Maxine Cuffe 00:03 

You’re listening to Speaking of Quality: Wealth Management Insights with Hank Smith. A podcast by The Haverford Trust Company. On Speaking of Quality, Hank chats with authors, influencers and wealth management experts to bring a sense of clarity and calm to the complexity and stress of personal finance. And now – here’s your host, Hank Smith. 

Hank Smith 00:26 

Hello, and welcome to another episode of “Speaking of Quality: Wealth Management Insights.” I’m your host, Hank Smith, Director and Head of Investment Strategy at The Haverford Trust Company. 

On this podcast, we explore topics ranging from quality investing, retirement resilience, stock market trends, estate planning, small business ownership, behavioral psychology and more. Today marks the end of season five of Speaking of Quality. It’s been a great season with some unique guests and in-depth conversations that have stuck with me and I hope stuck with you as well. Season five was centered on a core theme of navigating change through the lens of how we can react to an evolving economy, how decisions made today will impact us in the future. I spoke with guests who have navigated change in their careers and in their industries, and have come out stronger on the other side. On our season finale today, I’m joined by Maxine Cuffe, our Vice President and Director of Global Strategies, to look back at this season’s guests and key learnings. If she sounds familiar, that’s because Maxine is also the voice you hear at the beginning and end of every episode. Welcome back, Maxine. 

Maxine Cuffe 01:40 

Thanks, Hank. Happy to be here. It was another really great season. Some interesting guests. So, the first episode was with Carly Meyer Bentley, the CEO and founder of Freckled Strawberry, which is dedicated to financial independence for women, and they champion financial literacy, something very close to our hearts here at Haverford. 

Hank Smith 02:01 

Yeah, and her background was interesting as well. A granddaughter of a career farmer in the Midwest, a daughter of a serial entrepreneur, and she moved from the midwest to the east. That was always her goal. Got into financial services and during COVID, created The Freckled Strawberry to empower women and help them navigate financial decisions, money management, et cetera. And it really resonated with us, given that’s exactly what we do with the Speaker Series for Women that was started 15 years ago, I think, maybe even longer. You’ve certainly been part of that, and it’s great because it’s put on by the women of Haverford and for women, and it’s really a wonderful environment for learning and sharing. 

Maxine Cuffe 03:01 

Yeah, I’ve loved attending our Speaker Series for Women over the years. It’s such amazing empowerment and networking opportunities, and I would really encourage any of our listeners, clients who have not attended, to come along and find out what it’s all about. It really did remind me very much of the story that Carly was talking about, the importance of financial literacy specifically for women and also for college kids. And I thought it was, I kind of chuckled when I heard her saying, kids heading off to college, and then they realized that their allowance doesn’t cover their Starbucks, and that certainly happened within the first two weeks of my daughter arriving at college, switched to cheaper coffee. But it is an issue that kids don’t grow up with that sort of knowledge of finances, and they don’t get it from high school. 

Hank Smith 03:50 

That was a theme that resonated in several of our podcasts during season five, the financial literacy, civics, these are just not subjects that are taught in junior high school, high school, and, in many cases, colleges and universities. And it puts our kids and young adults at a big disadvantage as they start their careers. I also was fascinated that she uses the book The Psychology of Money by Morgan Housel, which we think is really one of the best books for anyone interested in money management to read. And again, it has nothing to do with what I call the Xs and Os of money management, PE ratios, book value earnings or anything like that. But as the title implies, the psychology of money, because if it was just about aforementioned PEs and earnings, we would all be rich. But the markets have such a psychological component to them, as does individuals in terms of their investing, their spending. And she uses that book when she engages with her clients. And of course, we’ve had Morgan Housel speak to our clients on that book, and I think it should be required reading in high school and college. 

Maxine Cuffe 05:28 

Yeah, a great event a couple of years ago with Morgan Housel and a book, actually, I reread very recently because so many of those themes really resonate. So, moving on, we had Lauren Schwartz, the President and CEO of the World Affairs Council of Philadelphia. The Council is an international nonprofit. It’s dedicated to fostering global understanding and engagement by connecting Philadelphia to the world. Done in a very nonpartisan way, and Haverford is a longtime friend and sponsor of the World Affairs Council. Many of our colleagues here at Haverford have been connected to the Council through being on the board or through volunteer work. I actually volunteered in the Junior Model UN a couple of years ago. We talk about this theme of education and real-world education for young people. The Model UN has middle schoolers analyzing just these very, very serious, big-world problems like reducing poverty, improving access to clean water, and then you see them present their policy resolutions like a real UN Council. So a very unique and innovative way for students to learn about diplomacy and problem solving. 

