I have just returned from a 4200-mile drive to check out America. My wife and I went into the heartland – Mt. Rushmore, Crazy Horse, Sturgis (a week before the huge motorcycle rally though the crowd was already gathering), Yellowstone, the Grand Tetons, and ended up in Jackson Hole, Wyoming. We then made our way back to Shreveport. For the benefit of both of you who were not out travelling the past few weeks – waiting in lines, trying to find a hotel vacancy, etc. let me assure you – the country is on the move. I have now paid $4.35/gallon for gasoline! The pent-up demand to get out and see and do is obvious everywhere. There may be a shortage of computer chips, but there is not shortage of bales of hay. I’ll be reflecting on my “economic research” in the coming weeks. However, having returned to a mask mandate, I feel the need to touch base with my trusted sources on the big picture as it might affect your investment account.
As I’ve stated before, Adam Crisafulli, authored the industry-leading Market Intelligence commentary for JP Morgan for over 10 years. He now provides a daily comprehensive market/economic report entitled Vital Knowledge. It appears in my computer inbox at 4:45 am every morning. He reminds us that the markets continue to be at – or near – all-time highs depending upon what day you’re observing. Not surprisingly he suggests that the Covid headlines remain troubling as transmissions climb and governments/companies implement various restrictions. Regretfully, the entire virus issue has heated into a battleground debate over vaccines, masks, social distancing – all things Covid. However, the markets continue to look past the prevailing delta variant surge. Crisafulli observes a general complacency in the consensus view as being very much in a post-pandemic mindset. Of course, that perspective is only as the virus affects the economic and market fundamentals. He explains that with 70{7cf23ffd9f893b42e5168467dbdff3dd8c8539e14232c919813e000f7f93ca07} of adult Americans having received at least one shot there is a sense the U.S. could follow the United Kingdom and see transmissions peak in the very near-term. His position rests, in large part, due to a contrast compared to the initial stages of the pandemic last year. As opposed to this time in 2020, a solution exists to defeat the virus (vaccines). The efforts of individual companies and the economy overall has reduced the economic fallout from each wave of the pandemic. Each surge has been less damaging than the preceding one. That is thanks to coping strategies formed since the early days of the virus according to his findings in the Wall Street Journal.1
Let me reiterate here that there is a distinction between the “big picture” that has an impact on your investment account and the challenges the average family faces living out our lives. A vaccinated but potentially positive tested individual with young children at home has a set of concerns beyond the scope of financial analysis. With school starting soon and children feeling the effects of 2020 we still have challenges to address. I agree that it is a bit disheartening to see Louisiana in the national news as a hot spot of virus-related problems.
To conclude on a positive note: My sources at Nuveen Investments state that regardless of volatility resulting in days/weeks with losses, market indices have been positive. In fact, July marked the sixth consecutive monthly gain for the markets. In addition, growth rates may be peaking, but historically low interest rates should help produce solid economic gains through 2021.2
Recently, I wrote about “the best investment I’ve ever made.” Let me leave you with perhaps the “investment” that comes in second: For 52 years I paid into the Social Security system. Most of those years I contributed at the capped maximum. We have all cursed both the Social Security programs and the inflation we experience currently. In October of this year the cost-of-living adjustment for 2022 will be announced. Depending on whose projection you want to use the “COLA bump” should be somewhere between 5.3{7cf23ffd9f893b42e5168467dbdff3dd8c8539e14232c919813e000f7f93ca07} and 6.2{7cf23ffd9f893b42e5168467dbdff3dd8c8539e14232c919813e000f7f93ca07}. That’s the largest increase since 2009!3 I just turned 69 and will begin my benefit in July of next year. An income guaranteed for my lifetime (and that of my spouse) might easily put this “investment” into the silver medal category. It is simply incumbent upon us to live long enough to recoup my contributions!
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. The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. 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.
RFG Advisory and its Investment Advisor Representatives do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. Please consult your own tax, legal, and accounting professional for guidance on such matters.
Visit us at www.williamsfa.com. Tommy Williams is a CERTIFIED FINANCIAL PLANNER™ Professional with Williams Financial Advisors, LLC. Securities offered by Registered Representatives through Private Client Services, member FINRA/SIPC. Advisory products and services offered by Investment Advisory Representatives through RFG Advisory, a Registered Investment Advisor. RFG Advisory, Williams Financial Advisors, LLC and Private Client Services are unaffiliated entities. Branch office is located at 6425 Youree Drive, Suite 180, Shreveport, LA 71105.