If you find the news headlines confusing, you would be normal.
As an example, here are three headlines that hit News Watch on Friday, 6/24/2022 within seven minutes of each other.
4:19 p.m.: Fed’s Daley sees another big hike in interest rates in the fight against inflation (Marketwatch)
4:23 p.m.: Stocks rally as fears over aggressive rate hikes ease (Barron’s Online)
4:26 p.m.: Fed’s Bullard says rapid rise in interest rates now is the best way to avoid recession later (Marketwatch)
In Statistics we would refer to the news at 4:19 p.m. and the news at 4:23 p.m. as “Mutually Exclusive events”. That is just “Stats speak” for events that can’t happen together.
These types of news releases and many more were part of our motivation to start engaging The WSG “Exit Strategy” last January.
Since the first two weeks in January, we started increasing cash levels in all our client family accounts. Most accounts now rest at 50% - 70% cash/money market, so won’t go up or down.
The market situation is complex. As in, I have been in this chair for over forty years and not seen anything get so sideways so fast, ever.
In the update I wrote and e-blasted last Friday 6/24/22 (Read it Here), I attempted to sweep all the parts into a place where we can focus our thinking to determine what changes, action, might be considered as this evolves.
The front story is simply that we see the same negative news updates each day, so is it priced into current valuations at -20% to -38% depending on which index you choose to measure? No one knows.
What I do feel very confident about is that with the cash we have raised form our sells this past January and as of recent, there will be a few thoughtful buys to be made as this all unfolds. This potential opportunity will likely not open until the pre-election mud-slinging season hits its peak in early November.
The back story, and my thinking, is money invested, a little at a time, going forward could be in some of the best returning investments in a long time. We just won’t know it for a few years. Remember, FIVE YEAR MONEY, from the 1/7/2022 Weekly Update (Read it Here).
I’m interested in your thoughts, comments and observations. Feel welcome to call, email or stop by the office and say Hi.
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk including loss of principal. No strategy assures success or protects against loss.