The Confident Chronicles: April 29, 2024
Cool Charts Explained: Market Returns:
April was a tough month for the stock and bond markets.
However, last week, we saw one of the best weeks in a long time, as the S&P had 4 winning days and only one down day.
The S&P was up 2.65% the week of April 22nd through April 26th.
It appears that there is a struggle going on between the “bulls” and the “bears”.
Time will tell to let us know if we can expect a continued “bull” (up) market or if we are in the beginnings of a new “bear” (down) market.
Our tactical models recommended changes on April 19th (see the “Current Allocations – Tactical Models” section below for more information).
When I look at the chart above, one thing is crystal clear, “Growth” style investing fell out favor in April.
And it fell hard!
We will see if “earnings season” can help the markets recover, which it did last week.
Hopefully, that can continue.
However, there is an old adage that says, “Sell in May and go away”!
Hopefully, this isn’t the beginning of that.
But one thing I know for certain, is that the “unofficial” start of the “summer season” is from Memorial Day to Labor Day. This is the time that many advisors start to slow down. Partly because many of their clients take vacations, spend more time with their families, and well, slow down.
So, as we start May and head towards the unofficial “summer season” my hope for you is that you continue to pay attention to the advice your advisor offers you through Plan Confidence.
You need to continue to stay vigilant and take advantage of any opportunities this summer season may provide.
PLAN CONFIDENCE MODEL UPDATES:
FUTURE CONTRIBUTIONS:
Future contributions are money that is added to your plan with every paycheck. We monitor the future contributions monthly and are looking to direct these monies into investments that are should be “on sale”.
This would allow you to buy more shares in your portfolio.
This month we are advising that you use the following:
· Commodities – Broad Basket
· Foreign Large Value
· High Yield Bond
The exact amounts you should allocate depend on the model that you are using. These categories may or may not be available in your plan. If they are not available in your plan, we will recommend the closest available asset class. You can find any substitutions on your “Proxy Page” within your dashboard. Please log into your Participant Dashboard to see the exact allocations you should be using as of today.
CURRENT ALLOCATIONS - STRATEGIC MODELS:
Our “Strategic Models” combine the benefits of asset allocation and “buy and hold” strategies. These models rebalance quarterly back to their risk “targets” and remain fully invested through all market cycles.
Our Strategic Models rebalance the first trading day of every quarter.
There are no changes from the April 1, 2024 advice
The exact amounts you should allocate depend on the model that you are using. The categories we use may or may not be available in your plan. Please log into your Participant Dashboard to see the exact allocations you should be using as of today.
CURRENT ALLOCATIONS - TACTICAL MODELS:
Current Allocations are the monies currently in your plan. Making changes to this money is known as a “rebalance”. Some plans have trading restrictions on how often you can rebalance the money in your plan.
Be sure to know your plan’s restrictions before implementing any strategies.
(Below is a reprint of the text that was sent out on April 19th):
Today our “Tactical” models are recommending that half of the stock positions be liquidated and moved to “cash”.
This is due to the technical indicators that we follow which have shown “sell” signals for the past three days.
We know that this may cause some issues for some participants that have short term trading restrictions within their plan since that last rebalance occurred on April 1st.
The participant will need to decide if they should trade their account as recommended by Plan Confidence or wait until their short-term trading restrictions are no longer an issue.
Below are the Asset Categories for each model.
Please check your Plan Confidence Participant Dashboard for the exact amounts and investments available in your plan.
Our “Tactical Models” combine the benefits of asset allocation and “momentum investing” strategies. These models rebalance periodically back to their risk “targets” and the targets can be changed at any time given the current market conditions. These models may go through periods of time while holding larger amounts of cash than the Strategic Models.
Our Tactical Models may rebalance on any given day. Please be sure to look for an email from support@planconfidence.com letting you know when to make changes. Also, be sure to keep our “push” notifications “on” if using our app.
The exact amounts you should allocate depend on the model that you are using. These categories may or may not be available in your plan. Please log into your Participant Dashboard to see the exact allocations you should be using as of today.
Model Portfolio Rationale:
Plan Confidence relies on the research and model construction from BlackRock, Inc. (the largest asset manager in the world). We use their “Target Allocation ETF Multi-Manager” model and “deconstruct” their allocations back to the asset categories to program the Plan Confidence™ Software.
We then map those categories as closely as we can to the available investment options that you have in your plan.
Below are some excerpts from the most recent market research report we rely upon to advise you.
· The markets are still adjusting to sticky inflation and structurally higher interest rates
· We think investors need to grab the investment wheel and take a more dynamic approach to their portfolios
· We see little in the near term to disrupt the market’s perception that inflation is slowing, growth is holding up and rate cuts are coming. We think the risk of resurgent inflation could eventually dent the mood.
· Even with the U.S. economy’s resilience through 2023, activity remains below its pre-Covid trend growth rate.
To read the full article and download the PDF check out:
This update has been written by Kevin T Clark, RF™.
All opinions expressed are those of the author and not that of Plan Confidence Corporation nor any other firm or individual.
Kevin T Clark, RF™ is the CEO and Co-founder of Plan Confidence Corporation.
Kevin is an ERISA Nerd and one of only a hundred(ish) Dalbar certified Registered Fiduciaries (RF™) in the United States.
He has been helping hard working Americans invest their money since 1997!
Plan Confidence Corporation is an SEC registered investment firm specializing in providing advice to hard-working Americans investing in their employer’s retirement plans (401k, 403b, TSP, etc). They have created proprietary software so hard-working Americans can receive professional, ongoing advice on their employer’s retirement plan from an adviser of their choosing!
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