📰 26: CPI, Member Survey, Newsletter Improvement

Estimated reading time: 5 minutes

Good morning and happy Sunday! This week we're covering CPI, a new member survey, and newsletter improvement.

What's New

  1. I'm starting a new monthly survey for members and newsletter subscribers. You can access it here: Monthly Member Survey. It's very short, and would help me provide maximum value over time to you. If you have 3 minutes, please fill it out. Thank you!
  2. Cloudflare first look and earnings update is here. They're a pretty interesting company growing topline revenue very quickly. It helps that I'm a happy customer. Read more at the link.
  3. This Wednesday I'm publishing a piece on META and Zuckerberg's place in the AR/VR race. Evidently Mr Zuckerberg is giving Apple a run for their money!

Portfolio Performance

Great bull market so far! Neck and neck with the market YTD.

MTD % QTD % YTD % 1 Year % Since Inception %
S&P 500 3.41 5.15 5.15 24.37 9.17
Portfolio 4.82 5.29 5.29 40.83 22.89
Results are annualized. Performance data is indicative and should not be considered as advice. S&P500 includes dividends reinvested. Inception date: 2022-04-18.

Market Summary

The S&P 500 ripped again this week! All good things.

It's been a heck of a year so far with a great bull market.

Economy Update

The CPI report came out.

What is CPI and why does it matter?

CPI stands for Consumer Price Index. It is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The CPI is one of the most commonly used indicators for tracking inflation.

For investors, CPI is important for several reasons:

  1. Inflation Gauge: CPI serves as a key indicator of inflationary trends in an economy. Investors closely monitor CPI data to assess the purchasing power of currency and anticipate potential impacts on investment returns.
  2. Interest Rates and Monetary Policy: Central banks, such as the Federal Reserve in the United States, use CPI data to inform their monetary policy decisions, particularly regarding interest rates. Investors track CPI releases to anticipate central bank actions, which can influence asset prices across various markets.
  3. Asset Allocation: Inflation erodes the real value of investments over time. By monitoring CPI trends, investors can adjust their asset allocation strategies to hedge against inflation risk. Certain asset classes, such as real estate, commodities, and inflation-protected securities, may perform better during periods of high inflation.
  4. Bond Markets: CPI data plays a significant role in the bond market, especially for inflation-linked bonds like Treasury Inflation-Protected Securities (TIPS). Changes in CPI can directly impact the coupon payments and principal values of these bonds, affecting their attractiveness to investors.
  5. Consumer Behavior and Corporate Performance: Rising inflation can affect consumer behavior and purchasing power, which in turn influences corporate performance. Companies may adjust their pricing strategies, production costs, and profit margins in response to changes in CPI, impacting their stock prices and investment returns.

Overall, CPI serves as a vital economic indicator that helps investors gauge inflationary pressures, make informed investment decisions, and manage portfolio risks effectively.

The rest of this post I'm reserving for members. I'm covering CPI decline, what I think it means for investors, and some personal day-to-day happenings.

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