Our mission is to help you Preserve Your Assets and Protect Your Lifestyle. In this month's newsletter, we provide a quarterly market review and provide you access to an interactive Social Security retirement benefits tool. In our, This is Life section we discuss "a young man's journey" and provide some perspective and planning advice to consider. Enjoy!

Quarterly Market Review

We thought this would be beneficial to share with you some key observations from three of our research partners as we navigate the 4th quarter of 2021:

Litman Gregory 

• Covid’s impact on the global economy likely to diminish from this point
• The Fed’s forecast seems to indicate lower growth but higher inflation
• Diminishing economic momentum tends to lead to lower market returns
• China is trying to manage a soft landing by easing speculation in real estate. Evergrande default is China trying to inflict losses on private investors – Socialistic/Capitalistic approach?

Ned Davis Research

• Global Asset Allocation Current:
  • 70% stocks (Overweight compared to 55% benchmark)
  • 5% cash (Underweight compared to 10% benchmark)
  • 25% bonds (Underweight compared to 35% benchmark)
• Recommends overweight exposure to stocks with an underweight to cash and bonds. Global economic momentum picked up in September as Covid situation improves. China remains the biggest risk to global growth. Supply chain problem is widespread globally, but signs of life at end of the tunnel.

Charles Schwab Market Perspective

• Bottlenecks – the supply of both labor and materials has become scarcer and more expensive. Jammed ports and shortage of freight ships.

Supply constraints are leading to inflationary pressure. Fed’s response: raise rates to cool down inflationary pressures but risk capital market reactions.

Our Conclusions:

• Inflation exists and could put pressure on this recovery - “Inflation is when you pay $15 for a $10 haircut that use to cost you $5 when you had hair”.
• Unemployment is still a challenge under the surface - At the end of February 2020 (pre-pandemic), US reported 3.5% jobless rate (5.7 million unemployed divided by 164 million labor force. At the end of September 2021, US reported 4.8% jobless rate (7.7 million unemployed divided by 161 million. Thus, during the pandemic, out-of-work Americans have increased by 2 million and our labor force has shrunk by 3 million.
• Job openings available but lack of experience, geographic mismatch, Covid concerns/issues and/or government benefits discouraging work.
• The Fed has moved up its timeline on tapering from 2023 to 4^th quarter 2021.  The reduction in purchases of Treasuries (reduce by $10 million/mo) and mortgage-backed (reduce by $5million/mo) could put pressure on the current economic recovery.
• Is Stagflation a possibility? Stagflation = economic weakness with rising inflationary concerns.  Increasing dividend and cash flow in portfolios can help absorb some of these risks.

We have made adjustments to our portfolios to reflect our opinion and concerns about the economy and the current investment environment.

This Is Life - "A Young Man’s Journey"

Life Perspective from Pat Guinet, Senior Founding Partner.

I have shared with my partners the excitement of having my middle boy, Elliot (23 yrs), move out of our home and into the dorms at CSUF this September ‘21.  The journey to the “dorms” is a part of the natural progression of growing up and becoming independent. It’s a right of passage, and one I am extremely thankful for seeing my middle son experience. Why?

Elliot was diagnosed as high functioning “autistic” at 3 yrs old. A little quirky and a little structured, but a great young man. His journey has certainly had its ups and downs:  Individual Education Programs(IEPs), additional special education services, and help developing social skills. Frankly, I worried about whether independence would be possible when he was 3 yrs old;  20 yrs later, he is thriving, living in the dorms with three roommates, and thoroughly enjoying life away from home, while getting a degree in Graphics Design and Animation from Cal State Fullerton. What a gift!

Our family had set aside some funds for college, but certainly, wish we had set aside more. The cost of a college degree has gone up considerably since I was a student. Back in 1978, I was attending UC Irvine (No age jokes please!) and tuition was $240 a quarter. My oldest, Brennan, just graduated from UC Irvine, and quarterly tuition had risen to $5,500.
I think we all learn by giving and sharing our life experiences. In looking back, here are a couple of mine:

• Bet on your kids/grandkids succeeding and achieving all their dreams,
• Do everything you can to help them achieve their dreams,
• Start saving for their future education (as parents and grandparents) the day they are born….. ; )

We would suggest you consider tax-advantaged vehicles like the Coverdell ESA or 529 plans. Money grows tax-free and can certainly help offset the cost of college!

Here are a couple of links to further educate yourself on these solutions:

• Intro To 529 Plans: Click here.
• Coverdell ESA: Click here.

Part of our commitment to you and your family is making sure we stretch the value of every dollar you earn and invest with us.   

All the best to you and yours from Guardian Financial Partners, LLC.

Understanding Your Social Security Retirement Benefits Options

When is the ideal time for you to turn on your Social Security Retirement Benefits? We recently introduced a new technology available to you at GFP called MyBlocks. MyBlocks is an interactive financial wellness tool. It has modules that cover various financial planning topics.  We encourage you to take 2 minutes to register and use the Social Security benefits tool. It is an interactive module that helps you understand how your benefits work and what they might look like at age 62, full retirement age, and age 70. You can register here. 

We are here to help and offer objective advice. If you would like to discuss any of these topics or any questions relating to financial planning and/or the markets, please click here and pick a time on our calendar.