Imber Wealth Advisors: retirement planning

Showing posts with label retirement planning. Show all posts

Tuesday, January 18, 2022

What's Up With Inflation?

Inflation was already on the rise before we learned about the omicron variant. Now on top of supply-chain shortages and transportation disruptions, Federal Reserve Chairman Jerome Powell recently observed that a resurgence of COVID-19 cases could reduce the consumer-driven boom we’ve enjoyed for the past few months. Concerns about safety could result in more workers being sent back home to work and small businesses needing to cut back staff after the holidays, further slowing economic progress.¹

To date, much of the blame for higher inflation has been attributed to supply disruption. In the past, when inflation reared its ugly head, the Fed could douse rising prices by reducing interest rates.² Unfortunately, supply shortages and COVID-influenced employment rates are not easily resolved by adjusting interest rates.

Perhaps the greatest lesson we can learn from these trying times is that we can’t always rely on the government, employers or the stock market to resolve our financial troubles. The best we can do is create a plan based on our wants, needs and long- and short-term goals, and stick with it. That can be tough to do whenever the market drops on news of a newly identified variant or soars when a vaccine is announced. While these events may create opportunities, just remember that few people ever get rich by timing the market. If you’d like us to take a look at your financial plan and make recommendations to keep you positioned to meet your goals, please feel free to contact us.

Alas, it is important to recognize that rising inflation isn’t just a domestic issue; it’s happening all over the world. Countries in Eastern Europe are experiencing some of the highest inflation rates in recent years, and in many cases, people are struggling to buy food or fuel their cars. With another surge of infections during the winter season, we may see more countries close or tighten their borders, further hampering global economic recovery. As supply chains get cut off, we can expect higher inflation here in the U.S.³

There is also some debate as to whether companies are taking advantage of rising inflation to boost their profit margins. In fact, nearly two out of three of the largest U.S. corporations have reported higher profits this year than pre-pandemic. And yet, perhaps due to increased consolidation and the power that gives large companies to set prices, inflation continues to rise.⁴

In recent months, the Biden administration has attempted to address inflation through various means, from negotiating changes with ports and container companies, to improving government benefit programs, to launching investigations into price gouging. One tactic he has yet to implement is easing the current tariffs on goods imported from China, which Treasury Secretary Janet Yellen says could have a “disinflationary” effect.⁵

¹Thomas Franck. NBC News. Nov. 29, 2021. “Omicron variant means ‘increased uncertainty for inflation,’ Fed Chair Powell says.” https://www.nbcnews.com/business/economy/omicron-variant-means-increased-uncertainty-inflation-fed-chair-powell-rcna7004. Accessed Nov. 29, 2021.

²Kimberly Amadeo. The Balance. Nov. 11, 2021. “How the Federal Reserve Controls Inflation.” https://www.thebalance.com/what-is-being-done-to-control-inflation-3306095. Accessed Dec. 10, 2021.

³Justin Spike, Paul Wiseman and Vanessa Gera. AP News. Nov. 29, 2021. “Food, gas prices pinch families as inflation surges globally.” https://apnews.com/article/coronavirus-pandemic-lifestyle-health-business-poland-f559465c6a822d12b2dd513f122d5a31. Accessed Nov. 29, 2021.

⁴Dominick Reuter and Andy Kiersz. Business Insider. Nov. 16, 2021. “Corporations are using inflation as an excuse to raise prices and make fatter profits — and it’s making the problem worse.” https://www.businessinsider.com/corporations-using-inflation-as-excuse-to-reap-fatter-profits-reich-2021-11. Accessed Nov. 29, 2021.

⁵Reuters. Nov. 19, 2021. “Factbox: To battle inflation, Biden targets supply chains, gas, meat packers.” https://www.reuters.com/markets/commodities/battle-inflation-biden-targets-supply-chains-gas-meat-packers-2021-11-19/. Accessed Nov. 29, 2021.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Investment Advisory Services are offered by Imber Financial Group, LLC., a Registered Investment Adviser. Insurance services are offered through Imber Wealth Advisors, Inc. Imber Financial Group, LLC. and Imber Wealth Advisors, Inc. are affiliated companies

