Asset Allocation

START PREPARING YOUR PORTFOLIO FOR THE NEXT TEN YEARS

START PREPARING YOUR PORTFOLIO FOR THE NEXT TEN YEARS

Market leaders of one decade are frequently laggards of next and vice versa

2010s MARKET LEADERS
(12/31/2009-12/31/2019)

U.S. Stock Market:
• Large (S&P 500) +256.4%
• Mid (S&P 400) +230.6%
• Small (Russell 2000) +205.5%

NETFLIX +4000%

2010s MARKET LAGGARDS
(12/31/2009-12/31/2019)

• Emerging Markets (MSCI Emerging Markets Index) +48.3%
• Brazil (Ibovespa) -26.9% (USD)
• Gold +38.9%
• U.S. Treasury Inflation-Protected Securities (TIPS) + 39.2%

Commodities:
• S&P GSCI -16.9%
• West Texas Intermediate (WTI) – 23.1%

Watch the related WEALTHTRACK episode.

REMEMBER TO REBALANCE INTO OUT OF FAVOR SECTORS

• U.S. growth stocks, mega-caps, in particular, have dominated markets and portfolios for years
• Their powerful performance means they have outsized positions in indexes and portfolios
• Out of favor groups like small caps, cyclical stocks, value, and emerging markets have been beaten down and in many cases are selling at the lowest relative values to large-cap growth since the financial crisis
• Divergence in valuations has created an opportunity not seen in years, to take some profits from overvalued large-cap growth and add to these unpopular and undervalued sectors

Watch the related WEALTHTRACK episode.

LOOK INTO SOME BASIC HEDGING STRATEGIES TO CUSHION YOU FROM MARKET DECLINES

• Market Neutral Funds
• – Vanguard Market Neutral fund, Morningstar Silver Medalist
• Cash & Cash Equivalents including U.S. Treasury Bills
• Gold
• Non-Correlated to Stock Market
• Provide Protection when markets get hit

Watch the related WEALTHTRACK episode.

CONSIDER ADDING A SHORT MATURITY MUNICIPAL BOND FUND TO YOUR PORTFOLIO

CONSIDER ADDING A SHORT MATURITY MUNICIPAL BOND FUND TO YOUR PORTFOLIO

Short term muni fund attributes:

• Tax free interest
• Less sensitive to rising interest rates
• Flexibility to reinvest as rates rise

Watch the related WEALTHTRACK episode.

CONSIDER USING MULTIPLE INVESTMENT APPROACHES

CONSIDER USING MULTIPLE INVESTMENT APPROACHES

Matthew Peron is using combination of active, passive, fundamental and quantitative

Watch the related WEALTHTRACK episode.