U.S. stocks moved lower last week.

The journey toward long-term financial goals is often interrupted by unexpected events that create stress and uncertainty. That’s one reason financial plans are built with a keen eye to risk tolerance. When disruptive events occur and financial markets lose value, even the most experienced investors have questions and concerns.

Over the last few months, markets have traveled a particularly bumpy road. We’ve seen:

Geopolitics create uncertainty. The United States government has been reshaping economic and geopolitical relationships with the rest of the world. Last week, the military conflict in Iran took a toll on financial markets. Lu Wang and Isabelle Lee of Bloomberg reported, “Market declines sparked by the Iran war are morphing into a full-blown rout across Wall Street. Efforts to broker an end to the fighting and restart the flow of Middle East oil produced only further escalation, which in turn fueled an ever-greater sense of dread in markets.”

Forecasts for economic growth and inflation change. Last week, the Organization for Economic Cooperation and Development (OECD) stated that “conflict in the Middle East is testing the resilience of the global economy.” Its March 2026 Economic Outlook forecasts that inflation will move sharply higher in 2026.

Consumer optimism fade. In early March, consumer sentiment improved. Those gains reversed later in the month after the conflict in Iran began, according to the University of Michigan (UofM) Consumer Survey. By month’s end, the Sentiment Index was lower month over month and year over year.

“Consumers with middle and higher incomes and stock wealth, buffeted by both escalating gas prices and volatile financial markets in the wake of the Iran conflict, exhibited particularly large drops in sentiment,” reported Surveys of Consumers Director Joanne Hsu.

Sentiment is an important indicator of consumer spending, which is the key driver of U.S. economic growth. Falling sentiment may translate to lower spending and slower economic growth, and vice versa, reported Aja McClanahan of U.S. News & World Report.

Government deficits and debts increase. Last week, the U.S. national debt rose above $39 trillion for the first time, according to the Peter G. Peterson Foundation, causing the U.S. Fiscal Confidence Index to drop to the lowest level in nearly two years. “There is a fundamental imbalance between [government] spending and [tax] revenues that will continue to grow in future years,” reported the Foundation.

Last week, the Nasdaq Composite Index and Dow Jones Industrial Average both moved into correction territory, meaning they declined 10 percent or more from previous highs. The Standard & Poor’s 500 Index also moved lower, according to Jacob Sonenshine of Barron’s. Bond yields rose, influenced “by rising inflation expectations but also by a repricing of what central banks intend to do next, a shift playing out from Washington to Frankfurt to Tokyo, according to Wang and Lee.

If you’re feeling uncertain, please get in touch. We’re happy to discuss any questions or concerns you may have.

S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.

WHAT DO YOU KNOW ABOUT FICTIONAL WEALTH? When markets are volatile, we can all use some light-hearted fun. Recently, a financial website picked up where Forbes left off in 2013 by publishing the “Fictional 15”, a list of wealthy characters from fiction (movies, books, cartoons, television, video games, and comics). See what you know about fictional wealth by taking this brief quiz.

1. Why did Forbes originally create the Fictional 15 List?
   1. Estimating the wealth of dragons, comic book moguls, and cartoon tycoons, allowed Forbes analysts to explore unconventional asset classes.
   2. Cruella de Vil financed it because she likes to see her name in print.
   3. Wealthy people often are reduced to caricatures, Forbes decided to satirize that by treating fictional characters as real people.
   4. People like reading about wealthy people, fictional or not.

1. Which fictional character topped the 2025 list of richest fictional characters?
   1. Scrooge McDuck, richest duck in the world
   2. Forrest Gump, shrimping magnate
   3. T’Challa, King of Wakanda
   4. Tony Stark, Iron Man

1. Why was Santa Claus removed from the Forbes Fictional 15 list?
   1. Santa preferred not to publish data about his net worth.
   2. Analysts struggled to apply traditional valuation models to Santa’s operation.
   3. People objected to Santa being on a list of fictional characters.
   4. Santa’s business model of delivering packages for free in a single night was economically disruptive.

