Why investors shouldn’t try to be a ‘hero’ in this economy
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The data show that the US economy may be at a precarious point and that investors do not take great risks with their portfolios due to the fear of loss.
Ritholtz Asset Management Chief Market Strategist Callie Cox wrote in a bulletin this month.
In other words: Experts stay loyal to your long -term investment plan, including a suitable asset allocation and time frame to achieve your goals. Avoid attractiveness to fill a large money into highly flying bright objects such as individual technology stocks or crypto currencies.
In an interview with CNBC, Cox said, “You need to have quality assets and investment baskets, keep your breath and let the markets do their jobs.” He said.
To be sure, this is a solid perennial advice offered by financial planners.
However, some market observers warn that economic winds can create abundant volatility in the coming months.
Irvine, California -based Sun Group Wealth Partners’s founding partner Winnie Sun, “I think there are many reasons to be optimistic, but also careful,” he said.
Economic Winds
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Seems to have a labor market For example, it weakened significantly.
Employers in the public and private sectors have added an average of 35,000 jobs for the last three months according to the federals. data.
COX, from May to July, occurs “normally or at a speed you see in stagnation”.
In addition, in the same three -month period of 2024, an average of 123,000 work fell from 111,000 in the first three months of 2025.
Cox wrote that the size of the US labor force has fallen for three months since 2011.
“After the labor market has slowed down consumer expenditures for months, at a precarious point.” “The American consumer directs the economy and the economy ultimately directs the direction of the markets.”
Economists are also concerned about the reign of inflation as the tariffs received by Trump administration reach higher prices for consumer goods and services.
In recent months, there are some symptoms and many economists expect inflationary pressure to bite more in the coming months.
‘People feel like they will be left behind’
Despite these winds, experts say the economy not terrible. The stock market also continued to go to new peaks and the S&P 500 stock index has increased by about 10% since the beginning of the year.
Many of Sun’s customers said that more bread and butter showed urgent interest in artificial intelligence and crypto in the midst of supreme feedback compared to long -term planning.
Shares in Technology Giants Meta– Microsoft And Nvidia For example, this year, approximately 34%, 24%and 36%, respectively. Bitcoin Prices are also over 25%.
Sun, “Hurry and trust” mentality, Sun Sun said.
“Many people feel like they’re going to be left,” he said. “But we do not feel that the US is economically, we have a full picture yet.”
According to Market-Watchers, the tariff policy was struggling in recent months, and its markets and investors have grasped for answers because they were announced, delayed or quickly canceled.
“Currently, we think it’s the best to adhere to diversified and long -term plans.” He said.
“Most of the current decisions are not financially directed,” he said. “I think much more emotion -oriented.”
Diversification and re -balancing ‘key’
Sun advises investors to diversify well and avoid the overlapping charm of overlapping their portfolios to growth -oriented sectors such as technology. Authorized, having a well -diversified portfolio, economic data rolling the markets diversified the risks, he said.
He said that stock market investment funds or investment funds, which are baskets of several different securities such as stocks and bonds audited by professional asset managers, can help diversify the average investor.
ETFs often Carry relatively low fees compared to investment funds, thus presenting a cheap way to diversify.
Cox, in this environment, more often re -balance is “key”, he said.
This requires that your portfolio does not exit assets if certain segments perform better for a while or perform low performance.
“You never want to sell it to a market and be exposed more than you think, C said Cox.
Jacob Manoukian, President of the US Investment Strategy, JP Morgan Private Bank pays attention to taking too much risk from the table may have negative consequences for investors.
Companies continue to have strong corporate gains despite the relatively weak economic data – a dynamic that can continue for a while.
“It is difficult to give advice to significantly reduce the risk when corporate gains are as strong as corporate gains.” He said.
“When companies are surprising to this degree, we encourage our investors and customers to have the right amount of risk for their plans and not to unjustly reduce risks – this is a way to perform low performance.” He said.
