(Go back to prior step: Define Your Risk Level)
Tactical Asset Allocation—Winter, 2021/22
There really is nothing that can take the place of proper asset allocation when it comes to growing and protecting your wealth throughout the economic cycle. What happens when you ignore your own risk level and your proper asset allocation portfolio? Consider the Americans who lost over 50% of their investment portfolio value between 2000 and 2002 because we were in a "new economy" and "old rules no longer apply."
No. Refuse to be one of the victims of a shock to the system by taking these four simple steps:
No. Refuse to be one of the victims of a shock to the system by taking these four simple steps:
- Identify your Risk Number
- Assure your portfolio is aligned with the appropriate portfolio below based on your unique Risk Number
- Use a combination of the 100 investments in the five Penn Strategies to fill in where you are underweighted
- Create your own Personal Financial Website to assure you remain on track building personal wealth as efficiently as possible
Members, select the appropriate image below to sign in and view recommended asset allocations for Winter, 2021/22...
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member.services@PennWealth.com, headline "Allocations"
member.services@PennWealth.com, headline "Allocations"
Winter, 2021/22 Commentary...
A highly unusual year...
(05 Feb 2022) This is not 2000, when the NASDAQ began its 78% decline, taking fifteen years to recover to March, 2000 levels. However, for owners of tech stocks with no earnings on the horizon, it may feel that way. There is an enormous reset going on in the markets right now, and investors must be aware of the environment and use all tools at their disposal.
For great American companies which have been sold along with the no-earnings names, buying opportunities abound. For stocks which won't generate net income for years, use stop-loss orders to protect your positions. Value companies which make money year-in and year-out, and have pricing power, will do well this year. In a rising rate environment, consider adding to "real assets" such as commodities, real estate, and precious metals.
With six to eight rate hikes on the horizon, navigating the fixed income world will feel like walking through a mine field. Investors must think differently this year: look for senior loan funds which should adjust higher as rates rise, emerging market bond funds in improving economies, preferreds with good credit qualities (the best yields one could hope for in this environment).
Overweight sectors such as financials, health care, energy, and utilities—defensive positions which generate strong net income and offer good dividend yields. Avoid tech names with sky-high betas and a lack of net income. This will be a challenging year, so keep plenty of dry powder in the form of cash equivalents to strike as opportunities arise. Most importantly, know your risk tolerance level and assure your portfolio is aligned with it.
—MSH, Penn Wealth
(05 Feb 2022) This is not 2000, when the NASDAQ began its 78% decline, taking fifteen years to recover to March, 2000 levels. However, for owners of tech stocks with no earnings on the horizon, it may feel that way. There is an enormous reset going on in the markets right now, and investors must be aware of the environment and use all tools at their disposal.
For great American companies which have been sold along with the no-earnings names, buying opportunities abound. For stocks which won't generate net income for years, use stop-loss orders to protect your positions. Value companies which make money year-in and year-out, and have pricing power, will do well this year. In a rising rate environment, consider adding to "real assets" such as commodities, real estate, and precious metals.
With six to eight rate hikes on the horizon, navigating the fixed income world will feel like walking through a mine field. Investors must think differently this year: look for senior loan funds which should adjust higher as rates rise, emerging market bond funds in improving economies, preferreds with good credit qualities (the best yields one could hope for in this environment).
Overweight sectors such as financials, health care, energy, and utilities—defensive positions which generate strong net income and offer good dividend yields. Avoid tech names with sky-high betas and a lack of net income. This will be a challenging year, so keep plenty of dry powder in the form of cash equivalents to strike as opportunities arise. Most importantly, know your risk tolerance level and assure your portfolio is aligned with it.
—MSH, Penn Wealth
Aggressive Growth Portfolio: If your Risk Level is above 90
Conservative Growth Portfolio: If your Risk Level is 51-89
Growth & Income Portfolio: If your Risk Level is 28-50
Asset Preservation Portfolio: If your Risk Level is 27 or below