Tuesday, January 4, 2022

The Investment Greats

Not surprisingly, some of the most notable investors in America founded well-known investment companies. For example, John Templeton, whom in 1999 “Money” magazine called “arguably the greatest global stock picker of the century” founded Templeton Funds, best known for its international fund lineup. Thomas Rowe Price Jr., also referred to as “the father of growth investing,” established T. Rowe Price investment management firm in 1937.¹

Jack Bogle, who founded The Vanguard Group in 1975, originated the idea of index mutual funds to track broad stock market performance through a lower cost option for individual investors. Warren Buffett, who is still widely regarded as the world’s most successful investor, preaches a very simple investment philosophy: Buy what you know. Buffett has stuck to a strict discipline of buying companies for a low price, implementing long-term improvements and then profiting from those improvements via higher stock prices.²

Known for sharing his investment insights, Warren Buffet is a big proponent of these principles:³

· Investing in what you know

· Never compromising on business quality

· Buying and holding forever

· Not getting distracted by day-to-day financial news

· Recognizing the difference between price and value (“Price is what you pay. Value is what you get.”)

While investment legend Roy R. Neuberger—who co-founded the brokerage and investment firm Neuberger Berman—encouraged people to study the great investors, he cautioned against trying to emulate their success. According to Neuberger, it is better to adopt only tactics that suit your temperament and circumstances because your needs and resources will be different from others.⁴ We’d like to add to that wisdom the importance of working with a financial professional who understands your needs and goals. Feel free to tap our experience for help matching your situation to proven investment vehicles and strategies.

Another investment great is Peter Lynch, the Fidelity fund manager who ran the Magellan Fund from 1977 to 1990. Lynch believed in investing throughout the long term, taking only as much risk as your stomach can handle and always spending at least as much time researching stock picks as you would to buy a house, car or major appliance.⁵

Content prepared by Kara Stefan Communications.

¹Investopedia. Oct. 24, 2021. “The World’s Greatest Investors.” https://www.investopedia.com/world-s-11-greatest-investors-4773356. Accessed Nov. 5, 2021.

²Robert Farrington. The College Investor. Oct. 23, 2021. “The Top 10 Investors of All Time.” https://thecollegeinvestor.com/972/the-top-10-investors-of-all-time/. Accessed Nov. 5, 2021.

³Simply Safe Dividends. 2021. “Top 10 Pieces of Investment Advice from Warren Buffett.” https://www.simplysafedividends.com/intelligent-income/posts/37-top-10-pieces-of-investment-advice-from-warren-buffett. Accessed Nov. 5, 2021.

⁴Anupam Nagar. Economic Times. July 17, 2021. “10 principles of successful investing from the legendary Roy R. Neuberger.” https://economictimes.indiatimes.com/markets/stocks/news/10-principles-of-successful-investing-from-the-legendary-roy-r-neuberger/articleshow/84498113.cms. Accessed Nov. 5, 2021.

⁵Fidelity. Aug. 11, 2021. “Lessons from an investing legend.” https://www.fidelity.com/viewpoints/investing-ideas/peter-lynch-investment-strategy. Accessed Nov. 5, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Tuesday, August 24, 2021

They say we don’t always appreciate what we have until it’s gone. That was one of the big lessons learned during the pandemic — but there are others. We learned a lot about the quirks and interests of family members — which tend to change as our children grow and we don’t always realize how much.

We also learned to never take good health for granted. For many who either didn’t contract COVID-19 or did so with mild symptoms, it’s hard to appreciate that one small change in a person’s health — asthma or diabetes — could be the difference between some people not taking the disease seriously and others dying.

We also may have learned a thing or two about financial security and the value of emergency funds and insurance safety nets. If it has occurred to you that your household finances could be in better shape, particularly if we have more pandemics and more shutdowns in the future, please give us a call. We can help you position assets for reliable income and emergency cash.

Family

Students switched to online classes. College graduates moved back home with no job in sight. Breadwinners either worked from home or risked their health to serve in essential positions or to keep their businesses afloat. With fewer entertainment venues available, we were either all living in close quarters or living alone with greater social isolation than ever before. As of last July, 52% of people ages 18 to 29 lived with a parent. That’s the highest number in more than a century, according to the Pew Research Center. While some households may have fared better than others, in the best-case scenarios families learned to spend days upon days together sharing (and negotiating) indoor spaces, preparing meals together, walking and working in the yard, and talking. One parent of a boomerang Millennial observed, “You raise your kids to grow up, and somebody else gets to meet them like this, as adults. But now I get to know her like this.”1

