Retirement Answer Man

What do you think the midyear outlook for the market is? Greece, is all over the news (what is it with Greece, anyway?), markets in China are crazy and here in the U.S. everyone is freaked out about when interest rates will rise. What is an investor to do?

In this episode, we'll discuss the midyear outlook for the markets as well as the importance of managing your assets in a consistent well thought out way.

Your Investment Assets Should Be Aligned with Your Financial Priorities. 

All to often, we collect investments over time just like we collect "stuff" in our closet. As we walk through life, we see an interesting investment, buy it and repeat again and again. Over time, many end up with an investment portfolio that looks more like a storage closet than a well structured portfolio laser focused on helping achieve goals. 

Over the years, I've seen some horrendously constructed portfolio (by Advisors as well as individuals).  I recall one IRA that had over 45 different managed portfolios! All actively managed by an advisor.  Geez!!!

Collected portfolios pose some serious risks to your long-term investment experience. Such portfolios make it very difficult to evaluate:

  • the individual and aggregate risk you're taking.
  • whether each manager is performing adequately.
  • the appropriateness of the fees you're paying.
  • Whether you're portfolio allocation is aligned with your family's priorities.

Much better, in my opinion, to have your portfolio, and your balance sheet, laser focused on helping you achieve things you know you care about. In short know:

  • what you own.
  • why you own it.
  • how to evaluate it.
  • how it helps position you to achieve your family's priorities.

It is Essential That You Stick with ONE Well Thought Out Investment Process.

This is such an important point I need to do an entire show on it. If you switch from process to process you really don't have any process at all. This can be DISASTROUS to your long-term performance.

Decide on a well thought out strategy and stick to it. Stick to it even when it feels uncomfortable; especially when it feels uncomfortable. 

Stay tuned for a future show focused on investment process. 

Highlight's From LPL Financial's Midyear Outlook

In this week's episode, I speak with LPL Financial's Anthony Valeri, C.F.A. about LPL's midyear outlook for the world economies and markets. Anthony and the entire LPL team are sharp cookies. More importantly though, because LPL does no investment banking or selling of proprietary products, they're investment opinions are not tainted by the normal conflicts of interest you see at major firms. 

Anthony is a Senior Vice President, Investment Strategies and sits on LPL's tactical allocation committee. 

Get LPL's Midyear Outlook for Investing


  • The economy has helped deliver six consecutive calendar years of positive returns for stocks since the end of the 2008 – 2009 Great Recession, as measured by the S&P 500 Index; however, constructing a strategy for the remainder of the economic expansion will require a tricky assembly. Divergent monetary policies reveal an uneven global recovery that has triggered an uptick in stock market volatility. A few important pieces requiring assembly for the remainder of 2015 include: „
  • How the U.S. economy pieces together the components needed to bounce back from a lackluster start of the year. The U.S. economy hit an unexpected soft patch to start the year due to a severe winter freeze, the West Coast port strikes, ongoing effects of lower oil prices, and the surging U.S. dollar. Returning to a more normalized 3% growth level will be crucial to build further upon the market’s first half gains. „
  • After successfully delivering the U.S. economy out of the recessionary “warehouse,” how does the Federal Reserve (Fed) assemble an exit strategy from its six-year policy of zero interest rates? With unprecedented levels of accommodative monetary policy rendering any traditional instruction manual pointless, the Fed will have to use its entire toolbox to construct a delicate increase in interest rates without disrupting the fragile economic growth and the wavering confidence of businesses, consumers, and investors.
  • Corporate earnings growth continues to search for that spark to ignite equity advances. In the U.S., lackluster profits aligned with weak first quarter 2015 economic growth to produce the lowest level of year-over-year corporate earnings growth in 11 quarters. Overseas markets are looking for a power boost from the very accommodative monetary policies of global central banks across Europe and Asia, in an attempt to spur sustainable growth, improve earnings, and avoid deflationary forces.

Although many packages are still in transit as we approach the midpoint of 2015, the biggest challenge for the market is putting the necessary pieces together to construct the backdrop for solid global economic growth, stable prices and currencies, and expanding corporate profits. The task is complicated by the Fed’s expected first interest rate increase in nine years later this year. The assembly will not be an easy one, but the LPL Research Midyear Outlook 2015: Some Assembly Required provides the investment instruction manual, tools, and tactics to construct portfolio strategies that may flourish in a market that remains in transition.

If you're an auditory learner, here's a link to their midyear outlook video.

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Direct download: Retirement_Answer_Man_Midyear_Outlook.mp3
Category:Investing -- posted at: 9:06pm CDT