We had the Fed’s preferred inflation measure on Friday and we are much closer to 3% than we are to 2%.
Of greater importance, the trend does not look like inflation is heading down.
I would suggest that the real rate target should be 3%.
If the concept is that the Fed funds rate should be 1% higher, then we are right at that point with the rate at 4%.
It might be argued that another quarter rate would be needed, I am not convinced.
We have to accept that zero interest rates will happen when we are in a financial crisis and no wants that.
In truth, the economy is still expanding, but will never satisfy some analysts.
Earnings have been better than projected given concerns over tariffs and a trade war.
The one great joker in the deck is the real impact of AI.
Will it be the same as the Internet for generating a completely new economic engine?
It would be hard to argue against that point.
Two decades ago, there was all this comment how they were giving it away and not monetizing the service.
It took time to get it moving, but the Internet started making it pay in a big way. Just look at Amazon, Alphabet and Facebook.
That said, you could have avoided all this drama by investing in gold, which keeps moving up.
As an alternative, there is Crypto, in whichever form you desire.
It has actually been possible for the last couple of years to put your money in interest-bearing accounts and make a higher return than the inflation rate.
For all of the noise coming out of Wall Street, there are all sorts of different roads to take.
I have not even mentioned collectibles or real estate.
The one thing I will say is that nothing is perfect for everyone or will be the right choice forever.
The only constant is change.
This is what makes the economy and finances so interesting.
It is far from predictable and it will change far faster than you can imagine.
This is partly why Warren Buffet suggested that you take your retirement funds and put them in an ETF of the S&P 500.
That has worked for me, but my real concern is the reality that nothing lasts forever.
I was reading with interest this weekend about people working to 75 and beyond. It was not so much for the money as it was for the challenge of accomplishing another goal or providing service.
I am a big believer in service above self.
Many of my vintage are giving back.
It is the least “Baby Boomers” can do.
It may not fatten your retirement account, but it will enrich your heart.
I find the more I give back the less I really need.
I think that we may all need to redefine what it is that we need to invest our time in over and above our families.
As we get older, our families will need us less and less. Investing your time in others could be a real outlet for all that talent you have acquired over the years.
I don’t look at it as seeking a return personally.
It just seems to being a team player rowing the boat with the rest.
That is not to say to go asleep at the switch.
There is more bad news on the horizon.
I am not sure shutting down the government is one of them, but there is plenty other so keep vigilant in your plan.
Besides, at my age, what can they really do to me now that I haven’t already done to myself.
