BY KRISTIN HOVENCAMP
1st Quarter Hindsight
Fear Of Missing Out, or FOMO, is a term describing the anxiety of missing a perceived opportunity. FOMO can influence investors to act against their best interests by investing in unsuitable securities that others believe will make money. Investors would be wise to avoid seeking emotional security by blindly following the same strategy as the masses. While the first part of 2021 is more favorable than last year, investment hazards remain abundant.
Intra-Year Declines
If you are putting cash to work, devise a plan and take your time. Outlining your schedule and dollar investment commitments will help you avoid the pressures of FOMO. Even during bull markets, intra-year declines create healthy market contractions of 5-10 percent with an average recovery time of approximately one month. Typically, the market experiences three to four pullbacks per year. For patient investors, price drops present entry points.
Sector Focus
While others may be distracted by chasing the next shiny thing, gain some grounding in your understanding of equity sectors. Our favored equity sectors include Information Technology, Communication Services, Financials, Industrials, and Consumer Discretionary. We view these sectors opportunistically, as they are leveraged to the economy in the near term and have long-term growth potential due to the increased consumption of e-commerce, streaming, advertising, broadband expansion, and fintech.
Selective Equities
As we begin the bull market’s second year, we place a heightened degree of importance on investment selectivity at the individual security level. Even with the market’s current elevated valuation, opportunities exist for further upside potential within the favored sectors.
Eye on the Ball
While we delight in the comparatively halcyon days of 2021 in contrast to last year, the importance of adhering to your unique aspirations and risk mitigation strategies should remain a priority. We continue to focus on the investor and the key elements that drive individualized portfolio development: liquidity needs, risk tolerance, diversification, and long-term investment goals.
Kristin Hovencamp is Director of Business Development at HAZLETT WEALTH MANAGEMENT, LLC and an Investment Executive with RJFS. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Securities are offered through Raymond James Financial Services, Inc., member FINRA/SIPC. HAZLETT WEALTH MANAGEMENT, LLC is independent of Raymond James and is not a registered broker/dealer. Investing involves risk and you may incur a profit of loss regardless of strategy selected, including diversification and asset allocation. Past performance does not guarantee future returns.675 Sun Valley Road, Suite J1 + J2, Ketchum, Idaho, 83340 208.726.0605 HazlettWealthManagement.com