The Friday U.S. jobs report was a reminder that things are not quite back to normal. Unemployment ticked up to 6.1% as businesses added just 266,000 jobs in April—well below expectations of one million. The negative report, coupled with March’s downward revisions, puts us at 8 million jobs below pre-pandemic levels. But, stocks climbed after the weak data appeared to ease fears about higher inflation.
In the meantime – the rise of bitcoin, dogecoin, ethereum and all other forms of cryptocurrency craziness harkens us back to the days of tulip mania. It occurred in Holland during the early to mid 1600s when speculation drove the value of tulip bulbs to extremes. At the height of the market, the tulip bulbs traded for as much as six times the average person’s annual salary. The excessive greed and speculation eventually led to a crash. Cryptocurrency even as it tries to stay relevant and achieve some form of legitimacy has turned into a casino, much like tulip bulbs.
The ending is not going to be pretty.
Future Wealth’s View
While the jobs report prompts us to exercise caution, it is important to bear in mind that the recovery is not going to be smooth. While the US is ahead on vaccinations and getting life back to normal, things are not going so well globally. Until we conquer the infection globally, US companies will not be able to get back to pre-covid employment levels. And, that brings us back to the importance of making diligent investment choices in our portfolios.
To those who are envying the returns from cryptocurrencies and wish they were holding some piece of the cryptocurrency pie in their portfolio, we would quote a famous statement from a financial advisor, when he was asked by a client – “Can you make me rich quickly?”. He replied – “I can only tell you how to become poor quickly: by trying to become rich quickly.”