May 2021
Money Conversations
Greetings and welcome to the May edition of Money Conversations.  

Below you will find some thoughts on the current market environment and a video discussing speculation vs investing and how the two are starting to blur together.

Please feel free to respond with any questions or any material you would like to discuss. Also, please forward to anyone you feel may benefit. If you have questions or concerns about the markets, please call me.

Ohio National announces intention to sell
Ohio National Mutual Holdings Inc., has announced a strategic transaction agreement with Constellation Insurance Holdings, Inc. At this point, to me, there are more unknowns than knowns as it relates to any decision making that policy holders, myself included, could be considering. I am happy to discuss this topic with you if you have any questions or concerns.
Market Commentary
The S&P 500 finished the month of April up 5.24% finishing close to the high point for the month while setting 10 new all time highs. This brings the S&P 500's year to date return to 11.32%.

The reported National GDP number came in at an annualized rate of 6.4% which equates to the second highest quarterly growth rate going back to 2003. Things within the labor force continue to heal. At the peak last year there were approximately 22 million Americans that had lost their jobs. The most recent numbers indicate around 14 million have returned to work, leaving around 8.4 million citizens still within the ranks of the unemployed. From what I have heard recently from local business owners, it has been very difficult as of the late to hire people. So of the 8.4 million that still are not working some may have reasons for still opting out of returning to the work force. The employers I have spoken with claim both the continued extra unemployment benefit in addition to the recent direct stimulus payments to individuals and families as potential reasons for why people are choosing not to return to a job.

The Federal Reserve bank continues to project their accommodative stance that they have held since last year. They still "are not thinking about thinking about" raising interest rates nor tapering their asset purchase program for the foreseeable future. So the bank continues to aid in the recovery and the US Government is continuing to spend this year bringing the national debt to just over $28 trillion to end the month of April. President Biden in a recent speech to congress unveiled his plans for both a $2 trillion infrastructure plan and a $1.8 trillion plan aimed at helping children and families. At one point in the speech he said "no American should have to choose between a job and a paycheck." This leads me to believe that our leaders are likely moving in the direction of Universal Basic Income which as I had spoke about a couple months ago fits well into the idea of Modern Monetary Theory. I don't have any problems with our government helping our fellow citizens who are downtrodden but most of the recent spending packages have added stipulations for large amounts of dollar bills being directed to areas that are far from helping our citizens that are most in need.

The continued advancement and placement of trillion dollar spending packages will likely continue to add to the inflationary factors we have already been seeing this year. Energy prices continue to rise as do almost all commodity prices. I wish I had some corn or wheat to sell right now. The increases in raw materials will eventually begin to be passed through to consumers with Proctor and Gamble recently announcing that they will be raising prices in the third quarter of this year and they make a lot of stuff people use every day. At the Berkshire Hathaway annual meeting Warren Buffett said that "we are seeing substantial inflation," stating that their companies will be raising prices. It's interesting to me that so much of the business community continues to talk about inflationary factors but that our government, for whatever their reason is, won't.

I continue to believe that the best offset against inflationary factors is to own assets that also continue to inflate in value. Land, real-estate, and most stock/equity based investments continue to increase in value this year. Cash based holdings not so much. As inflation continues to advance this year, cash based holdings will feel the negative affects of inflation the most. Assets that have a high negative correlation to the US dollar continue to be in favor just as they have been for the last 13 moths. Unfortunately, this means that conservative investors will continue to have to add risk to their portfolios likely just to keep pace with inflation.

Shawn M. Wyatt, CFP®, CRPC®
Seth M. Surface

StockCharts.com 4.30.2021
The views and opinions expressed are that of the author and do not necessarily represent the opinion of any broker dealer. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal.
For this month's video I am visiting about many of the recent conversations I have been having with people who share concerns about the potential for a market pull back. In conjunction I am sharing my thoughts in relation to how I am seeing the worlds of speculation and investing converge.