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401k/403b Traffic Light Advisor

Red Light: Consider moving to cash and lower risk assets, preserve value.
Yellow Light: Consider balancing lower risk and moderate risk assets, avoid higher risk assets, seek moderate return.
Green Light: Consider increasing higher risk assets, seek higher return.

Current Investment Headwinds:

  • Slow economic growth in Europe and China, China tensions increase
  • Low Yield on Bonds and Fixed Income

Current Investment Tailwinds

  • U.S. corporate earnings – returning to historical highs
  • Rebound in the Labor Markets, lower Unemployment Rate
  • New disruptive technologies may increase productivity and lower cost of doing business
  • Supply chain constraints being addressed
  • U.S. households hold historic cash positions, may be invested in the markets.
  • Receding Pandemic fears as vaccination rate rises, new Covid pill approved which may moderate virus symptoms and lower the death rate.
  • Congress adopts the bi-partisan Infrastructure bill. Congress may pass a slimmed down Build Back Better bill, with fewer tax hikes than proposed.
  • Federal Reserve reduces quantitative easing, maintains accommodative policy.