We regularly hear concern from clients about everything that is going on today. How am I going to save for retirement in such a turbulent, difficult time?

In many ways, saving and investing has never felt so strange. Today, interest rates on traditionally safe bonds are near zero, if not below; multi-billion-dollar corporations can go years without making any money; digital tokens and cryptocurrencies can become suddenly worth trillions out of seemingly thin air.

Some of this makes sense, and some of this is less easy to explain. In today’s post, we share our thoughts on how we are helping build wealth with time-tested disciplines while so many others are looking to unproven, far and away places for the answer.

Reaching Too Far

One of the biggest challenges facing investors today is interest rates. Thus far in 2021, rates have remained near historic lows, leaving many people wondering how else they can find yield. Whether you are a seasoned investor or not, everyone has noticed the steady decline in yield on everything from savings accounts, to bank CDs, to the bond market as a whole.

We get it, and our investment processes have been continuously adapting in response. As rates fall, our expectations for future returns on bonds falls too, making fixed income less attractive all else equal. That is part of the reason why our clients in our traditional multi-asset class strategies have a little bit more stock market exposure than normal.

This process is called dynamic asset allocation, but there is a fine line between strategically adjusting your stock/bond mix and being reckless. For many of you, your goals and objectives are long-term, typically measured in years or even decades. Our research team is constantly evaluating the balance between risk and reward in stocks and bonds and adjusting accordingly, so that your portfolio provides the best opportunity to achieve your long-term investment objectives in any type of market.

Exploring All the Options

Beyond just your stock/bond mix, part of building a holistic financial solution is understanding the role all potential investments can play from a total portfolio perspective. This includes a regular analysis of opportunities in different asset classes and the vehicles we can use to gain exposure to them.

A great recent example of this is in our new investment in a select group of gold miners. Gold has historically exhibited very defensive characteristics, and it has performed well in difficult market environments of the past.

It has been quite some time since we have invested in a gold-related security, but our research teams believe that the time is right for a purchase. Real interest rates are very low, inflation risks are building, and there’s a massive amount of government stimulus happening, all of which signal that the conditions may be ripe for gold. It should also be noted that the success of gold miners is highly correlated with the price of gold, and the two are very related. For more detail, see our recent Markets & Economy blog, The Value of Gold in a Portfolio.

Thinking About the Big Picture

We view every investment, especially and including alternatives, from a total portfolio perspective, asking questions like: What do we think would happen if the stock market goes down again this year? Or, how could gold perform if the stock and bond portions of the portfolio did less well at the same time?

Others may say they think about these things too, but we believe that what makes our investment in gold miners so unique is what we can actually do about it. Because we build all of our financial solutions with our own, in-house investment strategies, we can proactively adjust your portfolio based on new ideas and opportunities we see in the market today. This means that when we consider an investment in something like gold miners, we are adapting the rest of your portfolio too, making sure that it fits alongside your entire solution and helping to keep you on track to meet your long-term goals.

Today’s investing environment may be filled with all kinds of uncertainties and unknowns, but the principals that make up a successful investment solution remain unchanged. Dynamic, time-tested investment strategies customized to holistic financial planning solutions remain as important as they have ever been.

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All investments involve risks, including possible loss of principal. This material contains the opinions of Manning & Napier Advisors, LLC, which are subject to change based on evolving market and economic conditions. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product. The reader should not assume that investments in the securities identified and discussed were or will be profitable.