The war drums are beating. Oil and gas prices are soaring. Inflation is at a decades-long high. Bearish sentiment is exploding. And the stock market is giving investors angina. What to do? Take a deep breath and remember that whatever the circumstances, this too shall pass. I know that is easy to say, but a longer-term perspective might prevent you from doing something foolish like selling into this downturn. Let’s address the present fear that today’s geopolitical tension will somehow escalate into possibly WWIII. Sure, anything can happen, but is war the most probable outcome? The present reaction by the…
Insights & Advice
Tag: bearish
The grumpy consumer
You would think that the Americans would be feeling pretty good right now. Wages are increasing almost monthly. Workers have their pick of jobs in this tight labor market and the coronavirus seems to be peaking. So why are so many consumers unhappy? Consumer sentiment numbers, as measured by the University of Michigan Consumer Sentiment Survey, fell in preliminary February 2022 numbers to its lowest level in more than a decade. Back then, in October 2011, the unemployment rate was more than double the present 4% rate. In a January 2022 Gallup Poll, 72% of those surveyed thought it was…
Market bears are baffled
On a weekly basis, at least one of the main market averages hits another all-time high. But the bears continue to expect a correction. Will they ever be right? Sure, but playing for a pullback is a losing proposition most of the time. You may get it right eventually, but the opportunity cost of staying on the sidelines can be, well, costly, as the bears are discovering this month. A much better way to prepare for the inevitable next market correction is simply to reduce your risk by adjusting your portfolio. That might mean trimming back your more aggressive holdings…
Fewer hedges, more health care
Dalton — The U.S. economy lost 20.5 million jobs in April, bringing the unemployment rate to 14.7%. That’s the highest U.S. unemployment rate since World War II. During the Financial Crisis, the unemployment rate hit 10%, but until now, the previous post-war rate was 10.8% in December 1982, at the bottom of a 16-month recession. To put that in perspective, in the last couple of months, not only did the U.S. lose nearly four times as many jobs as during the Great Recession, but we lost more jobs than we had created in the decade-plus since the Great Recession. Yet…