BUILDING A BETTER RETIREMENT

Executive Summary The S&P finished the week at 6,114.69 The 2-year yield hit 4.38% after the Consumer Price Index (CPI) was released on Wednesday, but ended the week at 4.27% Investors dumped stocks when the CPI report was released Producer Price Index (PPI) has accelerated for five straight months PPI is a leading indicator of consumer inflation Inflation expectations are rising among fixed-income investors The 5- &10-year breakevens are rising The Stock Market

Executive Summary The S&P finished the week at 6025.99 The S&P has been trading sideways since 11 November Volatility (VIX) has spiked five times since last fall each time falling quickly back to mid-teen levels Microsoft, Alphabet, and Amazon have contributed to the negative tone with cautious guidance The Equity Risk Premium has been falling over the last 14 years Bonds have been a horrible investment over the last three, five, and ten years The jobs market continues to show strength Consumers' inflation expectations are increasing The stock market is expensive and will return less than its long-term average over the next decade Good stock picking will be critical if investors are to earn a return close to the long run average. The equity risk premium is too low which may make Treasury bonds a better investment than stocks on a risk adjusted basis over the next decade. Treasury bonds may outperform stocks over the next decade but not necessarily over the next few years since the 10-Year could rise another 100 basis points in the short term. The Stock Market