Transcript

Hello, this is our weekly market, or video, for the week ended April 23, 2021. And once again we have a lot of information to share with you, and, of course, we’re going to be keeping tally on the word transitory, which as we described to you in previous video emails, we said that that’s going to be the word of choice because the Federal Reserve has told us that they’re going to be looking at inflation and jobs numbers to make sure that they’re not transitory before they take policy action. But, anyway, a strong week. A lot of positive data. The economy is growing. Jobs numbers are getting better. People are finding work. And so, the big question that seems to be on everybody’s mind right now, and many of you have asked, is could inflation cause the next market crash? Are we headed for a large amount of inflation? And, of course, there’s a lot of precedent for large amounts of debt creating large amounts of inflation, and causing economies to crater.

For example, we saw in Greece where inflation hurt them. We saw that in Germany during World War I when they had hyperinflation when they borrowed lots of money. In our country, the Great Depression, to a great degree, was caused by large amounts of debt, as was too the credit crisis of 2008. So, debt does create issues, and potentially it creates inflation, and inflation, in its turn, can be detrimental to the economy. So, the answer to the question, in short, could inflation heat up? Yes, and it is already, but it appears the inflation that we’re seeing now is transitory because it is caused by this massive demand that’s coming on line where people are going back to work, going back outside, opening business, now that we have vaccinations and heard immunity, and so, that is creating this massive demand, the supply cannot keep up with it, and that, of course, when supply is not equal to the demand, the cost of that supply goes up, and that’s inflation, right? So, we are going to see inflation here in the short run, but we don’t believe that this year the inflation that we’re seeing is going to be something – it will settle down. It’ll be transitory.

See, I’ve already used it four times I think just in this video. However, the bigger question is, we are now going to potentially borrow another $2,000,000,000 for an infrastructure spend, higher taxes to pay for it as well, and then there’s talk about forgiving the $2,000,000,000 or $3,000,000,000 of student debt out there, where’s that money going to come from? And so, all of that adds up to the potential for higher inflation in the future. So, yes, we do believe inflation could come, it could come in a big way, and that could also force the Federal Reserve to start raising interest rates to combat it. And if they do that, the combination of higher prices and higher interest rates could have a very detrimental effect on the economy, and, therefore, the stock market, we could see a big drop. Now, all of that we don’t see happening this year.

We see if it is going to happen, it would be next year. And so, that’s why, again, we have our invest and protect strategy in place ready to protect you should that eventuality come about. In the meantime, we believe that riding this wave for as long as possible is the best thing to do. And so, we will. And that’s the beauty of our strategy of our strategy. We have unlimited upside. As long as the market wants to run, we can track with it. But when it decides to go the other direction and the trends are against us, then at that point our strategy will tell us to take evasive action. That’s the way it works. So, we want to worry about all this so that you don’t have to. And this video is just to update you on where we are and what we think.

But, again, we’ll take care of business for you. We’re minding the store. We want you to have peace of mind. We want your money to last as long as you do, and now that it seems like every client I’ve talked to have been vaccinated, and most have had their second dose, if that’s what they’re doing. And so, maybe it’s time to go out and enjoy your second childhood without parental supervision, and maybe you’re not grounded by the pandemic. So, we wish all of you very well. We thank you. And by the way, you can subscribe to this video, make sure you do that, by clicking on the button below. And you can subscribe to this video, and that way you’ll never miss it. It will always be there delivered to you on time, and you can always watch it at your leisure. So again, thank you for watching this video, and we’ll talk soon.

MMWKM Advisors, LLC (d/b/a Retirement Planners of America ) (“Retirement Planners of America”) is an SEC registered investment adviser with a primary business location in Plano, Texas. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. References to the “invest and protect strategy” (the “Strategy”) and recommendations made under the Strategy from 2007 through 2009 refer to strategies collectively employed and recommendations collectively made by Retirement Planners of America’s principals while employed at Eagle Strategies, LLC., and also at Cambridge Investment Research Advisors, Inc. Four of the five principals remain as principals today, including the Retirement Planners of America’s founder, Ken Moraif, and Chief Investment Officer, Eli Dragon. Retirement Planners of America has been employing the Strategy since its inception in 2011. Therefore, any references to Retirement Planners of America’s performance or its investment advisory recommendations predating 2011 generally refer to recommendations made by Retirement Planners of America’s principals at the respective other firms described above. Like all investment strategies, the Strategy is not guaranteed. It is possible that it can incorrectly predict a bear market (generally accepted as a 20% drop in a market index), which has, in-fact, happened before at Retirement Planners of America and affected its clients accordingly. When the sell / “protect” portion of the Strategy is implemented, affected investors will incur transaction costs and taxable accounts will incur tax consequences. However, when implementing that portion of the Strategy, Retirement Planners of America generally believes that the benefit of avoiding bear markets outweighs the burden of these transaction costs and tax consequences.