Last year, we saw the US consumer blow through over $5 trillion in excess savings as the stimulus plan was underway. In normal times, this would trigger inflation to surge. Add in a massive supply chain breakdown (one that is still going on today) and you have more dollars chasing fewer goods which results in higher prices. Then, just as the world started to see improvement in the supply chain, the war in Ukraine began causing energy and food prices to soar. Add on top of that higher wages and a lockdown in China, which cripples Chinese exports, and the Perfect Storm for inflation continues on.
This has put Jerome Powell and the rest of the Federal Reserve in a tough position. On one hand, they know they need to continue raising rates to slow the economy and subdue inflation. But this does not come without some pain. We will see mortgage and general borrowing rates increase, the economy will slow-down, and the risk of recession could go up. But as Powell said himself, “It’s absolutely essential to restore price stability. Economies don’t work without it.” … There is MUCH more to be said on inflation, but I’ll leave it at that for now as I have many topics to cover in this newsletter…
Book Offer… In such uncertain times, it can be hard to stay calm and not ill-time the stock market. Although, yet again, I give our clients so much credit. You all have done a great job of keeping perspective and staying the course. That said, if you are concerned, I welcome your calls ANYTIME outside of our regularly scheduled reviews. Also, if you are a client and you missed our March 24th newsletter, I would like to extend the offer to buy a copy of “The Psychology of Money” by Morgan Housel for you. I cannot think of a timelier book to read to calm any nerves about the market. I would even go so far as to say that this was one of my favorite books on finance that I have ever read! Angel, my Client Relations Manager, found it relatable and said it was a quick read. Even if you’re not much of a reader, I think you’ll appreciate this book. Let us know if we can get you a copy or the E-book version!
I-Bonds… If you have money on the sidelines but do not want to invest in the market right now, you may want to consider I-bonds. The annualized rate for an I-bond purchased between May 2022 – October 2022 is 9.62%. Before you consider purchasing one though, I urge you to read our December 2021 newsletter which states the basics of I-bonds. Like all investments, there are many things to consider first.
Upcoming Events…. Next Thursday (May 19th) we will be hosting a workshop on Estate Planning (wills, trusts, Powers of Attorney) at Meadowbrook Community Center from 5:30-6:30pm. NOTE: You do not have to be a client with our firm to attend but we do have limited capacity so you must RSVP. If you are a client, don’t keep us a secret! Consider inviting a neighbor, friend, family member, or colleague that could use the information. This is a great way to make a soft introduction to our firm and the services we provide. If you plan to attend, please RSVP with Angel Halls no later than Monday, May 16th, or to attend virtually send an email to [email protected] to make arrangements.
If you are a client with our firm, Save the Date for our annual Client Appreciation Picnic that will be held on Saturday, June 11th. We’ve reserved the Pavilion at Deanna Rose Farmstead and will provide lunch, games, and activity tickets for your kids or grandkids to fish or ride the ponies at Deanna Rose. This is always a fun and well attended event and I’ll make sure my daughter, Emma, is there to make her appearance as well. You can see how much she has grown!
Garden Photos … Lastly, I took some time off last week and I have to say, nothing seems more therapeutic to me than digging in the dirt. Trying to follow in my dad’s footsteps, I started my vegetable garden but also planted a few hostas and flowers. If you have a garden, send us some pictures! I will include them in a collage and send it out in a newsletter sometime this Summer! With so much negativity out there, I figured we could all take a moment to “stop and smell the flowers” … and I’d love to see some of your garden photos for our collage!