The Great Portfolio Reset - Economystery

The Great Portfolio Reset

The Great Portfolio Reset

  • Reading Time:25mn

The large portfolio point numbers

Møt Liz Young

  • When efficiency increases at short notice, reflect the expectations of the bold interest rates.
  • With long -term bonds, you can point out if these returns increase, the trust that these prices do not cause a recession..
 The Great Portfolio

Møt Liz Young

Liz Young is the head of the investment strategy and spokeswoman for public financing Sofi.In this role, Ms. Young offers both financial and marketing. You are passionate about training investors and Sofi members helps to really get their money.You can implement a regular contribution to CNBC and other financial media.

What Is In This Section?

The temperature has changed on the stock exchange, even if we always dealt around the year, it seems that the risk tolerance is shown when the Federal Reserve Hawkiaer becomes in the middle of a stubborn high inflation.Very when Big Tech shares carried out the indices after the second on a record high. It is the best three -year route since 1999, but we don't forget what happened in 2000.

Many investors have Jits when we arrive in 2022, and investors may be afraid to jump to a land market in the light of rising prices. We can now use all instructions and I have the right person to light the light.

Liz, just like us, you have as many millions of customers and readers of all ages on your platform, in your case to invest, save, borrow and follow your financial lifeinput?

I mean, I think that when you look at our platform, we probably cheat a little younger when it comes to investors. And there are many newer investors who came to the platform from pandemy in the last eighteen months, so I would like to see you twoTelling things. In general, a new and younger investor is more interested in some sectors than some of us ... I will not use the word of old but more sophisticated kind of investors.

Yes. I also talk about me. The younger and newer investors can be slightly weird for technological business, these men with higher growth.Based, but I also think it is traffic jams. And I think there is afraid in many of them because they know ... and as we all know, you have never had a monetary policy -Open bike thisBicycle that simply goes on, the calendar just pulls it out. I think there are many sad, many nerves in the minds of many investors, not just on the Sofi platform.

Now they say to potential customers ... and people who had to see them ... that in the year was to run with the wind behind, while will be the year to run in the wind. The increasing speed environmentAnd a Hawkischer food?

I loved the constant analogy. I have been waiting for a few years to write a section with a constant analogy. Base for inflation, so there is still a headwind, but not necessarily his own headwind., but there is also a headwind for consumers. We go into the world and create more activities where we still have a lot of increased demand. There are many savings for humans. The problem is if you pay more for everything than beforeYears. In inflation, inflation is not only at our expense, but also in many market sectors and the only market atmosphere in general.

And then the third big headwind is that we have more difficult competition, not just about companies, but when they look at the basic elements ... I think digested areas. And they look at that the landscape has become much more competitive, especially for technology companiesYou have to do so much more. They have to give so much more and they have to be so much more innovative.

And they look at some of the other companies. They look at consumer companies, they should not only beat it out of the park in the online shop, they also have to beat it out of the park in the Brick and Mortel because people like to inThe shops return. There are only a few examples. I think the competition has become much more difficult. But the comparisons have become more difficult. So we had this huge rebound. And we often measure the growing players in the course of the year.Based.

We have seen extreme sales in technology and small hats that brake their broken speech in the past few days. Because people who do not understand why technical warehouses and small hats are so sensitive to rising prices, explains to us.

Yes, I am technically seen, but in general technology is seen as a growing sector. The growing sector is based on what investors expect to produce the company in the future growth. To find out how much a company is worth todayThe future growth potential and you look back to what you would consider inherent in today's world.

In order to make this discount comparison, you need an interest rate. And because interest is very low, this interest is in progress. With increasing speed, the greater the denominator and the more difficult to look at the future growth and to believe that it is great todayis valuable.

With increasing prices, future growth is currently less valuable, so if you look at the technical camp, take a look at those who are already buying with high be moved once.

