Independent Investment Advisors

Independent, Fiduciary & Fee-Only Advisor

You are here: Home / Archives for All Posts

All Posts - Archive

7 Little Upgrades that Can Make Life Better in Big Ways

· ·

< back to Market Insights Blog

What would make your life better?

A new house or car? A bigger paycheck or bank account?

It’s easy to want more when you think of being happier and living better.1

And there’s little doubt that money can buy some (more) happiness.2

But the happiness we get from money is fundamentally limited.3

It leaves us wanting more, and it’s not enough on its own to enjoy a truly satisfying life.

The reality is a lot of the things that can make us happy and enrich our lives have nothing to do with money.4

And some of the things that may bring us the most joy could already be within our reach.4

What are they and how can they improve our lives?

Find out the answer with these simple life upgrades. They can transform the way you experience and enjoy life.

Read Our August Newsletter Here!

We’ve come so far!

· ·

< back to Market Insights Blog

Headlines are looking grim again, so let’s pause and take stock.

Why are the headlines terrible?

Because the media loves drama. This is not news to you or me or anyone who pays attention. The 24-hour news cycle is there to whip up emotions and keep us glued to the latest “BREAKING NEWS.”

So, what’s behind the noise and should we worry?

Before we jump into unpacking the news, let’s take a moment and remind ourselves of how far we’ve come since the pandemic began.

You can see it right here in this chart:

Cumulative change in jobs during the pandemic

We’ve recovered the vast majority of jobs lost since the bottom of the pandemic’s disruption last April. The economy is still missing several million jobs to regain pre-pandemic levels, but we’ve made up a lot of ground, and jobs growth is still strong.1

In fact, there are more job openings right now than job seekers to fill them.2

But there’s an important caveat to the chart above.

The monthly jobs report is what economists call a “lagging” indicator, meaning that it’s telling us where the economy was, not where it’s going.

To figure out what might lie ahead, economists turn to “leading” economic indicators that help forecast future trends.

So, what are the leading indicators telling us about the economy?

A couple of the most popular indicators are manufacturing orders for long-lasting (durable) goods, since companies don’t like to order expensive equipment unless they expect to need soon.

Another one is groundbreaking (starts) on new houses, which indicate how much demand builders expect for housing.

Let’s take a look:

Leading indicators show bumpy growth

Both indicators suggest continued (if bumpy) growth. Now, those are just two sectors, and we want to be thorough, so let’s take a look at a composite.

The Conference Board Leading Economic Index (LEI) gives us a quick overview each month of several indicators.

It increased by 0.7% in June, following a 1.2% increase in May, and a 1.3% increase in April, showing broad, but slowing growth.3

What does that tell us? That the economy still has legs.

Will the delta variant derail the recovery?

A serious slowdown due to the delta variant seems unlikely, but we could potentially see a bumpy fall, especially in vulnerable industries and areas with surging case counts.

There’s also some potentially good news about the delta variant that we can take from other countries.

India and Great Britain both experienced delta-driven surges earlier this summer.4

And what happened?

A steep and scary rise in case counts and hospitalizations…followed by a rapid decline.

It seems that these fast-moving delta waves might burn themselves out.

Unfortunately, these surges come with a painful human cost to patients, overburdened medical staff, communities, and families.

But, if this pattern holds true in the U.S., it doesn’t appear that the economic impact will be heavy enough to derail the recovery.

All this to say, it’s clear that the pandemic is still not over.

But we’ve come such a long way since the darkest days of 2020 and the road ahead still seems bright (if a little potholed).

Please remember to take panicky headlines with a shaker or two of salt.

I’m here and I’m keeping watch for you.

Have questions? Please reach out.

Be well,

Goran Ognjenovic
Independent Investment Advisors
(971) 350-8068
www.independentadvisorsnw.com

P.S. The bipartisan infrastructure deal is still making its way through Congress, and we don’t yet know what the final details will look like. The Democrat-led infrastructure deal is also in the works, but we’re not likely to see serious movement until the fall. I’ll keep updating you as I know more.

1 https://www.cnbc.com/2021/08/06/jobs-report-july-.html

2 https://www.cnbc.com/2021/08/07/there-are-about-1-million-more-job-openings-than-people-looking-for-work.html

3 https://conference-board.org/pdf_free/press/US%20LEI%20PRESS%20RELEASE%20-%20July%202021.pdf

4 https://nymag.com/intelligencer/2021/08/the-u-k-s-delta-surge-is-collapsing-will-ours.html

The following posts and commentary are to be used solely as educational tools and do not contain investment advice. Investment advice must be tailored to a particular investor’s specific needs. None of the information contained should be construed to be investment advice. Individuals wishing to tailor a plan to their own needs should seek the help of a Registered Investment Advisor.

There is a high degree of risk in investing and trading. Independent Investment Advisors assumes no responsibility. Principles of Independent Investment Advisors may, at times, maintain directly or indirectly, positions in securities or derivatives mentioned in these comments.

Is the sky falling (again)?

· ·

< back to Market Insights Blog

There’s a lot going on in the world right now.

