The biggest problem facing small business owners is no longer the labor shortage — it’s inflation. That is according to a December 2021 survey release by the NFIB Research Foundation. Shortly after the release of this survey, inflation clocked in at 7 percent over the past year, the highest measure of the Consumer Price Index (CPI) since 1982. In reaction to this problem, I suspect that the Federal Reserve will combat higher prices of goods and services. Up until now, the Fed has been comfortable letting inflation run above its target of two percent. A month ago, I predicted “at least…
Insights & Advice
Allen Harris
The top financial searches of 2021
The thing about investing is that it’s a lot easier to look back than forward. I will take the easy way out and talk about what was interesting in 2021. The website Investopedia has more than 20 million monthly readers. As you likely concluded by the website’s name, it draws a more investment-centric crowd than Google. Investopedia identified the most popular investment terms of 2021. I’ll list them and give my thoughts on why they were so popular. Were any of these compelling to you last year? Capital gains tax: Last year, investors were trying to determine if they should sell assets and…
A two-thirds chance the stock market will go up in 2022
Are you familiar with the hot hand fallacy? Gamblers fall victim to it when they convince themselves that wins or losses come in streaks, and those streaks stay that way because, well, just because they believe past performance is indicative of future results. In most cases, it isn’t. Admittedly, sometimes past performance is indicative of future results. I’ve hired people who have shown a track record of progressive responsibilities — and with the proper support, they continue to do so. A good boxer often beats her next opponent because she has developed skills and knows how to put together a fight…
Has inflation hit its peak?
The Consumer Price Index (CPI) is an often-used gauge of inflation in the U.S. economy. On December 10, 2021, the CPI rate was a blistering 6.8 percent year-over-year (YoY), more than triple the Federal Reserve’s 2 percent target and its highest level since 1982. Even though energy takes up less than 8 percent of the typical household expenses, it accounted for 30 percent of the YoY gain. Vehicles, shelter, and food were the next biggest contributors to the CPI. Along with energy, those four inputs represent almost 61 percent of consumer purchases but account for 81 percent of the YoY…