Just the comment. I joke about Jerome Powell, if I am not jealous at all, but we are stuck at every word and hang on the tone he uses, right? I joke that he is sitting at a dining table with a group of peopleAnd ask someone to pass pepper. And the people whispered: My God, did you hear, as he said? What does that mean? 'He can't do the poor man without being ratedOnly expectations of interesting interest.That will damage the technology.

Small hats are a little more complicated. So little hats, they can usually think just as cyclical as a tailor-made category, so what I mean when the economy extends over the economy, the cyclical categories grown with or better as a non-cycleCategories and small caps would be in the cyclical warehouse.

The problem at the moment is that because we expect feeding increase the prices, this fear is that they will make a mistake. It is afraid that they will make a mistake to go too fast to go too quicklyStart quickly or that it is not a good time for the economy to increase an increase in interest rates and to compress growth.

So if you have a situation in which Bold makes such a mistake and this leads to a headwind to grow, it is not so good. I think it is a lot of the little hoods that will continue, but I would like to point out this,If you look at what happened in 2021, the small DOP value has done it really well. Facts are that the growth of the small cap is not the case.Categories see a rather big difference between styles and sectors.

When we talk about sectorrotation, what is a lot about this podcast, which means that we are growing to value or vice versa or from technology to basic foods or vice versa, depending on the economic headwind., especially in the past year, corrected and creates and creates new heights. How and when should investors turn responsibly??

Therefore I will never introduce someone to pursue it or try it in a rotation. What happened in is that we thought we were on this route on which the 10-year return would rise and continueThen it was this invisible level of resistance, in which it could not be more than 1.74%.. So we went through a few different times to believe that this rotation would apply, and it ended in returning to the technology. In this year I think that the Fed has confirmed that they are intensifying that we are clearly alreadyare under the third voltage, and now there is even a discussion about roling the balance.

When efficiency increases at short notice, reflect the expectations of the bold interest rates. With long -term bonds, you can point out if these returns increase, the trust that these prices do not cause a recession.

These are therefore three different steps, three different steps in the monetary statement. And everything is confirmed that each of them is happening or forming one or the other this year, so I think that this is finally the year in theThe 10-year-old of this level of 1.74% can break and start to reach stages that are no longer seen for a long time, which means that rotation in these cyclical areas is only longer than it in the last twelve monthshave done.

As an investor, I assume that many people are too heavy or at least strongly weighed in technology and big cap, so we are still at the beginning of the year. I know that the market has fallen in the first few days.If the first few days had taken three weeks, but you have the opportunity to place your portfolio for what you think that it will be in 2022.And I will challenge myself that it can be good if you have done something that you have never done before. And I have often used this sentence. This is also the title of a book.

When we talk about the lack, we know that many were afraid of missing in the last year or in the previous year because the stock market has achieved this incredible return in the light of pandemic. And we also know that many investors were simply so unsure. They were in their hands at the time, but we say they are a new investor. They want to spend money now after the year begins. How would they advise someone who now says 10,000 US dollars to invest? In stock,But just like you build up the responsible plan, because that's what Sofi is about.

Yes absolutely and I would also like to say that it is fantastic, and I think that there are all institutions or that there are all people with high performance and the market does not contribute to someone else, this is no longer the case.

And that's a good, good thing. I think it works for the individual investor that you have so many other options to start ten years ago. And the best chance that I work best for people are ETFsSo the number one is the low costs, right?To invest directly in such a share. You can therefore get a much more diversified degree of exposure.

So what I want to say is always to think about how a hub and about talking about it are 10,000 US dollars, 5,000 US dollars, 20,000 US dollars. I don't care about the amount. Nave is your long core distribution that you can use something like a wide market -it can be a S&P ETF.So much risk of concentration. So use it in the core. They can also add something that is a little less aggressive.

