The Prudent Retiree - June 14, 2022

What about the market? We’re all looking for that answer and truly no one knows. Inflation is the cause of the collapse. Inflation is at levels we haven’t seen for forty years. Higher prices for gas, food, used cars and everything else. Treasury Secretary Yellen and Fed Chairman Powell recently admitted that they had missed it. President Biden blames Putin, Republicans, and Exxon. Republicans blame out-of-control Biden and Democrat spending programs. A pox on both your houses!

Susan Tedeschi fronts the Tedeschi Trucks Band along with her husband, Derek Trucks. She is a renowned singer/songwriter and “Looking for Answers” is about her relationship with God. Derek spent many years as the slide guitar player for the legendary Allman Brothers Band. Many consider him to be the best since the late Duane Allman. I often listen to the same song by both and can’t make a choice. They always fill the house on the jam band circuit.

As I write, the S&P 500 has just entered bear market territory. Inflation brings about higher interest rates and most likely a recession. We’re looking for answers, but there are no easy ones. The supply/demand imbalance brought about by Covid stimulus spending and supply chain bottlenecks won’t be easy to fix. The war in Ukraine only exacerbates the problem. I have little faith that our politicians will stop fighting and start fixing. The past can’t be changed and we need solutions moving forward.

Prudent Retiree is glad that we moved to a 50% cash allocation in our qualified accounts in April. Longer bonds have also experienced a large drop in value due to rising interest rates. Except for cash, no piece of the pie chart has worked. We’re looking, but answers are tough to come by. Silver linings are scarce. Prudent Retiree believes the right answer at the moment is 50/50.

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