Unlocking Exponential Growth: Transform Your Financial Future Today

Long forgotten are the dismal days of 2022. The S&P 500 has recorded new all-time highs on over 50 days this year. Gold broke above its 2020 (and 2011) highs and continues its march upwards. The Russell 2000, the main barometer for small US companies, broke out above its 2021 highs. Home price gains have stalled since the summer but remain near all-time highs. Personal incomes continue to climb, reaching new highs monthly. A different asset is making a new all-time high almost daily. And everyone’s favorite currency, Bitcoin, leapt past $100,000. 

Bạn đang xem: Owning Assets is Cool Again

Xem thêm : JBWere expands fixed income offering powered by UBS Asset Management

With the election in the rear-view mirror, the markets (and clients) turn towards their next set of worries. What will happen with taxes? Tariffs, are they good? Are they bad? Will they even happen? What will be the outcome of the wars in the Middle East? What about with China and Taiwan? 

The great thing about the investment markets is that these concerns (and a host of others) are baked into today’s asset prices. This allows us to focus on the things that we can control. Are we saving enough for retirement? Should I be making a career change? Is this house big enough for my growing family and can we afford to move? Am I taking the right risks now that I am a couple of years into retirement? Can I spend more?

These are the questions and situations that truly matter. Fortunately, these are also the things that we have control over. With asset prices and personal incomes at all-time highs, this provides more flexibility to make changes that can alter your life’s trajectory in any direction you desire. Your focus should remain on balancing your short-term, intermediate, and long-term goals. As well as, how you can utilize the assets that you have to improve your situation.

Xem thêm : BlackRock Recommends Bitcoin Allocation: Here’s How Much Should Be in Your Portfolio

The key is to remain calm in the face of mounting pressure on missing out on the “hottest” investment of the moment. For instance, Bitcoin was underperforming compared to holding cash over the last 3 years until we received the election results (and it is now barely outperforming gold over the last 3 years). Narratives can change quickly and the urge to do something in the moment may feel overwhelming. 

All-time highs feel great, but your financial goals should remain the most important factor to consider when looking at your investments. If you are just beginning to invest or are in your prime earning years, you should embrace the opportunity to buy stocks at lower prices when volatility presents itself. If you are in retirement, your bonds continue to offer attractive yields. When working with clients in or close to retirement, we point to their total cash and bond investments as the next X years of spending. This ballast is different for each client, but important in maintaining a large enough equity allocation to support those later years of retirement. Now is a good time to review your goals and asset allocation – as high prices may present an opportunity to rebalance. 

Andrew Messerschmidt, CFA, is an Investment Officer at Cedar Rapids Bank & Trust. His direct line is (319) 743-7136.