Hank Smith 06:41 

Yeah, I always knew of the World Affairs Council as an organization that brought in just luminaries as speakers from government, business, Hollywood, the music industry – really titans, if you will. I didn’t realize there were so many other facets to it. And you mentioned one: They’re involved in civics at the high school level, and you just talked about the Model UN. They also conduct tours for their members to various parts of the world. And there’s also a business outreach as well that they’re involved in. And this is all open to the public. It’s just another example of a great organization in Philadelphia. We have so many of them that you can become involved in, but you can also learn from. 

Maxine Cuffe 07:42 

Yeah, Lauren does a fantastic job as the face of the Council. She’s got such a passion for the work that they do there, and she’s a great public speaker. I’ve seen her a number of times. There’s a really interesting program coming up in January, January 29th at Villanova that I think our clients might be interested in. It’s a conversation with Mark Zandi, who’s the chief economist at Moody’s. Of course, they’re Chester County-based, around here. Haverford has tickets to this event. So, if there’s clients who would like to attend, please reach out to your portfolio manager. Mark Zandi’s really been in the press a lot lately because he did that analysis showing that the top 10% of households are driving almost half of all consumer spending in the United States. So really indicative of this K-shaped economy that we have been talking so much about. 

Hank Smith 08:31 

And I believe that is going to be one of the items we talk about in our “Year-Ahead Outlook” that should be available in early January to our clients and friends, the so-called K-shaped economy. There’s no question that consumer spending is incredibly important to the economy. It makes up some 70, 75% of GDP consumer spending and services, and increasingly that’s being driven by the top, let’s call it, quartile of earners. It doesn’t mean the middle quartile and bottom quartile aren’t spending, but they’re not having the same impact because they’re not getting the same advantages of a rising stock market that the top tier and rising home prices as well. So that should be a fascinating talk. 

Maxine Cuffe 09:32 

Yeah, that’s a really important part of it. But we’re also going to walk through in the Outlook, some of the catalysts that could be coming in 2026 that could maybe shape some of this economy. Thinking about the “One Big Beautiful Bill” and some of the fiscal policies that are in there, we’re going to see really good tax refunds coming through in the first quarter of 2026. That should help. And also, lower interest rates, which we will see again with the Fed cutting a couple more times over the next year. Those should help some of these lower income groups that are struggling with the affordability crisis that we’re seeing. Next up was Joyce Abbott, the author and the retired Philadelphia school teacher. And of course, the namesake inspiration for the TV show Abbott Elementary. One of Joyce’s students, Quinta Brunson, is the creator of that show, and she named it after her. And we were really lucky to have her speak at our Speaker Series for Women recently. And I know that was really enjoyed by the attendees. So much to talk about Joyce Abbott. She was a delight. 

Hank Smith 10:37 

Yeah, she is, in my view, a giant in the field of education being a homeroom sixth grade teacher in West Philadelphia. And she was named “Teacher of the Year” several times. And basically, her methodology of teaching and classroom management, so key, particularly in an inner-city school, put her heads and heels above her fellow colleagues across the country. And her book, Teaching the Ms. Abbott Way, really is, it’s a fun read. It’s a powerful story, and it applies to anyone and any business. You really do want to read Teaching the Ms. Abbott Way. 

Maxine Cuffe 11:33 

So, one of the things that we had talked about after that episode is why aren’t there more Ms. Abbotts, and what needs to happen to get more people like that in the classroom? 

Hank Smith 11:44 

Yeah, Maxine, I went back and reread the transcript, and she spent 10 years in the Army. When you’re in the Army, you don’t have any choice. You have to show up, and you have to work together as a team, and you have to lead. And she brought those principles to the classroom. She never took a day off. There was no sick day. She rarely ever took a vacation in 26 years of teaching. She was always present. She created an environment of order and structure in the classroom. She abhorred the term, “you can’t do this.” She hated that term. It was always, “yes you can.” We’re going to work on it. And she never let a student behind and had the whole classroom work as a team to help everyone so that they could all succeed together. I’m going to reread the book. It was so good the first time. 

