In this week’s episode, Josh and Austin discuss the Federal Reserve’s latest action, and what it means for the markets going forward! They answer: What is happening? Why did the Fed do this? And will the Fed go too far? Tune in now to learn more!
Main Talking Points
[0:44] – What is Happening?
[3:00] – Why Did the Fed Do This?
[5:35] – How Does the Fed’s Actions Make Changes to the Economy as a Whole?
[9:13] – What do Markets do When the Fed is Tightening?
[13:30] – Dad Joke of the Week
[14:13] – Will the Fed Go Too Far?
[16:34] – The Fed and Jerome Powell
[17:18] – Stimulus Packages Impact on Inflation
[18:14] – How do You Invest in a Fed Tightening Cycle?
[20:38] – How Does the Fed Hiking Rates Impact Your Financial Plan?
[21:58] – Rebalancing
Links & Resources
Invest With Us – The Invested Dads
Free Guide: 8 Timeless Principles of Investing
Social Media
Full Transcript
Intro:
Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.
Austin Wilson:
All right. Hey. Hey. Hey. Welcome back to The Invested Dads Podcast. The podcast where we take you on a journey to go to your financial future. Today, we are going to be talking about the Federal Reserve’s latest action, what it means for the markets going forward.
Josh Robb:
Yeah. The Fed took a hike.
Austin Wilson:
They did take a hike. They tightened their belt as part of their New Year’s resolution.
Josh Robb:
That’s right.
[0:44] – What is Happening?
Austin Wilson:
They’ve been putting on a couple too many pounds on their balance sheet. Nice. Nice. And yeah, they’re trying to get rid of that a little bit. So let’s talk about what is happening. So first of all, on the 16th of March, the Federal Reserve announced, unsurprisingly.
Josh Robb:
No, it was a shock to everybody.
Austin Wilson:
They announced that they were going to hike the overnight lending rate, the Fed funds rate to 0.25 to 0.5%.
Josh Robb:
Yeah. They always give a range.
Austin Wilson:
From 0.00 to 0.25%. So essentially they raised one quarter of 1%. The overnight lending rate that they’re lending, really lending the banks is the biggest thing that that is, that’s the really, really short term borrowing rate. So that was the first interest rate hike since 2018.
Josh Robb:
Wow, forever ago.
Austin Wilson:
In 2018, there was actually quite a few, but they actually kind of went too far at the end of the year and had-
Josh Robb:
They’d lowered it in 2019.
Austin Wilson:
Exactly. So this was the first rate hike since 2018. Again, it was 25 basis points or one quarter of 1% and that was largely as expected. There was some speculation a month or two before that, that it could even do a half percent, but the Russia, Ukraine uncertainty, and how that related to oil prices and all kinds of stuff, put a little bit of uncertainty into their forecast. So they air on the side of being conservative and not do too much by taking it half a percent at one time. In addition to that, they announced that quote, unquote, at a coming meeting-
Josh Robb:
Coming meeting-
Austin Wilson:
That could mean anything.
Josh Robb:
Anything.
Austin Wilson:
They are going to begin balance sheet normalization. This is known as Quantitative Tightening as opposed to Quantitative easing. QE versus QTs. This is QT and this will be them selling the bonds that they’ve accumulated on their balance sheet as they were easing. And that is coming at a later date. We haven’t gotten there yet.
Josh Robb:
They were buying bonds to put cash into our economy, to keep lending, to keep our finance sector flowing during economic crisis, like COVID.
[3:00] – Why Did the Fed do This?
Austin Wilson:
Yeah. And this is really, it’s only the second cycle that they’ve used that as a huge portion of their, of what the Fed’s been doing. They also did it in the financial crisis, but to a lesser extent, actually. And then they now have enormous, trillions of dollars balance sheet, which they will begin running off. We’re going to talk about the impact of what that will be here soon. But the question is why, why did the Fed do this?
Josh Robb:
They were bored.
