Hello from Woodward Financial Advisors!

We hope our quarterly newsletter finds you well as the weather cools, the leaves change, and the daylight shortens.
We kick off this edition by talking about what has undoubtedly been one of the most debated and discussed topics of this year: Inflation.
Then we transition to a recurring column of What’s On Our Nightstand. Each quarter a couple Woodward team members will share what we’re reading in hopes you may find something that piques your interest to add to your own reading list!
And last BUT NOT LEAST, we spotlight members of our Woodward family that you may not know as well (yet) - our pets! In addition to learning more about our furry friends we’ve saved the team member names until the end in case you’d like to place a guess on who belongs to whom.
Thanks for reading and please keep the great ideas for future content coming our way.
Inflation - Should I be Concerned?
The word “inflation” carries with it a negative connotation, and we’ve certainly been hearing about it more and more this year. After last year’s economic shocks and the shutting down of large swaths of the global economy, it’s not surprising to see prices for most goods and services rebounding. 

You likely have instances during your daily activities where you’re seeing inflation rear its ugly head. In my life, I’ve seen it firsthand recently as we set out to buy our oldest daughter Ava her first vehicle. She’s had her drivers license for over a year and we put off this adolescent milestone as long as possible, but given our family schedule we desperately needed another “driver” in the house. Shopping for a vehicle is never a pleasant exercise, and to make the process more challenging, we experienced firsthand several of the many things worrying investors these days – a labor shortage (car dealerships with empty offices and nobody to help with our questions), supply chain issues (desolate dealership lots holding maybe a dozen or so vehicles where hundreds typically exist), and price inflation (due to low supply, pricing for the same vehicle many times was 20% higher than a year ago). 

Maybe you’re seeing inflation in other areas of your daily life – perhaps buying groceries at the supermarket, trying to buy a new washer or dryer, or shopping for a new home. It’s certainly frustrating and it may seem like we’ve entered a new economic reality, but the current velocity of price increases shouldn’t persist forever. Inflation will always be a factor in our economic lives, but the recent spike will eventually level out. 
Investors may be wondering whether stock returns will suffer if inflation keeps rising. Here’s some good news: Inflation isn’t necessarily bad news for stocks. A look at equity performance in the past three decades does not show any reliable connection between periods of high (or low) inflation and US stock returns.

Over the last 20 years, one-year returns on US stocks have fluctuated widely. Yet weak returns occurred when inflation was low in some periods, and 23 of the past 30 years saw positive returns even after adjusting for the impact of inflation. That was the case in the first six months of 2021 as well.
Over the period charted above, the S&P 500 posted an average annualized return of 8.5% after adjusting for inflation. Going all the way back to 1926, the annualized inflation-adjusted return on stocks was 7.3%.

History shows that stocks tend to outpace inflation over the long term—a valuable reminder for investors concerned that today’s rising prices will make it harder to reach their financial goals.

If you have questions related to inflation, or how we are protecting you from it with your portfolio design please let us know. If you have a friend or family member with concerns about inflation, we’d be happy to talk with them and educate them on our perspective.

Written by Jim Miller, CFP®
What's On Our Nightstand
Every newsletter a couple members of our team share a brief introduction to what they have been reading.

Megan McManus - Where the Crawdads Sing” by Delia Owens

This is a captivating coming-of-age story mixed with a small-town murder mystery. The story takes place in the Outer Banks marshland, and also highlights the beauty and various ecosystems found within the marsh. This book will have you experiencing all the different emotions as you’re reading! The book is also scheduled to be released as a movie in Summer 2022. If you haven’t gotten a chance to read it yet, I highly recommend doing so before the movie comes out! Or, if you’re not a big reader, you can wait to enjoy the film instead.

Jim Miller – "Best Seat In The House" by Jack Nicklaus II and Don Yaeger.

Endless books have been written about arguably the best golfer of all time - “The Golden Bear” Jack Nicklaus, but this is from the vantage point of his son and isn’t really about golf at all. Instead, Jack II shares stories and lessons from his father related to - family. There are eighteen valuable lessons (to match the holes on a golf course) handed down from Jack to his son that come back to the values he holds most important – his legacy that will live on through his children and grandchildren. I’m anxious to make my way through the rest of the book and learn a different side of this childhood idol of mine. 

Pets of WFA!

You’ve met the people of Woodward Financial Advisors…so now it’s time to introduce you to (most of) the Pets of WFA! Some of us have dogs and cats, while others have chickens and horses. Can you guess which pet belongs to which person based off of their bios (hint: some of us have multiple pets and a few don’t have any)? Check the bottom of the article for the correct answers!

Answers: Riot (Roni); Hunter & Hazel (Jim); Reo (Megan); Huckleberry (Vic); Bean (Jess), Bodie (Alex); Juniper (Vic); The Chickens (Vic); Athena (Austin); Murphey (Megan); Raven (Vic); Charlie (Jess).

Thank you for reading our October newsletter! Please reach out if there is anything we can do for you.

Your Friends at Woodward Financial Advisors

Woodward Financial Advisors
1504 East Franklin Street, Suite 105, Chapel Hill, NC 27514.
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