#56 – Investing at Market Highs, Lump Sum vs. Pension Decisions, and S&P Super Bowl Stats

Connor Miller [00:00:50]:
Been way too long.

Wes Moss [00:00:51]:
I love yeah I love that you’re here this weekend and we got a lot to talk about. Kind of a big game today at super bowl today. I’ve got some you know cheesy super bowl statistics that always roll around. I’ve never been a big fan of the NFC AFC super bowl indicator, but I still have it. I still have it. It turns out it’s kind of gotten watered down over the years. It doesn’t have nearly the punch it used to have as far as the predictive ability which of course was ridiculous. It’s more correlation not causation when it comes to which which team wins Is it really matter for the stock market? Of course not.

Wes Moss [00:01:29]:
But it’s fun to think about. The stats are fun. We also had massive tariff news so we call the super bowl of tariff headlines I think you call it a one day one day trade war.

Connor Miller [00:01:43]:
One day trade war not even a day because it never actually happened and.

Wes Moss [00:01:47]:
Then but there’s still lots more to.

Connor Miller [00:01:49]:
Come on that should say just postpone delayed by a month for now the.

Wes Moss [00:01:53]:
First shots were fired in trade skirmish and there’ll be more to that and then really the what is the since super bowl is our theme the super bowl of early retirement decisions is coming to to bear Connor Miller with this if you are a government employee of the federal government of the United States you you very likely maybe not everyone but something like 2 million government workers got an email a couple of weeks ago that was titled and I guess I don’t know if it’s online we had a family just send it to us but called Fork in the Road where the Fed the op the ops the or OPM the Office of Personnel Management OPM sent out a letter titled Fork in the Road that essentially is asking if you would like to just were resigned they even give really explicit directions on this and there’s a long explanation about the look it’s A force in the fork in the road when it comes to government workforce. It’s built around these four pillars. One, return to office to performance culture. Three, streamline flexible workforce for enhanced standards of conduct. So it’s really, it’s saying, look, you work for the federal government. We’ve got a whole new rulebook and if you don’t like it, you can one, you can, they give you, they give directions in this email, select quote, reply to this email and it has to be from the government account and type the word resign into the body of this email and hit send. And this amazing. And this, this went out to almost 2 million people in the way supposedly this is, it’s supposed to work, is that if you resign you still get paid till September 30, which is again, you’ve, that’s a lot of months.

Wes Moss [00:03:57]:
That’s about what, eight months of pay. It doesn’t make it completely clear what you would be doing over the course of the next eight months. It says something about cooperating. You still have to do some things, but it does say you don’t have to go back to the office if you resign. So they are really trying to get as many people to take the, take this really quote offer. And I can’t help to think for somebody who’s about to retire anyway, this may be like great news, but for the workforce as a whole, I know it’s not, this is not amazing. People don’t, this is not a popular. Yeah, this is not popular.

Connor Miller [00:04:31]:
And really the only language they give is they say you’ll retain all pay and benefits regardless of your daily workload and will be exempted from all applicable in person work requirements until September 30th.

Wes Moss [00:04:44]:
You still don’t have to go back in the office at the same time. You’ve got. This is being challenged legally. So there’s another hearing tomorrow.

Connor Miller [00:04:53]:
So originally the deadline to respond to the email and hit send was February 6th and quote, hit send, that’s now been delayed to tomorrow until a judge can hear it, but it’ll probably be.

Wes Moss [00:05:07]:
Delayed even further than that. I can’t imagine they’re going to make a decision on this tomorrow. Maybe, I don’t know. Well, we’ll, we’ll stay tuned for that and we’ll talk about it next Sunday. But this is, this is, I don’t know if we’ve ever seen anything like this. I mean, no companies ever sent out early retirement packages to, if you want to call it that, I don’t know if you could even call this a retirement package, but it’s, it sounds like that. I’ve seen this with companies all across the workforce. Remember back in 2019, General Electric offered some hundred thousand people buyouts.

