Charting a Course through Choppy Waters- It’s a Marathon, Not a Sprint!

October 14, 2022
Share |

Just a poking a little fun at all the metaphors thrown around in the wealth management business. 

Have your financial goals changed?  If your destination hasn’t changed, then neither has your course for the journey.  We have factored in times like these- occasional bear markets are baked into your plan.

I have attended many Q4 outlook conferences from our fund managers this week and this is the main message:

  • The Fed is focused on crushing inflation, not worried about our investment portfolios. We should prefer that they take this route.  Look at your latest grocery store receipt!

“The Fed would rather serve burnt chicken than give us all salmonella.”- Alliance Bernstein

 

  • Our most recent experience with non- Covid recession (2008-2009) is causing a lot of anxiety. Our economy has been in good shape going into this.  It’s one reason inflation is sticking around longer.  The situation is very different and no one expects a repeat.

 

  • There are better/ worse possible scenarios of course, but in any case, “this too shall pass.”

 

  • After markets reprice to better valuations, it typically sets the stage for good returns going forward on a multi-year basis.


No one can forecast the economy, or time markets.  So what kinds of actions are being taken behind the scenes?

  • Fund managers are finding values and higher yield opportunities.

 

  • Rebalancing portfolios to add to beaten down asset classes and sectors, and dollar-cost averaging into our portfolios when possible.

 

  • We are reinvesting dividends and interest. Never interrupt the compounding!

 

  • We are harvesting tax losses against capital gains to lower the tax bill.

 

  • We are converting IRA assets to Roth while values are down for tax advantages.

 

Not all these actions may pertain to you, but giving up on your long-term strategy for success never makes the list.

This is our action plan for staying on course during these times, to capture all the returns of your strategy whenever the markets eventually resume their upward trend. 

That way we won’t miss the boat, or get behind the 8-ball!  (Sorry )



Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Investing involves risk, including possible loss of principal. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.  Diversification does not protect against market risk.

Securities and Retirement Plan Consulting Program services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. Investment Advice offered through Western Wealth Management LLC, a Registered Investment Advisor. LPL Financial, Kennebec Wealth Management LLC and Western Wealth Management LLC are separate entities.