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AVEK Invests Wisely but Always uses Caution

Despite what has been characterized as a whirlwind economy nationwide, financially AVEK stands on solid ground, according to investment consultant Richard Babbe of PFM Asset Management, LLC. At the AVEK Board Meeting of February 13, 2024, Babbe presented a picture of the Agency’s financial stability in comparison to mainstream America. Directors sought his expert advice regarding financial investments in today’s market.

Babbe began his presentation with industrial talking points, essentially the jargon of the investment industry. He identified the following “Current Market Themes,” saying the U.S. economy is characterized by:

·         Economic resilience but expectations for a slowdown.

·         Cooling inflation that still remains above the Federal Reserve’s target.

·         The labor market coming into better balance.

·         Consumers that continue to support growth through spending.

Babbe also said that federal officials reaffirm that restoring price stability is the priority. He noted that the Treasury yields ended the fourth quarter of 2023 “materially lower,” stating that “after peaking in October, yields reversed course.” AVEK is now functioning in a world where inflation drives investment reports, Babbe said, adding that “inflation has come down.”He also pointed out an expectation for “wages to go up.”

From a positive perspective Babbe said the “economy has been growing stronger than expected.” He attributed that to consumer spending. At the same time, he pointed out that credit card delinquencies are “going up.”

Although some uncertainty exists, Babbe said for AVEK “there’s still opportunities for investments.” He advised short-term investments, explaining that currently that’s a better option than long-term investments.

Babbe concluded his presentation saying, “I have concerns (about) what the Federal government has been spending.” His worry focused on the long-term impact on the U.S. economy.

Logo of PFM Asset Management.

“I hope we can correct it over time. Congress has no intention of cutting spending.”

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