- 2016 Investment Review and a View for 2017
- The Impact of the US Election and Your Portfolio
- Q3 2016 Market Update: Watch and Wait as Economic Growth Continues
- The Impact of Brexit on Global Markets and Your Portfolio
- SigFig App Wins “Editors’ Choice” Award
- 2016 Q2 Market Update — Markets Are Volatile, but We Remain in the Midst of a Good Bull Run
- For Retirement Investing, Putting Customers First Is Now the Law
- In a Market Downturn, Think and Act for the Long Term
- SigFig’s Tax Loss Harvesting Helps Lower Your Tax Liability
- Revisiting Stock Popularity Across States
Last night, the British voted “Leave” on their referendum to exit the European Union (EU). This result is poised to increase uncertainty and weakness within the union of 28 countries.SigFig’s Investment Team expects increased volatility in global markets, as investors assess the impact of the vote. Though there are likely to be few immediate economic consequences, many European economies, and especially the British, are likely to suffer from weaker connections to the Continent, with global impact.What should you do?Focus on the long-term and ignore the short-term market fluctuations. Markets will adjust to the Brexit result and recalibrate. Meanwhile, it’s important to recognize that a globally diversified, asset-class diversified, time-horizon appropriate portfolio will weather this storm. Your SigFig portfolio is designed to invest your capital wisely to endure the ups and downs of market volatility.With the uncertainty about global economic growth caused by the Brexit result, international markets are likely to decline. Meanwhile, U.S. Treasuries are likely to be a source of safety and could rise as investors seek to relocate their capital to more stable assets.SigFig portfolios deploy assets in all major markets, including the U.S., Europe, Asia, and points in between. Moreover, the portfolios contain U.S. Treasuries, investment-grade bonds, and other sovereign debts for asset-class diversification, while accommodating different risk levels and different investment horizons.If in doubt about whether your portfolio is matched to your time horizon, retake our risk tolerance questionnaire.
P.S. With the British pound falling in value relative to the U.S. dollar, now is a great time to visit England!
Earlier this week, Google Play selected SigFig as an “Editors’ Choice” app — and we couldn’t be more thrilled. Judged by Google’s editorial staff to be one of “the best Android apps of all time,” SigFig Wealth Management is among the few finance apps ever to earn this distinction. The Editor’s Choice designation is reserved for trusted apps of the highest quality.The SigFig Android app makes it easy for anyone to get access to high-quality, long-term investment management with low fees and low account minimums. Download it here for free.We’re always looking for new ways to make it easier for people to reach their financial goals, and our app plays a big part in that. In selecting which apps to award its coveted Editor’s Choice badge, Google Play looks at everything from app quality and material design aesthetic to integrated Android features and user experience.By awarding SigFig this honor, Google Play recognizes our commitment to providing our Investors with a great product. We’re incredibly proud of our team and the work they do to deliver the best app experience possible.
Looking for an exciting challenge? Want to solve big problems, shape the future of an industry and make a real impact on the lives of millions of people? Join our award-winning team here.
It’s hard to love a good bull market—if you’re out of the market, invested in cash or other assets, it’s frustrating to wait on the sidelines for better buying opportunities. You see the neighbors enjoying the gains, but you’re stuck in place. Meanwhile, if you’re fully invested, you’re always on edge that the bull market will give up the ghost. Should we stay in, should we get out?Prior to the current run, dating back to 1932, there were eleven bull markets, lasting an average of five years. But we’re nowhere close to the longest yet; the run from December 1987 to March 2000 lasted more than 12 years. Our view is that you should ignore all of this. If you think appropriately about your investment time horizon, you should invest your assets in a mix of stocks & bonds and ignore the intra- or inter-year fluctuations in the market.If you’re out of the market because you’re afraid or you have a shorter horizon, you should invest in a healthy mix of investment-grade bonds (fixed income), with a smaller but still meaningful allocation to globally diversified stocks. If you have a short horizon, make sure you’re taking sufficient and appropriate risks. Where do U.S. markets stand today?The US stock market remains on a tremendous seven-year run from the depths of early 2009. Equities wobbled for the first six weeks of 2016, down nearly 10%, but rebounded completely by the end of March.S&P 500 performance from January 4, 2016 to April 6, 2016Even with this volatility, it has continued to prove very hard to be a good stock picker. Fewer than 20% of large-cap active managers beat the S&P 500 in the first three months of the year. The experts do not reliably beat their benchmarks, and even acknowledging that they win sometimes, they on average do not do so by sufficiently large margins over the long-run to justify paying their high management fees.As a result, we recommend a more strategic approach: buy low-cost index funds, diversify your investments across many asset classes, and patiently take the long-view. This is the SigFig approach: we invest our clients’ assets in diversified portfolios that make sense for their financial goals and time horizon. International markets: slow growth, choppy marketsOn the international front, developed economies are still growing, albeit very slowly. Weakness in these economies has been met with European and Japanese versions of quantitative easing as central banks attempt to stave off recession. Though they have not yet completely rebounded from the early 2016 swoon, developed international markets cut their losses over the last several weeks.Meanwhile, emerging markets hit hard by declines in commodity prices have stabilized. The skid in oil prices has stopped, but low commodities prices have kept a lid on economic growth. Nonetheless, emerging markets stock performance bounced back after falling off more than 10% to start the year.(Chart illustrates the price return of VWO and VEA. VWO is the Vanguard Emerging Markets Equities Index ETF; VEA is the Vanguard Developed Markets Equities Index ETF; measured from January 4 to April 6, 2016.)The future is unpredictable, so it’s wise to have exposure to many different markets. The SigFig strategy is to diversify its clients’ assets across the globe, with exposure to both developed and emerging markets. Fixed Income: interest rates are going to rise, but possibly slower than you think.At the end of 2015, the Federal Reserve announced its first rate hike in seven years. Since then, the question remains how quickly the Fed will continue to raise rates to bring them in line with historical norms. (This chart illustrates the price return of AGG, the iShares Investment Grade Fixed Income Index ETF from January 4 to April 6, 2016.)Fed Chairwoman Janet Yellen indicated in her February congressional testimony that the Fed will increase rates slowly, but it appears reluctant to push too hard on interest rate hikes at the risk of stalling out the US economy. Related to these muted expectations about rate increases, investment grade fixed income prices continue to creep up, as market observers temper their expectations about future rate changes. Stay appropriately diversified; focus on the right time-horizonAs we have consistently stated, the SigFig approach is to stay committed to a diversified portfolio whose risk is appropriate to your investment horizon. Identify the right mix of asset classes to deliver the right amount of return to meet your investment goals while not too risky for your personal comfort. (Retake our risk questionnaire to make sure your risk tolerance is set correctly!) Then invest in low-cost index funds that give the exposure to a broad set of securities within an asset class. This is the research-backed way to build your investment portfolio.