It is officially summer time, and as we all know Chicago is the best city in the world during these months. At our office, it is a time to get caught up and work on special projects, and we do fun things like Friday BBQs for employees. We are firm believers that it is important to take the time to step back and enjoy every day. So with no further ado, here is our latest update for your 401(k) plans:
Summary, Last Qtr: For much of Q2, the upward climb of the US stock market continued thanks to key improvements in both the unemployment and housing numbers. In addition to the obvious economic impact of more people working and more houses being built, we are also seeing a solid improvement in the investor public’s confidence as a result, too. One of the negatives from Q2, however, was interest rates – they began to climb steadily in June, which caused rising mortgage rates and some market volatility across the board.
Our Commentary: For the second quarter in a row, consider reducing the amount of fixed income exposure, which will result in a higher exposure to stocks. The reason is twofold: (1) rising interest rates can negatively affect the value of your fixed income investments, and (2) in our opinion, the increased volatility we mentioned above may represent strong buying opportunities right now.
Our Investment Committee will continue to monitor the global markets, and we will provide our comments 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 Updates in the future.
Be safe this summer, take the time to kick up your feet, and we will check back with you in the fall!
-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.
Opinions voiced are not intended to provide specific advice and should not be construed as recommendations for any individual. To determine which investments may be appropriate for you, consult with your financial professional.