“Inflation is like toothpaste, once it is out you can hardly get it back in again.” -Karl Otto Pohl

Inflation has arrived. The Consumer Price All Items Index from May 2020 to May 2021 showed an increase of 5%. This is the largest 12 month increase since June 1992. This increase was not unexpected. In fact, moderate inflation is welcome and normal. The Federal Reserve has publicly stated that they are going to allow inflation to run above their target of 2% for some time. Most economists believe that this uptick in inflation is temporary. While we hope that is the case, we have gold and silver exposure in accounts as a hedge.

With inflation rearing its ugly head, you would think that interest rates would be rising. Unfortunately, that isn’t the case. The yield on the 10 year treasury recently dropped from 1.7% in March of this year to below 1.5% this week. We continue to feel that the best risk/reward for our invested assets is to continue to use our covered call strategy that allows us to earn additional “dividends” in the form of option premium while also participating in the rising stock market. That being said, we continue to monitor interest rates in the hope that fixed income will yield a fair rate of return in the future.

In our increasingly complex and online world, keeping your assets safe from cyber criminals is one of our top priorities. Password integrity is an important element of keeping your Fidelity Investment account secure. We recommend that you change your Fidelity password at least once a year. Additionally, your Fidelity password should be unique, different from all of your other passwords. If you use the same password across multiple websites, there is a chance that if a less secure website gets hacked (something that happens every day), the hackers will use that same username/password combination at financial institutions and therefore gain access to your Fidelity account. Some of the tell-tale signs that an account has been hacked are address changes, new bank transfer instructions, and abnormal, large purchases. We cannot guarantee that we will catch every infraction, but we are an additional layer of defense. Having a personal relationship with all of you, we have come to understand your financial patterns. If we come across something suspicious, we will reach out to you for verification. Please do not be offended or feel that we are judging. We are only making sure that you are the one in control of your assets.

Very truly yours,

Michael Cantlon
Thomas Guyett
Robert Gephart