We are watching four risks: geopolitics, domestic politics, demographics, and the Federal Reserve.

The first three help determine where rates need to be to combat inflation pressures. As job growth continues and wages remain constant, the price of goods continues to reduce. Earnings of banks and insurance companies have been a telltale sign of the state of the economy. We are sowing the seeds for a more productive market. I’m not sold on a recession at all this year; the signs just aren’t there.

For January, the S&P 500 was up 5.3% YTD:

This was aided by the belief that a slowing economy and softening inflation allows the Federal Reserve to be less intent on raising rates. Small businesses and companies have been responsive for most of the job growth in the United States during and after the pandemic. As inflation declines, the markets should head higher. I expect the markets to rise overall by 12% by year end.

Take Note:

The optimist sees bubbles and thinks champagne, while the pessimist thinks Alka-Seltzer.

Sometimes investing seems easy; sometimes the right decisions are hard to make.

How to determine where to put your money is the challenge.

It is a great time to diversify your portfolio to begin the year. Be sure to call/email to set up a conference call or in person meeting.

The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. No investment strategy can guarantee a profit or protect against loss.