Another month down, literally, and we are heading into the 4th quarter of what has been a miserable year for the markets. The questions is, when will this pain end?
Since our last update we have relocated from our beautiful spot in Tennessee to an amazing lake front spot in Oklahoma. This location has quickly become one of our favorite destinations since hitting the road. We have a pull-in spot and everyday when we open the shades we look out at the lake and enjoy the views and the wildlife. This year has been a disaster financially, but being able to live this life and wake up to these views and scenery almost everywhere we go has made these tough times much more bearable.
As for the financial markets, I will try and keep it brief this month as it’s just been more of the same and there is really not much more to be said at this point. Plus, Mrs. RVF has rightfully pointed out that my
anger passion for the markets and the current environment we find ourselves in is reaching an unhealthy boiling point and I should probably dial it back a little. I think that is wise advice as we didn’t get into this lifestyle to have it ruined by things we can’t control anyway.
So in short, the fed keeps raising rates very rapidly and they now sit at 3.25%. They continue to talk tough to try and intimidate the markets into capitulation. Bond prices continue to tank as well which is causing interest rates to rise further, which kills growth. And the strong dollar is causing earnings and margins for multinational companies to erode at a fast rate. We are, and have been, in a recession. The cowards and corrupt politicians will not be honest with the American people and say it out loud because an election is coming up. But at least we can travel to Europe on the cheap now!
You might be thinking, “wait, isn’t slowing down the economy to lower inflation the whole point of this”? The answer would be “yes”, but they are causing a whole host of bigger problems because of how they are taking action. Large rate increases are not a good thing to begin with, let alone three of them back to back to back with the threat of at least one or possibly two more. As we have said too many times before, it’s takes months to fully realize the impact of these increases and looking at lagging indicators, like unemployment, is foolish.
There is almost no doubt they are going to drastically overshoot and cause bigger problems. And if you listen to the financial media that realization is becoming very clear as alarm bells are starting to go off everywhere.
Look, I admit that I am a college dropout that only took a few economics classes and that lowers my credibility on the subject in the eyes of many. But I’ve been around the block a few times and I have seen this story before. This fed is down right awful and has no clue what they are doing!
In fact, I looked back through the archives of our blog. While the fed morons were living in their “inflation is transitory” delusions here are a few blasts from our past on the subject:
April 2021 Update: “It appears the reopening surge is happening, but inflation is a concern regardless of what the Fed is telling everyone. I tend to believe what I see with my own eyes before believing what some government official is trying to sell on the financial networks. Everything is getting more expensive and that’s a fact.”
June 2021 Update: “Going into July I am very weary of where the markets are heading. We are off to a good start but the inflation data is cause for concern and market prices are high. The fed maintains that inflation is only transitory and will subside which reinforces their stance to not raise rates for some time in the future, like 2023. I hope they are right about this because if not then we are in for some pain if they are forced to reconsider that stance and raise rates sooner than expected.”
That one aged well!
November 2021: “In my opinion the fed is creating more risk for the markets than Covid. For months now they have said that inflation is only transitory and will subside. Now all of the sudden during his congressional hearing Mr. Chairman stated “the word transitory should be retired from the conversation going forward”. Welcome to reality Mr. Chairman! It was always questionable to say inflation was transitory in the first place and as I have stated before I prefer to believe what I see with my own eyes over what politicians and bureaucrats spew out of their mouths.
The fact is inflation has not subsided at all and has continued to increase. Now it appears the feds wishful thinking might have left them in the position of having to play catch up which means speeding up the timelines for tapering and rate hikes to try and slow down the inflation freight train. The danger is that this could cause a bigger problem because it takes time for the impact of these measures to work through the system and show up in the economic numbers. This could in turn cause the fed to overshoot on rate hikes which could slow the economy to a crawl and eventually lead us into a recession.”
And here we are!
I could go on, but the point of this is that if a college dropout could see the writing on the wall then why couldn’t the fed? Now the signs are starting to appear that they are doing more harm than good which could lead to larger economic problems if they continue to push through major rate increases in addition to reducing their balance sheet. At what point is the safety and functionality of our system more important than their ego?
