History repeats itself, asserts Mike Larson, growth and income expert and editor of Safe Money Report.
Whether you’re religious or not, you’ve probably heard some version of the following quote from the Bible...
“What has been will be again, what has been done will be done again; there is nothing new under the sun.” - Ecclesiastes 1:9
The general idea? The world moves in CYCLES. Humans are destined to find themselves in similar circumstances and doing similar things now and in the future as they’ve experienced in the past. It’s just in our nature.
Right now, unfortunately, that means two major forces are converging in the same place and time...
The cycle of inflation
The cycle of war
The numbers on the first front are grim. Consumer prices soared 7.9% from a year ago in February. That was more than FOUR TIMES the inflation rate seen a year earlier.
Plus, those figures only capture activity that pre-dates Putin’s Ukraine invasion. In other words, the most recent increases in the prices of everything from wheat to gasoline to copper to corn have yet to filter through the economy.
As for the conflict in Eastern Europe, the pictures, videos, and headlines we wake up to every morning tell an even grimmer story. Destruction, death, and displacement on a scale Europe hasn’t experienced in a long, long time.
It’s an incredibly difficult time. One where even talking about the markets can seem a bit superficial. But that is what my colleagues and I are here for after all...to help you protect and grow your wealth in good times, bad times, and everything in between.
Which brings me to my best analysis of what lies ahead...
1. More volatility – If multi-hundred-point swings in the Dow give you indigestion, you better stock up on Tums! Any minor good news, such as rumors of peace negotitaions, will cause stocks to soar...while more bad news on the inflation front will cause stocks to tank.
But overall market conditions have weakened. The list of stocks and sectors doing well is shrinking. That means a “Safe Money” investing approach is monumentally important!
2. A more aggressive Fed – The Federal Reserve hiked interest rates on March 16 for the first time since December 2018.
It was just a 25 basis-point rise (less than necessary, given raging inflation). But Chairman Jay Powell will also make it clear this is just the first of many planned moves.
In other words, the Fed isn’t Wall Street’s best friend any more. Expectations of more hikes will keep fueling the market rotation I’ve been discussing for months, while helping to keep volatility elevated.
3. A greater need for critical, up-to-date guidance – Conditions in this market are changing...rapidly.
Bottom line? Cycles that drive world events and market action are in motion. They absolutely must NOT be ignored if you hope to protect and build your wealth. We’ll do our best to keep you ahead of them, come what may.