2023 Second Quarter Newsletter

              The Fed is in a quandary; if it raises interest rates to try to cool inflation, it also results in all governments (Federal and local) paying a higher rate of interest for their new borrowings. It could become a test for The Fed. They are receiving information on the economy that may lead to an increase in interest rates and they are also receiving political pressure to keep them lower. Hopefully, The Fed will stay out of politics.

                The much discussed and anticipated recession could become a self-fulfilling prophecy if businesses and consumers stop spending. Businesses are not cutting back on employment because they might not get that quality employee back. Employment is high, which is money for consumers to spend, thwarting The Feds’ efforts to reduce inflation by raising interest rates. So far, it is not working as well as hoped. If employment remains relatively high, it might make the downturn shallower than thought. Consumers continue to spend and the result appears to be rising credit card debt. Is the predicted 2023 recession the one that simply refuses to arrive? It looks to me that inflation is slowing and that The Fed will need two more increases to start making meaningful headway.

                The war in Ukraine has taken a different turn. Prigozhin and the Wagner Group have rebelled against Moscow and Putin. I am not a Russian expert, but it all looks like a Russian opera. No one is jailed or eliminated and life goes on. Could all of this be smoke and mirrors so Prigozhin can attack Ukraine from Belarus?

                Investment returns have been OK so far this year. Growth investments are strong and tech is doing most of the lifting. Only a handful of companies are supporting the tech run-up this year. The markets need a broader base to continue the uptrend into the second half of 2023. Value investing has its place, even in this strong growth market. The value stocks and the dividends will appear very good if a recession does come to pass. Value investing is a good balance to growth investing. Historically, stock dividends and corporate earnings are the main drivers of markets.

                It will be interesting to see how corporate earnings will be this quarter, starting mid-July. Those reports will either support the stock markets or hurt them. My guess is there will not be much change from last year.

                The word entitlements is being discussed in the press again. The main question is who and why are individuals entitled and for what? My question is, is it not better for society to try to build a culture of work instead of a culture of dependency? Some folks need financial help. I cannot figure who should be entitled to receive the help.

                Employee productivity (how much each dollar of wages is producing) is not increasing with payrolls. It has been stagnant for the last several years. Artificial Intelligence (AI) may help. We’ll see how well AI translates into higher productivity.

A few thoughts and questions for you:

                Do you have a will and trust agreement? Have you reviewed your beneficiaries and are they still viable? Do you have faith in your next generation to preserve the wealth you have created? Is the trust language what you want?

                If you were hit by a bus, who would help your family? If your answer is Kevin or me, then we should meet your beneficiaries and discuss their situation and your plans.

                Do you own life insurance? If no, why not?

                What provisions have you made to pay for long term care for you and your spouse? Costs are now over $100,000 per year per person. Would you like to pay that yourself or have an insurance company pay for your care? MetLife statistics show about one in every two individuals will require nursing home care before they die.

                If you own a business, do you have a succession plan in place? If no, why not?

                It is not how much money you have, but what that money can bring to you and your loved ones. Money does not buy happiness. It can help, but only if it is used properly.

While we are very busy helping our clients with their financial goals, we are never too busy to discuss the above questions and help you and your other professionals. These are very important and should be reviewed and thought about.

                We have hired a new office admin, Linda, who will work with Pattie. Linda will start working on July 5. Please welcome her and let her know who you are.

                If you like and enjoy our letter, please send it to others that might benefit from it.

                Thank you for your trust and business during these very trying times. We are continuing to search for plans and investments that can help you. There are so many cross currents in our economy and the world’s economies. We are here to help. Please do not hesitate to contact us.


                James F. Mangam, Jr., CFP, CLU                                   Kevin C. Mangam

The Mangam Agency

With over 50 years of combined experience in the fields of health insurance, life insurance, and investments, our team of dedicated representatives will help ensure you are on the right path.

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The Mangam Agency
800 Kinderkamack Rd.
Suite 200 S
Oradell, NJ 07649

Phone: (201) 368-8338
Email: info@mangamagency.com