This Week’s Blogger: Scott D. Heins, CFP®, IAG Chief Investment Officer
Miriam-Webster lists the origin of the word jitters as “unknown.” While the origin of jitters may be unknown, it is the unknown that will likely be creating jitters for short-term traders in the next few months.
Today bond traders believe the Federal Reserve will likely announce its third consecutive .75% increase in its target overnight lending rate. Over the next few months, traders expect even more rate hikes as the Fed aggressively fights the inflation they helped create. The great unknown is how high rates will go before the Fed is satisfied.
Rumors of a global recession are widespread. Last week several comments from corporate leaders pointed toward slowing economic growth and potential difficult economic times ahead. At the same time, consumer spending is showing no signs of slowing. The great unknown is whether it will take a recession (big or small) to end inflation or whether an economic “soft landing” is sufficient.
Mid-term elections will be held on November 8. Just a few months ago Republicans were dreaming of a “red wave.” Now Democrats believe they have suppressed that wave. We do know you will be inundated with negative ads painting ugly pictures about the world we live in or specific political candidates. The great unknown is which party will be in charge of the U.S. House of Representaives and the U.S. Senate in January 2023.
In summary, there are a plethora of great unknowns that will give short-term traders the jitters in the next few months. These contagious jitters can even occasionally have “break through” infections in long-term investors.
What precautions can a long-term investor take to minimize the odd of a jitters infection?
- Minimize exposure to people with jitters. You know that apprehensive, uneasy feeling when you are sitting next to someone that is sniffling, sneezing, and coughing? You can just feel those icky germs surrounding you in a virus-laden cloud. Conjure up that same exact feeling when you are exposed to anyone who is discussing the latest short-term catastrophes – whether in person, on television, or on social media. Avoid them and their jitters viruses!
- Frequently wash your mind. Your long-term financial plan already takes into account that the financial markets are volatile – sometimes for years. That is not an unknown. Frequently review your logical long-term plans so today’s emotional volatility is constantly isolated in the context of decades, not days.
- Get your booster. We are here to help you. If you have been exposed to the jitters and need a boost of confidence, we are happy to help you reinforce your immune system. With our 37 years of helping families build and manage their wealth, we understand that jitters infections can lead to very poor decision making with unfortunate long-term consequences. We exist to help all jitters-infected people survive their disease and thrive in the future.
- Focus on joys. While the “experts” frequently sell jitter-inducing fear as news, your time and energy would be better spent on joy-inducing activities. Find something you are passionate about – something that helps your family, expands your knowledge or skills, or has a positive impact on our community. You will find that being a positive force for others is far more rewarding than unnecessarily worrying about short-term traders’ jitters.
The next few months are full of great unknowns which can lead to a jitters outbreak. Be prepared, take precautions, and call us for help with any infections.
Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.
Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.
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