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INFLATION:
On December 11th, overall inflation across all items rose by 2.7%, year over year. In terms of where inflation is most persistent, Food at home increased by 1.6%, food away from home (like restaurants), is up 3.6%, Motor Vehicle insurance is up 13%, Health Insurance is up 6%, and Energy is Down by 3.2%.
On top of that, it’s estimated that “Shelter, which has about a one-third weighting in the CPI calculation, accounted for about 40% of the total increase in November” and, in this case ”the shelter index rose 4.7% on a 12-month basis.”
STOCK MARKET:
If we go all the way back to the 1920s, there have only been 9 times where we’ve seen more than a 30% return in a year – and, with the exception of the Great Depression – there usually follows more positive returns in the years that follow.
However, Warren Buffet is taking a more cautious approach while he sells massive positions and sits on his largest cash-pile of all time, at $325 billion dollars. On top of that, one economist was quoted as saying that “The stock market is in a ‘mania’ that will push it higher before a potential 26% drop in 2025.”
HOUSING MARKET:
Despite mortgage rates being their highest in 20 years – home prices have continue to grow, with the average home rising 5.9% since December of last year. In terms of which markets are seeing the biggest increase, Detroit Michigan saw a 15% gain year-over-year – followed by Chicago at 13.5%, Newark at 11%, and Cleveland at 10% – with the hardest hit being Austin and San Antonio, Texas – having fallen 3-4.5% over the last 12 months.
MY THOUGHTS:
In terms of the stock market, I think it’s important to keep in mind that – even though stocks are expensive – relatively speaking, based on history – honestly, no one has any clue what’s going to happen in the future. I’m still just dollar cost averaging, and I’m not deterred whatsoever by all time highs.
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