Starting 2022 with Empty Pockets?

Some of us have begun 2022 with empty pockets. Take the homeless, for example. Indeed, they begin every year in this state.

The governor of the great State of New York - who shall remain nameless - has announced "teams" will be created to deal with the homeless. They'll get to know them and help them...somehow. Those I know who work the streets for a living at best rolled their eyes; at worst, realized their tax dollars - for which they work hard - will pay for this.

A not-governor of New York, but a resident thereof, recently made a suggestion that might make some sense. I heard him say this before the governor's announcement. Why not restore those big facilities in the Catskills - once resorts where Jewish families once scampered from the hot summer pavements of the city to enjoy a respite with others of their community. Some of us remember the names of these resorts, for example, Grossinger's, Brown's, etc. We had Jewish friends who would talk excitedly of their plans to head north once summer arrived. Since some of those facilities still remain standing in various states of disrepair, they could be fixed up and provide a decent and humane environment for our penniless brethren. At least such folks with empty pockets won't be stuffed into luxury hotels in the city, as was the case under the previous mayor - who shall remain nameless - and who created all sorts of trouble in the neighborhoods where they were concentrated.

We'll set aside any discussion of homeless who indulge in booze and drugs, and how they might fare upstate, away from their suppliers. Either they'll find new sources of chemical oblivion, or - wouldn't it be nice - they'll dry out and live healthy, decent lives away from the lures of the big city.

But what do I know?

Investment managers of all stripes begin 2022 - and every new year - with empty pockets as well, in a way. Typically paid monthly or quarterly in arrears for their services, some are assured of a paycheck simply because they charge a fee based on a percentage of the money they manage. So empty today, but flush tomorrow. Those who pare compensated based on performance, though, may be a little light in the wallet if things keep going as they did the first week of January. Stocks were down 1.8% for the week; bonds down depending of the duration of the instrument held; precious metals all down as well, with Gold, the king of the metals, down that same 1.8%. If the trend continued in a straight line over the course of 2022, client accounts would be down about 93.6% (which it won't). While investment managers who charge based on the money they manage wouldn't have totally empty pockets, they might - depending on their other personal resources - find those formerly Jewish resorts attractive living quarters were they eventually be refurbished (which they won't).

Then again, they say as January goes in the stock market, so goes the year. While such "rules" are never 100% useful as forecasting tools, they do apply more times than not. While it's only been a week, it'll be interesting to see how the rest of the month goes.

But whether January ends up or down, it likely won't improve the various divergences that have stared us in the face for months now. As the major indices - S&P and the Dow and the NASDAQ - clawed their way to new highs in 2021, other indices that measure stock performance did not - and glaringly so in many instances. Usually these signals serve as warnings that a general uptrend is rising on wobbly legs. Of course, if you heeded such warnings you watched the happy campers who put all their money in passive S&P index funds and ETFs eating steak while you grumpily scrounged for a bowl of mush.

Sometimes - like in 2021 - its better to float with the boat of the uninformed rather than sail with those who try to make sense out financial markets in order to prudently hedge their bets in order to preserve capital.

Meanwhile, this first week of January brought the first snowfall to our neck of the woods. It wasn't huge, but the stuff stuck, so the shovels were retrieved to clear walkways and driveways. Despite the sub-freezing temps, there was no wind and the snow was amenable to being cleared away relatively quickly. So the final day of the work week began with some invigorating outdoor action. It was just as well as it's been unnerving watching all the assets in our portfolios start the year in the red.

But, hey, one-week trends do not a market make. Just as governor-created homeless service teams (whatever they might be) will likely do nothing to improve the homeless situation that's become a growing problem when combined with the growing crime on our city streets. 

Of course, in the end, none of this will matter. Flush with cash or empty pockets turned inside out, we're all going to face our Maker some day. He won't ask us if we were homeless or lived in a palace. He'll know all about us and wait for us to explain it all to Him. Whatever the markets have in store for us, however our politicians spend our hard-earned tax dollars, it will be how we responded to our circumstances each day in our thoughts, our words, and our actions. Somehow, we'll know how all that added up seen in the light of God's Commandments - for better or for worse.

With that in mind, knowing that we'll be accounting for the good and bad in our lives before the Just (and we hope Merciful) Judge, we would do well to take advantage of a New Year to start working on the better to the exclusion of the worse. Consider stuffing your pockets with the better. There will be no empty pockets on Judgment Day.