Unfortunately, the US government isn’t headed toward “cash on the barrel” any time soon. Enter: the debt ceiling. The debt ceiling is the maximum amount of money the federal government is allowed to borrow to pay its bills. The government reached its current ceiling of $31.4 trillion in January. Once the debt ceiling is hit, the Treasury has to find other ways to fulfill its financial obligations including but not limited to paying interest on the debt, paying Federal employees, operating Federal Parks, and funding Social Security and Medicare benefits.

Fast forward to last Tuesday morning. 7:15 am and Corie and I were watching the sun come up in Florida. At 7:20 am I got a text from Brian. Brian, Dave and I talk and text at all hours of the day and night about how to help our clients, the market, and all things Madeira. So when I got a text at 7:20 am, it wasn’t totally unexpected. Except, it was…..

We went to Detroit about once a season. We generally sat far away from the field (here comes the Jared’s frugal upbringing story). We got to the stadium and parked a few blocks away to get cheap parking. My dad then hunted down the scalpers and tried to swing a deal. It was always a crap shoot on where we would end up sitting. Put it this way, binoculars made the trip in case we were so far from the field that we couldn’t make out the players on the field. It’s absolutely stunning, then, that in 1989 this happened….

What does 2023 hold? Inflation is moderating, down from 9% in July to 6.5%. Most of the pundits believe the Fed is almost done raising interest rates on the belief that the previous increases will continue to bring inflation down. This is where the consensus ends. There is a camp that sees a recession coming, driven by the lightning fast move in rates. There is a camp that thinks there is still so much money sloshing around the economy that the Fed may have slowed everything just enough, without tipping the economy into recession. My eyes see a slow-motion slowdown.

If inflation moderates and the economy slows enough to justify a slowdown in rate hikes, or even a reduction in rates, the market may rise in response. However, it’s an uncertain time with downside risk matching upside potential. In this environment, we want to stay invested, but taking care in doing so. In summary, we are looking for those warm blankets to keep you comfortable and relaxed.

Corie and I first made the 15 hour trek down I-75 in 1996. Probably my most memorable visit was the drive when the twins were 9 months. We visited a rest stop in northern Florida and fed them as they sat in their car seats. I fell in love with Venice, FL as a result of these trips. Our three daughters enjoyed many spring breaks on the beach with grandma and great grandma. And the bike rides around the “island” with my father-in-law were great relief from the corporate grind. Fast forward to February 2022. Corie and I pulled the trigger and bought a house in Venice. It took only 7 months for us to realize the downside of my dream purchase and the importance of insurance.

Chad and I were playing baseball in the front yard. We heard him coming down the street. The muffler gave him away. We wondered what would be on the roof this time? Old tires? 30 year old lawn chairs? Whatever he was bringing had to be on the roof because the Plymouth Horizon was full of newspapers stacked from seat to ceiling. As he pulled in his driveway, we were a bit perplexed because there was nothing on his roof. When he got out, he was carrying two huge bricks of something, something wrapped in cellophane. Government cheese.

I mentioned last time that we were going to wade back into bonds. We have done so as bonds are now returning north of 4% in many cases. We are still cautious on stocks as we see continued chop until the Fed is finished raising interest rates and the slowdown has run its course. We remain overweight value stocks that pay dividends and expect to move back toward growth stocks in the near future. If the Fed gets its way, we may all hear that enjoyable “cha ching” sound a little less until a recession clears the way for more growth.

In this video, I look back to the 80’s and all the bad things that happened. And yet the market went up. 40 years later, we are still here worrying about all the things that will keep the market down. Time for some deep breaths!

I recently hit the big 5-0. In light of that milestone and in a desperate attempt to distance myself from the current market environment (😊), I thought I would go a different route with this month’s article. I read a book recently by Josh Brown (of CNBC fame) entitled “How I Invest My Money”. The title and some of the content revolved around how various professional money managers invested their own money. What struck a nerve with me about the book was the more subtle topic which I summarize as “What shaped my views on money”. Each money manager took a trip down memory lane and discussed the things that gave them their perspective on money. So, without further ado, that’s what I will do.