Nov 17, 2022
Summary:
There’s talk of inflation, stagflation, and rates going up—is it
too little too late? David Stryzewski joins us in this episode to
discuss why this time will not be different, emphasizing that the
true cause of our current economic turmoil stems from supply
issues. With this in mind, currency continues to spiral downward,
and the next crisis will come as a result of adjustments on the
earnings side of things. Nonetheless, there are a few investment
opportunities to take advantage of in fluctuating markets—fixed
index annuities being particularly opportunistic right now. Listen
in as David shares information that is relevant to the current
situation and strategies to pull you through uncertain times.
Highlights:
-A lot of what policy has been doing is actually making inflation
worse
-Affording life is becoming a lot more expensive
-The consumer is 70% of our economy today
-41 and a half years account for a full cycle. The Fed cannot
continue to raise rates like this
-Inflation comes from spending, but how did we not see the problem
earlier? We didn’t see it because these dollars went into the
banks, and banks were lending out money for mortgages
-More millionaires have been made in real estate over the years
than any other industry
-These dollars got out into society, and the catalyst for inflation
going through the roof was Biden’s administration
-When the Fed raises rates, the goal is that the consumer can
borrow less and has less purchasing power
-As much as we believe “this time will be different,” this is
rarely the case
-Analysts today are looking at earnings and noting that companies
are making the same amount of money as they were in previous years.
This is merely because prices are so high
-What we’re going through right now has always been a supply
crisis
-The Fed essentially doubled mortgage rates, which has created a
huge challenge. Rates have gone up about 4%
-Who affects supply? Right now, no steps are being taken to fix the
supply issue
-Migration changes within the US are probably going to slow
down
-Builders are in a very difficult spot today; it has been extremely
expensive to acquire property to build, and to get the assets
needed to build. Approvals have also become more troublesome to
get
-Corporations are borrowing
-In regard to pensions, it’s going to be the American consumer that
feels the pain of this
-We’re about to see the earnings side of things get adjusted, which
is what the next crisis will stem from
-Hedging is known as taking a long position but having some defense
in the event that things don’t work out
-You can make money in down markets; you just have to know where to
go. You have to learn to understand cash, protected assets, and
risk assets
-Bonds can lose money in five major ways
-Fixed Indexed Annuities have the ability to give you upsides when
markets are going up, down, and sideways. They provide more
certainty, and there has never been a better time to own these
-Utilize an asset class that doesn’t follow the same rules to
reduce risk and increase returns
-Protected assets have less liquidity
-In the short term, we’re seeing a bit of a relief rally
Useful Links:
Financial Survival Network
Sound
Planning Group