We celebrate 4 years of the Nurturing Financial Freedom Podcast with our 48th episode today. Thank you for listening!
As we reflect on the first quarter of 2023, we will do a recap of the markets (data courtesy of YCharts), as well as reflect on some of the headlines and lessons learned so far this year.
Alex starts us off by looking back at the markets, which were largely positive in 2023, as of our recording date of April 20th. After a stock and bond recap, we spend some time explaining bonds and why they're often a misunderstood asset class. Also, gold is interesting. Alex explains why this precious metal is considered both a "panic asset" and an "inflation hedge," perhaps erroneously!
Finally, Alex comes back to one of our favorite principles in this show - diversification. Why is it such an important concept to both understand and utilize?
In the second half of today's episode, Ed talks about not believing the predictions of market prognosticators. Two in particular predicted a very bad Q1 in 2023, which as Alex explained, didn't happen. You simply can't predict the markets. Ed explains what would have happened to your portfolio had you made a panic move based on what you saw or read.
Next, many investment management firms suggested buying dividend stocks and ignoring growth stocks. Ed has the numbers to show why that wasn't a good idea! We also look at the housing market. While "doom and gloom" were predicted, that didn't come to fruition either! Yes, interest rates have gone up, but a limited supply has prevented any drastic changes in housing prices.
Finally, Ed breaks down the collapse of Silicon Valley bank, an event that dominated the headlines for a few days last month. Why did the bank collapse? Ed walks us through the two biggest reasons.
So what did we learn, or perhaps have reinforced, in the first quarter of this year? Don't panic, stay diversified, and focus more on the long-term than the short term. The world is scary right now, but it always has been and always will be.
Alex Cabot and Ed Lambert are always happy to have a conversation with our listeners, whether they are a client or not. Financial literacy is something they are very passionate about at Birch Run Financial.
You can always email Alex and Ed at info@birchrunfinancial.com or give them a call at 484-395-2190.
Or visit them on the web at https://www.birchrunfinancial.com/
Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact your financial advisor.
Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.
Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification.
Dividends are not guaranteed and must be authorized by the company's board of directors.
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact your financial advisor.
Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.
Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification.
Dividends are not guaranteed and must be authorized by the company's board of directors.