Education

The pandemic may be the catalyst to effectively evolve our nation’s higher education system. At least some form of hybrid classes (online and in-person) are expected to continue permanently. In addition, colleges are becoming more focused on how to better prepare students to work (and find) jobs when they graduate, including more for-credit internships with local employers. Perhaps the growing cost of education may begin to subside, since the fees universities charge for student services has grown four times as fast as those for instruction. With so many students graduating with student debt throughout the last two decades, today’s young adults are questioning the value of a college education altogether. Instead, they are focused on a higher return of investment for taking on that level of debt. Today, only 66% of students say they believe a college degree offers a good return on investment, compared to 78% last August.2

Jobs

COVID redefined the concept of an “essential worker.” It is no longer just fire, police, emergency and hospital workers. The category has expanded to include grocery store stockers and clerks, factory floor workers and delivery drivers. Meanwhile, employees at every income level began to question their career choices, some not just abandoning jobs but switching professions. With more people enjoying the work-from-home option, they are less focused on how much they can earn but how it provides for their quality of life. If they earn less but are happier working from home, many are willing to make that sacrifice. As of January, a Pew survey revealed that 66% of unemployed people have seriously considered changing occupations.3

Saving and Spending

Since we could go nowhere and do nothing, millions of Americans saved more money in the early months of the pandemic. The Federal Reserve Bank of St. Louis reported that in 2020, the personal savings rate grew from 8.3% in February to 33.7% in April. By January 2021, it still remained as high as 20.5%. The ability to work from home meant fewer people dressed for work or paid dry cleaning bills. According to the U.S. Bureau of Economic Analysis, Americans spent $23.9 billion less on clothing and footwear in the fourth quarter of 2020 than in the fourth quarter of 2019. There was less driving in both business and commercial markets, reflecting $88.2 billion less spent on gasoline and other energy goods than in 2019. Additional savings resulted from preparing more meals at home and exercising at home in lieu of gym fees. 4

Health

The relatively quick onset of COVID-19 showed just how fast industries could adapt when necessary, particularly the health industry. Policy makers are driven to focus more on wellness, prevention and public health. Employers (and schools) have a greater appreciation of how precautionary measures can help prevent the spread of other airborne and infectious diseases (during cold and flu season). And while the U.S. has been debating health care reform for years, there is now a greater appreciation of how value-based payment models can create a more resilient health care system.5

We take pride in assisting our clients with incorporating all aspects of their life into their Retirement Roadmap 360®. Take control of your financial future and give us a call at (734) 769-1719 today to see how we may be able to help you!

1 Soumya Karlamangla. The Los Angeles Times. June 9, 2021. “A pandemic love story you haven’t heard before: Parents and their adult children.” https://www.latimes.com/california/story/2021-06-09/adult-kids-parents-have-unique-covid-love-stories. Accessed June 12, 2021.

2 Bianca Quilantan. Politico. Jan. 25, 2021. “How the pandemic forever changed higher education.” https://www.politico.com/newsletters/weekly-education-coronavirus-special-edition/2021/01/25/how-the-pandemic-forever-changed-higher-education-792939. Accessed June 12, 2021.

3 Joanne Lipman. Time. June 1, 2021. “The Pandemic Revealed How Much We Hate Our Jobs. Now We Have a Chance to Reinvent Work.” https://time.com/6051955/work-after-covid-19/. Accessed June 12, 2021.

4 Stephen Schramm. Duke Today. May 5, 2021. “How We’re Saving Money During the Pandemic.” https://today.duke.edu/2021/05/how-we’re-saving-money-during-pandemic. Accessed June 12, 2021.

5 Laura Joszt. American Journal of Managed Care. May 17, 2021. “Building a More Resilient and Sustainable Health System.” https://www.ajmc.com/view/building-a-more-resilient-and-sustainable-health-system. Accessed June 12, 2021.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Investment Advisory Services are offered by Imber Financial Group, LLC., a Registered Investment Adviser firm. Insurance services are offered through Imber Wealth Advisors, Inc. Imber Financial Group, LLC. and Imber Wealth Advisors, Inc. are affiliated companies

Tuesday, August 17, 2021

Putting Inflation Expectations in Persepective

Historically, inflation has been highly correlated with unemployment levels. When more people were out of a job, inflation was lower. As more people got jobs, inflation increased. From an economic point of view, this makes sense. Jobs increase income, which increases spending, which increases demand — supplies drop and prices rise. The opposite is true when fewer people hold jobs.¹

