Welcome to Quantitative Tightening

Welcome to Quantitative Tightening

 

‍June 2022 - Welcome to Quantitative Tightening

HOW TO SURVIVE WHAT COMES NEXT

Clear your mind and place yourself in Stuttgart, Germany at the Mercedes-Benz Museum on May 5th, 2022. On this day, you’re not at the museum for a tour, but instead a RM Sotheby’s auction. You find yourself sitting in a room with an “invite only” crowd, which happens to be some of the wealthiest car collectors in the world. You, yourself are one of them.

 


Only one item is up for auction, a 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupe, which is considered to be “‘the most beautiful car in the world’ by automotive experts and enthusiasts worldwide.” As the auction begins, your heart begins to pound, you ready yourself to make your best and highest offer to take home “one of the great jewels of motoring history.” The bid opens at ~ $50 million and you quickly raise your number. The bid jumps quickly to $55 million, then $60 million. You jump back in and raise your number at $75 million, knowing if bids go any higher, the “jewel” will slip through your fingertips.


The bid continues. As it exceeds $100 million, you find yourself asking, “Who can pay over $100 million for a car?” Twenty minutes later, the auctioneer smashes his gavel against the table and yells, “Sold to you sir!”


The 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupe sold for $143 million to a private owner, making it the most expensive car known to ever have been sold. Although $143 million is a lot of money, especially for a car, how about ~$8 trillion plus?

 

The financial markets experience an auction daily, as buyers and sellers trade positions. Buyers raise their “number,” the auctioneer slams his gavel and assets trade “hands.” Over the past 15 years, there has been a “private buyer” in the marketplace raising their number. Only it isn’t a wealthy car collector, the private buyer has been the Fed. Their pockets are full of liquidity, which is unrivaled by any individual or entity on the planet. Due to this, the Fed has created a mirage in the marketplace by throwing their weight around and bidding up prices in real time. Unfortunately, this has made it difficult for the everyday investor to gauge the true value of assets in the marketplace.

 

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Aex Willard,
Investment Advisor Representative
LeConte Wealth Management


 

HOW TO STAY SAFE ONLINE

It’s not uncommon for me to get an email or an instant message from a friend or colleague with the subject “I’ve been hacked!” I’m also surprised that my car is still working after all the auto warranty phone calls I received on a weekly basis. Cybersecurity and ransomware attacks are more prevalent now than ever before. We see the sophisticated phishing emails hit our email inbox and change our passwords when prompted more often than we used to. With this rise in online criminal activity, here are some steps you can take to protect you, your assets, and your information if and when a cyberattack is launched against you.

 


Be cautious when opening your emails. Don’t trust a link or an attachment in forwarded email. Also, pay attention to the source of the email. A message with the Microsoft logo may not be from Microsoft. Never ever click on a link that you don’t trust.


Keep your information secure. Be mindful of your passwords and change them often. Also, consider using two-factor authentication for your email, social media, and password manager accounts. And don’t forget to keep your computer files backed up regularly in a secure place.


Trust, but verify. Never give out your personal information without verifying the source. Remember the U.S. Government will not call, text, or contact you via social media about owing money nor will an institution or company ask you for bank account information to receive funds. When in doubt of whether or not to trust an electronic or phone request, don’t hesitate to ask questions and do further research.


You can find other great resources and information on the Department of Homeland Security webpage, www.dhs.gov. Using the three tips above can help protect your identity and your information online.

 

Kevin Painter,
Managing Partner
LeConte Wealth Management

 


The Money Talk

As local high school graduations are taking place, there will be plenty of tears amongst parents in the audience. Could it be that they realize that they are about to spend tens, if not hundreds, of thousands of dollars over the next several years in the hopes that their kid(s) will earn a decent degree, setting them up to have a successful career for decades to come?


There is a little bit of light-heartedness with that question, but maybe for some parents it’s a reality. While “success” can mean different things to different people, parents hope that college can transition their teenage kid(s) to responsible, level-headed and productive members of society. Hoping they understand college is not just for fraternity/sorority parties and late nights with friends, but about becoming better time-managers, prioritizing, setting boundaries and developing a work ethic that will lay the foundation for success in “The Real World.” If these hopes come true, parents have greater faith in having more meaningful and impactful conversations with their now adult children.


 

Over the next two decades, $68 trillion in wealth will transfer from Baby Boomers to their heirs and charities. Many adult children will have never dealt with a sudden windfall, know how to manage their inheritance in a way that is conducive to achieving their own objectives or goals, or even know such an inheritance was to be expected. Money can be seen as a topic amongst family members that should never be brought up, similar to talking politics with loved ones that don’t see things the way you do. However, the consequences of not having a plan in place when the inevitable occurs far outweighs a potentially uncomfortable conversation. Having the dreaded “Money Talk” with your children is not one that many parents look forward to, but once “The Talk” is had, it can lead to peace of mind and avoid a level of anxiety, tension and chaos down the road.

 

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Wes McNeillie
CERTIFIED FINANCIAL PLANNER
 
 


Contact us

865-379-8200

info@lecontewealth.com