Kane McGukin has 13 years of wealth management experience spanning brokerage and institutional equity sales. He is an independent registered investment advisor.
As the calendar neared September 2021, the money printer had slowed and individuals were beginning to tire from the toils of trading a basket of work-from-home stocks. At this point, COVID-19 was over, the crash was old news and lockdowns were nearing two years old. Most were looking to shift their focus to something new. Something like getting back to what used to be their real day jobs.
You Can Only Keep An Animal Caged For So Long
That’s the tough reality of the corner the Federal Reserve has boxed itself into.
For decades, the Maestro had conducted a seemingly beautiful orchestra, but you can only keep people and financial instruments locked up for so long. Eventually, there’s a breaking point — a point where you can no longer massage the data or print enough money to satisfy human greed. Greed, that internal emotion that leads one to believe if they just get more money, they’ll find happiness.
At some point, animal spirits begin to stir. In times of economic stress, these spirits have a voice of their own. One that cannot be tamed or controlled by a board of 12 members, headed by a chair.
For many years, and more specifically in 2021 and 2022, I’ve watched the rotations of the major financial asset classes. Recently, to my surprise, only three asset classes have had positive returns over the last seven months. Those are commodities, gold and the dollar (though when accounting for [tru]inflation[1], 11.8% now with a peak of 12.74%, the dollar’s return is actually negative as of time of this writing).
Note: actual real estate has been up and quite bubbly
