WAR, A Market Update and "Possibly the greatest risk to your assets"

WAR, A Market Update and "Possibly the greatest risk to your assets"

October 09, 2023

WAR!

This has been a year of conflict!  The Russia / Ukraine war, Chinese spy satellites and now the middle east.  Over the weekend, as you probably know by now, Hamas which is financially backed by Iran, conducted a surprise attack from Gaza into Israeli territory.  Saturday's attack was on the Jewish Sabbath and a major holiday.  As I write this, over seven hundred Israelis have lost their lives, over one thousand wounded and over one hundred civilians and soldiers were taken to Gaza as hostages.  I write about this in a financial blog because it matters... it seriously matters.

Surprisingly, the markets have shaken it off for now but it is my fear that when, not if, Israel retaliates, it may be towards Iran as well as Hamas.  A major disruption in the middle east creates geo-political uncertainty and most certainly higher oil prices, neither or which the economy and general markets react positively to.  Personally, I am moving my discretionary client accounts to more defensive investments that do not correlate with the markets as well as short term fixed income investments like certificates of deposit.  In my opinion, the risk just outweighs the potential return for now.  If you would like to sit down for a review of your current investments and the potential downside risk, please reach out to Kim or I to set an appointment at 731-285-0097.

A Market Update

As mentioned, the markets have held steady through this most recent tragedy.  However, despite above average returns, the markets have fallen the last few months.  The S&P 500 peaked on July 31st closing at 4,588. As I write this, the S&P 500 sits at 4,322 (down 5.7%) and was as low as 4,229 on October 3rd.  

Here are a few concerning headlines and snippets from the article

"US Money Supply Falling At Fastest Rate Since 1930's" Reuters March 30, 2023

"Money supply has now been shrinking year-on-year since December, an unprecedented development in modern times that should make investors sit up and take notice - growth, asset prices and inflation could all weaken." Jamie McGeever Reuters

Rising US interest rates posing the latest threat to US economic soft landing" AP October 5, 2023

"Surging interest rates are intensifying the challenges for the U.S. economy and threatening to derail the Federal Reserve’s drive to tame inflation without causing a deep recession." Christopher Rugaber AP

"The Fall Of Home Prices"  Forbes September 28, 2023 

"Is there any reason to think that the chart for Tampa (or Phoenix, Charlotte, Atlanta, Nashville, etc. ) will not pretty soon look like the one for Austin?" Ingo Winzer Forbes

I could continue building the wall of worry with higher oil, two military conflicts, a looming election year, high stock valuations, an unbalanced S&P 500, Union strikes, a leaky border, etc.. but I digress.  You get the point.

Of course all of this is opinion and we can not see into the future.  But we can prepare for the worst and hope for the best.  I suggest you call your financial advisor for a review and if you need a financial advisor, give us a call to set up an introductory meeting.  You can learn more about what to expect from our first meeting here:  Your First Meeting With Chad´╗┐

Possibly the greatest risk to your assets.

I have been in the financial services industry for over 26 years now (wow time flys!).  My first job was with John Hancock Financial Services and they trained me to focus on one thing, Long Term Care insurance.  in the late nineties, long term care insurance was relatively new.  The baby boomers were in their fortys and fifties at that time but their parents were aging and the cost of long term care got their attention.  Every insurance company wanted in on the action, which due to so much competition, created cheap premiums.  However, as claims came in, many of these companies were forced to sell their "book" and premiums went up.  Today, the number of companies offering long term care has shrunk significantly and the nature of the policies has changed  as well.  Today, we see more "single premium" policies than the traditional monthly or annual pay.  

When I meet with a potentially new client, one of the first things I check when doing a financial inventory is long term care insurance.   I know that no matter how well I manage the investments, it could all be taken away with a medical disability.  Home care, assisted living and nursing homes are paid one of two ways unless you are completely broke:  By your savings and investments or insurance.  Sure you can self insure but do you self insure your home?  No matter how wealthy you are, paying pennies for dollars is a good idea.  In my opinion, Long term care insurance is one of the cornerstones of a well thought out and implemented financial plan.

There are no promises.  Of course you have to have the money to buy it but you also have to have decent health.  If you would like to set an appointment to discuss if long term care insurance is right for you or to find out if you would medically qualify, please call the office to set an appointment.  731-285-0097

Please pray for the world today!

Regards,