If you’re seeking clarity, the daily spew of financial commentary won’t help. To cut past the clutter, we’ll revisit our investment selection process over this three-part series. Reviewing the steps involved speaks to the importance of looking past today’s unsettling news in pursuit of your greater goals.
There’s been a lot of talk about recessions lately: Whether one is near, far, or perhaps already here. Whether we can or should try to avoid it. What it even means to be in a recession, and how it’s related to current market turmoil.
I Bonds are not a cure-all for inflation. And there is a thing or two to know about them before you decide whether to proceed. But as one of few holdings whose payouts are indexed to inflation, they may offer a refreshing haven for a portion of your emergency funds or similar cash reserves.
After taking a closer look at interest rates in part 1 and inflation in part 2, we come to the heart of the matter: When interest rates, inflation, or both are on the rise, what’s an investor to do?
Inflation is the rate at which money loses its purchasing power over time. As you might guess, there are many ways to measure such a squishy figure. There are various economic sectors, such as energy, food, housing, and healthcare, which can complicate the equation by exhibiting wildly different inflation rates at different times. There is ongoing debate over which figures are most relevant under what conditions.
At its March 15–16 Federal Open Market Committee (FOMC) meeting, the U.S. Federal Reserve raised its federal target funds rate by a quarter point. It was the first increase since December 2018, but it wasn’t a huge surprise. Fed Chair Jerome Powell had already said we should expect as much, with the potential for additional hikes before year-end.
Despite our fervent hopes that Ukraine’s sovereign rights would prevail over tyrannical aggression, it’s now clear that Vladimir Putin has doubled down on the latter. Time will tell how his plans will play out.
Have you been reading the daily headlines—watching markets stall, recover, and dip once again? If so, you may be wondering whether there’s anything you can do to avoid the motion sickness.