Abstract Aerial Art
Make no mistake about it. We are in stormy conditions. We have the elections dead ahead of us with statements made by both parties that are often untrue and startingly alarming. Every day some politician or another is quoting nonsense and making alarming accusations, which affects not only our elections but both the bond and stock markets. Much of the time, you don’t know who you can believe or who can be trusted.
“The most terrifying words in the English language are: I’m from the government and I’m here to help.”
As many of you know, I concentrate on income. Appreciation is the other side of this coin, and virtually every business publication concentrates on the appreciation part of the equation. This, in my opinion, is the riskier side of the coin, of investing. Utilizing Bloomberg data, we can see that their U.S. government index is -0.42% for the last month, which indicates, to me, that the Treasury markets believe we are in for a bumpy ride with our elections, the war in Ukraine, the war in Gaza and in the American economy. This is also reflected in Bloomberg’s corporate bond index, which is only up 0.37% during the last month.
Another major part of the upcoming economic outlook is the Fed. I believe that they will cut ¼ of a point in September, but I also believe that is baked into the market cake already, and I do not think we are going to get some big move in either equities or debt if that is what they actually do.
“If the public understands the central bank’s views on the economy and monetary policy, then households and businesses will take those views into account in making their spending and investment plans; policy will be more effective as a result.”
– Fed Chairman, Jerome Powell
I do not disagree with this statement, except that the Fed rolls from making one statement to another which almost seem to be whims of the Fed’s governing board. Whims, I tell you, can be matters of interest but they are not a responsible base upon how to make money. In other words, the notion is correct, but the Fed’s execution of providing actual data has been much less than hoped by me and, I am sure, many others. In our stormy environment, many of the statements by not only Mr. Powell but other members of the Fed are “thunder from down under.” That is my conclusion.
This is also why I prefer income strategies at the present time. In the closed-end funds, it is possible to find funds that are paying double-digit yields and that pay a dividend every single month. This gives you the opportunity to have the dividend cash sent to you or to reinvest it. It is your monthly decision to make, and I think that is an absolute positive for receiving income at this point in time.
“A large income is the best recipe for happiness I ever heard of.”
So, in our present conditions, I’ll take the income, and you can invest how you best see fit.
Original Source: Author
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