Wes Moss [00:05:41]:
We know UPS did a bunch of this, but companies don’t like to advertise this. But sometimes it’ll get into the headlines if it’s a big number. This is a massive number. It’s really, it went out to, I don’t know if it’s 95% of government workforce, but it’s a really big number and who knows how many people will take it. Reports are already that 40 or 50,000 people have already said they’re ready to do this. But it’s a really big question. It’s a huge decision and now 2 million people have to make the decision, do you take eight months worth of pay and go look for another job? And risk. And the other thing that, what they’re trying to say in this email, at least if you’re reading, really don’t have to read between the lines, it’s saying this, it’s saying you don’t take this offer.

Wes Moss [00:06:32]:
There’s no assurance that your division won’t be restructured or your job is going to be here in the future. So it’s a real, it’s a very strong message and they make it pretty.

Connor Miller [00:06:42]:
Clear that the standards moving forward will be even higher. So it’s not just that you’re going to retain your existing job and go on as things have been, but that there’s a different level of expectation moving forward if you do decline to take the offer.

Wes Moss [00:06:59]:
Well, I think you’re going to see, I don’t know what the number is, but it’s going to be, I don’t know if it’s going to be 10%, is it going to be 30%? What do you think?

Connor Miller [00:07:08]:
Well, the administration provided some estimates on what they thought, the number of people they thought might take it, and it was around 60 to 65,000 employees.

Wes Moss [00:07:18]:
My guess is it’s going to be more than that because if you’ve got 2 million people and 10% of those people were already on the cusp of retirement, that’s 200,000 people. And if you’re within really two years of already wanting to retire, I could see that group just saying, okay, well I don’t have to do much for the next eight months. I was going to retire anyway. Great. It’s a much harder Decision if you’re 45 or 50, you like your job, you’ve liked this and now there’s going to be a lot of change coming. You don’t have a lot of choice in it and you don’t even know if your job is going to be so it’s much more uncertain. I think it’s a tough spot for a lot of people to be in and it’s going to it’s going to really require a lot of planning, doing some forecasting, seeing if you’re ready. Can looking at the job landscape, can you go find a similar job for similar amount of pay or another job and are you ready for it? So there’s a lot of I anticipate we’ll be having a lot of these conversations, not necessarily here on money matters, but out in the real world, helping people plan for this.

Wes Moss [00:08:23]:
What does it mean? How about super bowl who are you rooting for? Let’s talk ticket prices for just a second.

Connor Miller [00:08:29]:
You know, when when the Chiefs won and the Eagles won, my first thought was here we go again. Just wasn’t overly enthusiastic about the teams that were going to be playing in it. I was hoping for a Lions Bills or Lions Ravens, but here we are again.

Wes Moss [00:08:48]:
Yeah, it’s if there’s this takes the wind out of the sail of the whole NFL is scripted thing because this is probably the worst possible combo for ratings because this is the same thing over and over that we’ve had this literally before. What is I I grew up outside of Philadelphia and I I would say I grew up as somewhat of an Eagles fan. I wish I could say I was a die hard I like the Eagles. I I so I absolutely want the Eagles to win. But I also spent a lot of time in Michigan. My wife’s family’s from Michigan, so we’ve been Detroit Lions fans for a while and that was sad to see them lose. That was really kind of a sad game. So here are a couple super bowl statistics for Super Bowl L I X, which I guess that is 5951 minus 10, 10 minus 159 NFC and AFC have each won 29 Super Bowls.

Wes Moss [00:09:46]:
So this is a tiebreaker for NFC, AF, say past three Super Bowls decided by only three points. So that’s interest. Maybe we’ll we’ll see that. Speaking of the Lions, Lions, Browns, Jaguars, Texans still the only teams that have not made a Super bowl appearance. What else here the Remember the Bills when they made the Super Bowl? I don’t know you this is a long time ago.

Connor Miller [00:10:13]:
Long time ago.

Wes Moss [00:10:13]:
But they were there. They were in the Super bowl four years in a row. 1991, 2, 3 and they lost all four.

