Hello, this is our weekly Market Alert video for the week ending October 22, 2021. I am Ken Moraif, and I’m a founder of Retirement Planners of America. This video comes to you on a day that is actually the most important day of the entire year. And you may be wondering why Well, it’s because it’s my birthday. That’s why.
I’ve given you advance notice for this day, so that you could get your shopping done ahead of time because I don’t want you to get caught at those shopping malls or have shortages of what you want to get me and all that. So, I’ve been very diligent, and I think responsible in giving you an advance notice. I said, if you want to just short circuit the whole thing and make it easy on yourself, you can get me something small and red that fits in my garage—a Ferrari, that would work fine. Well, someone took me up on that, and they got me exactly that. Here’s what they got me. I said, “How am I supposed to fit in there? This thing doesn’t work!” Yeah, it fits in my garage, it is red, and it’s little…but no, this is what I was talking about.
So anyway, thank you for all your well wishes, and all the emails and communications wishing me a happy birthday. They’re very, very well received. I’m very thankful to all of you.
Let’s get back to what the purpose of this is video, and that is to talk about what’s going on out there. The question that I’m getting asked about quite a bit right now is: what what’s going to happen with inflation? I want to address that, and I think the best way I can do it is by repeating to you a conversation I had with a client. She said, “You know, can I just listen to this podcast?” Then I said, “Wait a second, you listen to a podcast besides mine, really?” And she said, “Yes, I do.” That’s good. It’s fine. I think the more stuff you hear, the better. So she heard another podcast that said we are going to experience inflation like we saw in the early 80s, it’s going to cause the economy to collapse and cause a great big bad bear market…and it’s going to be terrible, and life as we know it is going to come to an end.
I’m going to quote Warren Buffett to introduce how I responded to her concerns. Warren Buffett said that if you bet against the U.S, economy, you’re going to lose—or some version that implies anyone who’s banded against the U.S. economy has lost. If you think the current issues we are facing—which are the supply chain being clogged up, products not getting to the shelves, shortages and all the things that are happening—if you think that is going to continue indefinitely, then you have no faith in the U.S. economy and no faith in the businesspeople and entrepreneurs in our country and all the creativity that has built this country.
I do have faith. I think that we’re going find a way to get through the supply chain issues because people there’s a huge profit motive to make that happen. Therefore, people are going to figure out ways, and if anything, you know, in a backward-thinking kind of way, it’s possible that we could come out better because of all of this. People may say, “You know what, instead of having all those cargo boxes stuck in Florida, in Houston and in
New Orleans, why don’t we make them go to other places? Maybe we can use technology to advance how fast we can get it. Maybe we can use different methods”.
This supply chain issue could create a whole new set of businesses. There’s a possibility we could have another Jeff Bezos emerge from all of this if they can figure out a technological resolution. There’s lots of opportunity here for people and our economy is geared around opportunity. People find a way, and we believe this whole inflation thing will probably last longer than we would like. It may last into the middle of next year. That’s certainly possible. It could cause more disruptions. That’s possible, but it won’t be a permanent thing.
The other thing that I want to remind you of and that is that more often than not, the stock market is a reflection of profits—where a company’s profits are going is reflected in the stock exchange. If you look at the profits that have been coming in now that the quarter has ended, they are really good. Companies are making money, and as companies make money, their stock price tends to go up.
Also remember the pandemic, and a lot of these things have affected smaller companies. The largest companies are the ones that are on the stock exchange, and they’re the ones that have actually profited from all of this in many cases.
The overall picture for us right now is positive. We still think we are going to see new all-time highs. We saw a new one last week, and despite all of this, it happened again. We think we are going to see more highs over the next year and that’s it’s not time to panic. We don’t think it’s time to get overworked about inflation, sell everything and go into gold or Bitcoin or anything else that you’re thinking about. We discourage that.
Having said all of that…it is always possible that things could turn in a bad way. Our experience has been we don’t see what takes down the economy until it does. It’s always something no one expects, so all the stuff we know about the supply chain, the labor shortages, the inflation, all these things—they’re very well known, and they’re priced in, so we don’t think that’s going to take the market down. We think that will be something unexpected.
I’m going to admit something to you that my wife doesn’t like. I’m a huge boxing fan. I love to watch boxing, and one of the things you may notice in a boxing match is that two guys or gals can go at it for 16 rounds, beating each other up, and nobody gets knocked out. You see all they’ve been through in those rounds, but it’s the unexpected punch that knocks them out—the one they didn’t see coming. That’s what knocks them out. It’s not the expected they can brace themselves for it.
Our economy, our market and the participants are the same way. If we know something’s coming, we can brace for it. In most cases, and we can play through it. We can figure out a way.
So, all the things that we’re worried about right now in our view are not going to take us down. It will be something that comes out of the blue, like the pandemic did last year. It
is important to have a strategy to protect yourself against the bad things that could happen, the unexpected. If you have that, and it’s something that you have confidence in, then you can have peace of mind. We do, and as a client, I hope you do, too. If things go badly, we will get you out of the way. We will mitigate the losses as much as we can. We hope that gives you peace of mind.
Now I have something I am excited to tell you about. Our corporate nonprofit foundation is called RPOA Cares, and we raising money to help in the fight against Alzheimer’s by participating in the Walk to End Alzheimer’s in Dallas on November 6th. Our goal is to raise $10,000, so please click the link in this email to donate and help end the disease that kills one in three seniors. One in three! Look to your right and look to your left. One of you! If we end Alzheimer’s, then we can have all three of you still here.
We’re not asking you to walk or do anything like that, but if you would just donate to this great cause. Our employees going to be doing the walking, so please help out and sponsor them. Everything RPOA Cares raises for the Walk will be matched by Retirement Planners of America, so we hope you’ll help us make a big contribution to the Alzheimer’s Association so they can continue all the amazing work they do to support everyone impacted by Alzheimer’s and dementia and find a cure.
We’d also love for you to subscribe to this video and ask five other people you know to subscribe to this video. We want as many people as possible who may benefit from this information to be able to do so. Thank you for watching. We do hope you have peace of mind, and that all is well with you. We’ll talk again soon.