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THE VIEW FROM MY (LOUNGE) CHAIR

My wife and I are blessed to have several large circles of friends and they are truly a blessing in our lives! That said, we tend to travel with our friends, but this week we are alone at a terrific resort relaxing and catching up; this has also been a blessing. My staff agreed I would not be able to refrain from writing a blog post. Again, they are right!

I just read an article about avoiding the trap that may occur because money market yields have been so high. Investors felt justified in taking less risk by buying into these funds and waiting to see what transpired in the stock market. Many pundits are saying we passed the peak of money market rates and now investors will need to figure out the “what’s next” move. We have always eschewed market timing, in a form, because the decision to seek safety is easy. The decision to venture back out is far more vexing even for the most weathered professional.

I have always used a simple schedule for managing my liquidity. If I have a known need for money within 24 months, I put those funds in cash. I will stay on the theme of the blessing for a moment. God has blessed me in many ways, but not having FOMO (fear of missing out) is a real blessing! Once I know I need funds, those funds are in cash for a precise reason; I don’t know how well the market may perform, and the market may just as easily be down during the same period.

For money needed in two to five years, CDs, or high-quality, short-dated bonds are suitable investments. You can earn yield and allow those investments to mature at the time you need the liquidity. Once you move out beyond five years, equities begin to make much more sense for your asset allocation. The longer the time frame you have for a liquidity need, the greater the proportion of your assets you can reasonably invest in stocks.

FOMO is fine to have when you can’t make a great get-together with friends or a business trip keeps you from playing golf (for me anyway!). FOMO is NOT an advisable way to manage money. As a bond guy, we notice people always wanting to talk about their winning stocks, but never seem to hear a peep about the dogs they’re holding onto! Bond guys are simpler – we invest, collect our coupon, realize capital at maturity, and do it again. Not exciting, but certainly predictable!

I intend to use this forum to occasionally provide personal investing advice. After all, I invest personally as well! Keep my liquidity guidelines in mind and keep focused on your personal investment goals and needs. If investing isn’t your forte, seek professional help. Investment advisors can help you keep on track when you feel a little unsure. Know that we at KoCAA are always here to help.

Andrea and David, you win…I couldn’t help myself! Back to hanging out with Karen and enjoying the time we have left here!

This commentary has been prepared by Knights of Columbus Asset Advisors (“KoCAA”) for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions and information expressed herein reflect our judgment and are subject to change without notice. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults, (5) changes in laws and regulations, and (6) changes in the policies of governments and/or regulatory authorities.

KoCAA is an SEC registered investment adviser that maintains a principal place of business in the State of Connecticut. For information about KoCAA’s business operations, please consult the Firm’s Form ADV disclosure documents, the most recent versions of which are available on the SEC’s Investment Adviser Public Disclosure website at adviserinfo.sec.gov. KoCAA is a wholly owned subsidiary of Knights of Columbus, one of the world’s largest Catholic Lay Organizations. Investing involves risk and you may gain or lose money on your investments. For additional information visit KoCAA.com or write to kofcfunds@kofcassetadvisors.org.