June, 2021

Solid Gains

Stocks rallied, at the end of May, on renewed confidence in the economic recovery, lower inflation worries, and rising comfort with Fed officials talking about the potential for easing of its monthly bond purchases. Technology, communication services, and reopening stocks were among the market leaders.

Investor sentiment was buoyed late in the month by an encouraging jobless claims number and the unveiling of a Republican infrastructure proposal. A somewhat hotter-than-expected inflation indicator did nothing to dampen optimism as stocks added to their gains ahead of the three-day Memorial Day weekend.1,2

Jobless Claims Reach Pandemic Lows

In a sign of further recovery in the labor market, the number of initial jobless claims fell to a pandemic low, continuing the downward trend in worker layoffs. New jobless claims totaled 406,000 for last week, well below the pandemic high of nearly 1.5 million, though still above the 2019 weekly average of 218,000.2

Buffet and Powell Talk Inflation

What does it mean when two of the most powerful voices in American financial life seem to be saying two different things?

In one corner, we have the “Oracle of Omaha,” investor Warren Buffett. As one of the nation’s richest people and most frequently sought opinions on business matters, he’s a voice that gets a great deal of attention. He says that prices are going up.

“We are seeing very substantial inflation,” Buffett told his shareholders in May. “We are raising prices. People are raising prices to us and it’s being accepted.”3

In the other corner, Federal Reserve Chair Jerome Powell sees a slightly different story. While it’s true that prices are up, for now, the economic recovery is in progress and it might be a mistake to see inflation as a guest long overstaying its welcome.

“One-time increases in prices are likely to only have transitory effects on inflation,” Powell said. He later added, “It will take some time before we see substantial further progress.”4

While economic recoveries always take a bit of time, it can certainly test the patience of any investor, even one like Buffet who has lived through many economic ups and downs. 

Seasonal Stock Returns

You've maybe heard the old adage "Sell in May and Go Away." This saying comes from the seasonal performance of the stock market over time. As you can see in the chart below, The stock market has historically performed better between November 1st and April 30th, than it has from May 1st to October 31st. These time periods are comically referred to as from "Turkey to Tax" and "Mommies to Mummies." Of course, with all market statistics, there is no guarantee of this happening in any given year.

Part of being an investor is knowing about trends and statistics like this, while also knowing that you can't always depend on data from the past to predict the future. 

Raising Healthy Children (& Keeping Healthy Yourself)

One of the greatest legacies we can give a child is a framework for living an enduring healthy lifestyle and stay healthy ourselves!  As a parent, grandparent, neighbor or friend you can be part of creating this legacy.

The attitudes and habits formed in childhood can determine a child’s health in his or her adult years. While the ideas below are geared to parents who are looking to raise healthy children that grow up to be healthy adults, these are also great tips for all of us and help us be role models for our youth. 

Start Early: Good eating, sleeping, and exercise habits should begin early in childhood. It’ll save you (and your adult child) from the difficulties of breaking bad habits later on.

Be Family-Centric: Make healthy living a family affair. Consider the impact even small actions can have. Did you know that kids who eat more frequently with their families tend to choose healthy foods like fruits and vegetables over sugar-sweetened beverages and fried foods? Likewise, kids who eat more often with their families generally have a lower rate of eating disorders and less weight concerns in the future.5

Plan for Healthy Meals and Snacks: Modern lives are busy, but try to plan ahead by stocking healthy foods and snacks in the house. You may even want to cook a few meals during the weekend for the week ahead. If you’re looking to improve dieting behaviors, be sure to move slowly with these changes. The less the kids notice, the more effective the transition will likely be. Expose your child to different foods by pairing them with foods he or she already likes.

Be Active: It may be harder than ever to tear children away from the phone, computer, and TV, but it’s crucial that children engage in active play. It doesn’t have to be an organized event. Challenge your child to a push-up contest, or offer to play goalie so he or she can practice soccer kicks. Connect physical activity to a positive experience.

Be a Role Model: Lessons are difficult to teach if the teacher is not practicing what he or she preaches. Be sure to lead by example.

Should Investors Prepare for Inflation or Hyperinflation?

What are inflation, deflation, and hyperinflation?

What steps can be taken in a portfolio to protect against inflation?

What has happened in past inflationary periods?

During "The Great Inflation" (1965-1982):
  • There were 4 recessions, 2 energy shortages, and wage & price controls. 
  • Mortgage rates climbed to 18.6%
  • The unemployment rate climbed to 9.7%
  • The stock market was stagnant - The DOW Jones Industrial Average experienced little to no growth for nearly 2 decades.  
Watch this short video on the topic!

"Great Leaders Live Like Drug Addicts"

From a homeless drug addict to a successful CEO.

This story caught the attention of the owners at GTS Financial. During a team meeting, we watched this TED Talk and reflected on the three principles the speaker presents. As transparency is one of our core values, these principles resonated with us.

These three principles saved the speaker from death and set him apart as a leader. They are small enough to fit in your pocket, yet big enough to change your life. The best part is that anyone can take these principles and immediately implement them after watching this talk.

Click below to listen to this insightful presentation.

Footnotes and Sources

1. CNBC.com, May 28, 2021
2. The Wall Street Journal, May 27, 2021
3. CNBC.com, May 3, 2021
4. CNBC.com, April 28, 2021
5. DailyNews, Aug 22, 2019

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