Time to vault back into investing
As inflation eases, be ready to snatch up stocks and bonds, experts say
Inflation’s finally cooling, and interest rates may be peaking soon. That means now may be the right time to jump back into the market – even with a potential recession on the horizon, some strategists say.
Forty-year-high inflation and the most aggressive interest rate hikes by the Federal Reserve since the 1980s pummeled people’s portfolios last year. Stocks and bonds, which normally move in opposite directions, plunged simultaneously, leaving the classic diversified 60% stock/40% bond, or 60/40, portfolio in shambles and investors with nowhere to hide. Morningstar’s U.S. Moderate Target Allocation Index – designed as the benchmark for a 60/40 allocation portfolio – lost 15.3%, the biggest annual decline since 2008.
But 2023’s on a different trajectory, offering investors hope they can start rebuilding their retirement balances, some say.
“Overall, the inflation pendulum is swinging back now,” said David Russell, vice president of market intelligence at online securities and futures brokerage firm TradeStation. “The bond market sees it, and so does the stock market. That entire 60/40 strategy can go back to work, and I think we’re seeing that happen today. We’re seeing money flowing into bonds and the S&P and Nasdaq, in particular.”
What happened last year?
When inflation surged to a 40-year high, the Fed hiked last year its short-term benchmark fed funds rate by a whopping 425 basis points total, including three consecutive supersized 0.75-point ones, to cool inflation. Higher rates increase the cost of borrowing for people spending and for businesses to invest in future earnings growth, which slows demand, the economy and inflation.
When interest rates jump, bond prices drop because older bonds become less valuable. Their coupon payments are now lower than those of new bonds being offered in the market at higher rates. The combination of high inflation and aggressive rate hikes set the stage for a rare occurrence: Values of stocks and bonds plunged simultaneously.
“Going back to 1929, there have only been 3 years where bonds didn’t go up when stocks went down,” investment firm BlackRock wrote in a report last year. The last time it happened was 1969, it said.
Dolly Parton has cooked up some new baking mixes with Duncan Hines.
The mixes, hitting stores later this month, are for buttermilk biscuits, cornbread, and two flavors of brownies inspired by the legendary entertainer’s family recipes.
These new baking products build on Parton’s cake mixes and frostings brought to market last year by Duncan Hines.
“I knew Duncan Hines and I were bringing something special to the baking aisle when we launched our partnership last year, and I’ve been thrilled by the response,” Parton said in a statement.
A music legend, Parton is a member of not only the Country Music Hall of Fame but also the Rock & Roll Hall of Fame, into which she was inducted in November 2022. She is also a megastar in the world of food.
What baking mixes does Dolly Parton have?
Dolly Parton’s Buttermilk Biscuit Mix and her Sweet Cornbread & Muffin Mix will cost $3.29. The Fabulously Fudgy Brownie Mix and Caramel Turtle Brownie Mix will cost $3.49.
These new baking mixes will begin becoming available in grocery stores and mass retailers later this month.
“I’m really excited to launch more baking mixes steeped in my Southern roots, like cornbread and biscuits,” Parton said. “I think folks are really going to like them and hope they’ll bake up some special memories with family and friends.”
Also available: A limited-edition Dolly Parton’s Baking Collection ($40) with the mixes, a collectible “What Would Dolly Do?” tea towel, spatula and recipe cards. Members of the online Duncan Hines baking community can also get early presale access beginning Feb. 1. Individuals can join on the Duncan Hines website.
Already in the market:
⬤ Dolly Parton’s Southern Style Coconut Flavored Cake Mix.
⬤ Dolly Parton’s Southern Style Banana Flavored Cake Mix.
⬤ Dolly Parton’s Creamy Buttercream Frosting.
⬤ Dolly Parton’s Chocolate Buttercream Frosting.
What about Dolly’s other food projects?
In 2006, she penned a cookbook titled “Dolly’s Dixie Fixin’s: Love, Laughter, and Lots of Good Food,” with more than 100 recipes inspired by her childhood, Dollywood and her travels.
Also available: a 26-set cookie baking set, sugar cookie mix kit, oven mitt and potholder set, and Advent calendar with Williams Sonoma.
What has Dolly Parton been up to?
She’s working on a rock ’n’ roll album, and back in November Parton got a $100 million donation to devote to charities of her choice from Amazon founder and billionaire Jeff Bezos’ Courage and Civility Award.
Parton is also known for her philanthropic work. In 2020, Parton donated $1 million toward the creation of Moderna’s COVID-19 vaccine.
Prior to that, her My People Fund provided about $9 million in 2016 and 2017 to those who lost homes to fire in Pigeon Forge and Gatlinburg, Tennessee. Since she launched the Imagination Library to boost children’s literacy in 1995, the initiative has gifted more than 197 million free books to children.
Parton, who turns 77 on Thursday, will be celebrated with two shows at the Ryman Auditorium in Nashville on Saturday. She won’t be in attendance on Saturday, but those who visit the Ryman on Thursday can get free birthday cupcakes baked using Duncan Hines Dolly Parton’s Favorite Southern-Style Cake Mix (while supplies last).