OUT OF THE BOX: OUR FORTHCOMING ELECTION

"We do not have government by the majority. We have government by the majority who participate."?

-Thomas Jefferson

As Tuesday draws near, I wanted to take a moment to encourage all of you to vote. Your single vote could decide a person who wins, or loses, or a proposition that wins, or loses. We are fortunate to live in a country where the citizens make the decisions and all of us should participate in this process, in my opinion. We can disagree, or even argue but, in the end, it is up to us to choose our representatives to run the government. I take this quite seriously and I hope that you do too. God bless all of us that we make the right decisions.

Aside from our civic duty, our collective decisions will move the markets, in my view. The direction of the Fed, and of the Congress, may well be decided by who takes office. Remember that while the Presidents and the Governors of the Fed are independent, that the Fed, as an institution, is not. They were created by the Federal Reserve Act of 1913 and the Fed reports to Congress. We are at an historic moment, and I am quite thankful that it is all citizens, collectively, have the right, under the Constitution, to stand up and cast our ballot. I have already voted.

?The outcome of the vote, in my opinion, will move all of our markets and perhaps significantly. It has been a miserable year for the markets by almost any calculation that you can make. Bonds or equities, all smashed, and our portfolios along with them. Prices in tatters, borrowing costs skyrocketing, and hoping and praying, as always, are never good strategies, in my estimation. Knowledge and selection are paramount to winning, in “The Great Game.”

Look all around you. We are facing a war in Europe, staggering inflation, massive supply chain problems, the cost of borrowing money heading through the roof and the policies of our new government are likely to help, or hinder, the issues at hand. Some middle ground is unlikely to be found. The Barbarians are at the gate.

You often hear on television about “Kitchen Table Issues.” Aside from those I also consider “Market Issues.” Our markets, this year, have had serious effects on seniors, retirees, pension funds and the like. Don’t kid yourself about this. Both people and institutions have been struggling with the beating that the markets have taken. The amount of red ink has been staggering. The walloping has continued, unabated.

Sure, we have had a good day or two, like last Friday, but overall, 2022 has been a year of getting whacked, for both equities and bonds. We need to claw our way back to stability and then up the hill to looking at some green numbers and not all red numbers. No major Bloomberg Bond Index or major Bloomberg Stock Index is in the green currently. I hope our decisions on Tuesday can help correct that.

"The ignorance of one voter in a democracy impairs the security of all.”

-John F. Kennedy

With a $23 trillion GDP and a debt of $31 trillion, the country is in a perilous position, in my estimation. There are only three choices. They are to cut spending, or to raise taxes, or a combination of them both. I say again, to the Fed, that rapidly raising interest rates, without consideration of that collateral damage that it causes, is not making a good choice, in my humble opinion. Slow and steady, in my view, is the right course, and the one that should be taken. The markets, and their effects on people and institutions, should be a major part of their calculations.

Reuters recently stated, “Nevertheless, the S&P 500 finished the week with a 4.6% loss, likely burning many bulls that had jumped aboard an October rally that lifted the index more than 8% from its lows. A break of the index’s Oct. 12 closing low would mark the fifth time this year that stocks have rallied by 6% or more only to reverse course and plumb fresh depths. Meanwhile, data from BoFA Global Research showed some $62.1 billion flowing into cash in the latest week, the largest inflows since the COVID-19 crash of early 2020, underlining pessimism that has prevailed among many market participants.”

The problem with cash, with too much of it, is that every day, every single day, you are vastly under our current inflation rates, and I do not see that changing any day soon, even with the Fed’s current policies. As I have said before, our markets are “Flummoxed,” and the votes that we cast are sure to either help, or hinder, our current situation.

Therefore, I voted with not just the “kitchen table,” but also our “counting houses,” squarely in my mind. No one talks about this much, but I am today. Consequences are squarely on the table now.

Mark J. Grant

???????????Chief Global Strategist

???????????Colliers Securities

[email protected]

???????????U.S. 954-999-0933