00:00 Speaker A
And Tyler, you, like everyone, you’ve been trying to reassess the risk here, and you’ve also been rebalancing your allocations amid this uncertainty. So, how are you thinking about the uncertainty and what kind of process are you going through to rebalance?
00:24 Tyler
Yeah, look, I mean, the the market the last couple of years has been fantastic. And so, if you if you’ve been a 60/40 investor, a balanced investor for the last two years and done nothing, your portfolio is now a 70/30 portfolio. So, you’re taking on a lot more risk than what you may be expecting. And so that’s why we’ve been advocating for our clients to rebalance their portfolios and reassess their risk overall because there just is so much uncertainty. And even when we get the announcement today, who knows what’s going to happen after that, right? There’s a changing landscape, the the the tariff market, if you want to call it, is is very, very fluid right now. And so, these tariffs could be gone, or certain items could be excluded from tariffs in in a couple of days, who knows. So, there’s just a lot of uncertainty and so that’s why we’re trying to reassess our risk and rebalance our portfolios to to pull back on the aggressiveness.
01:45 Speaker A
And are you going still back towards that traditional 60/40 model here? Is that how you’re Is that an appropriate sort of balance for you? Are you retweaking things within stocks, for example, to go more defensive? How is that playing out?
02:03 Tyler
Yeah, really depends on the investor, right? So, a good example of what we’ve been doing is in a in a full equity portfolio, full growth portfolio, we’ve actually held up what we what we call a hedged equity position. So that that’s been including buffered ETFs, it’s include covered call strategies. It allows us to have some type of protection or or take take some of the profits that we’ve had over the last couple of years and try to mitigate some of these losses because we are expecting volatility to return this year. Our theme has been bring an umbrella. So we’ve been expecting some type of pullback or correction in the market. So that’s what we’ve been doing in our portfolios is adding those types of things to try to protect us on the downside if there is that correction, which we are now seeing.
03:20 Speaker A
And what are you telling your clients in terms of your outlook for whether things are going to calm down in the short term?
03:38 Tyler
Uh, short term, I think we’re going to continue to see the volatility, quite honestly. But our view is that we’ll end the year positive, right? So we we have to weather these storms. These types of corrections are normal. There’s different catalysts to all of these corrections, but going all the way back to 1980, the average correction in the market each year is almost 14%.
04:30 Tyler
And so we just saw the dip a couple weeks ago below 10, we’re now sitting about down 8%, down nine. So, this is normal course of action for the market. So there’s no reason for our clients to panic, or any client to panic at this point. We have to assess what these tariffs are going to do to the companies. And so, for right now, we we need to make sure that we’re remaining invested rather than trying to time the market at this point.