Austin Wilson:
They were bored. They wanted to, they’d been sitting on their hands for so long. I mean, imagine how easy it’s been to be the Fed.
Josh Robb:
It’s like right before you have your review at work, you’re like, “I got to get some stuff done so I can write down all the cool things I did.”
Austin Wilson:
That’s right. So there’s really two mandates. We always going to keep in mind when we’re talking about the Federal Reserve. These are their dual mandates. Number one is full and inclusive employment and they just added the inclusive piece, which is not really measurable, but they added that recently.
Josh Robb:
It sounds good. We’re all inclusive.
Austin Wilson:
Yeah. We’re talking about full employment here. So unemployment is currently about 3.8% seasonally adjusted here in the United States. That’s really low. Historically, that’s good. It’s actually closing in on three and a half percent, which was the pre pandemic lows since the sixties. So closing in on that, we are in an economy where we have more job openings than we do unemployed people. It’s putting a lot of pressure on wages because there’s just a lot of jobs out there. People are looking to hire.
Josh Robb:
You know, 4% is great and we’re below that and it’s looking strong.
Austin Wilson:
Absolutely. So check, we give the Fed a golden sticker on the-
Josh Robb:
They get the sticker for that because they worked real hard for that.
Austin Wilson:
They worked real hard on that.
Josh Robb:
They didn’t do anything for that. But they’re tracking it.
Austin Wilson:
So number two is stable pricing environment. And let’s just say they don’t get a gold sticker on this one because there is absolutely not a stable pricing environment out there. The latest CPI or Consumer Price Index reading showed that the basket of goods tracked in that is up 7.9%.
Josh Robb:
Does office supplies work? Is that part of that?
Austin Wilson:
It could be.
Josh Robb:
Because then that would be staple pricing.
Austin Wilson:
Oh my goodness.
Josh Robb:
Just so you know.
Austin Wilson:
Stable pricing, not staple pricing. No, we’re talking about stable pricing and we’ve not, 7.9% inflation year over year is not stable. Generally the Fed likes to see the 2 to 3% range. They were trying to get it up to three for a long time and now they’d be happy with three. But that is not where we are right now. Everything across the board is more expensive and not just by a little, in fact that CPI reading, that’s not actually what most people are feeling. Most people are feeling higher numbers than that because it’s-
Josh Robb:
CPI takes a set basket of goods and not everybody buys that in proportion to what they’re looking at.
Austin Wilson:
So we’re seeing inflation at the highest level in 40 years. And inflation’s at the highest level in 40 years at a time when the Federal Reserve had interest rates at zero. So like, they weren’t essentially doing anything to do that. We’ve had high inflation for months so a little bit behind maybe the curve on doing anything about that, but that’s how it got to be where it is. The question then leads to, how does the Feds actions make changes to the economy as a whole?
[5:35] – How Does the Fed’s Actions Make Changes to the Economy as a Whole?
Josh Robb:
Well, I’ve always wanted this for the first mandate, employment, inclusive, full inclusive employment. What can they do to help with that?
Austin Wilson:
Yeah. I mean, I think that if borrowing costs and financial conditions are extremely loose and easy, then companies will be more apt to invest, start new project, which are going to require people to hire. That’s kind of the biggest thing there. They don’t do as much for that one. Now the interest rate there,
Josh Robb:
But the current environment was very conductive for that to work. So low borrowing costs and very easy monetary policy made it that companies were probably apt to-
Austin Wilson:
And still are because historically speaking things are still loose and easy in terms of monetary fiscal, monetary policy.
Josh Robb:
Even after a quarter percent raise.
Austin Wilson:
Oh, that’s nothing.
Josh Robb:
So much.
Austin Wilson:
So let’s talk about the two things that the Fed really announced that they were going to be doing. So raising interest rates, what that is going to do is it’s going to increase borrowing costs across the board, essentially. But especially from the short term overnight bank lending. But it’s going to extrapolate there then to mortgages and everything in between. So hiring borrowing costs are going to make people think again before they go out and spend money because it’s going to cost more. Thus, they’re going to be less likely to spend in the first place.
