May 2022 Investing Update

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For the month of May, the DOW rose 13 points. It felt worse for investors as at one point the DOW was down by 1724 points. YTD the DOW has declined almost 11%. Interest and dividend income was $3,291 this month, which was offset by a loss of -$3,298 in market value. Withdrawals for living expenses came to $818 for the month. I did not make any trades in the last 30 days. I am riding out the volatility and waiting for a sign that inflation is under control before buying any more stocks or bonds. Money market rates are starting to increase. The 7-day yield has increased to .46% which is good news. Forty five percent of my retirement fund is in a money market fund. It was about 33% at the beginning of the year.

The President is getting poor reviews on his handling of the economy. Democrats are known for spending money on social programs without regard for how it will impact workers, investors, and businesses. A clear sign of this is when the press secretary basically said that Biden’s team doesn’t pay attention to the stock market. The stock market is a forward-looking indicator of the economy. A steady 24% decline in the NASDAQ since the start of the year should tell you that things are going downhill. We’ve only had one depression in modern times between 1929 and 1933. An economic depression is a steep and sustained decline in economic activity featuring high unemployment and negative GDP growth. A recession is a downtrend in the economy that can affect production and employment and produce lower household income and spending.

It feels like we are in the early stage of a recession. The next presidential election will take place in 2024. This leaves two more years for the economy to continue its downward trend. What happened to the post pandemic economic recovery? Instead, we have inflation and recession. Gas prices are at $4.49 per gallon in my area. The US average price of gas has officially broken the record set back in the summer of 2008 when it rose to $4.11. We are in uncharted territory folks. I think we have just begun to see the effect this is going to have on our cost of living. Until I see gas prices get back to $3 per gallon, inflation will continue to grow worse each day.

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