PHONE: 414-223-1099 TOLL-FREE: 1-800-236-1096
SEND US A QUESTION OR COMMENT FOR OUR NEXT SHOW

Risk, rotation, resilience, rebalance

dollar globe

Note: Brian Kilb has been corresponding regularly with his clients, sharing his thoughts about the economy, the markets and long-term investing. Below is a message sent three weeks after the Russian invasion of Ukraine, encouraging investors to take a step back from the news of the day to reflect on their long-term portfolio plans.

By Brian Kilb

Let’s step back, take a deep breath, and revisit a few key portfolio thoughts in these challenging times.

The primary focus over the last couple years, beginning with the pandemic and now the Ukraine invasion, has been to get a proper exposure to risk. As prices elevated in the rally following the initial Covid correction, we paid special attention to keeping a lid on risk (both in bonds and stocks), often taking profits along the way. Consequently, bond portfolios are focused on short to intermediate maturities and higher credit quality. Exposure to stocks has been watched carefully.

Another significant theme along the way is the rotation from a handful of large growth companies to the broader market. For much of 2020 and before, those few growth companies dominated and propelled indexes forward.  Things cycled (as they often do) and classic value stocks and smaller companies had their day through much of 2021. As a result, we find ourselves with reasonably symmetrical portfolios reflecting the caution that is warranted in these scary times. So, what’s next?

I continue to be impressed by how resilient stocks have been in the face of so many challenges. A healthy consumer has kept corporate profits strong. Interest rates, while on the rise, remain historically low. Stock prices have fallen, but from elevated levels, and seem more reasonable as a result. Inflation continues to be a worry. And Ukraine.

Looking ahead, we can start to see where opportunities in stocks may warrant some rebalancing or even adding to risk. But let’s not get ahead of ourselves.

For now, I continue to be cautious, for the obvious reasons. I also can’t help but address the special nature of risk the war in Ukraine represents. I’ll remind you that if you abandoned stocks during the Covid correction, you could have done lasting harm to your financial plan, as the rally came quickly. The same potential applies here. Your portfolio addresses relevant risks with a balance of stocks and bonds. If we haven’t addressed this important relationship in your portfolio, now is a great time to revisit that conversation.

The possibilities which emanate from Ukraine are frightening, I understand. I want to make sure you understand how your portfolio addresses those risks. As always, this is about the long run, and a balanced portfolio will get you there. A simple message, but a critical reminder at this uncertain moment in time.

Brian Kilb is senior vice president of Landaas & Company. 

Learn more
Pandemic lesson: Invest in resilience, by Kyle Tetting
When Should I …rebalance my portfolio? by Art Rothschild
Rebalancing Your Portfolio, from the Financial Industry Regulatory Authority
(initially posted March 31, 2022)

Send us a question for our next podcast.
Not a Landaas & Company client yet? Click here to learn more.
More information and insight from Money Talk
Money Talk Videos
Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail.


Text Size:  A  A  reset

No client or potential client should assume that any information presented or made available on or through this website should be construed as personalized financial planning or investment advice. Personalized financial planning and investment advice can be rendered only after engagement of the firm for services, execution of the required documentation, and receipt of required disclosures.
Landaas & Company performs investment advisory services only in those states where it is licensed, or excluded or exempted from state investment advisor licensing requirements. All responses to inquiries made by prospective customers to this internet site will not be made absent compliance with state investment advisor and investment advisor rep licensing requirements, or applicable exemptions or exclusions from licensing.
Please contact the firm for more information.
MEMBER FINRA MEMBER SIPC MSRB REGISTRANT

Powered By: mindspike design
ADDRESS: 411 E. WISCONSIN AVENUE, 20TH FLOOR MILWAUKEE, WI 53202
© 2022 Landaas & Company