Connor Miller [00:10:21]:
I was. I was born in 93. So I guess that ended the. The misery for Bills fans and almost being there.

Wes Moss [00:10:28]:
Now, let’s talk about ticket prices. I. That’s interesting. And as I was looking this week, I saw some crazy price tickets. I saw $36,000 for tickets. So that was in the. That was. Those are really good seats in the.

Wes Moss [00:10:43]:
And I don’t know this stadium all that well because this is in New Orleans. It’s the vers. Is it. It’s a Mercedes Benz.

Connor Miller [00:10:51]:
The Superdome. I don’t know if it’s still Mercedes or not.

Wes Moss [00:10:55]:
The. Oh, it’s the Caesar. Is it Caesar Superdome? I don’t know. But it’s 30. Some tickets listed for 36,000, 11,000, 14,000. So they’re still super expensive. But it’s interesting that the prices have come down. Last year, the average ticket.

Wes Moss [00:11:12]:
The average ticket for the Super bowl was nine. This year it’s about 6,500. And that you think Connor’s just a function of same teams.

Connor Miller [00:11:22]:
Chiefs fatigue. Yeah, same team. I mean, think about it. If you’re a Chiefs fan. Yeah. You still want to go. You’ve been there. This is the third year in a row that you’ve been there.

Connor Miller [00:11:31]:
So you can’t make the excuse once in a lifetime. You may not have the cash if you’ve gone the last two years.

Wes Moss [00:11:37]:
It really is. And it’s been this way for a long time. Super bowl is not for individuals. More it’s for companies buying big blocks and giving away tickets. Because what family can afford a ticket that’s 6,500 bucks times 2, 3, 4, 5. I mean, that’s a big deal. And then you got to travel and the hotel rooms are crazy expensive. It’s just not an event that many families in America can afford.

Wes Moss [00:12:07]:
So it’s all about companies buying up seats and giving them away. Or that’s gotta be what it is. Super bowl for tariff headlines this week, Connor Miller, you had a really interesting take on this. Maybe walk us through where we stand now.

Connor Miller [00:12:24]:
Yeah. So about a week ago, Saturday was when the list of new tariffs were announced. It was in three tranches. 25% tariffs on Mexican goods, 25% tariffs on Canadian goods. There was a carve out for Canadian energy, which was only 10% and then an additional 10% on. On Chinese goods. And I think what was most interesting about this, and we had, we had kind of been insinuating this all along. We follow one of our research partners very closely, Dan Clifton with Strategus he’s their political expert, and he’d been saying these tariffs are going to be treated entirely differently across different countries, that Mexico and Canada were faced a lot more legal challenges because of the existing trade deals than what you’d find in China.

Connor Miller [00:13:15]:
And so I think what was really interesting about this was the announcement was made Saturday with a deadline for Tuesday, early Tuesday morning at 12:01am so there was a little bit of foreshadowing going on with that in itself that, all right, maybe we’re leaving some room here on the table for some negotiation.

Wes Moss [00:13:36]:
Yeah, well, markets were down a bunch Monday and they were down. And then during the day, they were.

Connor Miller [00:13:46]:
Down about one and a half to 2.5%, depending on what index you looked at. And then we got the announcement that we had reached somewhat of a deal with Mexico, that those tariffs were going to be delayed out a month until March 4th. And then we had already known that Trump was going to be speaking to the Canadian Prime Minister Trudeau at 3pm sure enough, later that day, it was announced that the Canadian tariffs were also going to be postponed a month.

Wes Moss [00:14:15]:
So that’s where we stand with Canada and Mexico. We still, there’s now really a month around negotiations for this. And there were some concessions. And those concessions were border patrol from the Canadians.

Connor Miller [00:14:30]:
Yeah, I think about 10,000 border agents on the Mexican side. I think there were some Canadian as well.

Wes Moss [00:14:37]:
Now, where do we stand on China, though? Those did get implemented.

Connor Miller [00:14:41]:
China did get implemented. And again, that’s where you’ve got to look at these countries independently, that China had the most likelihood of having tariffs enforced on their goods.

