Investors should ‘stick to their long-term plan’
with the debt ceiling crisis in the rearview mirror, investors are shifting their attention to other economic interests, experts say.
“We’re getting started climb over that wall of worry again,β said CFP Chris Mellone, a partner at VLP Financial Advisors in Vienna, Va., citing the market’s resilience despite economic uncertainty.
While some clients are hesitant to put money to work because of recession fears, he encourages investors to “stick to their long-term plan” rather than keep cash on the sidelines, he said.
The volatility indexor VIX, is currently trending lower, below 15 as of June 5, Mellone noted. “It looks like if we’re going to have a recession, it’s going to be a shallow one,” he said.
Inflation is still a major concern
While inflation continues to moderatemany wealthy Americans are still worried about high prices.
“That’s the thing I hear the most from my clients,” said Natalie Pine, CFP and managing partner of Briaud Financial Advisors in College Station, Texas, noting that inflation is a big concern for her $1 million to $5 million clients. . .
Annual inflation increased by 4.9% in April.The U.S. Bureau of Labor Statistics reported a slight decline in May from 5% in March.
We start climbing that wall of worry again.
Chris Mellon
Partner at VLP Financial Advisors
A significant number of millionaires, especially older investors, believe it will take one to five years for inflation to drop to Fed’s 2% target, a CNBC survey found. Meanwhile, about 43% of millionaires are considering portfolio changes or plan to make adjustments due to inflation.
Matthew McKay, CFP, who also works for Briaud Financial Advisors, said the best way to combat sticky high prices is to invest βto keep up with and beat inflation.
“We’re seeing a lot more interest alternative assets and private deals that can generate returns,” he said. “We do a lot in oil and gas, which is a big driver of inflation, so it’s a good hedge.”