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Want Double-Digit Returns? Hold Cash.

So, you want double-digit returns in 2022? Hold cash. Sounds crazy, I know.

Especially today with the mainstream financial media headlines and big shots like Ray Dalio, who laments how ravaged cash is due to inflation. While that is indeed true for…

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So, you want double-digit returns in 2022? Hold cash. Sounds crazy, I know.

Especially today with the mainstream financial media headlines and big shots like Ray Dalio, who laments how ravaged cash is due to inflation. While that is indeed true for a long-term investment portfolio to a degree, maintaining a decent cash emergency reserve and going a step further with a financial vulnerability cushion can get you to double-digit returns.

Want to see how? I’ll show you.

First, let me share a broad perspective concerning the state of household cash coffers. According to a 2021 survey from Bankrate, only 39% of Americans say they could cover an unexpected expense of $1,000. Moreover, the Personal Saving Rate, which skyrocketed to 13.1% in 2020, has retreated to 6.9% as of September 2021. Moreover, real wages, which account for inflation, have declined by 1%. Consequently, the overall state of most Americans is cash poor.

Keep in mind, the decision to hold cash is a conscious tradeoff. The reasons to have cash are as diverse as people are. For some, it’s an emotional Snuggie to smooth out portfolio volatility or ‘dry powder’ for future purchases. Perhaps, you’re an investor dependent on portfolio cash to recreate a retirement paycheck.

Regardless of your motivations, maintaining a cash position is the ultimate protection against unforeseen events, and we seem to have quite a few of them over the last decade or so. Wall Street seeks to grab every dollar we possess, so they employ entire marketing departments to pick your pockets.

Even better, they’re persuasive enough for us to pick our own pockets because they disseminate scary stories about cash vs. the inflation monster. And while cash indeed can succumb to the inflation beast, it depends entirely upon the arena in which cash fights your financial battles. In many cases, cash rises victorious.

Cash is fungible – it channels through every financial category and keeps your household functioning – Sort of like oil in an engine. Therefore, breaking down the mental accounting barriers around cash Wall Street built in your head is crucial. In many cases, cash can provide attractive returns just because it’s available, ready for the taking because you need it!

How valuable are liquidity and preservation to robust financial health? Crucial.

One: Cash provides an attractive alternative in case of emergencies.

The Personal Savings Rate has dropped precipitously since March 2020. Household cash accumulated during the pandemic is dwindling. As a result, credit card usage to service daily needs is increasing. In the case of a financial emergency, would I want cash eroded by inflation or maintain a credit card balance?

Per Bankrate.com, the current three-month trend for credit card interest rates is 16.3%, and with the Federal Funds Rate forecasted to increase at least three times this year, interest rates on credit cards will inevitably go higher as well. So isn’t it worth maintaining six months of living expenses in cash instead of turning to high-interest alternatives?

It seems like a rudimentary question, but it’s common for our brains to categorize financial decisions and make them in a vacuum. For example, some consumers maintain a credit card balance yet have cash in reserves to pay it off. Unfortunately, mental walls prevent the flow of cash to its highest and best use in some instances! One small move and double-digit returns come from holding cash and parting with it at an opportune time.

Two: Cash is an asset class and a respected addition to your portfolio.

In a portfolio strategy for retirees in the distribution stage, it makes sense to hold cash, perhaps a year’s worth. After all, periodic distribution of cash, cash flow in general, is the life’s blood of retirement.

However, what about younger investors with over a decade left to retirement? Cash is still worth a place in an accumulation portfolio. Here’s why:.’

Brokers lament – “Cash isn’t working for you! Cash will lose to inflation!” Well, there are times when cash will do just that. However, it’s the responsibility of your money manager to make portfolio adjustments. The ebb and flow of portfolios to adjust for risk is a responsibility most brokers will not undertake; therefore, they must trash cash regardless of valuations and the market’s overall health.

REMEMBER – It’s not cash forever; it’s cash for now. Can you imagine telling your broker that double-digit returns can come from holding cash?

