Part 1: Economics, Tariffs, and Global Events Ben Fuchs: Welcome to How to Retire with Fuchs Financial. It seems like every day we’re bombarded with headlines about tariffs, taxes, inflation, and conflicts around the world—from Ukraine and Russia to Israel and Iran. These stories affect markets, create uncertainty, and often leave people wondering how they should respond. To help us make sense of it all, we’re joined by Kenneth Goroshko, Executive-in-Residence at the University of Hartford’s Barney School of Business. Ken teaches economics, finance, and risk management and spent more than 35 years in corporate risk management and insurance before entering academia. Ken, thank you for being here. Kenneth Goroshko: Ben, it’s a pleasure. A Career Built on Business and Education Ben Fuchs: Before we get into the economy, tell us a little about your background. How did you end up becoming a professor at the University of Hartford? Kenneth Goroshko: I attended Northwest Catholic High School in West Hartford and always had a strong connection to the University of Hartford. I loved the campus, the faculty, and the learning environment. It was a very personal educational experience. While working in the business world, I continued my education and earned several degrees. I began my career with Travelers Insurance in Hartford and spent decades working in corporate risk management and insurance. The knowledge I gained in business helped me in the classroom, and the education I received opened doors throughout my career. It was truly a win-win experience. Economics as Cause and Effect Ben Fuchs: The way I think about economics is that it’s really the study of cause and effect. It’s understanding that when one thing happens, something else follows. Am I thinking about that correctly? Kenneth Goroshko: Absolutely. Economics is fundamentally about behavior. People respond to incentives and disincentives, and those responses create outcomes. Some outcomes occur on a large scale—what we call macroeconomics—and others occur on a smaller scale, such as within a company or industry. Economics helps us understand those relationships and ask important questions: What is causing a particular outcome? Is the relationship positive or negative? What are the trade-offs? Another important concept is opportunity cost. Every decision involves giving something up in order to gain something else. Understanding those trade-offs is central to economics. Understanding Tariffs Ben Fuchs: One of the biggest topics over the past year has been tariffs. Can you explain exactly what a tariff is and why economists pay so much attention to them? Kenneth Goroshko: At its core, a tariff is a tax. Regardless of how it’s structured, someone has to pay for it. One of the basic principles of economics is that there is no free lunch. Taxes don’t simply disappear. The cost is eventually absorbed by either producers or consumers, and in many cases businesses pass those costs on to consumers through higher prices. Ben Fuchs: That’s one of the things that concerns me. Even if consumers don’t feel the effects immediately, those costs eventually work their way into the system. Businesses have to account for them somewhere. Kenneth Goroshko: Exactly. Tariffs increase costs, and those costs can contribute to inflation. They also create uncertainty, which can affect supply chains and business decisions. The Ripple Effect on Supply Chains Ben Fuchs: Let’s talk about that uncertainty. When tariffs or policy changes affect supply chains, what does that actually mean? Kenneth Goroshko: Businesses need confidence and predictability. When uncertainty increases, companies may delay decisions or struggle to determine where goods and materials will come from. That uncertainty can reduce supply, increase costs, and ultimately lead to higher prices for consumers. It also affects productivity and economic growth. Ben Fuchs: And that’s something we’ve seen repeatedly over the last several years. When businesses don’t know what’s coming next, they’re less likely to invest, expand, or make long-term decisions. Kenneth Goroshko: Exactly. Uncertainty can be toxic for economic growth and financial markets. Why Global Events Matter Ben Fuchs: Another topic that’s constantly in the headlines is the Strait of Hormuz. One day it’s open, the next day there’s concern about disruptions. Most people understand it’s important, but they may not understand why. How does something happening halfway around the world end up affecting prices here at home? Kenneth Goroshko: The biggest connection is energy. Energy affects almost everything we do. It impacts manufacturing, transportation, shipping, distribution, and daily life. When energy supplies are threatened or disrupted, energy prices rise. Those higher energy costs eventually work their way through the economy and show up in the prices consumers pay for goods and services. Ben Fuchs: It really seems like energy sits at the center of everything. Kenneth Goroshko: It does. Energy touches nearly every aspect of economic activity. How Long Does Recovery Take? Ben Fuchs: Let’s say