Happy 4th of July! Independence Day.
I enjoy fireworks, hot dogs, family gatherings and even tormenting my children with a quiz about the Declaration of Independence. However, what really inspires me is the nature of independence. I have been independent as an advisor for 28 years. Independence has its’ pros and cons. I can come into work when I want and leave when I want. I can wait for the phone to ring or make calls. I do have to pay rent as long as I have an office and there are plenty of rules to follow.
Let’s set aside the concept of independence for a moment and talk about the world of investing. As of June 27, the S&P 500 is down just over 18% year to date. There remains the concerns over inflation, you’re paying more for the hot dogs this year. Though Russia and Ukraine have slipped from the headlines, there still is a war. Recent Supreme Court decision have caused greater anxiety and division in the country and Recession looms large. Recession is defined as two successive quarters of shrinking gross domestic production (GDP). Q1 was negative and we will find out in a week or so about Q2. Regardless of the pronouncement, it seems like people feel we are in a recession. Where is the good news?
The good news is Independence. I listened to a recent podcast on the economic outlook (if interested www.HardyBroadcast.com ) and they prescribed three steps in response to adverse conditions.
- Preparation – Bust follows Boom and Boom follows Bust. We live in a world of cycles. It is easy to fall prey to the doom and gloom of the headlines. We need to find reason to be happy. I have a beautiful wife and five amazing children. With all its’ idiosyncrasies we live in an incredible country.
- On July 16, 2017 (roughly 5 years ago) the S&P 500 closed at 2472. In 5 years it is up over 55 percent. Another way to look at things.
- Adaptation – From an individuals’ stand point, we can adjust our spending. Instead of steaks maybe hot dogs. Instead of hosting the whole neighborhood, may I suggest potluck? Consolidate car trips to save on gas. Use a public library instead of buying a book. Minor changes can make a huge difference.
- Do you have cash to invest or perhaps come out of some fixed income positions and take advantage of market up turns?
- Innovation – Start a lemonade stand (Has Chal lost his mind?) No, but we do need to think outside the box. When Lily had to return to South Carolina for family, I was furious. She was doing great, learning quick and teaching us stuff. I did not want to begin another search for a new employee. So we kept Lily on payroll, shifted to a new phone system and now many of you have no idea whether she is calling from Napa or South Carolina. COVID sent millions of workers home and some of you stayed. Now many CFOs are wondering what to do about the real estate that remains empty. (HINT: maybe not a great time for commercial real estate.)
Perhaps with the ’bomb bursting in air’ this weekend you may come up with a few of your own great ideas and we would love to hear them. Celebrate your independence as well as our Country’s’. God bless you and the USA.
The views stated in the linked commentary www.HardyBroadcast.com are not necessarily the opinion of First Allied Securities Inc. and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
The views stated in this linked commentary are not necessarily the opinion of First Allied Securities Inc. and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.