Client Investment Accounts Update for April 2024

Recently, you may have seen a lot of activity in your investment accounts. As a result, you might understandably be wondering what is going on:

• Is something broken in the stock market or the U.S. economy?
• Is something broken within your investment account?
• Is what you’re seeing cause for alarm?

Let’s start with the most important answer here: no, there is no cause for alarm or concern. Still, the question remains, what is happening?

We’re Doing Our Annual Rebalance

Every year, we rebalance all of our accounts, rebuilding the models based on what we’re seeing in our investment framework. You’ve likely heard me talk about our investment framework before, but just in case, here is a quick refresher:

🔎 Learn more about our investment framework

Within this investment framework—which is designed to help us make the smartest investment decisions possible for you, based on your goals—there are four components:

1. How do we view the investment world? How do we view the U.S. economy? What are future expected returns?
2. What is going on in the economy? What is going on in the business cycle? Is inflation increasing? Is it shrinking?
3. What is the Federal Reserve doing? Are they being accommodating? Are they being restrictive? (Right now, for instance, we know they’re being restrictive.)
4. What are current market trends? Specifically, what is the stock market doing? What is the bond market doing?

With this framework, we rebuild many of our portfolios and models, and we do this once a year. On a quarterly basis, you’ll see us rebalance particular sleeves, as well; this is pre-scheduled.  So, for the most part, what you’ve seen traded this week is in no way a cause for concern. It is simply annual maintenance.

What Should You Do Now?

First, when you evaluate your investments, you’ll want to ask yourself a few critical questions. Did you and your advisor redo your income plan last year? Did you rebuild it in any way? Did you add an annuity? Do you add another fixed income product? 

Depending on what your answers are to those questions, and how your accounts are organized by extension, you may see specific accounts as more aggressive. You need to remember your story, and you need to remember your plan (and your goals) when you look at your accounts. Because what you may see as a result of those changes may be different than what it was in the past. 

Now, some of you may still have more questions—and that’s more than OK. We encourage them. Whether you’re seeking clarity on the investment framework or simply need a refresher on the specifics of the plan you’ve built, we’re here for you. 

I would also encourage you to take a risk assessment. “But Chris, those things are so boring and confusing. They don’t really tell me anything!” 

In reality, the results of a risk assessment tell us a lot. Rather than relying on terms like “conservative” or “aggressive” (which we all define differently), allows us to numerically score what your true investment risk tolerance is and align your portfolio to that score.

🔎 Learn more about the risk assessment process

You can email us at info@soundfsg.com if you’d like to complete a risk assessment for yourself.

To be clear, no action is required on your part, as the rebalancing work is complete on your behalf. However, like I said we are here if you have questions or if you’d like to discuss taking a risk assessment, if you haven’t done so already. We appreciate the trust that you put into us, and we don't take that lightly. We look forward to talking to you soon.