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June 03, 2021

What's ahead for the last half of the year?

Broadly rising equity markets coupled with increasing interest rates will lead to more near-term volatility, predicts investment firm Edward Jones in a recent report.

In other words, there's still money to be made in 2013: "We believe stocks are primed to deliver attractive total returns going forward, particularly compared to bonds and cash."

However, while there are compelling opportunities in today’s market, there are also some clearcut mistakes investors need to avoid, the firm warns


Don’t hold too much cash. The current real return (adjusted for inflation) on cash and short-term GICs is at or below zero.

Reduce over-concentrated positions. Owning too much of any single investment can lead to higher volatility in your portfolio, particularly in the event of a market pullback.

Avoid heavy sector bets. Over-investing in a specific sector or too few sectors can also expose your portfolio to excessive swings. In the current slow-growth environment, investing in just a few industries can limit your portfolio’s ability to weather shifts in the economy.

Limit your holdings in long-term bonds or preferreds. While their current yields may appear slightly higher, the prices of long-term bonds and preferred stocks will be negatively impacted in a rising-rate

How do you see the second half of 2013 shaping up? Have you made any adjustments to your portfolio as a result?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...