Central banks and companies around the globe are hesitant to provide guidance. With Q2 GDP estimates coming in at -0.9%, we have entered a technical recession, although not a political recession apparently. Many have wondered how the Fed expects to effect supply issues in both energy and food. The scary answer? They know they can’t. The Fed’s actions hope to make you think twice about spending. They cannot affect supply, but they can slow the velocity of money to the point where demand will come down and prices will balance out. The Fed is playing a game of chicken. On one side is the value of our collective assets; on the other is our demand for all things, especially food and energy. Central banks are fighting for their credibility, and reputation, which is a dangerous place to be making such decisions from.
Content continues below advertisement
It is quite an odd year. The 60/40 portfolio had its worst start to the year ever. Everyone but aggressive, primarily equity investors felt pain in terms of returns, not too dissimilar to 2008. Inflation actually hurts a greater portion of the population than just a traditional recession. In a traditional recession, unemployment may tick up to 8-10%, mostly affecting those who lose their jobs. Inflation effects everyone’s purchasing power, which is a foreign concept to most market participants in America. This is white collar recession, not a blue collar one. Your bonds and cash aren’t safe, but the US dollar is king. The dollar and the euro reached parity, exporting our inflation to economies around the globe. It’s a confusing time to be an investor. Sentiment has never been lower, and while we are raising rates at the largest magnitude in over 15 years, how much worse can the market get if employment stays relatively high?
For more news, information, and strategy, visit VettaFi.
DISCLAIMER
Past performance is no guarantee of future returns. Articles, opinions, and/or commentary written by Toroso Investments, LLC (“Toroso”) and/or its advisory personnel are for informational and educational purposes only; are not intended to constitute legal, tax, accounting or investment advice; and do not constitute an offer to sell or a solicitation of an offer to buy any security or service. Securities discussed are presented for illustration purposes only and are generally selected because they are relevant examples of the respective points being made. Toroso and/or its supervised persons and/or clients may have a beneficial interest in any security discussed and thus a conflict of interest may exist when Toroso and/or its advisory personnel write articles, opinions, and/or commentary that is published. Securities discussed do not represent all of the securities previously or currently purchased, sold or recommended to Toroso’s advisory clients and may not have been previously or currently recommended to Toroso’s advisory clients. It should not be assumed that any securities discussed in articles, opinions, and/or commentary written by Toroso and/or its advisory personnel were or will prove to be profitable or that Toroso and/or its supervised persons and/or clients achieved any results that are discussed. Furthermore, Toroso and/or its related persons may take actions for their own accounts and/or the accounts of Toroso’s clients that are not in conformity with and may be contrary to information conveyed in articles, opinions, and/or commentary written by Toroso and/or its advisory personnel. Investments or strategies discussed may not be suitable for all investors and should not be considered a recommendation to purchase or sell any particular security. Investors should make their own investment decisions based on their specific investment objectives and financial circumstances and are encouraged to seek professional advice before making any decisions. While Toroso has gathered the information presented from sources that it believes to be reliable, Toroso cannot guarantee the accuracy or completeness of the information presented and the information presented should not be relied upon as such. Any opinions expressed are Toroso’s opinions and do not reflect the opinions of any affiliates or related persons. All opinions are current only as of the date of initial publication and are subject to change without notice. All investment strategies and investments involve risk of loss, including the possible loss of all amounts invested.
