Friends, I know many of you are concerned about the state of the economy and the future of your portfolios, in particular. The short version of my analysis is: you should be. As bad as things seem now, the full economic consequences of the Fed's actions to raise interest rates and wrestle inflation under control have yet to be felt. The housing contraction and the constriction of the labor market and the general decline in business activity are likely to get a lot worse before they get better. Does that mean you should panic and sell everything? Not necessarily. Outsmarting the market is notoriously hard. Knowing when to get out, and when to get in again, is way beyond most ordinary mortals. Generally, the best advice is to...let it ride. That's what I'm doing. I fully expect my portfolio to shrink (as it already has), but I also fully expect America and her economy to recover in due time. 2023 is likely to a rough year. Now, there's a possibility that some of our problems are structural and fundamental, and that we won't shake them off for years, or decades, or ever. Yes, that's a possibility, but my guess is that the market will come back. The reason for that is simple: in many ways, it's the only game in town. It's where money goes, when money wants to find a home, and it always wants that. In a recession, people can withdraw from the market and sit on their money for a spell, but eventually they always return, and frankly there's more money floating around out there than ever, thanks in part to our spendthrift government. So my advice is: keep calm and carry on. And, if you can, identify some ways to profit from the downturn. There are always opportunities, if you look hard enough.
Anyway, below you'll find one of the best and most comprehensive analyses of where we stand that I've seen. It should get you up to speed.
https://www.breitbart.com/economy/2022/10/13/consumer-prices-surge-higher-than-expected/
For those of you on Social Security, the SSA is giving you unprecedented help in keeping up with rising prices. That's the good news. The bad news is that the basic fiscal health of the system is being sacrificed to juice up your checks in the short term. Gee, where have we seen that before?
https://www.newsmax.com/us/social-security-benefits-increase/2022/10/13/id/1091690/
Dr.Waddy from Jack: I'm glad to get the xtra$ but if thereby SS is harmed it will yet another "gift" to our country from we boomers, the most destructive generation ever. Oh, we just can't help ourselves: to o many of us are reflexive dissemblers and baseless dreamers.The passage of time allows an extensive
ReplyDeleteevaluation of our teeming faction. We have fulfilled the fears our adolescence engendered.. and we may yet destroy America through our baleful influence on our offspring.
Jack, you may yet destroy America just by cashing your checks! And remember, at least for now the Boomers are mostly voting Republican. It's the young whippersnappers who ooze enthusiasm for Marxism in all its forms.
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