In today’s Steady Investor, we take a look at key factors that we believe are currently impacting the market, such as:
Is the U.S. Headed for Another Debt Ceiling Showdown? Back in 2019, Congress voted to suspend the debt ceiling until July 31, 2021. With that date fast approaching, the U.S. government needs to take action to either increase the debt limit or suspend the limit for a set amount of time. If Congress does not act, it is possible the federal government could run out of the cash needed to pay debt obligations, perhaps by October or November of this year. The timeframe gives Congress a bit of wiggle room to take action, but politicians appear to be posturing for a debt ceiling showdown, much like the “fiscal cliff” scare of 2013. Absent Congressional action, the U.S. Treasury would be inhibited from selling bonds (Treasuries) to raise cash for paying bills, which at worst could mean defaulting on debt payments for the first time ever. History tells us that Congress will likely wait until the 11th hour to take action, with plenty of drama and fanfare between now and then about the debt.1
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Market Volatility Can Be a Good Thing – Use it to Your Advantage!
Downside volatility can be a hassle for almost every investor and we understand how the ups and downs in the market can be hard to manage. Even through the feeling of discomfort, do you know that volatility may have useful, positive benefits to better navigate your investing decisions? We encourage investors to learn how to handle volatility instead of avoiding it.
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 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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Life Expectancy Falls in the U.S. – According to the Centers for Disease Control, life expectancy in the U.S. fell by a full 1.5 years in 2020, to 77.3. The Covid-19 pandemic of course had an outsize impact on this figure, and 2021 is likely to see a bump higher. But the largest single-year decline since 1943 (World War II) has some economists and public-health experts concerned, as rising life expectancies are generally a sign of vibrant and improving socioeconomic conditions. The Covid-19 pandemic was also seen exacerbating crises in other troubled areas of American life, such as overdoses, homicides, and chronic diseases. This type of data matters for retirees and planners, as life expectancy is a key component of establishing an appropriate asset allocation for every investment portfolio.3
Homebuilders Struggle to Meet Demand – The U.S. housing market continues to exhibit supply and demand imbalances, where demand is firmly outweighing supply and putting pressure on prices nationwide. Homebuilders are responding by ramping up production, but the slack in the market is seemingly too large to overcome in a short amount of time. According to the Commerce Department, housing starts rose from May to June, 1.16 million of which were for single-family homes. This production boost is the biggest jump since March and is an early signal that home builders are actively trying to respond to sustained demand. Even as single-family housing starts to increase, they are still below the averages seen during the 1990s, when the U.S.’s population was about 20% lower than it is today. Homebuilders want to capitalize on rising demand but are also contending with higher input costs – by some estimates, the jump in softwood lumber prices have added nearly $30,000 to the price of a new single-family home over the last 15 months. Consumers are recognizing these price pressures, too. According to the University of Michigan’s consumer sentiment survey, Americans largely believe now is a bad time to buy a house. The last time consumers were this skeptical was in 1982, when the average 30-year fixed-rate mortgage was around 14%.4
There will always be times like these, where the market is very volatile and investor’s uncertainties are high. Did you know that there are positive aspects of volatility that can affect your long-term financial health? We recommend finding ways to manage volatility instead of overlooking it.
To give
insight into ways to manage volatility, I am offering all readers 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 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