U.S. vs. the World
What is it?
Lately the U.S. stock market has drawn back from the highs it made not long ago. With the U.S. not performing as well as some other markets we have added some exposure internationally.
Why does it matter?
We see opportunities overseas as the U.S. economy has been tightening. We are still adding a little bit more exposure to the U.S. after many stocks came back from an overbought level. The market has held up well and is now in a more favorable spot to adjust the 401k allocation number for those of you with 401k’s that need to be managed separately. We are adjusting the 401k allocation number to three (or 50% invested) as we edge closer to being 100% invested at number one.
Inflation Continues
What is it?
Inflation has not subsided as some experts anticipated it would. It continues to run higher than last year in some key areas.*
Why does it matter?
We have added to certain investments that may appreciate as the cost of products and services moves higher. Some examples are energy companies, high yield bonds, and commodities. We will continue to analyze these current holdings as they may not last long. If inflation does stay higher for longer then those investments can help us hedge against the lower relative value of the dollar.
Other articles we found interesting this week:
‘America Is Broke’: Robert Kiyosaki Warns That A Crash Landing Is Coming
A smooth ‘last mile’ to 2% inflation may not be a stretch for Fed
Current 401(k) portfolio
Our last 401(k) portfolio reallocation: 8/14/2023.
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.
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Sources:
*Paul Wiseman. ”Wholesale inflation in US edged up in July from low levels”. AP News. 8/11/2023. https://apnews.com/article/inflation-wholesale-federal-reserve-interest-rates-consumers-1838b302c99045749b0597853886d32c
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