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  • May 11, 2021

Market Update: May 11, 2021 How lower jobs created can lead to higher inflation

Disclaimer - Read More

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.

Transcript:

Tom Vaughan:

Well, hello, everybody, and welcome to Tuesday. The S&P 500 unfortunately, today was down .87%. And really, it was kind of a flip flop day last yesterday, the NASDAQ was down a lot, the Dow was barely down today, the Dow is down more 1.4%. And the NASDAQ was barely down at .1%. So what we’re seeing right now is this fear of inflation.
And it comes from this jobs report that happen on Friday. And so there was a million jobs expected, we have 266,000 reported, normally in a normal situation, you would see a scenario where inflation was reduced, because now we had less jobs than we thought we would have means the economy is soft, and there aren’t as many jobs out there. But this is not a normal scenario. This is not a recovery from a recession, this is a reopening that is quite dramatic, actually.


So what has really happened is that there are literally millions of open jobs, and they’re having a very hard time filling those jobs. And there’s been lots of different things talked about as to why people aren’t taking these jobs some of them are saying that it’s because of this additional stimulus, or people are having to stay home with their kids. Because the school isn’t fully back yet, or people are just afraid of the virus. I mean, one thing about these particular jobs, the lot of them were closed down during the pandemic, because they were face to face person type jobs. And so there had some higher risk.


So coming back to them, obviously, is a bit of an issue, especially since it’s probably a younger demographic, as from what we’ve seen, and they’re the last ones to get the vaccine. So maybe not all of them are even vaccinated yet at this point. And so you’re hearing all these weird stories about companies that are struggling to get the employees in. And so what that means and the way the market will look at that and say, oh, even though there’s about 10 million people that are unemployed or underemployed, if none of them want to come to work, then we have a very tight labor market.


That’s that’s the thought process. And a tight labor market is what really can ratchet up inflation. So, we were having shortages and lumber and semiconductors, and chlorine, and chicken, all of these things. And but a lot of those things can be worked out fairly quickly. But ultimately, when you get to a situation where almost everybody that is going to work is working, then you end up with a battle for those employees that are still there. And that usually means higher pay, as far as that goes. And so that’s kind of a harder one to get. That’s why they call that systemic inflation. Now, this is not a normal scenario, in the sense that we still have so many people that are unemployed and underemployed, and the fact that they don’t want to come out and work for a variety different reasons, almost all of those reasons, probably go away here at some point in time.


Schools will eventually open the unemployment insurance ends in September and the fear of the virus and getting vaccinated probably dissipates at least somewhat so here during that same timeframe. So, what we’re looking at here is possible inflationary situation, we saw the bond yields go up again, because again, this fear of inflation, but it is looking fairly temporary in that regards. And so we’ll have to see how that works out.


Very fascinating to see what’s happening. Market is kind of running all over the place as far as that goes. But very interesting time period to pay attention as to what’s happening here and try to make some adjustments. The pieces, the value pieces that we have quite a few did better than the S&P 500 again today, and did better than the Dow as far as that, but some didn’t. Yesterday was a better day for us. So we’ll see what happens tomorrow. So look forward to talking to you then. Thank you very much.

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Disclaimer - Read More

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.

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