This has been a tough year for investment markets with rising interest rates producing a common result for investments of all kinds, in dollar terms:
And that’s what makes a market. There are intelligent, experienced people in both camps. From our point of view, inflation is headed in the right direction with oil prices down pretty consistently over the past two months, with some retailers cutting prices, the housing market stalling, and with the prospect of some layoffs on the horizon.
Well, we’re not in no man’s land anymore! The markets turned hard over the past few weeks on the threat that inflation would stay higher for longer and that the fed might raise interest rates farther than expected.
I got my first job after college by going to the job fair my senior year. I talked to the guy in the best suit, and he worked for MassMutual. Geno became my first professional mentor and a friend. He talked about financial planning and investing. Helping people make good decisions made sense to me.
It’s not too late to rebalance. You can still choose to get your risk levels right, but these decisions get more difficult than they were a few months ago.
Investments don’t just come in to the “right price.” They usually overshoot.
The early part of 2022 has given us declines in both stocks and bonds. That is happening because we are a in a credit contraction.
If you’re watching the financial news, there are factors in the economy and markets that could give you the willies. From our standpoint as investors, preparing for volatility also means being ready for opportunities that emerge as the world changes and the markets react.
This probably isn’t the last of the volatility for the year, and we haven’t necessarily put in the market lows.
We believe 2022 is a transition year. A transition away from Covid as a novelty and into Covid as an endemic disease. A transition away from money creation and aggressive subsidies by the federal government.