Payne Points of Wealth Podcast

Why inflation won’t be sustained, Ep #65

By December 29, 2021January 6th, 2022No Comments

As we wrap up the year we’re seeing lots of interesting stuff… The FED Chairman is talking like a Dove but beginning to act like a Hawk. Is that a Dawk? Just watch, you’ll see that term springing up in common parlance, and remember, you heard it here first! Inflation is running hot but it’s not going to stay that way. We’ll tell you why on this episode.

AND.. on this episode’s “Tipping Point” you’ll hear Bob and Chris explain which of my suggested “Financial Stocking Stuffers” go to those who are on the “naughty” list, and which go to those on the “nice” list.

You will want to hear this episode if you are interested in…

  • CPI and PPI both well above the estimates [1:22]
  • Trends can turn quickly and badly [6:47]
  • The Tipping Point: Year End Stocking Stuffers [8:09]]
  • Hidden Facts of Finance [18:54]

Inflation is high but is destined to drop

This past year we’ve had lots of issues in the market but none as big as the supply chain. It’s been a mess all the way around. Some of it has to do with the semiconductor shortage, there’s also the labor shortage sparked by the government tax credits, etc. Those are driving inflation higher, but we have to remember… As time goes on, many of those problems will be fixed. One example: Intel is building TWO semiconductor plants in Alabama over the next year. They are not going to be caught dependent on foreign manufacturing again. We’ve also got a big problem in the labor market. There are more jobs than can be filled (greatest gap ever) and many who are employed are switching jobs to get a better wage. But in time, all of this will settle down and we are going to see how those with truly diversified portfolios are going to weather all the weirdness just fine.

This week on the tipping point: Year-End Financial Stocking Stuffers

Gifts for those on the “nice” list

Fiduciary: Anytime a financial advisor is legally bound to work in your best interest as their client, it’s a winner. They won’t steer you wrong.

Long-term care insurance: The cost of medical care becomes higher as you age. Long-term care insurance isn’t a bad idea if you watch your premiums and run the numbers to ensure you’re still getting the best deal. Premiums can increase astronomically the longer you hold them. You must run the math to ensure it’s to your benefit.

Gifts for those on the “naughty” list

An annuity: Any so-called investment that comes from an insurance company is not to be trusted. Most of the time the fees are too high and what you receive is not comparable to what you pay.

S&P 500: The S&P 500 is not what it used to be. Seven companies make up 25% of the index, which means you’re not getting true diversification if all you invest in is the S&P 500. And it’s a lot riskier than you think because you’re not getting full exposure to all 500 of the stocks.

High Yield Bonds: The main selling point is that these bonds pay a great rate of interest but because they are so risky, you may not get your money back. Think about it: companies that have to borrow at a high rate are unable to get financing at lower interest rates. That means they are risky.

Whole Life Insurance: Typically Whole Life works in reverse of what you really need. Don’t be fooled by the two-benefits-for-the-price-of-one sales pitch.

This week’s hidden facts of finance

  • 26% of U.S. investors have Crypto holdings
  • 48 top execs have collected more than $200M each from stock sales
  • 45 years ago this month, “Hotel California” was released (7th biggest selling album)
  • Apple: 44 years to reach $1T <> 2 years later, $2T <> 15 months later, zeroing in on $3T

Resources & People Mentioned

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