Special Note: Just a reminder that we offer tax preparation through our tax team at Summit Tax Services/Heemer Klein. If you’d be interested in a quote, as we’re very competitive, please give us a call at 586-459-5340. Our goal is to make tax time easier on you. Please do not finalize/file your taxes before March 15th if you have a non-retirement investment account with us in case a 1099 is revised for any reason.
Navigating the Market Amidst Conflicting Data
In January, we received the latest inflation report, which showed that Core inflation, which is of particular interest to the Federal Reserve, increased by 0.3% in December and 5.7% over the past year. Services inflation came in year over year at 6.1%, which is still high, but lower than the 8.5% three months ago.
Researchers at Goldman Sachs recently published a note titled: “Getting worse before getting better” when describing the housing market. They downgraded their prediction, saying that housing prices will fall 6.1% nationally in 2023. Last week we received some troubling house data: Sales of existing single-family homes have decreased 26.6% since December 2021.
Our Approach for the Future
Santa Claus did not arrive in December, as the S&P 500 was negative 6.3%. The Nasdaq was down 8.73%, while our daily actively managed portfolios were actually positive. We encourage you to look at your year-end statements to see the overall performance and call us if you’d like to discuss it.
In January, the stock market indexes were positive, but most of our portfolios were negative. When looking at the overall picture, we believe the stock market is overbought in the short term and is overdue for a drop, so we positioned to profit from a drop the same way we did in December. That predicted drop has not occurred yet. We have a research indicator that predicts recessions. While past performance cannot predict future performance, the indicator flashed that a recession is coming, and in the past, it has a 100% hit rate.
A Look at Our Investment Toolbox
As you know, we have many tools in our toolbox, including the ability to purchase investments that profit when the stock market goes down and flip back to normal stock-based investments if we think the market is heading up. After a short-term drop occurs, we will consider removing our hedges, buying stocks/stock ETF’s, and aligning with the market again.
Our ultimate goal is to make money, so we’re using what we believe to be all the appropriate tools in our toolbox to accomplish that goal potentially. We are always trying to improve, so we’ve made some changes to our research company lineup and plan to continue to improve our processes to help ensure potentially better performance this year moving forward. We aim to profit from the environment and watch inflation, the Ukraine war, the Federal Reserve, corporate earnings, and the markets like a hawk. This is why we manage our active portfolios daily.
Financial Review for 2023: Schedule a Meeting Today
We’d love to have a review meeting with you to discuss investments, retirement income 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 contact our office at (586) 226-2100 to schedule a meeting today!
Keep Us Informed of Financial Changes
If you’ve had any changes to your income, job status, marital status, 401K options, address, or any other financial changes, please get in touch with us right away. We hope you and your family have an excellent, safe, and healthy start to 2023!
Happy New Year again to you and your family!
Bob, Ken, Jim, Zach, and James
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