Every few weeks we compile a list of articles and books which we believe would be helpful to investors who want to make wise, informed decisions. All of these are relevant to current events or the long-term financial planning methodology that we here at Creekmur Wealth practice with our clients every single day.
If you have any questions you can reach out to our team via email or by scheduling a call using the link below. With that in mind, lets dive in!
How the Semiconductor Shortage has Impacted our Global Supply Chain
It's no secret that the past two years have lead to a massive issue with the global supply chain. Everything from couches to cars to food has had some level of delivery time issue. One of the major factors in the supply chain issues has been the shortage of Semiconductors.
Semis have historically been a very cyclical sector of global markets that will massive boom and bust cycles. However, the proliferation of technology in every aspect of our modern life going into 2020 had consistently reduced this boom and bust cycle over. Then the COVID-19 pandemic began and everything that came with it over the past 2 years has just further accelerated the importance of Semiconductors in every aspect of our daily life.
Both the article and podcast linked below do a great job breaking down what can feel like an incredibly complex sector. I would encourage you to dive into both items to better educate yourself on a crucial topic.
From an investing standpoint we have increased the allocation of semis in our client’s portfolios. At this time, it appears there will be a multi-year global semiconductor shortage. Which will result in massive amounts of investment at both the private and public levels in the semiconductor sector. From an investment perspective these tailwinds are exactly the type of megatrends that we want to be invested in to provide the possibility of outsized long-term returns.
Read: The Semiconductor Ecosystem Explained
Listen: Acquired Podcast on the History of Taiwan Semiconductor
This book looks at the life and times of Charles (Chuck) Feeney. Chuck co-founded Duty Free Shoppers (DFS) and built the company into a global organization that we encounter in airports all around the country/world. While the story behind the building of DFS is a fascinating read, the story behind Chuck’s desire to "Give While Living" is equally interesting and crucial to think through on a personal level. I also recommend Andrew Carnegie’s “The Gospel of Wealth” that was a key piece of developing Feeney’s thoughts on philanthropy.
The ability to invest and build wealth to ensure your personal and familial well being is a cornerstone of what we do here at Creekmur Wealth every day. We have also found that Charitable Giving has become a larger area of emphasis recently as we have begun incorporating tools and methodologies into our financial planning practice that were previously inaccessible for the majority of investors.
I would encourage you to discuss Donor Advised Funds, Trusts, and other efficient giving techniques with your advisor. While this these tools may not be a fit for everyone, it is well worth considering appropriate options that would allow you to pursue charitable giving in ways that can also be a benefit to your overall financial plan.
Are 401(k)'s an "Accident of History"?
The largest non-real estate financial asset in America is an Individual’s Retirement Plans (401(k), 403(b), 457, TSP). It is crucial to understand both the history behind these plans AND how to properly invest your retirement plan assets in order to ensure that you are able to do the things you want to do, when you want to do them.
John and myself dove into this topic and discussed some tips on how to ensure you are making the right decisions when it comes to your retirement plan accounts. Check out that video here!
Target Date Funds are a great tool to begin building your account balance when you first start saving in a retirement fund. However, as your balance grows and times change Target Date Funds may not be the best place to invest 100% of your retirement dollars. Andrew Pisel & myself dove into this topic in a recent Flash Briefing that you can watch here.
An Eye on Interest Rate Increases
Below is a good summary of the likely paths that the Federal Reserve will take when it comes to interest rates in the months ahead Inflation has hit a 40+ year high and is the key economic topic of the day. The primary way for the Federal Reserve to combat inflation is to raise interest rates and begin decreasing the amount of bonds they are purchasing. Raising interest rates has historically lead to volatility in the stock market and decreasing bond prices. Tracking what actions the Fed takes in this area will be crucial to both the economy and markets at large - especially with recent Geopolitical events possibly altering the course of all the above.
John and myself have talked about this topic and the actions we are taking to address this risk in our client portfolios at length in past Deep Dives. If you have any questions on this topic I would encourage you to reach out to our team or your advisor to discuss the moves we have made recently in portfolios to put your dollars in the best place for the months ahead.
