"Baseball Season is Under Way"... For the Most Part


Recently, the Chicago Cubs postponed 5 of their games due to weather in the city of Chicago. Even the Cubs organization tweeted “Would you believe us if we said we’re playing baseball today” (April 19th). Unfortunately, the Cubs schedule was probably created a couple years ago and the organization cannot consider outside factors like weather. Therefore, when it snows in the middle of April, the organization must adjust to fulfill their schedule.  

We think this goes together with investing. Did you establish a retirement plan in the past? Are events, themes, or concerns in the economy affecting your account and ultimately disrupting your retirement goals? Just like how the Cubs are being proactive throughout the season, you should too when it comes to making changes in your retirement account.

Let’s consider a few examples on how investors should remain proactive due to outside factors affecting the economy. Recently, the Federal Reserve raised the fed funds rate by 0.25%. This supports the fact that we are in a rising interest rate environment. So, what happens to your portfolio when interest rates go up? Well it depends on the duration (average years) of the bonds being held in your portfolio.

Did you know when interest rates move higher, the price of existing bonds go lower. Bonds with higher durations are affected more by rising interest rates than bonds with lower durations. For example, the price of a bond with a duration of 5, will hypothetically decrease 5% for every 1% increase in interest rates. Similarly, the price of a bond with a duration of 2, will hypothetically decrease 2% for every 1% increase in interest rates.

Our point is, if you held longer duration bonds when you initially set up your retirement account, have you reviewed your retirement account to protect it from rising interest rates.  

Two other events that recently took place were tax reform and a possible trade war. How will these affect your portfolio? Tax reform should benefit your portfolio, but which sectors will do better? Large, medium or small cap companies? What investments or companies should you steer clear from if a trade war were to occur?

As the Cubs organization reacts to disruptions in their schedule, you should be prepared to make changes in your portfolio. Griffin Financial Advisors remains proactive with our clients and their accounts. Please reach out to us with any questions or concerns in your portfolio.  

Have a great weekend!



Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio.  Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Griffin Financial Advisors, LLC. The opinions expressed are those of Griffin Financial Advisors, LLC and are subject to change at any time due to the changes in market or economic conditions.

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