Trajan's Tactical Tips
A blog for everyday financial tips, Trajan news updates, and more
To diversify investments and manage risk, we continue to recommend allocating assets across different classes. We also believe that non-traditional asset classes – “real assets” such as real estate and infrastructure, as well as private equity and private credit merit consideration given the real portfolio enhancement opportunities as we transition to a potentially lower growth environment.
Did you know teens can start investing early with a Roth IRA? Early exposure to saving and investing can help teens learn about investment strategies and confidently manage their finances throughout adulthood.
The S&P 500 was up 8.7% in the second quarter and 19.4% over the past year. Despite fears of inflation, rising interest rates, and a weakening economy, investors are optimistic about future earnings growth. That’s especially true in the technology sector, where there have been rapid advances in artificial intelligence. We encourage investors to ignore the short term so they can focus on their long-term financial plan.
As the US economy remains in a late economic cycle for an extended period, it’s important to remember that the stock market is the story of cycles, and human behavior is responsible for overreactions in both directions. Despite the transition to a tightening monetary policy environment, the markets continued to improve overall in June. However, we still expect high market volatility going forward.
High-earning women have become the newest face of wealth and will increase their net worth even more. Women have unique needs that often differ from their male counterparts. Taking action to manage their wealth and plan for their future can help women pursue financial confidence, regardless of their income.
The US financial markets have been performing well in 2023, with stocks and bonds showing strong returns up until the end of May. However, there are signs of stress in the “high yield” corporate credit market due to higher front-end interest rates (maturities of 1-5 years). We anticipate increased market volatility in the future, as financing costs continue to rise rapidly, potentially impacting economic growth and corporate profits.
Making investment decisions by focusing on issues beyond balance sheets, income statements, and other measurable metrics has become a major issue in the finance world. ESG (Environmental, Social, and Governance) is the movement aimed at incorporating other factors into the investment decision process. But does it work?
Recent turmoil in the banking industry, including the failure of Silicon Valley Bank, has put a spotlight on Charles Schwab’s unrealized securities losses. However, Schwab’s deposits are much stickier and more diversified than those at SVB. Asset gathering and higher net interest margins should help offset headwinds from “cash sorting.”