But, I don’t have a degree in economics. Oh wait, neither does Jerome Powell or pretty much anyone else at the fed who is making these horrible decisions! Hmmm, maybe that’s part of the problem?
This is what happens all the time in government. It’s not about who is best suited for the job like it is in the private sector where people get fired for poor performance. In the public sector it’s about inserting the next turd that rises to the top of the government toilet bowl. And this happens because the turds never get flushed down the toilet in a bureaucracy. They just float to the top and replace the previous turd while continuing to stink up the joint. Everyone else gets to suffer with the stench of their incompetence.
Think about it………….
Anyway, if you want a good take on this fed check out this clip from Professor Jeremy Siegel from Wharton. You know, a real economist who has been around for awhile.
Here is how our portfolio performed in September 2022:
(Our original portfolio goal $1.5m)
Portfolio = $1,238,024
Our Portfolio Decreased By -$118,129 or -8.71% From The End Of August
Year-To-Date Our Portfolio Has Decreased By 24.59%
Net Worth = $1,289,279
Our Net Worth Decreased By -$116,939 or -8.32% From The End Of August
Year-To-Date Our Net Worth Has Decreased By -23.35%
As you can see the month of September once again lived up to it’s billing as being the historically worst month for the stock markets as they were completely blown out. We now sit at our lowest point of the year and our lowest point since October 2020. But, where there is disaster there is also opportunity as we received over $5,000 in dividends in the month of which $4,000 was reinvested into their underlying positions and at a low low price.
Going forward there are two options on the table. If the fed is paying attention to what is going on around them they will be forced to pivot, despite their continued rhetoric, and we will see a nice relief rally in the fourth quarter. However, if they continue to feel the need to try and prove how tough they are because their ego hurts and they have zero credibility, then we are heading for disaster. They have already gone too far too fast and the signs of stress on our economy, and the world economy, are there even if the data doesn’t reflect it yet. If they keep pushing we could be in for an economic meltdown to go along with all of the other problems they have caused over the last couple of years. So buckle up because I give a vote of no confidence that they will do the right thing anymore.
Here is how we did on our spending for September 2022:
Monthly Budget = $5,000
Total spend for September 2022 = $4707
Over/Under Monthly Budget = -$293
Over/Under Budget YTD = -$2,104
Less Prepaid Site Fees = $351
Net Over/Under Budget YTD = -$1,753
Our spending in September was under control for the most part. As expected we paid almost $700 for diesel fuel to travel to Oklahoma. We were also a little over budget on our food expenses as we stocked up before we left Tennessee.
Out of pocket we managed to stay under budget by just under $300. However, since we prepaid for part of our site in Oklahoma and all of our site in Tennessee we have to recognize those expenses in the month. So in total we were actually over budget by about $500. That’s not too bad considering the fuel expenses and paying for two spaces in the same month. Year to date we are now $1,753 over budget net of prepaid fees.
October will be a rough month for our budget as we have our semi-annual auto insurance to pay and we will continue to have large diesel fuel expenses as we will make our way across the country to Arizona where we will stay for the Fall and Winter. The good news is that we have paid our last out of pocket site fees for the year as we only have one prepaid night in Texas left and after that everything is included with our work camping gig. The savings from that, along with the savings from being out of bourbon country, should help us get our budget back to the positive for the year if everything goes as planned.
Speaking of our diesel fuel adventures. Last month we figured we had 2,000 miles in total left to drive. At 9.5 miles per gallon and averaging $5 per gallon we expected to pay about $1,150 to get to Arizona. So far we have managed to stay under the $5 per gallon average we were expecting, but that might change as we head west where everything is more expensive. As of now we have used $2,242 of our $3,000 annual diesel fuel budget and we still have 1,100 more miles to go. We are currently sitting on 3/4 of a tank and will have to fill up at least one more time to get to Arizona.
Technically this means we will be able to stay under budget. However, it’s important that we top off again before we park because it’s not healthy for the RV to sit with an empty tank as that can cause more problems later. So it’s looking like we will be at or just over budget for the year on fuel expenses. If that happens we will take it because this has been a horrible year for this category.
The fun never ends when you are living the dream! Please remember to follow us on instagram for update on our adventures as they happen.
Thank you as always for reading our blog and we will see you on the road………………………
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