Embrace the Fog—2023, A chance for upside surprise? Every calendar year, as one year ends and another begins, we receive a deluge of financial forecasts and predictions for the new year. When looking back on these predictions 12 months later, they tend to be wildly off base and, in the vast majority of times, flat out wrong.
With 2022 now behind us, not only do we have the opportunity to plan ahead, but also to take a moment to reflect on the year that passed. In the financial markets, as within our personal lives, we must take the good with the bad, adapt to new and changing circumstances, and learn from our mistakes.
Every day, more and more young people are entering the investment markets for the first time. A quiet wave of investors is growing in force, and it appears that their priorities are different than those that preceded them.
While the traditional 60% stocks and 40% bonds portfolio (60/40) has historically been used as the primary example of a core diversified portfolio delivering attractive risk-adjusted returns, it has struggled year-to-date. The illustration below from BlackRock plots various annual stock and bond returns showing only four times when both stocks and bonds were down simultaneously, including this year.
Where is the real estate market heading? We at WGCA recently hosted a webinar with members of the Erich Cabe team at Compass, addressing essential questions that buyers, sellers, and real estate investors are asking about the current and future state of the housing market. You can watch the recording here in case you missed!
What Should I Do Now? Many wealth management professionals tend to get this question from clients. While this question is quite common among the average market participant, we view it as somewhat superficial. It is more appropriate to understand your goals and risk tolerance and then set the appropriate level of risk within your portfolio.
Inflation reaches a four-decade high, recession risks continue to increase, the S&P 500 is now in bear market territory, the Consumer Confidence Index hits an all-time low. It’s understandable to get nervous, anxious, and even fearful.
I think we all worry about whether we will have enough to do the things we want to do as we approach retirement age. The “enough” can be money, time, or energy but I’m going to focus on money in this segment.
Financial markets are often difficult to navigate. The first five months of 2022 have been especially treacherous.
The last 23 months of investment (and cryptocurrency and meme stock, etc.) returns have created a lot of “fear of missing out” (FOMO) in the investing public. FOMO tends to manifest itself in various behaviors in which otherwise rational individuals would not participate.