ALLOCATION UPDATE
As we highlighted a few days ago the Federal Reserve and the Peoples Bank of China shook up investment policy last week in their efforts to combat inflation.
The price makers in the markets are the Central Banks. Liquidity (debt your children and grandchildren will have to pay off) is moving towards certain destinations and investors need to position, and2021 06 reposition if needed, in order to benefit. At some point this will end but until then the liquidity infused rallies will continue.
Here is our current positioning as a result of the central bank actions last week. The Growth Allocations are referenced, Balanced Allocations are a little smaller to allow for the bond allocation.
Cash and Bonds: 14%
High Quality Growth: 15%
The Fed signaled that reopening of the economy is largely in the rear view mirror and a shift towards high quality U.S. Growth, large blue chip companies whose business have large barriers to entry, makes sense. Think funds or ETFs that include a company such as Home Depot.
U.S. Energy: 21%
The price of oil is expected to continue to advance for many macro and micro reasons. U.S. energy should see increased revenues and year over year comparisons will likely be dramatic given that today’s earnings are being compared to a period of economic shut down.
Global Technology: 25%
Technology has largely been stagnant as reopening stocks such as industrials and materials have been center stage. With the Fed promising that inflation is transitory (Wall Street experts are split on whether inflation will be temporary or sustained) there was a marked shift towards technology over the past week. Our adjustments included repositioning into Apple, Microsoft, Amazon, the NASDAQ 100 Index, and the U.S. Communication Sector Index.
Foreign Equities: 25%
A weaker United States translates into strength on foreign shores. Fund flows towards foreign investments are picking up and there are a number of options that have been providing a consistent rate of return.
As always our portfolios utilize Capital Shield, a discipline that seeks to preserve capital and help avoid large losses and drawdowns. Note: past performance is not an indication of future results and expectations might not materialize.
LPL 1-05160352
DEFINITIONS
S&P 500 Index - The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of predecessor index, the S&P 90. The index is a capitalization weighted index of the 500 large companies listed on various stock exchanges (such as the NYSE or NASDAQ). The S&P 500 was developed and continues to be maintained by S&P Dow Jones Indices, a joint venture majority-owned by S&P Global. The S&P 500 differs from the Dow Jones Industrial Average and the NASDAQ Composite index, because of its diverse constituency and weighting methodology. It is one of the most followed equity indices, and many consider it one of the best representations of the U.S. stock market.
IMPORTANT DISCLOSURES
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. This memorandum is being made available for educational purposes only and should not be used for any other purpose.
The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
Investing involves risks including possible loss of principal. Past performance does not guarantee future results. Any investment or investment strategy outlined herein are not suitable for all investors, readers should conduct their own review and exercise judgment prior to investing. Wherever there is the potential for profit there is also the possibility of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein and may be subject to change without notice. Neither Highcroft, Inc., Gerald Asplund, nor LPL Financial, has no duty or obligation to update the information contained herein.
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Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources. The economic forecasts set forth in this material may not develop as predicted.
Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer.
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The fast price swings in commodities and currencies can result in significant volatility within an investor's holdings.
ABOUT US
Highcroft Investment Advisors provides retirement planning, investment management, financial planning, fiduciary investment management, and lifetime income planning. Certified Financial Planner. Working with business owners, individuals, and wealthy families near Wayzata, Minnetonka, Plymouth, Orono, Minnetrista, and Minneapolis Minnesota (55402, 55391, 55447, 55364, 55428).
Highcroft Investment Advisors serves as a 3(21) and 3(38) Investment Advisor and fiduciary for labor union supplemental 401(k) and pension plans and corporate 401(k) plans. Highcroft works with the union's counsel, recordkeeper, administrator, and the plan's trustees. United Association, Plumbers, Pipefitters, Steamfitters, IBEW, and Carpenters. Serving Wisconsin and Minnesota. 401(k) investment management provided through LPL Financial's corporate RIA - offering 3(21) and 3(38) services.
Working with business owners, individuals, and wealthy families near Wayzata, Minnetonka, Plymouth, Orono, Minnetrista, and Minneapolis Minnesota (55402, 55391, 55447, 55364, 55428). As independent financial advisors we are not driven by certain products or services, instead we focus on your needs as an individual. Services include fiduciary fee only, retirement and divorce financial planning, life insurance, capital preservation, lifetime income planning, bonds, stocks, ETF, income, IRA, brokerage, rollover IRAs. Financial advisor near me, financial planner near me, independent planner near me.