We understand that financial planning isn’t always top of mind – but it is for us! Each month we publish a commentary to update you on the latest financial trends and changes.
Marshall Wealth IQ is aimed at sharing insightful financial market and economic data in easy to visualize charts with brief analyses. This commentary isn’t designed as a call to investment action, but rather as a dependable source to help you feel better informed about current events in today’s market and the underlying trends impacting current wealth.
Let’s get started:
1) If Google activity is any indication, inflation seems to be the early leader for ‘economic term of the year’. Notably, the two recent peaks in Google searches for inflation both align with release dates of Consumer Price Index (CPI) data – likely the result of increased media and social media coverage fueling public interest.
4) The second contributor to recent inflation changes has been ‘bottlenecks’, as seen in the used car market. A number of pandemic-related challenges have temporarily impacted the car market, including production shut-downs and subsequent employment levels, consumer preference for driving vs. mass transit, and inventory shortages. A number of issues have impacted inventory shortages, from supply disruptions delaying the production of new cars, to car rental companies purchasing used cars for their fleets (in the past these companies were typically a net supplier of used vehicles). Many of these challenges are likely temporary disruptions, and recent data of the wholesale vehicle market shows used vehicle pricing may have already peaked.
Manheim US Used Vehicle Value Index Year-Over-Year % Change
8) Cryptoassets are likely here to stay and the underlying blockchain technology has many practical uses. While some investors may truly own cryptoassets for the technology, we believe the more common narrative surrounding investor interest is that of a speculative asset – meaning investors purchase them with the objective of making money. Given the volatility of the asset class, in the near term, the type of investors who are likely to have the best experience are those who have the risk appetite to stomach large price movements and the ability to absorb losses with minimal impact on their financial lives.
10) Perhaps more meaningful for investors is since last summer, market multiples, a gauge of how expensive valuations are, have continued to come down even as the S&P 500 has reached new highs. A full recovery in corporate earnings from 2020 lows has been a major contributor to this and a positive development to observe.
S&P 500 Forward P/E
S&P 500 Forward Earnings
It’s impossible for anyone to know with certainty what will happen today, tomorrow, or even a minute from now. Investment involves risk and volatility; it’s why long-term investors have historically been rewarded with excess returns relative to cash. Our investment department monitors market data and works with our wealth advisory teams to right-size portfolios should something change relative to long-term trends. In the meantime, we’ll continue to share financial and economic data we believe is insightful and relevant to your wealth to help you feel informed.
Thank you for reading; please be well and stay healthy.
Sean Dann
Research Analyst
Disclosure: Marshall Financial Group, Inc (“Marshall Financial”) is an SEC-registered investment adviser with its principal place of business in Doylestown, Pennsylvania. This newsletter is limited to the dissemination of general information pertaining to Marshall Financial Group’s investment advisory services. Investing involves risk, including risk of loss.
This newsletter contains certain forward‐looking statements (which may be signaled by words such as “believe,” “expect” or “anticipate”) which indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward‐looking statements. As such, there is no guarantee that the views and opinions expressed in this letter will come to pass.
For additional information about Marshall Financial, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). Please read the disclosure statement carefully.
