EDITED FROM A RECENT EMAIL TO CLIENTS:
Many of you are probably seeing the sensational stock market headlines. Here’s some context for how I’m thinking about the current market and what I’m expecting for the rest of the year.
What’s happening right now is a run-of-the-mill correction (this happens on a regular basis, typically once or twice a year) but it’s not an indication of any major economic shifts (remember: the S&P has only been down 7% from its all time HIGH). There is no current significant economic stress and inflation data continues to not rise.
Later in the year, I see a likely downturn in the market (lower stock prices) as economic growth slows and inflation remains persistently higher than the Fed’s (Federal Reserve) 2.0% Target.
Potential strategies for this type of market environment:
- Reduce bond exposure (selling off some bonds)
- Allocate to equity assets (stock index ETFs, individual company stocks) that have value at current price levels (i.e. they’re priced low right now).
- Look for one more upward move before becoming more defensive (move into a higher percentage of cash) around mid-year
Disclosure:
All content is for information purposes only and is not individualized investment advice. Opinions expressed herein are solely those of Geddi Capital, unless otherwise specifically cited. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. No trading strategy can guarantee an outcome or protection from loss. All investments hold the potential for loss.
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