Inflation remains higher than most Americans would like, with the US Bureau of Labor Statistics reporting that price increases over the past 6 years have occurred at a steeper rate than the previous trend indicated.
Recent economic data also shows some softening in the job market. That puts the Federal Reserve in a difficult position. Higher interest rates can help slow inflation, but they can also slow economic growth and employment.
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As investors, we have little control over inflation, interest rates, or employment data. What we can control is how we respond to them.
While inflation and unemployment often dominate the headlines, long-term investors are rewarded by focusing on business fundamentals. Corporate earnings continue to show resilience, which remains one of the most important drivers of long-term market performance.
The news cycle encourages us to focus on what might happen next. Successful investing requires us to focus on what matters most over time.
Because we can't reliably predict the market's next move, our approach remains unchanged: maintain diversified portfolios, manage risk according to your goals, and stay focused on the long term rather than the latest headline.
*Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.
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Here are some other things that caught our attention:
On the topic of inflation, when adjusted over time, the price of a Chipotle burrito has not increased. Though some people claim they are smaller.
In March 2020, we attended a conference where Steve Gleason shared his inspiring story. A former professional football player, Gleason’s perseverance in the face of ALS is worth knowing about.
State-to-state, there is wide variance in auto theft rates in the United States. Florida fares surprisingly well for a populous state.