The Financial Purpose Podcast

Where is the market headed in 2023?

The real question is where is the Fed going in 2023?

One year ago, the Fed was suggesting that the inflation we were seeing was transitory. I was suggesting my clients that possibly it was not, and as it turns out inflation stayed around for all of 2022 and persists.

This time last year, the federal funds rate was essentially 0.08%; it’s now sitting at about 3.78%. The last time we saw fed funds rate that high was all the way back in October 2005.

US inflation bottomed at right at 0% in May 2020 and kind of floated back up a little bit around 1 ¼ - 1 ½ percent until about March 2021. Then it just absolutely took off like a rocket ship and peaked in June 2022 at 9.1%. We’re now down to somewhere around seven or 7.1% and hopefully headed in the right direction. The numbers are definitely trending down.

The market is currently trading at a level that goes back to several points over the last two years. We’re trading back to where we we’re in about the middle of October, and then before that around the middle of September. Before that, through the month of July. Then, you have to go all the way back to March 2021 to find this level again. So that’s the time frame I want to talk about - March 2021.

March 2021 was a period of euphoria that I have never seen in the investing markets. And here is the crux of all that happened during that period: valuations didn’t matter. 2022 has been where we have dealt with the cleanup of this mess.

So – where is the market heading in 2023? I don’t know. I have a hunch that it might look similar to this year. If we don’t get a recession, things might be OK. If we do get a recession, I lay out a few suggestions that can be executed between you and your financial advisor. Barring any major event that we just can’t see, I do think inflation continues to come down. We’ll see how that impacts the rest of the economy.

Listen further for data on the fair value of the S&P 500 and where that could be headed based on changes to EPS and P/E. I also discuss a few things you can consider, depending on where you are financially and what investing "game" you are playing.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com

The holiday season can be a time of joy and making new memories, or it can be a time of expectations that create stress and pressure around giving. This time of year can distort the heart vs wallet dynamic, which can lead to financial securities being expressed in a lot of different ways.

In this episode we reflect on how the holidays have a unique way of exposing financial insecurities all over the wealth spectrum.

Listen as I share my own financial insecurities tied to what I remember about Christmas as a kid and thoughts about what the holidays mean at this stage of life

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com

Articles cited:

https://www.cnbc.com/2022/11/15/household-debt-soars-at-fastest-pace-in-15-years-as-credit-card-use-surges-fed-report-says.html

https://libertystreeteconomics.newyorkfed.org/2022/11/balances-are-on-the-rise-so-who-is-taking-on-more-credit-card-debt/

https://fred.stlouisfed.org/series/PSAVERT

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com

In this episode I discuss the promises made and broken by crypto, as exemplified by the recent blow up of SBF and FTX. Also, how decentralization in crypto is a pipe dream thanks to the efforts of the NY Fed and large banks in creating a digital dollar pilot.

Crypto is not living up to billing - and I won't say I told you, but it's pretty darn close.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com

One of the most common questions advisors ask prospective clients is: “what are your financial goals?” I happen to think it's a bad question.

Financial services firms market a goal-centric approach to the general public. With this question, advisors are communicating that you need to have specific and well-defined financial goals in order to get somewhere.

Let’s explore this concept and decide if it’s better to have a financial goal or a financial direction.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com

What exactly is financial purpose?

It’s the underlying reason behind your financial decisions, rooted in your values and priorities. This goes beyond just dollars and cents, helping you make decisions that align with what matters most to you.

By focusing on your financial purpose, we shift the conversation from affordability to achieving what’s truly important.

Listen to discover how the core element of our approach to financial advice centers around your financial purpose.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com

In this episode I go back to November 2017 to establish a trend line from that time to November 2022. Given all the volatility since then, is the market actually right on track?

One important note about trend lines: depending on where you draw them, you can communicate a variety of messages.

This post gathers inspiration from this tweet: https://twitter.com/SouthernAdvicer/status/1587514476391469057

Be sure to check out the blog post for this podcast to see the charts and figures referenced: https://thefinancialpurpose.substack.com/p/right-on-track

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com

Have you ever heard of set point theory? At it relates to health, set point theory essentially states that your body has a normal set range for weight. Ever go on a cycle of diet and exercise, lose weight, only to see it return?

Financial considerations are like bodies - everyone is different, and what works for some may not work the same for others. This is part of the work of financial planning - understanding how changes in your financial habits impact your financial health, and how you mentally and emotionally adjust to those changes.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thefinancialpurpose.substack.com