That’s one thing that makes economic policy so difficult to set. It requires a careful balance of cause and effect, keeping in mind that what’s good for some portions of the population is bad for others. During periods of rising inflation, it’s important to monitor how it might affect us personally, from buying household goods to managing a portfolio. While economists are keeping an eye on the direction and momentum of rising inflation now, you may want to consider adding inflation-protection measures to your investment portfolio at some point. Contact us if you’d like to learn more about allocations to treasury inflation-protected securities (known as TIPS), real-estate investment trusts or commodities to help hedge the effect of rising inflation.²

In April, the inflation rate grew to 4.2%, which drove speculation that the Federal Reserve might reconsider its current stance on interest rates and monetary policy. The consumer price index (CPI) rose significantly for used cars and trucks, food, housing, airline fares, recreation, motor vehicle insurance, household furnishings and operations.

Currently, the federal funds target rate (which serves as the benchmark for bank interest rates) ranges from 0 to 0.25%. Previously, the Fed indicated that it expects to maintain a near-zero interest rate through 2023. The central bank targets an average inflation rate of 2 percent throughout time, so it appears not particularly concerned with the recent spike. In recent comments, Fed chairman Jerome Powell noted that the committee was monitoring “a broad range of financial conditions,” rather than focusing on addressing just one.³

Besides, Fed officials expected inflation to increase as the U.S. economy reopened. The surge in prices is expected to be temporary, as it is simply a matter of a supply crunch after months of pent-up demand. It’s normal that prices for hotel rooms, rental cars, used vehicles, sporting events and restaurants will go back to their pre-pandemic levels. Once jobs, consumerism and inflation reach a level of normalization, the Fed will consider whether it needs to raise the target federal funds rate.⁴

In terms of the investment market response, CNBC’s Jim Cramer observed that people expected high inflation due to stimulus and jobs numbers. As a result, when the numbers were announced the market didn’t panic – thus far it has taken the high inflation number in stride. Cramer went on to note that raising interest rates won’t solve all the problems that occurred last year. In many cases, only time can resolve them.⁵

Likewise, time may resolve the current labor shortage, as restaurants and hotels struggle to find enough workers to fill open jobs. Additionally, the current strong economy could solve for the national minimum wage debate without the need to pass new legislation. For example, retailers Amazon, Costco and Target have all voluntarily increased wages to $15/hr or more to meet demand. This strategy follows the traditional economic principle of supply and demand, in which the only way to stay competitive in the labor market is to increase wages. After all, workers have to keep up with the rising costs of housing, childcare, food and transportation.

Speaking of childcare, after decades of working mothers in the labor market, it will be interesting to see if the rising economy also can address the problem of childcare. During the pandemic, more women than men left their jobs to stay home with children sidelined from schools and childcare centers. This phenomenon may continue until employers — or legislators — come up with a solution. It will be difficult for the American economy to advance while there are millions of unemployed women staying home because of trouble securing child care.

The pandemic also convinced twice the number of Baby Boomers to retire than the previous year. Raising wages and providing more childcare resources, paid parental leave and paid vacation time may be the only way to woo more people back into the labor force.⁶

¹ Greg Depersio. Investopedia. Aug. 22, 2020. “What happens when inflation and unemployment are positively correlated?” https://www.investopedia.com/ask/answers/040715/what-happens-when-inflation-and-unemployment-are-positively-correlated.asp. Accessed June 11, 2021.

² Greg Iacurci. CNBC. June 8, 2021. “Gold as an inflation hedge? History suggests otherwise.” https://www.cnbc.com/2021/06/08/gold-as-an-inflation-hedge-history-suggests-otherwise.html. Accessed June 11, 2021.

³ Knowledge@Wharton. June 1, 2021. “Inflation: What Lies Ahead?” https://knowledge.wharton.upenn.edu/article/inflation-what-lies-ahead/. Accessed June 12, 2021.

⁴ Patti Domm. CNBC. June 11, 2021. “Inflation is hotter than expected, but it looks temporary and likely won’t affect Fed policy yet.” https://www.cnbc.com/2021/06/10/inflation-hotter-than-expected-but-transitory-wont-affect-fed-policy.html. Accessed June 11, 2021.

