💪 Recession-Proof 2023 Trade

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Markets

Fed December Meeting Approaches, Here’s What To Expect (3 minute read)The markets expect the U.S. Federal Reserve (Fed) to raise rates 0.5 percentage points at its next meeting on Wednesday, December 14 at 2 p.m. ET. That would be a step down from the large 0.75 percentage point increases at recent meetings. The Fed stresses its commitment to fighting inflation, but now rates are increasing closer to where officials want them to be. The real question for markets is what the Fed does at its next decision in February 2023.

All Pain and No Gain from Higher Interest Rates (5 minute read)In the name of taming inflation, central banks have deliberately set themselves on a path to cause a recession – or to worsen it if it comes anyway. Worse, today's monetary-policy tightening will leave long-lasting scars, whereas more carefully considered responses would work better and yield long-term benefits. Any benefits from the extra interest-rate-driven reduction in inflation will be minimal, compared to what would have happened anyway.

Shoppers are dipping into savings and going into debt. That could cause a holiday hangover (5 minute read)Despite high inflation and recession fears, the holiday shopping season appears to be off to a strong start. Black Friday and Cyber Monday sales were solid, as Americans were lured by deep discounts. Although consumer spending may be slowing, it remains surprisingly resilient. The problem, however, is that many Americans’ paychecks are not keeping up with stubborn inflation. That has forced consumers to finance their shopping sprees by dipping into savings and tapping increasingly expensive credit cards.

Mortgages May Force Central Banks To Back Off (5 minute read)Today, many homeowners around the world are enduring high anxiety. Interest rates are going up, making home loan payments harder to handle. The impact that this could have on consumers and the real estate sector could be enough to get central banks to slow down or stop their tightening campaigns.

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Investing

In Depth Analysis of a Bad Real Estate Deal (7 minute read)Not all real estate deals are good. In fact, if you analyzed all of them, the majority would probably be bad real estate deals. And that’s what I’m going to focus on in this post. This was a 4 unit residential property being sold by the owner. It was not located in the city of Buffalo but rather in a suburban area not too far from where we live. In fact, the way we found out about the property was from driving by it on my way home from work!

Sustainable Portfolio Withdrawal Rates During High-Inflation Periods (4 minute read)Planning for the future with 50% stocks and 50% bonds is tricky! A difference of 1% withdrawal rate can be huge over a 30 year retirement. Here’s the difference between a 3% initial withdrawal rate (then adjusted upwards with inflation) and a 4% initial withdrawal rate (then adjusted upwards with inflation) during a period that contained high inflation (1965-1995). Starting out at withdrawing $30,000 a year on a $1,000,000 portfolio would have been just fine, but withdrawing $40,000 a year would have been disastrous.

BlackRock’s Chaudhuri Touts Bonds as Recession-Proof 2023 Trade (5 minute read)For a long time, one acronym reigned supreme on Wall Street — TINA, or “there is no alternative,” which was used to talk about the allure of stocks in a low interest-rate environment. But now, BARB — or “bonds are back” — is the new queen. That’s according to Gargi Chaudhuri, head of investment strategy for the Americas at BlackRock’s iShares unit. She joined this week’s “What Goes Up” podcast to talk about her 2023 outlook.

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