Beginning on January 1, 2021, we’ll be making a couple of changes. We will include Emerging Markets, US small-cap stocks, and the broad Commodity Index. We will substantially reduce allocation to US Treasuries. Here’s what things will look like starting the year.
|Asset Class||Allocation||YTD 2020|
|S&P 500 Stocks||20.65%||16.02%|
|US Russell 2000 Stocks||17.70%||30.76%|
|Emerging Market Stocks||22.11%||14.89%|
I’m making these changes for now because of the increased risk of inflation and the likely continuation of the dollar’s decline. In 2020, Small-Cap stocks were the top-performing asset class, followed by Gold and US Treasuries. At one point, the S&P-500 was down about 35%. Yikes!
I will continue doing research on ways to manage risk for our conservative clients so that we can continually adapt to the changing markets.
Please be safe out there and have a blessed 2021.