In today’s Steady Investor, we take a look at key factors that we believe are currently impacting the market, such as:
Global Supply Chains Can’t Keep Up with Consumer Demand – U.S. consumers are out shopping again, boosted by accumulated savings, more stimulus checks, and positive news on the national vaccination campaign. Demand is returning so quickly, however, that global supply chains are having a hard time keeping up. If you have tried to order an item recently only to realize it is on “backorder” or not available, then you’ve had first-hand experience with the bottlenecks in the marketplace. Everything from toys, to cars, to semiconductors are experiencing supply chain shortages and could ultimately drive up prices. Perhaps the most acute shortages are being seen in the supply of semiconductors, which seems to stem in part from a global movement to buy new computers and other electronics for home office setups. Semiconductors are also used in cars, and Toyota and Honda have gone as far as halting production in North America due to lack of essential components. The end result is that factories are reporting the sharpest rise in prices for inputs they’ve seen in nearly 10 years, which is likely to find its way into prices charged to consumers, in our view.1
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Let’s Try Using Market Volatility to Your Advantage!
While there are many positives impacting the economy like increasing demand, the market has still been very volatile. As of recently, the market has been experiencing extreme ups and downs. Managing this volatility can be a huge challenge for many investors.
As we wait for this rollercoasting of volatility to calm down, we recommend that investors learn from the positives of volatility.
If you have $500,000 or
more to invest, get our free guide, “Using Market Volatility to Your Advantage”
and learn our insights, based on decades of experience, about how a volatile
market may be able to actually help investors refine their strategies and
potentially generate solid returns over time.
You’ll get our ideas on:
Download Our Guide, “Using Market Volatility to Your Advantage”2
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Americans are Itching to Travel Again – U.S. airports are now seeing travel activity on par with activity in March 2020, before restrictions went into place. For full-year 2020, U.S. airlines flew 60% less passengers than in 2019, which brought passenger traffic down to levels not seen since the mid-1980’s. To be sure, the pandemic is not over, and it may take another quarter or two before we see travel surge back to 2019 levels. But major U.S. airlines see light at the end of the tunnel, and CEOs form United Airlines and Delta indicated they may stop bleeding cash in the coming weeks. Hotels are also seeing an uptick in activity, with hotel stocks rallying and many properties reopening and hiring again. Hotels will also need to adjust downward for conventions and large meetings that may not happen this year. One area for both hotels and airlines that could take much longer to recover, and is a key part of overall revenues, is international travel. Though we believe there will be a day this year or early next when international travel rebounds substantially, it will be a much longer wait than domestic trips and travel.3
As the Housing Market Booms, the Costs of Building are Rising – Housing is one area of the U.S. economy that has been extremely resilient in the face of the pandemic. As Millennials made the leap from cities to the suburbs and purchased homes (often for the first time), median home prices have felt support and continued to march higher. The demand has been so firm that the prices are rising for raw materials used to build homes. Lumber has never been more expensive than in the current environment, and crude oil – which is used in paint, drain pipes, roof shingles, and flooring – has rallied over the past several months. Copper prices have also jumped by nearly 40% since last fall, and brick, concrete, and insulation prices are all higher as well, with many hitting new records in 2021. Taken together, these higher prices for raw materials are putting upward pressure on the overall cost of homes in the US today, which makes affordability even more of an issue nationally.4
Finding Silver Linings in a Volatile Market – The market has had extreme ups and downs recently and ss we experience this volatility, it may be hard to find the silver linings, but that doesn’t mean they aren’t there. To help give you additional insight into how you can make the most of turbulent times, I recommend reading our guide “Using Market Volatility to Your Advantage.”5
This guide
can help you learn about our insights, based on decades of experience, about
how a volatile market may be able to actually help investors refine their
strategies and potentially generate solid returns over time.
You’ll get our ideas on:
If you have $500,000 or more to invest, download this free guide today by clicking on the link below.
Disclosure