Happy New Year! We hope you and your family had a wonderful holiday season. For many of us, this is a time to start over fresh and set some new year’s resolutions, and you might expect, we suggest you add “update my 401(k) every quarter” to your list. Boring, we know. But with the help of our quarterly email updates, it should take you less than 5 minutes every three months. That is a lot easier than getting on the treadmill for 30-minutes a day!
Summary, Last Qtr: As we had feared, volatility went up quite a bit in Q4 due largely to the result of the U.S. Presidential election and fear surrounding the “Fiscal Cliff.” The market reacted negatively to the Obama re-election, and as a result the S&P 500 Index lost as much as -5.6% in the week following. The market has slowly climbed back since then, but was down slightly for the quarter.
New Recommendations: With the uncertainty surrounding the Fiscal Cliff and the drawn out negotiations in Congress that could loom, we believe maintaining a slightly conservative position is something you should continue to consider. We are optimistic that the market could begin a very nice long-term run if Congress can iron out the budget issues, but until we are confident that something is in place, maintaining a slight overweight to fixed income is the safe play.
Our Investment Committee will continue to monitor the global markets, and we will provide our recommendations at the beginning of each quarter. As you get closer and closer to retirement, it is as important as ever to make the effort to protect what you have worked so hard to save! And to help you do that, we will continue to pass along our insights and the Quarterly Allocations any time we make changes in the future.
Try to stay warm the rest of this winter, and we will check back again in the Spring.
-The Retirement Network team
International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods. Past performance cannot guarantee future results.
Fixed income securities carry interest rate risk. Fixed income securities also carry inflation risk and credit and default risks. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.
Certain statements contained within are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties.