Thing’s You’ll Learn Along Today’s Journey
Are you wondering how to make sense of everything that is happening in the world right now? How does it affect your finances and your future? On this special market update, Michael Sorrentino, CIO of Elevated Capital Advisors will discuss what is being reported on in the news, what’s NOT being reported on, how we are addressing volatility, and what we are not going to do (or going to do) about it.
What’s being reported on right now? Russia and the geopolitical tensions with Ukraine. Russia has been doing stuff like this for a while now. It began with Georgia in 2008, annexing Crimea in 2014, and now this. This has been brewing for years and now it’s finally escalating. But looking at the data, geopolitical events impact the market for a short amount of time. We usually see corrections within a few weeks.
But there is also a lot that is not being reported on. Retail sales are up 3.8% in January. That’s a healthy retail sales number. We like this sign. People are getting their paychecks and the economy is growing. There are hurdles but looking at the underlining data, the economy is strong.
If you think inflation, Russia, interest rates, or anything else floating around in the news right now will severely impact the economy you need to ask yourself “How will any of this impact spending?” That’s the question we’ve used with clients who are worried about Russia, and it’s mostly worked. Our economy is spending 88% (70% consumer and 18% business). How will Putin keep people from spending their $2.5 trillion in excess savings at a time when mask and travel mandates are being lifted?
The odds of another World War are infinitesimally small. Countries talk to each other more today versus decades ago, alliances are stronger, globalization has created interdependencies, and there hasn’t been a military force like the U.S. in the history of mankind. Sometimes it’s healthy to turn off the news. We are probably seeing emotional reactions to these events and as we know emotional reactions are never a good thing. The economy is strong and that will likely continue into the future.
Listen to the full episode or skip ahead using the timestamps below to hear more about the planning process.
[0:55] – Let’s talk through this
[1:55] – Catalysts for volatility
[5:33] – What’s not being reported
[11:06] – The shift that’s occurring now
[13:28 ]– Geopolitical pressures with Russia
[15:24] – Rising interest rates
[18:15] – How does this impact spending?
[20:11 ]– Starting early and going slow
[23:01] – Adjustments based on fundamentals
[23:49] – What are we not going to do?
[26:34] – The economy is strong
Looking Back From The Mountaintop
“The fed is not going to rise interest rates unless the economy is strong.”