This week the U.S. Bureau of Labor Statistics said the consumer price index in December had risen 7% from a year earlier, bringing inflation close to a 40-year high. There was a bit of improvement in the producer price index, with a December increase of 9.7% from a year earlier, down from 9.8% in November.
Rex Nutting breaks down the causes of inflation during 2021 while also considering whether the Federal Reserve’s expected moves to raise interest rates can even work in slowing price increases.
Here’s more coverage of inflation and the Federal Reserve’s reaction:
- America’s housing market is in the grip of an inflation storm
- Hulbert: Everyone thinks inflation will stick around. These three accurate models say otherwise
- ‘Inflation was killing my grocery budget’: Meal-delivery company uses inflation fears in latest ad
- Supply-chain backlogs may `never’ clear as long as U.S. consumer demand persists, says RBC Capital Markets
- Fed’s George urges faster drawdown of $8.5 trillion in assets and ‘more normal’ interest-rate strategy
- Four mistakes the Powell Fed made — from a former insider
How to invest in the rising-rate environment
The pandemic bull market for stocks has been driven in part by historically low interest rates. For much of 2020, the yield on 10-year U.S. Treasury notes
But investors have been anticipating a tougher time for stocks in the rising-rate environment of 2022, especially tech stocks that trade at high price-to-earnings ratios. Here are some investment ideas suited to this new environment:
- Bet against tech and these other winners from the Fed’s loose policies, says Bank of America strategist
- Four reasons why value stocks are poised to outperform growth in 2022 — and 14 stocks to consider
- These bank stocks are in the best position to benefit from rising interest rates
- These S&P 500 stocks have cratered, but analysts think 12 can turn it around with rebounds of up to 70%
What market signals really tell you
Here’s how the S&P 500 index and its 11 sectors have performed this year through 10 a.m. ET on Jan. 14, in ascending order:
|Index||Price change – 2022||Price change – 2021|
|S&P 500 index||-2.2%||26.9%|
It’s easy (and possibly fun) to read into these results and predict what’s in store for the rest of 2022. Mark Hulbert weighs the usefulness of the “January Barometer” is a useful measure for investors.
Where to move if you want to have fun on rail-trails
Silvia Ascarelli writes the Where Should I Retire column. This week she helps a reader who is ready to retire and move to “a small town with easy access to hiking and biking trails, kayaking and other joys of the natural world.” A home-purchase budget of $200,000 makes this a tall order, but here are three possible locations.
Regardless of your budget or preferences for weather and amenities, you should try eLesor’s retirement location tool for your own custom search. It includes data for more than 3,000 U.S. counties and incorporates climate risk.
Retirement lessons and plans
Alessandra Malito writes the Help Me Retire column, not only to help people plan big post-career moves but to help them solve problems after they have retired. This week she does something different, sharing lessons learned by a reader who retired years before she was eligible for Medicare and then suffered serious heath problems.
On a related note, Richard Conner advises people planning for retirement to think carefully about their possible needs if they “age in place” and their health eventually turns for the worse.
5 crucial steps for boosting your career in this tight labor market
For those who don’t want to join in the “Great Resignation,” the Great Reshuffle now happening within companies also creates career opportunities. Karyl Innis, a career coach, walks you through how to position yourself for the next opportunity.
Financial crime pays — until it doesn’t
Lukas I. Alpert writes the Financial Crime column, which can help all of us understand how easy it is to be victimized. The stories can also be entertaining, if we care to admit it. Here’s a sampling of recent coverage:
- Founder of nationwide tax-prep firm sentenced to prison for skimming $70 million in exorbitant fees over a 5-year period
- CEO admits stealing $15 million from her company to finance clothing boutique, Plaza Hotel visits, and $200K on relative’s wedding
- Bad judgment? New Orleans judge charged with allegedly failing to pay taxes on cash she earned officiating weddings
Semiconductors are in demand
A shortage of computer chips has been commonly cited by corporate executives talking about supply shortages and price increases. Here’s a breakdown of exchange-traded funds that cover the semiconductor space as well as 44 stock held by those ETFs.
ETFs and crypto
Mark DeCambre writes the ETF Wrap column, with performance highlights and various industry features. This week he talks to Benchmark Investments CEO Kevin Kelly, who makes the case that Ether
Want more from eLesor? Sign up for this and other newsletters, and get the latest news, personal finance and investing advice.