adjust your plan if needed.

If you have questions about how Social Security fits into your personal plan—or if you’re nearing retirement and want to discuss timing your benefits—please reach out.

-SM

Donna Cournoyer
In Market Updates

July 2025 Market Recap: Somnolent Summer – So Far

During the summer of 2025, financial markets have been somnolent – so far.

In a typical month which has 21 trading days, the S&P 500 index of large company stocks registers a daily rise or fall that exceeds 1% on average four times (trading days).

This means that about 80% of the time, stock market movements are unremarkable.

Since the summer solstice through the end of July, there were only two days when stocks moved more than 1% – and both were in a positive direction.

In this period of calm, stocks have been trending up, and the S&P 500 reached a new all-time high on July 28.

Recently, stock prices have been supported by company earnings reports for the 2nd quarter of 2025, which have validated that corporate revenues and profitability are generally strong, and in many cases have exceeded Wall Street’s earnings estimates.

Somnolence “took a break” on August 1st, however, when the Bureau of Labor Statistics (BLS) released its monthly employment report showing significant weakness in the labor market – and stocks proceeded to drop by 1.5%.

Specifically, downward revisions to May and June showed that 253,000 fewer jobs were created in these two months than previously reported.

In July, a net 73,000 new jobs were added – well below a level of 100,000 or more new jobs added per month that is commonly viewed as a sign of a healthy, growing economy.

The BLS employment report followed an announcement on July 30 which showed that the overall rate of growth of the US economy had slowed during the first half of 2025.

The Commerce Department said the value of all goods and services produced across the economy, or gross domestic product (GDP) grew at an average annual rate of 1.2% in the first six months of this year, a step down from the 2.5% average pace in 2024.

The weaker labor market, and slower pace of economic activity, may be enough to convince the Federal Reserve to change its policy and reduce its target for short-term interest rates – commonly referred to as a “rate cutting cycle” – as we approach autumn and head into winter.

So, recent data releases and stock price movements seem to indicate that both the US economy and the financial markets are at an inflection point.

If the current economic expansion holds up, and if the Federal Reserve begins to reduce interest rates soon, the stock bull market could continue to charge forward.

But if consumer spending sours, if businesses retrench, and if the economy goes from expansion to contraction, it could mean tougher times for stocks – even if the Federal Reserve cuts interest rates.

JP Morgan Asset Management researchers looked at the relationship between Federal Reserve interest rate policy changes and stock market performance against the backdrop of economic expansions and recessions going back 40 years.

The research shows:

  • Stocks have done well when Fed rate cutting cycles have coincided with slower (but still positive) economic growth – large company US stocks climbed on average by 18% in the year following the first Fed interest rate cut of a new cycle
  • When rate cuts coincide with recessions, stocks have suffered – losing an average of 5% in the year following the first interest rate cut of a new cycle

The key takeaway: consumer and business activity, along with the direction of Fed interest rate policy, will strongly influence the path along which financial markets will travel in the months ahead.

For the month of July, US stocks delivered satisfactory returns. Technology stocks did particularly well, gaining 4.6% for the month.

Tech stock strength helped to boost US large company stock returns, which gained 2.3% for the month. Small company US stocks rose by 1.7%.

The US bond index return was slightly negative last month as longer-term bond yields edged up.

And some of the steam was taken out of foreign company stocks, which declined by 2.1% in dollar terms, due primarily to a stronger US dollar.

The US dollar snapped its 5-month losing streak versus major developed economy currencies and rose by an average of 3% in July.

The chart below shows financial market performance for the month of July and Year-to-Date (YTD).

Source: Moore Financial Advisors & Morningstar

-RK

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: Wild

Summer Reading Series: Non-Fiction

Wild by Cheryl Strayed

A good summer read requires the ability for your mind to be fully transported into another person’s story and life and out of your own (in my opinion).

Wild, by Sheryl Strayed, does exactly that.

This summer, I chose a story about hiking trails on the West Coast, specifically the PCT (Pacific Coast Trail).

The story is told by Strayed as she covers 1,000 miles from the Mohave Desert through California and Oregon to Washington State. Woven into the story of this trek are the details of her past and how she got to this place both physically and mentally.

While the book is about backpacking and hiking, you do not have to be a hiking enthusiast to enjoy poring through these pages. In fact, you may enjoy it even more if you are not.

The story takes many twists and turns around the bend that you don’t see coming.

Ultimately the story is about finding your way free of the weight of past experiences, loss, and grief by allowing yourself to go through the difficult steps of processing it all.

Wild is also a story about taking action which leads you to learning your own hard lessons- while finding a way to let it all in, so that you can come out the other side healed and whole. (Likely not 100%, but possibly monumentally better.)

And it is a story of finding your own true strength. Facing what is in front of you head on.

In this account of her life, Strayed tells authentic tales of true kindness, tales of true grit, and tales of true fear.

You yourself will likely come away with some new perspective, inspiration, and possibly some motivation for beginning your own journey. Big or small. I know I did.

-Donna

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: The Thinking Machine

Summer Reading Series: Biography

The Thinking Machine: Jensen Huang, Nvidia, and the World’s Most Coveted Microchip by Stephen Witt

This captivating biography doubles as a sweeping chronicle of the modern tech revolution.

Centered on Nvidia’s visionary CEO, Jensen Huang, the book traces the company’s rise from a modest startup focused on making computer components for PC video gamers to the world’s most valuable corporation by 2024.

Witt’s reporting illuminates how Huang’s big bet on artificial intelligence transformed Nvidia from a graphics card manufacturer into the backbone of the AI era.

In terms of biography, Witt’s interviews with Huang, his colleagues, and industry insiders enable him to paint a compelling portrait of a relentless innovator who defied Wall Street skepticism to reshape computing.

