We Are Getting Closer

QUOTE OF THE WEEK

“Do not get tired of doing what is good.  Don’t get discouraged and give up, for we will reap a harvest of blessing at the appropriate time.” -Galatians 6:9

TECH CORNER

The recession that we have been predicting still has not yet arrived but by all indicators we are getting closer. There are many indicators that point to a recession. The composite Leading Economic Indicator (LEI) is pointed down. The consumer has spent almost all of the savings they accumulated from the Pandemic stimulus drawing it down over $2 trillion.

Inflation is still high and the Fed apparently is going to keep their foot on the brakes by keeping interest rates high. In the Fed’s 110-year history, there have been 18 such tightening cycles and 89% of  them have ended in a recession, according to Investech.com research.   

Bank lending is drying up due to the inverted interest rate curve, credit card balances just exceeded $1 trillion and car loans are at $1.6 trillion and corporate profits are declining. There is a Debt Maturity Wall for US corporations coming soon with $196 billion for the rest of this year and $327 billion next year that will need to be refinanced at much higher rates.     

We are currently positioned in US Treasuries. If the recession comes, this is the correct positioning which is illustrated in the three graphs below. As you can see during the last three recessions, US Treasuries have had a positive return and the stock market as illustrated by the S&P 500 have had a negative return.

When managing your money, we will always follow the data and position your portfolio for the best possible chance of success. 

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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