The whole world is going into a recession!
What is a recession? Schwab “dominoes” diagram...there’s only a few things missing to be in a recession – Labor market weakness, EPS growth falls, NBER (Nat’l Bureau of Economic Research) recession declared.
See Flight #33 for “Inverted Yield Curve – Canary in the Coal Mine.”
So, what does this mean...mild recession. Already priced in?
• See DFA “...Official Announcements” graphic
Why should we stay in the market? Why would we keep investing?
• 1st - gotta have a plan...context for why you're doing what you’re doing.
• Flight #43 Appolo from DFA
What if I’m near retirement?
• Podcast/Flight #45 Sequence of Return Risk
What are the positives to the current environment?
• No more quantitative easing.
o “The Fed is propping up the markets/economy”
• Higher future returns expected...fairly valued equities?
• Higher yields on cash – great for short-term savers and retirees.
o 4%-5% - CDs, T-Bills, Annuities
• Housing was getting out-of-control – would soon become unaffordable for most Americans.
• Two jobs for every one person is not a healthy job market.
• The Fed is fighting inflation! That’s the real risk...unlike the Fed of the 70’s.
So, what do we do...as investors
• Stay globally diversified, don’t chase trends or recent trends, performance.
o Bonds are back!
• Quality investments: Profitability, Dividends...
• Improve your balance sheet
• Prepare/Insure for deep risks...
o Flight #42
1. Rob’s Lesson Learned:
a. Identify and accept what I cannot control. And realize that the only thing that I can control is how I react to the situation.
i. When experiencing difficult times with family health it would be easy to get angry, frustrated and allow negative emotions to be destructive to yourself and those around you.
ii. Instead, make a disciplined decision (with help from trusted friends, loved ones) to have a positive attitude and make the best of a difficult situation.
iii. When going through difficult times thing about: “What does this make possible?” In Rob’s situation, he was able to spend focused time with his son and get help from the doctors that may improve his son’s health.
2. Charlie’s Lesson Learned:
a. Time is the most valuable, precious resource. Become a protector and defender of your time.
i. Time goes by so fast, take the time and be intentional about the impact you are having with your time.
ii. Take time to plan your time and how you will be using it wisely, for the benefit of you and your family.
a. Kevin Kruse: CEO of Leadx and author of Great Leaders
Have No Rules.
3. Rob’s Lesson Learned:
a. Treat others with respect and kindness. Even when it’s not easy.
i. It’s easy to treat friends and people you like well. However, there will be many opportunities to treat people with respect and kindness that don’t treat you that way.
ii. This takes intentionality and planning. You must think about how you will react when someone makes you angry.
1. How will you react with your personal values and principles in mind.
4. Charlie’s Lesson Learned:
a. Choosing the meaningful over the urgent.
i. Don’t let tasks drive your day and distract you from the meaningful things.
a. “Choosing the meaningful over the urgent so that our life is unhurried, yet purposeful and reflects the values and the impact we want to make, takes reflection. It takes intention. It takes planning...”
ii. Think about the analogy of filling the glass container throughout the week. Fill the container with the big rocks first. The most important things. Then the smaller rocks, sand will fill in around the larger rocks.
5. Rob’s Lesson Learned:
a. Be present, stay on target, remain focused on the task at hand.
i. Sometimes we get caught up on thinking of past wrongs and/or mistakes and it can negatively affect our present performance and quality of life.
ii. Be present!
iii. See Lesson Learned #1: Control what you can control. Sometimes the only thing you can control is only your reaction to difficult situations.
6. Charlie and Rob, Final Lesson Learned:
a. Practice Gratitude!
i. It will improve every aspect of your life and those around you.
ii. Without practicing gratitude, other things in your life will suffer:
1. Mental health, physical health, quality of relationships, your positive impact on those around you.
iii. By practicing gratitude, you become a person other people enjoy being around. Your positive influence grows as your gratitude, even during difficult times, encourages others who may be struggling.