Etzler Financial Advisors - Fee-Only Financial Planning

U.S. Dollar Rebound

Mon, 05 Oct 2026 13:32:10 -0700

As interest rates have risen to multi-decade highs, one of the implications that has received less attention is the strengthening U.S. dollar. The dollar affects all aspects of financial markets, the economy, and everyday life. Its value impacts the cost of imported goods, foreign travel, the revenues of U.S. businesses that operate around the world, and portfolios with international assets. In addition, the dollar is affected by the outlook on U.S. economic growth, interest rates, and concerns around the national debt.

In other words, many factors impacting global financial markets are reflected in the dollar. This is relevant for long-term investors because the dollar has recently recovered to its highest level since last year’s “Liberation Day” tariff announcements. This rebound has been broad, with the euro, British pound, and Japanese yen all weakening as the dollar has strengthened. Higher Treasury yields are one of the most important reasons for this, with long-term interest rates such as the 10-year and 30-year Treasury yields at over 20-year highs. These trends also reflect the Fed’s shift to hiking policy rates again, which naturally raises shorter-term yields.

While a stronger dollar is beneficial in some ways, its overall effects can be more complex. For consumers, a stronger dollar does make it more affordable to import goods and travel internationally. However, it can also make U.S. exports less competitive for businesses. Additionally, a rising dollar can act as a headwind to the returns of international investments, just as a falling dollar can support them.

So, what is driving the dollar's recent strength, and what does it mean for investors?

The dollar has strengthened against major currencies

The dollar, as measured by the U.S. Dollar Index (DXY), which is based on a basket of six major foreign currencies, is now near 102 after hovering at or below 100 for the past year and a half. The chart...Read More

What 7% Mortgages Mean for Housing and the Economy

Mon, 28 Sep 2026 20:05:28 -0700

The housing market is important both on a personal level as well as for the broader economy and financial system. For many households, owning a home is an accomplishment that requires years of planning and saving, representing their largest asset, most significant monthly expense, and main source of debt. The housing market is also a large part of the overall economy, accounting for between 15% and 18% of the country’s economic activity. When combined with the overall wealth effect of the housing market, these factors can impact consumer sentiment, household balance sheets, and the pace of overall economic growth.

One factor that directly impacts the housing market is interest rates. When rates rise, mortgage costs for new applicants rise as well, affecting everything from loan qualification to the volume of home sales. The average 30-year fixed mortgage rate is now back above 7% after falling toward 6% at the start of the year. While mortgage rates have been volatile in recent years, they have not been sustainably at these levels in nearly 25 years. What could these housing market pressures mean for households and the broader economy?

Mortgage rates are back above 7%

Mortgage rates had been declining alongside long-term Treasury yields from the early 1980s to 2020, when they bottomed out during the pandemic. From 1990 to the 2008 financial crisis, the long-run average for 30-year fixed rates was 6%. In contrast, the average since then has been only 4.6%. For much of the past decade, and particularly during the pandemic years when rates fell to 3% or below, many buyers and homeowners became accustomed to financing costs that were well below these historical norms.

So, the return to 7% can raise questions on the economics of homeownership. One of the biggest consequences is what economists refer to as the "lock-in" effect. Homeowners who secured low fixed rates in prior years face a disincentive to sell their homes,...Read More

The Myth That Families Will "Work It Out"

Sun, 27 Sep 2026 07:48:25 -0700

Few assumptions create more family conflict than this one:

"My kids will work it out."

It sounds hopeful. It sounds reasonable.

And sometimes it's true.

But after decades of helping families navigate estate planning, I've learned it's also one of the most dangerous assumptions parents can make. Don't misunderstand me. Most parents raised good kids. They love each other. They have good intentions. They genuinely believe that when the time comes, everyone will come together, do the right thing, and honor their wishes.

Sometimes that's exactly what happens.

But here's what I've learned after decades of working with families:

Good people can still disagree.

Reasonable people can see the same situation completely differently.

And grief has a way of amplifying emotions that have been quietly sitting beneath the surface for years.

I've watched siblings argue over who Mom "really meant" to put in charge.

I've watched families disagree over whether to sell a family home, keep it, rent it, or give one child the opportunity to buy it.

I've seen arguments over sentimental items that had almost no financial value.

I've watched adult children question each other's motives, even when everyone believed they were acting in their parent's best interest.

The conflict usually isn't about the money.

The money simply becomes the stage where decades of family history play out.

That's why I encourage families to stop thinking of estate planning as a collection of legal documents.

It's really a communication process.

The trust matters.

Beyond the Headlines: Fed Rate Hikes and Long-Term Portfolios

Mon, 21 Sep 2026 21:44:44 -0700

Janet Yellen, the former Federal Reserve Chair, often said that "monetary policy is not a panacea." Just as there is no cure for the common cold, except to let it run its course and address the symptoms, the Fed’s tools often cannot fix the underlying issues in the economy. In theory, monetary policy is meant to help ease these challenges, especially when it comes to the job market and inflation. In practice, however, the Fed does not control the economy directly, but instead responds to the economic environment.

