Volatile Markets

So far this year, the S&P 500 went down 3.56% in January, up 4.31% in February, up .69% in March, and, as of tax day, was down 1.80% in April.  It's been quite the roller coaster ride so far this year for the U.S. stock markets.

Markets such as this present challenges for most investors.  Without a clear direction up or down, investors have trouble deciding how and where to invest their money.  Some are looking for security while others are using the down days as opportunities to buy into stocks.

Sage Advice:  The average investor will find that the old advice still rings true.  Most of you have likely been told to buy low and sell high, stay invested for the long-term, and diversify.  Over the past ten years, you have likely heard those sayings too often and are looking for someone to tell you something new.  While these are wise ideas, following this advice doesn't mean that you have to stay paralyzed like a deer in headlights!

A Fresh Take:  This may be a time for a change.  Review your investment portfolio to see if there are any opportunities for adjustment to your allocation.  First, you may have some investments in asset classes (such as the large U.S. companies that comprise the S&P 500) that have performed well over the past few years.  You may want to pare back some of your investments in these asset classes and use the proceeds for something else.  By making changes such as this, you're effectively selling the investments while they are higher than what you paid and buying other investments while they are lower than where they recently traded.

Second, you may want to look for opportunities in sectors and asset classes that you haven't been utilizing.  Many people have some money invested in stocks of large U.S. companies, but have little in medium and small U.S. businesses or in international firms.  When it comes to fixed income, many people have U.S. Treasuries and corporate bonds, but have neglected to add international bonds to their portfolio.  You may want to look into other fixed income sources such as convertible bonds as well.  Making these changes could allow you to better diversify your portfolio.

Third, look into different investment vehicles for possible benefits to your portfolio.  For a long-term investment, consider real estate.  Whether you use traditional real estate purchases or investments through a brokerage firm, real estate has only somewhat rebounded from its recent levels.  Real estate isn't usually liquid and could still go down in value, so continue to think of this as a long-term strategy.

You may want to look into other vehicles such as annuities.  Today's annuities are different from those offered before the tech bubble burst.  Annuities now come with the ability to invest a portion of your money in equities while maintaining income or principal guarantees.  While annuities may have fees and surrender charges, many like the idea of having equity upside with some downside protection.

All three of these ideas still enable you to be invested for the long-term while following the advice to buy low and sell high while staying diversified.  There may be other ideas that could apply for your portfolio based on your specific risk level and objectives.  See a financial advisor to help determine what is appropriate for your situation.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.  Stock investing may involve risk including loss of principal.  Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price.  Investing in international investments may carry additional risk such as currency changes and political instability.  Investing in small and medium-sized companies may carry more risk than investing in larger firms.  No strategy guarantees performance or protects against a loss.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. 

The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual.  Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.

Office Changes...

We've moved!  Our new address is 

2809 Boston Street, Suite 509, Baltimore, MD 21224.

We're very excited about the change. Our new office is an ideal build out for our needs, has parking for clients, and is next to a wonderful new restaurant.  Feel free to drop by for a visit.

Website...

We are in the process of updating our website.  We'll let you know when we're done so you can see the exciting changes. 

Shred Day...

Our annual shred day, cosponsored by The Baltimore Guide, will be held from 10am to 12pm on Saturday, May 3rd.  We will once again be at the Safeway in Canton near the smoke stack.  Feel free to bring as much as you like to the event.  The shred company has a large mobile shredding truck and we're happy to fill it!  Contact our office for more information.

Office Closings...

The markets, LPL Financial, and our office will be closed on Monday, May 26th for Memorial Day.

We are always accepting donations for the local animal shelters - toys, tennis balls, collars, leashes, food, cat litter, cardboard trays, office supplies, cleaning supplies, towels, mats, washcloths, etc. We will accept donations Monday-Friday between 9AM & 5PM.