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November 2022 Investment Changes

November 2022 UPDATES

We repositioned a portion of our shorter term bond funds into money market funds. 

WHY? Attractive short term yields with minimal interest rate risk due to the recent Fed rate hikes. We anticipate opportunities to deploy these funds into more opportunistic fixed income once our interest rate environment becomes a bit more settled.  

We have repositioned some of our equity holdings to align with a focus on quality companies across many sectors measured by sustainable earnings and low leverage.  

WHY? Focus on less interest rate sensitive companies without being too defensive. We believe balance sheets have a greater impact in this environment than in the era of low interest rates. While we are adding some exposure back into our growth and tech segment, we are doing so with a measurable emphasis on companies not dependent on low interest rates. 

Although these times are challenging, the decisions made now, both in investment selection and financial behavior set the stage for investing success in the future. While it certainly is not a time to overreact and make emotional decisions, it's also not a time to sit back and do nothing. These shifts reflect the changing era of investing we are entering primarily driven by the change of Fed monetary policy.  


“Our very survival depends on our ability to stay awake, to adjust to new ideas, to remain vigilant and to face the challenge of change.”  – Martin Luther King Jr.


OUR PROCESS

As you know, we follow a disciplined and diversified asset allocation process to building our portfolios. We believe in long-term investing, not short-term speculation. We lean on our LPL Research team of 50+ professionals for ongoing asset allocation and fund screening. (Remember, LPL offers no proprietary products, which enables us to make objective decisions.) Then, we utilize a secondary screening through Morningstar (a third-party investment research company) for another layer of due diligence.

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. Value investments can perform differently from the market as a whole. They can remain undervalued by the market for long periods of time. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Tactical allocation may involve more frequent buying and selling of assets and will tend to generate higher transaction cost. Investors should consider the tax consequences of moving positions more frequently.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies. Stock and mutual fund investing involves risk including loss of principal. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk. 

No strategy assures success or protects against loss.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA & SIPC.


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BridgeQuest Wealth Strategies

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