Josh Robb:
Pause. Quick question. Do banks get a discount for overnight lending on the night that there’s a time change? Because they didn’t have that extra hour. They moved ahead. They jumped the one out. Do you think they got a discount?
Austin Wilson:
But did they have to pay extra last?
Josh Robb:
I don’t know. Maybe they sequel out, but I would be asking for one, if I was-
Austin Wilson:
You see the news that the, was it, the Senate passed the bill to permanently eliminate daylight savings time.
Josh Robb:
I saw that.
Austin Wilson:
That’s not what this episode’s about at all, but it just makes sense. It’s the most,
Josh Robb:
I feel like they do that every couple of years, but it just doesn’t go anywhere.
Austin Wilson:
It has to go somewhere. I’m sick of it. I’m going to sign a petition. Let’s start one.
Josh Robb:
You should.
Austin Wilson:
Okay. So second part of what the Fed announced is Quantitative Tightening. Right?
Josh Robb:
I’m going to sleep on it.
Austin Wilson:
So Quantitative Tightening, that’s the Fed selling their bonds-
Josh Robb:
Get out of here.
Austin Wilson:
So what this is going to do is it’s going to dry up excess liquidity in the markets because when they’re buying things, they’re putting cash into the markets. When they’re selling things, they’re taking cash out of the markets. So excess cash and liquidity.
Josh Robb:
Where does that cash go, once the Fed gets it?
Austin Wilson:
Where’s that cash go?
Josh Robb:
When the Fed buys it back.
Austin Wilson:
Probably back to the treasury. I assume back to the treasury.
Josh Robb:
To the place the bond came from.
Austin Wilson:
Exactly. It’s interesting, out of one pocket, into the other.
Josh Robb:
It’s a circle.
Austin Wilson:
It’s a circle. The circle of life. So all this excess cash that they had when they were buying bonds, that was in the market, that was really good for people, businesses, banks, having money to lend or borrow or spend. So when they’re selling these bonds, that is going to then put downward pressure on the bond prices, which is going to put upward pressure on yields, which in turn raises interest rates really across the yield curve. So really, they can control the ultra short end of the yield curve for their overnight lending rate, that funds rate, which they’re increasing. And they could really strategically control the rest of the yield curve. Yield curve control, indirectly, by choosing which area in the market they’re selling. Because they hold, treasuries across the curb, they also hold mortgage backs, securities and all kinds of stuff. But anyway, this is their way of essentially controlling interest rates.
Josh Robb:
And higher interest rates means slower economic growth, slower economic growth means lower inflation, in theory. Play this all out in theory, that’s the whole point of this.
Austin Wilson:
It’s the goal. That is the goal. Gotcha. So Josh ask me the question.
[9:13] – What do Markets do When the Fed is Tightening?
Josh Robb:
I’m going to ask you this question. This is my question to you.
Austin Wilson:
Josh’s question for me.
Josh Robb:
What do markets? Because you asked me, what does this mean to our listeners? But I’m going to ask you, what do markets do?
Austin Wilson:
Because we’re going to get to your answer.
Josh Robb:
Yeah. That’s down the road. But what do markets do, when the Fed is tightening?
Austin Wilson:
So the question is,
Josh Robb:
No, that is the question.
Austin Wilson:
What are they going to do? Well, overall stocks have returned an average of 5.3% per year during years when the Fed hikes rates for the first time. That’s a little bit below the long term average, but-
Josh Robb:
What is the long term average, five and half?
Austin Wilson:
It’s 5.3.
Josh Robb:
Okay.
Austin Wilson:
Now in slow tightening cycles where you’re not having huge hikes all at once, but more gradual like one hike per meeting or whatever, stocks have returned about 10 and a half percent. Double.
