Greetings, and Happy New Year to you!
Tax season is rapidly approaching, so PLEASE READ the following with regard to statements you might need:
Additional and more specific information will be posted as it becomes available on TDAI’s website.
If you have any questions or concerns, never hesitate to reach out to us. We wish you all a happy and HEALTHY New Year!
Quoted from an article on the Schwab Markets and Economy page. A summary of the key points of the article appears below. Schwab updates their market commentary page frequently, so this may not be the most recent. The following comes from their article entitled "Market Volatility: Inflation Fears Strike Again", dated October 14, 2022.
The central bank has already raised its benchmark lending rate by three full percentage points so far this year. It is now expected to hit 4.5% by the end of the year. Rate increases take time to work their way through the economy, so the speed at which rates have risen raises the risk the Fed might go too far. At the same time, any sign the Fed might be backing off should be treated with caution—a sudden reversal would probably not be a vote of confidence in the economy’s health.
Notwithstanding the continued rise in consumer prices, the economy shrank during the first six months this year and forward-looking measures of activity suggest the situation hasn’t improved. Some investors have hoped such weakness might persuade the Fed to ease up on its campaign against rising consumer prices, leading to periodic and temporary rallies in stock prices. However, Fed officials have repeatedly quashed these hopes with aggressive commentary on inflation and the future path of rates. The concern now is that the steep rise in borrowing costs this year will push an already weakening economy into recession.
What does that mean for investors? Quality is the order of the day when it comes to both stocks and bonds. For stocks, Schwab recommends taking a sector-neutral approach and focusing on factors such as strong profit margins, high free-cash-flow yield, low volatility, and positive forward earnings revisions. For bonds, that means focusing on Treasuries, certificates of deposit (CDs), and investment-grade municipal and corporate bonds.
In the face of rapidly shifting markets, investors should also consider periodically rebalancing their portfolios to maintain their strategic long-term allocations.
There is a lot of information here and in the original article. To reduce scrolling the major topics have been collapsed into the subtitled sections below. Click or tap on the section title to expand the section. Once expanded, click or tap on the title again, or use the link at the bottom of the text, to collapse the section back to the title block. If you would like to print this page, be sure to expand the sections that you want to be included in the printout.
Market volatility is unsettling, but historically not unusual. If you've built an appropriately diversified portfolio that matches your time horizon and risk tolerance, it's likely the recent market drop will be a mere blip in your long-term investing plan.
However, it can be hard to do nothing when markets are rough. Here are some things to consider:
Stout Bowman regularly posts important and interesting information on our blog. Current topics include credit/debit/loans, estate planning, insurance, investing, Medicare, retirement, Social Security and taxes, as well as general information that we think you might find of interest. You can browse our blog by topic here.
We have been publishing an email newsletter for our clients and friends since 2016. Links to all of the newsletters can be found on our newsletter page, with the most recent listed first. We try to keep our emails short, so there are typically only three articles in each one, most of which link to other articles in the financial and mainstream press. Take a look at our newsletter archive page.
We also have a page on our site for the latest news about our company, notice of any upcoming events, and a market commentary to discuss what our advisors and other financial industry experts conclude about the previous investment performance and what we might expect the markets and the economy will do in the coming months. News and that market commentary can be found here.