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Scannell Wealth Market Commentary: January 18, 2018

Pipe

THE MARKETS

Inflation, inflation, where’s the inflation?

The U.S. Federal Reserve has been raising interest rates in anticipation of higher inflation.

In its 2018 forecast, Goldman Sachs indicated it expected to see “a gradual increase in global core inflation, albeit to levels that are still below central bank targets in most places.”

At year-end 2017, Barron’s wrote:

“Economists have raised the specter of inflation for several years, only to be disproved time and again. There’s reason to believe, however, that 2018 will be different – that prices will finally rise in a more sustained pattern, forcing stock- and bond-market investors to react to a new trend. ‘An unanticipated acceleration in inflation is probably the biggest risk for markets in 2018,’ says Larry Hatheway, chief economist at GAM Investments…Economists like Hatheway aren’t expecting runaway inflation, as in the days of disco and leisure suits, when prices rose by double digits. They’re girding for an annual increase of 2 percent to 2.5 percent at the most.”

Last week, data released by the Department of Labor showed U.S. inflation, as measured by the Consumer Price Index, ticked higher (0.1 percent) during December. With food and energy excluded, the index was up 0.3 percent. Shelter, which reflects the cost of rent, rose the most (0.4 percent). The indices for medical care, new vehicles, used vehicles, and vehicle insurance all increased during December.

Some publications are predicting December’s uptick in inflation will lead to a March rate hike by the Federal Reserve. It’s difficult to say with certainty, however, until January’s inflation report is released on February 14.

HOW LONG DO YOU WANT TO LIVE?

In 2013, the Pew Research Center asked Americans about the ideal lifespan. More than two-thirds (69 percent) gave an age between 79 and 100. Four percent wanted to live to be anywhere from 101 to 120, and another four percent wanted to live beyond 120.

It’s interesting to note the lifespans named by survey respondents generally matched to some scientists’ predictions about the hardiness of humans. One of the authors of a much-debated article in the journal Nature reported, “It seems highly likely we have reached our ceiling…From now on, this is it. Humans will never get older than 115.”

A slew of billionaire investors falls into the dissenting camp. They’re starting companies and funding research with the goal of making death optional, reported The New Yorker.

 

LiveMint wrote:

“Death is an old technology but, like the umbrella, it has endured…Most of the billionaires who have waged the war against ageing and death are from Silicon Valley because they are the sort of people who have been trained to believe that a problem, because it is a problem, must have a solution.”

While human longevity is interesting to think about, it also has some practical applications. For instance, the life expectancy chosen for a retirement plan should be carefully considered. It influences the amount saved, the investments chosen, and the retirement income withdrawn.

If you would like to talk about your retirement and how it factors into your financial plans, give us a call.

 

WEEKLY FOCUS–THINK ABOUT IT

“It’s paradoxical, that the idea of living a long life appeals to everyone, but the idea of getting old doesn’t appeal to anyone.”

–Andy Rooney, American journalist

 

 

Best regards,

The Scannell Wealth Management Team

 


Securities are offered through HighTower Securities, LLC, member FINRA/SIPC. HighTower Advisors, LLC is a SEC registered investment adviser.

* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.

* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.

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* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

Sources:

https://www.federalreserve.gov/monetarypolicy/files/monetary20171213a1.pdf

http://www.goldmansachs.com/our-thinking/pages/macroeconomic-insights-folder/2018-global-economic-outlook-as-good-as-it-gets/report.pdf (Page 1)

https://www.barrons.com/articles/what-inflation-could-mean-for-the-market-1514604543 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-16-18_Barrons-What_Inflation_Could_Mean_for_the_Market-Footnote_3.pdf)

https://www.bls.gov/news.release/cpi.nr0.htm

https://www.reuters.com/article/us-usa-economy/rising-rents-healthcare-costs-boost-underlying-u-s-inflation-idUSKBN1F11QD

https://www.ft.com/content/7ba28a3a-f7a5-11e7-88f7-5465a6ce1a00 (See Headline)

http://www.pewforum.org/2013/08/06/living-to-120-and-beyond-americans-views-on-aging-medical-advances-and-radical-life-extension/

https://www.nytimes.com/2016/10/06/science/maximum-life-span-study.html

https://www.newyorker.com/magazine/2017/04/03/silicon-valleys-quest-to-live-forever

http://www.livemint.com/Leisure/miPQTdrjDl5tcjflbG9z4I/What-happens-when-billionaires-seek-immortality.html

https://www.brainyquote.com/quotes/andy_rooney_417356?src=t_long_life

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Scannell Wealth Management is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.

All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.

This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates.