CHECK YOUR ALLOCATION TO STOCKS A big risk for pre-retirees and retirees is a major decline in retirement funds Lack of time to make it up More than one- third of baby boomers’ 401(k)s: +70% in stocks Almost one-tenth of baby boomers’ 401(k)s:100% in stocks Watch the related WEALTHTRACK episode.
Action Point
GIVE YOUR PORTFOLIO A NON-CONSENSUS INVESTING REVIEW
GIVE YOUR PORTFOLIO A NON-CONSENSUS INVESTING REVIEW Where Most Vulnerable To Declines: Highest Risk Areas = Most Appreciation With Lagging Fundamentals Appreciation Vs. Fundamentals (2019 Performance) S&P 500 +29% capital appreciation S&P 500 +2% earnings per share Watch the related WEALTHTRACK episode.
DON’T CHASE PERFORMANCE
DON’T CHASE PERFORMANCE Studies show: Individual investors underperform funds they invest in They buy into funds after periods of exceptional performance (buy high) They sell funds after periods of underperformance (sell low) Watch the related WEALTHTRACK episode.
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 […]
STICK WITH PUBLICLY TRADED SECURITIES
STICK WITH PUBLICLY TRADED SECURITIES Signs of Private Equity Trouble An explosion in the number of private equity firms: 106% increase in PE-backed companies in the decade ending 2017 Net asset value of PE holdings up sevenfold since 2002 Watch the related WEALTHTRACK episode.
REBALANCE SOME OF YOUR U.S. STOCK EXPOSURE TO FOREIGN STOCKS
REBALANCE SOME OF YOUR U.S. STOCK EXPOSURE TO FOREIGN STOCKS U.S. market has outperformed foreign markets over the last decade Trim some U.S. holdings and add to some overseas markets Consider markets you are underexposed to and/or are unpopular Watch the related WEALTHTRACK episode.
