The first day of July was a good one for the stock market, however it was not enough to save investors from another losing week that encompassed the worst first half of a year for the S&P 500 since 1970.

The main story lines were all too familiar. War, concerns of economic and earnings growth, inflation, and central bank rate hikes. If one wanted to gain a good feel for growth, one need only look at the Treasury market.

Since interest rates and bond prices typically move in opposite directions, the Fed’s rate hikes have sunk bond values. Further, the high demand of bonds have lowered yields to a point where some investors have sought out low quality bonds that can face default. All of this is a reflection of weaker-than-expected consumer confidence. This is the first time in recent history that we have experienced both high inflation and a low savings account yield. So what do we do?

Be defensive. This is not the time to be aggressive. Nor is it the time to go all cash. If you are aggressive, you lose value. If you hold too much cash, you miss the rebounds that could recover losses. The challenge is understanding that the balance is your compass. I cannot stress enough the importance of understanding your monthly expenses multiplied over 6 to 12 months. More than ever, iPlan is focusing on being defensive by understanding what our clients should set aside in cash or cash equivalents. With the remaining balance – we need to answer this question: How much of your portfolio are you willing to put at risk? What level of risk are you comfortable investing? These are important questions when looking at a possible recession. Everyone is still investing, but the prudent investor limits how much they will invest AND how much will be preserved on the sideline waiting for the rebound.

If you have not done so in a while, this may be a good time to contact our office to schedule an appointment to perform your “Sustainability” analysis that exams both your cash needs and investing goals considering your timeline – This includes your employer savings!! Generally speaking, this will try to balance the money you’ll need to meet your expenses away from stocks and other riskier investments. And that is the essence of iPlan (investing to Protect Lifestyles Assets and Needs).