401k Model Update
What is it?
This week we are changing the 401k model allocation for those of you that have separately managed accounts due to your employer or something else. We are adjusting the 401k number from five being the lowest level of being invested to four.
Why does it matter?
On the spectrum of 0% invested at a five to 100% invested at a one, the 401k adjustment is closer to 20% invested in the stock market. We believe now is a good time to get invested in the markets. However, because of our tactical trading approach we may get in or out of investments sooner than a more passive investor. With that said we believe the market has held up well through raising interest rates and may continue higher long term. In the short term there could be some drawbacks but we anticipate a relatively stable market until conditions change.
Earnings and Employment
What is it?
“Stocks inched slightly higher Monday as investors prepared for earnings from two more mega cap techs and for the July jobs report to land later this week.”*
Why does it matter?
Apple and Amazon are set to release earnings this week among others. We will see how the market reacts. After that markets will be looking ahead to Non-Farm Payroll later in the week. That should provide more insight on what the Fed’s next move will be based on changes in employment data. All of that will impact markets as investors look to manage risk and seek rewarding opportunities for different portfolios.
Other articles we found interesting this week:
Stocks could sink into a bear-market recession, says technician
Clock on the Fed’s ‘soft landing’ may already be ticking
Analysts predict home prices will drop next year
Current 401(k) portfolio
Our last 401(k) portfolio reallocation: 7/31/2023.
Want more information?
The weekly market insight provides a window into the process we use in our investment management process. At Breakaway, we believe markets are always changing and require a nimble yet data-oriented approach.
Our process attempts to identify trends and momentum in the financial markets. With that information, we align our clients’ portfolio accordingly in the hope to help our clients accomplish their life goals while attempting to lower the risk of a large drop in their portfolio.
Click here for more details about our investment management
Sources:
*Karen Friar and Dani Romero. “Stocks close higher to end another strong month”. Yahoo Finance. 7/31/2023. https://finance.yahoo.com/news/stocks-close-higher-to-end-another-strong-month-stock-market-news-today-200411578.html
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