RL125 - 2022 Mid-Year Review and Outlook
On the Retirement Lifestyle Show, Roshan Loungani, Erik Olson, and Adrian Nicholson discuss how the markets have been performing so far in 2022 and why you should bother conducting a mid-year review of your portfolio. They also analyze the short-and long-term factors that could affect the position of an investor's portfolio and what to expect from the economy, the bond market, and global equities in the second half of the year.
[05:26] 2022 Mid-Year Market Review
[10:45] Comparing the Current Economic Environment to 2008 and 1973
[12:57] Are Treasuries Still an Effective Hedge Against Credit Risk?
[16:34] Impact of The Fiscal Stimulus Slowdown
[18:05] Does Slower Economic Growth Forecast a Recession?
[22:13] Is a Recession Unavoidable or We're Already in One?
[26:52] Inflationary Data Points And the Consumer Price Index
[31:40] What to Expect When We Get Inflation Under Control
[37:00] How Investors Should Respond to the Inflationary Environment
[40:30] How to Tactically Position Your Portfolio
[45:35] The Cardinal Rule of Investing: Always Keep Emotions Out of It
[49:35] Advice to Investors Who Want to Go All-In on Tech Stocks
[53:11] What Are Your Investment Beliefs?
[58:50] Mid-year Crypto Analysis
[01:03:10] Benefits of Having Guidance and Following a Strict Financial Plan
[01:05:50] How to Rebalance Your Portfolio
[01:07:35] Parting Thoughts
For more links and the full show notes keep scrolling down!
Roshan Loungani can be reached at roshan.loungani@aretewealth.com or at 202-536-4468.
Erik Olson can be reached at erik.olson@aretewealth.com or 815-940-4652.
Adrian Nicholson can be reached at adrian.nicholson@aretewealth.com or at 703-915-8905.
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Full Show Notes:
2022 Mid-Year Market Outlook
Most investors conduct mid-year market and portfolio reviews to evaluate the progress of their portfolios. Some go a step further and rebalance their portfolio with respect to market positions. Unfortunately, the markets in the first half of 2022 were incredibly turbulent such that most people feel like a mid-year portfolio checkup is a little more daunting than in other years. Stocks and bonds are down, and cryptocurrencies weren't spared either. And while economic turmoil may have peaked in the first half of the year, there is something you can do to cushion yourself for the remainder of the year. First, have a diversified and well-balanced portfolio with a risk profile consistent with your long-term goals. Second, be prepared with a plan in the event of an unexpected outcome such as a recession. The third, and maybe most important one of all, is to seek expert help and manage your emotions when investing.
Is a Recession Unavoidable, or We're Already in One?
Are we in a recession or headed for one in the coming months? A lot of calls from investment professionals seem to suggest that we're already in one. And two data points seem to support this argument that we might be close to, if not already, in a recession.
The first is that the Fed has historically had 13 rate hike cycles, and there have been 10 recessions in that same period. So, almost 80% of the time, when they're hiking rates, there's going to be a recession. The second one is that according to a recent paper by Domash and Summers, historically, since 1955, when inflation is over 5%, there is a 60% chance of a recession in the next two years. And if unemployment drops below 4%, the probability of a recession is about 70%. We've got both of those going on right now. This is why most financial experts believe the likelihood of a recession is a matter of when not if.
All opinions expressed by podcast hosts and guests are solely their own. While based on information that they believe is reliable, neither Arete Wealth nor its affiliates warrant its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only, and should not be regarded as specific advice or recommendations for any individual. Before making any decisions, consult a professional.