Written By: Alli Masoero, CFP® – Zenith Lead Financial Planner
Not Rich, Yet: A blog talking about finance in a way you’ll actually understand.
No, she did not go there to get insider trading tips on semiconductors (well, maybe). Pelosi was the highest-ranking American politician to visit the island in 25 years, creating a shockwave across the geopolitical environment. It’s kind of a big deal, y’all.
I think it’s safe to say we all have a lot of questions circling in our heads.
We hear fed announcements about fighting inflation, markets performing erratically, combined with an unpredictable political environment both nationally and internationally. Let’s touch base:
→ Geopolitical Issues: Pelosi’s visit, Putin’s war, and rising tensions in the technological sector between the U.S. and China are all issues factoring into negative market outlooks. A week later, Biden passed the Chips and Science Act meant to bolster domestic R&D and chip manufacturing.
→ Market Volatility: While rallying after a late night may have worked for you in college, it doesn’t seem like it is for the market. It is facing a downward trend, and we may find coming rallies to be short lived.
→ Housing Prices: This is a wild housing market guys. Prices are still rising – but, with high interest rates we see the growth of prices slowing rapidly. From an analyst perspective, this is extremely unusual.
→ Inflation Continues: In July, it dropped slightly to 8.5%, and while that’s a move in the right direction (likely due in part to Fed Action), we are still very much in a high inflationary environment.
→ Crypto Remains Uncertain: Leading Crypto firm, Coinbase, missed revenue estimates for Q2 and reported a $1.1 billion loss. Cryptocurrencies future performance continues to remain uncertain.
We are all on the same page here, it’s unsettling, and I am not here to deny that. Many large financial mistakes are made in times of uncertainty and I want to help prevent that!
- Review Your Investments: It’s important to review your investment allocation in times of volatility.
- Keep Investing: Only if your budget allows it! Market downturns can be a good opportunity to buy.
- Limit The Risk: Having risk in your portfolio can provide more uncertainty. Be cautious, do your research, or talk with someone before investing in risky assets (crypto, NTFs, real estate/housing etc.).
- Emergency Fund/Spending Review: Revisit your emergency fund. Saving is not everyone’s favorite piece of advice. But, with layoffs happening all over, it’s integral.
- Stay Calm: Maybe you do need a house, or maybe you need cash from your portfolio. That is okay too. Just talk to someone first and do not panic!
Nothing is permanent and nothing is set in stone. From what we have experienced over the past couple of years – you can see things can change in an instant. So focus on the things you can control, the things I (so kindly) underlined for you above.
Be smart out there guys!
All written content is for information purposes only. Opinions expressed herein are solely those of Zenith, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.