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  • What are Your Thoughts on Inflation?

    Regarding inflation, I think you need to view the Fed as an asset manager that was a little late to the game.  A great deal of money was pumped into the economy during the pandemic, and when that money started to dry up, consumers continued spending. We have seen, and continue to see, personal savings decrease while consumer credit balances increase and delinquencies on personal credit have increased as well.  In other words, people were spending at the same rate, but the spending was savings and credit-based.  As a result, when the stimulus money ran out, inflation didn’t self-correct. At some point, overall spending will decrease, which in turn will ease inflation.  I think an interest rate increase earlier in the game would have prevented prices from rising as quickly and to the extent they did. Had the Fed made the decision to raise interest rates earlier, they would not have needed to raise interest rates as aggressively as they did.  Raising rates as quickly as they did softened both the real estate and labor markets. Now, we’re in a holding pattern to see what impact the Fed's recent 50 basis point rate cut will have.  Disclosure : The content of this article is published in the United States of America, and persons who access it agree to do so in accordance with applicable U.S. law. All opinions expressed by the article participant(s), their affiliates, and/or subsidiaries may have been previously disseminated by them on television, radio, the Internet, or another medium. You should not treat any opinion expressed in this article as a specific inducement to make a particular investment or follow a particular strategy but only as an expression of an opinion. Such opinions are based upon information article participants consider reliable, but neither the article participant(s) nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Participant(s), their affiliates, and/or subsidiaries are not under any obligation to update or correct any information available in this article. Participants are professional investors who may be actively involved in securities discussed herein on behalf of themselves, their companies, and their investors. Also, the opinions expressed by the article participants may be short-term in nature and are subject to change without notice. No part of an article participant’s compensation is related to the specific opinions they express. Past performance is not indicative of future results. Participants do not guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed in this article. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than they invested. Investments or strategies mentioned in this article may not be suitable for you. This material does not take into account your particular investment objectives, financial situation, or needs and is not intended to make recommendations that are appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this article. Before acting on information in this article, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial professional, broker, investment adviser, CPA, or attorney. Article participant(s) is/are not retail advisors or brokers.

  • What are the Major Economic Headwinds We Will Need to Address?

    Wow, I’m not sure where to start on this one.  I think the U.S. is facing uncertainty across a broad spectrum of issues.  Setting the election, the Russia-Ukraine conflict, the Israel-Hamas conflict, and trade tension with China aside for the moment, I would say the largest issue this country faces would have to be the combination of spending and the future of taxes.   It may sound a bit cliché, but at some point, we’re going to have to pay the piper.  U.S. spending far outpaces revenue, evidenced by the ever-growing national debt and budget deficits. The national debt is quickly approaching 36 trillion.  A lot of the proposed solutions are inadequate at best. The notion that this country’s spending problem can be solved by increasing the rate at which companies and the wealthy are taxed, in one form or another, is not based in reality—it’s a flawed way of thinking.  If we’re completely honest with ourselves, these proposed tax hikes are for votes in the upcoming election, not a practical solution to this country’s spending problem. If you take a look at the federal budget, discretionary spending for 2023 was about 1.7 trillion vs. 3.8 trillion of mandatory spending. Discretionary spending represents only 27% of total spending and is the only portion of spending Congress controls. Mandatory spending, on the other hand, represents 62% of total spending. Mandatory spending is really what we need to focus on.  Reforming Medicare, Medicaid, and Social Security should be the priority.  Remember that spending will only increase for these programs because we have an aging population. Tax revenues totaled 4.4 trillion, and we spent 6.1 trillion in 2023. If the government was able to increase tax revenue by 20% across the board, we’re still barely scratching the surface, especially when you consider the fact spending on Medicare, Medicaid, Social Security, and interest on the national debt will only increase for the foreseeable future.  How does this affect us directly?  We need to look for tax-efficient opportunities and higher returns.  A lot of investors are preparing for the possibility of significant changes to capital gains rates, carried interest policies, and wealth transfer rates.  We need to be a step ahead of this.  Disclosure : The content of this article is published in the United States of America, and persons who access it agree to do so in accordance with applicable U.S. law. All opinions expressed by the article participant(s), their affiliates, and/or subsidiaries may have been previously disseminated by them on television, radio, the Internet, or another medium. You should not treat any opinion expressed in this article as a specific inducement to make a particular investment or follow a particular strategy but only as an expression of an opinion. Such opinions are based upon information article participants consider reliable, but neither the article participant(s) nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Participant(s), their affiliates, and/or subsidiaries are not under any obligation to update or correct any information available in this article. Participants are professional investors who may be actively involved in securities discussed herein on behalf of themselves, their companies, and their investors. Also, the opinions expressed by the article participants may be short-term in nature and are subject to change without notice. No part of an article participant’s compensation is related to the specific opinions they express. Past performance is not indicative of future results. Participants do not guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed in this article. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than they invested. Investments or strategies mentioned in this article may not be suitable for you. This material does not take into account your particular investment objectives, financial situation, or needs and is not intended to make recommendations that are appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this article. Before acting on information in this article, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial professional, broker, investment adviser, CPA, or attorney. Article participant(s) is/are not retail advisors or brokers.

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