May 2023
401(k) Allocation

There are trades.

By: Jake Eggett

The Fed met market expectations yesterday by hiking .25% and signaled its pausing further rate hikes for now. There might be some debate in the June meeting but for now it appears they have finally reached their terminal rate of 5.0 – 5.25%. It’s all up to economic data now. If the data hints at a soft landing it could propel stocks substantially higher; however, if data starts to hint at a hard landing, then even with a Fed’s pause stocks could drop sharply from here. Earnings season is still in force, but the numbers so far have been ok. The economy is facing some extra headwinds from the regional banking crisis to the looming debt ceiling fight. Both of which have investors on edge. For now, our models have us fully invested in both the stock and bond side. On the stock side we favor Large Cap vs Small Cap. We are also maintaining our exposure to Developed International, as that trend continues to be good. On the bond side, High Yield and Floating Rate bonds are attractive from a yield standpoint and the trend has been sideways to up, so we’ll take advantage of it for now.

As always, if you have any questions about how to rebalance your 401K, we encourage you to reach out to us at the office and we’ll be happy to help!

If you have questions, please contact us.

MARKET UPDATE
FINANCIAL PLANNING
FRAUD ALERT

To download the May 2023 Newsletter: CLICK HERE

(Click on the Image to enlarge it.)