This month we will explore Q1 economic and market highlights, the Federal Reserve's policy shift, and key retirement insights. At Certus, we are committed to keeping you informed and working together to achieve your unique goals.
Feel free to reach out with any thoughts or questions about your financial journey. Your goals are our priority.
Yours truly,
Economic & Market Summary: Q1 Insights
In this update, we provide insights and considerations that are guiding investment strategy. Covering topics from market positioning and style adjustments to actively managed exposures and economic outlook, let's dig into the highlights:
Maintaining Strategic Positioning: We maintain a 2% overweight stock position with a firm bias towards the U.S. market. There appears to be confidence in the U.S. consumer's strength, and the potential for a soft landing in 2024 supports an overall risk-on stance.
Tech Overweight and Style Adjustment: Remaining overweight on Tech, we are adjusting our overall growth/value positioning. Recognizing positive earnings momentum for value stocks, we are strategically adding value to balance the portfolio's growth bias. The belief in looser liquidity and higher earnings supporting value stocks aligns with an actively managed factor rotation strategy.
Actively Managed Exposures and Risk Diversification: We are introducing actively managed exposures to capture market return dispersion and reduce duration while increasing credit.
Economic Outlook and Potential Volatility: We may experience some volatility due to the (perhaps surprisingly) strong fundamentals of the economy. Many economists do not foresee an early Fed interest rate cut due to the robust state of the economy. Consumer spending remains strong, inflation expectations seem to be trending in a positive direction, and the unemployment rate, though slightly lower, suggests a normalization in the job market.
Election-Year Considerations: Though elections can introduce market noise, historical trends show that the second half of the year tends to be stable. While election cycles might cause concern for some investors, the enduring strength of the U.S. economy suggests that elections do not impact long-term market outcomes.
Get Ready for 2024: Retirement Plans, Social Security & Medicare
The Federal Reserve's recent indications of a potential shift in monetary policy have sparked discussions among economists and investors. The Fed's preferred measure of inflation, the personal consumption expenditures price index, increased by 2.6% in December, slightly above the central bank's 2% goal. The uptick has led to speculation about a possible series of rate cuts in the coming year.
Luke Tilley, the chief economist at Wilmington Trust Investment Advisors, sheds light on this prospective shift, stating, "I think of it as turning a battleship. Their communication has gone from being way too hawkish and started to turn to what is more likely to happen and preparing for the start of cuts. The switch takes a while, and they are moving in that direction."
For a deeper look into the Fed’s evolving stance, read the full Reuters article. We at Certus are closely monitoring this topic and will continue to keep you updated.
Smooth Transitions: 6 Keys When Changing From the Accumulation Phase of Life to the Distribution Phase of Life
Planning for retirement involves a crucial shift from accumulating wealth to distributing assets strategically. In our latest blog post, we dig into six considerations to help ensure a smooth transition and financially secure retirement. From evaluating market implications to strategizing asset withdrawal and accounting for market fluctuations, each factor plays a vital role. We are here to guide you through this pivotal phase, providing insights and support tailored to your unique goals. Read more.
Now Available: Tax Statements
Tax statements are now available on both Schwab and the Orion platform through our website's Client Login page or via the Certus Wealth Management app, downloadable for free on the App Store and Google Play. To request your login credentials, email us at info@certuswealthmanagement.com. The app grants easy access to your portfolio information dating back to our partnership's beginning and allows customization for biometric access (Face ID for Apple and Face Recognition for Android).
Thinking about retirement readiness? Explore age-specific strategies for savings, investments, and life milestones – to help ensure you’re prepared for the future.
Financial Advice is offered through Certus Wealth Management LLC, a Registered Investment Adviser.
This message and any attachments are solely for the intended recipient and may contain confidential or privileged information. If you are not the intended recipient, any disclosure, copying, use, or distribution of the information included in this message and any attachments is prohibited. If you have received this communication in error, please notify us by reply email and immediately and permanently delete this message and any attachments. Thank you.
This material prepared by Certus Wealth Management, LLC (“Certus Wealth”) is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Opinions expressed by Certus Wealth are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Certus Wealth, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Certus Wealth does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.
Certus Wealth Management, 1025 Alameda de las Pulgas, Ste. 102, Belmont, CA 94002, (650) 232-2023