Introductions Are in Order ~
Get your math [and history] straight folks. Recognize that half of these guys appearing on financial programs and the internet have [nothing but] personal agendas. If they’re working at a firm they have some kind of agenda. If they’re running money for clients you can bet there’s some kind of agenda in their statements. For example, what if they appeared on television and talked about how sucky it is to be in the stock market right now, how do you think that would go over with their current clients that they invested in the stock market? Not very well. So understand, many of these folks will certainly have agendas that prod them to sort of “sculpt” what they say and they don’t mention. See how this works? I’m not working, not running anyone else’s money and don’t plan to change that as long as I’m here on earth. That said, my agenda involves only me and no one else so I can be completely honest when I say I’ve seen a ton of times when stocks are not attractive to own while some investors have a variety of reasons to still be invested in the stock market these days. I guess I just don’t share any attributes with them at least not at this writing. In the absence of a catalyst I see no reason to buy or hold U.S. equities, or foreign stocks for that matter. None at all. There just isn’t anything in place that gives me confidence or a high probability of prices moving higher [with broad participation], not that I can detect anyway. It does suck that we have pitiful leadership in place just about everywhere one looks – the U.S. Treasury Dept., the Security and Exchange Commission, the Federal Reserve, the White House, the Justice Department, the FBI, the Departments of Energy and Transportation and Defense and Foreign Affairs, and don’t forget the IRS. Who can forget the Tax Man? Basically all federal agencies are now run by woke Democrat Socialists that know absolutely zero about moving the economy into positive growth. And U.S. corporate boardrooms have become a disgrace as well. In turn, they have replaced all talent with nothing but woke liberals in key C Suite positions. And all the while the Biden Crime Family has promised God knows what to our communist enemies in exchange for 10’s of $millions of dollars and given all this I’m supposed to place my money at risk in financial markets? Hilarious! Surely you jest! Ain’t going to work, look how that’s worked since late 2021 my friend. 🙂

On Interest Rates ~
Some of these pundits out there will sight interest rates as the culprit saying that they’re too high now and that it’s all the Federal Reserve’s fault and yada-yada-yada. These knuckleheads must either have been asleep for five decades while interest rates were way higher than today, or they were newby’s in diapers back then, it’s either one or the other. The simple truth is that the 10-year Treasury yield spent a ton of time yielding between say 5% to above 7%, and for decades. Currently, it’s yield sits in a range around 4.5-4.7%/year. So, no interest rates are still fairly benign historically speaking. Now, with all that said, one could argue that the recovery in some large tech stocks was predicated on interest rates returning to zero [and soon]. I hope you’re not in this camp? Still believing in the tooth fairy and watching Peter Pan are you? The fact of the matter is people do the opposite of what they should be doing – when interest rates went to zero we should have been panicking but instead many of you borrowed gobs of free money to invest in very speculative things, like techno start-ups and SPACS and Crypto-Currencies. When interest rates are at zero that means the economy is ill so we should worry, not go all in. But stock markets like it when rates are at zero don’t they? I made money in stocks most of the time when U.S. interest rates were set at zero – didn’t you? That has to do with a thing known as the discounting of future value cash flows [you can search that topic on this site]. However, interest rates cannot stay at zero forever so get used to it peeps!

What Happens When Rates Rise? ~
Other things besides stocks begin to look a whole lot more attractive. Ever heard of bonds? There are some bonds paying 7-8-9% per year out there right now. You have to assess your own risk parameters before partaking in any of these. I don’t personally own any of that paper, I’m just making a point about how a higher interest rate environment can change investor sentiment that’s all. Interest rate levels can change the landscape out there, it’s happened throughout history. Find an advisor who can accurately quote history, that’s the man or woman you want running your money. Not someone wet behind the ears or recently licensed.

A Cookie Cutter Approach to Investing ~
This is a really dangerous idea for those of us in or even close to retirement. That is taking a simple one-step solution to investing when our time horizons for something good to happen have shrunk as opposed to a younger person who could be working for the next 25 years. If it looks simple, chances are it won’t work so don’t do it. Get professional advice [always]. Not just anyone’s advice either. Go to a major firm and interview some advisors out there, take your time. If they don’t have any gray hair yet chances are they’re not seasoned and you don’t want to be the first client that gives them a gray hair either. Find a person [with a substantial firm, not some Mickey Mouse outfit] that’s been around awhile and has a clean record on FINRA.org, and expect to bring over a chunk of change. No one that’s any good at what they do in the business of managing money is going to want to deal with a client where they will make less than $5,000/year. It’s not worth their time and all the compliance crap they have to go through defending themselves against management about the ongoing advice and strategy(ies) they are providing you. [I’m so glad to be out of the business, compliance is an absolute nightmare even when you’re doing things completely right for clients these days.]

Get the “Fuzzy” Out of Your Brain ~
First of all anything can happen when you’re talking financial markets and over time it truly has. However, generally speaking corporate earnings do compress a bit as interest rates move higher. Money tends to move around less when rates are firmer but by no means are these rate levels historically high, as I mentioned earlier. The environment we have entered into is better described as a “normalization” of rates [for lack of a better term]. Rates should have never gone as low as they were in the past 15-20 years. Stimulus programs on top of stimulus programs sent them there. Look at it this way, that trend is just unwinding now, that’s all. We’re probably headed toward a more normal interest rate environment where other forms of securities besides equities will compete for investor capital. So I don’t look at all this with the same attitude as many others out there. I don’t see it as a hindrance, more that it will probably lead everyone to make much better investment decisions going forward; instead of what we have witnessed the last few years which was akin to the Wild, Wild West! Plus, I see the potential, [anyway], of many a techno has-been crying in their Bud Lights and their foamy French latte’ what-cha-may-call-it’s, … and not too very long from now? 🙂