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QUOTE OF THE WEEK

“I’ve learned that you can tell a lot about a person by the way he handles these three things: a rainy day, lost luggage and tangled Christmas lights.” – Maya Angelou

TECH CORNER

The month of November was a really good month for the stock markets and investors seem to think that we will have a soft landing or no recession at all. Sorry, all the data points to a recession coming soon and it could be deep if the trends of the data continue. Last month was also a good month for the bond market which was good for our portfolios.

One factor pointing to a recession is the fact that many Americans are plagued with debt. Credit card debt has eclipsed the $1 trillion mark for the first time ever. Household debt is at a record high and interest rates on that debt is also continuing to rise.

During the first few years of the COVID-19 pandemic, Americans were socking away some major savings which actually exceeded over $2 trillion dollars. Stimulus checks were bringing in extra income, student loan repayments were on pause and isolation measures ensured folks saved on their work commute, coffees and they spent less on things like travel and dining out.

But when the restrictions were lifted, many consumers made up the lost time by splurging on luxury items, concert tickets, eating out and travel. Because they had a big cash cushion, people spent more than they normally would. Sort of like a rebounding spring effect. This spending helped push inflation higher.

However, since then, 80% of Americans have run out of their extra savings, and have borrowed on their credit cards to finance the excess spending. They now have less cash on hand than they did when the pandemic began. 

The graph below shows the percentage of 30 day plus delinquency rates for the major credit card issuers. The average is at 2.53% and rising. Most consumers have run out of money and they are still spending at an unsustainable rate using credit cards to finance their debt.  

If you have friends or family in need of financial life planning services,

It would be the honor of Laurence Lof Financial Advisors to assist them.

We value your referrals!

These are Larry Lof’s opinions and not necessarily those of Cambridge, are for informational purposes only and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.

The S&P 500 index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.

Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.

Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Laurence Lof Financial Advisors, LLC are not affiliated. Laurence Lof Financial Advisors 4757 E Camp Lowell Drive Tucson AZ 85712 info@lofadvisors.com

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State Disclosure: Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SPIC. Investment advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Lof Laurence Lof Financial Advisors, LLC are not affiliated. Investment products and services available only to residents of: Arizona (AZ), California (CA), Colorado (CO), Florida (FL), Idaho (ID), Indiana (IN), Michigan (MI), Massachusetts (MA), Minnesota (MN), Montana (MT), North Carolina (NC), North Dakota (ND), New Mexico (NM), Oregon (OR), Ohio (OH), Pennsylvania (PA), Texas (TX), Virginia (VA), Wisconsin (Wl), Wyoming (WY). We are licensed to sell insurance products in the following states of: Arizona (AZ), California (CA), Colorado (CO), Florida (FL), Idaho (ID), Indiana (IN), Michigan (MI), Montana (MT), North Dakota (ND), New Mexico (NM), Oregon (OR), Pennsylvania (PA), Virginia (VA), Wisconsin (Wl).
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