2021 SFG Q4 Newsletter Update

October 11, 2021

Americans are typically an optimistic lot, yet ‘we’ suddenly turned gloomy in August as demonstrated by the University of Michigan Consumer Sentiment Survey, dropping more than 13% in August to the low for this decade. Moreover this is part of a trend, since going back to June the index is off more than 20%.  Why so gloomy?  The continuing problems related to COVID-19 and the up and down rules seem to play a part, but there has to be more.  Our own sense is that it is a combination of rising prices which are frequently seen in big ticket items like cars or homes, as well as the uncertainty over major tax and financial policy changes currently being contemplated, not to mention ongoing tensions with China, Afghanistan and other international cohorts. The pace of hiring is also slowing, meaning the unemployment rate will only improve slowly from here.  As I’ve said to many of you that have asked, the economy is extraordinarily resilient, but the marketplace is made up of millions of consumers making decisions and they just want and need to know what the rules will be. Certainty is a big comfort. When tax laws and other regulations are unresolved, consumers as well as business start to stand still wanting to “see how it all plays out”. While the stock and real estate markets have recovered and thrived in this expansion since the 2020 lows, there is a sense that maybe some segments may have gotten ahead of where fundamentals would dictate; markets may take a pause and/or back track a bit.

Americans strive to do better for themselves, their children, families and communities. Within the Sterling Financial Group employee family, we have clients, friends, and staff involved in churches, schools, conservancies, children’s homes, senior centers, architectural heritage, military family support, and hospital volunteering, just to name a few.  According to Giving USA’s annual report for 2020, American’s gave a record $471 Billion last year, more than a 5% increase over the prior year and more than 2.2% of USA total GDP. During a global pandemic.  Why?  Because we help people, that is what we as Americans do.  We volunteer our time, expertise and treasure, to help those in need.  Do we do so perfectly? No.  But just as we assisted and rebuilt lives and organizations devastated in the 9/11 tragedy some 20 years ago, Americans continue to give at twice the rate of other countries.  Not because of the tax write-offs. Because it is the right thing to do.  We strive to fulfill the promise of all the good fortune we may have had from the start of our lives, or from overcoming the hardships and challenges many of you have faced, AND, just simply to help because we can.  So in this time of uncertainty I am reminded of Warren Buffet’s comment in his shareholder letter: “Never bet against America.”  My belief is that the drive, mobility, capital markets, and robust start-up innovation community,  not to mention our legal and regulatory framework, means that this country’s brightest days are still ahead of us. How else can a television show like Shark Tank be near the top of the rating charts for 12 years?  Please keep striving to help yourselves, your families and your communities to continue getting stronger, and let us know if we can assist in any way.