In our latest quarterly investment outlook video, Wally Obermeyer, President and Co-Founder, shares his thoughts on the economic and market trends we are keeping a close eye on heading into the rest of 2022. We are watching the Fed, geopolitical developments, and the economy closely, and adjusting client portfolios to balance short-term risk with long-term opportunity.
Hi, I'm Wally Obermeyer. And this is our first quarter 2022 video. There's a lot going on, particularly with the Russia-Ukraine war, the economic reopening post COVID. We've seen huge price increases. People are worried about inflation, now worried about recession as we try to control the inflation. So let's dig into this a little deeper and share with you what we're doing, how we're working to protect our clients money, and also to give you some advice for how you ride through this period of uncertainty.
Top of mind, of course, is Russia's invasion of Ukraine. And our hearts go out to all of the Ukrainians. And I think the whole world is inspired by their determination and the resistance that they've shown. And also, it's instilled in all of us an appreciation for our democracy and our rights, our privileges, and hopefully something that stays with us.
Thinking about it economically, we've seen prices increase, and this does affect things. It kind of ripples through the economies in various ways. At the same time, there are other supply chain issues still. We're not completely opened with the U.S. ports. And another thing on the supply side is American service workers, we don't have enough of them. So where does this lead us? It's really a question then of do the supply shortages contribute significantly to inflation and what happens on the demand side? Demand has been pretty strong. And so things are looking pretty good there. There's been a lot of economic stimulus. The estimate are that consumers have only spent about a third of the stimulus payments, they've saved a fair amount, and people are ready to spend.
So now the big question is does the combination of supply shortages and demand exceeding supply, does that raise prices to the point that the Fed needs to really throttle back the economy and we could fall into recession? I think on the good news side, Jerome Powell, who is somewhat of a respectful advocate of Paul Volcker, is willing to raise prices, or tighten the money supply rates, interest rates in order to curtail demand without inflation catching kind of a cold where it gets built in and is difficult to stop.
Switching gears now, what are we doing to work through this period? One is to take a longer-term view. Typically, during wars, the market has gone up. So we're not overly concerned about longer-term market reaction. We are aware that inflation can be difficult to constrain and that can reduce demand. On the other hand, there's some positives coming out of this. For example, with the energy prices so high, it's almost as if we've had a carbon tax put on and we've seen consumers gravitating more toward electric vehicles, for example. So the shift to more renewable resources is one benefit.
We are making some changes on the portfolio level. We've been thinking about inflation for some time and have leaned toward adding companies that have more pricing power and whose margins are not hurt or hurt less as input costs rise. So we're working to just very thoughtfully make a few changes and take advantage of some of the things that are opportunities.
Finally, I think in terms of investors just riding through this period, I would encourage people to just be patient and think of particularly the stock portion of the portfolio as something that really is a three or five or seven or even 10-year investment. Let the stocks grow through time. We will have some recessions. There'll be disruptions. But if one owns quality companies as reasonably diversified, then the outcome we would expect to be good through time.
I'm also reminded of Warren Buffet's expression, "We're greedy when others are fearful and fearful when others are greedy." So the other way through this is to think about it, look opportunistically, where are there opportunities when prices get hit, when they're down? And we're working diligently to help ride through this period. And if we take also even a couple year lookback, if you look at the three-year average returns, even though accounts are down somewhat in the first quarter, they've been pretty stellar.
So long term, we're optimistic. We've been through periods like this before, and we just keep working diligently on your behalf. Thank you. And we wish you a happy spring.