David Greene, CFP® discusses what inflation is and its impact on the markets.

Hello, and welcome to this summer 2021 edition of the CJM tutorial video update. My name is David Greene, I’m CEO and Principal here at CJM Wealth Advisers. Big topic today, so we’ll jump right into it, inflation. You’ve been hearing about it, reading about it, seeing various different headlines. What’s going on with inflation? Let’s start with a simple definition, and we’ll kind of throw it up here. Inflation is an economic term that refers to an environment of generally rising prices of goods and services within an economy, and as prices rise, the purchasing power of consumers decreases.

So now that we have a definition formally, we can also throw up a quick funny here. This is what it feels like. So just when you think that you’ve found your pot of gold at the end of the rainbow, we realize that the pot of gold is maybe not as large or doesn’t purchase as much as we thought it would. So how does it apply to what’s going on currently? Because if you’ve tried to rent a car or purchase a car, do a house project, fill up your gas tank, prices are rising. And that’s a fact. The empirical data suggests that that’s what’s going on. If we throw up a quick graph here, we can see that over the last several years, it’s been within a range, and then towards the right-hand side, you can see that, in fact, there’s been a spike here recently. The fed is describing this as transitory, so somewhat, I guess you could say not permanent or potentially short-lived. And so why are they saying that, and what’s causing this?

Well, there’s two main things. We’re in the midst, hopefully coming out of this global pandemic, certainly in the United States. On the supply side, there hasn’t been as much creation of raw materials, timber, metal, et cetera, and then the manufacturing of goods and services has slowed down because workers weren’t working. So there’s a lot less a supply of everything, basically. And then, because we haven’t done anything in 15 months, there’s a huge demand. So people want to buy cars, or do projects around the home. And so timber, if you want to build a fence, is going through the roof because projects are demanding that. So those are the two main competing aspects going on here, and what feels like a pinch is… The question becomes is, how long is this going to last? Are we back into the ’70s and ’80s?

And the quick answer is we don’t know, but if we throw up a historical look, graph, as to where inflation is relative to past decades, we can see that although there is a spike, we’re still well within range. And we need to understand this within the context of inflation has been quite low for the last five to 10 years, so when we bring it all together and look at the short-term facts, that inflation is rising within the historical context, we just want to be aware of what may happen. The fed could eventually decide to raise interest rates, although currently it doesn’t look like they’re going to do such a thing until 2023. That may change based on the recent data. And we know that interest rates can make it more costly to borrow, and it has an impact on the economy. So normally they won’t do that unless they think that the economy is really growing almost out of control, which it doesn’t really seem to be doing at this point.

Other thoughts and impacts, factors to consider as the fact that the money supply is increasing with stimulus and infrastructure packages, PPP loans, et cetera. So there’s more money in the economy chasing fewer goods and services. Just need to be aware of this. That’s kind of a political football that we’re not going to address in this brief tutorial, but we just want to recognize that inflation is out there. It seems, based on the current economic situation, that it is going to be more transitory as opposed to a long-term shift and no real indications of some sort of hyper-inflationary situation at this time.

So that’s a quick look at what’s going on with inflation. Hopefully that’s helpful to understand what it is, what the factors involved are. We’re taking a look at it. As always, please reach out to us, give us a call, shoot us an email if you have any questions. Appreciate your time and attention, and look forward to speaking with you soon.

CJM Wealth Advisers is thrilled to announce that Jessica Ness has become a Principal of the firm as a Senior Vice President.

She joins the other three Principals on the ownership team, David Greene our CEO, Brian Jones our Chairman, and Tracey Baker our President.  CJM is proud to continue our long tradition of investing in our team members to help them achieve their career goals, and we celebrate alongside Jessica as she achieves her goal of business ownership.

Jessica joined the CJM team in 2014 after helping establish another successful registered investment advisory firm. During her career, Jessica has been listed as a Top Financial Adviser by Washingtonian Magazine and Northern Virginia Magazine, and has been quoted in multiple industry publications.  She was also recently chosen to participate in Pershing’s Next Leadership Forum, which is composed of an elite group of young firm leaders from around the country.

As a graduate of Virginia Tech’s nationally ranked financial planning program, Jessica is passionate about the financial planning profession.  She enjoys getting to know her clients and finding solutions that fit their priorities and values.  Jessica’s clients appreciate her ability to explain complex topics in an easily digestible way, giving them the information they need to make important financial decisions.

Congratulations Jess!! CJM clients and team members are excited for you to be part of the ownership team!

2020 has thrown us a curve ball like we have never seen before.  Thankfully, at CJM, we were able to adjust and accommodate to be able to provide a safe work environment for our employees and a seamless, continued level of excellence in the service of our clients. We focused on teamwork, synergy and communication in order to transcend what was going on in the world. We appreciate the flexibility of our client family as we faced the new normal of the “Zoom” meeting and the challenges of working remotely.

Usually at this time of year, we send this letter as an annual recap of the CJM events, volunteering efforts, fun times in the office, and personal photos (everyone’s favorite). There have been many sacrifices this year, including the personal time spent together, so we were left with very few pictures to share of the team. Rather than sacrifice all of the pictures, we simply included personal photos of our team and families.

Although our plans for client and volunteer events had to be postponed, we were still able to donate to several organizations that focused on caring for those most affected by the pandemic.

• Feeding America
• Salvation Army
• American Red Cross
• Lamb Center
• NVFS
• Justice for Vets

We cherish the memories made with our work family and the extensive quality time with our home families too!