This week on the One Minute Retirement Tip podcast, I’m going in depth into our quarterly update that we send to our clients to discuss the current economic and market environment as we enter the last quarter of 2021. 

So far this week I’ve been talking about what’s been going on in the stock market, the bond market, and the economy. Today, I’m talking about what all of this means for positioning your investment portfolio to take advantage of the current environment. 

Hopefully if you’ve been listening this week, you got the impression that I’m still positive about where the markets and the economy are headed. Yes, there is a lot of uncertainty, and yes there may be some short-term hiccups in the stock market that you might see reflected in your investment portfolio, but I think that the economy will continue to normalize as we emerge from Covid, and that’s good news for stocks and bonds. 

Here’s how I’m positioning client portfolios right now: 

• On the stock side, the foundation is still value stocks. I’ve always preferred value stocks especially for investors close to retirement or in retirement, but with increasing interest rates, they’re looking more attractive compared to the high-flying big tech stocks
• On the bond side, I like shorter term bonds, especially laddered bonds, where investors will be rewarded by reinvesting those bonds at higher rates, if interest rates continue higher in 2022 and beyond
• Diversification is key right now, especially if big tech stocks fall out of favor. Many investors don’t realize how much of their supposedly diversified broad-market index fund is concentrated in just a handful of large tech stocks. Investors have been rewarded by this in recent years and have become complacent as a result. I find this concerning that so much of Americans wealth is tied up in just a handful of companies. As we have already seen this year with selloffs in big tech, this trend can turn on a dime and it would be prudent to evaluate your portfolio - really look under the hood - to determine if you are well-diversified across companies and different industries. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip podcast. 

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