tensions ease tomorrow and peace breaks out. How long would it take for things to normalize? Kenneth Goroshko: Most analysts believe there would still be a lag of several months before the effects fully worked through the system. The exact timeline depends on the details of any agreement and whether energy markets regain confidence that supplies will remain stable. Any disruption to energy supplies can quickly affect oil, natural gas, and transportation costs. Those costs then influence inflation expectations and, ultimately, interest rates. Ben Fuchs: And that’s where the conversation becomes very relevant for retirees and investors. Why Retirees Should Care Ben Fuchs: Some people may wonder why a retirement planner spends so much time discussing energy prices and global events. How do you connect those issues back to retirement planning? Kenneth Goroshko: The answer is disposable income. Gasoline and energy are necessities. People still need to drive, heat their homes, and pay utility bills regardless of price changes. As those costs rise, consumers have less money available for discretionary spending. For retirees living on fixed incomes, higher costs can have a significant impact on their budgets and long-term financial plans. Ben Fuchs: That’s why retirement planning can’t be a one-time event. Plans need to evolve as economic conditions change. The world looks very different today than it did a few years ago, and retirement strategies need to account for that reality. Part 2: Interest Rates, Bonds, and Managing Risk Ben Fuchs: Welcome back to How to Retire with Fuchs Financial. We’re joined by Kenneth Goroshko from the University of Hartford’s Barney School of Business. Before the break, we discussed tariffs, inflation, energy prices, and the broader economic forces affecting investors and retirees. One topic that always seems to dominate the headlines is interest rates. It feels like every day there’s a new story about whether rates should move higher or lower. From my perspective, it’s hard to lower interest rates when inflation remains elevated. Am I oversimplifying that? Kenneth Goroshko: Not at all. Interest rates are closely tied to the value of money. When inflation rises, purchasing power declines. In order to compensate for that loss of purchasing power, the cost of borrowing money typically increases as well. That’s why inflation and interest rates are often connected. If inflation expectations rise, interest rates generally need to remain higher to help preserve the value of the currency. Why Interest Rates Affect Everything Ben Fuchs: Most people think about interest rates in terms of mortgages, but the impact is much broader than that. Kenneth Goroshko: Absolutely. Interest rates influence mortgage rates, student loans, credit cards, business lending, and many other aspects of the economy. Another important factor is the independence of the Federal Reserve. The Federal Reserve’s job is to make decisions based on economic conditions, not political pressures. Maintaining that independence is critical for preserving confidence in the financial system. Ben Fuchs: That’s an important point because people often focus on what they want rates to do rather than what economic conditions justify. The Debate Over Bonds in Retirement Ben Fuchs: In the retirement planning world, one topic I often disagree with is the traditional advice that investors should automatically own more bonds as they get older. The old rule was simple: take 100 minus your age, and that’s how much you should hold in stocks. I’ve never believed retirement planning can be reduced to a formula like that—especially during periods of rising interest rates. From an economic perspective, how should people think about that relationship? Kenneth Goroshko: Every investor is different. Everyone has unique goals, risk tolerances, income needs, and time horizons. That’s why it’s important to work with a qualified advisor who understands your circumstances and can build a strategy around your specific objectives. The equity markets offer many different opportunities, including investments that can provide income while still offering growth potential. The key is understanding what you own and why you own it. Ben Fuchs: That’s really the heart of it. There isn’t a one-size-fits-all solution. Financial Education Matters Ben Fuchs: In addition to teaching economics, you also teach finance, portfolio management, and risk management. How do those disciplines connect? Kenneth Goroshko: They’re all connected. Economics helps us understand what’s happening in the world and why. Finance helps us evaluate the impact of those economic forces on investments and financial markets. Risk management focuses on identifying threats and finding ways to reduce or transfer those risks. Insurance is one example of that process, but risk exists everywhere—in investing, in business, and in everyday life. Our goal at the Barney School of Business is to prepare students to recognize those risks and make informed financial decisions throughout their lives. Understanding Risk Transfer Ben Fuchs: That’s an