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Economic trends that could affect your portfolio:
- Market all-time highs
Economic Trends and numbers
One of the biggest economic trends right now is how unemployment is continuing to come down but the numbers from the Labor Department are deceiving (more in the video).
Another economic trend that we have been talking about for several years here at fi-Plan Partners is how business models are changing, especially in healthcare and education. It’s called “Creative Disruption” and it’s being caused by innovation. As old industry models are crumbling, innovation is allowing for the creation of new models. Last week’s edition of The Economist magazine has “Creative Disruption” on the cover. It discusses education and especially how online education is dramatically changing universities.
As we watch the employment numbers rise, The Economist is telling us that by 2025, two thirds of universities could be closed or drastically changing how they operate. We look at these kinds of trends for our clients to find new investments that will benefit from these changes (more in the video).
We are also seeing market highs as well as inflation and prices going up. It’s important for investors to know tht if your portfolio is not staying ahead of inflation, you are not going to have enough money to continue living the lifestyle you’ve grown accustom to.
The economic trend of another market all-time high
The week was pretty slow until Thursday when we saw the DOW hit an all-time high at 17,000 points being pushed by the employment numbers. From a historical perspective, this is occurring quite differently than in the past (more in the video).
Why are we concerned about this? The employment report comes out at the beginning of the month and it covers all areas of the economy. The big take away is that this report shows how retail stores are hiring. This is important data about the economy because it tells us that the retail industry is confident that people are going to be buying products. This is confirming the second quarter momentum we have been seeing.
The ISM manufacturing report is also giving us a good feel for the economy and we are looking at the details closely. This week begins the earnings season which we will be analyzing beginning on Thursday when those numbers come out. Currently, we are watching the data that the Federal Reserve is focused on, as well as what the everyday individual is seeing in the economy. You may be seeing prices rising at the grocery store on meat, seafood, milk, cheese and other perishable products. Between disease and droughts, the meat industry is being hit hard (more in the video).
What is impacting your wallet?
The Fed is trying to control the economy to keep inflation in a “sweet spot” (more in the video). The Fed is looking at every bit of data that has to do with food and fuel which comes from The Personal Consumption Expenditure Price Index. That index is going up and we are watching this closely, as we could be seeing an important turn as people are impacted in their wallets (more in the video).
We celebrated independence this weekend and as an independent wealth management firm, we keep up with all this data and more to help guide our clients towards more independence. Our independence as a financial firm gives us access to so much data that we are confident we provide a higher level of service to our clients.
Greg Powell, CIMA
Email Greg here
fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.