Remember, the only choice is optimism, the pessimists never get it right.
The annualized inflation rate for the month of May came in higher than expected and ignited the flashing red lights from all the talking heads last week. The year over year rate took a considerable jump so all the chatter was about what the Federal Reserve Board might do.
I still keep going back to the year-over-year thing remembering last year we were in the peak of the pandemic with the economy dropping like a rock. And, because of some supply chain disruptions, products such as automobiles rose, especially in the used car market. It still remains to be seen whether the inflation is structural or transitory. So, we just have to live through the noise for awhile in order to see how this plays out. FYI, the S&P500 did set an all-time high at the close last Friday. The attached article is a good analysis of the overall inflation picture.
Overall, the economy is making a strong recovery. When all of this mess started out last year, I sent out an email about the different kinds of recovery and illustrated using capital letters. The one everyone hoped for was the V shaped recovery and we are experiencing this as I write. However, we do live in a changing world so this too could change. One strong indication supporting a strong recovery is the number of jobs available, 9+ million. 25 states have voted to stop the supplemental $300 in an effort to get people to go back to work. Believe it or not, some want to make that benefit permanent.
So we continue to hold the course with our investment philosophy. As I said last week when I quoted Nick Murray, “Over the long term, mainstream equities have been the most efficient hedge against inflation ever crafted by the hand of man.”
As always, should you have any questions or wish to meet with or talk with me, please don’t hesitate to email, or call. Now, let’s all go out and have a super week.
PS: This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.