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Inflation, interest rates, and what we're looking at as the year closes.

Updated: Aug 16, 2022

Welcome to the Redfish, Healthy, Wealthy, and Wise podcast. Our focus is to deliver information that helps you become healthy, wealthy, and wise. This podcast is sponsored by Redfish Capital Management, the views and opinions expressed here and do not necessarily represent the views and opinions of SCF securities, Inc, or any SCF related entity. This material is for general information only and is not intended [00:00:30] to provide specific advice or recommendations for any individual securities offer through SCF securities, Inc. Member FINRA, S I P C investment advisory services offered through SCF investment advisories Inc office at 1 55 east Shaw in Fresno, California, SCF securities, Inc, and Redfish Capital Management are independently owned and operated. SCF is not associated with other podcasts. And the messages contained within. Brad [00:01:00] Murrill and Redfish Capital does not offer legal or tax advice. This material is not intended to replace the advice of a qualified tax advisor or attorney please consult legal or tax professionals for specific information regarding your individual situation now for your host, Brad Murrill.

This is Brad this is the Red fish 411, the date today is October the 28th it's about 12:30 in the afternoon and I'm kind of excited this is by far my favorite time of year and normally I have a little bit more energy this time of year but as some of you know I came down with COVID and that really can put a damper on your energy level let me tell you I'm I was fully vaccinated the doctor just told me I was exceptional I enjoyed hearing that part but it just really threw me for a loop not me down pretty good so I was down about 10 days and this week I'm in the office about half days as I've noticed that right around 2:00 o'clock my energy just leaves I just I've got nothing in the tank so I end up heading to the house so hopefully by next week I'll be back to full time here in the office hopefully by next week we'll be moving into a new office as we've continued to build out is we're still waiting on doors and I'm going to get to doors and inflation and all that kind of stuff in a minute but we still don't have doors at our office so we're still waiting on all that to take place so that we can finally get moved into the new space.

This time of year is by far my favorite as many you know I'm a huge baseball fan and my Astros are in the World Series again third time in five years playing the Atlanta Braves and so it's just as bad as most fun as I can have is being able to watch that it's not real good for my nerves you know the stock market does what it does commodity markets does what it does Dutton move the needle don't make me flinch you know it really doesn't but a baseball game with my Astros are playing or they get down there's two strike I've got no nails left an I am exhausted at the end of every one of these games largest starts laughing at me I have to stand I'm in my house I'm standing in front of the TV we get down by two strikes and I just.

Anyway it's been a little bit nuts but I do love this time of year I love college football that's going full swing and also as many you know I love to hunt and fish and this is hunting season and it's also the best time to be fishing down on the coast not that I've been able to do a whole lot of that I've been really busy and I wish I could be doing some more but this is my favorite time of year fireplace will be on here before too long I got some trick or treaters I know come into the house I love the littles and Halloween time those are my favorite costumes I can do without the teenagers dressing up and whatever they dress up and come by and grab a handful of candy I like the littles they just make me laugh every time I see him so I am excited for this time of year.

Another reason why I am excited for this time of year as historically not always but historically the last three months of the year in January 10 to be the best time to be invested in the markets as that's when they tend to do well so if you go back to 1950 to the president October has historically returned a brown .9% November 1.5% December 1.6 in January 1% so yeah that is 5% right there that typically comes in the matter in the matter of just a few months the markets can move rather rapidly so for those of you have been with me for a while I've been investing for you for a while you know that you tend to be a little more fully invested during this time of year and I start to lighten up heading into spring in the summer and that's when we'll have a little bit more cash in the portfolio but I'm just really excited about this time of year so let's kind of get into some details if you will and what's been going on out there.

What I'm looking at as far as the stock market is concerned so we're close to these all-time highs we've had some rough patches I think as on the heels of the delta variant we are right smack dab in the middle of earnings season so this is when the companies are reporting how they did and there's two parts of earnings that I think are important number one we need to know that the third quarter earnings reporting period is typically the worst reporting period there are for companies so it is the toughest quarter historically for companies to meet and beat Wall Street expectations on how much money they should be earning now across the four earnings are really strong really strong where there's been a bit of a disconnect is after the earnings are reported in the numbers are officially reported we have what's called an earnings call with the CEO and the CEO oh where they tend to go on the air an in the CFO they tend to go they tend to go on the air on these calls and tell us a little bit about the last quarter but more importantly what they see going forward and what I'm hearing kind of consistently across the board on all of these earnings calls is they're really trying to temper expectations going forward so stock ABC XYZ whatever it may be has come out with earnings and they just crushed it but then the CEOs are talking people down and talking back a little bit they're trying to make us a little bit more conservative about what they see in the future I'm just looking at the data and when you look at the amount of growth that some of these companies especially the big tech guys they're reporting Microsoft and Amazon Google and Microsoft premier Li it is huge return but we're talking that they're gaining on their earnings are growing by 45% somewhere in that neighborhood that's insane so there's still growing quite rapidly let's not say quietly their growing growth is strong right now but the CEOs are trying to tamp it down and talk us down a little bit and say well it may not be so strong going forward I kind of understand where they're going because they can't get on there's a business is so good I can hardly stand it I don't sleep at night column his work seven days a week I love it they can't say that they're trying to talk us down a little bit and part of one of the reasons where they're talking is down as they are looking at inflation so inflation was to big talk if you remember I did a couple of my podcasts here on inflation not too long ago because everybody was screaming about his coming is coming inflation is coming so let's keep in mind this look at the 30 year treasury bond and I'm just going to talk about the yields.

So when we started out the year the yield on the 30 year treasury was at 1.24% as low as it got 1.24% so you give your money buy a treasury bond your return is 1.24% a year for 30 years that slow now in everybody started talking about interest rates and that rates digit rates the market got a little spooked and if you remember in m