Unless you’ve been living under a rock, you’ve probably noticed a bit of an issue with the stock market lately. This can be distressing for any retiree, but when the declines in stock prices are coupled with high inflation and rising interest rates, then you have a triple threat to your retirement plans.

Today we have a special guest joining the show. Joseph Hogue, CFA from the Let’s Talk Money!  YouTube channel, is here to help us understand what the heck is going on with the stock market. If you have been trying to figure out what you should be doing with your portfolio you won’t want to miss this interview with Joseph Hogue

Outline of This Episode

  • [1:22] What is a CFA?
  • [3:22] What the heck is going on with the stock market?
  • [8:55] Will this be over sooner or later?
  • [10:50] Should we rebalance now?

What is a CFA?

When I see CFA my mind immediately goes to Chick-Fil-A, but apparently, Joseph is not affiliated with the famous chicken sandwich. The CFA after his name actually stands for chartered financial analyst.

The CFA designation is gained through a rigorous 3-year self-study program followed by a series of tests.

Joseph describes the difference between CFA and CFP as CFAs being those who work with wall street and CFPs as those who work with main street. CFAs provide investment guidance by analyzing the stock market trends and data and building portfolios based on financial statements.

What the heck is going on with the economy right now?

Inflation is at 8%, interest rates are climbing, and the stock market is tanking. So what the heck is going on?

Everything seems to be such gloom and doom, but to analyze what is happening now it is important to put the present-day into perspective. To do that we must look back at the past ten years.

When things are going well we tend to close our eyes and enjoy the ride, so over the past 10 years many of us have done just that. Now when we look up to discover the financial world crumbling around us we have a tendency to panic.

The past 10 years have provided stock market investors with historically high returns and interest rates have stayed at artificially low rates. This is due to the fiscal and monetary stimulus that has been injected into the economy over this time period.

Now it’s time to pay the piper. What we are seeing happen is a return to normalcy.

Even though it may not feel this way, today’s retirees are actually in a good position. Since they have had the tailwind from the high returns of the past ten years they are in a good position to weather the storm if they don’t make hasty decisions.

What should you do to weather the storm?

Rising interest rates mean bond prices decrease. However, bonds are starting to become more attractive. Short-term bonds will react less as interest rates go up while still providing a bit of safety and asset protection. Listen in to hear which bonds are returning at a rate of 9.6%. You’ll also learn whether now is a good time to rebalance and why using a bucket strategy could be a good decision for your retirement plan.

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