Today, the primary challenge is stubborn inflation. For the most part, this is due to higher oil prices as the war in Iran continues, prolonging the closure of the Strait of Hormuz and other issues in the region. Clearly, the Fed cannot control these geopolitical issues with interest rate policy. However, they can try to ensure that inflation does not spread beyond energy prices into other categories that affect consumers and businesses. How does seeing the Fed through this lens affect long-term investors and their portfolios?

The Fed's latest rate hike was anticipated by investors

At its September meeting, the Fed decided to raise policy rates by one-quarter of a percent, to a range of 3.75% to 4.00%. This was the first hike in three years and followed a period of rate cuts from September 2024 to December 2025. This decision was widely anticipated by investors, so while there were some market swings immediately after the announcement, the market took the move in stride overall.

What makes this hike different? The Fed is mostly reacting to higher energy prices, particularly with oil still around $100 per barrel. Economists often refer to this as “cost-push inflation,” which simply means that supply disruptions have led to higher prices. This is in contrast to “demand-pull inflation” which occurs when an overheating economy drives excessive consumer demand, which then pushes prices higher.

In 2022, for...Read More

Grandparent-Owned 529 Savings Plans: The Benefits of Recent Changes

Sun, 20 Sep 2026 10:25:21 -0700

Nelson Mandela famously said that “education is the most powerful weapon which you can use to change the world.” For many families, investing in a child’s education is a central financial planning goal, but the cost of doing so has grown rapidly. For this reason, grandparents often like the idea of helping fund a portion of their grandchildren’s education, especially because it creates a legacy that lasts longer than traditional gifts.

Historically, grandparents have had to navigate specific rules when gifting to grandchildren to prevent unintended financial consequences, including tax and financial aid considerations. However, recent changes to federal financial aid now exclude grandparent-owned 529 accounts from the student assets section of the aid calculation. This removes a drawback of these accounts that was a problem historically. This change makes them worth another look as part of a family’s broader financial plan for education funding.

The rising cost of a college education

Attending college is a reason to celebrate but also represents a major source of financial stress for many families. The cost of obtaining a college education can be significant and has easily outpaced inflation over the past 40 years. The accompanying chart shows the average level of tuition and fees after adjusting for inflation, according to the National Center for Education Statistics, since 1963. It’s easy to see that these costs have grown rapidly, especially for private 4-year institutions.

Tuition and fees alone represent only one part of these expenses, with families also responsible for housing, food, books, transportation and other education-related expenses which now average over $17,000 a year according to the College Board. These figures underscore what most families already know: the importance of planning and saving early.

To manage these costs, it’s common for families to combine different sources of funds, including...Read More

The Stock Market: Style, Size, & Regions

Mon, 14 Sep 2026 11:38:02 -0700

Investors often use major indices like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average as a way to understand how financial markets are performing. While this is a helpful place to start, the reality is that the stock market is made up of many thousands of companies, each affected by economic and market trends in unique ways. To understand these trends, stocks are often grouped into sectors, geography, and by other characteristics such as the size of the company or the style of investment. Each of these groups can play an important role in long-term portfolios.

While headlines about the S&P 500 reaching new highs or the Nasdaq being driven by artificial intelligence can make it seem as though all stocks are moving together, there is often much more happening beneath the surface. This is especially relevant today because many of the drivers, including AI, oil prices, interest rates, and tariffs, affect all parts of the market, not just large cap stocks. Understanding these drivers can help investors stay balanced and position their portfolios for long-term goals.

Today, areas of the market including small caps, value stocks, and international companies have outperformed over the past year, and their valuations have generally been more attractive. Understanding how sizes and styles have performed can help investors maintain balance. What is happening beneath the surface of the broad market indices, and what does it mean for investors?

Different sizes and styles are affected by market conditions in unique ways

While the overall market has experienced double-digit returns this year, at least two important trends have been taking place beneath the surface. First, value stocks have outperformed over the past year, a reversal of the trend since 2022 when growth stocks generated strong returns due to technology and AI investments.

The distinction between value and growth is an important one for investors,...Read More

September 11: When Plans Change

Fri, 11 Sep 2026 14:44:56 -0700

There are certain moments in life when we remember exactly where we were.

September 11, 2001, is one of those moments for me.

My wife and I had just finished about a 10-day vacation in New Orleans with two good friends. It had been a great trip. We had enjoyed the city and our time together, and that morning we were at the airport preparing to fly home to California.

We were literally standing near the jetway, getting ready to board our flight, when everything changed.

There was a television monitor near the gate. I remember seeing the first plane strike one of the World Trade Center towers - almost certainly a replay by the time we saw it - and then, within what seemed like a very short period of time, watching the second plane hit the other tower.

I also remember everyone around us just stopping. People throughout the gate area were glued to that television. We were frozen, trying to comprehend what we were watching. There was this collective sense of, “Oh my God. Is this really happening?”

At first, it didn't seem real. It looked like something from a movie. But after seeing that second plane, there was no mistaking that something horrific was happening.

What we didn't know was almost everything else.

Who had done this? Why? How could something like this happen? Were there more attacks coming? What else was happening that we didn't yet know about?