Josh Robb:
Nice. They like that.
Austin Wilson:
In fast tightening cycles, so big hikes quickly in a response to maybe out of control inflation. Something like that. Stocks have averaged a loss of 2.7% annually.
Josh Robb:
So you average those two out, you have 5.3.
Austin Wilson:
So overall time periods where the Fed is not hiking, stocks are up 11.5.
Josh Robb:
Ooh, they like that the best.
Austin Wilson:
They like non hiking because when interest rates are low, that’s better for stocks. And when you get to the point where you look at valuations for stocks and you’re talking about discounting future earnings and cash flows and dividends, the lower the interest rate is, the better that is for the valuation of the stock.
Josh Robb:
I’m going to be honest with you. I’m surprised that number is where it is because in non hiking years, that would also be in years that it’s down. Because they’re not going to hike, they’re probably be reducing. So you actually think the stock market return would actually be lower. So that average of 11 and a half is actually really impressive when you figure those non hiking years is higher for the total.
Austin Wilson:
So those are years where the Fed is either not doing anything or cutting.
Josh Robb:
So I guess what I’m saying is, if they’re cutting it’s usually in response to bad economic conditions. And so the fact that it’s at 11 and a half percent, it’s interesting to me.
Austin Wilson:
Yeah. So I actually have some stats on that.
Josh Robb:
Okay. Show me that.
Austin Wilson:
So, but essentially like we just talked about, roughly average stock market returns for early, slow, easy tightening cycles. Not terrible for stocks at all. Now if we break this into four phases, so easy tightening, which is like light policy tightening. And we can then look at tight tightening. So tight monetary policy while they’re getting tighter. Tight and easing. So tight monetary policy, but they’re lowering-
Josh Robb:
It’s at the top. Starting to do the thing.
Austin Wilson:
And then easy and easing. Meaning it’s as easy as it gets. Getting easier. So if we look at returns for all of these, the first category there is the easy tightening. That’s where we’re at right now. That has averaged about an 8% return annually. That’s like normal, right? The tight and tightening. So that’s, you have tight monetary policy and you’re tightening further, that has actually averaged a loss of 0.1% annually, but about breakeven. The tight and easing segment there, that phase, that has been a red, a positive return of about 0.9% annually, but very low. But not much off of tight and tightening. And then phase four, easy easing. That is the easiest monetary policy getting easier. And that has been a average return of 12.8%.
Josh Robb:
So it seems the bigger deal is that first word, whether tight or easy.
Austin Wilson:
Yes. Easy monetary policy is good for stocks. Tight monetary policy is not good for stocks.
Josh Robb:
Makes sense.
Austin Wilson:
It does. So in general, during easy financial conditions, stocks have been up about 10.6%. And while conditions have been tight, they’ve only returned 0.4 percentage.
Josh Robb:
Wow. That’s a lot of percentages floating around there. Long story short, it sounds like we’re entering into that early stage, which historically the stocks do well.
Austin Wilson:
It’s still easy. And then we need to look at during hiking cycles. Or during easing cycles. During hiking cycles, stocks have returned 5.1%. During easing cycles, they’ve averaged 9.4. So a couple of different ways to look at it. Overall, where we’re sitting right now, what this is pointing to is, it’s not the end of the world for stocks. It could still be lucrative stocks, but it is only, we’re headed in their direction where it gets to be more of a headwind than a tailwind. It will turn then at some point from a tailwind to a headwind as you get too tight. So that’s kind of where we’re at. So, that is my nerdy stats.
[13:30] – Dad Joke of the Week
Josh Robb:
So let’s stop, digest those percentages. Let it float around in our head for a minute. I got a dad joke of week for you.
Austin Wilson:
Bring it.
Josh Robb:
All right. Here we go. Do you know why the mailman was unable to deliver the envelopes?
Austin Wilson:
Is it envelope or envelope?
Josh Robb:
Envelopes.
Austin Wilson:
Which one is it?
