Supporting Our Community with Gradient Gives Back
We appreciate your trust in Summit Financial! To show our appreciation, we’re proud to announce our partnership with the Gradient Gives Back Foundation. Gradient Gives Back provides critical support to local families facing financial hardship by assisting with mortgage payments. This assistance helps families who may otherwise face homelessness.
- If you know of someone who has fallen upon hard times, they may be considered eligible for help paying their mortgage for 6-12 months. Direct them to the application here: Application Link
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Note About www.SchwabAlliance.com
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- If you have not logged in since last September, when your funds moved to Schwab, they will send your documents on paper instead of email.
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Home and Auto Insurance – Quoting Update
Our team at Summit Insurance Services LLC, along with our business partners, have recently partnered with a large number of insurance carriers. If you are dissatisfied with your current home or auto insurance policy, whether it’s time for renewal or not, contact our office to learn how our team can potentially assist you in finding the right coverage with the right carrier at the right price. Call us today at (586) 226-2100.
Inflation on the Rise, but the Market Does Not Seem To Care (Yet)
In March, we received the February Consumer Price Index report and saw that inflation is increasing rather than decreasing. While it is a far cry from the 9% inflation rate in June 2022, Core CPI rose 0.4% and was up 3.8% on the year. On Friday, March 29th, we received more inflation data that showed energy prices increased 2.3% in one month.
The stock market performed well in March despite these concerns. The Federal Reserve met this month and said that despite the fact that inflation has stopped going down, they still plan to cut interest rates three times this year. We believe the market has moved up a bit too fast and is overdue for a short-term drop. In our opinion, this drop could be 3% all the way up to 15%.
Four Reasons for Long-Term Optimism
However, we believe the drop will be short-lived because, in the longer term, four pieces of evidence are currently making us optimistic that the next seven months until the election have the potential to be good for stocks overall despite some potential short-term bumps in the road.
- First, in our opinion, every President who is running for election wants to get re-elected, so they make moves that potentially “window dress” the economy and stock market before the election. Please check out the chart in this article for a refresher.
- Second, in late April of 2023, one of our most important longer-term indicators shifted from negative to positive. It had been negative since the first quarter of 2022, when we saw the bulk of our previous market volatility, and then it flipped positive to participate in the recovery during 2023 (Source: https://www.shermanportfolios.com/indicators). It remains positive at this time, so we remain optimistic about future performance.
- Third, our short-term and intermediate-term indicators are still positive, so four out of four preferred indicators are currently positive.
- Lastly, while past performance cannot predict future performance, the 200-day moving average of the S&P 500 has turned and has been heading up rather than down. This is a longer-term trendline, and in the past, it has had some success identifying a change in trend.
Federal Reserve Policy Easing (lower rates)?
We had a different indicator last year declare that there is a chance we’ll have a recession within the next year (inverted Yield Curve, Source: https://www.forbes.com/sites/simonmoore/2024/02/06/the-inverted-yield-curve-continues-to-flash-a-recession-warning/?sh=1325948b15ac). We’re hoping that recent improvements in the overall economy, inflation data, and the housing market, as well as signals from the Federal Reserve that interest rates may be lowered in 2024, will provide some stability moving forward.
Speak With a Trusted Advisor
We’d love to have a review meeting with you to discuss investments, retirement planning, college planning for kids or grandkids, tax preparation, health insurance, including Medicare supplemental and prescription drug plans, and various other financial planning topics. Please get in touch with our office at (586) 226-2100 to schedule a meeting today!
If you’ve had any changes to your income, job status, marriage status, a new birth in the family, 401K options, address, risk tolerance, or any other financial changes, please get in touch with us right away.
Sincerely,
with contributions from Robert Wink, James Wink, Zachary Bachner, and James Baldwin
Sources:
- https://www.cnbc.com/2024/03/12/cpi-inflation-report-february-2024-.html
- https://finance.yahoo.com/news/inflation-gauge-closely-tracked-federal-124908519.html
- https://www.shermanportfolios.com/indicators
- https://www.carsongroup.com/insights/blog/two-more-bullish-pieces-of-evidence/
- https://www.forbes.com/sites/simonmoore/2024/02/06/the-inverted-yield-curve-continues-to-flash-a-recession-warning/?sh=1325948b15ac
Notes & Disclaimer: Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, or correctness. This information is provided “AS IS” without any warranty of any kind. All historical returns data should be considered hypothetical. Past performance is no guarantee of future results.
This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. Investment advisory services are offered through Summit Financial Consulting, LLC, an SEC registered investment advisor. Registration does not imply a certain level of skill or training. Summit Financial Consulting Investment Advisor Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Note: Please update Summit Financial Consulting, LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an additional copy. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. The Sherman Group, LLC is not associated with Summit Financial Consulting, LLC in any way, other than a research sharing partnership. Back testing is more heavily scrutinized than any other type of investment analysis because it can be updated to take advantage of past data. The algorithms and trading signals that we receive from the Sherman Group, LLC were created using back testing with the goal of creating a sustainable research process. We have reviewed data from the entire 20 year period which was mostly back tested, and have also personally reviewed the live data for the past 5 years and feel comfortable with it, but we encourage you to meet with us and ask questions so you are fully informed on what we plan to do with your investment assets at Charles Schwab. It is important to look at fees, taxable repercussions, and trading frequency when looking at a rate of return number. There is no perfect system or research feed, and Sherman Group, LLC has had both longer term and short-term periods where they lost money. Investing involves risk, and these portfolios are no exception.