I also don't think that cash is a bad chance. I think everyone likes it: I don't want to invest in cash. But nothing deserves anything.To diversify, especially at a time when bonds do not look so attractive, right? The core is the basic exposure of capital.Those they see? So I want to say this year that they have their core and then lean against cyclical, some of these economically sensitive areas, small hats and I even wanted to throw some internationally and develop there.

Good recommendations. They record ETFs and give me a great chance of doing what we did last week. Liz was one of our special guests at ETF -22.We did it with ETF trends. We spoke to Tom Lydon in the podcast last week. People that were fantastic ninety minutes to learn something about ETF. And Liz helped them. Fantastic recommendations for those who start, even if you are an experienced investor, even if you are now on the market, not a bad way to start the new year.

You have mentioned the millions of new investors who have agreed to the stock market market in the past eighteen months either for shopping or long -term investing.Game changed. The detailed investor now has a certain power and can actually postpone markets, especially in certain shares, but what happens when they go?

I want to say that it is one of my biggest problems for 2022.It is very easy to be in the game when you win. And many have won in the past eighteen months or have called it since April 2020. If you start losing it or if things look more demanding, it will take more than 20% or 25%, unless it is combined with a recession, so if you do not see a recession ... and I do not come a recession ... if you don't see that there is a recession, it is the chance to have oneBig step like this to experience, 20% to 25% on the broad market are quite tight.

If you have these little bumps like this, I think one of the things that frightened me that the fact that we as investors believe that the pain of loss is twice as bad as joy with a profitContinue the year because there may be periods in which you look red in your portfolio, you can see a negative number in the weekly project, the monthly performance.A loss, right? And it does not mean that you have to keep everything that loses.

I mean, of course, you can end up with what we would describe as a falling knife. But short corrections are no reason to go. And the knee -member reaction simply worsens it, so I would like to be very careful.I will be very careful with it. You will find your expectations of this year. You probably don't get 28% s & p, and as long as you have the right expectations, you can maintain the endurance a little better.

What is your hot roof 2022? What does nobody talk about that a very big question can be in the coming year?

I mean, I hate starting with a risk, but something that nobody speaks about is a risk is the credit market. I believe that the credit market for the importance of consumer loans.So outside and possibly the loan activity that occurred due to our reinforced question. Then things like car loans.

Now we are discussing a period in which we have reached a point where the personal savings rate can be attributed to the pre-Pandemic level, so that people no longer store cash. This means that from around fifty billionUS dollars are saved per month.Now 2.5 trillion dollars are available, but fifty billion a month is expected to get out of this warehouse.

I am concerned that people are wrong and that they will take part in many wraach costs. We are probably already.You buy all the things you couldn't do before.

Yes. My, concerts, travel, what does it cost, but maybe you have to do it exactly the time when the prices rise.Second half of the last part 2022.

It is completely sensible. And I think you are right. I think many will use and keep these levels because they feel that they feel like, or they have the feeling that they still have these savingsHad so many good investments for you in the past few months.

Ok. The first thing, just because it is nice to say, is Contango, but I think you are almost all favorite words, right? Contango only means if the spot price or the current price for something during the future price becomes over the courseRemove from this time. The opposite is behind it. But my really favorite expressions that sound a bit boring, but I'm a moment for the chance. And I think it's a good expression now. We have already discussed it.In fact, an entertaining way to say Fomo. And if you want a comparison, because you have given what you save.

So think about it this year in your portfolios. How do you hang around? Have you fell in love with something you are with the time you can break with? Not because it was a bad investment, not because the company is suddenly bad, but because the environment is changing, right? And it is very easy to fall in love with your investments, especially if you did something well, right?Outside of the armed forces, the alternative costs are what you want to indicate by keeping one and not having the money available to buy something else that can do better this year.

It is a good expression and explains so well. I am very good in it. I told you people, a feeling of voice in a time when we really need it.

When efficiency increases at short notice, reflect the expectations of the bold interest rates. With long -term bonds, you can point out if these returns increase, the trust that these prices do not cause a recession.

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