Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, September 19, 2016. You can also find the re-balance calendar for 2016 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Inflation protected securities (TIPS) for current overvalued markets

Amid a buoyant financial market that sees everything is rising,  prudent investors are actually facing an increasingly tougher market condition: on the fixed income/bond side, zero or even negative interest rate is unprecedented. Eventually, one way or the other, interest rate will rise and as a result, bond prices will decline. It’s a matter of when, not if. It’s also a matter of how much decline. On the risk asset side, stocks and REITs have risen to a level where their valuation is also historically high. For these risk assets, investors are more familiar with their behavior: they will eventually suffer from a violent correction, as much as a 30%-50% loss. Again, this is just a matter of when and how much decline, not if. 

One of the most important goals in investing is to preserve your purchasing power, before even considering a real wealth increase. Inflation is a real threat even for the most conservative investors: those who keep cash under mattress. Unless they are willing to suffer from the loss of purchasing power, they are forced to participate (or invest) in other assets. The much harder question is what to invest. In old times, these most conservative investor can earn reasonable interests from their bank accounts or from bonds purchased. Even when bad inflation indeed happens, the interests earned along the way can still make up some of the loss. However, with rates being so low at the moment, these investors are forced to venture into other areas, both for the purpose of preserving purchasing power and earning a little along the way. 

One way to combat such a potential loss is to subscribe to a tactical or dynamic investing strategy, such as MyPlanIQ’s Tactical Asset Allocation(TAA). Such a strategy is often coined as a timing strategy that has been usually labeled as ‘bad’ by status quo financial professionals. However, numerous articles we have published on this subject and our 6 year and on going live record have illustrated its effectiveness. Admittedly, there are issues in such a strategy (see, for example, July 22, 2013: Tactical Asset Allocation: The Good, The Bad And The Ugly). However, with enough patience and disciplined implementation, this can work. 

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