1. Who was the only woman to be included on the list in 2025?
   1. Carol Miller, Mom in Futurama
   2. Lara Croft, Archeologist
   3. Lady Mary Crawley, Downton Abbey
   4. The Tooth Fairy

While none of us has a dragon’s hoard or a magic money tree, we all have the opportunity to build wealth by saving and investing.

WEEKLY FOCUS – THINK ABOUT IT
“Passion is one great force that unleashes creativity, because if you're passionate about something, then you're more willing to take risks.”
― Yo-Yo Ma, Cellist

Answers: 1) c; 2) c; 3) c; 4) b

Sources:

https://www.bloomberg.com/news/articles/2026-03-27/wall-street-reels-as-iran-war-shatters-its-portfolio-defenses?srnd=homepage-americas or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/03-30-26-Bloomberg-Wall-Street-Reels%20-%201.pdf

https://www.oecd.org/en/publications/2026/03/oecd-economic-outlook-interim-report-march-2026_254a8d56.html

https://www.sca.isr.umich.edu or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/03-30-26-U-of-M-Surveys-of-Consumers%20-%203.pdf

https://money.usnews.com/money/personal-finance/family-finance/articles/consumer-sentiment-what-it-is-and-why-it-matters#:

https://www.pgpf.org/press/2026-3-fci-press-release/

https://www.pgpf.org/our-national-debt/

https://www.barrons.com/articles/stock-market-bottom-closer-than-you-think-a61e7557? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/03-30-26-Barrons-The-Stock-Markets-Bottom%20-%207.pdf

https://en.wikipedia.org/wiki/Forbes_Fictional_15

html https://www.yahoo.com/lifestyle/articles/15-richest-fictional-characters-much-000009560.html

https://www.forbes.com/2005/12/01/fictional15-rich-methodology-cx_mn_1201method.

https://en.wikipedia.org/wiki/Forbes_Fictional_15

https://www.brainyquote.com/topics/creativity-quotes

There’s a moment early in retirement that surprises a lot of people.

They wake up, and there’s nowhere to be. No commute. No quick check of the inbox before coffee. Just a quiet morning that's all yours to enjoy however you wish.

At first, that quiet can feel wonderful. After years of deadlines and responsibility, maybe even a relief.

And then, somewhere in those first few months, another thought creeps in:

Now what?

It's a more common phenomenon than you might expect. Research shows that retirement is much more than a schedule change. For many people, it’s an identity shift. You’ve spent years being known for what you do. When that role changes, it’s natural to feel a little unsteady.¹

That doesn't mean something is wrong. It means you’re just adjusting to your new schedule.

The first year of retirement isn't about filling your time; it's about finding your rhythm.

The “Honeymoon” Phase (and What Comes After)

Some retirees describe the first few months after retirement as a “honeymoon phase,” during which they focus on travel, projects, and catching up on rest. After the honeymoon glow wears off, many begin asking deeper questions about how they want to spend their time and energy.¹

It's not only normal to ask those questions, but necessary. Our careers give us more than income. They provide structure, social interaction, and a sense of purpose. When that structure is no longer part of your daily routine, it can be difficult to fill the gap.

Over time, most retirees begin building new routines around things they find meaningful. That might mean volunteering, mentoring, traveling, learning something new, or simply spending more time with family. Research shows that adults age 65 and older spend more hours each day on leisure and personal activities than working-age adults. That’s not just “free time.” It’s an opportunity.²

Income Feels Different in Retirement

One of the biggest adjustments in the first year is how income arrives.
For decades, income likely showed up as a paycheck.

Many retirees don’t expect how spending feels emotionally in retirement. Even when income sources are stable, transferring money from savings can feel more eventful than it did during working years. After decades of being encouraged to save, the shift toward spending can take practice.

