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
