On Thursday, August 4, Ryan O’Connell hosted the quarterly BTWM Virtual Lunch Webinar. The free 30-minute meeting covered the current state of the market, inflation, and protecting purchasing power.
Ryan started the webinar by talking about where the market currently is, which is “violently flat.” After ups and downs, the S&P 500 has remained around the same level over the past three months, but has “been everything but smooth,” according to Ryan.
The story of the year up to this point has been inflation, and “the market is very interested in what the FED is doing and saying these days.” After reaching 40-year highs, it’s clear that we will have to work around record levels of inflation for the time being.
So, what should we do about inflation as investors?
https://www.youtube.com/watch?v=MbM5BN9VOU8
Ryan says to take an active approach to outpace inflation. To outpace inflation, which is at record highs, bonds simply won’t cut it. Ryan is looking at strong small cap stocks, which are currently well below long-term averages. Ryan recommends adding “width and breadth” to your portfolio. After the market was heavily “moved by the top 50 in the past couple of years,” Ryan believes that it’s “time for the other 450 to do the heavy lifting.”
“If you’re feeling that urge to do something; to take action; don’t move towards gold, don’t move towards bonds. Move towards improving the quality of the stocks you own.”
Ryan also stressed the importance of not focusing solely on your principal when investing for retirement in a rocky market where inflation is high. “It’s not about protecting principal; it’s about protecting purchasing power,” Ryan says.
“Is a recession imminent?”
With investor sentiment at all-time lows, every Financial Advisor is fielding questions about a potential recession. My response to questions about a recession is, “how much can we really get hurt?” At a recent convention, a speaker made a comparison between a recession and falling from a basement window. The lesson being, if we believe that we’re already close to the ground floor, which many experts do, then a fall won’t do much damage.
Stay tuned for details on the BTWM Q4 Virtual Lunch Webinar later this year. As always, if you need anything or have questions, contact me at Ryan.Oconnell@bloomingtreewm.com.