The long-awaited ‘Infrastructure deal” finally arrived as of yesterday. Everybody cheered. Republicans joined Democrats in pointing out the various compromises made, applauding ‘all the hard work’ put forth by both sides and a politically divided America paused as common ground was found for the common good.

President Biden stepped out of the White House and apparently referring to his Republican adversaries, said, “We have a deal. They have my word; I’ll stick with what they’ve proposed. And they’ve given me their word as well. Where I come from, that’s good enough for me.”

We must admit, that sounds promising. And, if one is feeling the spirit of optimism, there are even more good words being said; Susan Collins (R-Maine) assured us that working out the budget went rather swimmingly, “We’ve agreed on the price tag, the scope and how to pay for it.” Democrat Joe Manchin explained his pitch to his fellow Dems to not hold out for the whole enchilada, “I would say please don’t let the perfect be the enemy of the good”. Sounds like progress. Not cats and dogs moving in together kind of progress but progress nonetheless.

So, what’s in this deal anyway?

At about $953 billion, the package is merely a shadow of its former self — you know, the six trillion-dollar magnitude of Biden’s proposal. Of the $953B, 559 is going for so called ‘hard’ infrastructure. That’s stuff like roads, waterways, and bridges, as well as electric utilities, broadband internet, etc. Gee, that sounds like the actual definition of “infrastructure”, as most people know it.

We believe that this is a very good deal for America. And for you too. Anyone who has traveled our highways, used our airports or trains or has worried about the electrical grid knows that some serious work needs to be done. That work requires people to do the work and companies to manufacture the parts and supplies, co-ordinate the projects and deliver the goods. All of that contributes to economic growth and stability. As JFK once pointed out, “A rising tide lifts all boats.” Your retirement portfolio is one of those boats.

Now, you could be wondering if there’s a catch. Perhaps you are pondering, “Why did the Democrats give up so much? And so easily?

Well, you might have been listening on Wednesday when Chuck Schumer and Nancy Pelosi gave a super-sized hint for deciphering their strategy.

You see, as we mentioned above, the agreed upon deal is all about ‘hard’ infrastructure. The 5+ trillion that was so delicately — and in the friendliest of ways — hacked off of Biden’s proposal was all about what is being called ‘soft’ infrastructure. Soft infrastructure is made up of things like child care, elder care, climate change and education. Conceptually, there is a problem with the idea of soft infrastructure. Unlike a broken bridge, a missing railway piece, or an airport runway pockmarked with potholes, it is very hard to get people to agree on how some of the things on the list of soft infrastructure actually meet the definition.

Nancy and Chuck are thinking that by categorizing a whole laundry list of wish-list items as infrastructure, they can fund all with a Budget Reconciliation vote, which only needs a simple majority and is therefore filibuster-proof. That may end up being a tough sell. Surely Republicans will point out to voters that “Democrats already voted for an infrastructure bill. Why do they need another one?”

Indeed. The one signed yesterday is the one we needed.

Ron’s Market Minute – Boring?

After last year, which was a really exciting year in markets, (though not necessarily in a fun way) one might think that a bit of time with some rather boring market action might be appreciated.  But perhaps not. A couple of our clients noticed the ‘boring markets’ and called to ask about them. As I explained, on the phone; ‘it’s not your imagination’.

 One of the hardest concepts for investors to grasp, is that markets are quite ‘non-linear’. We generally look at the results of market returns on a year-by-year basis, but over the course of a year we typically have some upward excitement, some downward excitement, and some periods of time when markets seem to go nowhere. 

The past 8 weeks has been one of those. Here’s a chart of the major indexes over the past 8 weeks. Going nowhere is where we’re at.

(Source: FastTrack Charts)

The big laggard over this time was the Dow Jones Industrial Average Index* dropping a rather minimal -0.29%. Rather uninspiring. On the other hand, the big winner over the same time period was the Nasdaq Index* rising by a whopping +1.69%. Also, not particularly inspiring for an 8-week return. The other major indexes (the S&P 500, Russell* and the Equal-Weight S&P Index managed to fall somewhere in between those two performers. 

Think of it as the pause that refreshes. Certainly, less terrifying that last Spring’s markets, but not overly exciting now, either. 

These periods when markets seem to languish tend to not be very long. Perhaps the rest of the year will be more interesting, and hopefully in an upward direction- which is what we are expecting. We’ll see. 

 Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com

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Ron Denk is a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Mr. Denk is also an Advisory Representative offering services through Denk Strategic Wealth Partners, a Registered Investment Advisor. Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation.

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