It can help to separate essential expenses from flexible ones. When you know your core needs are covered, the rest becomes a series of intentional choices rather than a source of worry. Over time, confidence often grows as retirees see that their financial approach is working as intended.

The good news? The first year gives you space to observe and adjust.
Spending patterns often settle once retirees see what everyday life actually looks like.

It’s not about getting everything perfect immediately. It’s about building confidence over time.

What Do You Do With 40 Extra Hours?

Social connections can shift, too. Work friendships naturally evolve, which makes room for new communities through volunteering, clubs, travel groups, continuing education, or faith organizations.

Volunteering is especially common in retirement. In fact, more than one-quarter of adults age 65 and older report volunteering in a given year. For many retirees, it’s not just about giving back. It provides structure, social connection, and a sense of purpose.³

Travel is another goal many retirees revisit. Some take multigenerational trips. Others explore slower travel or finally visit places they’ve postponed for years.

And sometimes, retirement isn’t about big ideas at all. It’s about simple things. Reading more. Gardening. Taking a class. Returning to an old hobby.
Another common experience in the first year is something few people talk about: decision fatigue.

When you’re working, much of your day is mapped out for you. In retirement, that structure disappears. Suddenly, it’s up to you to decide what today looks like. And tomorrow. And next month.

That freedom can feel overwhelming at first.

Some retirees find it helps to build a routine into the week. Maybe that’s volunteering every Tuesday. Meeting friends for lunch on Thursdays. Taking a class that gets you out of the house once a week, or setting aside certain mornings for exercise or hobbies.

It's not about maintaining a rigid schedule, though; it's about creating something to look forward to. That excitement for the next day is what helps make retirement feel grounded.

The Practical Side of Year One

Along with emotional and lifestyle changes, the first year is a practical reset. Many retirees use this time to:

• Review estate documents
• Confirm beneficiary designations
• Revisit healthcare directives
• Evaluate insurance coverage
• Understand the pros and cons of various income sources

Financial professionals can help clients think through income coordination. Tax-specific questions should always be discussed with a tax, legal, or accounting professional, and legal updates should be addressed with an attorney.

Healthcare coverage is another area to review, especially when making decisions about extended care.

Giving Yourself Permission to Enjoy It

After years of saving and preparing, some retirees feel hesitant to spend.
That’s understandable. Shifting from a saver’s mindset to spending intentionally can take time.

But retirement isn’t just about managing money. It’s about using it to support the life you want to live.

Life expectancy data suggests that many retirees can expect to live for decades in this next chapter, which means you'll need to take time to think carefully about your financial decisions.⁴

If you’re in your first year or approaching it, consider asking yourself a few simple questions:

• What am I ready to let go of?
• Where do I want to feel useful?
• Where do I want to feel rested?

You don’t have to answer them all at once. Retirement unfolds in stages, and as spending and routines settle, uncertainty often fades.

The first year of retirement isn’t a test. It’s a transition. And it’s okay to take it one step at a time.

1. AARP, May 28, 2025.
2. U.S. Bureau of Labor Statistics, 2024 Annual Averages
3. U.S. Bureau of Labor Statistics, 2024 Volunteering Data
4. OECD, N.D.

Market Insights from Research Financial Advisors: Understanding Stagflation and Navigating Volatility

Over the past couple of weeks, you may have noticed the term "stagflation" popping up frequently in financial news. It is a daunting word, and feeling concerned about it is entirely valid. At Research Financial Advisors, our goal is to cut through the noise, grounding these headlines in historical context to help you navigate the current market cycle with confidence.

What is Stagflation?

Stagflation is an economic condition characterized by three simultaneous challenges:

• High inflation (rapidly rising costs of goods and services)

• Slow economic growth * Rising unemployment

The possibility of stagflation is concerning to economists because it is notoriously difficult to fix. Historically, the most prominent example of this occurred in the 1970s.