Josh Robb:
Envelopes.
Austin Wilson:
You tell me?
Josh Robb:
I said them both.
Austin Wilson:
It’s envelope.
Josh Robb:
Envelope.
Austin Wilson:
I don’t know which one it is. No, I have no idea.
Josh Robb:
It’s because they were stationary. They were stationary for the envelopes.
Austin Wilson:
For the envelopes. I don’t think there’s a right answer.
Josh Robb:
Washington. Washington.
Austin Wilson:
Well, there is a right answer.
Josh Robb:
There’s a right answer for that.
[14:13] – Will the Fed Go Too Far?
Austin Wilson:
There’s no R in there, let’s just say that. There’s no warshing, there’s no washing, wash rag, warsh rag. So anyway, let’s get back to it. Will the fed go too far? That’s the question. I have an answer for you.
Josh Robb:
You have an answer.
Austin Wilson:
It’s to be determined. We don’t really know at this point. So inflation’s crazy high. They still believe many aspects of it are going to stabilize when supply chains normalize over the next year. That is the Fed’s standpoint as of now.
Josh Robb:
That’s what the Fed says.
Austin Wilson:
That’s why they’re only increasing 25 basis points at this point. Haven’t done anything crazy. If they tighten too much, to slow down the economy before it’s ready, that would be known as policy error.
Josh Robb:
That’s what they call it.
Austin Wilson:
From a monetary policy standpoint.
Josh Robb:
Or a mistake is how everybody else would say it.
Austin Wilson:
Yeah, I would just say you were wrong.
Josh Robb:
Messed up.
Austin Wilson:
But they would call that policy error. And that could, not that would, but it could send the economy into a recession, which is why they would then respond by easing. And if you look at the way the yield curve is trading right now, so fixed income bond yields, we are getting to the point where certain areas of the yield curve are either inverted, which means the shorter end of the curve is yielding more than the longer end, means you’re more bullish about the short term than the long term. Meaning it’s about to get worse.
Josh Robb:
Because the reason why that’s weird is if I’m, that’s just you and me, if I’m letting you borrow some money.
Austin Wilson:
Yeah, say five years and 10 years.
Josh Robb:
Yeah. You say, “Hey, I’m going to pay you back in five years.” And I say, okay, I need a certain amount of interest because I’m not going to have that money for five years. But if you say, “Hey, can I pay you back in 10 years?” I should want a little more interest because I don’t get my money for longer. So when you say that your curve is inverted.
Austin Wilson:
That means the shorter end’s higher than the long end.
Josh Robb:
Which doesn’t make sense.
Austin Wilson:
That does not make sense.
Josh Robb:
So that’s the reflection of people in the economy. The market’s saying I don’t really know what’s coming. I’m going to go on the short end because I don’t trust longer.
Austin Wilson:
Yeah. And so that, so yes, it’s about bullishness. You’re more bullish about right now even though it’s uncertain with what’s happening in the future, which is not typically a good thing. And in fact, an inverted yield curve in certain areas of the yield curve has always proceeded recessions. That’s why the recession word is popping up again now. And now the Fed could kind of control some of this to some extent with A, their interest rate increases, but B, their QT, quantitative tightening. Now their balance sheet is large, but compared to the overall basket of fixed income securities out there, it’s not the mammoth thing that we think it is. So they really won’t be able to do a whole lot there.
[16:34] – The Fed and Jerome Powell
Josh Robb:
So, the Fed says that some of this maybe with supply chain. Have they addressed the amount of cash floating around our economy from all of the stimulus being a factor as well? Because I feel like that’s a factor.
