Podcast 100: How Do You Prepare Your Portfolio for What’s Coming?

Check out the latest episode of Ask Gregory where Gregory discusses how you can set yourself up for success in regard to the Federal Reserve’s recent interest rate hikes.


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Gregory Ricks  00:00

Hey welcome I’m your host Gregory Rick’s a financial advisor here to answer your questions and help you win with your money.

Disclosure  00:10

On today’s episode of the Ask Gregory podcast, Gregory discusses the impacts of rising interest rates on the economy and what that may mean for your retirement portfolio. We also have got a complimentary download waiting for you on this topic if you go to gregoryricks.com/podcast100  Again, that is gregoryricks.com/podcast100

Gregory Ricks  00:32

What’s going on in the markets it’s it’s it’s a bit of a tough go. Right now. You know, we kind of had a not so good week from the Wall Street Journal this morning is updated this morning wave of selling and financial markets swept across the globe Friday with nervous investors forced again to confront the specter of a recession. New signs of slowing global growth rocked investments of all sorts, the Dow Jones Industrial Average fell to its lowest level of the year. The dollar surged and short term treasury yields chopped investors mauling stubbornly high inflation and a nerve by Russia’s attempts to escalate the war in Ukraine. Investors have fled for the exits. Driving the concurrent sell off in stocks and bonds alike bond yields remain near their highest levels in more than a decade as prices tumbled. The Dow fighty lost 496.27 points or 1.6% to 29,005 90.41 its lowest since November of 2020. The s&p 500 dropped 64.76 points or 1.7% to 36 93.23. The NASDAQ Composite declined 198 point 88 points or 1.8% to 10,867.93. They go on to say the three index is tumbled for a second consecutive week and a sell off that has dragged down the s&p 500 by 9.2%. And the Dow almost 8% that marked their worst two week decline since June. The NASDAQ has fallen more than 10% Over the past 10 weeks. Its biggest such decline since March of 2020. During the pandemic induced market crash. The sell off this week continues a stretch of turbulence since the Federal Reserve Chairman Jerome Powell speech in Jackson Hole Wyoming in August where he reiterated, yes, he reiterated the central bank’s resolve and fighting inflation through a series of interest rate, in creases I’ve been telling you, and look, we have a nice run up. And now it’s been given back and taken additional that there’s more pain coming. There’s going to be more interest rate hikes coming it looks like they’re gonna want to raise another one and a quarter this year. And they’ve signaled a quarter percent increase next year. They want to get the Fed rate to about 4.6 per set. And they’ve signaled in 2024 There’ll probably be a couple of reductions, probably quarter point reduction because ultimately they want to get inflation down to 2%. I was on a couple of news shows this week discussing what’s going on in the impact of the Fed and ultimately, what they’re trying to do is slow things down. That’s one reason raising of interest rates. Raising interest rates doesn’t solve inflation. It’s going to be the reduction in the supply of money. You know you have too much money chasing too few goods and an enormous amount of money chasing too few goods and what It leads us to this. You know, it’s a pretty big impact on portfolios, especially, as most people are that are investing are overweighted into stocks. And I do believe we have some more downside coming. With that said, we’ve made adjustments accordingly. But we, as a firm, we kind of always invest this way, knowing that these things are coming. And we’ll talk about some of that on the next segment some of those numbers. But you know, historically, you know, I’ll throw one out there, you know, in the past 170 years, how many times have we had a 10%? Move down in the market? 102 times. So it’s kind of the norm the past 33 And a third years, how many times have we had a 20%? Move down? 20 times. Does the year finish up that way? No, I’ll give you some counts on that one after the break. Once again, I’m gonna pull up some more information to share with you on that, and I want to share with you the opportunity that’s coming and the way I look at this and yeah, I I’ve been in this industry and financial services. Yeah, 40 years advising and helping people with their assets on that side for more than 20 years now. Yes, It troubles me. It anytime this happened, say when we had lock downs in the market dropped over 30% Yes, that bothered me tremendously. But also knew as an opportunity, the Great Recession that bothered me and troubled me, I’m not immune to it. I don’t ignore it, I understand it. But I also see it as a tremendous opportunity. That’s where if you are diversified in assets, and the asset classes I like I do like some stocks. But I like us utilizing ETFs cause of efficiency. I like the indices, why they’re just hard to beat. I like bonds. But they’re not doing well right now. So we want to basically in that strategy, we want to use alternatives that are less interest rates sensitive. Also, like tactical, quantitative tactical, where money follows momentum. And when there’s no momentum, or extreme volatility probably you’d be holding a good bit of cash in that strategy like we are today. I like index linked well before I get to that, there is another buffer strategies utilizing buffer ETFs to reduce downside exposure and still give you the opportunity for the upside to having a mix so I like that into the mix. Now as far as trying to time or figure out when the markets going to do that. That’s that’s the great difficulty. You know, what most investors do? They buy high and sell low they’re buying it oh, I don’t want to miss the top or his things going to keep going. And then when it drops like this to get our word, oh, I’ve got to make changes. I gotta get it out. What you’re buying high and selling low, the opposite of what you should be doing. And you shouldn’t necessarily buy let’s say you did it the right way. You’re selling high. Should you be doing that. You might should be making adjustments in your portfolio rebalancing, creating some more diversification and then on buying on the downside, when should you buy? Oh, the most scariest possible time? Yeah.

Podcast Intro / Outro  10:00

Well, thanks so much for listening to ask Gregory where we answer your financial questions. You can find us anywhere Podcasts can be found and on YouTube and Facebook Live every Saturday from 10 to one subscribe, leave a review and tune in next time. We also have got a complimentary download waiting for you on this topic if you go to gregoryricks.com/podcast100 Again that is gregoryricks.com/podcast100

Disclosure  10:30

Gregory Ricks & Associates is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Gregory Ricks & Associates are not affiliated companies. Gregory Ricks & Associates, The Total Wealth Authority is our trademarked tagline, it does not promise or guarantee investment results or preservation of principal nor does it represent a certain level of skill. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including (but not limited to) a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.  This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Gregory Ricks & Associates is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Gregory Ricks & Associates. Any media logos and/or trademarks contained herein are the property of their respective owners and no endorsement by those owners of Gregory Ricks & Associates is stated or implied Gregory Ricks & Associates has a strategic partnership with tax professionals and attorneys who can provide tax and/or legal advice. AEWM, Gregory Ricks & Associates, WJ Blanchard Law, LLC, J Heath & Co. and Mortgage Gumbo are not affiliated companies.