After a strong July, stocks continued to climb in early August with global stocks and U.S. stocks both up double-digits since July 1st.
But since mid-August stocks are down about 5% partly as a reaction to Fed Chair Powell’s Jackson Hole speech. Chief Investment Officer Bob Weisse and I discussed this and more in our latest Wealthy Behavior podcast.
Powell’s short, but pointed speech, in which he predicted economic pain took markets by surprise. Investors are finally realizing there’s no Fed put coming, which may have been the point. Tough Fed talk can serve as a pseudo-rate hike by convincing consumers and businesses of tough times requiring retrenchment ahead.
And while housing and energy prices have cooled off, and the consumer is healthy, all this could lead to a recession investors should prepare for.
If you’re in accumulation mode don’t stop buying stocks now just because they’re down and there’s no Fed put coming. They’re cheaper and buying only in “good” years will hurt your retirement plan.
If you’re living off your portfolio consider diversifying into real assets and bonds. Quality yield is available.
Be sure to listen to the entire episode as Bob and I also discussed:
- If we’re going to see real estate prices decline or merely price appreciation cool off
- Whether it’s time to back up the truck and load up on stocks given volatility and fear levels
- Our favorite sources of investment information, who we recommend avoiding, and how to decipher facts from opinion
Available through link in title.