I thought this note was going to be about the $3.5 trillion budget deal or what to do with any child tax credits that may be heading your way.

But then global markets jolted on fears of new viral variants.

Is the sky actually falling?

Is the sky falling (again)?

Could a big correction happen?

After hitting record highs in previous days, markets tumbled Monday, sending the Dow 700+ points lower.1

Why?

Mostly fears of a COVID-19 resurgence caused by the delta variant that could derail the economic recovery.

Case numbers are rising globally, even in countries with high vaccination rates, and the surge could lead to a return to travel restrictions and business closures.2

Could these market jitters cause a 10%+ correction?

Absolutely.

Should we panic and freak out?

Definitely not.

Here are a couple of reasons why:

Summer months can bring higher volatility, perhaps because of lower trading volume, making bad news shake the market harder.3

We’ve had a pretty long winning streak, and corrections are part and parcel of a healthy market, especially when we’re near all-time highs.

New variants and higher case counts are a threat. However, vaccination rates are continuing to rise, and experts don’t think that we’ll see the devastating health outcomes we saw last year.4

Could the delta variant cause the economy to slow down?

It’s hard to say at this point. The rosy projections about the economy have been based on a swift return to normal from the shortest recession in history.5

If surging case counts cause a resumption of business and travel limits, we could definitely see a hit, especially in recovery-dependent industries like airlines, cruises, and hotels.

Supply chain issues are still causing materials shortages, creating delivery delays of goods, and potentially triggering slowdowns in industries such as building and construction.6

However, consumer spending is still very strong and the economy is in way better shape than it was last year.7

Bottom line: we could see some economic complications due to the delta variant and we’re likely to see more market volatility ahead, especially if economic data disappoints.

I’m keeping an eagle eye on the trends and will be in touch with you personally if your strategy needs to change.

Have questions? Please reach out. I’m always here to help.

Calmly,

Goran Ognjenovic
Independent Investment Advisors
(971) 350-8068
www.independentadvisorsnw.com

P.S. A massive $3.5 trillion budget deal is working its way through Congress.8 It’s got a lot of moving parts that may affect taxes, Medicare, and much more. I’ll reach out when we know more about how it’s likely to shake out.

1https://www.cnbc.com/2021/07/18/stock-market-futures-open-to-close-news.html

2https://www.reuters.com/business/healthcare-pharmaceuticals/delta-covid-variant-now-dominant-worldwide-drives-surge-us-deaths-officials-2021-07-16/

3https://www.nasdaq.com/articles/volatility-gauge-suggests-tactical-trading-during-summer-doldrums-2021-07-19

4https://www.nature.com/articles/d41586-021-01696-3

5https://www.cnbc.com/2021/07/19/its-official-the-covid-recession-lasted-just-two-months-the-shortest-in-us-history.html

6https://www.washingtonpost.com/us-policy/2021/07/20/biden-delta-coronavirus-economy/

7https://www.reuters.com/business/finance/us-retail-sales-unexpectedly-rise-june-2021-07-16/

8https://www.cnbc.com/2021/07/14/democrats-3point5-trillion-budget-package-funds-family-programs-clean-energy-medicare-expansion.html

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

The following posts and commentary are to be used solely as educational tools and do not contain investment advice. Investment advice must be tailored to a particular investor’s specific needs. None of the information contained should be construed to be investment advice. Individuals wishing to tailor a plan to their own needs should seek the help of a Registered Investment Advisor.

There is a high degree of risk in investing and trading. Independent Investment Advisors assumes no responsibility. Principles of Independent Investment Advisors may, at times, maintain directly or indirectly, positions in securities or derivatives mentioned in these comments.

The Financial Quarterly Q2 2021

· ·

< back to Market Insights Blog

The Financial Quarterly

The Financial Quarterly

2nd Quarter 2021

Goran Ognjenovic
https://independentadvisorsnw.com
Independent Investment Advisors
(971) 350-8068

The second quarter of 2021 had a little bit of everything: vaccines, inflation concerns, jobs recovery, and more. Let's take a look at how markets performed and what we might look forward to in the months to come.

Looking Back

How Did Markets Perform Last Quarter?

S&P 500

Despite considerable volatility, the broader U.S. market grew strongly in Q2.1

NASDAQ

The tech-focused NASDAQ soared on the back of a sustained tech rally after pulling back in mid-quarter.1

DOW 30

Blue chip stocks delivered solid growth despite ongoing inflation and interest rate fears.1

Looking Ahead

What Can We Expect Three to Nine Months Ahead?

U.S. Economic Outlook

Negative Positive

The U.S. economy looks to be on a clear path for growth as the recovery continues.2

Equity Outlook

Negative Positive

Market fundamentals could support continued growth though volatility is very likely.3

Consumer Sentiment

Negative Positive

Consumer sentiment is very strong as Americans look forward to a post-pandemic world with ample cash in their pockets.4,5

Labor Market

Negative Positive

The labor market shows strength, though some sectors and regions may struggle to match workers with roles.6

Business Outlook Survey

Negative Positive

The business outlook looks solid as demand picks up, though inflation and supply chain issues may be obstacles.5

Fiscal Policy

Negative Positive

Government policies could support further growth, though waning stimulus spending and debt concerns may cause bumps.5

"Despite fears of runaway inflation and pandemic-related challenges, markets delivered a strong performance in Q2. While obstacles to growth remain, we expect the economic recovery to continue this quarter."

