Trade The Journey

Trade The Journey

Reflections III

Top of the Morning! The masks are coming off as people eagerly await the day when no face covers are required. Some employees are returning to the office, while others have opted not to return. For some, working at home embodied the freedom to set their schedule and be around their family more. It also lowered their day-to-day traveling to and from work.

For instance, my cousin was able to spend more time with her newborn. She was able to arrange teaching appointments with students around her schedule. Some students showed and others use their free time for other activities. Unfortunately, students in my cousin’s district often lacked the means to have internet access, so they fell behind.

I enjoyed freedoms at my workplace as well and was sad to see them go. For me, the experience opened my eyes to the possibilities of redefining my work life. I was able to get more done, working at my own pace.

I worked on my business, studied the market, lost weight, and changed my diet. The only drawback to a life lived in seclusion is the lack of social interaction.

With rising home prices and living costs, I wonder if working at a nine to five will lose its appeal, which means that my best efforts in the workplace provide a standard of living unequal to the rising costs. Living paycheck to paycheck is becoming the new norm.

 

I’ve heard it said that the wealthy measure their wealth in “Time.” Time is such a valuable resource that many sacrifice it in the hopes of gaining more of it later. Imagine living an entire day where your time is spent pursuing goals and enjoying activities for your benefit.

I think this is a time that many reevaluate their life and goals. Being ambitious myself, I often wonder if my employer reciprocates the dedication and consideration I place into my job.

It’s always a toss-up when you leave your ambition in the hands of someone else.

The Pandemic hit my family hard, and we lost some loved ones. It’s surreal when someone is gone forever.

Inflation, Inflation, and more Inflation is causing the Federal Reserve to reconsider its plans. A future interest rate hike was initially forecasted a few years out, and now late 2023 is the new vantage point. However, another board member mentioned 2022.

Reading some of the past Federal Reserve meeting minutes, you get a sense of the different perspectives on rate adjustments depending on the board. Board governors representing their district provide updates on the economic performance and needs every quarter.

The districts include:

The beige book is a culmination of the district reports, and it’s released eight times a year. I like to read the summaries, and if needed, I’ll read the section in its entirety.

I think the purpose of reading this information is to form an educated guess on the economy’s direction, barring any unforeseen events like a pandemic.

Understanding what’s happening regionally will help you understand the trends nationally.

Some of the sectors covered in the district summaries:

Employment and Wages

Prices

Consumer Spending

Retail and Tourism

Manufacturing

Real Estate: Residential and Commercial

Construction

Financial Services

It’s important to realize that although the Federal Reserve comprises some of the brightest minds in economics and finance, people make mistakes. With that in mind, you can make your assessment of current economic conditions.

Although they have more of an encompassing view of the economy and the forces influencing current trends, they may be far removed from the average person’s day-to-day experiences.

There’s only so much that can be conveyed in a statistical report. If you make a concerted effort to listen and observe those around you, you’ll gain a sense of what’s happening economically.

I watch the spending habits of neighbors, co-workers, family, and friends.

Is it safe to say that the middle-class is the backbone of America?

Probably so; around the world, I’d say the goal is to have a class of educated people who positively contribute to the economy.

A countries advancement is tied to education.

I’ll be the first to admit, applying this information is especially difficult. It’s one of the reasons I believe market knowledge doesn’t naturally translate into trading profits. I think it’s clear to see how higher rising costs might affect economies.

With more cash going to capital expenditures, interest costs, and possibly rising wages, it’s not hard to see how inflation might affect a Companies bottom line. Can the company survive charging the customer a higher price for its service or product?

Because most of the public enjoy life outside of confinement and restrictions related to the Pandemic are slowly being removed, companies can survive and possibly thrive charging higher prices. There will be a point where the customer will look at the prices and find it hard to justify the purchase when all their other bills are rising.

Whatever happens, you know with certainty a recession will occur because business cycles are a natural part of life. The challenge is knowing when the cycle changes.


This past week:

I didn’t eat out, except for some sushi I purchased at the end of the week. I’m happy to say that I developed the habit of bringing lunch and snacks whenever I’m going to be out for the day. I try never to purchase an item I have at home unless I have a few errands to run and know it’ll be a couple of hours before returning home.

I also try to break big purchases down into smaller payments. For purchases over five hundred dollars, I try to piece the total amount together from various accounts. I might use one hundred from a paycheck now, a hundred from the next one, two- hundred from investment profits, and the final hundred from a savings account.

All of this might seem silly, but different accounts grow at different rates. The account with the most negligible growth is my paycheck account; once spent, it’s gone forever until the next pay period. However, your paycheck is often your most liquid account. It’s necessary to have an account where you can access the money immediately in case of an emergency. If I see a deal to purchase an item I regularly purchase for a 2 to 1 deal, I usually make the purchase.

Investment profits have the best opportunity for regeneration. I also don’t have to increase my workload or time to generate more of it.

Reason: Continued Improvement.

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