Market Rally to Continue? + NJ Anchor Program Info

The S&P 500 managed to rally 4.74% last week, in the face of the obvious negativity and doubts as to where our economy is heading.  The 10-Year US Treasury finished last Friday with a yield of 4.22%We started 2022 with the 10-Year @ 1.512%. 

The markets appear to be in a technical back and forth.  A small victory is the markets held their recent lows and bounced higher, even with rates climbing to the highest in years. Perhaps markets are smelling the later stage of the Fed raising rates?

This week and the next few will certainly put the market to a test

Earnings kick into high gear this week with over 120 companies in the S&P 500 reporting.  We’ll hear from Apple, Google, Microsoft, Amazon, Bristol Myers, Coca Cola, Exxon Mobil and several other important companies.

On the economic front, Thursday brings the 1st of 3 readings on the Gross Domestic Product (GDP) for the 3rd quarter.  On Friday, the Fed’s favorite gauge of inflation, the Personal Consumption Expenditures Price Index (PCE) is reported.  In August, the headline PCE came in at 6.2%, with the Core (minus food and energy) at 4.9%.

Other economic data this week includes new home sales, durable goods orders, and consumer confidence.

Peering around the corner (in about 2 weeks) are the mid-term elections.  The importance of this election is rather significant.  I’m looking forward to the end of the political commercials, as they have been soooo uplifting and positive….  After watching, it’s hard to believe any politician running is honest and the right choice.

NJ Anchor Program

You may be eligible for a check up to $1500 if you were a NJ homeowner on October 1st, 2019. You must have also used that home as your principal residence in 2019, paid property taxes on the home, and had a gross NJ income of $250,00 or less.

To verify your income, look on line 29 of your 2019 NJ 1040 tax return.  If that figure is 250K or less, you should apply.  For more information on the Anchor Program and how to apply, please visit the NJ Treasury website.

Applications must be received by December 30, 2022.

60/40 Stock/Bond Portfolio

Many retirees maintain a 60% stock allocation and a 40% bond allocation for their retirement assets.  So much has been written in the past on this allocation, and now it’s again front and center.  Actually, it became front and center when interest rates plummeted to their recent lows last year, suggesting this strategy is no longer viable….

Now the press is suggesting this strategy is back in vogue as interest rates are again attractive.  It is amazing how much the media can influence many retail investors.

It’s no secret that portfolios are down, which makes all of us a bit uncomfortable.  In the past when stocks sank, bonds (in most situations) increased in value, limiting the downside of the stock market.  This year, when stocks sold off, the proceeds did not go into the bond market. 

Now however, we may be set up a little different.  With yields at 4% on most bond indexes, this balanced type of portfolio (plus a bit of active management), may prove to be what the doctor ordered going forward. 

If current clients would like to discuss their current allocations prior to your next review meeting, please feel free to reach out. 

For non-clients, we offer a “Second Opinion Service.”  Feel free to pass this blog/our contact information along if you know anyone who would like to discuss their current portfolio!

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