⁵ Tyler Clifford. CNBC. June 10, 2021. “Jim Cramer reacts to red-hot inflation number: ‘The market took it in stride’.” https://www.cnbc.com/video/2021/06/10/jim-cramer-reacts-to-inflation-report-the-market-took-it-in-stride.html. Accessed June 11, 2021.

⁶ Sarah Hansen. Forbes. May 15, 2021. “Could Covid-19 Worker Shortages Create A $15 Minimum Wage—Even Without A New Law?” https://www.forbes.com/sites/sarahhansen/2021/05/15/could-covid-19-worker-shortages-create-a-15-minimum-wage-even-without-a-new-law/?sh=1ae0db234929. Accessed June 11, 2021.

Saturday, August 14, 2021

Retirement Withdrawal Strategies

As hard as retirement saving and investing may seem, that’s the easy part. The real challenge is figuring out how to make your accumulated savings last throughout your and your spouse’s retirements. You need a strategy, and it’s best to have that strategy developed before retirement begins.

Because life expectancy is longer these days, many retirees need to maintain a growth component in their investment portfolio during retirement. That adds an extra challenge to your distribution strategy. The goals for drawing down funds include minimizing market risk to an equity allocation, coping with variable income that may be impacted by market returns, minimizing taxes, and supporting an increase in income needs associated with late-stage medical and long term care. It’s important to understand how these goals and needs interact to customize a retirement distribution strategy, and we can help you with that. Contact us to learn more.

Given that an investment portfolio may need to keep growing even after you retire, it’s important to consider “sequence of returns” risk. This basically means that if you retire around the time of a significant market decline, you can greatly deplete the principal from which you draw retirement income throughout the long term, subsequently having to reduce your retirement lifestyle or risk running out of money. To combat this risk, retirees should remain flexible. For example, continue to work past your planned retirement date if the market has a setback, or even re-enter the workforce post-retirement to help supplement your income and give investments time recover.¹

Once you retire, you can set up a systematic withdrawal plan if you need to supplement your regular household income. If your retirement plan indicates you’ll need more money at different stages, consider the bucket strategy, wherein you allocate certain investments (“buckets”) for different stages so you have new assets to tap as you age. This strategy may also enable you to retain a more aggressive equity allocation in buckets you plan to tap later.²

To help minimize taxes in a retirement portfolio, alternatives could be to first withdraw from taxable assets (e.g., brokerage account), then tax-deferred plans (e.g., 401(k) and traditional IRA) and finally tax-free assets (e.g., Roth IRA). This approach gives your tax-advantaged accounts more time to grow tax-deferred. By planning to tap tax-free assets last, there’s a better chance of leaving tax-free income for your heirs.

However, it’s important to tailor your draw-down strategy for your personal circumstances, taking into account your retirement tax bracket. For example, a moderate-income household with multiple account types may want to draw a combination of tax-free, taxable and tax-deferred assets from the beginning to stay within a lower marginal tax bracket.³

It’s also important to consider the best time to start receiving Social Security benefits. Here, too, conventional wisdom recommends delaying as long as possible; preferably to age 70 for maximum accrual. Wayne Pfau, co-director of the New York Life Center for Retirement Income, would like to see the Social Security Administration extend the age to which additional delayed retirement credits (8% a year starting at full retirement age) accrue on benefits until age 72. This would be an effective way to encourage people to work longer and reward them for doing so. Even if they don’t work longer, investors can draw down income from their taxable accounts to reduce the value of their employer accounts and IRAs. Then, when they do begin drawing their larger Social Security benefit for life, they also benefit from lower required minimum distributions (RMD) to help them stay in a lower income tax bracket.⁴

The key is to customize a retirement distribution strategy for each household’s situation, taking into consideration factors such as health and life expectancy (of both spouses), retirement income needs, where assets are invested, tax bracket management and what assets are best positioned for an inheritance.

¹ BlackRock. 2021. “Will my income last a lifetime?” https://www.blackrock.com/us/individual/insights/retirement-income. Accessed June 4, 2021.

² Curtis V. Cloke. Retirement InSight and Trends. May 4, 2021. “Advanced Annuity and Tax Strategies for Retirement Income.” https://www.retirement-insight.com/advanced-annuity-and-tax-strategies-for-retirement-income/. Accessed June 4, 2021.

