Economy

If you’ve had a bit more concern about the economy and your financial portfolio recently, then you’re far from alone. With ongoing market tumult and surging inflation, it’s reasonable to wonder what the future holds for your finances.

It's been more than four decades since we've seen inflation this bad and many point to an aggressive set of Fed actions on the horizon, including a series of interest rate hikes.

Fortunately, there are ways to help hedge against inflation. Adding commodity exposure to your portfolio can help diversify an existing portfolio of stocks and bonds, and potentially lower risk, while helping to boost return potential—particularly, during periods of rising inflation. 

Emerging market debt could be in trouble according to JPMorgan. With a seemingly never-ending Russia-Ukraine crisis as well as rising borrowing costs low grade emerging market debt could be in trouble. A note said that almost half of the sample of the 52 countries are carrying high repayment risk. Generally speaking, spillover risk is high if Russia defaults and Ukraine has to res-structure. All of this is compounded by rising yields which makes repayment even more difficult.


Finsum: For those looking for solutions to rising volatility be careful chasing emerging market debt as a response.

Volatility is pervading markets and many advisors may have new clients or millennial investors who haven’t experienced this volatility before. A study from McKinsey showed that trust with an advisor is highly correlated with the amount of communication with advisors. Outsourcing financial news, posts, and blogs are a way to not burn clients out. Also, you can give different avenues to communication such as emails as well as social media. Themes can also help concentrate your message and lead to better takeaways. Managing expectations in uncertainty and making sure your clients feel their goals are being addressed are crucial.


Finsum: A little communication goes a long way and investors need to understand how their portfolio is adapting and performing in high volatility. 

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