The dramatic surge in the money supply (M1) since 2020 – rising fivefold and peaking in 2022 – has left a lasting impact. M1 represents the most liquid forms of money: cash, checking deposits, and similar funds readily available for spending. Nearly 80% of all dollars in circulation were created in the last five years, largely in response to pandemic-driven disruptions.
This flood of money fueled inflation and enabled speculative assets, even those without intrinsic value, to skyrocket. While the Fed now aims to shrink the money supply gradually, the RiskFirst® process helps clients confidently navigate this “new normal,” focusing on risk management to adapt to shifting markets.
The “New Normal”
- We believe the preservation of capital is key to consistent, long-term investment success.
- Our investment approach is grounded in economic theory and backed by quantitative analysis.
- Managing drawdown risk is a pillar from which we build our portfolios.
60-Second Breakdown: December 23, 2024
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
Best Invest Advise EVER!
Bryan Bourgeois, CEO/Founder of Shorebreak Capital, discusses why 90% of investors fail and how to avoid these common investment mistakes with Conner Small, Partner at Redwood Investment Management, Shorebreak Capital’s dedicated asset manager.