Here, RIA’s Chief Investment Strategist Lance Roberts outlines the inflation-adjusted return of $100 invested in the S&P 500 (capital appreciation only using data provided by Dr. Robert Shiller). The chart also shows Dr. Shiller’s CAPE ratio. Lance caps the CAPE ratio at 23x earnings which has historically been the peak of secular bull markets. He then conducts a simple cash/stock switching model which buys stocks at a CAPE ratio of 6x or less and moves back to cash at a ratio of 23x.

During the significant inflation of the 1970s in the United States, the value of cash experienced downward pressure. In other words, although the CAPE ratio in 1970 was roughly 23x, a switch to cash didn’t work so well, which validates the erosion of returns on cash. However, the sentiment of this chart validates the fact that holding an allocation to cash during a period of nose-bleed valuation levels is a formidable risk management tactic. As of this writing, the Shiller P/E is 39X.

An idea for a do-it-yourself investor is to maintain a minimum of 5% cash to add to opportunities slowly; I expect significant volatility in 2022 as the Fed clumsily severs its love affair with risk assets by pulling liquidity and increasing short term rates.

As Lance so eloquently states –

“While no individual could effectively manage money this way, the importance of “cash” as an asset class is revealed. While cash did lose relative purchasing power, due to inflation, the benefits of having capital to invest at lower valuations produced substantial outperformance over waiting for previously destroyed investment capital to recover.

Time frames are crucial in the discussion of cash as an asset class. If an individual is “literally” burying cash in their backyard, then the discussion of the loss of purchasing power is appropriate.

However, if cash is a “tactical” holding to avoid short-term destruction of capital, then the protection afforded outweighs the loss of purchasing power in the distant future.”

Much of the mainstream media will quickly disagree with the concept of holding cash and tout long-term returns as the reason to remain invested in both good times and bad. The problem is it is YOUR money at risk. Furthermore, most individuals lack the “time” necessary to capture 30 to 60-year return averages truly.

So, if you want double-digit returns, hold cash because it allows you to pounce on opportunities. Again, cash is an emotional salve since it smooths the overall portfolio ride. Thus cash may prevent a novice investor from bailing out of markets entirely at the absolute worst time.

Three: Cash can magnify your purchasing power.

Mark Cuban recently shared with Vanity Fair magazine that having cash can save money. In the article, he mentions how “negotiating with cash is a far better way to get a return on your investment.” A valid point. Ironically, cash provides leverage. Yet, leverage or debt places a borrower below a creditor in the financial pecking order of things.

For example, I worked with clients through the financial crisis who possessed tremendous leverage and deployed for real estate property offered at distressed prices because of overindebted owners. One client specifically headed to Florida and purchased four Naples and Fort Myers properties for 60 cents on the dollar because he possessed cash and waited for an opportunity. Today, those houses, townhomes provide robust rental income and have appreciated tremendously since early 2010.

Cash is boring; cash is not a riveting topic for cocktail party fodder.

But double-digit returns can come from holding cash.

Are you smart and patient enough to know when to release it?

The post Want Double-Digit Returns? Hold Cash. appeared first on RIA.

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Economics

Peppercomm Named Public Relations Agency of Record for AgriFORCE

Peppercomm Named Public Relations Agency of Record for AgriFORCE
PR Newswire
NEW YORK, Aug. 18, 2022

AgTech innovator taps integrated communications and marketing agency to drive global growth and brand awareness
NEW YORK, Aug. 18, 2022 /PRNewswire…

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Peppercomm Named Public Relations Agency of Record for AgriFORCE

PR Newswire

AgTech innovator taps integrated communications and marketing agency to drive global growth and brand awareness

NEW YORK, Aug. 18, 2022 /PRNewswire/ -- Peppercomm, award-winning, strategic and integrated communications and marketing agency, today announced it has been named global PR agency of record for AgriFORCE Growing Systems Ltd. (NASDAQ: AGRI; AGRIW), an AgTech company dedicated to advancing sustainable cultivation and crop processing to yield more nutritious food with limited environmental impact. AgriFORCE selected Peppercomm following a competitive evaluation of several firms.

