The October Effect: Volatility, Inflation, and Our Game Plan

2022 has been an awful year for investment returns. It may turn out to be the best year for repositioning portfolios for future growth and income, but every day is painful.

Not to throw a wet blanket on a rainstorm, but October has traditionally been the most volatile (ups and downs) month of the year, including an investment year as bad as 2008-2009, considered the 2nd worst depression period since the Great Depression of 1929.

You know the story about inflation. Nationally, it’s up 8.3%. But personally, living in California, gas is up $1.20 per gallon, food is up 20-35%, there are shortages of products in every store, and the Federal Reserve is going to raise interest rates again. 

California is about to enact a new tax on oil companies and the Biden Administration is about to reverse the tax breaks from 5 years ago on oil drillers and make their tax retroactive, which will basically end all new drilling and exploration in this country.  

As I said earlier, we are taking action every day to reposition portfolios to meet your needs and lower your risk tolerance. We are also being nimble to take advantage of energy, certain commodities, and inflation to meet your needs. I urge you to meet with us, review your investments and make sure they are in the correct position for your future, while not giving you acid reflex in the present.

It is also a time to do some tax harvesting should you need some taxable losses.  

The fourth quarter is usually our best period for receiving referrals. Remember that your friends, family, and co-workers are experiencing all types of investment pain and the typical communications in our industry can be awful.

We stand mostly alone in sending out bi-weekly newsletters and personal investment letters, creating education videos, Zooming regularly with our clients and friends, and being exceptionally proactive with portfolio adjustments. Equally important, we make sure to never forget that our clients are also our friends. 

Mark your calendar for Friday, December 2nd. This will be our 20th Annual Client Appreciation Event at the Crow Canyon Country Club. Details to follow.