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What to Do With New Investible Money?

Author: Thomas Martin, CFA                                                 Senior Portfolio Manager

Invest it. What to do with an already fully invested portfolio? Stay invested.

Why? With the S&P 500 and Nasdaq near all-time highs and up nearly 15% year-to-date, isn’t that a risky time to put cash to work in the markets? Perhaps the most important thing to remember about true investing, is that it is investing. It is by its very nature risky, uncertain, and difficult to time. It is also long-term. It should have a long enough time horizon to weather shorter-term ups and downs. The next most important thing is to diversify exposure to risk. Different assets usually act differently in different scenarios. Why invest now? To prudently gain exposure to risks and their associated returns and build wealth over the long-term. That can only be accomplished by putting money to work.

We view the near-term prospects for equities and fixed income to be positive on balance. This doesn’t mean that we think it will be blue skies and clear sailing with uninterrupted gains, but we don’t view the markets as being vulnerable to an imminent top. We see a number of favorable underpinnings that are supportive of the current levels of equity and fixed income prices.

Business fundamentals appear to be stable. Not all companies, industries and sectors are doing equally well, but the factors of production are settling into a level that is closer to normal as time moves on from the disruptions initially put in place by the global pandemic. Unemployment is low, and jobs are being net created. Companies and consumers still have money to spend and a willingness to spend it. Price levels may not be ideal, but they appear to be manageable. The same can be said of credit availability and interest rates, in our view. Education, talent, and skills, although not perfectly distributed and matched, seem to be generally meeting the needs of operators. The US economy is broad and diverse, and ingenuity, problem-solving and the motivation to improve is alive and well. This has resulted in a reacceleration in revenue growth, margin improvement, and thus profit growth.

The markets themselves have a few things going for them as well. Generally speaking, technical indicators are more indicative of further gains rather than the beginning of a downturn. Sentiment is positive but is not indicating an overweight of excess as we read it. This stage of the election year cycle has been a tailwind for markets in the past. Interest rates have risen significantly since they were close to zero but are within range of their highs and have the potential to stabilize here or even a bias in the downward direction.

We remain close to fully invested in the strategies we manage. We are positioned in keeping with those points we noted above. We are diversified across investment styles, market capitalizations, sectors, industries, and companies. Our investments are highly liquid, so we have the ability to move quickly if necessary. We believe we have a degree of non-correlated exposure that has the potential to benefit the portfolio should macro events get rough. We believe our strategies are positioned as prudent investments for new and already invested money.

Source: FactSet, Ned Davis Research

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GLOBALT Investments LLC (“GLOBALT” or the “Firm”) was founded in 1990.  It has been registered with the SEC as an Investment Adviser pursuant to the Investment Advisers Act of 1940 since 1991. Effective October 1, 2023, GLOBALT is a limited liability company owned by the employees and succeeding the “GLOBALT Investments” which had been a separately identifiable division of Synovus Trust Co. N.A. (its affiliate since 2002). GLOBALT is no longer affiliated with Synovus. The SEC declaring GLOBALT’s successor registration effective should not be mistaken for an endorsement.

This information has been prepared for educational purposes only, as general information and should not be considered a solicitation for the purchase or sale of any security. This does not constitute legal or professional advice and is not tailored to the investment needs of any specific investor. Registration of an investment adviser does not imply any certain level of skill or training. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information may be required to make informed investment decisions, based on your individual investment objectives and suitability specifications. Investors should seek tailored advice and should understand that statements regarding future prospects of the financial market may not be realized, as past performance does not guarantee and/or is not indicative of future results. Content may not be reproduced, distributed, or transmitted in whole or in part by any means without written permission from GLOBALT. Regarding permission, as well as to receive a copy of GLOBALT’s Form ADV Part 2 and Part 3, contact GLOBALT’s Chief Compliance Officer, 3200 Windy Hill Road SE, Suite 1550E, Atlanta GA 30339. You can obtain more information about GLOBALT Investments and its advisers via the Internet at adviserinfo.sec.gov, sponsored by the U.S. Securities and Exchange Commission.

The opinions and some comments contained herein reflect the judgment of the author, as of the date noted.

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