A key goal of ours is to deliver value to clients by sharing research reports, insights, and macro perspectives outside the typical performance updates. Today we are sharing one that you might find interesting.
Some of the questions most financial advisors get asked often by their clients are: when should I invest? Should I wait for a market dip? We explored various approaches used to deploy capital: from dollar-cost averaging (fixed amount on monthly or quarterly schedule), to lump-sum (once a year), and timing for when the market dips.
The analysis going back over 20 years indicates that employing a monthly investment plan generally outperforms in the long run versus staying out of the market longer (quarterly or annually). More importantly, attempting to time the market results in subpar performance. In summary, create a plan today and stick with it. Invest when able and as your situation allows irrespective of short-term market movements. Read more here.
What we are tracking
New Monetary Policy Framework
Yesterday, Fed Chair Jerome Powell announced the adoption of average-inflation targeting, a policy strategy aimed at minimizing the social loss of monetary responses to price-target. With this policy, we could expect a dampened response to inflation rates slightly above the standard 2% target. Actions by the Fed play a critical role in stabilizing the economy. We will be accessing the implications of the new strategy on capital markets.
The aftermath of Hurricane Laura
The first major category 4 storm this year made landfall in Lousiana and Texas at 150mph before ripping northwards to Arkansas. We have seen severe power outages and disruptions in oil & gas production. We are closely tracking the aftermath of the storm.