Bottom Line

Key Takeaways for Savvy Investors

Despite a lot of uncertainty around business reopenings, vaccination rates, and economic growth, equities delivered a solid performance in the second quarter, closing out the strongest first half since 2019.7

While the quarter closed strong, a number of dips, rallies, and ongoing volatility made it a bumpy road. We can expect more of this as the world continues to recover from the pandemic.

With all the uncertainty, it would not be surprising to see a market correction or pullback in the months ahead.

Overall, the economy seems positioned for strong growth in the second half of the year, though inflation worries, politics, and post-pandemic concerns may weigh.

Bottom line, I'm keeping a close eye on market conditions, as continued uncertainty could drive sudden changes.

Questions? Please reach out. I'd be happy to chat.

Goran Ognjenovic
Independent Investment Advisors
(971) 350-8068
info@independentadvisorsnw.com

A tale of two infrastructure deals

· ·

< back to Market Insights Blog

It appears we have a deal on infrastructure.

Maybe.

After weeks of grandstanding, posturing, and wrangling, it looks like a bipartisan infrastructure deal that both parties can live with is in the works.

Good news: no tax hikes. But you’ll want to read on because we’re not out of the woods yet.

Before we dive in, I want to wish you a very happy Fourth of July. Wherever you are, and whoever you’re able to spend it with, I sincerely hope it’s fun, relaxing, and meaningful.

Now, onto the politics.

The bipartisan deal (can’t call it a bill yet) finds $579 billion of common ground from President Biden’s original $2.25 trillion American Jobs Plan.1

It appears we have a deal on infrastructure.

It focuses on “hard” infrastructure — such as roads, bridges, rail, and public transit projects, as well as electric vehicle infrastructure and broadband internet — that both sides can agree on.

So, is it a done deal?

Not even close.

The current framework represents a compromise that makes no one happy, and there’s still a fair bit to hammer out (including how to pay for the plan).

The deal still needs to gather broad support in both parties, especially among those who think it’s too little or too much and might seek to scuttle the whole thing.

Fortunately, it doesn’t look like higher taxes are part of the deal. Though the math looks a little fuzzy from where I’m standing, it looks like funding sources could include repurposed pandemic funding, better IRS enforcement, and possibly digging through couch cushions for spare change (joking).1

So, that means my taxes won’t go up, right?

Not so fast.

There’s another bill on the table. And it’s a $1.8 trillion doozy.2

The second bill, called the American Families Plan, focuses on so-called “human” infrastructure and contains many Democrat-backed priorities like childcare, climate change, health care, and education.3

Basically, the initiatives that couldn’t get Republican support are packaged up in a separate bill.

It looks like the Democrats are planning to pass that bill through a reconciliation process that doesn’t require Republican support to get through Congress.

Inside that bill are the tax increases we’ve been on the watch for. Higher taxes on wealthy individuals and corporations, as well as eliminating the step-up basis on inherited assets, among other tax hits.4

Since the bills are independent, it’s really not certain yet which (if either) will pass. Or when.

Will one pass and not the other? Will both grind to a halt this summer?

Hard to say.

What does all this mean?

That depends on where you’re standing. For industries expecting to benefit, it means an influx of tasty government cash.

For those worried about America’s crumbling infrastructure, it represents some critical moves in the right direction.

For those concerned about the spending spree the government’s been on (and how we’re going to pay for it all), it’s another brick in a looming wall of debt that will eventually come due.

Bottom line, it’s not nearly over yet. I strongly suspect the coming weeks will be full of more politicking, more grandstanding, and more arm twisting.

I’ll reach out when I know more.

Now, go enjoy your summer. You deserve it.

Infrastructurally yours,

Goran Ognjenovic
Independent Investment Advisors
(971) 350-8068
www.independentadvisorsnw.com

1https://news.bloomberglaw.com/environment-and-energy/a-win-for-roads-and-no-tax-hikes-infrastructure-deal-takeaways

2 https://www.cnbc.com/2021/04/28/biden-american-families-plan-whats-in-it.html

3https://www.cnbc.com/2021/06/27/infrastructure-gop-senators-say-deal-can-go-forward-after-biden-walkback-.html

4https://taxfoundation.org/american-families-plan/

Chart source: https://news.bloomberglaw.com/environment-and-energy/a-win-for-roads-and-no-tax-hikes-infrastructure-deal-takeaways

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax professional.

The following posts and commentary are to be used solely as educational tools and do not contain investment advice. Investment advice must be tailored to a particular investor’s specific needs. None of the information contained should be construed to be investment advice. Individuals wishing to tailor a plan to their own needs should seek the help of a Registered Investment Advisor.

There is a high degree of risk in investing and trading. Independent Investment Advisors assumes no responsibility. Principles of Independent Investment Advisors may, at times, maintain directly or indirectly, positions in securities or derivatives mentioned in these comments.