FFR 294 – Gen-Z & Their Finances

This week’s Financial Flash #294, we tried something different and handed the reins over to our Summer Intern, Amaan. He grabbed a friend of his from Purdue to discuss Gen-Z and their attitudes around finances.

Surprisingly, we got a glimpse into the 1% of their generation with a firm grasp on what it takes to set yourself up with responsible financial habits and a firm understanding of how to manage credit, debt, savings and spending responsibly, setting the stage for a solid financial future.

The benefits are clear, when teens are taught about finances in school, they are less likely to get in financial trouble and less likely to default on a loan as an adult.

Currently, 80% of Gen-Z doesn’t understand how a credit score works. And 7 out of 10 believe saving for retirement is something they can put off until later. Pass this along to someone you care about and who could use a little reminder to up their Financial IQ.

Thanks. Have a great weekend.

FFR 294 – Looking Beyond The Headlines.

Hi, everyone. This is Paul from Stiles Financial, with this week’s Financial Flash. Last week offers a good example of something we talk about at Stiles Financial. Markets don’t really react to what’s happening today. They react to what investors believe will happen tomorrow and in the future. At the beginning of this year, Wall Street had a clear expectation: the Federal Reserve would cut interest rates multiple times in 2026. That belief shaped investors’ views on valuations, bond yields and portfolio positioning. But here’s what we’ve learned in over 20 years of managing money: those expectations can change, fast. Last week, a stronger than expected jobs report, recent sticky inflation readings, and ongoing concerns about the Iran conflict’s impact on energy prices have shifted the conversation. CME Fed Funds Futures now show a growing probability that the Fed may not cut rates at all this year, or could even hike again. This is exactly why we don’t manage portfolios based only on forecasts. When we analyze a market shift like this, we ask ourselves different questions. We don’t ask, “Will the Fed cut rates or not?” We ask, “What does this tell us about which investments are positioned to perform well if rates stay higher? Which ones are exposed if inflation sticks around?” See the difference? One is about being right. The other is about being prepared. When rates were expected to fall, growth stocks and bonds both looked attractive. Higher rate expectations flip that equation. Growth companies, especially speculative ones, face pressure because future earnings become worth less in today’s dollars. Bond prices decline. Suddenly, the math changes. This is why our process focuses on owning high-quality companies, businesses with strong balance sheets, consistent cash flow, pricing power and durable earnings. These companies tend to perform across multiple interest rate scenarios. That’s not exciting, but it’s disciplined. The Iran conflict is instructive for our approach. Most investors see higher oil prices and worry about today’s inflation. We’re asking, “Could sustained energy costs force the Fed to stay restrictive longer than expected? If so, how does that affect our assumptions about bond yields, equity valuations, and the types of companies we want to own?” That thinking cascades through every asset class we manage. Higher rates favor companies with real pricing power and durable cash flows. They create short-term pressures on bond prices, but they also create more attractive income opportunities for long-term investors, if you’re willing to accept short-term volatility. The broader point: we remain disciplined when narratives shift. Six months ago, everyone debated how many rate cuts. Today, they debate whether rates move higher. Six months from now, the conversation will change again. Rather than repositioning every time sentiment shifts, we stay focused on this question: Does this investment make sense across a range of economic outcomes? If it does, we hold it. If it doesn’t, we might not own as much of it relative to our benchmark, or maybe we don’t even own it in the first place. That’s the difference between reacting to headlines and managing money for the long term. As always, we appreciate your trust and will continue monitoring these developments closely. Thanks for listening, and we’ll talk to you next week.

Disclaimer:
Stiles Financial Services is an SEC registered investment adviser based in Minnesota. Information presented is for educational purposes only and does not constitute an offer or solicitation to buy or sell any securities or investment strategies. Investments involve risk and are not guaranteed. Past performance is not indicative of future results.