Bill’s Blog: Important Market Update May 10, 2021

SHARE

Share on facebook
Share on twitter
Share on linkedin
Share on email

“WE see INFLATION EVERYWHERE,” Warren Buffett

Inflation, inflation, O, did I mention inflation. There are so many asset classes and commodities skyrocketing right now. We have not seen this type of inflation since the 1970s. It is hard not to ignore and, most importantly, you need to understand how it will affect your life and wealth. Remember, all asset classes and financial trends happen in cycles. We all experience seasons of upcycles (inflationary), followed by down-cycles (deflationary). No exceptions, and currently, we are experiencing high inflation. Here are several examples that are impacting all of us.

HousingUP 20 to 30% in many Canadian markets

Lumber: UP 220% 

Gas at the pumpUP 50 cent a litre since January 2021

Food Prices: UP 8 to 10% and corn pricing at an all-time high.

Copper: UP and doubled in price in the last year. Iron ore way up from last year.

Currency Printing: UP to record levels, not seen since WW2. Our currencies are becoming worthless as governments and central banks continue their endless expansion of debt. Remember, currencies are debt instruments, and we must pay for these debts with higher taxes. Many of today’s politicians either do not care or do not understand simple monetary policies and how they negatively impact Canadians. Yes, 10’s Trillions of new debt do create inflation, as we are witnessing.

Debt & Leverage: UP with record-low interest rates (lowest in 5000 years), the wise thing to do is pay off debts. O, no, let us all go on a debt spending spree, so governments, many businesses, and Canadians decided to leverage even higher to record levels. Unfortunately, this is not just a Canadian phenomenon but a global trend. What possibly could go wrong?

Cryptocurrencies: Way UP! You could have purchased Bitcoin for $3500 US last year, now $60,000. Ethereum even did better. Up over 400% already this year and many altcoins in the 1000’s of percent. 

Gold & Silver: UP We recently ended an eight-month consolidation phase. The price of Gold one year ago was $1698 US and today $1836 US. Silver’s price in May 2020 was $15.68, and today $27.38 US. I fully expect this trend to continue. If you need guidance to purchase physical investment-grade gold and silver, please let me know I will ensure you get a discounted price. 

Many Stocks Indexes: UP at all-time highs. Many trend stocks are at nose bleed levels and have higher evaluations than the 2000 tech bubble. However, there is a stock rotation going on to defensive and undervalued stocks and different markets. 

But if your trust government CPI (Consumer Price Index) numbers or central banks, then there is little to no inflation. You be the judge. All I know, the stuff that matters, like housing, stock markets, food, gas at the pump, most insurances, building commodities are all in massive inflation.

If you reach out to me at bill@fivefoldfinancial.ca, I will send you a recent 4-page economic report by Mark Taucar of Accilent Capital. Mark is an excellent active discretionary portfolio manager with over two decades of experience. I work with Mark to help my clients grow and protect their investments. Mark understands trends and focuses on protecting your investment dollars. I can arrange a personal Zoom call with Mark if you have 100K or more family assets.

In these uncertain times, volatility and significant inflation, it is vital you evaluate and possibly adjust your investment portfolio strategies. If you need financial guidance or a second opinion, I will offer you a free consultation through Zoom or an in-person session in Lower Mainland. 778-539-7107.

All the best in 2021!

Bill

Financial Education & Honest Solutions Create Success

Leave a Reply

Your email address will not be published. Required fields are marked *