Today we are talking about consumer sentiment. Sentiment has been a big topic lately, given high inflation levels and retailers' corporate earnings announcements.

Observation: when inflation is high, consumer sentiment tends to be low. This makes intuitive sense; as we're shopping and seeing higher prices, our dollars are not going as far as they used to. This is not the first time we have seen this setup with sentiment low and inflation high.

We look back to the 70s for comparables and ask how does the stock market perform one year later. While not a prediction, we find markets tend to rebound. At some point markets will recover and diversifying investment based on time periods, we believe, can help navigate through the uncertainty.

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