Even though the temperature begins to get cooler and the days begin to get shorter, fall is a feel-good time for many reasons – the kids and grandchildren go back to school, football is back and the Bears have a lot of promise this season, and the leaves will begin to turn. It is also a great time to re-focus on the things that are very important (but not always fun to deal with), and your 401(k) certainly fits that description for most people. Spend a few minutes this week and log into your 401(k) account, and make sure your allocations are where they need to be. And after that, you can get back to enjoying some of the best months of the year!
Summary, Last Qtr: Throughout much of the 3rd Quarter, the stock market saw a fairly steady increase in value and decrease in volatility. The U.S. economy continued to slowly improve despite the fact that unemployment has remained well above its historic averages. In September, the Fed announced its plans for a Quantitative Easing #3 (“QE3”) saying it would spend $40 billion per month to buy back mortgage-backed securities in an effort to keep interest rates low and to improve the health of our banking system. After that announcement, we saw continued increases in the value of the stock market.
New Recommendations: As a continuation from last quarter of the very gradual allocation back towards international funds, we suggest that you continue that movement. For all risk categories, you may want to consider adding a small amount to your global exposure by reducing the amount of U.S. stocks (instead of reducing the amount of fixed income you own). We may see a spike in volatility during the 4th Quarter, but ultimately we are comfortable with that possibility due to the slight overweight in fixed income.
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.
Enjoy the cooler months and the upcoming holiday season, and we will check back with you at the beginning of 2013. Until then…GO BEARS!
-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 predications 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.