The U.S. Labor Department reported today that its producer price index — which measures inflationary pressures before they reach consumers — rose at the fastest annual pace on record for the fifth consecutive month in August. This significant inflation increase is likely due to economic ramifications resulting from excessive fiscal and monetary stimulus, pent-up consumer demand, and supply issues arising from the government’s shutdown of our nation’s economy in response to COVID-19.
Our firm has previously projected that INFLATION IS IN NO WAY TEMPORARY! SFA’s view is that our country has already entered a likely decades-long period of higher inflation pressures. But – HIGHER INFLATION, which is extremely DESTRUCTIVE TO BOND INVESTORS, WILL ACTUALLY RESULT IN HIGHER INFLATION-ADJUSTED EARNINGS FOR EQUITY INVESTORS! In other words, higher inflation will likely push your stock values upwards, while hurting bond holders. We stated in our December 31, 2020, video that “We believe interest rates will increase in 2021 (pushing down bond values), but that the equity markets will remain strong.”
As inflation rises, so does investor fear. But, as we stated in our October 28th, 2020, video, posted to all our social media accounts, “Investor fear is why DALBAR, Inc. studies of investor returns, shows clearly that SFA clients receive approximately twice the returns of the average investor. Folks, that is because of our investment discipline. It is because we always put market fears into perspective, and never allow them to interfere with our proven investment methodology. We look at today’s markets in a pragmatic way, and we are certain that the path we are on will likely be highly profitable.” THE RESULTS? From November 1st, 2020, to September 9, 2021, OUR AVERAGE CLIENT ACCOUNT HAS APPRECIATED 44.80%*, NET OF ALL COST, compared to the Dow Jones return of 31.61%!
Folks, your SFA portfolio is uniquely and appropriately positioned for there continued inflationary pressures! WE BELIEVE INFLATION SHOULD ACTUALLY HELP OUR CLIENT’S PORTFOLIOS! We see this inflation announcement as a CURRENT BUYING OPPORTUNITY to add to our holdings, which are likely to perform even better with increased inflation and interest rates. WE BELIEVE THIS IS CLEARLY A BUYER’S MARKET!
*Full listing of all applicable disclosures (bit.ly/3lGX3mM)