Private: Wealth in a changing world
As you work to build a financial future for yourself and the ones you love, it is beneficial to have a perspective on the world around you and the outside factors that may impact how your wealth can grow and thrive in a global economy.
January was yet another interesting month for the U.S. Unemployment came in at 4%, ticking down from December’s 4.1% (still decent for businesses looking for help and near historical lows). Inflation (CPI) ticked up a little year over year to 3% in January versus the prior month of 2.9% (housing and used cars still holding us up) and still in the right direction for the Fed’s target of 2% vs highs of 9.1% in 2022. We could see interest rates drop by as much as 1.5% by the end of the year as the economy continues to slowly expand. The economy has continued to expand and GDP (gross domestic product) for the 4th quarter of 2024 came in at 29.7 trillion dollars, only 12 trillion +/- dollars ahead of the next largest economy (not too shabby). https://fred.stlouisfed.org/series/GDP
On the international front, thoughts of recession are still out there, and we are seeing some signs of stability with some growth here and there. The Eurozone’s PMI Composite in January ticked up to 50.2 up from the prior month (up again is even better), PPI (producer price index) year over year was flat in December (a good sign for inflation slowing), and Retail Sales year over year for December was up 1.9% (a good sign the economy is starting to thaw). In Asia Pacific economies: Japan’s PMI Manufacturing came in at 48.7 for January down from the prior month by .1 (a .1 decrease may not need worry). China’s PMI Manufacturing for January came in at 50.1 down .4 (above 50 means growth) and the CPI (inflation) came in at .5% year over year for January (slowing inflation can be good for everyone). Australia’s Business Confidence leaped to 4 for January versus -2.1 the prior month (that has to be a good sign). As a result of U.S. companies deriving 40% +/- of earnings from outside this country and the current strength of the U.S. economy, I still feel investment in stocks will continue to favor the U.S. in the coming months with most markets outside the U.S. continuing to play catch up.
The market (measured by the S&P 500 ETF, SPY) was up a massive 2.69% +/- in January, reversing December’s -2.73% +/-, and up 2.69% +/- for the year/2025 (What a start to the year!). I still feel that markets are valued a little high and expect heightened volatility, but valuations are still lower than levels experienced in 2021. At AWMS, we still own equities/stocks for the same reasons we always have for their long-term growth and consistent dividend cash flow. Although markets can be volatile at times, dividend and interest payments continue to pour in like Victoria Falls.
Please continue to make healthy decisions like washing your hands, getting plenty of sleep, eating balanced meals, staying hydrated, and taking a stroll if you feel like it. Reach out to a friend or loved one and have a great conversation.
Until next time, be well and keep putting one foot in front of the other. If you are not a client and would like to receive our newsletter or our monthly blog update, please use the contact tab on our website or drop us an email.
Sincerely,
Thaddeus D. Phelps, CEO/CIO
PS: Understanding what you are paying for advisory services can be important. Our advisory services are priced in the medium-to-low range. If the postings on your statements under “Transaction Details” and labeled “MGMTFEE ADVISOR” are not adequate, we do create reports on our portal at awm-s.com for your convenience. Please reach out to srphelps@awm-s.com if you have any questions.
This commentary on this website reflects the personal opinions, viewpoints, and analyses of an Advance Wealth Management Service, LLC employee, and should not be regarded as a description of advisory services provided by Advance Wealth Management Service, LLC or performance returns of any Advance Wealth Management Service, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data,a or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Advance Wealth Management Service, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.sed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.