Stock markets grew for the first half of August only to lose the gains and more. The two major stock indices averaged losses of -4.2% in August with all indices down double digit year-to-date and over the past year. Bond values lost -2.3% in August and are also down -10-11% in 2022 and from a year ago. A bright light is the utilities sector, up this month and +11% from last August. Energy and natural resources sectors continue positive with very strong returns.
Inflation is the pivot point for the economy and investments now. Stocks can keep up in inflationary times unless it becomes severe. Bonds are not a safe haven in inflation, as risk free bank interest rates rise and bond rates stay the same for the life of the bond. Gold is not a hedge now although the US Dollar and natural gas have performed well. Inflation continues even when the pace of inflation is slowing and cumulative inflation is what the Fed is considering. Continued Fed rate hikes seek to reduce inflation, not just slow it.
One wish we hold for September, let us down easy. Let golden days continue even as starry nights come earlier. Hummingbirds drain the feeder quickly as they tank up for their annual epic journey to a gentler winter place. No one messes with these swift, fierce flyers. Perhaps it is our desire for ease that leaves us wishing for permanence in what is fleeting. We must hold some fierce to face change.