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If You’re Waiting to Spring Into Action on Your Portfolio, Here Are Three Things to Consider.

AngelaRoberts

Written by Angela Roberts

Mar 31, 2022

One of the most important parts of being a CEO is learning how to motivate your team. Earlier this month, I wrote about how the spring season presents a great opportunity to get to work on your finances—a bit of “spring cleaning” to help prepare your portfolio for whatever the rest of the year may have in store.

For some, the idea of freshening up their portfolio may be enough to motivate them to sit down, reexamine their unique financial situation, and see where new opportunities may lie. For others, some additional motivation or help understanding “Why now?” may be useful.

With that in mind, these three big news stories happening right now may help motivate you to spring into action on your portfolio.

The Federal Reserve is increasing interest rates, but some analysts are saying it may be too late to stop a recession.

Front of Federal Reserve building in Washington, D.C.For many of us, uncertainty can be our worst enemy. Not knowing what will happen can cause us to freeze up or experience incredible levels of stress. But not if we take action.

For some time now, we’ve been waiting and watching as the Federal Reserve has made plans to increase interest rates, which have been kept incredibly low to help bolster economic growth. But now that the Federal Reserve is updating its policies, some worry that it may be too little, too late to stop a recession.

According to a March 29, 2022, article by Bloomberg, the Federal Reserve has “pivoted toward an even more aggressive plan of interest-rate hikes than they signaled earlier this month to ensure price increases cool.” However, CNBC writes, “Economist Mohamed El-Erian warned that the Fed’s efforts to combat inflation could tip the economy into recession,” citing among other things a “cost-of-living crisis.”

I believe that in a world where economic uncertainty feels like it’s fast becoming the norm, taking actions against that uncertainty should become the norm right along with it. Economic uncertainty is not something to fear—it signals that now may be a good time to spring into action.

We still don’t know how the continuing conflict in Eastern Europe may impact our portfolios.

Another reason to consider taking action is the additional uncertainty caused by the ongoing conflict in Ukraine. In fact, according to the Bloomberg article mentioned above, the conflict may have been one of the reasons the Federal Reserve held off from making a larger initial interest rate increase.

A March 21, 2022, article by Fox Business states that the Russia-Ukraine conflict “will likely hit economic growth globally and here at home.” The article continues by saying, “The majority of [National Association of Business Economics] economists see inflation staying above 3% through 2023.” The New York Times seems to agree: “The global economy is poised to be sent on yet another unpredictable course.”

In other words, it may not be economic factors just here at home that could impact your portfolio. With multiple layers of uncertainty hitting markets at the same time, you may wish to examine your diversification strategy.

As this uncertainty continues, interest in and demand for precious metals is rising.

If your first thought during times of economic uncertainty is to turn to non-paper-based assets like precious metals, you’re not alone.

Earlier this month, on March 12, 2022, Bloomberg reported that gold was “playing its age-old role as a safe haven in times of wars and crisis, and people all over the world are piling in.” On March 21, 2022, CNBC reported, “Fighting in Ukraine boosted demand for safe-haven bullion,” and according to Craig Erlam, senior market analyst at OANDA, “Another escalation around Ukraine will drive significant safe-haven flows to gold, even inflation hedge moves if we see sanctions that trigger another commodity surge.”

Consider, too, that Russia is the world’s largest supplier of palladium and the second-largest supplier of platinum. If sanctions are put on Russian precious metal exports or if the country reduces its output, it could impact both demand and prices for these precious metals.

In times like these, I’ve always preferred being proacting over reactive. There’s a peace of mind that comes from knowing you’re being proactive to protect yourself and your loved ones—a level of comfort from knowing you’ve taken well-researched steps just in case. Combine this with the other reasons listed above, and I believe there’s a very strong case for springing into action on your portfolio today.

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