[17:18] – Stimulus Packages Impact on Inflation
Austin Wilson:
They try and dodge that because the Fed tries to, and doesn’t, actually Jerome Powell. Jerome Powell is a registered Republican yet he’s nominated and had just got confirmed, I believe again, by essentially Democrats, as the Fed chair again. So he tries and does a really good job of being a political because the federal reserve does not, it’s not Republican, it’s not Democrat. And so he makes a very big point to not criticize fiscal policy is what you were talking about. So the stimulus packages that have went through for the last couple years and given trillions, not trillions, billions and billions and billions of dollars, even trillions, but tons of money into the economy, tons of money into people’s pockets, Powell does a pretty good job of dodging questions on how fiscal policy has impacted inflation. But the general consensus is that yes, all of the trillions of dollars and billions and all those big words of extra money that’s gone into people’s pockets and the economy has surely contributed to inflation.
Josh Robb:
Yeah. It has to help inflation a little bit. I mean, there,
Austin Wilson:
Help as in make it higher, you have more money.
Josh Robb:
Fuel the fire of inflation a little bit. Whether it’s the primary one or supply chain, all that, whatever.
[18:14] – How do You Invest in a Fed Tightening Cycle?
Austin Wilson:
If you hand someone $5,000, they’re going to go spend it. And the more people that go do that, the more prices are going to go up because business are going charge more. And as their costs are going up, they’re going to pass that along with consumers. It’s just, it’s all a big circle. So the question is, how do you invest in a Fed tightening cycle?
Josh Robb:
What do you?
Austin Wilson:
Do you want some tips?
Josh Robb:
Give me a tip.
Austin Wilson:
Give me a tip. No, really, treasury inflation protected securities. No, I didn’t even put that on here, but stocks are really the only proven inflation hedge.
Josh Robb:
Long term that’s the only thing that beats inflation.
Austin Wilson:
They do better than cash. They do better than bonds because bond prices are usually going down. So total returns are muted during times of interest rates going up. So, that is really where we’re at. We’re in that environment where stocks are really, the only option.
Josh Robb:
Gold is in inflation hedge, I hear on the news, everywhere.
Austin Wilson:
Yeah. We had the, last year, 2021, highest inflation in 30 years at that point, gold was down.
Josh Robb:
Oh. But I thought it was a good inflation hedge.
Austin Wilson:
Yep. Don’t think that gold’s a good inflation hedge, if someone tells you that, you should not hire them.
Josh Robb:
What gold is good for?
Austin Wilson:
Is pretty jewelry and technology.
Josh Robb:
The time that you do really see it move though, is uncertainty. Right? Gold is a protection against economic uncertainty because gold historically is seen as a valuable, limited commodity that then can be exchanged for other things. So it is not an inflation hedge historically, like you said, even last year was a great example of that. If you see that on the news, ignore that.
Austin Wilson:
Yeah. So another way to, I wouldn’t really say invest in this, but maybe take advantage of higher inflationary environments, rising rates, because rates are going up, is fixed-rate mortgages. So first of all, if you have an arm,
Josh Robb:
I have two.
Austin Wilson:
An adjustable rate mortgage, your rates will at some point be going up as interest rates go up.
Josh Robb:
Because they adjust the rate of the mortgage.
Austin Wilson:
The rates are going up.
Josh Robb:
They say it right in the name. So don’t be surprised.
Austin Wilson:
So that is something that you may want to consider a fixed-rate mortgage as an option.
Josh Robb:
Instead of adjustable.
[20:38] – How Does the Fed Hiking Rates Impact Your Financial Plan?
Austin Wilson:
And in areas, in an inflationary environment that we’re in right now, borrowing at a lower cost than the inflation rate is essentially more than free money. Like you’re doing really good on your money, if you’re borrowing at like, mortgage rates are 30 years over 4% again, which is big move. But it’s still lower than inflation is right now. So that’s a natural hedge that if you have a fixed-rate mortgage, you’re naturally hedging your overall financial position. So justice brings us to you, because you’re the guru. You like sit on a mountain and go Hum. Wearing like a Toga or whatever gurus do. So you’re the financial guru. How does the Fed hiking rates impact your financial plan?
