Recession or no recession…that is the question.
It seems that whatever recession (or not) develops in the near future, it will be the most talked about recession in history! All joking aside though, there are some truths to the recession noise.
The inverted yield curve is one of the leading indicators of a recession to come. We are also coming out of a very fast and steep rate hike cycle. Both “should” point to a slowdown in the economy, aka recession. The latest economic data has shown slowing GDP growth, jobs, and manufacturing. We have, however, had a very strong year for the stock market. All these variables lead us back to the question; will the US (world) find itself in a recession in the next few quarters? year? We feel it best to be prepared for either. As investment managers, we constantly strive to be forward-looking while searching for both opportunities and weaknesses. Our goal, using our balanced approach to investing and relatively defensive posture, is to capitalize on opportunities as they present themselves. We remain cautiously optimistic.
No matter what the market is doing, investing in your 401(k) is an efficient way to save for retirement, and tomorrow is National 401(k) Day. Your company retirement plan is a powerful tool that allows you to take care of yourself in retirement, defer taxes, and, hopefully, take advantage of a company match.
While September is traditionally a challenging month for stocks, history has shown us that in years that post double digit returns in the first half (go 2023!), September tends to hold up pretty well. We look forward to all that fall brings: a new school year, time with family, and some cozy fall weather.
"These tax-advantaged accounts remain the backbone of a retirement savings strategy, Despite what naysayers might argue. 401(k) plans are an important and effective way for investors to prepare for retirement."
"We estimate the budget deficit for this year (FY 2023, ending September 30) will be $1.74 trillion, or 6.5% of GDP. That’s larger relative to GDP than the largest budget deficit ever under Reagan. Worse, this is happening when the unemployment rate will average about 3.6%, the lowest average for any fiscal year in more than fifty years. But the current budget situation is even worse than these numbers suggest."
If you have any questions about this month’s topic, reach out to our cybersecurity team.