04 August 2023

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4 people to help guide you through today's issues in the financial market

Luigi Campopiano

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Four words and four people from history can help investors navigate the uncertainty of financial markets while managing their emotions. We are currently in the midst of a storm caused by rising inflation and an economic slowdown, and we need guidance like a beacon on the horizon. 

The four words are protection, inflation, innovation and growth. And the four characters I’ve chosen include Teddy Roosevelt, Paul Volcker, Henry Ford and Alexander Hamilton.

Four stories to offer hope

• Theodore Roosevelt and the protection of the U.S.: He was the 26th president, elected at the young age of 42. His significance goes beyond American history, as he successfully mediated between Russia and Japan during the 1905 conflict, earning him the Nobel Peace Prize. Roosevelt epitomizes protection, having implemented measures to preserve and safeguard the environment, including the establishment of five national parks and four national monuments. He also created the U.S. Forest Service. We can learn a lot from this former president.
  
  
• Paul Volcker and the fight against inflation: Elected as the thirteenth chairman of the Federal Reserve in August 1979, Volcker faced the challenging task of managing the American central bank during one of the most severe inflation crises in history. Due to the oil shock in the spring of 1980, inflation had reached 13.6%, higher than the 9.1% experienced in June 2022. His motto was "no pain, no gain," and he tackled inflation through strict fiscal measures, successfully reducing it to 3.7% in 1987. In times of instability like the 1980s and the current situation, dividends can serve as a hedge as they are indexed to inflation.
  
  
• Henry Ford, the father of innovation: Ford was an absolute innovator in the automotive market and a key promoter of economic growth in the U.S. His motto, "innovation is necessary for growth, and economic recovery cannot be achieved without it," reflects his commitment to both his company's performance and the welfare of its workforce. He famously doubled wages in 1914, increasing them from $2.34 to $5 per day and reducing the workweek from six days for 48 hours to five days for 40 hours. Ford also had a forward-looking approach to transportation, as evidenced by his design of the hemp body car in 1931, a vehicle made from hemp and soy-based plastics and fueled by hemp oil-derived fuel. This was an early example of sustainable automobiles that aligns with design discussions taking place today.
  
  
• Alexander Hamilton as an example of growth: Originally from the Caribbean, Hamilton arrived in America to study at King's College, participated in the American Revolution and became one of the Founding Fathers. Under George Washington, he served as the first Secretary of the Treasury of the U.S. His story is one of growth and revival, as he established the first two American central banks in Philadelphia and founded the oldest American credit institution. The Tony Award-winning and ground-breaking musical by Lin-Manuel Miranda, “Hamilton,” was inspired by the 2004 biography, “Alexander Hamilton” by Ron Chernow. As another sign of growth, the musical set a record in 2016 for the most money ever made in a single week — $3.3 million — in a Broadway show.