As your financial advisors, we are always researching market trends and reviewing our investment selection so that you don't need to worry about your account or investment strategy1.
This is what I'm anticipating from the market in the upcoming months2:
- continued volatility in the market
- the market will likely see a low point in the next 6 months
- growth stock prices declining further than value stock
- increased interest rates from the Federal Reserve
- high inflation (similar to this last year)
- when the markets do start to recover, expect it to be a slow/long recovery
As we're experiencing a bear market, it's important to keep in mind that you do not lose money unless you sell while values are down. Which means, you need to stay invested and unfortunately experience the low (for your risk level). It is impossible to eliminate risk; even if you were to invest solely in cash-- you risk that your assets will not keep up with inflation. As history tells us, eventually the market will recover, and values will return and grow again. The average bear market last 13 months and takes 22 months to recover3. While we are waiting for the inevitable recovery, The Hanson Group's goal is to combat inflation and reduce the impact of volatility to the degree that it will not adversely affect your overall investment strategy.
Here is a highlight of some of our investment strategies to help mitigate the current market environment4:
- continue to invest more heavily in value focused stock for conservative to moderate investors
- start investing new contributions in value focused stock for aggressive investors
- ultra-safe US Treasury (T-Bills) as a cash alternative
- safe US Treasury Inflation Protection Securities (TIPS)
- limit bond duration as prices will drop (more severely on long-term bonds) when rates go up
- invest in bond alternatives
- invest in dividend producing mutual funds/ETFs
If you would like to discuss your specific investment strategy, please schedule an appointment. As always, we are here to answer questions and talk you through any concerns. Thank you for your partnership!
1 Meeting with your advisor regularly is pivotal to maintain an appropriate investment strategy for your investment goals.
2 This is purely my professional opinion. It is not a guarantee of what may/may not happen in the market.
3https://www.cnbc.com/2018/12/24/whats-a-bear-market-and-how-long-do-they-usually-last-.html
4 It is impossible to eliminate risk and volatility in investments.