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“It’s different this time.” I’m hearing this more frequently from economists and strategists on Bloomberg and CNBC. Why? They believe today’s inflation is the result of Covid’s pent up demand. Since the last major pandemic was the Spanish Flu in 1918, maybe they’re right. Let’s not forget, however, what Mark Twain once said, “History doesn’t repeat itself, but it rhymes.”
What about the statistic that a recession occurs 100% of the time after the yield curve inverts which, importantly, occurred at the beginning of 2022? How about the lack of breadth in this year’s major market averages? As we live in a consumer driven economy, let’s not overlook the below-trend savings rate, and the above-trend credit card balances (approaching $1 trillion). Finally, one can’t ignore the geopolitical risks here and abroad.
I don’t portend an ugly recession or crushing blow to the stock market. Nor do most financial advisors. What they do quite well, however, is protect investors’ capital gains, and prevent mistakes when new capital is being invested. They know how to implement dollar cost-averaging programs and stop-loss orders or collars on highly concentrated stock positions. They can build custom market-linked notes for investors who are particularly risk averse. They know how to build bond ladders on the yield curve. They understand the municipal bond market and the intricacies of different issuers, call features, and insurers.
Is it possible the market could go down 10%, a correction by definition, between now and year end? In my opinion, this is a likely scenario. How about a 20% decline or bear market? That I’m less certain about. Here’s a better question. What’s more likely, the market rising 20% or declining 20%? Regardless of your answer, you’ll improve your odds of participating on the upside or limiting your downside with a veteran financial advisor.
Simply put, it’s NO TIME TO GO IT ALONE!
Paul Sullivan
Founder and Managing Partner
Wealth Management Independence
(973) 525-7626
Jun 21, 2023
No Time To Go It Alone
What about the statistic that a recession occurs 100% of the time after the yield curve inverts which, importantly, occurred at the beginning of 2022? How about the lack of breadth in this year’s major market averages? As we live in a consumer driven economy, let’s not overlook the below-trend savings rate, and the above-trend credit card balances (approaching $1 trillion). Finally, one can’t ignore the geopolitical risks here and abroad.
I don’t portend an ugly recession or crushing blow to the stock market. Nor do most financial advisors. What they do quite well, however, is protect investors’ capital gains, and prevent mistakes when new capital is being invested. They know how to implement dollar cost-averaging programs and stop-loss orders or collars on highly concentrated stock positions. They can build custom market-linked notes for investors who are particularly risk averse. They know how to build bond ladders on the yield curve. They understand the municipal bond market and the intricacies of different issuers, call features, and insurers.
Is it possible the market could go down 10%, a correction by definition, between now and year end? In my opinion, this is a likely scenario. How about a 20% decline or bear market? That I’m less certain about. Here’s a better question. What’s more likely, the market rising 20% or declining 20%? Regardless of your answer, you’ll improve your odds of participating on the upside or limiting your downside with a veteran financial advisor.
Simply put, it’s NO TIME TO GO IT ALONE!
Paul Sullivan
Founder and Managing Partner
Wealth Management Independence
(973) 525-7626
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