What’s new in wealth management?
All the news that’s fit to print from global wealth solutions.
Hello, and welcome to 2022!
This year has thus far proved to be an eye opener for Covid and the financial markets. December 23, 2021, we wrote an article that laid out our 2022 financial thoughts. Three major themes were highlighted:
The fact of the matter is, unless you can read the minds of the Federal Reserve, no one on earth other than that committee knows what will prompt them to raise interest rates for the first time in over two years or how the market will react. What we do know is that since the 2008/2009 financial crisis, along with the Covid-19 crisis, the Federal Reserve seems to dictate where the stock market goes.
For several years, all eyes were on the stock market, watching it climb. As usually happens at levels that get over-extended, retail investors want to chase the market higher. Fear of missing out drives emotions until the market begins to correct, and then the other side of the emotional roller coaster overrides and selling pressure escalates.
While the stock market generally takes the stairs up, the elevator down, and then waffles back and forth for a while, overall, much of it will depend on the Federal Reserve. The financial news media will take either side and make things sound better or worse than what they truly are.
I!ve listened intently to the rhetoric over the past few weeks. It has turned from extreme favor to negativity in that short window of time.
Companies’ values in the past was a gauge for the market; was it expensive or was it cheap. As mentioned, today, and for the past 13-14 years, the Federal Reserve has been the measure of the market. If they stay with "easy money,” the stock market has risen. Once the punch bowl is talked about being pulled, the stock market gets grumpy.
Should the market reach that 20% milestone, if you!re willing to take some stock risk to your portfolio, it might be a spot to add some exposure. With interest rates being as low as they are currently, and with the threat of interest rates rising, the bond market overall appears it may have back-to-back years of losses...unless something changes.
As we!ve stated, please take the time - only about 3-5 minutes - to fill out our risk profile questionnaire. You can access it by visiting our website, www.GlobalWealthSolutionsLLC.com, and then clicking on the tab titled "risk assessment quiz.”
Thank you for reading and we hope you enjoy the remainder of the winter months. "Spring is right around the corner.”
Mike Reinhart and Leonard Rhoades