On Wednesday, investors waited anxiously for the Federal Reserve to announce its next interest rate move...
Stocks rose on the news that the Fed would keep interest rates between 5.25% and 5.5%. That's the same rate we've had since July. But the announcement isn't shocking given the Fed's "higher for longer" interest-rate warnings.
So it'll likely be awhile still until we see rates start to come back down. The Fed noted:
Recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.
According to Fed Chairman Jerome Powell, there could be another hike at the next meeting in December if inflation doesn't cool further.
If you don't follow the interest-rate saga, you might wonder why all this matters...
The Fed controls the "federal-funds rate." This is the rate at which banks and credit unions lend to each other on an overnight basis. And it has been raising this rate to combat high inflation. The idea is that higher borrowing costs will drive down prices and slow the economy.
But the truth is that analyzing inflation is difficult. No one – including politicians, economists, central bankers, or hedge-fund wizards – fully understands it. It comes from complex interactions among monetary and fiscal policy, the financial system, and the expectations of everyday people.
For several years, we saw the cost of everything – from housing to food – increase, alongside shortages of essential products. And while life feels like it has largely returned to normal, we're still seeing the effects of the pandemic on things like the cost of goods and inflation.
Our modern monetary system isn't perfect, but policymakers have a simple remedy for inflation: higher interest rates from the Fed.
The problem is that higher interest rates slow the economy and push down stock and bond prices. That makes it tough to find new investments or even protect your existing wealth.
That means more interest-rate hikes could hurt your portfolio's future performance... if you're not putting your money in the right investments.
This portfolio contains the names of 25 stocks you can put your money into today and hold... forever... without worrying about what the Fed is doing or what's happening in the markets.
You can deploy your capital by tomorrow morning. There's no need to wait and see what plays out in the months to come. As a subscriber, you'll even get a position-size calculator, so all you have to do is type in how much you want to invest and it'll tell you exactly how many shares of each of the 25 stocks to buy.
It can't get much simpler than that.
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Now, let's dig into some questions... As always, keep sending your comments, questions, and topic suggestions to [email protected]. My team and I really do read every e-mail.
Q: I live in a suburban area. I have a septic system with city water. The water comes from a huge manmade lake. Our water management system reports on quality every six months. There are probably only three of us who read the report, but I do and this past report, for the first time ever, they reported "forever chemicals" in the water supply. What can I do? I use a countertop pitcher filter, which I doubt is good enough for this. Thank you in advance. – J.G.
A: Great question. For those who aren't familiar, "forever chemicals" are also known as per- and polyfluoroalkyl substances ("PFAS"). PFAS are a large group of manmade chemicals that have been used in industrial processes (like the automotive, construction, and electronic industries) and in the making of many household items (like nonstick cooking pans, stain-resistant sprays, and even dental floss) since the 1950s.
They're nicknamed "forever chemicals" because they do not break down easily in the environment. As a result, these chemicals can leach into the air, soil, and water... and build up in our bodies over time. Research has shown that exposure to high levels of PFAS can result in serious health problems like hormone disruption and changes in liver enzymes.
Fortunately, there are ways to protect yourself from drinking PFAS straight from the kitchen tap. Earlier this year, the Environmental Working Group tested 10 different water filtration systems to see how well they removed PFAS. They found that these three filters removed 100% of the PFAS detected prior to filtration:
The ZeroWater and Clearly Filtered brands are the most economical choices of the three... and they offer different products – like sink attachments, for example – to best suit your needs.
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Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
November 3, 2023