A rosy view through the rearview mirror.

To say that economists did not have great expectations for the January employment report might be understating their position. It was widely believed that the spread of the COVID-19 Omicron variant would translate into a dismal jobs report.¹ It didn’t.

“After some estimates called for U.S. payrolls to decline by as much as 400,000, the labor market shockingly added that many jobs in January – and then some,” reported Olivia Rockeman of Bloomberg.

The United States added 467,000 jobs in January, and the numbers for November and December were adjusted upward, too, by more than 700,000, reported the Bureau of Labor Statistics.

The U.S. unemployment rate ticked up to 4.0 percent as labor force participation rate – the number of people working or actively looking for jobs increased. The change in participation reflected updated population estimates in the household survey based on U.S. Census data that boosted the population of 35- to 64-year-olds and reduced the number of people age 65 and older.

The jobless rate among those seeking employment was 3.4 percent for White people, 3.6 percent for Asian people, 4.9 percent for Hispanic people, and 6.9 percent for Black people. Teenagers had the highest unemployment rate at 10.9 percent.

Signs of the economy’s strength during the fourth quarter also showed in company earnings reports. Earnings reflect a company’s profitability. With 56 percent of the companies in the Standard & Poor’s 500 Index reporting fourth quarter earnings so far, “The index is reporting earnings growth of more than 25% for the fourth straight quarter [of 2021] and earnings growth of more than 45% for the full year,” reported John Butters of FactSet.

The jobs and earnings reports paint a picture of robust economic growth in the United States, despite supply chain issues and pandemic variants. Robust economic growth often is accompanied by rising demand for goods and that can push inflation higher, reported Investopedia.  In 2021, U.S. inflation rose 7 percent, which is well above the 2 percent target set by the Federal Reserve (Fed), reported Christopher Rugaber of AP News.

Last week’s jobs report likely reinforced the Fed’s commitment to pursue less accommodative monetary policy in 2022. Fed rate increases make borrowing more expensive, which cools economic growth and brings inflation into line.

Major U.S. stock indices moved higher last week, according to Ben Levisohn of Barron’s. The yield on 10-year U.S. Treasuries finished the week higher.

the dollars and cents of the olympic games. Last week, China won the first gold medal of the Beijing Games with a victory in the mixed short track speedskating relay, beating the Italian team by half a skate blade. The U.S. women’s hockey team outscored Finland, Russia and Switzerland, and a 21-year-old Swede took home gold in men’s moguls.

In many countries, athletes who take home a medal in the winter Olympics receive financial bonuses and other rewards, reported The Economist and Brett Knight of Forbes. For example,

• Hong Kong promises a $642,000 bonus for a gold medal. (It hasn’t won one yet.)
• Turkey will reward a gold medalist with $380,000. (It also has yet to win gold.)
• In Italy, a gold medal is worth a bonus of $214,000.
• Spaniards who take home the gold receive $112,000.
• German Olympic medalists were rewarded with a lifetime supply of free beer in the 2016 games.
• South Korean medalists are rewarded with an exemption from national military service.
• Slovakians who win individual gold medals receive $56,000, while those who compete on teams receive $17,000 each.
• U.S. athletes receive $37,500 for a gold medal, $22,500 for silver, and $15,000 for bronze. (U.S. athletes also receive financial support through training grants, healthcare benefits and endorsements.)

The rewards for Olympic medal winners are reasonably clear. However, the rewards for cities that host Olympic games are less so. James McBride and Melissa Manno of the Council on Foreign Relations reported:

“A growing number of economists argue that the benefits of hosting the games are at best exaggerated and at worst nonexistent, leaving many host countries with large debts and maintenance liabilities. Instead, many argue, Olympic committees should reform the bidding and selection process to incentivize realistic budget planning, increase transparency, and promote sustainable investments that serve the public interest.”

Before the Tokyo Olympics, the event cost was estimated at $7 billion. Recent estimates of the actual cost are around $28 billion.

That’s a significant cost overrun.

Weekly Focus – Think About It
“I am very proud of my mom and consider her the most courageous woman I know. With perseverance, sacrifice, and hard work, she raised a family of Olympic athletes and gave us the tools and the spirit to succeed. That is something that my brothers and I will always be thankful for.”
—Diana López, Olympic medalist

Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
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Investment advice offered through Research Financial Strategies, a registered investment advisor.

• How we manage it: Because you cannot "diversify away" total market risk if you own equities, we manage this through asset allocation. By balancing your portfolio with a mix of equities, fixed income, and other non-correlated assets based on your personal risk tolerance, we ensure you are never overly exposed to broad market downturns.

