January 2023
401(k) Allocation

There are trades.

By: Lynda Elley

Ahhh….a fresh start for a new year!

Maybe not so refreshing for the stock market as the opening days have seen some indecision about direction.  And coming off of a December with no Santa Claus rally … well, caution may be the recommendation here on stocks.  Interestingly enough, the move by the Federal Reserve to “decrease the size of rate increases” and potentially “end the rate increases” in early 2023 has given some lift to the battered bond market.  The bond index (AGG) finished down -13.03% for 2022 – the first time we have ever seen a double digit loss in the bond index for the full year, and never seen in a year with a corresponding negative finish on the S&P.  Not the kind of record you like to see – but it has set up the bond market for some potentially nice returns this year, especially if we see the Feds more cautious about continued interest rate hikes.  To that end:

We have stepped out of a small bit of equity and moved the bond allocation around for the first time in over a year – to add either a Total Return option (see your decoder rings) or High Yield corporate bonds – if your 401K plan allows for high yield.  If your plan does not have an option for High Yield bonds, take that allocation and add it to Total Return. 

As always, if you need a “de-coder ring” established for your 401K or need assistance in rebalancing, we encourage you to reach out to us at the office and we’re more than happy to help!

If you have questions, please contact us.

MARKET UPDATE
FINANCIAL PLANNING
FRAUD ALERT
TAX PLANNING

To download the January 2023 Newsletter: CLICK HERE

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