3 things I'm thinking about this week...

 

1 - 3 Thoughts on Tariffs and the Economy. Starting with inflation…staying moderate right now, good but that's not expected to last. Tariffs are inflationary. Make sure you’re invested to tackle current and potential inflation. Every retirement investor should focus on the preservation/growth of their purchasing power. A 4% CD won’t cut it, unfortunately. We seek out stocks with pricing power to address this.
 
Recession? Saw a negative GDP number this week (economy’s more likely just slowing based on other metrics). Could be negative again this quarter – 2 in a row are deemed a recession. I expect any recession to be fairly short, and for equities to anticipate its end faster than “market-timing” investors (as usual). Famed fund manager Peter Lynch once said, “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves.” Agree 100%.
 

What happens after 90 days? Following “Liberation Day,” the Administration put a 90 day hold on most proposed tariffs. There have been conflicting and repeatedly changing tariff announcements. Uncertainty is the bane of corporate planning…leading many to delay projects until there is more clarity. A good recap here. We’ll likely experience more bumps in the market as a result. It will get figured out...corporations are better at optimizing than governments are. 

 

2 - Getting More Comfortable with Uncertainty. This goes beyond investing. Uncertainty comes with the territory as we age. How it goes comes down in part to how we handle it. This article from Greater Good has several welcome, common-sense tips. Ask “How” not “Why” when life is hard…as in “how can I change this situation?” Prepare for change in advance – write out the changes and see which ones are causing anxiety. 

 

3 - Degree of Difficulty. “Smart” money doesn’t always live up to that label. Especially in times of turmoil (sound familiar?), a personal investor can outpace the pros through sensible behavior. 3 examples of major league missteps: Stop avoiding simplicity. Investment “helpers” such as consultants and some financial advisors look more useful when they ask you to do complex things. Which leads to esoteric investments in hedge funds, funds of hedge funds, and other “alternative” investing. Typically, the pitch is equity returns/lower volatility. Not easy to pull off. Lemming Mentality. Why are they doing all of this in the first place? In part because their peers are doing it. Doing what’s conventional isn’t automatically prudent behavior. And, Value (what you get for what you pay). Outstanding fund managers are worth their big paychecks when they deliver exceptional results. I feel that (too often) complex investments don't deliver on value.

 

...and one more thing

If you can't lick 'em (tariffs), join 'em. Lick Honest Ice Creams in Austin just released “Tarriffic Cookies & Cream” - as noted, it promises an escape from reality, anyone interested in that?!