Everyone Macarena (I mean Macro) + an excellent podcast about Time, Money, & Experiences
Similar to the macarena dance and its popular run years ago…it seems being a macro economist is going viral, too. The reason is simple - it’s all about the Federal Reserve as highlighted in my January commentary. The fever pitch attention on the Fed/Inflation/Pivot won’t be changing anytime soon … they are the DJ setting the mood on the dance floor.
Meme Humor of the Moment:
Enjoy 4 - 4.5% risk free:
If you are afforded real wealth on your household balance sheet, have you calculated how much monthly income you are receiving from money market funds paying 3.9 – 4.0%? Reach for another 50 basis points by buying short-term treasuries direct (1 - 3 years). The wealthy are rolling in cash and now income, too.
Risk assets:
Inflation, inflation, inflation ... I will spare you the misery of a dozen charts to illustrate the rapid decline of numerous cost inputs / economic strength indicators (nor will I pretend to be a macro economist). Regardless, the labor market remains tight and the broad economy is not yet reflecting the result of 450bps of fed tightening. Be patient when allocating to risk assets.
Control what you can:
Prepare for higher rates for longer (Laddered treasury bonds).
The macro will continue to be difficult (Dollar cost average into risk / US equity).
Expect market volatility to be high in both directions (Don’t chase short-term rallies).
Don’t sit idle in a disappointing portfolio** (Low Return/High Fee is not the path to wealth creation.)
**I’d be happy to discuss this individually and illustrate the pitfalls of the typical portfolio.
Time, Money and Experiences:
The very definition of my role as a fiduciary is to help clients understand wealth and time (how to compound money). I strongly recommend listening to this discussion about “Time, Money and Experiences” with Dr. Peter Attia and investor/author Bill Perkins. When you are done listening, send the link to a 20-something-year old.
Best,
Jon
The podcast is free (no registration required either) as of FEB 2023…I do not control its access so listen while you can. WLA has no affiliation with Dr. Peter Attia, The Drive Podcast or Bill Perkins.
About Western Level
Western Level Advisors LLC is an independent Registered Investment Advisor. The firm provides investment management and long-term financial planning services for individuals. All services are provided on a fiduciary and fee-only basis. Western Level’s only purpose is to establish a clear pathway for each client to help them manage and compound their wealth.