As a self-described member of the “marginally tech literate”, I found the book to be a valuable guide that explained key computing concepts and the specialized hardware and software that has made AI possible.

What sets The Thinking Machine apart, though, is its ability to contextualize Nvidia’s ascent within the broader cultural, economic, and scientific forces driving the AI boom. Witt explores the intellectual ecosystem that enabled Nvidia’s dominance, from academic breakthroughs to geopolitical tensions over chip supremacy.

Additionally, and importantly, Witt also discusses the growing anxiety among leading technologists and influential tech-oriented thinkers (including Geoffrey Hinton and Nick Bostrom) about the unchecked advancement of AI, and contrasts this with Huang’s more optimistic and pragmatic stance.

Witt’s treatment of these themes invites readers to consider not just the marvels of AI, but also the responsibilities that come with creating machines that can “think” faster and more efficiently than humans.

-Rob

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: The Wide Wide Sea

Summer Reading Series: Narrative Non-Fiction

The Wide Wide Sea: Imperial Ambition, First Contact, and the Fateful Final Voyage of Captain James Cook by Hampton Sides

This is a detailed and morally complex account of one of history’s more consequential explorers. Captain James Cook, an 18th-century British navigator, is renowned for his three epic voyages that dramatically expanded European knowledge of the Pacific.

This book focuses on Cook’s third and final expedition, launched in 1776, which aimed to return a Polynesian man named Mai to his homeland and to search for the elusive Northwest Passage.

Sides portrays Cook not just as a brilliant navigator, but as a man increasingly consumed by stress, paranoia, and authoritarian impulses. As the voyage progresses, Cook’s treatment of native populations grows harsher, culminating in his violent death in Hawaii.

Themes explored in the book include:

  • Imperial Ambition vs. Indigenous Sovereignty: Sides examines how Cook’s voyages, though often framed as scientific and diplomatic missions, paved the way for colonial exploitation and cultural disruption.
  • The Clash of Cultures: The book delves deeply into the misunderstandings, miscommunications, and power imbalances that defined Cook’s encounters with Indigenous peoples across the Pacific.
  • The Psychological Toll of Exploration: Sides charts Cook’s transformation from a disciplined and humane leader into a man increasingly plagued by paranoia, authoritarianism, and emotional instability. This theme underscores the immense physical and psychological strain of long-term maritime exploration.

While Sides’ work may not be as sensational as Jaws (or have as much popular appeal), I found the book to be a gripping narrative that balances high-seas adventure with a thoughtful critique of colonialism.

-Rob

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: 1776

Summer Reading Series: Non-Fiction

1776 by David McCullough

This book brings to life the pivotal year of the American Revolution with impressive detail and compelling storytelling.

Focusing primarily on George Washington and the Continental Army, McCullough captures the uncertainty, courage, and resilience that defined the struggle for independence.

McCullough chronicles not just Washington’s military campaigns, but the deep philosophical and practical divisions among colonists themselves – roughly one-third supported independence, one-third remained loyal to Britain, and one-third were undecided or indifferent.

Most importantly, 1776 shows how leadership during crisis requires both conviction and flexibility, as Washington repeatedly had to adapt his strategies while maintaining his core principles.

The book reminds us that the democratic ideals we take for granted were forged through messy compromise, painful setbacks, and the willingness of ordinary people to persist through uncertainty— serving as a reminder that deep divisions, however intense, are not unprecedented and offering hope that the divisions we experience today need not be permanent.

-Susan

Donna Cournoyer
In Financial Planning, Reading Recommendations

Summer Reading Series: Rethinking Investing

Summer Reading Series: Personal Finance

Rethinking Investing by Charles D. Ellis

Comprehensive, to-the-point, and short, Ellis’ Rethinking Investing: A Very Short Guide to the Long Term gives key tenets on how to achieve long-term financial goals.

Truthfully, I’d say it’s fair to assume that whoever is reading this client letter has likely already financially positioned themselves well (you’re taking time out of your day to read book recommendations from a financial advisor’s newsletter, and that has to say something).

However, I think this book can be particularly powerful for young people.

I can say from personal experience that there is no lack of social media personalities trying to sell you their drop-shipping method or cryptocurrency coin – all through their affiliate links, of course.

So I find Ellis’ explanations of compound interest, accessible diversified funds, and the always-wise “live within your means” recommendations quite refreshing. It’s not much longer than 100 pages so why not give it a read?

And if you do, pass it along to a young person in your life; it’s not particularly groundbreaking or incredibly provocative, but it surely is practical.

-Greg

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: Non-Fiction

Summer Reading Series: Non-Fiction

The Power of Wonder by Monica C. Parker

Have you ever wondered where all your curiosity went? Do you see it sometimes in a small child and think, was I ever that in awe with wonder? It seems to me as we get older, life gets busy, complicated and sometimes challenging and wonder can fade. Where has our sense of wonder gone? How can we get it back?

Monica Parker helps to give us clarity on the importance of regaining that sense of wonder.

Parker reveals real paths to incorporate a sense of wonder in our lives. She goes deep into the connection with neuroscience, philosophy, psychology, literature and even business.

You will learn about elicitors of wonder like art and architecture, love and other elements of wonder. You will learn how they can transform our bodies and brains.

She has a “Wonder Wrap-Up” at the end of each chapter, focusing on how wonder is directly related to each chapter topic.

I especially like this excerpt from Part Three – Living in Wonder, Chapter 13 “Resilience”:

“More than just a simple ameliorator, every element of the wonder cycle, from openness to awe, supports a more resilient psyche in even some of the most extreme and terrible situations. This attribute of wonder means we can reap some benefits even in challenging times.”

I believe, in these challenging times we are facing, we could all benefit from learning how to weave some more real wonder into our lives.

-Donna

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