INSIGHTS Blog

When I was in high school, I worked after school in a factory loading trucks.  This was hard work.  It was a very long time ago so the rate I was paid might seem pathetic by today’s standards, but it was pretty small even by the standards of the day, at less than $1.25 per hour.  I worked for the shipping manager.  He spent most of his time in a small office sitting at a desk.  I don’t recall ever seeing him lift anything heavier than the telephone. 

I’m reminded of Ronald Reagan’s definition of a recession and of a depression. “A recession is when your neighbor loses his job. A depression is when you lose your job.” Humorous and clear and a little illustrative of our topic. What President Reagan was saying in his homespun way is that it’s a matter of degrees. A matter of severity. Market corrections are similar.

In October 1987 I was a new father. I was also new to financial markets. The Oct 19th collapse looked so much like 1929 that I was sure the world would never be the same and that I had to take action to protect my new family. I was far from alone in my thinking. To the contrary, only a very few people could be heard to say that it was a buying opportunity. Just about everyone felt the same panic I did.

When I was little I saw a Bugs Bunny cartoon that included Bugs time traveling into the far distant future. The world was fantastical with all our sci fi dreams coming true. That far distant future year was 1999. Seems pretty funny now. Not only didn’t all our sci-fi dreams come true by then, but today, 24 years later, 1999 is practically old fashioned now. In the financial world, 1999 is known as the year of the Dot Com bubble.

The SECURE 2.0 Act of 2022, (named after its predecessor, the Setting Every Community Up for Retirement Enhancement Act of 2019) is designed to improve the current and future state of retirement savings and retiree income in the United States. The following highlights just some of the provisions in the law that could affect you and your retirement savings.

DISCLAIMER - I don't know the future - neither do any of the others. But sometimes it’s at least a little clearer than the present moment. Take the outlook for recession. Nearly everyone says we’re going to get one. The Conference Board recently reported that 98% of CEO’s expect a recession. 98%!!!! Yikes! . . . So, is it a done deal? We’re going to have a recession? Maybe.

I have a rule that I never make decisions in the middle of the night—especially if I’ve woken up in the dark. Everything always looks worse then. The stock market can be thought of as a place of long days and short nights. If bull markets are the days of the stock market, then bear markets are the nights—and they don’t tend to last very long.

In 1926 Earnest Hemmingway published what most people consider his best novel, the Sun Also Rises. Like most Hemmingway novels, it’s about real people and events from his life, but fictionalized, and, like most Hemmingway novels, it spends a lot of time being dark and depressed. 2022 has been rather like a depressing Hemmingway novel.

Most everyone knows that inflation is when prices of things are rising. This is a wonderful thing when you go to sell your house and you get a lot more than you paid for it some years ago. Not so good when you go to the grocery store or buy a car or for that matter, buy a house.

When the financial world barks, it sends cascades of bad news. So far this year it’s been impossible to escape from this onslaught as we see soaring consumer prices, rising interest rates, bogged down supply lines, war in Europe and saber rattling in Asia between China and Taiwan. Getting hammered by bad news day after day, week after week for 8 months causes people to sell. Fear of losing is a big thing.

When I was 16, my mother helped me get an afterschool job loading trucks at a factory in Philadelphia. I learned a lot about how the world works during the two years I worked there. As a part-time dock loader, I was low man on the totem pole. I'm certain I was also the lowest paid. But it was enough to take my girlfriend on dates and have a little extra money of my own. The owner of the factory was a relatively young man of roughly 40. He was rarely around the plant.

I think of myself as a boy of summer. When I was young, summer was a time to spend outside with my friends. We played a form of baseball with only two kids using a plastic bat and ball. We played tag and touch football, and really any game we could think of or make up. It was truly great fun. So much so that more than five decades later, you can still find me outside playing games in the summer. Most of the time that we played, someone won and someone else lost.

Here we are, almost halfway through yet another historic year.  Unlike the turbulent times of 2020 and 2021 though, the markets this year have not been as kind.  Inflation, war, and recession are just a few of the things weighing on the minds of investors as we look to the rest of 2022 and beyond.