Hello, YieldAlley readers! In this issue:
Here's What the Creator of The 4% Rule Now Recommends
Nasdaq Posts Best Week Since November as Middle East Tensions Ease and Mixed Jobs Data Roll In
Capital One Cardholders: Earn Up to 14,600 Miles on One DoorDash Order
America Has Kickstarted a New Space Race
And more!
NEWS
Standout Stories
📉 Tech Stocks Sank in Q1—but the Biggest Opportunities May Be Ahead (Morningstar)
🏦 Vanguard delivers landmark cost savings (Vanguard)
🏃♂️ Retail traders are “skipping the dips” to dash for cash and bet against tech stocks (Sherwood)
🍎 Apple ‘blew a 5-year lead’ on AI, but former insiders say it can still win (CNBC)
🏫 The Financial Planning Expert Who’s Boycotting 529s for His Kids (WSJ)
MARKET THOUGHTS
Nasdaq Posts Best Week Since November as Middle East Tensions Ease and Mixed Jobs Data Roll In
ECONOMY
Labor market data came in mixed for the week. Private employers added 62,000 jobs in March according to ADP, down slightly from February's revised 66,000 but above estimates of 40,000. Weekly jobless claims fell 9,000 to 202,000, beating expectations of 212,000, though continuing claims rose 25,000 to 1.841 million. Job openings declined to 6.9 million in February from 7.2 million in January, with hiring sliding to its lowest level since 2020. On a brighter note, the Conference Board's Consumer Confidence Index edged up 0.8 points to 91.8 in March, its second consecutive monthly gain, as improving views of current conditions offset a more cautious outlook. U.S. manufacturing expanded for the third straight month, with the ISM Manufacturing PMI rising 0.3 points to 52.7, supported by new orders and production growth, though employment contracted for the 30th consecutive month and price pressures hit their highest level since June 2022.
STOCKS
Major U.S. indexes finished the volatile, holiday-shortened week (markets were closed Friday for Good Friday) solidly higher, driven by tentative signs of de-escalating conflict in the Middle East. The Nasdaq Composite led the way, posting its best weekly performance since November, while the S&P 500 gained 3.36% to close at 6,582.69 and the Dow Jones Industrial Average rose 2.96% to 46,504.67. The S&P MidCap 400 added 2.94% to 3,408.16 and the Russell 2000 climbed 3.28% to 2,530.05. Equities rallied sharply Tuesday and Wednesday on signals that the U.S. may wind down military involvement in the region, though gains were tempered Thursday after a presidential address provided no clear de-escalation timeline. Year-to-date, the major large-cap indexes remain in negative territory, with the Nasdaq down 5.86% and the S&P 500 down 3.84%, while mid- and small-cap indexes are modestly positive.
FIXED INCOME
U.S. Treasuries advanced during the week as yields moved lower across the curve. The benchmark 10-year Treasury yield declined from 4.44% to approximately 4.31% by Thursday afternoon, with bond prices benefiting from both the geopolitical backdrop and comments from Federal Reserve Chair Jerome Powell that helped ease recent inflation concerns. The combination of falling yields and a risk-on equity environment reflected a market balancing between safe-haven demand and improving sentiment. Credit markets tracked the broader risk appetite, with investment-grade and high yield spreads generally tightening alongside the equity rally.
INCOME BUILDING TIP
Here's What the Creator of The 4% Rule Now Recommends
If you've been using 4% as your retirement spending benchmark, there's good news: the creator of that rule says you can likely spend more. The original 4% was built on a simple portfolio of large-cap U.S. stocks and bonds. When small-cap stocks were added, the safe withdrawal rate jumped by half a percentage point -- to 4.5% -- on its own. Adding micro-cap, mid-cap, and international stocks pushed it further to 4.7%. On a $1 million portfolio, that extra 0.7% is $7,000 more per year you can spend sustainably. Over a 30-year retirement, that adds up fast.
Why do small and micro-cap stocks move the needle so much? It comes down to a century of return data. Small and micro-cap stocks have outperformed large caps over the long run, and that higher return drags the overall portfolio's sustainable spending rate upward. The reason this wasn't the standard recommendation before is simple: getting exposure to these asset classes used to be expensive. Three decades ago, fund costs were high enough to eat away the very premium you were trying to capture. Today, low-cost index funds and ETFs have made broadly diversified portfolios essentially free to own -- Vanguard, Fidelity, and Schwab all offer small-cap and international index funds with near-zero expense ratios. That's what makes the 4.7% figure realistic now in a way it wasn't before.
One important nuance: more diversification isn't infinitely better. At some point, adding more volatile asset classes actually starts to reduce the safe withdrawal rate. Higher volatility means larger portfolio swings, and when you're taking money out (not adding it), those swings can permanently impair your portfolio if they hit at the wrong time. The sweet spot in the research is a well-diversified mix across multiple equity asset classes -- not a portfolio tilted so heavily toward volatile segments that the volatility effect cancels out the return benefit.
The bigger insight from the updated research isn't the number itself, though. Most retirees fear a devastating stock market crash, but historically the worst retirement outcomes weren't caused by bear markets -- even the Great Depression, which wiped out nearly 90% of stock values, didn't produce the hardest scenarios. The real culprit is sustained high inflation. When inflation runs hot for years, it erodes purchasing power faster than portfolios can recover, especially when you're giving yourself a cost-of-living raise on your withdrawals every year. For anyone approaching or in retirement, that's the variable worth watching most closely right now.
INCOME BUILDING
Cash Rates
Government Money Market Funds (7-Day Yields)
SNVXX (Schwab Government Money Fund - Investor Shares): 3.38%
SPAXX (Fidelity Government Money Market Fund): 3.29%
TTTXX (BlackRock Liquidity Funds: Treasury Trust - Institutional Class): 3.53%
VMFXX (Federal Money Market Fund): 3.58%
Brokered CD Rates (6-Month Rate)
Charles Schwab: 3.89%
E*Trade: —
Fidelity: 3.85%
Merrill Edge and Merrill Lynch: —
Vanguard: 3.85%
ETFs (30-Day Yields)
SGOV (iShares 0-3 Month Treasury Bond ETF): 3.55%
BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): 3.50%
USFR (WisdomTree Floating Rate Treasury Fund): 3.60%
TFLO (iShares Treasury Floating Rate Bond ETF): 3.60%
DEALS AND BONUSES
Capital One Cardholders: Earn Up to 14,600 Miles on One DoorDash Order
Capital One is quietly rolling out a targeted offer that hands you 13,700 to 14,600 miles for a single DoorDash restaurant order. No minimum spend required, which makes this one of the easiest bonus triggers we've seen. The catch: you have to scroll through your Capital One Offers page to find it.
Offer Details
Main promotion: 13,700 miles (some cardholders see 14,600 miles) for one DoorDash restaurant order
Promo code: None (activate via Capital One Offers page)
Valid dates: Targeted/rolling (check your offers page now)
Bonus tiers: 13,700 miles or 14,600 miles depending on cardholder
Eligibility: Targeted Capital One cardholders only; must activate offer before ordering
Funding/deposit requirements: Place one restaurant order via DoorDash after activating the offer
Key restrictions: Do not use third-party promo codes (may invalidate offer); payout issued within ~45 days; account must remain open and in good standing
Our Thoughts
At 1 cent per Capital One mile, this is roughly $137-$146 in value for literally any food order. There's no minimum, so a $3 side dish qualifies. If the offer doesn't trigger on your existing DoorDash account (the terms say "first restaurant order"), try a separate account where you haven't ordered before. Worth grabbing immediately since the offer may disappear if you navigate away.
Picture of the Week
