Dean, Jacobson Financial Services, LLC

Over the past couple of weeks, the term stagflation has been popping up a lot. The United States experienced stagflation, which is a combination of high inflation, slow economic growth, and high unemployment, during the 1970s. The possibility of another round of stagflation is concerning because it’s difficult to fix, explained Denny Center Student Fellow Ian Stubbs at Georgetown Law.

Oil shocks and stagflation

In the 1970s, two oil shocks occurred as the Organization of Petroleum Exporting Countries (OPEC) cut oil production and sharply curtailed exports, reported Greg Myre of NPR.

The shortages pushed inflation higher, increasing the costs of goods and services. The United States economy moved into recession and unemployment rose. Normally, inflation moves lower during recessions, but at that time, prices moved higher alongside the price of oil. By 1979, inflation was 9 percent a year. The term “stagflation” was used to describe the combination of high inflation and slow economic growth, according to Bill Medley of the Federal Reserve (Fed).

The cure is as bad as the affliction

During the 1970s, the U.S. government and the Fed tried a variety of tactics to end stagflation. Nothing worked. In the late 1970s, Paul Volcker was appointed to chair the Federal Reserve. Under his leadership, the central bank took a different approach. It raised the federal funds rate to “a record high of 20 percent in late 1980. Inflation peaked at 11.6 percent in March of the same year,” reported Medley.

In October 1981, some U.S. homebuyers paid a mortgage rate of 18.63 percent, reported Erika Giovanetti of U.S. News & World Report.

Neither the American people nor the government was happy, and there were many protests. However, “inflation began to decline, falling to 6.1 percent in early 1982 and then to 3.7 percent in the following year. The unemployment rate hit a peak of 10.8 percent in late 1982 before beginning a steady decline.”

Are we headed into stagflation?

Last week, as oil prices spiked and fell and spiked again, there was discussion about whether the United States is, once more, facing the threat of stagflation. Jeff Cox of CNBC explained:

“For most economists and Wall Street strategists, the primary factor this time is duration. If the Iran situation can be resolved in a few weeks, as President Donald Trump has promised, any stagflationary shock likely will be muted.”

Last week, major U.S. stock indexes moved lower, while yields on U.S. Treasuries with longer maturities moved higher.

S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

VOLATILITY IS UNCOMFORTABLE BUT NOT UNEXPECTED. If you’ve ever walked down a city street on a gusty day, you may have been beset by a whirlwind of dirt and debris that stops you in your tracks. The haze and flying grit make it hard to see where you’re going. But if you’re patient and wait it out, the wind dies down, and you can continue on your way.

Recently, investors have been engulfed in a whirlwind of market volatility. News about wars, the economy, artificial intelligence (AI), and tariffs have created tremendous uncertainty – and lots of volatility. While short-term ups and downs are quite uncomfortable, they’re not unexpected when investing. See what you know about market volatility and investing by taking this brief quiz.

1. When stock prices are gyrating and you’re feeling anxious, which of the following could prove to be most valuable to you as an investor?

 a. A financial news app

 b. A popular pundit’s prediction about where markets will go next

 c. A financial plan that aligns with your short- and long-term financial goals

 d. A friend who has lots of stories about investment successes

2. People are not always perfectly rational. Adam Hayes of Investopedia reports that, sometimes, investors give more weight to recent events than they should. As a result, they make short-term decisions – like selling stocks at a low during a period of market volatility – that can negatively affect their long-term financial plans. What is this type of decision-making behavior called?

 a. Hindsight bias

 b. Recency bias

 c. Overconfidence

 d. Herd behavior

3. If an investor’s long-term goals have not changed, what should they do during periods of market volatility?

 a. Sell everything and wait for markets to calm down

 b. Check stock prices every three to four hours

 c. Talk with a financial professional and reach a thoughtful decision about whether to take any action

 d. Try to time the market by buying and selling at just the right moments

4. A portfolio is well diversified when it includes a wide variety of investments (such as stocks, bonds, cash, and other types of assets) that respond differently to market conditions, reported Troy Segal of Investopedia. In addition, portfolios may be diversified by geographic region, industry, and other factors. Why is it important to have a well-diversified portfolio?

 a. Diversification can help manage portfolio risk

 b. Diversification guarantees higher returns

 c. Diversification eliminates all losses

 d. Diversification ensures investors outperform the market

During periods of market volatility, it’s important to remember that we’ve seen the Standard & Poor’s 500 and other stock indexes decline before. Historically, they’ve recovered and moved higher. During periods of volatility and market downturns, a prudent approach is to remain patient, stay disciplined, and focus on your long-term goals.

Answers:

1. C. During periods of volatility, having a financial plan can help investors stay focused on long-term goals and avoid emotional decision-making, according to research conducted by Margaretha Dasinapa of Airlangga University.

2. B.Recency bias causes people to place too much emphasis on recent events. As a result, they overestimate the likelihood that those events will continue or occur again.

3. C. Philip Straehl of Morningstar pointed out that many investors like to meet with their financial professionals during periods of market volatility to discuss whether any action is necessary.

4. A. Diversification can help manage portfolio risk. It does not guarantee higher returns, eliminate losses, or ensure investors outperform the market.

WEEKLY FOCUS – THINK ABOUT IT

“Fear is often our immediate response to uncertainty. There’s nothing wrong with experiencing fear. The key is not to get stuck in it.” ― Gabrielle Bernstein, Author

Best regards,

DEAN, JACOBSON FINANCIAL SERVICES

Securities and Retirement Plan Consulting Program advisory services offered through LPL Financial, a Registered Investment Advisor, member FINRA/SIPC. Other advisory services and investment advice offered through Dean, Jacobson Financial Services, LLC, a Registered Investment Advisor, and separate entity from LPL Financial.

*The views expressed are offered through Dean, Jacobson Financial Services, and do not necessarily represent the opinions of the firm or its advisors, nor those of LPL Financial. These views should not be construed as investment advice. Please contact advisors at Dean, Jacobson Financial Services for specific questions or explanations on interpreting this information for your personal circumstances.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED),fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
*The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
Google search conducted March 13, 2026 (See pdf) https://resources.carsongroup.com/hubfs/WMC-Source/2026/03-16-26-Google-Search%20-%201.pdf
https://www.law.georgetown.edu/denny-center/blog/slow-but-not-steady-the-fight-against-stagflation-in-the-1970s/
https://www.npr.org/sections/pictureshow/2012/11/10/164792293/gas-lines-evoke-memories-oil-crises-in-the-1970s
https://www.federalreservehistory.org/essays/anti-inflation-measures
https://money.usnews.com/loans/mortgages/articles/historical-mortgage-rates
https://www.cnbc.com/2026/03/09/fears-of-1970s-style-stagflation-arise-with-oil-spike-to-100-how-big-a-threat-is-it.html
https://www.barrons.com/market-data? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/03-16-26-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=202603
https://www.investopedia.com/recency-availability-bias-5206686
https://www.investopedia.com/terms/d/diversification.asp
https://www.researchgate.net/publication/390828670_The_Influence_of_Financial_Planning_on_Investment_Decision_Making_Qualitative_Analysis
https://www.morningstar.com/financial-advisors/market-uncertainty-will-continue-2026-heres-how-investors-can-cope
https://www.brainyquote.com/quotes/gabrielle_bernstein_899064