While gloom and doom is dominating the economic headlines, the actual numbers are starting to look pretty good! In addition to what’s shown here, the S&P 500 is up almost 7% year to date. That’s just one month, but it’s a pretty darn good month!
I’m sure I’m gonna hear about inflation in the comments, so here’s a bit of explanation on the data. Inflation is tracked every MONTH, but the number we generally use to talk about inflation is the trailing YEAR. The first half of 2022 we had really high inflation, but the second half shown in this post, inflation was quite low. Note that this doesn’t mean “prices have dropped to pre-pandemic levels”. It just means prices have stopped RAPIDLY INCREASING. Which is frankly, the best you can hope for. Don’t expect prices to fall overall, but not going up quickly is a good thing!
GDP was also rough the first half of 2022, showing negative growth both months. That spurred much of the talk of recession, but the economy does seem to have gotten through that without seemingly experiencing a recession last year.
What’s in store for THIS year?! I don’t know. Many still think we have a recession ahead of us. We might. But even if we do, maybe it won’t be as bad as people EXPECT. And in that case the market would actually go UP as expectations were bracing for the worst. That may be why we saw a 7% rebound so far in January.
Either way, I’m doing the same thing. Continually periodically investing into low cost index funds with a plan to buy and hold for decades. I suggest you do the same!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
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