interesting point because insurance is essentially a transfer of risk. You’re paying someone else to assume a risk that you don’t want to bear yourself. But there’s always a cost associated with that transfer. In retirement planning, I often see people pushed toward insurance-based solutions without fully understanding the trade-offs involved. That’s not to say those products are bad, but they need to be used appropriately. Kenneth Goroshko: Exactly. Every financial decision involves trade-offs. Reducing one type of risk may create another. That’s why education and understanding are so important. People need to understand both the benefits and the costs of any strategy before making a decision. Ben Fuchs: I think many retirees share the same concern. They’ve worked hard to build their savings and don’t want to lose what they’ve accumulated. The challenge is finding the right balance between protecting assets and maintaining enough growth potential to support a retirement that could last decades. The Importance of Financial Literacy Kenneth Goroshko: One of the areas we’re especially passionate about is financial literacy. Many young people enter adulthood without a basic understanding of budgeting, investing, debt management, or long-term financial planning. That’s a significant challenge. If we can provide that education early—when students are eighteen, nineteen, or twenty years old—they’ll be much better positioned to make smart decisions throughout their lives. Education creates opportunities. It allows people to understand risks, evaluate choices, and take advantage of opportunities that they might otherwise miss. Ben Fuchs: I couldn’t agree more. Financial education is one of the most valuable investments anyone can make. Looking Beyond the Headlines Ben Fuchs: One thing that fascinates me is how often markets seem to ignore bad news. We see conflicts around the world, inflation concerns, political uncertainty, and countless other headlines. Yet the market often continues to move higher. Years ago, some experts argued that the market was dramatically overvalued. In many cases they eventually proved correct—but investors who exited too early missed years of gains before any correction occurred. How do you approach that as an economist? Kenneth Goroshko: The first thing I emphasize is that successful investing requires patience. Historically, wealth has often been created during periods when markets experienced significant declines. Those moments can create opportunities for disciplined investors. Second, diversification remains critical. Investors should understand what they own and avoid concentrating too much risk in any single area. Finally, it’s important to recognize that change is constant. Markets, economies, and industries evolve. Investors can’t control those changes, but they can control their discipline, preparation, and decision-making process. Ben Fuchs: That’s a great reminder. We can’t control headlines, but we can control how we respond to them. Part 3: Market Volatility, Diversification, and Long-Term Investing Ben Fuchs: One of the things that always stands out to me is how quickly investors can become distracted by headlines. Every day there’s a new crisis, a new prediction, or a new reason someone claims the market is about to collapse. At the same time, history shows us that markets have a remarkable ability to recover and move forward. How do you reconcile those two realities? Kenneth Goroshko: It starts with understanding that investing is a long-term endeavor. One of the biggest mistakes investors make is allowing short-term events to drive long-term decisions. If you look back at market history, some of the greatest opportunities were created during periods of fear and uncertainty. Investors who maintained discipline and stayed focused on their goals were often rewarded over time. Ben Fuchs: That’s something I try to remind clients of constantly. The market doesn’t move in a straight line. There will always be periods of volatility, but volatility alone isn’t necessarily a reason to abandon a sound strategy. Kenneth Goroshko: Exactly. The key is maintaining perspective. Economic conditions change, industries evolve, and markets fluctuate. Those changes are inevitable. What matters is having a plan that can adapt without requiring emotional decisions every time a headline appears. Time in the Market vs. Timing the Market Ben Fuchs: There’s an old investing principle that says it’s more important to spend time in the market than it is to time the market. Kenneth Goroshko: I believe that’s absolutely true. Investors often assume they can predict exactly when markets will rise or fall, but history suggests that’s incredibly difficult to do consistently. Missing just a handful of strong market days can dramatically reduce long-term returns. That’s why discipline and patience matter so much. Ben Fuchs: And often the best opportunities appear when people are the most uncomfortable. During major downturns, many investors want to move to cash, yet those periods have historically been some of the best opportunities to accumulate