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Today’s Inflation Report

It is a big day for markets as U.S. Stocks dropped and Treasury yields jumped with the news that inflation hovers over a four decade high. In the short term, that points to the Fed remaining aggressive in their counter measures, including tightening the belt on risk assets. What does that mean for the “average Joe investor?” To begin, you may be taking a short term hit on your stocks. That is not a new experience in 2022, but we had hoped that the blood letting would end sooner. But there are two points of good news.

First, if you can make it through the storm without panicking, you will probably live to see blue skies. It is reasonable to bet on the market rising again before the fourth quarter of 2022 closes. It may be a nail biter for now, but there will ultimately be a reversal. Second, despite the fact that most investors unwisely sell low and buy high, the very best time to purchase is when stocks are plummeting. That means that this is a moment of opportunity for the bold and the brave. If you have the liquidity, now is a time to invest in proven successes like disruptive technologies. Remember that stocks, like life, often require three steps forward, two steps back, before taking more steps forward.

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Erik Weir