The 1970s Oil Shocks: A Historical Precedent

During the 1970s, the U.S. faced severe stagflation triggered by two major oil shocks when OPEC cut production and sharply curtailed exports. These shortages pushed the cost of goods and services higher, driving the economy into a recession while unemployment rose. Normally, inflation cools down during a recession, but in the '70s, prices kept climbing alongside the price of oil. By 1979, inflation had reached 9% annually.

The Cure and the Affliction The U.S. government and the Federal Reserve initially struggled to find a solution. It wasn't until Paul Volcker took over as Fed Chair in the late 1970s that a new, aggressive approach was taken. To break the back of inflation, the Fed raised the federal funds rate to a record high of 20% by late 1980.

The medicine was a bitter pill to swallow. By October 1981, some homebuyers were facing mortgage rates upwards of 18.6%. It was a deeply unpopular and painful period, but it worked: inflation fell from a peak of 11.6% to just 3.7% in 1983, and unemployment eventually began a steady decline.

Are We Headed Back to Stagflation?

Recently, as oil prices have spiked, fallen, and spiked again, discussions have reignited about whether the U.S. is facing a renewed stagflation threat.

For most economists and Wall Street strategists, the primary factor determining our economic path is duration. If current geopolitical tensions and energy supply issues can be resolved in a matter of weeks, any stagflationary shock will likely be muted. However, as the market processes these unknowns, we have seen major U.S. stock indexes move lower and long-term Treasury yields move higher.

Navigating the Whirlwind

Volatility is uncomfortable, but it is not unexpected. If you’ve ever walked down a city street on a gusty day, you may have been beset by a whirlwind of dirt and debris that temporarily stops you in your tracks. The haze makes it hard to see exactly where you’re going. But if you are patient and wait it out, the wind eventually dies down, and you can continue safely on your way.

Lately, investors have been engulfed in a similar whirlwind. News about geopolitical conflicts, shifting economic data, the rise of artificial intelligence, and trade tariffs have created tremendous uncertainty. While these short-term market fluctuations are uncomfortable, they are a normal part of the investing journey.

At Research Financial Advisors, we build your financial plan to weather these gusty days. Patience, perspective, and a focus on your long-term goals are your best defenses against market turbulence.

The Markets

AI is reshaping the world – and markets are jittery.

Last week, investor attitudes continued to shift. Instead of celebrating AI as a growth engine, they focused on its potential as a business disruptor. The catalyst for this change was the introduction of AI tools that automate tasks in legal services, coding, financial research, and freight shipping. The news generated a wave of stock selloffs, reported Jeran Wittenstein, Ryan Vlastelica, Phil Serafino, and Charles Riley of Bloomberg.

Investors are concerned about “creative destruction”. It’s a theory developed by Joseph Schumpeter, who wrote that historically waves of innovation have destroyed older business models and created new ones, according to Richard Alm and W. Michael Cox in The Library of Economics and Liberty.

Today, AI appears to be a disruptive force – dismantling and reorienting business models.

Signs of AI disruption are clear in the labor market. Researchers at Stanford analyzed payroll data from millions of workers to track AI’s early impact. Erik Brynjolfsson, Bharat Chandar, and Ruyu Chen of Stanford reported:

“…since the widespread adoption of generative AI, early-career workers (ages 22-25) in the most AI-exposed occupations have experienced a 13 percent relative decline in employment even after controlling for firm-level shocks. In contrast, employment for workers in less exposed fields and more experienced workers in the same occupations has remained stable or continued to grow. We also find that adjustments occur primarily through employment rather than compensation. Furthermore, employment declines are concentrated in occupations where AI is more likely to automate, rather than augment, human labor.”

They concluded that these workers may be “canaries in the coal mine” – early signs of broader structural change.

Last week, major U.S. stock indexes moved lower on concerns about AI, wrote Paul R. La Monica of Barron’s. Bond investors focused on economic data, which showed a stabilizing job market and lower inflation. That led to a rally in U.S. Treasuries with the two-year Treasury yield dropping to its lowest level since 2022, reported Rita Nazareth of Bloomberg.

