NEW YORK - March 20, 2024 - PRLog -- Wharton Wealth Planning, LLC, a New York-based independent fee-only fiduciary financial advisor, believes many areas in the fixed income markets are attractively priced and that it is likely not be the best idea to over-allocate to cash right now. Many investors have flocked to CD's and high interest bank accounts over the last couple of years, but that trend is likely to reverse itself.

Today's Federal Reserve meeting supports the view that inflation is cooling and rates will likely fall over the next few years, as the Federal Reserve maintained expectation for three interest rate cuts before the end of 2024. From a big picture perspective, recent Consumer Price Index (CPI) and Producer Price Index (PPI) reports, which serve as gauges to measure inflation, have been moving in the right downward direction. Two years ago, yields on 10-year Treasury bonds were below 2%. They've more than doubled since then. This is a big advantage for those planning for and in retirement in particular. The Fed Dot Plot, which many view as an orchestrated road map for the markets, suggests that current policy rates are almost 300 basis points above a 'long-run neutral stance,' which is where the Federal reserve may want to get to over time. A neutral stance would theoretically be the rate at which the economy is neither stimulated nor slowed down by interest rates.

Bonds currently have numerous advantages over cash in Wharton Wealth's view. Given where cash interest rate yields are currently, there is a very strong case for bonds right now. When you purchase bonds and longer maturity fixed income investments, you are able to lock in a higher yield for longer. So, if you buy a five-year bond or a 10-year bond, that means that interest rate will prevail over your holding period.

Another key advantage is that you do have some appreciation potential with fixed-income instruments, which is something you do not have with cash interest rate instruments. You don't have principal volatility with a CD, but that goes both ways. You can't have losses with a CD, but you can't have gains, either. As we think of rates potentially going lower in the future, the fixed-income investor stands to benefit potentially from some appreciation in such an environment.

Wharton Wealth believes there are also some attractive areas in the stock market. According to Rosenstrock, "When we look at the asset classes that have had the best long-range opportunity to outrun inflation, stocks have done that compared to other asset categories." This is also important as you are thinking about your future and allowing for growth in your investment accounts.

Wharton Wealth Planning believes that you should have a diversified mix of stocks, bonds, and short-term investments, and should diversify your portfolio within those different types of investments. The right percentages and investment selections should be customized and depend on your personal situation and circumstances.

Wharton Wealth Planning (https://whartonwealthplanning.com/ ) provides comprehensive and consultative investment management and retirement planning services. Wharton Wealth Planning employs a disciplined investment philosophy backed by academic and scientifically validated principles and processes. Unlike many other brokers and advisors, Wharton Wealth Planning advisors' compensation is not based on what products are used to implement client investments. CERTIFIED FINANCIAL PLANNER™ practitioners have taken additional steps to demonstrate their professionalism by completing a rigorous certification process, meeting continuing education requirements for ongoing certification, and adopting the CFP® Board's Code of Ethics and Standards of Conduct.

Contact
Wharton Wealth Planning
David Rosenstrock, CFP®, MBA
Director of Investments & Financial Planning
***@whartonwealthplanning.com

Source: Wharton Wealth Planning, LLC

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