William Lako: Market reactions and investor perspectives amid the debt ceiling debate
While there is plenty to discuss regarding what is happening in the stock market and the economy, much of it consists of the same actions and reactions that we've been talking about for a year and a half.
It started at a time when the government was distributing excessive money to sustain the economy during the Covid shutdowns. This was also a time when the supply chain was broken, resulting in high demand for limited products. When demand outpaces supply, inflation often occurs. During this time, we watched the
In the past two years, inflation has remained above 4 percent, reaching as high as 9.1 percent. Only in the last 14 months has the Fed increased the Federal Funds Rate from near zero to 5.0 percent — 5.25 percent. Furthermore, over the last year,
Our country has also reached the debt ceiling, which is the maximum amount the
While
Inevitably, the market volatility of late has been a response to the debt ceiling debate. Should investors worry? While the
Remember the Ten Year Rule and keep money you know you will need to access within the next 10 years in fixed-income investments held to maturity. For your equity investments, focus on quality fundamentals—such as cash flow, return on assets, valuation, history of profit retention for funding future growth, and the soundness of capital management for maximizing shareholder earnings and returns.
Federal Reserve governor hints at a break in rate hikes for now
Do you really think you can beat the market?
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