Blog by Brian Biggs, CPA – Storen Financial
August reminded us that, in the short term, stock markets can make dramatic and unexpected swings up and down. We like the “ups” but the it’s the ‘”downs” that can scare us. We do not know what the future short term moves in the stock markets will be but we believe, and history has shown, that over the long term stock markets are the place to invest to make money. Over time, stock markets grow along with the US economy.
There are times when US economic growth turns negative and enter a recession. We do not know when this will happen but there are signals that this may be happen within the next 12 to 24 months. We believe that the US economy is currently in the later stages of a record period for economic growth and it is a good time to make portfolio adjustments in anticipation of a change in the market cycle. The following article “Investing Ahead of Recession: 5 Mistakes to Avoid” from Capital Group discusses ways to be proactive and prepared for a market cycle change (recession). We agree with their suggestions on portfolio positioning and in our portfolios, have made the adjustment they highlight. The overall theme of the article is that maintaining a diversified portfolio is the best way to prepare for whatever market conditions come at us. With this we agree.