³ T. Rowe Price. February 2021. “How to Get More Out of Your Retirement Account Withdrawals.” https://www.troweprice.com/content/dam/iinvestor/resources/insights/pdfs/how-to-get-more-out-your-retirement-account-withdrawals.pdf. Accessed June 4, 2021.

⁴ Ginger Szala. ThinkAdvisor. May 6, 2021. “Wade Pfau Makes Case for Raising Top Social Security Claiming Age to 72.” https://www.thinkadvisor.com/2021/05/06/wade-pfau-makes-case-for-raising-top-social-security-claiming-age-to-72/. Accessed July 7, 2021.

Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Monday, August 9, 2021

Midyear Market Outlooks

In its midyear review, market analysts at Charles Schwab say that economic growth in the United States may have peaked in the second quarter of this year, and it believes China experienced its peak in the fourth quarter of 2020. However, Schwab is bullish on Europe’s prospects for the rest of this year. It notes that the rollout of Europe’s largest-ever stimulus plan should aid growth and the region still has some way to go before peaking — meaning eurozone stocks could deliver further gains.1

Consider that, because the overall stock market performed well in the first half of the year while bonds underperformed, it’s possible your asset allocation may be skewed. Feel free to contact us for advice on rebalancing your portfolio midyear. This will enable you to cash in on gains and reassess how to potentially position your equity allocation given market projections for the second half of 2021.

Morgan Stanley is bullish on sustained growth in the U.S., citing three factors that appear to be driving the economy. The first is the high savings and consumer spending rate. Despite job losses throughout 2020, U.S. households were bolstered by stimulus payments and supplemental unemployment benefits. As a result, the average household income has already exceeded its pre-COVID level. Consumer demand fuels corporate prospects, so the money manager expects capital spending to continue here and in other developed countries throughout the globe. And finally, Morgan Stanley economists predict that the nation’s core inflation will rise above 2% by year’s end, but not enough to trigger the Federal Reserve to raise interest rates.2

At JP Morgan, economists believe that robust growth and rising inflation in the U.S. will prompt the Fed to taper bond purchases by the end of this year and begin to raise short-term rates as early as the fourth quarter of 2022. Investors should consider that rising rates will produce higher yields that will increase pressure equity valuations. Furthermore, the falling dollar will benefit international equities. The money manager recommends investors consider higher allocations to international equities and alternatives in the near-term.3

In the fixed income market, Raymond James emphasizes the importance of strategic asset allocation to maintain portfolio balance, regardless of the current interest rate environment. The firm’s fixed income experts believe the 10-year Treasury will end the year in the range of 1.25% to 1.80%. By diversifying assets with a balanced approach, investors can preserve principal and allocate for growth in assets expected in appreciate in price.4

In the stock market, given the reopening of the U.S. economy, Ameriprise Financial expects continued price growth among cyclical value stocks, improving business trends and strong year-over-year profit growth. While stock fundamentals remain strong, they suffer more from investor views that the market isn’t performing as strong as it could be, which can damper enthusiasm. Going forward, Ameriprise analysts caution that share prices may fluctuate due to changes in growth expectations. Given the uncertainties related to higher inflation and supply shortages, they recognize that short-term conditions may be volatile through the summer but, in the long term, the current environment favors stocks.5

1 Charles Schwab. June 15, 2021. “2021 Mid-Year Market Outlook: Peak or Pause?” https://www.schwab.com/resource-center/insights/content/quarterly-market-outlook. Accessed June 16, 2021.

2 Morgan Stanley. June 9, 2021. “2021 Midyear Economic Outlook: A Business Investment Surge Ahead.” https://www.morganstanley.com/ideas/global-economy-midyear-outlook-2021. Accessed June 16, 2021.

3 JP Morgan. 2021. “The Investment Outlook for 2021: A Midyear Review.” https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/investment-outlook-2021-us.pdf. Accessed June 16, 2021.

4 Doug Drabik. Raymond James. June 14, 2021. “Midyear Rate Review: Markets and Investing.” https://www.raymondjames.com/commentary-and-insights/markets-investing/2021/06/14/bond-market-commentary. Accessed June 16, 2021.

5 Anthony Saglimbene. Ameriprise Financial. June 15, 2021. “Midyear market review: What’s ahead for stocks.” https://www.ameriprise.com/financial-news-research/insights/midyear-market-review. Accessed June 16, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.