Wes Moss [00:14:51]:
Even more because there’s already a fair amount of tariffs there.

Connor Miller [00:14:54]:
Yeah. And this was just a universal 10% because I think back in 2018, it was, it was specific. It was, it was specific. This is universal. But so far, no, no new tariffs on Canadian and Mexican goods.

Wes Moss [00:15:07]:
Okay. So this is just the beginning. And we’ll see how much gets negotiated over the next 30 days for Canada and Mexico. Clearly, as you’ve said, Connor, and you’ve made this point and we’ve made the point here on the show for a while now that, yes, these are financial instruments to encourage work to be done here in the United States, factories here in the United States, production here in the United States. And it’s also a negotiating tool to get better deals when it comes to our, our export import partners. More money matters straight ahead. If you’ve ever done a Jane Fonda workout or if you remember as a kid, Rocky running The steps. And if Michael keaton is still Mr.

Wes Moss [00:15:55]:
Mom to you, then guess what? It’s officially time to do some retirement planning. It’s Wes Moss from Money Matters. Weren’t those the good old days? Well, with a little bit of retirement planning, there are plenty of good days ahead. Schedule an appointment with our team today at your wealth. Com that’s y o u r your wealth dot com. Here we are again. It’s 2025 and last year we spent a lot of time talking about markets continuing to make new highs plow new ground. And when that happens, it makes it difficult to for an investor, I think to say, okay, I’m going to go ahead and get invested.

Wes Moss [00:16:37]:
Now if you’re already invested psychologically it’s maybe a little easier to stay invest invested. But we’re always making that same decision day after day after day. If we’re invested today, we could not be invested if we wanted to. So we’re constantly making that decision to be invested. For some reason, psychologically it’s a little bit harder when it comes to putting new money to work. Now we talked earlier about how potentially fifty thousand, a hundred thousand, we don’t know how many people are going to quote, retire early from the federal government. The folks that have the fers, the federal employee Retirement Plan pension, they don’t have the. They typically there’s always exceptions to some of this, but they’re typically not having to make the lump sum versus pension decision where they say, do I take the amount of money rolled to an IRA versus just take a monthly amount.

Wes Moss [00:17:34]:
But that’s happening every day as well. And I had a couple of people just this week that I was helping contemplate what’s the better, what’s the right choice for you? And it’s different for everybody. But if you decide that the monthly pension isn’t the right thing for you and you want to take a lump sum, you get a big check and it typically will go into, it would go into an IRA unless you want to pay taxes on it. So it doesn’t go to the IRA invested goes, goes as cash. And then you got to make the decision, well, okay, what’s next? The market just hit another all time high this month. We had something like 57 of them last year. We already have had at least one in 2025. So if you’re putting money to work today, you’re putting money to work at a high, which is a little scarier than putting money to work when we’re at a low.

Wes Moss [00:18:25]:
Even though most people are Even more scared. When the market is down, they think it’s going down even more. So I wanted you to maybe take us through the thought process of some economic history around markets that have seen plowing new ground, new highs. And then I’m going to ask you a question about what you would do. What are the statistics around this?

Connor Miller [00:18:46]:
Well, and to me this is one of the ultimate behavioral finance conundrums because in this specific scenario, which we’ll talk about the data here in a second, the data is counter to what our intuition is.

Wes Moss [00:19:03]:
Buy low, sell high, buy low, sell high.

Connor Miller [00:19:07]:
Yeah, there’s an uneasiness about investing in an all time high because what does everyone want to avoid? You don’t want to invest at the peak and then a correction. Yeah, lose 20, 30, hopefully not more than that percent of your money temporarily. So let’s just look at the data. So we ran the numbers and going back to 1950, we just looked at two different data sets. Just if you invested on any day of the week, regardless of whether the market was at an all time high or not, any random day, any normal day versus investing only on the days where the market set an all time high. And you would think, well if the market just set an all time high, that means it probably has less and we’re looking a year out, year out and two years out probably has less room to run. And excuse me, this is actually according to a JP Morgan report since 1970, so the last 50, 50 plus years.