• How we manage it: We avoid putting "too many eggs in one basket" by spreading your equity exposure across all major sectors of the economy, ensuring that a downturn in one industry does not drag down your entire portfolio.

• When IBM lost 36% of its value, the SPY only lost 36% of $0.30—which equals a negligible 0.108%.

The Markets

America's wealth looks different than it did just a couple of generations ago.

A lot has changed since 1989. Back then, there were no smartphones or streaming services. There wasn’t an app for anything. The first digital camera arrived the previous year, and the first handheld global positioning system (GPS) became available in 1989. While technology began reshaping everyday life, another change began unfolding, too.

Between 1989 and 2022, after adjusting for inflation, the wealth held by families in the United States almost quadrupled. It rose from $52 trillion (in 2022 dollars) to $199 trillion, according to data from the Congressional Budget Office (CBO). The composition of that wealth changed, too.

• Wall Street has become Main Street. More household wealth is invested in stocks than ever before. “Some 34 [percent] of US household wealth is now in stocks — the highest proportion on record,” reported Tracy Alloway and Joe Weisenthal of Bloomberg. “These are obviously aggregate figures, and equity ownership is skewed towards higher-income households. Nevertheless, this is a sea change in the composition of America’s total wealth, which was dominated for years (even after the bursting of the housing bubble in 2008) by real estate.”

• Retirement plans help grow household wealth. Years ago, a family's wealth was largely tied to its home and, perhaps, a pension that would be paid by a company after retirement. Today, an increasing share of household wealth is in 401(k)s, IRAs, and brokerage accounts. Even people who have never thought of buying an individual stock may own thousands of companies through their workplace retirement plans. “In 2022, retirement assets and accrued Social Security benefits made up about 40 percent of [household] wealth,” reported the CBO.

• Diversification matters more than ever.With stocks comprising a bigger share of household wealth, managing risk is essential. One of the best ways to do that is through diversification, which means owning different types of investments that respond differently to changing market conditions. The idea is that one asset may increase in value when another is losing value. While diversification does not ensure a profit or protect against loss, it plays an important role in long-term investment strategies.

Last week, the Standard & Poor’s 500 and Nasdaq Composite Indexes finished higher. The Dow Jones Industrial Average lost ground, largely due to the collapse of the U.S.-Iran ceasefire, according to Teresa Rivas of Barron’s. Yields on mid- and longer-term U.S. Treasuries moved higher over the week.

THE WORLD CUP HAS PRODUCED SOME EYE-POPPING NUMBERS, and we’re not talking about the scoreboard. For example:

$713,000. The World Cup trophy is gilded with almost 11 pounds of 18-karat gold. In April of this year, the value of the gold would have been roughly $713,000, reported Phil Haunhorst via Yahoo Finance. The champions receive a gold-plated replica, while the original trophy stays with FIFA, which is the international governing body for soccer.

6 million. That’s how many spectators have packed into stadiums throughout the United States, Canada, and Mexico to watch the beautiful game, according to FIFA.

 $12.5 million. The country of every team playing in the tournament receives $12.5 million in qualification and preparation money, reported Maggie MacKenzie of Sports Illustrated.

$16 million. The U.S. men’s national team won $16 million for making it to the round of 16. Since the U.S. men’s and women’s teams split all World Cup winnings, “The prize money will be split evenly between the 26 men on the U.S. roster and the 26 women who make next year's U.S. roster for the 2027 Women's World Cup, should the Americans qualify,” reported Jeff Kassouf of ESPN.

 33 million. Last week, more than 33 million viewers tuned in to watch the U.S. men’s national team play Belgium, making it the “most-watched soccer telecast in U.S. history,” reported Michael Schneider of Variety.

$50 million. The prize for the team that lifts the World Cup trophy is $50 million. The winnings don’t go to the players, although they receive a share. The award goes to the winning nation’s soccer federation, which is the sport’s governing body in the country.

$13 billion. This is the amount of revenue that “FIFA expects to have generated across the four-year cycle ending with this World Cup,” reported Brett Knight of Forbes. “Of that total, almost $9 billion would be from 2026, including $3.9 billion from broadcasting rights and more than $3 billion in hospitality rights and ticket sales, according to projections in the organization’s 2024 annual report.”

The World Cup offers some unforgettable moments. It also offers some pretty impressive trivia.

