The Fed raised rates another .25% earlier this month so hopefully your bank accounts are earning a bit more these days. Rising rates tell us the Fed thinks the economy is doing so well, they want to curb it and not let it overheat with inflation. Remember, it's inflation that is the killer of most great bull market runs!
Most indicators say our economy is doing exceptionally well and looks to keep moving in that direction for the near future. Our investment committee is keeping fully allocated to the stock market, but trimming most profits back in rebalancing through 2018 and some of 2019. From there, we believe we may start to see the indicators turn and slow down. Recently consensus reports indicated 30 well-respected economists are targeting 2020 as the year of a slow down, to the point of recession. I think we'll start talking about it in late 2019.
This is what we as your investment committee is keeping abreast on daily. Additionally, our diligent research on fixed income in rising rates is paying off. We got out of mutual funds a while back and have been using target date maturity bulletshares. These bulletshares are mostly up for the year while typical intermediate bond mutual funds are down more than 2% for the year. If you want to know how your fixed income might be doing, make sure to read my take in the Chart of the Month linked below.
Happy Summer!
Kelly
A Look at Fixed Income Yields & Returns
Interest rates are rising... what does that mean for your fixed income investments?