Headquartered in Vancouver, British Columbia, AgriFORCE is poised to disrupt the agriculture industry by building a portfolio of proprietary AgTech solutions to help growers achieve higher quality and more sustainably produced crops, alongside branded products and ingredients that unlock superior nutrition for consumers. With an agreement to acquire Delphy Group BV and a binding LOI to acquire Deroose Plants NV recently announced, the company's strategic and holistic approach aims to address key challenges facing the agriculture industry.

"We're pleased to work with a company that can have a real impact on our food and our planet," said Steve Cody, CEO of Peppercomm. "The global pandemic and Russian invasion of Ukraine have significantly affected the food supply chain and accelerated the need for solutions to address these extraordinary challenges. AgriFORCE's IP and expertise are coming to the marketplace at just the right time."

Peppercomm will help AgriFORCE build global brand awareness through an integrated approach that includes strategic counsel, messaging development, thought leadership, earned media and social media, and digital advertising. 

"AgriFORCE is excited to partner with Peppercomm as our agency of record," shared Mauro Pennella, President of AgriFORCE Brands and CMO of AgriFORCE Growing Systems. "Peppercomm has strong experience across agriculture, agtech, and consumer brands, including public companies with multinational operations. We are confident that their tight-knit and senior team, with existing industry and media relationships, can bring to life the vision and purpose of AgriFORCE in the months ahead."

About Peppercomm
Peppercomm is an award-winning strategic, integrated communications and marketing agency headquartered in New York City with offices in San Francisco and London. The firm, which was recently acquired by Ruder Finn, combines 27 award-winning years of expertise serving blue chip and breakout clients with forward-thinking new service offerings and the freshness of a start-up. This unique mix of experience and energy enables the firm to attract and empower teams with a creative edge, drive, and passion for promoting, protecting, and connecting clients in a fast-changing marketplace. Founded in 1995, Peppercomm has received numerous accolades, including Crain's Best Places to Work in NYC 2021, PRWeek's Best Places to Work 2020, the Agency Elite 100, SABRE Award (Integrated Campaign), PRSA Big Apple (2020, 2019 Winner Integrated Campaign), Platinum PR Awards (Media Relations), PRNews Digital Awards (CSR), the Bulldog PR Awards (Media Relations) and PR Daily's Top Agencies of 2022 among others. For more information visit peppercomm.com.

About AgriFORCE
AgriFORCE Growing Systems Ltd. (NASDAQ: AGRI; AGRIW) is an AgTech company focused on the development and acquisition of crop production know-how and intellectual property augmented by advanced AgTech facilities and solutions. Looking to serve the global market, the Company's current focus is on North America, Europe, and Asia. The AgriFORCE vision is to be a leader in delivering plant-based foods and products through advanced and sustainable AgTech solution platforms that make positive change in the world—from seed to table. The AgriFORCE goal: Clean. Green. Better. Additional information about AgriFORCE is available at: agriforcegs.com.

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SOURCE Peppercomm

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NEARLY HALF OF AMERICANS FEEL THEY CAN’T AFFORD THEIR FORMER LIFESTYLE; THREE-FOURTHS ARE SHIFTING GROCERY PURCHASING BEHAVIORS, FINDS NCSOLUTIONS

NEARLY HALF OF AMERICANS FEEL THEY CAN’T AFFORD THEIR FORMER LIFESTYLE; THREE-FOURTHS ARE SHIFTING GROCERY PURCHASING BEHAVIORS, FINDS NCSOLUTIONS
PR Newswire
NEW YORK, Aug. 18, 2022

66% of consumers are more mindful of spending on groceries85% of …

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NEARLY HALF OF AMERICANS FEEL THEY CAN'T AFFORD THEIR FORMER LIFESTYLE; THREE-FOURTHS ARE SHIFTING GROCERY PURCHASING BEHAVIORS, FINDS NCSOLUTIONS

PR Newswire

  • 66% of consumers are more mindful of spending on groceries
  • 85% of Americans are concerned or very concerned about inflation
  • 58%  believe the cost of living will be more expensive in the coming year
  • 46% of consumers say they're buying fewer non-essentials
  • 43% seek out sales and promotions to afford their favorite brands 

NEW YORK, Aug. 18, 2022 /PRNewswire/ -- Nearly half of Americans (45%) feel like they can't afford their previous lifestyle and 76% of American consumers say their family has changed how they buy food with prices on the rise. In addition, two-thirds (66%) are more mindful of how they are spending their money. These findings are part of a new consumer sentiment survey on inflation commissioned by NCSolutions (NCS), the leading company for improving advertising effectiveness.