WEEKLY FOCUS – THINK ABOUT IT
"We didn’t underestimate them, but they were a lot better than we thought."
 — Bobby Robson, Former professional soccer coach and player

Sources:

https://medium.com/fbdevclagos/tech-timeline-30-years-and-beyond-1987-2017-8beef66255dc

https://en.wikipedia.org/wiki/Digital_camera

https://www.geotab.com/blog/gps-satellites/

https://www.cbo.gov/publication/60807

https://www.bloomberg.com/news/newsletters/2026-07-10/the-stock-market-and-a-phenomena-of-our-lifetimes? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-13-26-Bloomberg-The-Stock-Market-And%20-%205.pdf

https://www.investopedia.com/investing/importance-diversification/

https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-13-26-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf

https://www.barrons.com/articles/stock-market-magnificent-seven-9a8da693?refsec=the-trader&mod=topics_the-trader or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-13-26-Barrons-The-Stock-Market-Cant-Afford%20-%208.pdf

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2026

https://finance.yahoo.com/markets/commodities/articles/much-gold-hiding-world-cup-111438017.html

https://inside.fifa.com/organisation/media-releases/packed-stadiums-record-digital-reach-world-cup-2026-numbers-unprecedented-scale

https://www.si.com/onsi/athlete-lifestyle/2026-fifa-world-cup-prize-money-full-payout-breakdown-every-team

https://www.espn.com/soccer/story/_/id/49301582/us-men-women-get-equal-split-16m-world-cup-prize

https://variety.com/2026/tv/news/u-s-world-cup-loss-ratings-most-watched-soccer-telecast-1236806132/

https://www.si.com/soccer/how-much-do-world-cup-soccer-players-get-paid-usmnt-england-bonuses-explained

https://www.forbes.com/sites/brettknight/2026/07/01/the-numbers-behind-the-2026-world-cup/ or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-13-26-Forbes-The-Numbers-Behind%20-%2016.pdf

https://www.si.com/soccer/50-inspiring-soccer-quotes

The Markets

The market spent the first half of 2026 floating like a butterfly.

The market slipped every punch during the first six months of 2026, and there were a lot of them: the Iran War, gyrating oil prices, rising inflation, changed interest rate expectations, employment concerns, and mounting national debt. Each issue stepped into the ring swinging and, while the market staggered occasionally, it recovered every time.

Teresa Rivas of Barron’s reported, “Bolstered by double-digit earnings growth, 2Q was the best quarter for the S&P 500 since the second quarter of 2020, and [we saw] the best first half of a year for the index since 2021.”

Here are some issues investors are watching as we head into the second half of the year.

• Winning on points. The United States economy had some mixed data rounds, but it appears to be solid. “Higher energy prices, stubborn inflation and widening inequality all pose risks that could erode the country's current advantage,” reported Michelle Fleury of BBC. “Even so, compared with many other advanced economies, the U.S. continues to look robust. Its combination of flexible markets, rapid investment, abundant energy, and tolerance for risk has helped it weather shocks that have strained its peers.”

• AI prospects. Artificial-intelligence stocks have a shiny record, but will they prove out? Enthusiasm for AI and strong earnings lifted stocks to new highs, but the industry has been rocked by uncertainty. One issue is cost. The LLM Token Expenditure Index measures token price and usage. It doubled from December to May and is now down 20 percent from its May high, according to Jan-Patrick Barnert and Michael Msika as reported by Charles Riley of Bloomberg.

The move can be interpreted in different ways. “One explanation for the recent decline is that AI companies are losing pricing power with increasingly cost-sensitive customers, and that expectations for an eventual AI bonanza could prove misplaced,” according to Barnert and Msika. “Another read is that total spend has roughly doubled since last year and cheaper tokens have expanded the market. This means that an index pause is simply digestion, while demand is real and [capital expenditure] is money well spent.”

• A hostile crowd. An additional issue for AI companies is opposition to data center expansion. Over the first three months of 2026, more than 75 data-center projects valued at $130 billion were blocked or delayed because of grassroots protests. Many Americans dislike the energy demands, and environmental impacts of the enormous installations. “Public pushback is becoming a risk factor for AI companies and their shares,” reported Joe Light of Barron’s.

• Fresh legs in the ring. A market rotation has begun. As June came to a close, technology stocks fell out of favor, and investors began to find value in other market sectors, including healthcare, industrials, and financials, reported Barron’s. In addition, “nervousness about AI valuations has seen investors turning away from U.S. stocks at the fastest pace since March…Investors turned to some international stocks instead, with Japanese equities seeing their biggest inflows in seven weeks…,” according to sources cited by Andre Janse Van Vuuren of Bloomberg.