Josh Robb:
You know, it really doesn’t. Honestly, this has happened in the past. This is not norm. That’s what they’re there for. The Fed was created to do these things. To help smooth out our economic trajectory, remove those kind of bumps along the way. So how does this impact your financial plan? Doesn’t. Inflation being higher? Now that does impact your financial plan a little bit. But the long term is the important thing. We’re going to have spikes of high inflation. We’re going to have periods of low inflation. So you need to make sure that you factor in a reasonable inflation for the long term.
Austin Wilson:
And try and be conservative probably if you had to choose one way,
Josh Robb:
Conservative meaning higher in this.
Austin Wilson:
Exactly.
Josh Robb:
I don’t think I would do a long term 7% inflation. But the long term average, that includes all, even the seventies where we saw hyperinflation, is three and a half percent.
Austin Wilson:
That’s a good number.
Josh Robb:
So how does this impact your financial plan? It doesn’t if you factored that in already for a good long term average inflation. In the short term, we talked about, depending on what type of phase we’re heading into, your different investments may underperform or outperform, but again, fully diversified portfolio should be built to sustain all these different pieces. Some will do well, some won’t, but you’ve got to stick to the plan, stick to the course. And if you have any questions, make sure you’re talking to your advisor about it.
[21:58] – Rebalancing
Austin Wilson:
Yeah. And that’s also a good thing that brings up the thought of rebalancing. So as some of these things get out of whack during certain periods, certain things are going to do better than others. This not a time to not rebalance.
Josh Robb:
Correct.
Austin Wilson:
Because naturally things are going to move in different trajectories than the other, take advantage of that. And if you’re adding money in regularly, which if you’re not in retirement, we would hope everyone is, your money should automatically be doing that for you.
Josh Robb:
And as a reminder, we talked about this before in rebalancing, rebalancing is selling things that are up to buy the things that are down, which means you’re selling things that are at an appreciated price, which is a good time and buying things that are a reduced price, which is also a good time. So rebalancing is good for your portfolio, keeps you in line, long term. Now let things ride, you could probably get, but that’s not the goal here. The goal is to stick to your plan. And stick to an asset allocation that you’re comfortable with, that should, in the long run, meet all your financial needs.
Austin Wilson:
But Josh, what if everything in my portfolio’s down, my stocks are down, my bonds are down?
Josh Robb:
Look at the timeframe. So if you’ve been investing for more than three months, you’re probably still up. Most year to date are still positive because last year was a good year in the stock market.
Austin Wilson:
Annually.
Josh Robb:
Yes, that’s 12 months. And so that’s, look at your time horizon and then look at your portfolio and say, how am I allocated to get to that goal?
Austin Wilson:
Absolutely. Well, as always, check out our free gift to you. It’s a brief list of eight principles of timeless investing. These are overarching investment themes meant to keep you on track, to meet your long term goals. We don’t talk about the Fed because again, what they do is irrelevant to your long term plan. It’s just part of the normal cycle. And that will kind of take care of self if you stick to your plan, but check that out, it’s free on our website. Josh, how can people help us grow this podcast?
Josh Robb:
Make sure you subscribe, that way every Thursday you get our most recent episode sent right to you. Leave us review on Apple Podcast, Spotify or wherever you listen to us. And then email us any questions. If you have a nomination for the Fed, you know somebody that do a good job there because they are all elected officials, and you can let us know. And then if you know somebody that’s asking questions about rising interest rates share this episode with them.
Austin Wilson:
All right, until next Thursday, have a great week.
Josh Robb:
All right, talk to you later.
Outro:
Thank you for listening to The Invested Dads Podcast. This episode has ended, but your journey towards a better financial future doesn’t have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today’s show. If you enjoyed this episode and we had a positive impact on your life, leave us a review, click subscribe, and don’t miss the next episode. Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin or any podcast guest are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions or forecast provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns. Securities investing involves risk, including the potential for loss of principle. There is no assurance that any investment plan or strategy will be successful.
