It is November 10, 2022;
two days past the national mid-term election, with a few outstanding races still undecided as the last ballots are counted, with control of Congress on the line. As far as I can tell, the financial markets have paid almost no attention whatsoever. We're in a new era this year; inflation is back with a roar. The federal Reserve is doing what it has done previously to get it under control; raise interest rates. There has been a correction in the stock market, the word recession is increasingly being used amongst the forecasters even as employment is at historic highs and personal discretionary spending remains robust.
My wife and I excercised what is known as a 72t early and substantial distribution from retirement assets, a program that avoids the early withdrawal penalty from 401k, IRA assets, starting in 2019, I believe. This coming year, we will no longer be obliged to make that withdrawal, but in the interim we went from high-earning to middle-class average yearly earned income, so we'll probably continue to withdraw at some rate. We are also past the magic age of 59.5, so there won't be penalties regardless. And, we have funded Roth IRAs, opened a joint expense account to which we both contribute a portion of our earned income and distributions. Our boy will graduate from high school this year, has college plans and will take a big piece of our cash flow with him to college. I'm not complaining, only understanding that we will make substantial changes in our financial practices coming up soon.
At this time, there doesn't seem to be a reason to change our basic investment strategy or expectations, other than to anticipate that capital gains are not assured by any means, and capital losses don't mean we have to sell and buy treasury bills.