Last week, major U.S. stock indexes rose, and yields on mid- and longer-term U.S. Treasuries moved higher.

WHAT DO YOU KNOW ABOUT ROUTE 66? The United States turns 250 this year. It’s a remarkable milestone and one worth celebrating. Since the history of the United States is broad and varied, we focused this quiz on one iconic American highway: Route 66. The Economist described it like this:

“Though it began as a motley stitching of state and local roads…it quickly became the main route west, passing through eight states. Farmhands used it to flee the Dust Bowl; so did workers, many of them African-Americans from Texas and Oklahoma, who flocked to California’s booming industrial base after the second world war; merry holidaymakers traveled along it to Los Angeles…Services for drivers flourished, including [gas] stations, diners and motels, as did the small towns through which the route passed.”

See what you know about the “Mother Road” by taking this brief quiz.

1. Few highways capture the American imagination as Route 66 does. If you traveled all 2,400 miles, from one end of the highway to the other, what cities would you start and end in?
   1. New York City and San Francisco
   2. Chicago and Santa Monica
   3. Louis and San Jose
   4. Detroit and Las Vegas

2. In 1928, runners traveled the length of Route 66 as part of a coast-to-coast marathon. “…The grueling event was organized as a promotional stunt by sports agent C.C. ‘Cash and Carry’ Pyle. Of the 199 men who began the 84-day race, 55 finished it,” wrote Elizabeth Nix of History.com. The official race name was the Trans-America Foot Race. What did the press nickname it?

1. 1. The Cash and Carry Classic
   2. The Blister Bowl
   3. The Footsore Follies
   4. The Bunion Derby

3. In its heyday, Route 66 was known as “America’s Main Street.” The all-weather highway traveled the 35^th parallel, minimizing exposure to ice and snow in winter and blistering heat in summer. What led to the highway's demise?
   1. Rising prices during the 1970s oil crisis.
   2. The interstate highway system bypassed it.
   3. A series of earthquakes destroyed key segments.
   4. The rise of commercial air travel.

4. A Marine Corps veteran wrote the song “(Get Your Kicks on) Route 66”. Over time it was sung by Nat King Cole, Bing Crosby, The Rolling Stones and other recording artists. What was the songwriter’s name?
   1. Bobby Troup
   2. Woodie Guthrie
   3. Chuck Berry
   4. Allee Willis

Route 66 turns 100 this year, a noteworthy celebration that aligns with America's 250th birthday. The iconic highway paved the way for modern Americans to answer Horace Greeley's historic call to “Go West and grow up with the country". And they did.

WEEKLY FOCUS – THINK ABOUT IT

“The social, and especially the political institutions of the United States, have, for the whole of the current century, been the subject in Europe, not merely of curious speculation, but of the deepest interest. We have been regarded as engaged in trying a great experiment, involving not merely the future fate and welfare of this Western continent, but the hopes and prospects of the whole human race. Is it possible for a Government to be permanently maintained without privileged classes, without a standing army, and without either hereditary or self-appointed rulers? Is the democratic principle of equal rights, general suffrage, and government by a majority, capable of being carried into practical operation, and that, too, over a large extent of country?”
  – The New York Daily News, 1860

Answers: 1) b; 2) d; 3) b; 4) a

Sources:

https://www.barrons.com/articles/stocks-today-ai-rotates-sectors-health-care-industrials-financials-28819289 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Barrons-Review-and-Preview%20-%201.pdf

https://www.bbc.com/news/articles/cwy031el03po

https://www.bloomberg.com/news/newsletters/2026-07-03/investors-track-tokens-for-clues-on-ai-trade-s-next-move or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Bloomberg-Investors-Track-Tokens%20-%203.pdf

https://www.barrons.com/articles/ai-data-centers-backlash-stocks-8d564b5f or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Barrons-Amerians-Hate-AI-Data-Centers%20-%204.pdf

https://www.barrons.com/articles/stock-market-rotation-things-to-know-today-f366b0b4 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Barrons-This-Market-Rotation-From-Tech%20-%205.pdf

https://www.bloomberg.com/news/articles/2026-07-02/stock-market-today-dow-s-p-live-updates?srnd=phx-markets or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Bloomberg-European-Stocks-Rally%20-%206.pdf

https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2026

https://www.economist.com/culture/2026/07/02/route-66-how-a-century-old-highway-helps-explain-america or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-06-26-Economist-Route-66-%209.pdf

https://en.wikipedia.org/wiki/Trans-American_Footrace

https://www.history.com/articles/8-things-you-may-not-know-about-route-66

https://www.history.com/articles/route-66-rise-decline-highway-system

https://en.wikipedia.org/wiki/Go_West,_young_man

https://www.historians.org/sixteen-months/the-american-experiment/

Is the "4% Rule" Still the Gold Standard for Retirement Income?

