For the past decade, monetary easing measures implemented by the U.S. Federal Reserve expanded the monetary base but not the money supply. The surge in money supply, aka M2, is a major financial change currently unfolding now.
M2, currency held by the public, plus checking, savings and money market accounts, skyrocketed like never before following the $5.5 trillion unprecedented US stimulus and aid payments in response to the pandemic.
After the global financial crisis of 2008, Fed easing was implemented principally through its purchases of US long-term bonds. That added liquidity to the monetary base, but it did not boost M2.
Fed easing is different this time. Direct payments from Uncle Sam have loaded Americans with an unprecedented cash reserve that’s just been waiting to be spent.
The stock market is at record highs and could keep rising, but inflation risk could cause a sharp decline. Tax hikes are simmering, leaving this last bit of time to act if your adjusted gross income is more than $400,000 or if you, your parents, or grandparents own assets worth more than $3.5 million.
That’s what’s happening now in wealth management.
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The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
This article was written by a professional financial journalist for Derand Capital Management Group and is not intended as legal or investment advice.
The Standard & Poor's 500 stock index is priced at about 21 times forward earnings estimates by Wall Street analysts -- a high P/E multiple by historic standards -- but not as high as the peak of the stock-price bubble in 2000, when the price-to-earnings ratio of the S&P 500 peaked at 25. Moreover, things really are different this time.
Securities and advisory services offered through The Strategic Financial Alliance, Inc. (SFA), member FINRA and SIPC. mel r. hertz is a registered representative and an investment adviser representative of SFA, which is otherwise unaffiliated with SFA.
We are registered to sell Securities in the following states: Arizona, California, Colorado, Hawaii, Michigan, North Carolina, New Mexico, Nevada, Oregon, Texas, Washington.
Securities and advisory services offered through The Strategic Financial Alliance, Inc. (SFA), member FINRA and SIPC. mel r. hertz is a registered representative and an investment adviser representative of SFA, which is otherwise unaffiliated with Derand Capital Management Group.
We are registered to sell Securities in the following states: Arizona, California, Colorado, Florida, Hawaii, Louisiana, Maryland, Massachusetts, Michigan, North Carolina, New Mexico, Nevada, Ohio, Oregon, Texas, Washington.