Maxine Cuffe 13:04 

Yeah, that idea of leadership and, in particular, training in this profession really resonated in the next podcast that we had with Pat Roberts and Nancy Blair, who are the co-founders of the AIM Academy and the AIM Institute for Learning and Research just based over here in Conshohocken. It’s a school for kids with learning differences and also has really expanded to do teacher training for teachers from across the country. 

Hank Smith 13:33 

Not just across the country, internationally as well. And COVID, actually, in some ways was very beneficial because they can reach so many more people through Zoom and do this training. They also attract students. It’s a 400-person school, 400-student school; it started out 20 years ago with maybe a dozen students in just a few grades. So, it’s really grown. But they’re attracting students from all over the country. That their parents are so committed to addressing their reading difficulties, namely dyslexia, that they move to the Philadelphia area so they can be at AIM Academy – what a testament to the job they’re doing. And again, the training. And at AIM, every teacher is at the top of their game and continuing to learn the techniques of teaching reading. It’s with the reading difficulties. So, it was is a wonderful story to share with our listeners. 

Maxine Cuffe 14:49 

And that’s actually a field where the research is changing all the time, and there’s new and innovative ways of teaching kids that are dyslexic. So, this was just a great story to hear how much progress is being made by educating teachers who will then go back to other schools that aren’t focused just on dyslexic students, have a wide body of students, and to have those skills to be able to identify what children are there and what they need that might be having dyslexic issues. So, the next podcast was Loretta Mester, who is the newest member of the Haverford Board of Directors, and we’re delighted to have her on board. She’s also the former President of the Cleveland Fed. And listening to her speak, it was so clear that she was really in the room when it happened in key moments over the last couple of decades. 

Hank Smith 15:45 

During the Great Financial Crisis and then the Global Pandemic, boy, talking about being in the hot seat. She was certainly, and it was wonderful. Some of the insider baseball that she shared, she shared with us. She’s also a CNBC contributor. And ironically, driving to work this morning, I listened to Loretta being interviewed, and many of the things she said about the current economy during our podcast, she reiterated to CNBC. So, she was very, very consistent. But it was fun to get a little bit of the backstory of being a Regional Fed President and serving on the FOMC Committee, which the Regional Fed Presidents alternate as voting members each year with only the head of the New York Fed having a permanent voting membership in the FOMC. So, it was really a wonderful podcast to get some insight into how the Fed works and also the current state of the economy. 

Maxine Cuffe 17:02 

And you talked a lot about inflation in that interview because of course, inflation has been such an issue over these last couple of years and went all the way up, hit almost 9%, and then it was that whole transitory issue. And today, inflation has come down, but not really as much as what people were hoping. We’re still stuck around that 3% sticky inflation. And you asked her, is there some magic number of 2%? Why does it have to be that level? And I thought she had some interesting insights there. 

Hank Smith 17:36 

Yeah, I don’t think there is a magic number, but you don’t want to get close to deflation for sure. That’s not good. And you don’t want to be much above 3%. So, 2% seems like a fairly reasonable, kind of baseline, goal. And with respect to the inflation, I said it really, the Fed, in my view, got way too much blame for staying, easing too long. There were some other key components to that spike of inflation, and a big one was the disruption of global supply chains that took several years to get back to normalcy. And also, the fiscal spending blowout that three tranches, the first one in April of 2020, about a trillion dollars, another 800 billion at the end of 2020. And then when the Biden administration came in the one final blowout in the spring of ‘21 of 1.3 trillion, and the economy was already ripping. It was already really moving, and we didn’t need that, and that put a lot of fuel on the fire. But Loretta was very upfront and said, yeah, but the Fed made some mistakes. And she also talked about how she voted against one of those Fed decisions because she thought they should have been tightening much sooner, and perhaps they wouldn’t have had to tighten as much, but that’s water over the dam. 

Maxine Cuffe 19:32 

Yeah, it was interesting to hear her say that they had to be so aggressive because they were late. They didn’t appreciate really how strong that last wave of fiscal stimulus was going to be. And then today, we have the tariffs that are causing maybe transitory inflation, but it does seem that those tariffs are being reasonably controlled through the economy. It’s not all going straight through to consumer prices. We’re seeing a little bit of that. Some companies are having to eat some of the inflation, and then some of the suppliers are probably eating a little bit of that too. So, it really hasn’t had the overall impact that it could have had or what people were expecting at the beginning of this year. So that’s been positive. 

