September 2022 UPDATES
We reduced our exposure to infrastructure oriented companies, re-positioning these assets into Mid-Cap Value companies. This decreases our concentration to Industrials and Materials sectors, as both sectors face challenging headwinds with continued rising inflation and labor costs. Mid cap stock valuations are near 20-year lows compared to large caps.
We have also shifted a portion of our bonds back into slightly longer maturities to take advantage of the higher yields that recent Fed interest rate hikes have created. High quality bonds tend to perform relatively well during economic slowdowns.
Our Process
As you know, we follow a disciplined and diversified asset allocation process to building our portfolios. We believe in long-term investing, not short-term speculation. We lean on our LPL Research team of 50+ professionals for ongoing asset allocation and fund screening. (Remember, LPL offers no proprietary products, which enables us to make objective decisions.) Then, we utilize a secondary screening through Morningstar (a third-party investment research company) for another layer of due diligence.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. Value investments can perform differently from the market as a whole. They can remain undervalued by the market for long periods of time. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Tactical allocation may involve more frequent buying and selling of assets and will tend to generate higher transaction cost. Investors should consider the tax consequences of moving positions more frequently.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies. Stock and mutual fund investing involves risk including loss of principal. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.
No strategy assures success or protects against loss.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA & SIPC.
BridgeQuest Wealth Strategies
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