Weekly Market RecapThis week saw the International Monetary Fund (IMF) nudge down global GDP growth estimates for 2016 to 3.1% from 3.2%. This forecast change by the IMF is primarily a reaction to Brexit, with the UK expected to see lower, but still positive growth for 2016-17 with small, but negative impacts on trading partners. On the positive side, the emerging markets of Brazil and Russia are expected to have a more positive 2016 than originally projected. We encourage you to take some time to consider your risk tolerance setting. This is useful to do at least annually, unrelated to market events. To help with this, it can be helpful to think back to how you felt as an investor on Friday, June 24th, after the Dow fell 610 points on Brexit fears. Was your view that these types of market movements can happen regularly, and tend to come with investing in portfolio that contains equities? Or did the large movement make you nervous to the point you considered changing your allocation? Also, bear in mind that the Brexit pullback last month was relatively short-lived and shallow. Historically longer and deeper corrections have occurred. Self-reflection on how you react to market events can help correctly identify your true risk tolerance, and consequently, be better prepared when future world events occur that rattle the financial markets. Your risk tolerance should be set for the long term. The right answer for your risk tolerance depends on your own ability to manage the expected trade-off between greater ups and downs in the market in exchange for potentially higher returns. Please remember that our algorithms already take into account your age and time to retirement in personalizing your portfolio. This means that your risk tolerance should not necessarily be aggressive if you are younger or conservative when you are older. Considerations of your age is already included in your personalized portfolio allocation through what is often called a glide path that changes your allocation as retirement draws closer. If in doubt, select a lower risk tolerance, because having a strategy that you can truly stick with is critical for investment success, in our view. Also, remember that adjusting your risk tolerance is likely to result in trades for your portfolio, which can have both a direct cost and tax implications. Notes: Disclaimer: Your Portfolio Update
Over the past month your portfolio was up 6.1%, and we have no recommendations at this time to improve it. Congratulations on maintaining one of the best portfolios among all our clients. We will, as always, continue monitoring your account and alerting you if there are actions to take (periodic rebalancing is required, etc). Ways To Improve Your Portfolio
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Saturday, July 23, 2016
Your portfolio up 6.1% over the last 30 days as IMF trims forecasts on Brexit
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