Investments: Continued Conflict
Two weeks have passed since I wrote the last Anthem Angle, which revolved around President Trump announcing the U.S. had entered into peace talks with Iran and a temporary ceasefire. While much has happened since then, including a series of unsuccessful negotiations and the U.S. setting up a blockade of the Strait of Hormuz, we essentially sit in the exact same place as we were two weeks ago, with tensions still elevated and a stalemate underway. The U.S. has continued to put immense economic pressure on the Iranian economy by shutting down the waterway and Iranian commerce. Given the importance of the strait to global markets, these disruptions have continued to have profound impacts on the global economy. Reports of increased military activity in the region have also added to overall uncertainty and reinforced concerns about the potential for further escalation. With the conflict going on for almost two months now, inflation will begin to become an ever-important factor. Recent headline inflation came in at 3.3% in March, and we will most likely see that number increase for the month of April. Considering the price of crude oil is still in the $90s, with Brent Crude still even sitting above $100/barrel, these effects from the war will likely linger longer than anticipated. In a recent study by Oxford Economics, researchers found that past oil shocks stemming from war saw resulting inflation remain elevated for multiple years after the conflict. Investors should remain cautious, as a poor inflation report on top of a war that still seems to be far from over could turn this recent market rally around on a dime.
Sources: WSJ, Investopedia
Planning: Enough Life Insurance?
Life insurance is one of the most important aspects of a comprehensive financial plan. It is not about protecting yourself, but protecting those you love and making sure they are provided for. While most people have some sort of life insurance policy, whether through work or a separate provider, many don’t have enough coverage to provide meaningful protection for their family if a tragedy were to occur. For families, adequate coverage ensures there is sufficient protection to replace lost income, pay off debts such as a mortgage, pay for kids to go to college, and maintain a similar lifestyle or standard of living. Determining the right amount of coverage for you comes with thoughtful planning that takes into consideration incomes, liabilities, number of dependents, and long-term goals such as when you plan to retire. A general rule of thumb is to have coverage equal to roughly 10 times your annual income, but this varies for different households and who are in different stages of life and who have different financial situations. Ultimately, it is important to make sure your coverage aligns with the needs of your family, ensuring they are positioned to move forward with stability and confidence.
