Change of Season, Rates Rising & Keeping Wellness in Mind
Uptick in Rates
The Federal Reserve meeting ended Wednesday this week with an announcement of a .75% increase in the Fed funds rate from 2.25-2.5% to 3.00-3.25%. This certainly was not unexpected as interest rates had been rising in anticipation. 30-year mortgage rates are now above 6% and not surprising mortgage refinancing and home sales have slowed down dramatically. More signs are increasing that the economy is slowing down. Layoffs are increasing and the unemployment rate will definitely rise from the historic lows we have been seeing for several years. Even with the rise in the unemployment rate it will still be lower than what the Fed historically has viewed as full employment.
Generally, we do not believe in any statements like “this time it’s different”. As markets head lower with Fed fund rate increases, it still seems there is a sense of complacency among investors. The American Association of Individual Investors (AAII) has a sentiment index generally viewed as a contrary indicator meaning that high bearish sentiment indicates that markets are closer to a bottom as well as the Volatility index (VIX) as a sentiment indicator with higher readings indicating more fear which correlates with predictions of further lower markets and possible market bottoms. With a sharp decline last week both indicators were not reading excessive fear. That said we probably have to prepare to see further market drops. The recommendation going forward is the same as far as market timing does not work so hold onto your hats. Volatility on the downside will continue, the extreme pain point has yet to be reached.
On the other hand, there is common wisdom that says active stock management does better than passive management in declining markets. Morningstar has research that says this is not true.
Read the article here: Morning Star: Busting The Myth That Active Funds Do Better in Bear Markets.
Wellness for Productivity
This has been a challenging year in many ways, but self-improvement can be a great tool in the means of even more difficult times. Here are examples of phrases that undermine confidence and suggestions of different phrases that are more effectively confident. Words are power remember to be kind to yourself.
Sound and Feel More Confident Ditch These 11 Phrases
If you are feeling blue or more importantly bluer than you have been in your life, you are not alone. The preventive health panel is recommending general mental health screening for adults under the age of 65 as part of your regular annual physical. Are mental health issues more prevalent over the past 2+ years than previous? Will mental health issues stay elevated as we return to “normal”? We shall see, but for now just remember you are not alone with your feelings of anxiety or being in the blues.
Recommended to Get Mental Health Screenings as Anxiety, Depression Are on the Rise
Fall Equinox is Here!
What is a more perfect way to reflect on the year's progress with the start of a new season? A time were slowing down, cozying up and spending more wholesome time doing things with family and friends is truly good food for the soul. Happy Fall Equinox!
Weekly Catch Up - News Articles That Caught Our Eye
A focus on 529 plans and recent market returns. Saving for college can and should be a prudent mix of a 529 plan, cash savings, ongoing cash flow, scholarships (merit- and needs-based), and other options.
Feeling a sense of encouragement, positive perspective within your team makes working whether near or remote a true experience of wanting to thrive. When you feel the positive atmosphere, you certainly want to embody that through your own work. Keeping true to the integrity of your choice of the job. It doesn't matter what line of work it may be, it's a choice for yourself and asking yourself does this serve me, and my happiness.
This website is informational only and does not constitute investment advice or a solicitation. Investments and investment strategies recommended in this blog may not be suitable for all investors. SAS Financial Advisors, LLC and its members may hold positions in the securities mentioned within this newsletter.
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