January 15, 2025

Dear Friends:

Inflation Sensations

Jimmy Carter recently passed away at age 100 and although his record and legacy are mixed, most all who knew him said he was a good and kind man who treated others well and served our country to the best of his ability.  He also led a peace agreement between Isreal and Egypt that still stands to this day.  However, in terms of his legacy he had 2 major issues.  One was the Iran hostage crisis (not discussed here) and the other was that his presidency was decimated by runaway inflation which went from an already high 6.5% when he took office in 1976 to over 10% in 1980.

Out of control inflation drove up the cost of everything and put many Americans out of work.  Singer Barbara Mandrell had a hit song at the time that exclaimed “a Dollar’s worth of gas won’t even start your car!”.   (Financial Markets don’t generally like inflation as we experienced in 2022 and more recently with the pullback in the last month or so as fears of inflation were raised again.)  By the time Ronald Reagan ran for office in 1979, taming inflation was paramount. Under his tenure, inflation went back down to 4.1% and the US economy took off, enjoying rapid growth for several years.  The implemented strategies at the time were fed funds rate management, emphasizing fiscal responsibility, and incentivizing companies to invest, innovate, and increase productivity.  Assuming current policy officials can find similar success in taming inflation, the market could very well respond favorably with the words of the indelible rapper Biz Markie: “Oh Baby, you, you got what I need!”.

Market Updates – Strong 2024 overall, though sluggish Q4 due to inflation and other factors

During 2024, markets climbed the proverbial “wall of worry” to produce strong gains in all 4 major indices (S&P 500, Dow, Nasdaq, and the Russell 2000 (Small Cap) Index).  Similarities to late 2016/2017? Coming off a strong 2016, markets were choppy and mostly flat during the first half of 2017 before responding to tax cuts and economic growth indicators, moving up and ending the year up 8-12%.  While there are always differences and we are not trying to predict exact the timing, we do believe small cap stocks in particular are not priced unreasonably and offer an intriguing opportunity with the recent pullback.

Tax Statements for 2024

Just a reminder that most tax statements will go out in February through March 15.  You will likely not receive any tax statements before February 10^th.  If you have accounts through our partnership with Altruist you will receive 2 statements – one from Altruist and one from SSG (for the Jan-Oct 2024).  Please reach out if you have questions about tax statements or any other items.  We are extremely grateful for each of you and thank you for your partnership!

Regards,

Mitch Anderson                                              Destin Tompkins