The first three months of 2022 have been rough. Every day the cries, the moans, and the sobs are about inflation, supply chains, and the devastating Russian assault on Ukraine.  Yet underneath all the fearful headlines is a strong economy—people are getting jobs, they are being paid more, and the housing market remains exceedingly strong.

Where are we now?

We have had tremendous negative days and weeks in the market so far in 2022. The somewhat good news is that there has been some recovery from the bottom. I believe that our All-Weather portfolio will continue to bend but not break because of our focus on quality companies. Our clients who are retired or focused on income and growth can rest assured that because of my RetireWise™ process of income distribution, which is the holy grail of investment and financial planning, I am able to pinpoint specific securities to monetize to provide sustainable monthly income. Even with the market down, not all securities are down. I know how to harvest the cash you need and at the same time still invest for growth. It is during times exactly like this that historically I have found and invested in great 10x companies—Visa, Shopify, and Nvidia, just to mention a few.  

Where do we go from here?

We are laying the groundwork for the next 10x companies now. Although you cannot see the grass grow, it is indeed growing—because we put in the necessary upfront work. There are still profitable new companies and established companies growing their market share and profits in this environment. Unfortunately, the trifecta (inflation, supply chain challenges, and war) of negative headline news supersedes the good news about the next generation of growth in green energy, bringing industries back into the country, and increasing productivity. I am probing with a scalpel into clients’ portfolios one by one—holding on and improving as warranted. RetireWise™ means Wisdom.  

On fixed income and alternatives:

The Federal Reserve Bank finally raised (.25%) rates for the first time since 2018 and promised more in the battle against inflation—up to 2% this year. I believe it. I think they will raise rates again in May and July. The job is simple:  curb inflation. I am hoping and praying that they are successful in their task quickly because if additional planned rate increases do not halt inflation, then both the economy and the markets will be subject to more draconian rate shocks.  Trust me, we don’t want that.

On Alternatives: 

So far in 2022, Bitcoin has gone up to around $68k, traded down to $28k, and is at $48K as I write. That is the good news. I have read more negative stories of fraud and various disappearance shenanigans than positive news of Bitcoin as a store of value. Therefore, my vote is still NO, consistent with the points I raised in my letter three months ago.

In conclusion:

So, when we see the value of our investment portfolios is down and the headline news is scary, yet the underlying economic fundamentals are strong—it is time to hold on tight our dreams.  This is not the time to panic, make rash decisions, and head for the hills. Better days are coming.

Sincerely,

Femi T. Shote, MSF, ChFC, CFP®

Accredited Investment Fiduciary®