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In this video, a panel of financial experts explores the changing landscape of investing and the new rules that investors need to consider. They discuss the challenges of investing in a year that has been the seventh worst year ever and the importance of diversification in an investor's portfolio, especially for younger investors. The experts emphasize the importance of creating an investment policy statement, being disciplined, taking emotions out of investing, and cautioning against making rash decisions during uncertain times. The panelists also suggest various investment options like owning property or investing in things like Real Estate Investment Trusts (REITs) or ETFs. Finally, the speakers talk about the changing American dream and planning for resiliency while enjoying life in the present moment.
In this section, the panel of experts discusses the changing landscape of investing and the new rules and practices that investors need to consider. As a result of the pandemic, there has been a significant change in household wealth with the bottom 50% of Americans doubling their wealth in the last two years, largely due to an increased appetite for financial information and investing. However, these new investors may be experiencing their first bear market test, and thus, it remains to be a huge question whether they will continue to invest or abandon their investments. The panel also discusses the challenges of this year's market, which has been the seventh worst year ever and the toughest year for investors.
In this section, the speakers discuss the current inflation problem and the impact of rising interest rates on tech companies and growth stocks. They explain that the tech sector now accounts for 25-27% of the S&P 500 index and that growth stocks are heavily reliant on interest rates. As interest rates rise, companies' future potential is diminished, leading to a smaller return on investment for buyers. The speakers advise caution for those nearing retirement, suggesting a 50/50 investment portfolio with a greater emphasis on high-quality bonds to meet spending needs. By understanding spending needs and being conservatively invested, clients are better positioned to weather market downturns.
In this section, the discussion revolves around the financial literacy survey conducted last year across the US, which highlights the Millennials' and Gen Z's expectations for retirement. Contrary to popular belief, the survey revealed that they expect to retire earlier than the actual retirement age. However, despite this, a lot of people are investing without having any idea of what they're doing. They receive their 401k at work but don't know where to put the money, and therefore there is a need for financial education and planning. The resolution of the current bear market will not be quick, and while there is an abundance of financial news, not every piece of information should trigger a reaction from investors, and caution should be exercised.
In this section, the speaker highlights the importance of diversification in an investor's portfolio, especially for younger investors, as the market dynamics are constantly changing. They advise investors to set aside money in safe assets, such as traditional banks, real estate, industrials, and materials, as they are the ones that lead on the other side of the business cycle. The speaker suggests that investors should re-examine their beliefs about their portfolio and make changes accordingly. Additionally, they argue that retirement should be redefined as life maximization, where individuals are encouraged to create resiliency and save for unknown future events such as job loss, serious illness, or a pandemic. They also urge people to have an emergency fund and switch careers if necessary while working longer.
In this section, the speaker emphasizes the importance of creating an asset allocation and sticking to it, rather than selling everything in a bad market. It's important to have cash on hand for the next few years and not panic at market crashes. A long-term perspective is necessary, and investors must focus on building a solid foundation now to pay for future profits and take advantage of discounted prices. The S&P 500 is the most all-inclusive index to look at, and it has an upward-sloping tendency over the long term. Investors need to manage their emotions during a recessionary environment and avoid running for the door. Instead, they should stay in the game and pick up safe sectors and asset classes, such as dividend-paying stocks and cash, which are valuable in such scenarios.
In this section, the experts discuss the importance of being disciplined and taking emotions out of investing during uncertain times, as younger investors, in particular, tend to be heavily influenced by their emotions. They also caution against making rash decisions, such as selling off entire investment portfolios, and instead advocate for seizing opportunities in the market when others are fearful. The experts also note that while more people are gaining access to investing through zero commission online brokerages, investors may be making riskier and speculative investments, such as cryptocurrency and NFTs, further emphasizing the need for discipline and caution in investing. Finally, they suggest that investors consider repositioning their portfolios or potentially converting from certain retirement accounts based on changing monetary and financial policies.
In this section, financial advisors discuss the importance of creating an investment policy statement to maintain discipline in investing. They suggest that creating a contract with yourself that aligns with your asset allocation strategy and always rebalancing back to that contract when the market drops can lead to successful investing. Low-cost, tax-efficient investments such as ETFs should also be considered. Moreover, there is a discussion on the impact of geopolitical risk on investments and the importance of international investments for US investors. Although the US might still be the best country amid global uncertainty, globalization still exists, and investing abroad can be accessible.
In this section, the speaker discusses the potential consequences of deglobalization. The three items mentioned are: onshoring, trade sanctions, and limited immigration, all of which are inflationary pressures that could lead to a triple whammy of inflation. They argue that most governments are fighting inflation and deglobalization will not make things easier. Furthermore, they emphasize that even with the low oil import from Russia and Ukraine, the compromised market significantly affects gas and oil prices. Finally, the panelists give their hot takes for next year, including the looming issue of consumer credit, the breaking down of the US Health Care System, the possibility of tax cuts, and climate change.
In this section, the experts discuss how real estate can fit into your investment portfolio and how it has become a significant investment category in the last decade. The discussion explains how one can approach investments in real estate, by owning property or investing in things like Real Estate Investment Trusts (REITs) or ETFs. The conversation also touches on the new rules of investment and the changing American dream, where experts recommend planning for resiliency and enjoying life in the present moment while striving for a sense of security.
In this section, the speakers discuss changing investment styles and expectations for the future in order to plan for resiliency. They also mention how Americans are redefining the American dream, now valued by freedom of movement and time rather than buying a house and working until 65. When asked where to keep cash, Kristen suggests keeping it in a high yield money market, while advisor Lynne suggests investing in T-bills or leaving some cash in the investment account as dry powder. When advising young professional athletes on how to prevent going broke, Lynne recommends defining your lifestyle and what is necessary for a happy life, and creating a safety net or “nut” to fall back on.
In this section, the speaker talks about a young man in his early 20s who has his money invested in a conservative portfolio. He and his wife have a good understanding of their desired lifestyle and have a safety net in place. The speaker also mentions taking a break for coffee and refreshments before continuing the conference.
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