After more than a year of the pandemic and its corresponding lockdowns, vaccination rates are rising, the stock markets are rebounding, and economies are poised for reopening. Wealth Professional recently spoke with Sightline Wealth Management Senior Vice President and Investment Advisor Paul de Sousa on some of the best and worst steps he believes investors can take as we begin to enter a post-COVID world.
While the market outlook may seem bright after such a quick and sensational recovery, de Sousa warns that investors should not get too far ahead of themselves, especially if the U.S. Federal Reserve tapers and/or interest rates rise. Instead, it is important for investors to keep emotions in check and manage expectations if the current stimulus-fueled market run comes to a halt.
“It’s all about being prepared to be proactive rather than reactive,” says de Sousa. “The natural inclination is to squeeze every last bit of juice from the fruit. But you won’t get out at the very top or get in at the very bottom; be happy that this occurred.”
Another thing de Sousa says investors need to be aware of as we move forward is the reality that the traditional asset allocation approach of 60% stocks and 40% bonds no longer creates properly diversified portfolios. It is now crucial for investors to incorporate the right alternative investments across various asset classes.
“Alternatives provide wonderful and consistent returns but it takes an inordinate amount of time and a skilled team of individuals to do proper due diligence,” de Sousa explains. “It’s not like a traditional open-ended fund or daily liquidity, there are a lot of factors that go into it.”
Sightline Wealth Management LP (“Sightline”) is an investment dealer and is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF). Sightline provides management and investment advisory services to high-net-worth individuals and institutional investors primarily through fee-based accounts.
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