We are smack in the middle of the holiday season.
On the festive side, the various averages and indexes have climbed up this bumpy hill.
We keep talking about recession, but last Friday’s job growth was far greater than expected.
I don’t understand the logic of the theory that the Federal Reserve is not only going to stop raising rates, but will start dropping rates after a pause.
The statistics just don’t support that.
We can debate the level of inflation, but at almost every turn it is costing me more on each and every purchase.
The real problem is that these increases are not going to turn anytime soon.
I will admit that the real estate market has been impacted by the rising rates.
What seems to be the situation is that some sense of reality is coming back to real estate where houses are finally reflecting the actual value.
The market was more like a lottery in that you could get far more for your property than seemed reasonable.
With the slowdown, at least the components of a home will find prices stabilizing if not falling.
I do think that the real winners over the last several years - a.k.a. the technology sector - is getting punished.
The sector had become a far too large component of the NASDAQ and no one was concerned as long as the FANG stocks took the indexes higher.
It only became a problem now.
The great thing about the market though is that you have a whole raft of alternatives to choose.
I would suggest that preferred stocks could just fit the bill during this period of instability.
Specifically, look to the big banks.
One can get paid over 4% for a couple of years with the potential to be converted to the basic stock for further capital gain.
The realization is that throwing money at the FANG stocks without regard will not bring a significant return.
Everything has its time before fading, as nothing lasts forever.
With the Fed likely to increase the Fed Funds rate next week by 50 basis points and then another in February, we will be looking at 5% on government-backed securities.
Not getting rich, but for significant portion of your savings you will at least get a respectable return without risk.
