January 2022
401(k) Allocation

No Trades.

Last month our risk off indicators flashed a warning signal and that prompted us to both lower stock risk exposure, but also to change the bond allocation out of your diversified bond portfolio and over to your plan’s cash equivalent.  It turns out that stocks rallied into the close of the year (thank you Santa!) so we may have missed out on a portion of those S&P gains for the end of the year, but exiting those bond funds (remember, what you have for bond options in your 401K plan is not what we trade here) is proving to be the right trade.  Chairman Powell with the Federal Reserve came out mid-December and accelerated the timeline for ceasing some of the accommodative programs that had been in place since the start of the pandemic.  Further, they announced estimates of 3 interest rate increases for 2022.  Initially, markets shrugged off this information but with recent publication of the Fed meeting notes where we can read the details of their conversations, it has become obvious that their intent is to be even more aggressive in slowing down the stimulus their programs have provided the past two years.  Problematic for bonds in the near-term and may prove the same for stocks, we shall see!

As always, if you have not looked at your 401K plan in awhile or need assistance with your allocation, we welcome your calls and are happy to help walk you through making any changes necessary.

If you have questions, please contact us.

MARKET UPDATE
FINANCIAL PLANNING
TAX PLANNING

To download the January 2022 Newsletter: CLICK HERE

(Click on the Image to enlarge it.)