When it comes to grocery prices, some items have seen more dramatic changes than others. Take eggs and pork, for instance.
Although prices have dropped in recent months, egg prices in June 2024 were 10.2% higher than those in June 2023. (1) Meanwhile, pork prices increased by 3.81% from last year. (2)
These fluctuations show how unpredictable food prices can be. And when we look at more specialized items, like those used in sushi, the price changes can be even more striking. (3,4)
Whenever you listen to financial experts, there’s one topic that will almost always come up: interest rates. But what do interest rates have to do with your portfolio and wealth?
It turns out, a whole lot.
When you hear the term “interest rates” on the news, it’s usually referring to the Federal Funds Rate, which is the rate that banks use when borrowing from one another. This interest rate is the benchmark set by the Federal Open Market Committee (FOMC), and factors in current economic conditions like inflation, employment, and GDP growth.
But why should you care about the Federal Funds Rate?
Geopolitical events and earnings reports drive long-term investment returns, right?
Think again.
Global occurrences like the Cuban Missile Crisis and Iraq War have only resulted in short-term changes for the market, and not the long-term effects that investors might have imagined. (1)
This is just one of several key factors that don’t play a role in your long-term returns (or as much as one might think). But most investors still overvalue the importance of these political occurrences on long-term returns. So what then?
