You can never fall too far too fast

Added: Brendon Cepeda - Date: 14.12.2021 08:30 - Views: 43721 - Clicks: 5133

As hard and fast as stocks fell starting in late February, the rebound of the past few weeks has been nearly as stunning. Rallies in the middle of bear markets are to be expected. While we still see areas of opportunity in areas like financials, small caps, cyclicals and health care , a great deal of uncertainty remains. Below are three key questions. Until investors have answers, markets are likely to remain volatile.

There are plenty of reasons to be optimistic. I continue to recommend dollar-cost averaging, or buying stocks at consistent intervals say, once a month regardless of price. That allows you to avoid the risk of putting a lot of money into the market just before a dip while reinvesting when stocks may still be relatively cheap. I also recommend favoring actively managed funds over passive index funds. That way, professional portfolio managers can help identify specific areas of opportunity and avoid potential pitfalls. Markets have moved very far, very fast given still high levels of uncertainty.

Rather than chasing those returns, now is most likely the time to stick with a longer term strategy to rebuild your exposure to risk while using volatility to your advantage. Yields are subject to change with economic conditions. Yield is only one factor that should be considered when making an investment decision. Equity securities may fluctuate in response to news on companies, industries, market conditions and general economic environment. Bonds are subject to interest rate risk. When interest rates rise, bond prices fall; generally the longer a bond's maturity, the more sensitive it is to this risk.

Bonds may also be subject to call risk, which is the risk that the issuer will redeem the debt at its option, fully or partially, before the scheduled maturity date. The market value of debt instruments may fluctuate, and proceeds from sales prior to maturity may be more or less than the amount originally invested or the maturity value due to changes in market conditions or changes in the credit quality of the issuer.

Bonds are subject to the credit risk of the issuer. Asset allocation and diversification do not assure a profit or protect against loss in declining financial markets. Rebalancing does not protect against a loss in declining financial markets. There may be a potential tax implication with a rebalancing strategy. Investors should consult with their tax advisor before implementing such a strategy. Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

Technology stocks may be especially volatile. International investing entails greater risk, as well as greater potential rewards compared to U. These risks include political and economic uncertainties of foreign countries as well as the risk of currency fluctuations. These risks are magnified in countries with emerging markets, since these countries may have relatively unstable governments and less established markets and economies. Investing in foreign emerging markets entails greater risks than those normally associated with domestic markets, such as political, currency, economic and market risks.

Investing in commodities entails ificant risks. Commodity prices may be affected by a variety of factors at any time, including but not limited to, i changes in supply and demand relationships, ii governmental programs and policies, iii national and international political and economic events, war and terrorist events, iv changes in interest and exchange rates, v trading activities in commodities and related contracts, vi pestilence, technological change and weather, and vii the price volatility of a commodity.

In addition, the commodities markets are subject to temporary distortions or other disruptions due to various factors, including lack of liquidity, participation of speculators and government intervention. Certain securities referred to in this material may not have been registered under the U. Securities Act of , as amended, and, if not, may not be offered or sold absent an exemption therefrom.

This material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy.

Past performance is not necessarily a guide to future performance. The author s if any authors are noted principally responsible for the preparation of this material receive compensation based upon various factors, including quality and accuracy of their work, firm revenues including trading and capital markets revenues , client feedback and competitive factors.

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This material should not be viewed as advice or recommendations with respect to asset allocation or any particular investment. This information is not intended to, and should not, form a primary basis for any investment decisions that you may make. This report will be distributed only upon request of a specific recipient. This report does not constitute an offer to sell or the solicitation of an offer to buy any securities in the PRC. PRC investors must have the relevant qualifications to invest in such securities and must be responsible for obtaining all relevant approvals, s, verifications and or registrations from PRC's relevant governmental authorities.

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Here are some different ways to approach that transition. Carefully managing distributions from your portfolio during retirement can save on taxes, leaving you more money to spend and enjoy. Search Go. The market may have already come back too far, too fast. Manage your Wealth. Enter zipcode Enter Zip Code Go. When will the economy reopen? Clearly, there could be setbacks and delays in this timetable. Will consumers start spending? Roughly two-thirds of the economy is based on consumer spending and recent economic data has been even worse than expected in terms of unemployment, retail sales and consumer sentiment.

What will full-year corporate profits look like? Given the first two unknowns, it may be too early to forecast earnings with accuracy. If the recovery is delayed or reported profits are worse than currently modeled, that price target may not hold. Related articles. Wealth Management Focusing on an Eventual Rebound. Risk Considerations Yields are subject to change with economic conditions.

Member SIPC. View disclosures Close disclosures. Wealth Management How to Build a Green Portfolio Sep 17, You can seek to generate positive financial returns while benefiting the environment. Wealth Management Making the Most of Your Retirement Savings Jan 12, Carefully managing distributions from your portfolio during retirement can save on taxes, leaving you more money to spend and enjoy.

You can never fall too far too fast

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