In today’s current market environment, we see the forces of inflation and deflation are at work. Central bankers are and should be concerned about price stability, but too many assume that price stability is only a one-way street.
“A new technology bids to transform the human cognitive process…redefine human knowledge, accelerate changes in the fabric of our reality and reorganize society.” These are the words of Henry Kissinger on the age of artificial intelligence (AI) and the potential impact of ChatGPT
If the U.S. was to default on its debt obligations, it would cause investors to flee from U.S. Treasuries, leading to a decrease in confidence in U.S. government debt and the U.S. Dollar (USD) as being the medium of exchange for the global economy.
“Patience is a form of wisdom,” notes Jon Kabat-Zinn, creator of the Stress Reduction Clinic and the Center for Mindfulness in Medicine at the University of Massachusetts Medical School. It demonstrates that we understand and accept that sometimes things must unfold in their own time. In 2022, Wall St. and policymakers lost their patience.
Most people, investors or not, tend to base their current views on what is most recent in memory. In good times, we may expect them to continue for the foreseeable future; in bad times, we often underestimate our ability to move forward. We all tend to “drive by the rear-view mirror” to some extent, basing our decision making on what has just happened.
The summer did not see much respite from the volatility that has gripped the financial markets. The bearish commentators continue to evoke fears that the aggressive moves by the central banks in raising interest rates will inevitably push economies into recession.
Keeping expectations on an even keel has been a challenge when it comes to the financial markets. In 2022, we have experienced a rapid reversal in both direction and sentiment. With persistently high inflation, and with headwinds from the Ukraine war and the spring Covid shutdowns in China, the central banks have taken a more aggressive stance to try and temper inflation.
The opinions contained herein are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Wellington-Altus Private Wealth. Assumptions, opinions and information constitute the author’s judgement as of the date this material and subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. All third party products and services referred to or advertised in this presentation are sold by the company or organization named. While these products or services may serve as valuable aids to the independent investor, WAPW does not specifically endorse any of these products or services. The third party products and services referred to, or advertised in this presentation, are available as a convenience to its customers only, and WAPW is not liable for any claims, losses or damages however arising out of any purchase or use of third party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus.
