Hi friends!

This weekend, three big holidays overlap: Ramadan, Passover, and Easter. If you celebrate any of those, we hope you have a wonderful time. And if not, no harm in a little extra chocolate from the grocery store sale section, right?

As for our usual business, this week we’ll learn more about what an inverted yield curve means. Then, we’ve got some tips for sustainable living (Earth Day is coming up!).

Okay, what the heck is a yield curve? It’s basically a way to model the relationship between long- and short-term interest rates of fixed income securities issued by the US Treasury. An inverted yield curve means the short-term interest rates exceed the long-term interest rates. This is uncommon, because we expect longer maturities to have higher interest than shorter ones.

Last week’s yield curve was inverted for the first time since 2019, contributing to investor concerns over inflation, the war in Ukraine, the Fed, and more. There are three important factors to consider when thinking about the impact of an inverted yield curve:

• They can point to a pending recession, but not on any particular timeline. In the six recessions since the 1980s, the yield curve inverted nine to 23 months ahead of time, so it’s not the case that a recession is definitely going to happen next month because the yield curve is inverted now.
• Not much has changed for long-term investors over the past week. The curve behavior is driven by forces we already know about, like inflation, supply chain problems, the war in Ukraine, the raising interest rates, and more. If these trends are predicted by the market, the market has a chance to steer around them.
• Even with the curve inverting, real inflation-adjusted interest rates still stimulate the economy.

Always remember: we work to help you reach your goals here at Obsidian. We want to answer your questions, and to assure you that this inversion is nothing new and something we have faced before.

Speaking of the future! Earth Day is approaching (or, if you’re an Xennial, you know that every day is Earth Day–there’s a free earworm for you). Here are a few things we can do as individuals to live more sustainably:

• Clean your air filters. It’s better for you, and it makes it cheaper to heat and cool your home.
• Choose products based on packaging, when you can. For instance, produce wrapped in plastic is less sustainable than produce that isn’t. Bar soap is better for the earth than body wash in a plastic bottle.
• Line-drying your clothes is much less expensive from an energy standpoint and it’s better for your clothes, so you’ll have to replace them much less often.
• Consider how to travel sustainably: staying in hotels that support sustainable practices, take public transportation, and don’t ever litter.
• Buy second-hand. Thrift stores always have something surprising and cool, and a lot of well-made furniture and clothing winds up there.

That’s it for us this week! We’re looking forward to being right back here next Friday.

How We Help

One of the attendees from our MillionHeir Mindset webinar realized that his house was titled in a particular way with family members that is no longer relevant to his goals. He learned that his home needs to be re-titled to protect him from any liability and make it a more tax efficient transfer to his heirs when he passes. As a result of having learned that from our webinar, our client changed the name on his property. We’re so happy that our webinar made an immediate impact on someone. Stay tuned for upcoming dates!

Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Securities are offered through Triad Advisors, member FINRA/SIPC. Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.