April 2023 Market Update
Recently, my neighbor hired my boys to take care of their cat and they were excited to receive $20 as their payment. It was a big deal for them to earn money. Similarly, earnings in the stock market are also a big deal.
If company earnings are high, the stock market usually responds positively. On the other hand, if earnings are down or lower than expected, the stock market responds negatively.
Inflation, High-Interest Rate, and Earnings
We are experiencing high inflation, it has been on a steady climb for the past few years.
While the inflation number given is around 5%, most people realize it is more.
Considering the inflation calculations from the 1970s, our inflation rate is closer to 20%. This is because many areas with the highest inflation, including healthcare and food, are excluded from the calculations.
Food is a significant factor that drives inflation. You may have experienced this yourself when you compare what you bought last year or two years ago to what you’re getting now for the same amount of money.
High inflation and interest rates can impact company earnings because people tend to spend less money on discretionary items.
Earnings reports can significantly affect the stock market, causing volatility.
It’s crucial to ensure your accounts are structured to withstand ANY market changes. It’s also essential to invest in companies that have strong earnings and can withstand market conditions. This way, you can recession-proof your portfolio.
As we continue to see earnings reports released, we need to be aware that volatility may follow.
It’s important to have a team that can help
in the right way and you have a team that’s looking out for you and making sure you are put in the right positions.
That’s what we that’s what we do!
If you have any questions, make sure you reach out.
Don’t send in just put your head in the sand but make sure that you’re situated in a way that you are recession-proofing your portfolio. (Click here for a free white paper on the topic!)
Give us a call with any questions.
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