Today, we know the chronology of September 11. We know what happened in New York, at the Pentagon and aboard Flight 93. We know the terrible human cost. But standing in that airport that morning, we didn't know how the story ended.

We were watching it happen.

Within minutes, everything at the airport changed. Boarding stopped. Our flight was canceled. Eventually, air travel across the country came to a halt.

Our immediate thought was getting home.

We had young children in California and had already been away for more than a week. We...Read More

What's Driving Portfolios: The Impact of High Oil and Copper Prices

Tue, 08 Sep 2026 11:29:43 -0700

The 19th century geologist Charles Lyell popularized the concept of “uniformitarianism,” a long word that reflects the simple idea that the natural forces shaping the earth today are the same ones that have consistently affected it across history. A similar principle applies to commodities we extract from the ground like oil and copper. While there are events like wars, tariffs, and AI impacting commodity prices at the moment, ultimately it’s supply and demand that always drives these markets in the long run.

As an asset class, commodities have not only outperformed this year, but have also supported other areas of the market such as U.S. stocks. Commodities are closely followed due to their sensitivity to economic conditions as well. Oil prices have swung from month to month, copper has climbed to new record highs, and precious metals surged to all-time highs at the start of the year before pulling back. Short-term price swings in the commodity market are not unusual, and the forces behind them, including geopolitics, tariffs, and changing economic trends, are difficult to predict.

The important question for investors is not where oil or copper will trade next week, but what supply and demand tell us about the broader economy, long run trends, and how they interact with a well-constructed portfolio. Commodities can serve as indicators of global conditions, and their volatility is a natural part of how they function. How can investors maintain perspective when commodity markets are moving sharply?

Oil prices remain tied to geopolitical uncertainty

Oil markets have fluctuated dramatically this year, which shows both how sensitive they can be to global events, and also how difficult it can be to forecast commodity prices. Oil jumped to multi-year highs back in March when the war in Iran began. Since then, Brent crude has oscillated from as low as $72 per barrel at the start of July back toward $100 as of today, touching a...Read More

The Fed’s AI Dilemma: Long-Term Perspectives

Mon, 31 Aug 2026 21:05:11 -0700

The Nobel Prize-winning economist Paul Romer once wrote that "economic growth springs from better recipes, not just from more cooking." This key idea in economics is that raising our standard of living is not just about adding more workers or more equipment, but about enabling each worker to produce not only more goods and services, but higher quality ones as well.

This is often measured with the concept of "productivity," which is the main ingredient to the type of economic growth that improves wages and quality of life. It’s also one of the most important questions today as the adoption of artificial intelligence accelerates.

AI and Federal Reserve policy may seem unrelated on the surface, but they are connected. In the short run, this connection is through their effects on financial markets and interest rates, and in the long run through productivity and economic growth. In fact, Fed Chair Kevin Warsh recently addressed these topics at the Fed's annual symposium in Jackson Hole, Wyoming. Given how much AI has already impacted markets in recent years, and the continued uncertainty surrounding the Fed's policy direction, what should investors consider from a long-term perspective?

AI and long-run economic growth

To understand why productivity matters, it helps to review how economists think about growth. Standard economic models are built around workers and “capital,” a term that includes equipment, machines, and tools. But just as important are education and technology, since they allow workers to produce more with the same amount of capital.

For example, a restaurant can create more meals if it has more cooks, better equipment, or better trained cooks that can make the best use of their tools and ingredients. A doctor that is more knowledgeable with access to more advanced facilities can produce better outcomes for patients. While economic models naturally oversimplify the world, the core idea is that...Read More

Tariff Refunds and the National Debt

Mon, 24 Aug 2026 18:06:07 -0700

Since new tariffs were announced last year, global trade has been a source of uncertainty for financial markets and the economy. In February, the Supreme Court ruled that the original “Liberation Day” tariffs were illegal, resulting in a wave of refunds to businesses that are now well underway. New tariffs have been implemented since then under different laws, including recently with close trading partners such as Canada.

At the same time, tariff refunds have pushed the federal budget deficit higher, with the national debt exceeding $40 trillion for the first time and raising questions about the government's long-term cost of borrowing.

While some investors have legitimate concerns around these developments, the impact on portfolios has been muted. In fact, markets have performed well over this period with broad market indices reaching new all-time highs. This shows how important it is for investors to keep these developments in perspective, since markets have performed well across many different trade and fiscal environments across history. What do investors need to know about the latest events?

Tariff refunds are making their way back to businesses

When the Supreme Court ruled in February that billions in tariffs collected under the International Emergency Economic Powers Act (IEEPA) had been unlawfully imposed, markets generally reacted positively. This is because tariffs are typically viewed by markets as an added cost to consumers, so the reversal was expected to support the overall economy.

Since then, companies that had paid those tariffs became eligible for refunds, which are in the process of being paid out. According to U.S. Customs and Border Protection, $129 billion in refund claims had been accepted for processing, representing a significant share of the total amount owed. Treasury data shows that tariff refunds have exceeded new tariff collections since May, resulting in net outflows from the...Read More