Wes Moss [00:20:09]:
A lot of all time highs in there. If you invest something like over 12, 50, by the way, new all time high. So a lot of data points.

Connor Miller [00:20:19]:
If you invested only on days when the market set an all time high, and this is investing in the S&P 500 by an index fund or an ETF, your average annual return 12 months later, about 9.4%. Well, if you invest on any normal day, a random day, random day, not.

Wes Moss [00:20:43]:
An all time high day, I say.

Connor Miller [00:20:45]:
In quotes, only 9%. So your one year return is actually better. Investing at an all time high. Both are pretty good, slightly better for investing at an all time high. Well then let’s say, well what about two years later? You go two years out investing at an all time high, your average return is 20.2% any random day, I’d say significantly better than the 18 and a half percent after two years investing in any random day. And so this is where that.

Wes Moss [00:21:16]:
All right, how do you explain it? So the data is essentially counter to buy low, sell high. This is saying if it’s if the market’s high still keep buying.

Connor Miller [00:21:27]:
There’s a great chart that we follow that shows the year, the calendar year, so 20, 21, 22, 23 and the number of all time highs that are set. And what, what typically happens is you get these all time highs in clusters and so the market momentum carries on for years at a time. Oftentimes we’ll refer to that as a bull market where you’re just setting multiple news new highs every year. Last year we set one, basically more than one every week on average. On average. And so I think that’s what happens is in these prolonged bull markets, momentum, momentum, you know, gets you in the right direction and you end up having a little bit better performance.

Wes Moss [00:22:12]:
What about the length of the average bull markets?

Connor Miller [00:22:17]:
So the average bull market, again this is going back, this is going back a little bit further. But if you go to about 19, 30, so almost 100 years, the average bull market lasts five years on average and I think does about 175% in total return. And so you say, well how does that compare to today? We’re about 27 months into the current bull market that we in, that we’re in that began in October of 2022.

Wes Moss [00:22:46]:
I think to me. So I’ll pose the question. If you got a lump sum today because you chose not to do a pension amount and you got a million dollars and it rolls into your ira, what do you do? Do you invest the whole thing? Assuming you’re an all stock investor, let’s just say you’re not balanced and you’re young, you’ve got a 40 year horizon, what do you do? Do you do it? Do you listen to the data and just put the whole thing to work tomorrow or do you space it in.

Connor Miller [00:23:15]:
As much as I am? I try to focus only on the data. I think there is an element of this to doing what feels right. The right feels like the right thing. I would be more of a proponent of doing a limited dollar cost average. So not doing it over, don’t spread it out over two years or two years, probably three to six months is what I would do. On the stock side of things, I think if you’re going to have a balanced portfolio, which most of the families that we serve do, I think today with where interest rates are is a great time to go ahead and get that cash invested in bonds because of, because of the.

Wes Moss [00:23:55]:
Explain that. So you’ve got, let’s. If we’re looking at a portfolio, you’ve got a balance between equities or stocks on one side and you’ve got a. The pie chart shows that you’re going to have some fixed income. In some other areas we call these alternative investments or alternative income investments. You would be less inclined to spread out investing in the safety side of the portfolio.

Connor Miller [00:24:19]:
Why you think about where we came from with interest rates the decade before the COVID 19 pandemic and even a year or two into it when rates really started rising, you just weren’t getting anywhere near the interest rates that you are today. So a risk free government treasury was almost at zero. Yeah, I think it got down to 0.3% at its low today it’s about four and a half percent. So that’s an entirely different dynamic. So today I would, I would go ahead and just take what you can get there and probably be a little bit more selective on stocks.

Wes Moss [00:24:57]:
Would you still have relatively short term maturities or fixed income or would you ladder things or would you go buy the longest bond with the highest yield.

Connor Miller [00:25:11]:
Somewhere in the middle there? Yeah, I wouldn’t go super short and just leave it in cash because then you’re kind of at the whim of the Federal Reserve and whether they’re going to cut interest rates aggressively. Right now they’re saying no, you never know based on what the economy does. So I think having some element of being locked into interest rates makes sense.