Eighty-five percent of Americans are very concerned or extremely concerned about inflation and almost unanimously (93%) they said we're in an inflationary time. On the same economic theme, over half (57%) are concerned about the country's financial situation, while 47% say they're concerned about their family's financial situation. Eight out of 10 or 83% of Americans expect the cost of living will become somewhat more or much more expensive in the coming year. Sixty-five percent of Americans agree with the statement 'my income has not increased as fast at the cost of food, beverage and personal care products.'

"For the second time in a little over two years, consumers are pivoting to new purchasing behaviors at the grocery store," commented Alan Miles, CEO, NCSolutions. "Since the start of the pandemic, they've been swapping their favorite brands for what's available. Today, though, value is the centerpiece more often than availability, consumers are selecting brands and products to stretch their budgets as far as possible. CPG brands that meet customers where they are both in this inflationary moment and as prices ease have the best shot at keeping them for the long-term."

SIX YEARS OF PRICE TRENDS
NCSolutions' proprietary purchase data, which reflects the buying trends of consumers for CPG products, shows an almost 13% price increase on average. In a six-year price trend analysis, we see that price increases in 2022 are pacing at an accelerated rate compared to other years.  The survey findings bear this out with 58% of consumers believing the cost of living will be much more expensive in the coming year and 71% feeling the U.S. economy is declining. 

Six-year Inflation Trend

 

Percentage Inflation Change Year-Over-Year

On a consumer packaged goods category level, there are wide variations in percentage increases.

CONSUMERS REACT TO THE PINCH
Compared to one year ago, six in 10 Americans believe CPG product packaging has gotten smaller but costs the same. Consumers still feel the strain of supply chain issues as 69% say there are fewer items of the same product on the shelves. Thirty-six percent of Americans said there is less variety of  brands available on the shelf today compared with one year ago.

Over half (53%) of American consumers say they find basic food staples more expensive; 40% believe a recession will occur in 2023. For almost half of consumers (46%), this means buying fewer non-essential items on the food aisle, or for 43%, it means buying only the essentials.  Seventy-one percent of Americans say the increased price of groceries is straining their savings. For other American consumers, increased prices on the grocery aisle mean seeking out less expensive brands (45%).  Other ways consumers are coping with the increased price of groceries are loading up the pantry (27%) or freezer (26%) or shopping closer to home (24%).

When it comes to consumers' preferred brands, they have to make tough choices. Sixty percent of consumers seek less expensive alternatives when their favorite brands reach a price beyond their budget. Forty-six percent of consumers plan to go without their favorite brands, and 43% of consumers look for sales to offset the cost. In the survey, respondents could select multiple ways they react.

June 2021 vs. June 2022: Inflation Increases by category

"Though it may be tempting to pull back on advertising, a more effective strategy is to recognize and respond to consumer 'stress-flation.' Brands have an opportunity now to build loyalty and attract new customers with empathetic marketing," said Leslie Wood, Chief Research Officer, NCSolutions. "We're heading into a period of heavy CPG purchasing moments, such as back to school and the approaching holidays. Compelling, well-targeted advertising is a proven strategy for increasing brand equity and sales both in the short- and long-term."

