A new normal?
“It may mean people are getting used to higher inflation, which would be very bad news. The more people behave as if high inflation is here to stay, the likelier it is to stay. That would force the Federal Reserve to choose between inducing a potentially deep recession to force inflation lower, or giving up on its 2% inflation target.”
– Wall Street Journal chief economics commentator Greg Ip in a 5/10/23 article in which he noted that just 9% of respondents to a recent Gallup poll cited inflation as the nation’s largest problem, down sharply from 20% last fall. Read more at bit.ly/3IG3Dax.
Managing the right risk
“An assessment of risk capacity, and constructing a portfolio whose securities are a good fit for one’s time horizon, are jobs 1 and 2 of the portfolio-building process. An assessment of risk tolerance, meanwhile, is in the category of ‘nice to have.’”
– Christine Benz, Morningstar director of personal finance and retirement planning, in a 5/17/23 article that challenges investors to rethink which risks matter most. Read more at bit.ly/3MB1bTI.
Erring on the cautious side
“In making your plan, look for ways to build in just a little more margin for error than you think necessary.”
– Wealth manager Adam Grossman, in a 5/21/23 post on the Humble Dollar blog. As with this month’s cover article, he noted the prevalence of cycles and a key lesson they contain: bad times don’t last forever, but neither do good times. Read more at bit.ly/3IHUj61.
A high-cholesterol financial news diet
“Whether it be an update on why the stock market closed lower today...or a compelling account of why we are headed for a recession, such communication bears a striking resemblance to the attractions and dangers of junk food. It provides us with a quick fix...and can create long-term damage.”
– Behavioral Investment blogger Joe Wiggins, in a 5/22/23 post on the importance of tuning out the financial noise. Read more at bit.ly/3MVO6ps.
When helping hurts
“A big theme of our survey was this idea that you need to put your oxygen mask on before helping others.”
– Ted Rossman, Bankrate senior industry analysis, in a 5/24/23 CNBC article about new research showing that young adults in the U.S. are taking longer to reach key life milestones — including financial independence — than previous generations. The study noted that many parents are sacrificing their own financial security to help their adult children. Read more at bit.ly/429eJvs.
