Keeping a Balanced Approach

Strategy Update 2022

As much as we hoped that 2022 would be a return to normalcy, so far this year has presented us with new challenges. For our 2022 Strategy Update, we presented A Balanced Approach – a reminder that during periods of market turbulence, it’s critical to remain steady in our approach.


Bartlett team members Jim Hagerty, Troy Snider, Matt Stith, and Lori Poole guided us through a lively conversation as we dove into strategies to help navigate the ever-changing landscape we are facing.


The inflation situation


Inflation – the steady increase in prices of goods and services – is on the rise after a period of relatively low inflation. Right now we’ve got three kinds of inflation in play (cost-push inflation, scheduled inflation, and demand pull), creating a tsunami of sorts.


Ongoing supply chain bottlenecks come into play, along with the dramatic upturn in money supply partly due to the Fed’s 2020 stimulus. This was a sharp contrast to the slowing of money velocity in line with the economic shutdown at the beginning of the pandemic.


As the Fed starts to steadily work down inflation pressures, we’ll keep our eyes on interest rates. While higher interest rates can be beneficial to some companies and industry groups, it can hurt growth-oriented companies whose future cash flow may be affected.

Opportunities to invest


With inflation very much a factor in today’s markets, there may be a silver lining – that, in fact, inflation can be good for stocks, which can act as a hedge against inflation provided levels of inflation don’t rise to excess. Well-managed companies that provide highly desirable products and services can use an inflationary environment to raise prices. This may result in growing corporate profits. At the same time, companies are more likely to raise dividends as corporate earnings increase, helping protect the income stream for investors.


However, if inflation growth is too high, the economy can slow and eventually fall into a recession. Thinking about it a little differently, if companies are unable to offset the rising input cost or wage inflation, profits can get squeezed. And if they try to get too aggressive on the pricing side, that can actually result in demand destruction. So, the key here is striking a balance.


Sticking to the plan


Navigating this environment as an individual can be overwhelming, but having a financial plan can help keep goals on track.


Inflation is always a risk when considering long-term financial plans, and it’s not the only one. Beyond inflation, healthcare costs and muted future returns are among the other factors to consider. To find a comfortable balance, Bartlett often suggests people take a three-prong approach:


• Set a sustainable spending policy for your long-term financial plan
• Put together an appropriate asset allocation for each of your portfolios
• Perhaps most importantly, stick to your plan


The key to long-term financial planning is to find that balance between saving and spending.

In summary, staying invested is really the key to keeping a balanced portfolio, and a balanced mindset. Some years will have big returns, like we heard about last year, whereas sometimes things will be rocky, like we’ve experienced in the start of 2022. We’re looking forward as we project portfolio returns based on the current market while keeping a long-term view, never letting the highs get too high or the lows get too low.


We invite you to view a video recording of our full Strategy Update presentation below or on our YouTube channel.

Disclosure: This material provided by Bartlett Wealth Management (“Bartlett”) is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Opinions expressed by Bartlett are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Bartlett, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Any reference to a market or asset class index is included for illustrative purposes only, as an index is not a security in which an investment can be made. Indices are unmanaged vehicles that serve as market indicators and do not account for the deduction of management fees and/or transaction costs generally associated with investable products. The holdings and performance of Bartlett client accounts may vary widely from those of the presented indices. Any referenced or included research reports reflect the opinions of the issuing firm at the time written and may not represent the opinions of Bartlett. Any references to “clients” are hypothetical in nature, for illustrative purposes only, and should not be considered investment advice.  The information is intended to illustrate services available at fiduciary investment advisors, and is not intended as a testimonial or endorsement of Bartlett Wealth Management.  Any references to “clients” do not  represent the experiences of actual clients, do not reflect actual investment results, nor is a guarantee of future results.  Actual clients of Bartlett Wealth Management may have had results and experiences different than those provided

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