Wes Moss [00:25:32]:
Well, I think that’s a really good point because I’ve gotten this question too. Why not just leave cash? If cash is paying four or four and a quarter and bonds are only paying four and a quarter, four and a half, then why not just do cash and why worry about locking in rates? And the answer is because you want to lock in rates. Over the course of economic history, 98% of the time, bonds do beat cash. If you stack up returns, who wins over time? With all these different asset classes, cash doesn’t win. Fixed income beats cash over time. Equities of course, beats cash over time. So the answer is that even though money market rates are attractive, they can quickly go down. They could, the Fed could lower rates.

Wes Moss [00:26:15]:
They’re very unpredictable. And money market rates would go down immediately, almost immediately. So bonds at least allow us to lock in a little longer duration for that income level that we’re finding today. It is Super Bowl Sunday. My kids are so excited about today. And which team should you be excited about? Producer Mallory is 100% Chiefs fan. Just because Taylor Swift’s in the audience, we knew she’s a giant Taylor Swift fan. Connor, you Asked her why would you rather rather go to a Swifty concert or the Super Bowl?

Connor Miller [00:26:52]:
Shockingly, she said the Swift concert.

Wes Moss [00:26:57]:
But if we take a look at the history of super bowl winning teams and then the S&P 500 average return, who’s the worst here? Connor? It looks like the Miami Dolphins. Probably because this was in what, the 70s with the Miami Dolphins that won two Super Bowls and they average average s and P500 total return. When the Dolphins win Super Bowl -23 and a half percent. Is that when that was?

Connor Miller [00:27:26]:
Yeah, I think the had to be the 70s. That was when they had the. They went undefeated.

Wes Moss [00:27:33]:
In Contrast, the number one ranked team as far as the S&P 502 Super Bowls, the Tampa Bay Buccaneers number one on average S&P 500 rate of return 26% after the Tampa Bay Buccaneers won the Super Bowl. So where do we stand for Eagles slash Chiefs? So many Chiefs.

Connor Miller [00:27:57]:
Well, the first thing I noticed here, there’s 22 teams. There’s no Falcons. I don’t see the Falcons on here. That was the first thing I noticed going through this list. So sad. We’ll get there one day.

Wes Moss [00:28:09]:
The Chief are Super bowl winners. Winners not appearances.

Connor Miller [00:28:13]:
The Chiefs versus the Eagles. Here’s why you should be a Chiefs fan today. The Chiefs have won four Super Bowls. Average S&P 500 return one year later, 15.9% for the Eagles, who.

Wes Moss [00:28:30]:
And that’s a pretty good sample set.

Connor Miller [00:28:32]:
Pretty good. One of the most, the Eagles, who granted have only won one Super bowl, but the market was down 6.2%. And so if you’re following this, you want to be a big Taylor Swift and Kansas City Chiefs fan.

Wes Moss [00:28:47]:
So the more Super Bowls a team has, the closer you’re getting to the S&P 500 average because you have more data sets in this, which makes Sense. So the 49ers have five Super bowl wins. They’ve averaged 19.2. That’s a little. That’s better than normal. Steelers. This is interesting. They have six Super Bowls average s and P521%.

Wes Moss [00:29:10]:
They’re number two on the list. But really I would, I would think that. Let’s talk about the patriots. They have six different Super Bowls that six years. Interestingly low 6%. It’s an interesting look for that many years to average only 6%. But again, that was a very 2000, 10 or 20 team.

Connor Miller [00:29:33]:
The decade of the 2001, I think was when they won their first one. So right in the middle of the tech bubble.

Wes Moss [00:29:37]:
Couple rough years takes the averages down. So either way, just because I’m still rooting for the Eagles, Even though the one Super bowl win the next year was minus 6.2%, still root for the Eagles with that Connor Miller, thank you for being here in studio on this Super Bowl Sunday. Enjoy the rest of your day.

Speaker C [00:30:07]:
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