CONSUMER PRIORITIES
Respondents were asked, "When shopping for groceries, which products are most important." The majority ranked:

  1. Affordable products that provide a clear value for my money 
  2. Finding food products that feed their families for several meals
  3. Products they know their families will enjoy eating

ABOUT THE CONSUMER SURVEY: The online survey of 2,141 respondents was fielded from June 17- 20, 2022.  Responses presented in this survey were weighted by location, education, income and other demographics to be representative of the overall population. To read more about the findings, you can download the full report

ABOUT NCS
NCSolutions makes advertising work better. Our unrivaled data resources powered by leading providers combine with scientific rigor and leading-edge technology to empower the CPG ecosystem to create and deliver more effective advertising. With NCS's proven approach, brands achieve continuous optimization everywhere ads appear through purchase-based audience targeting and sales measurement solutions that have impacted billions in media spend for our customers. NCS is a joint venture company with  Nielsen as the majority owner. 

View original content to download multimedia:https://www.prnewswire.com/news-releases/nearly-half-of-americans-feel-they-cant-afford-their-former-lifestyle-three-fourths-are-shifting-grocery-purchasing-behaviors-finds-ncsolutions-301608518.html

SOURCE NCSolutions

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Economics

Only 14% of Consumers with Federal Student Loans on Pause Can Afford Payments, ScoreSense Survey Finds 62% of survey respondents say they are delaying major life purchases

Only 14% of Consumers with Federal Student Loans on Pause Can Afford Payments, ScoreSense Survey Finds 62% of survey respondents say they are delaying major life purchases
PR Newswire
DALLAS, Aug. 18, 2022

DALLAS , Aug. 18, 2022 /PRNewswire/ — A s…

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Only 14% of Consumers with Federal Student Loans on Pause Can Afford Payments, ScoreSense Survey Finds 62% of survey respondents say they are delaying major life purchases

PR Newswire

DALLAS , Aug. 18, 2022 /PRNewswire/ -- A survey of consumers with federal student loans on pause, which went into effect during the COVID-19 pandemic, reveals that only 14% of respondents say they can afford the payments with no issues when the forbearance period ends, according to a consumer survey by ScoreSense®, a credit score monitoring product. The survey also revealed that 42% of respondents aren't sure how they will add loan payments back into their budget. The most recent extension to the payment pause, which began in March 2020, continues to August 31, 2022, with payments currently scheduled to restart in September.

18% of survey respondents say they will need to cut budgets or rely on family to help to resume loan payments.

The survey, focused on the resumption of federal student loan payments and implications, included these highlights:

•       To resume payments, 18% of survey respondents say they will need to cut their budgets or rely on family to help to add these loan payments back into their budgets. About one of four respondents between the ages of 18-34 will need help from family members to help with student loans.

  • During the pause, nearly 25% of respondents used their money to pay off debts/loans. Loan holders between 18-34 in age indicated they were more likely to invest the money compared to the older age groups.
  • The resumption of payments will delay major life events for some loan holders, including the purchase of a home (30% of respondents) or having a child (18% of respondents).
  • Loan holders plan to cut expenses to make payments, including groceries (25% of respondents) and children's activities (19% of respondents).

"Unfortunately, we're seeing the perfect storm of economic stress on households where higher prices, interest rates, property assessments, and more is making it very difficult for many people to live within their means. For many student loan holders, making payments in 2020 was much easier than it will be when they resume," said Carlos Medina, senior vice president at One Technologies, LLC., which offers ScoreSense.

ScoreSense serves as a one-stop digital resource where consumers can access credit scores and reports from all three main credit bureaus—TransUnion®, Equifax®, and Experian®—and understand what is most affecting their credit.

About One Technologies

One Technologies, LLC, harnesses the power of technology, analytics, and its people to create solutions that empower consumers to make more informed decisions about their financial lives. The firm's consumer credit products include ScoreSense®, which enables members to seamlessly access, interact with, and understand their credit profiles from all three main bureaus using a single application. The ScoreSense platform is continually updated to give members deeper insights, personalized tools and one-on-one customer care support that can help them make the most sense of their credit. One Technologies is headquartered in Dallas and was established in October 2000. For more information, please visit onetechnologies.net.

View original content to download multimedia:https://www.prnewswire.com/news-releases/only-14-of-consumers-with-federal-student-loans-on-pause-can-afford-payments-scoresense-survey-finds-62-of-survey-respondents-say-they-are-delaying-major-life-purchases-301608129.html

SOURCE ScoreSense

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