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June Market Update

Economic Data

Inflation has cooled in recent months, with this month's reading (3.3%) coming in unchanged from the prior month. As a result, bond yields fell, and equity prices rose in anticipation of the Federal Reserve cutting rates before year-end. Part of the reason for slowing inflation is weakening demand for retail sales, as retailers have been cutting prices to keep products moving (source). The unemployment rate also ticked up to 4%, which is still historically low and will not likely raise alarms at the Federal Reserve. Finally, home prices have surged recently, moving 7.4% higher in the last 12 months (source). This comes as mortgage rates have remained steady at 7%+. This price increase is causing many to wonder what the implications will be if interest rates (and by extension mortgage rates) decrease.

Lifestyle-Based Alzheimer’s Breakthrough

The results of a clinical trial aimed at reducing the progression of Alzheimer's disease were released earlier this month, and its results could have major implications for the treatment of the disease and by broader extension, financial planning. Researchers set out to see what impact lifestyle changes could have on a group of participants (average age of 73) diagnosed with Alzheimer's disease. After 20 weeks, all of the people showed improvement in cognition and function and had significantly less progression of the disease than the control group. Researchers modified four key areas of lifestyle:

  • Diet: A whole food, minimally processed plant-based diet.

  • Supplements: Omega-3s and a multivitamin among others.

  • Exercise: Walking for 30 minutes daily and mild strength training three times per week.

  • Stress Management: Meditation, breathing exercises, and stretching for one hour per day.

  • Group Support: Participants and spouses met for 1 hour sessions, 3 times a week to discuss experiences and challenges dealing with Alzheimer’s.

While this is just one study, it highlights a bigger trend of our increasing understanding of how the human body ages, and what we can do to live more comfortably into our elder years. There is no reason to expect this trend to stop, and if anything it is likely to increase. From a financial planning perspective, a longer, healthier, and more active period of retirement comes with increased costs. This longer potential lifespan underlines the importance of a long-term sustainable withdrawal rate. Many times we come across people who think they will be lucky to live to a certain age due to various family history and lifestyle reasons. They could find themselves living comfortably much, much longer, so it would be wise to plan for it. For anyone interested, the full study can be found here:

Europe’s Changing Political Winds

June saw a rightward shift in the political landscape in Europe with nearly all major countries participating. In France, the National Rally party (conservative) won nearly double the votes of Macron’s centrist party. In response, Macron dissolved parliament and called for snap elections which will be completed in early July, a move widely expected to backfire (source). In Germany, the far-right AfD (Alternative for Germany) surged to become the 2nd largest party, while Chancellor Olaf Scholtz’s party scored its worst result ever (source). In Belgium, the left-leaning prime minister resigned after his party had a poor showing in their elections. Similar moves came in Italy, Austria, Spain and Luxembourg. A common theme of the emerging parties is opposition to immigration, which has surged in recent years. Furthermore, continued distrust of elites and concerns about the economy and inflation have disillusioned voters selecting previously unpopular parties. Some are saying this rightward shift is a preview to the elections in the US, but as we all know, only time will tell.

As always if you have any questions, please don't hesitate to give us a call.

Citrus Wealth Management

O: 909.312.4412 // F: 909.312.4441

1461 Ford Street, Suite 103, Redlands, CA 92373

Any opinions are those of Citrus Wealth Management and not necessarily those of Raymond James. The information contained in this email does not purport to be a complete description of the securities, markets, or developments referred to in this material nor is it a recommendation. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results.


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