Every 6 months (January and July) I rebalance the portfolio models I use for individual clients to adjust for current market and economic conditions. The July 2020 update will include 2 changes - a shift to include more value investments and a shift to include more international investments. Below are the changes in allocation, new allocations, and the current allocations. These changes do not cost you anything in trading fees as I cover those fees for clients.

Below are two graphs that show why I think the move to more Value and more International allocations is prudent at this time. Essentially, the last time spread between growth and value investments was anywhere near this high was around the year 2000 and value investments outperformed growth investments until the year 2007. 7 years of out-performance is hard to ignore historically. Also, the spread between domestic and Int’l hasn’t been this high going back all the way to 1970. If you are the least bit of a contrarian investor such as me, this is a strong indicator to decrease domestic holdings and increase Int’l holdings.

These updates will occur in the qualified models over the next few days. The qualified models are the models we use for IRAs that don’t incur capital gains tax when an investment is sold. For the models that we use for taxable investment accounts, I generally don’t sell investments just to rebalance an account. Instead I rely on dividends, contributions, and withdrawals to slowly rebalance those account over time to the new targets. This minimizes capital gains taxes for clients in those types of accounts.

Please feel free to reach out to me if you have any questions or wish to discuss these changes in more detail.

Steve R. Conkin, MBA, ChFC, CFP®

Conkin Financial Group, Inc.

405-348-6200

Steve.conkin@conkinfinancial.com

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary.  Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.