Week of 5/19/2022

Investment declines remind us that there are many things that we don’t control about the economy and the markets. What can we do during challenging times? Continue regular investment into appropriately diversified portfolios. Revisit savings levels to make sure you are taking advantage of reduced asset prices. Remember that long-term goals require patience during the rough patches. Brad McMillan has a helpful post on the subject here. Now to our regularly scheduled programming:

This is a different way of looking at housing affordability. By this measure, it’s not the worst it has ever been, though it could certainly get worse. The infant formula shortage has its roots in the same behavior that was typical in the early stages of the pandemic in commodities like toilet paper and hand sanitizer. You can find a fairly comprehensive rundown of the situation here. If you’ve ever played in a golf tournament, you may have noticed special prizes for holes-in-one. Those prizes are underwritten by insurance companies, a practice dating almost 100 years. The French drink much, much less alcohol than they used to. We take cyber security very seriously, so we were surprised to learn that a laptop infected with 6 types of malware was sold at an art auction for $1.3 million. Art can be weird.

Q: II saw that the US government had a budget surplus. Aren’t we in a huge deficit? A: For the month of April, the federal government received more in tax receipts than it spent. This occasionally happens during April because of normal seasonal activity. The retirement of pandemic-related programs and stimulus also contributed and will hopefully help reduce inflation pressures. David Kelly explains some of the longer-term investment implications of reduced fiscal stimulus.

Investments are subject to risk, including the loss of principal. Because investment return and principal fluctuate, shares may be worth more or less than their original value. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Diversification does not assure a profit or protect against a loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved. Past performance is no guarantee of future results.

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