The Last Fed Rate Hike.

The last Fed rate hike.

The last time you hear about inflation on the news—no more debt default nonsense.

We are going to move on!

I want to start June 2023 and continue the remainder of the year with positivity and opportunity for all investors.

This bi-annual letter will apply to the young, old, conservative, and aggressive. We will cover international investments, domestic ideas, and fixed income.

We will have a very productive 2nd half. Inflation is coming down, and companies are re-aligning with older long-term business plans, exiting Covid protocols and mistakes.

There are several key drivers to my optimism, all worthy of discussion.

Global supply chains are being diversified across Asia, Japan, and Europe. This will help importing nations diversify away from single-nation issues and create opportunities for macro (top-down) investing abroad. The United States spent 20-plus years building up our largest trading partner, China. Now, we are moving to India, lower Asia, and back to Europe. Its positive macro-economic drivers for global investing. Factories, supply chains, logistics, banks, etc. must be developed. This costs money, in turn making global stocks worth considering.

CPI domestically is headed lower! The market is pricing darn near flat to negative prints by late 2024. This is good for us! The key metric in measuring CPI is watching bond yields. You may have heard me mention it several times before. Lower yields allow higher price-to-earnings multiples (P/E) for short. If the economy sustains its current path and inflation continues downward, the market will allow risk to expand this multiple to growth-type level

Disinflation helps the margins of consumer-based companies. But if a product costs less, you can sell it for more. The company makes a more significant profit margin. (this looks more realistic over the next 6-18 months)

The US markets have already priced in a shallow recession; we have only fear of a more significant slowdown to manage at this point. I recognize this is a tired statement! Depending on where you live and what you do for a profession, you are either working hard and making a lot of money or freaking out at the lack of business. Our economy is very bifurcated at the moment. This will change, but it will take time. Please reach out if you want to know which parts of the economy are in contraction vs expansion.

Lastly, Artificial Intelligence is a complete game changer. Which I touch more in-depth on later,

I hope you find the following series valuable, productive, and inspiring.

If you have questions, please let's meet to discuss how 2023 will go for you and, most importantly, how much risk you should take depending on your specific situation.

Regards 

Christopher R Lakian