The Prudent Retiree - September 29, 2022

If only – I got out of stock at the end of last year. If only – prices weren’t going to the moon. If only – the Fed wouldn’t raise rates any higher. If only – my guy wins the election. If only – the Russians are stopped. If only – the banks paid higher interest rates.

If only is mental anguish. It changes nothing. Stock and bond markets are down sharply this year. We can enumerate many reasons. They all matter, but markets are primarily down because of inflation. This has resulted in aggressive Fed rate hikes and a booming dollar. Not a market friendly environment.

Lou Reed was a cult rock star from the 1960s until his death in 2013. He was billed as the Rock ‘n’ Roll Animal and his music combined biting lyrics with loud guitars. He wrote about life on the street and some would characterize his songs as cerebral and poetic. He is a member of the Rock and Roll Hall of Fame as both a solo artist and as a member of the Velvet Underground. He was posthumously elected to the Grammy Hall of Fame in 2015. I saw many of his concerts in the 1970s and once rode up the elevator at the Whitney Museum of Art with him. Didn’t get an autograph, just said hello and thank you. He responded with a nod.

The words of Lou – “How do you think it feels?” When the market is dropping, it feels lousy. Prudent Retiree has been telling you the markets will be volatile. Buckle up and expect the sharp downs-and-ups to continue. It is important to remember that equity performance from 2019-2021 was well above the norm. Down periods are part of market cycles. Our risk management process led us to move 50% of our qualified equity portfolios into cash earlier in the year. This significantly reduced our losses as the market continued to fall. It still feels lousy, but not nearly as painful as remaining fully invested.

The words of Lou – “When do you think it stops?” The truth is no one knows. Expect the investment climate to be tough and volatility to continue. This stops when the Fed indicates they are done raising rates and the dollar peaks and begins to weaken. We don’t know when there will be a turn, just what will signal the start. Our allocations remain 50% equity, 50% cash. We will diligently monitor risk and change when appropriate. That is how we feel.

Here at Horseman Group, we strive to provide you with the highest possible level of customer service. Feel free to reach us at 314.692.7842 with any questions regarding your investments, risk management, or retirement. Should you wish to be removed from this mailing list for any reason, please respond to this email with your request, and your name will be removed immediately.

Horseman Group – 3 CityPlace Drive - Suite 290 – St. Louis, MO 63141 – 314.692.7842 – www.horsemangroup.com

Advisory Services offered through Horseman Group. Securities offered through AW Securities, a registered Broker/Dealer, member FINRA/SIPC.