Market Growth and Headline Hype

Bold statements. Covert operations. Political stand-offs. The first half of 2017 saw its fair share of activity. As we shift to fall and plan for the final quarter of the year, what can investors expect? Tim DiSette, Infinitas founder and partner, shares his take.

Re-balancing act

2017 has been a bright spot for investors. And most believe the rest of the year will follow suit. However, it’s not uncommon for the market to pull back after a period of growth.

DiSette said January 2016 was the last time we saw a normal market decline. Knowing investors have likely seen gains since then, he suggests talking with an advisor about what a potential market pull back could do to their now larger portfolios.

“Most investors have seen their assets grow in the last 18 months. It’s a good time to think about rebalancing your portfolio to buffer the impact of a routine market correction,” DiSette said. “This step isn’t as critical for someone in their 40s with a longer investment runway. But if you’re closer to retirement, you may need to fine-tune your portfolio to account for investment growth.”

Headline hype

Russia, North Korea and U.S. political showdowns have dominated the headlines in recent weeks. As we shift to the latter part of 2017, the media spotlight will likely move to health care reform, tax reform, as well as whether the Federal Reserve will increase interest rates. There’s also bound to be speculation about the future of Fed Chair, Janet Yellen, knowing her term expires in early 2018.

Global and domestic distractions like these can sidetrack investors and may cause you to second-guess your financial strategy. But DiSette said it’s important to tune out the media hype and zone in on your long-term financial goals.

“While we can’t predict what will happen on the world stage, it’s rare for political rhetoric to drive down the market for more than a short time,” he said. “Investors may have a bad month or quarter until the market rebounds. But in most cases, this shouldn’t make you change your long-term financial strategy.”

Instead of headlines, DiSette said investors should take their cues from economic indicators that can impact the market long-term such as unemployment rates, corporate earnings and interest rates.

“It may not be as exciting as some of the headlines we read but the best advice for long-term investors is to stay focused on the fundamentals and keep your eye on the ball.”


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