“Inflation is when you pay $15 for the $10 haircut you used to get for $5 when you had hair.” Sam Ewing
These are broad areas that have been getting stronger
- Insurance Companies
- Healthcare Companies
- Silver
These are broad areas that have been getting weaker
- Coffee
- Regional Banks
- Travel and Leisure
Source: Dorsey Wright and Assoc./Thomson Reuters
(See complete list by clicking here: Market Trends)
The government announced on Dec 12th the inflation number over the last twelve months. Surprise, surprise, it came out at 7.1%*. Even though 7.1% is lower than the recent peak of 9.1% (June 2022*), it is still extremely high. The Fed still has work to do getting that inflation number down to their stated goal of 2%. Who knows how long this will take, but it is extremely important the Fed gets this under control.
I just finished an incredible book called, The Great Inflation by Robert J. Samuelson. It discusses the super high inflationary period of the 70’s and early 80’s. As if that period wasn’t bad enough due to the infamous leisure suit!! The author does an incredible job methodically walking through how we got to the point where inflation went from 3.5% in 1966 to a whopping 13.3% in 1979*! Ultimately, inflation was extinguished, and it was brought back down to 3.4% by the end of 1982*. It was not easy, but the Fed did it. In my opinion, it all came down to two words, focus and fortitude. To read my book review, click on this link: (AWM Book Reviews)
Let’s look at this “Great Inflation” in terms of eggs. Before inflation got crazy, a dozen eggs cost $0.53 in 1965*. By the time we hit 1980, eggs had increased over 56% to $0.83 a dozen (Univ. of Missouri). Not fun. Comparing that to today…. according to the St. Louis Fed, in November of this year, the average price of a dozen eggs was $3.58 a dozen. If we see eggs go up like they did in the “Great Inflation,” we could be paying over $5.60 a dozen and I am not talking about organic! So, let’s hope the current Fed keeps their eye on the ball and has a little fortitude!!
As always, I enjoy interacting with you! Feel free to contact me with any thoughts and questions. You can email or call me…my phone is with me all the time. I look forward to speaking with you soon!
Michael
Michael S. Lewis
President, Wealth Manager
Anchor Wealth Management
358 NW 1st Ave, Suite 2, Canby OR 97013
(503) 910-1687
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Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.
*Source: U.S. Bureau of Labor Statistics