assets at lower prices. Kenneth Goroshko: That’s correct. Fear can create opportunity, but only for investors who are prepared and able to maintain a long-term perspective. Why Diversification Matters Ben Fuchs: Let’s talk about diversification because it’s a word people hear all the time but don’t always fully understand. Kenneth Goroshko: Diversification is one of the most important risk-management tools available to investors. No one knows with certainty which asset class, industry, or company will perform best in the future. By spreading investments across different areas, investors reduce the risk of any single position having an outsized negative impact on their portfolio. Diversification doesn’t eliminate risk, but it helps manage it. Ben Fuchs: And that’s especially important for retirees. When you’re no longer earning a paycheck, protecting against concentrated risk becomes even more critical. Kenneth Goroshko: Absolutely. Diversification helps create resilience within a portfolio, which can be particularly valuable during periods of economic uncertainty. Learning from the Past Without Living in It Ben Fuchs: One challenge I see is that investors often try to apply yesterday’s solutions to today’s environment. For example, there were periods in the 1970s and 1980s when bonds offered extraordinarily high yields. In those environments, heavy bond allocations made sense for many investors. But the world changes. Kenneth Goroshko: That’s a great observation. Successful investing requires understanding the current environment while also learning from history. What worked in one decade may not work in another. Economic conditions, interest rates, inflation levels, and market opportunities all evolve over time. Investors need to remain flexible and willing to adjust their thinking when conditions change. Ben Fuchs: That’s why retirement planning isn’t something you do once and forget about. It requires ongoing monitoring and periodic adjustments as circumstances evolve. Preparing for the Future Ben Fuchs: We’ve spent a lot of time discussing economics, markets, and risk. As we start bringing the conversation toward practical advice, what do you think investors should focus on most? Kenneth Goroshko: Education. The more you understand about economics, markets, and financial planning, the better positioned you’ll be to make informed decisions. Education helps investors avoid emotional reactions and maintain confidence during uncertain times. It’s also important to understand your own goals. Investing isn’t simply about maximizing returns. It’s about aligning your financial strategy with your objectives, risk tolerance, and time horizon. Ben Fuchs: That’s something we emphasize every day. A successful financial plan isn’t built around headlines or predictions. It’s built around the individual and their goals. Kenneth Goroshko: Exactly. Markets will always fluctuate. The economy will always change. But investors who stay educated, remain disciplined, and focus on long-term objectives give themselves the best opportunity for success. Looking Ahead Ben Fuchs: In our final segment, we’ll move from theory to practice. We’ll talk about what someone approaching retirement should actually be doing today, how to think about risk, and where investors may find opportunities in the current economic environment. Stay with us. Part 4: Practical Retirement Planning in an Uncertain Economy Ben Fuchs: Welcome back to How to Retire with Fuchs Financial. We’ve spent a lot of time talking about economic trends, interest rates, inflation, and market behavior. Let’s finish with something practical. If someone is five years away from retirement and asks an economics professor, “What should I be doing with my money right now?” where do you begin? Kenneth Goroshko: Before giving any recommendation, I’d need to ask a few questions. First, what’s your risk tolerance? Second, what does your income look like? Third, how much debt do you have? And finally, what are your goals and objectives? Those answers help determine the right strategy. Every investor’s situation is unique, and understanding those variables is critical before making any recommendations. Understanding Your Financial Position Ben Fuchs: That’s very similar to the way we approach retirement planning. I often simplify it into three questions: What do you have? What is it earning? And what are you spending? Everything else tends to build from that foundation. Kenneth Goroshko: Exactly. Those fundamentals matter. For some individuals, the focus may be preserving wealth and protecting assets. For others, especially those who are still building wealth, the focus may be on accumulation and growth. Debt also plays a significant role. Understanding outstanding obligations and how those obligations fit into an overall financial plan is essential. The Question Everyone Asks Ben Fuchs: Whenever someone finds out you teach finance and economics, they eventually ask the same question. “What stock should I buy?” Kenneth Goroshko: And it’s usually the wrong question. Instead of looking for a single stock, investors should