When the financial markets experience a sudden downturn, determining a sustainable portfolio withdrawal strategy can feel intensely stressful. For decades, investors have leaned on a single benchmark to guide their spending. However, this target is far from static.

With ongoing shifts in bond yields, market valuations, and inflation, financial research institutions continue to adjust their math. Relying on a rigid, one-size-fits-all percentage can introduce unnecessary risk to your capital.

Here is why your distribution strategy matters far more than any rigid rule of thumb, broken down by the core risks and modern adjustments you must consider.

1. The Hidden Threat: Sequence of Returns Risk

Stepping into retirement right as a bear market begins is a vulnerability that pure personal discipline cannot easily correct. If your assets suffer a 15% or 20% drop during your first few years of retirement, continuing to pull out a fixed dollar amount forces you to liquidate a much larger chunk of your remaining principal. This leaves less capital in the tank to catch the wave of an eventual market recovery.

While historical models are stress-tested against past market cycles, they cannot adjust automatically to the live performance of your personal account. Ultimately, two investors with identical nesting eggs can experience completely different outcomes simply based on whether their retirement timeline kicked off in a bull market or a down market.

2. The Missing Variables: Taxes and Investment Fees

The traditional benchmark calculations are built on gross figures, meaning they completely omit real-world friction. Standard baseline rules fail to factor in:

• The income tax brackets triggered by standard traditional 401(k) or IRA distributions.

• The capital gains taxes incurred when selling appreciated assets in taxable brokerage accounts.

• The ongoing asset management or advisory fees that gradually reduce your principal.

If you blindly withdraw a flat rate but lose an extra percentage point to internal fees and a substantial slice to Uncle Sam, your actual household purchasing power drops significantly. A truly viable income strategy cannot ignore the tax code; it must treat tax optimization as a primary pillar.

3. The Evolution of the Benchmark: From 4% to 4.7%

First introduced by financial planner William Bengen in 1994 and further verified by the 1998 Trinity Study, the classic guideline states that you can withdraw 4% of your total balance in year one of retirement, and then adjust that exact dollar amount for inflation every year after to sustain a 30-year horizon.

However, modern research shows the rule has evolved:

• Bengen's Recent 4.7% Update: In his updated research, William Bengen explicitly stated that sticking rigidly to the old 4% threshold may mean unnecessarily shortchanging your lifestyle. By expanding asset classes to include small-cap, mid-cap, and international equities, Bengen discovered that a more robustly diversified portfolio can actually support an initial safe withdrawal rate of 4.7%. He argues that the original 4% rule was essentially a absolute "worst-case scenario" (modeled after the severe stagflation of the 1968 market crash).

• Morningstar's Adaptive Guidance: Conversely, Morningstar's annual research continues to fluctuate based on market environment. Their baseline safe withdrawal rate for a fixed, inflation-adjusted spend over a 30-year horizon sat at 3.7%, rising slightly to 3.9% based on adjusted bond yields and equity valuations. Morningstar notes that these baseline assumptions are conservative and highly dependent on a specific asset allocation (often targeting portfolios with 20% to 50% equities to hit a 90% success probability).

4. Personalization Beats General Rules of Thumb

Data from Northwestern Mutual highlights a telling trend: roughly 74% of American millionaires actively partner with a wealth advisor, compared to just 34% of the broader population. The reason for this gap is clear—wealthy investors understand that a generic percentage can never account for unique personal variables.

A static rule knows nothing about your shifting health needs, your core income alternatives (like pensions or Social Security), or your capacity to alter your lifestyle spending when markets get choppy. Modern retirement planning has largely moved past rigid rules in favor of dynamic spending methods. For example, implementing "guardrail strategies"—where you temporarily pare back spending by 5% to 10% during market corrections—allows retirees to safely start with a much higher initial withdrawal rate without risking portfolio depletion.

Bottom Line

Pinpointing your initial distribution rate is just step one. The more vital, high-level task is engineering a dynamic blueprint that flexes when tax laws change, global markets shift, and interest rates fluctuate. Working alongside a fiduciary financial advisor allows you to stress-test your portfolio against thousands of simulated economic environments, ensuring you don't underspend your hard-earned wealth out of fear, or overspend it out of miscalculation.