High Earnings, Bond Rates Rising, & Inflation, Ep #62

Payne Points of Wealth

To quote Led Zeppelin,”The Song Remains the Same!” This great earnings season we’ve been experiencing continues, with companies experiencing their best performance in 7 years. In addition,the status quo is likely going to continue as we see Jerome Powell renominated as the Federal Reserve Chairman. That means interest rates are likely to increase next year. And that will have an opposite impact on the bond markets.

Going into the last month of the year, what does all this mean for your investments? We’ll break it down on this episode.

And in this episode’s “Tipping Point” segment… you’ve been saving your money diligently, but what are you doing with it? We’re going to outline the things you might be doing wrong when it comes to your savings, so be sure to listen!

You will want to hear this episode if you are interested in...

• Jerome Powell is renominated: a hawk or a dove… or maybe a turkey? [1:16]
• When the supply chain is repaired, inflation is going to go down [4:01]
• Is gold really an inflation hedge? No, but there are other great options like oil [7:55]
• The Tipping Point: Mistakes investors are making with their savings [11:59]
• Hidden Facts of Finance [18:06]

Inflation is increasing while yields are low… how does that work?

The biggest math we’re seeing right now has to do with inflation. Inflation is running at 6% and yields are running at 1.7%. That can’t remain as it is. Interest rates are going to have to move higher, so we suspect there will be an increase in rates… so be careful with your bond portfolio because bond rates go down when interest rates go up. Historically, bond rates go up to keep pace with inflation but it’s trailing, so you need to be careful. In fact, Bob says the most important thing in your life as an investor is, “Don’t own a bond fund!” But that’s not the whole story… we’ve got more to say, so listen to get the full story.

This week on the tipping point: Mistakes you’re making with your savings

Most of our clients and the people we talk to are diligent about saving, but are they doing the right things WITH that hard-earned money they’re stashing away? Not always. Here are the three biggest mistakes we see…

1. Many savings plans include far too much cash. It’s a big problem because of inflation.
2. Speculative investments are incredibly risky. Always have been, and always will be.
3. Most people are not taking advantage of the tax benefits available to them.

This week’s hidden facts of finance

• The National Retail Federation estimates a 9.5% increase in spending this Nov./Dec.
• Gold is only a reputation hedge reputationally, not statistically.
• Stocks deliver regardless of whether inflation is high or low (the real inflation hedge).
• Chinese personal wealth is leaping 77-fold to $120 Trillion.

Resources & People Mentioned

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