First Happy New Year. I hope you and your families had a pleasant, safe, and healthy start to the year. There are so many things causing headline news and affecting the market: COVID, “Transitory Inflation”, Ukraine, another $1.7 trillion spending bill, FTX’s downfall, snowstorms, Trumps Tax Returns, Fentanyl and the border. It is no wonder we are having a rough market! The S&P was down 19.4% in 2022, the worst since 2008. I think the three things that are most affecting the market are:1) the COVID shutdowns,2) massive government spending, and 3) inflation. The shutdown of an enormous part of our economy during the pandemic, in hindsight, was a mistake. The necessary government spending following the shutdown went on for too long and now is too much. Thus, we have too much money chasing too few goods and services. This latest everything but the kitchen sink government spending is adding “fuel to the fire”! Months ago, the Federal Reserve and most economists were saying that the inflation we were seeing was “transitory”. Wrong. Fed Chair Powell admitted he was wrong and is clearly stating he will continue to raise rates until inflation gets to the stated goal of 2%. Raise rates too fast and for too long you get into a recession.
I read a lot of economic reports and almost all were wrong, the exception was Brian Wesbury at 1st Trust. Fortunately, the rate of inflation is slowing but it has not yet rolled over, meaning it is going down. It is looking like it may do so soon. If so, the market will turn, and once again we can look at our quarterly account statements and smile! To ease any pain you are feeling, realize the gains we made in the past years have more than offset the drops we have seen. Our firm’s goal is a long-term growth of 7% or better. I am optimistic that we can achieve that in the future.
I will recommend a book my brother in-law recommended. It is relatively short and is an excellent read: The Psychology of Money. If you have younger people in your family, buy them a copy. They will enjoy it and find it very useful in their financial planning.
A little housekeeping. Katie has accepted a new position and has moved on; we wish her the best. However, she is helping us through the year end accounting, and I am VERY grateful. Kathy Patton has graciously stepped in to cover the gap while we hire a new person. Also, Alison Ashby has joined the firm and is bringing smarts and computer skills at which I marvel. Welcome Alison! She is working on her CFP designation and will join Nick, Keith, and I in providing excellent advice and investing ideas. We all thank you for the trust you place in us and will continue to give you our best efforts.
Willis
WSJ, Forbes,1st Trust, Yahoo Finance, TD Economics
5105 DTC PKWY Ste 316
Greenwood Village, Colorado 80111 United States
5105 DTC PKWY Ste 316
Greenwood Village, Colorado 80111 United States