AMERICA’S PLUMBING PROBLEM. The United States financial system is like the plumbing in your home. The water pressure needs to be just right to keep the system flowing smoothly. The Fed, which is the U.S. central bank, is the primary plumber responsible for maintaining the system.

The Fed adjusts interest rates
One tool the Fed uses to keep the financial system operating efficiently is the federal funds rate. When newscasters say the Fed raised or lowered rates, that’s often the rate they’re discussing. Many investors keep a close eye on Fed rate cuts and hikes because they can influence financial markets. For example:

• When the economy is overheating (water pressure is too high), the Fed can release the pressure by raising the federal funds rate. Higher rates make it more expensive to borrow, reducing the flow of money. This action can also put pressure on stock prices because higher borrowing costs can lead to lower profits, according to Mary Hall of Investopedia.

• When the economy is slowing or in recession (water pressure gets too low), the Fed can increase the pressure by lowering rates, causing money to flow more freely through the system. Rate cuts can boost stock prices because lower borrowing costs can lead to higher profits.

The Fed also buys bonds
Over the past few months, Wall Street’s attention has shifted from the federal funds rate to another tool the Fed relies on to keep money flowing through the system – the Fed’s balance sheet. That’s basically a list that includes everything the Fed owns, such as Treasury bonds and mortgage-backed securities.

• When the pressure in the financial system is low, the Fed pumps more money into the system by purchasing government bonds and securities. This process is known as quantitative easing or QE.

During the financial crisis, and again during the COVID-19 pandemic, the Fed bought a lot of government bonds to stabilize U.S. financial markets. Over the last two decades, its “balance sheet grew from about $800 billion to roughly $6.5 trillion—an increase from around 6 percent to 21 percent of GDP,” reported Burcu Duygan-Bump and R. Jay Kahn, writing in FEDS Notes.

• When pressure in the financial system is high, the Fed stops buying bonds and lets the ones it owns mature. As a result, the Fed’s balance sheet gets smaller. This process is called quantitative tightening or QT.

After the pandemic, as inflation rose well above the Fed’s target inflation rate, the central bank raised the federal funds rate to cool the economy. It also stopped buying bonds, shrinking its balance sheet from about $9 trillion to about $6.5 trillion.

The size of the Fed’s balance sheet affects long-term interest rates. A bigger balance sheet can keep long-term rates lower, encourage borrowing, and support stock prices. In contrast, a smaller balance sheet can push long-term rates higher, make borrowing more expensive, and put pressure on stock prices. In other words, the Fed’s balance sheet can influence mortgage rates, bond prices, and even the stock market.

A change of course in 2026
After years of shrinking its balance sheet, the Fed paused in December and began buying bonds again. Typically, it does this to stimulate economic growth, but the economy isn’t slowing. The Fed paused because of a different stress that was building in the financial system — falling bank reserves, according to Michael S. Derby of Reuters.

Over the next couple of weeks, we’ll explain the role of bank reserves in the financial system and how the selection of Kevin Warsh as the next Fed chair could affect the Fed’s balance sheet and financial markets.

WEEKLY FOCUS – THINK ABOUT IT
“Acting is not an important job in the scheme of things. Plumbing is.”
― Spencer Tracy, Actor

Sources:

https://www.bloomberg.com/news/articles/2026-02-08/ai-fear-grips-wall-street-as-a-new-stock-market-reality-sets-in? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/02-17-26-Bloomberg-AI-Fear-Grips%20-%201.pdf

https://www.bloomberg.com/news/newsletters/2026-02-13/the-ai-scare-trade-has-now-come-for-trucking-stocks? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/02-17-26-Bloomberg-The-AI-Scare-Trade%20-%202.pdf

