FPI May 2026 Economic Update

https://youtu.be/e8ZbtbRkG8o

May 4, 2026

Greetings everyone. This is Bob Kramer giving you your May economic update with Financial Partners.

So, we're past May Day, May 1st on Friday, and the markets have acted pretty pretty good so far this year. Just wanted to let you know the S&P 500 right now is sitting at about 5.6% to the positive. The Dow around 3%. MSCI, which is a Morgan Stanley International Composite, is about 2 and 1/2% and then the ones that are really rocking right now are the emerging markets sits at a 17% gain for the year, and small caps, represented by the Russell 2000, sits at 13 and 1/2%.

So, really strong numbers so far this year for just not even halfway through the year. What I wanted talk to you a little bit about is what sort of volatility we've experienced this year. Now, the volatility measurement is the index is the VIX or VIX. You can look it up on your computer. And a normal low volatility range usually is in the 13 to 19 range. Right now we're seeing 26 to 31 for the high range, and it hit 36 this year. Right now we're sitting at about 18.

So, it's moderated a little bit, but it just seems like anytime we have any news out of the White House regarding the Hormuz Canal, the conflict with Iran and and Israel and the US really has set the market, you know, up and down at very wide swings. So, we're still optimistic about this year, but we do think that the the market is priced a little high right now. High being that the PE ratio, the price to earnings ratio sits at between 26 and 31. A normal range is between 15 and 18.

So, price to earnings ratio usually tells you if the market is priced kind of high or low or in the average range. And we're a little bit high right now. But what I wanted to say is since our our market is high and we've reached all-time highs in the S&P and and other indexes this year, I would suggest you reevaluate your bucket system. When I mean by bucket is you should have certain buckets for different time allocations of money.

So, the now bucket is anything that you'll need in the next 6 to 12 months. That could be an emergency fund. If you know that you'll have to replace your roof with all the hail that we've had in the Midwest this year. Or if you are going to have to replace a furnace or maybe your car is getting a little aged and you'd like to take advantage of some good credit rates right now interest rates on on new vehicles. So, I would say this. The now bucket, make sure you have adequate reserves for 6 to 12 months.

And then the soon bucket. This would be if you were planning a maybe a big vacation like at

one of our beautiful national parks or or maybe to a European trip that you and your wife have have dreamed of. Or if there's something that you've really been hankering for to take your your

kids on a nice little outing so you can rekindle family memories and and have a good gathering at sometime this this summer.

But what I would say is your 3 to 5-year soon bucket should be in fairly conservative investments. That would include protection of the principal by using maybe some very stable funds, investment grade bonds, having some downside protection with certain

exchange-traded funds that have some protection element to them, or short-term bonds.

Short-term bonds are paying normally a little bit better than CD rates, but I would say make sure that that short-term or your your soon bucket should also be allocated and make sure you cover those those big expenses in the intermediate term.

This is the month of May, my favorite month of the year. I hope that you had a

good good start to May. Make sure that you say hi to your moms by either in person or on the phone or in prayer, thanking them for all that they have sacrificed and given to your family.

Wishing you a great May and and happy Mother's Day to all those mothers out there. We wish you the best. Take care and look forward to seeing you soon. >> Woohoo!

1-641-684-0368 Intelligent Choices – Exceptional Service Learn more about the current economy and the impacts on the markets. Financial Partners, Inc. is an Iowa-based independent boutique financial advisory firm in business since 2000 and operated by Blake Smith, CFP®, AIF®, President and Bob Kramer, ChFC®, AIF®, RICP® Founder & Vice President. Discover how our unique process, The Intelligent Advantage, can make a positive, profound impact on your life. Sources: www.efficientadvisors.com, www.cantorassetmanagement.com, www.ftportfolios.com, www.dorseywright.nasdaq.com, www.advisorperspectives.com, www.morningstar.com, www.conference-board.org, https://howardcm.com/, https://waysandmeans.house.gov, www.wsj.com.