06 Feb Tom Dupree Show, Saturday, February 3
On Saturday, February 3rd Tom Dupree hosted the Tom Dupree Show with Mike Johnson and Adarsh Mashu.
Tom opened the show stating, “we cannot assume we’re ‘off the races’ with high inflation” in response to the market’s recent volatility. However, Adarsh talked about several signs that could indicate an “up tick” in inflation. He mentioned the 2.9% increase in wages (which is the highest increase since the financial crisis of 2008-2009), crude oil prices have moved up, low unemployment, and the new tax package which will allow companies to invest more into the economy.
The question was then posed, “So is this a good time to invest?” Tom stated that this is an opportunity, not something to run from. Mike gave some examples and explained that an investor needs to look at the fundamentals of the companies to see if earnings are still good and not rely on speculation as to what inflation may do.
Tom explained that pull backs in the market give Dupree Financial Group the opportunity “to buy some of the things we like at a much lower price. Our investment philosophy is designed to produce income. So the cheaper we buy something, the better the income level is.” Mike explained that the dividend of a company doesn’t necessarily change when the market dips. You’re now presented with the opportunity to buy at a better price. They discussed how investors don’t want to be holding cash in an inflationary environment because the purchasing power can be eroded. Adarsh added that in an inflationary environment, common stocks are one of the best places to be because companies can adjust to higher prices much quicker than people think.
Tom and Mike talked about other dips in history and the opportunities that they have given. Mike said “if you can keep a 10,000 foot view of what’s going on in the market and know the companies you’re investing in then that’s when you can find opportunities to buy.” He explained that for Dupree Financial Group’s newer clients, they have been able to buy for their portfolios because of the price drop. Tom added that “with our portfolio, the design is to take the dividends to create the income.” The income relies on investment decisions and that dipping into the principle, when the market might be going down can be a problem.
Tom concluded the show by emphasizing that “the way we invest for retirement is not by chasing the market and hoping that everything goes up because no matter how much it goes up it can also come back down. And that time that it happens to come down, it could be a period in which you would have to liquidate part of your portfolio to live on.”
As always, to listen to the full, one hour show, visit www.dupreefinancial.com.
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