May 401k Allocations

We are making a small change this month – taking some of those profits off the table for the next several months.  If you wish to stay more aggressive, you certainly can, simply make no changes to your allocation from the past few months.  By most standards the market is no longer “inexpensive” – but it is certainly a long way from the frothy days of the dot-com era, for example.  So this is a precautionary move and you can feel free to ride out the summer status quo.  If there are any dramatic shifts, we will make far more dramatic changes so keep an eye on this space!
As always, should you need assistance with rebalancing your 401K / 403B / 457 plan, please don’t hesitate to call.
April 401k Allocations

No changes for the month of April!  Markets continued to strengthen on the hopes of a trade deal and the Fed’s decision to stand pat on interest rates for 2019.  We remain fully invested in all portfolios with a slight emphasis on Growth stocks and the addition of Emerging Markets (last month) for the first time in a year.  Will this be the year the old adage “sell in May and go away” holds true?  Earnings season kicks off in a few short weeks and should give us the answer to that question.  For now we stand pat on our investment recommendations for your 401K / 403B / 457 plan.  As always, if you need assistance in getting your portfolio rebalanced please don’t hesitate to call!

Also if your 401k investment options include a High Yield Option, you can replace up to 50% of your Total Return Bonds!  
March 401k Allocations

No changes this month.  Volatility has mellowed and markets continued to drift higher over the month, so we stand pat on our allocations for now.  Winners this month were the small and mid-size companies, thanks largely to recovering oil prices and interest rate stability (higher borrowing costs for small companies are more impactful; lower interest rates more helpful!) – but these are also the more volatile parts of the market when sell-offs occur.  Because we feel markets are a bit ahead of themselves here, we’ll stay fully invested but with those things that tend to have lower volatility.  All bonds have registered positive returns this year, but high yield and some of the other specialty bonds are doing very nicely this early in the year.
As always, we are here to help you with any reallocations if you need assistance with your 401K plans.  If you have a plan and have not yet gotten your “decoder ring” from us to assist in managing those accounts, please let us know and we’ll be happy to put that together for you!

February 401k Allocations

After a bruising fourth quarter, it is perhaps no surprise, but definitely a relief that markets have calmed greatly, and so there will be changes to this month’s allocation.  Dovish comments by the Federal Reserve have helped bond funds and stocks alike, and for the first time in two years, we are moving back into the traditional bond funds, where we hope to be able to stay.  All will depend on the Fed, but recent remarks made by Chairman Powell should be helpful and we can get better yield and appreciation in the bond funds.  If you have a high yield bond option, you might also add to that for part of your bond allocation (up to half of your bonds is acceptable).  In stocks, we are adding Emerging Markets for the first time in almost a year!  This could be tricky for some of you as not all 401K plans offer Emerging Markets as an option.  Usually we suggest just adding your basic international option, but not this time.  The market is not rewarding Developed international markets (Europe, Canada, and the like) as much as either the Emerging markets or the US markets and Brexit is still a very uncertain factor for the Europeans.   If you do NOT have an emerging market option, please just add to your US Large Cap equity choice for now.  And if you have any questions, don’t hesitate to call us and ask for help or clarification – we’re happy to help!

January 401k Allocations

Well 2018 turned out to be a bruising year for investors!  A quick summary of the good and the bad as far as active management on your 401K / 403B / 457 plans goes:
1. Risk off in November and December should have been helpful in protecting from some of the volatility and downside in Q4 (but would have been nicer if we could have started in October)

2. Increasing small cap exposure over the summer was initially helpful, then hurtful as the markets turned against small and midsize companies in October.

3. Exiting international and emerging markets and staying out for the bulk of the year was ultimately the right choice

4. As boring and unexciting as Stable Value / Money market accounts were, they were absolutely the right choice for 2018.
For 2019, you will find the bond/risk off choice isn’t changing until the Federal Reserve has signaled a change to interest rate policy, so Stable Value and Money Market will still be the go-to low risk position.  Fortunately, most of these options are now paying better than they were a short year ago, and that will be helpful, although still not exciting!  On the stock side of the equation, we are standing pat with our risk-off allocation for now.  This volatility will make it too easy to be on the wrong side of any choice, just witness the past 48 hours!  So a measured approach is best until we get into earnings season and see what companies are saying.  We still think economic fundamentals are strong, although we do see signs of slowing – not of the recession variety, rather slowing back to a “normal” pace.  All of the swings over the past quarter, however, have served a useful purpose – international markets, commodities, and certain types of bonds have gotten cheaper and could be setting up for a nice time to buy.  As always, if you need assistance in rebalancing your 401k, please call into the office and we are happy to help!
Contact us for a free consultation!