YOUR BUSINESS AUTHORITY
Springfield, MO
Americans are feeling the effects of soaring inflation not seen in 40 years. Inflation, as measured by the consumer price index, has surged this year, hitting a high of 9.1% in June and posting an elevated reading of 8.2% in September. As a counteroffensive, the Federal Reserve has been aggressively raising rates to cool demand to fight inflation. Both stocks and bonds have seen tremendous declines this year, impacting the portfolios of millions of Americans.
Here is a backdrop of 2022 and how you can position your portfolio for success in the years ahead.
The S&P 500 has shed over $10.2 trillion, or roughly 25%, since the start of the year through Sept. 30. The aggregate bond index is down over 15% during the same time period. The Fed has raised rates five times this year, starting the year at a range of 0%-0.25% and ending at 3%-3.25% as of the September meeting. The Fed is set to meet two more times this year to determine interest rate policy.
Inflationary pressures aren’t unique to the United States. Many countries around the world are also seeing high single-digit, and in certain cases double-digit, inflation numbers. As a result, other leading central banks have been raising rates. The high global inflation coupled with the instability created by the Russian invasion of Ukraine, slowing Chinese economy and strong dollar have had negative effects on U.S. investors owning foreign securities.
Given this backdrop, consider these tips to find opportunities in these times of uncertainty:
Work with your credentialed financial planner or investment adviser to do a checkup on your portfolio and look for opportunities in challenging times.
Andy Drennen is a certified financial planner and senior portfolio manager at Simmons Private Wealth in Springfield. He can be reached at andy.drennen@simmonsbank.com.
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