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Obsidian Planning
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Obsidian Market Update 8/12/2022

Hello friends!

 

This week, we’ll take a look at the unemployment numbers and inflation. Then, we’ll explore some of the best places to live in the world.

 

Before we get into the economic news, we wanted to let you know that Pat and Todd will be traveling to the BEI exit planning conference next week. We hope they have fun in Denver, and we know they’ll come back with even more up to day information on helping you plan the perfect exit strategy for your business.

 

Unemployment is down and at 3.5%- well below the average rate of 5.74% since 1948. That is generally good news. But adding jobs can also increase inflation. Both high unemployment and high inflation are bad for our economy, so what should we think?

 

Financial experts are worried about the idea of a very low unemployment rate because those who rely on the Phillips Curve believe it can contribute to inflation. Essentially, low unemployment means employers have to pay higher wages–and we have been in a decades-long period of low inflation and low wage increases. This can be good for workers but can also prompt companies to raise the prices of goods and services.

 

It is worth mentioning that the Phillips Curve is not always in style and may work better as a short-term model than a long-term one. Economics is a complicated field and even the smartest people in it can disagree with each other’s well-researched ideas. We’ll continue monitoring the situation, and as always, give us a call if you have questions about how this affects your portfolio.

 

Thinking of making a move? Maybe it’s time for a change of scenery. If you want to make a choice based on research, the 2022 Global Liveability Index has you covered. Using the metrics of stability, healthcare, culture and environment, education, and infrastructure, they ranked the top 10 places to live in the world. If you want to move to one of these cities, get your visa applications in order, because none of them are in the United States (or Central America, South America, the UK, or Africa). Here are the top five:

 

  1. Vancouver, Canada: What’s not to love? It’s beautiful, it has great restaurants, it’s laid back. The cost of living is through the roof–it’s the third most expensive city in North America–but for those who can afford it, it’s Pacific coast paradise.
  2. Calgary, Canada: Tied for third is another beautiful Canadian city. Perfect for mountain lovers, Calgary also boasts excellent infrastructure and North America’s first-ever Muslim mayor.
  3. Zurich, Switzerland: If you’re looking for a spot buzzing with creative energies that is also clean, efficient, and well-run, Zurich is the place for you.
  4. Copenhagen, Denmark: This bike-friendly city has some of the best restaurants in Europe and a thriving arts community. Plus, great healthcare, education, and political stability. Sounds like a dream!

And in the number one spot: Vienna, Austria. Vienna has it all. Beautiful baroque streets, historic everything (parks, buildings, probably lamp posts), a vibrant culinary scene, more museums and operas than a person could handle in a year–what else could someone want? Glad you asked: the government’s approach to infrastructure and housing makes the cost of living much more affordable than any other city in the top five.

 

That’s it for us this week! Let us know which of these cities you move to so we can come crash on your couch, and we’ll be back in your inboxes next Friday.

 

How We Help

 

Obsidian recently received a referral from a long term client. This family engaged us to build their unique Lifestyle Protector Program. As part of the process in reviewing all their documents, we discovered a very common theme within their portfolio. First, their investments were being managed as silos rather than as a family portfolio to achieve the couple’s long term goals. Second, and more urgent, was the fixed income allocation of their portfolio. Most people believe that equities are the most volatile and risky assets to hold in a portfolio. However, fixed income and bonds can be just as volatile as stocks in certain environments. (Bond prices move inversely to interest rates. When interest rates rise, bond prices fall, and longer-term bond maturities fluctuate more.) This family consolidated their assets to Obsidian to align them with their financial plan. We rebalanced the portfolio to resolve their risk exposure in the fixed income allocation to account for the current interest rate environment.

 

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.

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