focus on diversification and building a portfolio that reflects their goals and risk tolerance. There are certainly areas of opportunity. Artificial intelligence, for example, has created tremendous excitement and innovation. But with that opportunity comes volatility and uncertainty. At the same time, there are companies that provide products and services people use every day—businesses with strong brands, stable cash flows, and a history of returning value to shareholders. The answer isn’t choosing one over the other. It’s understanding how different investments work together within a diversified portfolio. Investing in Necessities Ben Fuchs: One thing I’ve always appreciated about long-term investors like Warren Buffett is their focus on businesses that people rely on regardless of economic conditions. Kenneth Goroshko: That’s an important distinction. I often encourage investors to think about the difference between necessities and discretionary purchases. Some companies provide products that consumers buy regardless of economic conditions. Those businesses often have strong pricing power and the ability to pass increased costs along to consumers. They may also offer consistent dividends and long-term stability, qualities many investors appreciate, particularly as they approach retirement. Ben Fuchs: And for retirees, income matters. Kenneth Goroshko: Absolutely. Dividend-paying companies can play an important role in generating income while still offering long-term growth potential. The Power of Compounding Ben Fuchs: We can’t talk about investing without mentioning compounding. Kenneth Goroshko: One of the greatest financial concepts ever discovered. Compounding allows investors to earn returns not only on their original investment but also on the growth that investment generates over time. The earlier someone starts investing and the longer they remain invested, the more powerful compounding becomes. Ben Fuchs: It’s one of the simplest concepts in finance, yet one of the most impactful. What If Interest Rates Fall? Ben Fuchs: Let’s look at a few scenarios. Suppose the Federal Reserve significantly cuts interest rates over the next eighteen months. Is that good for retirees? Kenneth Goroshko: The first question would be why rates are being cut. If inflation remains elevated and rates are reduced for reasons unrelated to economic fundamentals, that could create additional inflationary pressure. On the other hand, if inflation is under control, economic conditions are stable, and global tensions have eased, there may be a stronger case for lower rates. Context matters. Investors should focus on the reason behind policy decisions, not simply the decision itself. The Case Against Overloading on Bonds Ben Fuchs: One of my concerns today is that many investors continue to follow traditional allocation models without considering the current interest-rate environment. If someone believes rates will remain elevated—or potentially rise further—does it make sense to heavily overweight long-term bonds? Kenneth Goroshko: Investors should understand the relationship between inflation, interest rates, and bond prices. When inflation expectations rise, interest rates often rise as well. Higher rates generally place downward pressure on existing bond values. That doesn’t mean bonds are inappropriate, but it does mean investors should carefully consider how interest-rate risk fits into their overall strategy. Ben Fuchs: That’s exactly the point. Asset allocation should reflect current realities, not simply historical rules of thumb. Where Opportunities May Exist Ben Fuchs: If an investor believes interest rates will remain elevated for the foreseeable future, what types of businesses might be attractive? Kenneth Goroshko: I generally look for companies with strong competitive advantages and the ability to pass higher costs on to consumers. Businesses that provide essential products and services often have that capability. I also continue to see value in certain technology companies with strong balance sheets, established market positions, and significant long-term growth potential. Ultimately, however, the answer comes back to diversification. No one knows exactly how future events will unfold. Final Thoughts Kenneth Goroshko: If there’s one message I’d leave investors with, it’s this: education matters. The more you understand about economics, investing, and financial planning, the better equipped you’ll be to make sound decisions. Markets will change. Economic conditions will change. But knowledge and discipline can help you navigate those changes successfully. Ben Fuchs: Ken, thank you for joining us. This has been a fantastic conversation. Kenneth Goroshko: Thank you for having me. It was a pleasure. Ben Fuchs: And thank you for watching. If today’s discussion made you think about your own retirement plan, we’d be happy to help. At Fuchs Financial, we work with individuals and families every day to evaluate their plans, stress-test their assumptions, and prepare for whatever economic conditions may lie ahead. Until next time, plan smart and retire happy.