Hank Smith 20:17 

And we certainly don’t have rates anywhere close to what was announced on so-called “Liberation Day” that were extraordinarily high tariffs and, to the administration’s credit, after the bond market and stock market, resoundly said, we do not like this policy with a quick 19% decline in six trading days in the stock market and a dramatic spike in interest rates from the bond market, better heads prevailed, namely our Treasury Secretary, Scott Bessent. And so, the administration walked back on those extraordinarily high tariffs and the market has been up ever since. 

Maxine Cuffe 21:03 

Yeah, hard to believe that that was just earlier this year. Markets have just moved on and had another fantastic year, three years in a row, double-digit gain, so fantastic. Then the last podcast was with Rosemary DiRita, Vice President and Philanthropic Advisor here at Haverford. This is a new role that’s been created to bring in additional services to our nonprofit clients and clients that are interested in philanthropy, and it really compliments our investment advice. We actually have a very large nonprofit business here at Haverford. 

Hank Smith 21:35 

We do, and we focus on the nonprofit community that have endowments, call it between $5 and $25 million, maybe $5 to $50 million. And this is a very underserved community of nonprofits because larger consultants don’t want to be bothered with that. So, these boards are really on their own trying to navigate many of the challenges of operating a nonprofit and also operating the endowment of a nonprofit. So, it’s a really good, complimentary service that we provide that they don’t have to pay for and they’re not getting it anywhere else. And Rosemary described two or three anecdotes of her service and action, which I thought was wonderful for our listeners to hear exactly what she’s doing and the impact that she’s making. 

Maxine Cuffe 22:44 

There’s so many ways that she’s helping our nonprofit clients. She can meet with their boards, really help them with education, with financial goals, reviewing their investment policy statements, best practices in fundraising. There’s so much expertise that she can bring to our boards. So, I would really stress any of our clients that are on nonprofit boards, Rosemary can be a resource for them. 

Hank Smith 23:10 

And we have the biggest trend, secular, long-term trend in the United States that cannot go away is the aging of the baby-boom generation, and I at the young end, having been born in 1961, at the young end of the baby boomers, but not to be too morbid, the older end are starting to die, and you’re going to have the greatest transfer of wealth from one generation to another in world history occurring that’s already started to occur and will accelerate for several decades because right after the baby-boom generation is the millennials, I believe. 

Maxine Cuffe 24:05 

Gen X.  

Hank Smith 24:06 

Or it’s Gen X, thank you. 

Maxine Cuffe 24:08 

That would be me. 

Hank Smith 24:09 

And they’re just about as big as the baby boomers, if not bigger. And so, you just have this extraordinary wealth, and a lot of that’s going to go to philanthropy and to the nonprofit world, so hopefully our clients get their fair share. 

Maxine Cuffe 24:33 

Well, thanks for that, Hank. A great season, and of course, this podcast would not be possible without our listeners. Thank you to each and every one of you for tuning in, sending in your suggestions and sharing feedback. Keep sending us your thoughts and ideas, and we’ll try to incorporate them in upcoming episodes. 

Hank Smith 24:51 

Maxine, thank you for helping me close out another successful season of Speaking of Quality. I also want to take a moment to thank, once again, all of our incredible guests this season for joining us and sharing your experiences and insights with our listeners. To our listeners, thank you for tuning into Speaking of Quality: Wealth Management Insights. We already have an exciting lineup of guests for season number six, so stay tuned for new episodes in the near future. In the meantime, please send suggestions or questions for me or the Haverford Trust team to marketing@haverfordquality.com. And don’t forget to subscribe, rate, review and share this podcast. Until next time, I’m Hank Smith. Stay bullish! 

Maxine Cuffe 25:39 

Thank you for listening to this episode of Speaking of Quality: Wealth Management Insights with Hank Smith. To hear future episodes of Speaking of Quality, please subscribe on Apple Podcasts, Spotify, Google Podcasts or wherever you listen to podcasts. To learn more about The Haverford Trust Company, please visit https://haverfordquality.com/. This podcast is provided as general commentary and market overview, and should not be relied upon as research, a forecast or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt an investment strategy. Any opinions expressed are as of the date this podcast was recorded and may change at any time and are the opinions of that commentator, not Haverford. Any opinion or information provided are believed by Haverford to be reliable at the time of this podcast’s recording, but are not necessarily all-inclusive or guaranteed for accuracy. Before making any financial decisions, please consult with an investment professional.