Pictures speak a thousand words. So we wanted to show you one that raises important risk management questions as the Federal Reserve prepares to withdraw quantitative easing (QE).
The equity and fixed income markets have reached all time highs; but the economy and the markets do not feel nearly as healthy as they did in other cyclical bull markets. Indeed Main Street does not feel as though it has participated at all in the recovery. The reason is simple, the patient has been on life support – more popularly called quantitative easing – and the doctors are now considering turning it off. This raises important risk management questions such as …
- Can the economy support current market levels on its own?
- If yes, will the transition be smooth or bumpy?
- If no, where do price levels belong?
- Or will they continue QE and allow the market to march higher?
While Pinnacle is not calling for the end of this cyclical bull market, our CIO Ken Solow (author of Buy & Hold is Dead Again) penned a blog titled “A Turning Point in the Market?” that explains why now is not the time to invest blindly but rather a time to double down on risk management to ensure safe passage through an uncertain environment.
The good news for Pinnacle and its clients is that we have created a disciplined investment process that has proven effective at managing risk and compounding returns through arguably the most difficult investment environment since the great depression. So while no two markets are the same, we feel as prepared as we can be with six full time investment professionals, exceptional technology customized over ten years to suit our needs and best-in-class institutional research from around the Street.
So the questions for you are …
- Are you equally as confident and equally as prepared?
- Are you ready to bet your clients retirement and the future of your practice on your current risk management process?
If you don’t like your answer to these questions, we are happy to share what we have learned.