by Franklin J. Parker, CFA
The Summary
- We are still in a holding pattern. Economic data continues to be mixed, and investors are now focused on consumer spending through the holiday season. Consumers have largely kept the US economy afloat and investors are expecting that trend to continue through the last month of the year.
- The US and EU central banks are expected to be done raising interest rates and markets now predict rates to begin coming down over the coming year. That expectation has resulted in prices moving higher for risky assets (stocks, bitcoin, etc). Interestingly, GDP growth in the US has started to diverge from other global economies — the Eurozone and Chinese economies have seen GDP growth slow, while the US has seen GDP growth tick upward (see Chart of the Week). The big question is whether the US can sail on her own without growth support from the rest of the world.
- I want to reiterate the challenge of this environment. US stocks have been volatile and traded mostly sideways since April of 2022, and long-dated bonds have had some of the worst returns on record. To be clear, this is a difficult environment to invest through. Even this recent rally has only pushed stocks back to where they were this summer. I am watching for a catalyst to break markets free from this sideways trading, whether that be higher or lower. Again, with such mixed data caution is warranted, and I am reluctant to recommend committing strongly to one direction or the other.
The Details
I watched a docuseries on Netflix this past weekend called Live to 100: Secrets of the Blue Zones.
The series follows bestselling author Dan Buettner as he travels to various blue zones around the world and discusses what they can teach us about living longer and also living better (a blue zone is an area where people live much much longer than the global average).
Buettner finds that there are four basic things that the longest-lived humans have in common, and these are things that can help us not just increase our lifespan, but also lower our healthcare costs through retirement.
First, they live in a way that exercise comes naturally. In some places, a village is nestled into a hillside or mountain making a simple walk to church or friend’s house an exertion. In other places, food from gardens is an important component of their food supply. In all places, however, constant natural movement is an important part of their lifestyle.
Second, they eat well. Long-lived folks tend to have a diet heavy in complex carbohydrates (things like yams, potatoes, sourdough breads) and vegetables. Wine seems to play an important role, as well. In all cases, moderation is the name of the game: only eating until you are about 80% full seems to make a big difference.
While diet and exercise are not surprising, what I found most interesting were the final two:
Having a relaxed and positive outlook on life appears to have a significant effect on living longer. Additionally, long-lived people tend to have a purpose that drives them, a real and expressible reason to live. This is something I can confirm in my own experience, a point I have discussed here before.
Last, the longest-lived people tend to have meaningful friendships, faith, and family connections. Having people around you who care about you, and for whom you care, is a very important component in both quantity and quality of life. Volunteering, faith, part-time work, even exercise leagues, can be simple but profoundly important ways to build and maintain your connection to other people.
For those of us who find our lives out of alignment with these principles, simple and small changes are probably our best bet for getting on a different track. Change one small thing, then another, then another. Before too long you’ll find that your life is different in a very positive way.
Chart of the Week
This week we see data on US GDP, and analysts expect it to post around 5% (annualized) for Q3. That would be a fantastic figure, to be sure especially when one considers that China and the Eurozone are both in a downward GDP growth trend. Can the US continue its stellar performance without other major economies? Markets are celebrating a successful soft landing by the Federal Reserve. However, history is not on our side here. Typically, recessions are global phenomena, and central banks have yet to engineer a soft landing. Yet I must admit that there is a first time for everything. Will this be it?
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