Do you feel like 2021 has been unlike almost any other time in the history of the stock market? Well, you’re right. I invite you to check out my video about what this means, what we should be prepared for going forward, and how Glassman Wealth Services is using this information for our clients and their portfolios.
At any point in time, we need to be prepared for some kind of significant reset. But when things are this good for this long, investors forget this, and complacency and risk set in. During a very low volatile time like this, we need to expect that we’re going to see some additional volatility and it may be for a surprising reason.
An interesting thing to note: Bad economic news does not necessarily equal bad performance in the stock market. This is because a challenging environment is likely to keep the Federal Reserve from raising interest rates. We saw this back in 2013 and I recorded this video to explain it at the time: Are Stocks Expensive? (2013). The bigger risk, in Glassman Wealth’s opinion, is that the economy starts to overheat both in the U.S. and overseas, and we could see the Federal Reserve taper their purchases and signal that interest rates will rise in 2022.
Glassman Wealth is using this information to rebalance client portfolios to appropriate risk levels, particularly in cases where clients are closer to retirement and their goals.