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Weekly Market Review

Weekly Market Review

Good afternoon,

 

“Like all your WMR publications, there’s a lot to love and always a little to hate….” was the beginning of a reply to last week’s message

Thank you very much. Wait, what?

What did I say that was controversial last week? Hmmm.

I don’t expect everyone to agree with me all the time. In fact, if everyone does agree, then I’m probably doing it wrong. And whether readers agree or not, it is never my intention to offend anyone. And I’m always open to discussion. If you think I’m off base about something, then give me a call and change my mind.

 

But very importantly, no matter what’s going on with current events, that doesn’t change my investment philosophy and/or financial planning strategies. Tried, true and time tested, they need only be fine tuned around an investor’s personal circumstances. No fads based on headlines or soundbites here.

 

Inflation is finally in the news. You’ll notice that it’s been a subject of the WMR for many many months.  Producer prices are rising, https://www.cnbc.com/2021/06/15/retail-sales-producer-price-index-may-2021.html

The CEO of JPMorgan Chase, Jamie Dimon, says they are hoarding cash because “very good chance” inflation is here to stay, https://www.cnbc.com/2021/06/14/jamie-dimon-jpmorgan-is-hoarding-cash-because-very-good-chance-inflation-here-to-stay.html?&qsearchterm=dimon

The WMR doesn’t disagree that inflation is an issue, but cash is probably the worst place to be as higher prices take hold. Cash loses purchasing power every day when inflation hits so why would that be his asset class of choice?  In the article, he says that he’s waiting to use it for higher yielding assets once interest rates start to rise again.  Hmmm. Ok I guess. Mr. Dimon didn’t get to the top of the banking world by making big errors of judgement, so we’ll give him the benefit of the doubt for now. For those of us who don’t have billions in reserve, I suggest keeping your emergency fund liquid and available and anything above and beyond should be invested appropriately, with potential inflation taken into consideration.

 

Let’s call this one the Boar’s Head beef. As is often the case when there is a death in a prominent family, now there is a fight among the heirs about the money.  The matriarch, and daughter of the founder of the Boar’s Head meat and cheese empire passed away and now there are grandsons suing each other. https://thehill.com/regulation/court-battles/557192-boars-head-earns-1b-annually-theres-a-feud-between-the-families-in

Unfortunately, this is not an unusual family problem when there are many heirs and a substantial fortune at stake. The lesson here, don’t let this happen to your family. Get your wishes in writing via some appropriate estate documents and instructions so your family won’t have to fight each other. An important caveat when having your estate work done, make sure you use someone knowledgeable and experienced in estate work. Don’t use the person who negotiated your speeding ticket or helped you close on your house. Use someone well versed in estate law. If you don’t know anyone, call me for an introduction.

 

I was having lunch with one of my strategic partners yesterday. Strategic partners are other trusted professionals who have expertise in areas that I do not, property and casualty insurance, tax preparation, family law, etc. In this case, it was my group health benefits specialist.  Anyway, during our discussion, he asked me to get him up to speed on crypto currency. As readers know, I’ve been doing a lot of research on crypto currency for a while now so I consider myself more informed than most in that area. While I think I understand what they do and what they’re for, I’m still a bit hard pressed to understand it as a viable investment and not just a speculation. The idea of a decentralized currency that anyone in the world can use virtually for free, that can’t be manipulated or confiscated by any government, bank or other entity and the only requirement to qualify for it is that you own a smartphone, it a really good idea. And if the old guard money printing fiat currency governments around the world don’t see it coming, they’re going to be left behind and have only themselves to blame. That said, the case for crypto as an investment is totally different than crypto as a monetary tool. First there are way too many cryptos to choose from and their valuations are far to volatile to be dependable as a store of value. So while they are sometimes compared to commodities like gold or silver, I’m not yet sure that is true. As I’ve mentioned before, part of the underlying technology that makes crypto possible, blockchain, is a huge deal and will be disruptive to dozens and dozens of industries. The best example I can give of what is a blockchain is your own life. Your life is time stamped with everything that has ever happened to you. Your past cannot be modified, cannot be altered and cannot be deleted. If you choose to allow it, then it is available for anyone to see. Everything new that happens to you is added to the immutable chain. Think about that next time you’re at the market for example. With blockchain, you’ll know exactly where that tomato came from. When it was delivered, what farm it was grown on, what chemical fertilizers were used and even where the original seed was from. Expand that to every item in the market, then expand it to other industries, like real estate or automobiles or health care and you can see the enormous impact of blockchain technology.

 

We also talked a little about NFTs, which also rely on blockchain, but I’ll save that discussion for a future WMR. I will mention that the inventor of the internet, Tim Berners-Lee, recently announced that he’ll be selling his original source code as an NFT via online auction. https://www.cnbc.com/2021/06/15/web-nft-source-code-is-being-auctioned-by-inventor-tim-berners-lee.html

Good for him. It’s about time he monetized his creation which has monetized so many others.

 

We’ll wrap with this week’s varmint update. I’m beginning to feel like Marlin Perkins in Mutual of Omaha’s Wild Kingdom (now there’s an old school reference.)  The squirrel posse is still very active and seem mostly playful chasing each other around the yard. A raccoon has been spotted near the trash cans as well and he’s pretty big, at least he looks pretty big, I’d guess 20+ pounds at least. Doesn’t seem to mind when he sets off the motion sensor and the lights come on. I would think this would startle him into retreat, but it didn’t. He has emerged as the front runner in the saga of the toppled trash cans. Also spotted were a trio of groundhogs, a large one and two smaller ones. These, I’m told, are the culprits digging holes all over my yard. The larger one saunters by, glances at me with a “meh…” look and continues on. The smaller one comes a little closer to investigate and looks right at me. Like, “yeah man, I’m here, what are YOU gonna do about it?” then he moseys away. Here they are.

 

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And here are some groundhog facts that you didn’t ask for and probably don’t need from an appropriately named website, https://www.treehugger.com/groundhogs-explained-4857655

 

Also spotted munching on some bushes was a small baby deer. Deer sightings are not unusual, but I don’t see many babies. She was spooked when I opened the patio door and darted off through the backyard. I think I need to set up some cameras just for the fun of it.

 

And speaking of cameras, for a final random thought, and I don’t know why this came to me, but it did as there was a commercial for the latest wilderness reality show, “Naked and Alone in the Mountains with Nothing but a #2 Pencil” or whatever the show was, but why don’t they do a reality show about the camera people whose job it is to film the reality shows? That’s got to be an interesting gig….

Reality show ARE real, aren’t they?

 

This week’s chuckle is comedian Michael McIntyre talking about passwords on the internet,

Pretty sure we all do it the way he describes. I recommend his Netflix special if you’re so inclined.

 

LF27 – “Never let yesterday use up too much of today.” – Will Rogers.

 

Have a great week and stay healthy.

 

This material includes links to third party sites not affiliated with Lincoln Financial Advisors.  Lincoln Financial Advisors is not responsible for the content and does not guarantee the accuracy of any information or material contained therein. Lincoln Financial Advisors Corp. does not participate in the crypto marketplace.  The opinions expressed are those of Michael Acho and not necessarily those of Lincoln Financial Advisors Corp.  CRN-3636916-061721

 

 

 

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Michael J. Acho, MBA, CFP®
Private Wealth Advisor
---------------------------------------------------
Lincoln Financial Advisors/Sagemark Consulting
1000 Town Center, 26th Floor
Southfield, MI  48075
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Michael.Acho@LFG.com

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