As an investor, it feels good in a year like 2021, when the major indexes (S&P, DOW, NASDAQ) all finished with healthy returns. As a wealth manager, it’s also nice to have years like that, but it’s also our job not to get complacent and always be forward looking to help you achieve your long-term investment goals.
Since the start of the new year, we have seen volatility increase in U.S. Equity markets. This change was not overly surprising for us, as major equity averages began 2022 at a near record levels, with many stocks looking to be priced optimistically. Investors are also facing a great deal of uncertainty with surging inflation, higher fixed-income yields, the possibility of a less accommodative Federal Reserve and the continued battle against COVID-19. Recent geopolitical tensions with Russian/Ukraine, China/Taiwan, and the Middle East, are also adding to that uncertainty. Having an experienced team working for you is an important element to navigating volatile markets and staying on track to reaching your financial goals.
I started in the business in September of 1982 as a stock and bond broker. Now, as a wealth manger with 40 years of experience, I see the current volatility and the market uncertainty as a potential opportunity for our clients. We are expecting corrections in the bond and stock markets which we believe is normal and healthy. In an inflationary environment, we evaluate decreasing long-term fixed income (bonds) and increase equity investments that have a history of consistent and rising dividend payments.* There are any individual equities, ETF’s and mutual funds that we like to use to help keep up with inflation. To effectively combat and pace inflation, one typically targets a yield between 3% to 5%, considering other objectives as well.
With our merger with XML Financial as a subsidiary/division, we now have more resources to help our clients to conquer their fi nancials goals. Please give us a call if you have any questions, or if you have any updates that could impact your Envision; we want to know. We work for you!
Something I know many of you have heard me say repeatedly through much of our relationship and my career. Remember these two rules:
- Rule #1: Do not touch principle! Live off your cashflow (social security, dividends, interest, pension, etc.)
- Rule #2: Do not forget about Rule #1!
I hope for a happy and healthy 2022 for all our clients’, teammates, new teammates and their families!
– The CIG Team
*Past performance does not indicate future results. Dividends and Interest payments are not guaranteed and are subject to change or elimination.