I can’t remember a time when I’ve seen so many pictures of an ear in the news. The term play it by ear is not usually meant to be literally about an ear, but I have a feeling that the Trump campaign will be doing just that, playing it by ear, until the election in November after last weekend’s failed assassination attempt.
The horrific event that nearly killed the former president, but did end up killing two others (including the shooter), could end up being a boost to Trump’s poll numbers according to the NY Post. To be sure, we will continue to see Trump’s campaign play, and then replay, the video of Trump taking it in the ear.
The term play it by ear actually means to do something without a detailed formula, or to wait and see before making a decision. Some overly cautious people may recoil at the idea of playing it by ear because it sounds reckless or irresponsible to them. But it’s used quite a bit in all kinds of areas:
Buying a home – Playing it by ear can be advantageous to buyers as they wait for the right price, the right rate, or the right home to come along before making a decision.
Interest rates – Jerome Powell and the Federal Reserve are playing it by ear as they weigh the advantages and disadvantages of cutting rates. A cut in September is all but guaranteed according to the experts, but future cuts are not as certain.
Politics – Democrats are playing it by ear as they weigh Biden’s chances of beating Trump in November. Rep. Adam Schiff is apparently done playing it by ear as he’s now calling for Biden to be replaced.
Playing it by ear is also used in financial planning and investing:
Planning for Retirement – Playing it by ear means having adaptable expectations in or near retirement because of unpredictable circumstances. While we try to predict what our clients will have to live on in retirement (see example below), sometimes they have to play it by ear because they won’t know the exact dollar amount they’ll have to live on until ~90 days before retirement.
Investing in Stocks – Playing it by ear means waiting for stocks/funds to drop before buying into them and playing it by ear also means waiting to let the stocks/funds run up before trimming them. After playing it by ear the last few years we’ve trimmed and are trimming positions for the eventual pullback.
Taxes – Playing it by ear means being willing to adjust your taxable income in retirement from year to year because of future tax changes. For example, the individual income tax cuts from the Tax Cuts and Jobs Act (TCJA) of 2017 are set to expire after 2025.
While the stock market has been great in 2023 and 2024, we are well aware of the uncertainty that awaits us later this year with interest rates, an election, and geopolitical tensions.
While we wait to see what the uncertainty brings us, we know that uncertainty can bring opportunity. We’ve been trimming positions in client accounts in anticipation of the coming pullback and will look to reinvest at that time. I can’t predict the timing of the pullback, just that we will see another one in the future and we want to have some assets set aside for that day.
I guess you could say we’re playing it by ear.
Kaiser Permanente Retirement Seminars
It appears the Kaiser Permanente presentations are back on again! We’re preparing to team up again with KaiPerm Credit Union to begin offering retirement seminars in two KP locations on either side of Portland. More details will be coming shortly but the dates look to be about a month or two out.
We’re excited to crank up the 7 Deadly Sins of Retirement presentation again and to help KP employees make good decisions with their finances. Hope to see some of you there!
Thanks for reading,
Tim Porter, CFP®