https://www.econlib.org/library/Enc/CreativeDestruction.html

https://drive.google.com/file/d/1hge_LViJqjqY9-VwyVxYQOFmp6AGy5br/view

https://www.barrons.com/articles/stock-market-suffers-ai-inspired-meltdown-31fde781? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/02-17-26-Barrons-Stock-Market%20-Suffers%20-%205.pdf

https://www.bloomberg.com/news/articles/2026-02-12/stock-market-today-dow-s-p-live-updates- or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/02-17-26-Bloomberg-Treasury-Yields-Fall%20-%206.pdf

https://www.federalreserve.gov/aboutthefed/fedexplained/monetary-policy.htm

https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/

https://www.congress.gov/crs-product/IF12147

https://www.pgpf.org/article/how-do-quantitative-easing-and-tightening-affect-the-federal-budget/

https://www.federalreserve.gov/econres/notes/feds-notes/the-central-bank-balance-sheet-trilemma-20260114.html#fn2

https://www.reuters.com/business/finance/fed-says-will-start-reserve-management-treasury-bill-buying-2025-12-10/ or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/02-17-26-Reuters-Fed-Says-It-Will-Start-Technical%20-%2012.pdf

https://www.brainyquote.com/quotes/spencer_tracy_621095

In an era of market fluctuations, clarity is your greatest asset. While volatility is a natural part of the economic cycle, it can feel particularly unsettling when you are nearing or already in retirement.

One of the most effective ways to replace uncertainty with a concrete plan is the Bucket Investing Strategy. This approach is designed to provide both the liquidity you need today and the growth you require for tomorrow.

The Three-Bucket Framework

The strategy is simple: we divide your assets based on when you will need to spend the money. This structure helps ensure that short-term market "noise" doesn’t disrupt your long-term financial security.

1. The Liquidity Bucket (0–12 Months)

Goal: Immediate Cash Flow & Security This bucket serves as your financial safety net. It consists of highly liquid assets—such as government-backed money markets or short-term Treasuries—that currently offer competitive interest rates.

• The Benefit: When the market dips, you won’t be forced to sell your long-term investments at a loss to cover your living expenses.

2. The Stability Bucket (5–10 Years)

Goal: Reliable Income & Inflation Protection This bucket focuses on the medium term. We utilize a diversified mix of U.S. and international bonds, dividend-paying stocks, and private credit to generate steady yield.

• The Benefit: It provides a "bridge" between your immediate needs and your long-term growth, offering a buffer against volatility.

3. The Growth Bucket (10+ Years)

Goal: Long-Term Wealth Appreciation Reserved for assets you won’t need for a decade or more, this bucket is primarily composed of equities and growth-oriented investments.

• The Benefit: Because this money has a long time horizon, it has the "breathing room" required to recover from market swings and capture long-term gains.

Why This Works

The Bucket Strategy shifts the focus from market timing to time horizons. Even during periods of high volatility, having your immediate needs secured in Bucket 1 allows you to stay disciplined with your growth investments in Bucket 3.

Perspective: A volatile market is only a threat to the money you need to spend today. By segmenting your wealth, you can maintain your lifestyle without sacrificing your future.

Let’s Build Your Plan

Every retirement is unique. Whether you want to refine your current strategy or are just looking for a second opinion on your portfolio, we are here to help.

Yield Optimization: With anticipated Federal Reserve rate cuts in 2026, searches have surged for locking in rates via Certificates of Deposit (CDs) and High-Yield Savings Accounts (HYSAs) before yields drop further.

Research Financial Strategies is a private wealth management firm that was established in 1991 to provide fee-based investment advice.  We are a registered investment advisor with the Securities Exchange Commission. Research Financial Strategies specializes in providing financial advice using a proprietary investment methodology that leverages technical analysis to identify and protect our clients against stock market risk.
Research Financial Strategies provides families, individuals and foundations with an alternative to institutionalized and impersonalized money management. A privately-owned, independent, and financially secure firm, Research Financial Strategies pursues without conflict the greatest potential in each client’s wealth.