by A Raymond Randall
Lisa and I walked 5 miles around Boston to celebrate our wedding anniversary. The Swan boats, Italian food in the Northend, a new “doo” for Lisa on Newbury Street, and new summer sweaters for me(”About time you got some sweaters with bright colors!”, Lisa said).

At Fanueil Hall Marketplace we watched “Formerly known as ‘Jim the Juggler,’ now known simply as “Jim, from The Jim Show.” Jim does daffy juggling as children giggle and parents laughed (we laughed and giggled). Jim balanced on a large beach ball while juggling.

I cannot stand on a beach ball nor can I juggle. Yet every morning my brain attempts the economic juggle, a dance registered investment advisors do
in their office (privately). No need to mention the balls required, but here is an outline of what each ball lofted represents. Each subject has current relevance, especially when the market movers sell more stock than they buy. I will
define and explain the relevance in my opinion.

* Interest Rates
* Bond Rates
* Inflation

Other influences driving the stock market have aggregate affect, but individually lack market-moving clout. So, let’s look at what each subject means to the market.

1. Interest Rates: Lisa’s grandmother laments about the Bush administration while she longs for Jimmy Carter. “Those were the good ole days when the banks paid you for investing!” She remembers a call from a Florida stock broker offering her a 15 leaving 2.67.

Now, let’s calculate what that means to your spending power. We can calculate the affect of inflation: $1+($1 x .2714)= $1.2714 or $1.27. This means your investment account per thousand must earn at least $270 more per thousand just to keep up with inflation.

The current Inflation Rate is 2.57%.

“Inflation causes reduced consumer spending, it squeezes profit margins,'’ said John Kornitzer, who manages $6 billion at Kornitzer Capital Management in Shawnee Mission, Kansas. (Bloomberg.com, U.S. Stocks Retreat on Inflation Concern…, Michael Patterson)

What do you prefer? High interest rates or low inflation? Juggle them if you can; for me, logic recommends asset allocation.

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