Things are tough out there. The stock market is off to its worst start to a year since 1970. Inflation is at a 40-year high. Interest rates are rising. A recession could be around the corner if ...
Last week inflation hit a 40-year high and there has been much talk recently about its impact on markets and the economy (as we discussed recently here. One way investors can benefit from rising consumer prices is the Series I Savings bond (I-bonds) issued by the US. Treasury. I bonds set their interest rates every six months (in May and November) based on inflation and a fixed rate. Since they are tied to inflation rates, until recently I bonds have flown under...
First, the bad news. During this year’s first quarter inflation reached a 40-year high. Russia invaded Ukraine, destroying cities and killing civilians. The bond market had its worst three month stretch since 1980. At one point, the NASDAQ entered bear market territory, while the S&P 500 and Dow both experienced corrections. And, by one common measure, recession is a near certainty.
It has been said that “far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves”. That sage advice would have come in handy at the turn of 2021. Remember, this year started with a riot on Capitol Hill…during a global pandemic. Following the insurrection, concerns about newly elected President Biden’s proposed tax hikes took center stage, only to later be overshadowed by inflation running at levels not seen since the early 80’s.
