Buckle Up, The Market Could Get Bumpy This Fall

A hot summer for stocks may give way to a chill this fall. (Michael M. Santiago/Getty Images)

September’s got a lot going for it—fall foliage, tailgating—but it’s no banger for stocks. And October’s no picnic either (see: the crashes of 1929 and 1987). These two months are the most volatile for the market.

Should you gird your portfolio for what may come? That depends. If you have a diversified mix you’re comfortable with, you can ride out any bumps without touching your investments. If you don’t, now’s a great time to add some shock absorbers.

You don’t want all your eggs in the AI basket –that is, unless you’re a 20-something who’s bullish on the technology. In that case, you have time to ride out multiple boom and bust cycles. Otherwise, spread your stocks around.

The equal-weight S&P 500 index has outperformed this year, up 17% versus 14% for its cap-weighted counterpart. With market-cap weighting, stocks occupy a place in the index in proportion to their size. That’s how Nvidia and other Magnificent 7 tech stocks make up more than a third of the S&P 500. Equal weight is just as it sounds–every company takes up the same space, regardless of its market capitalization.

Many pros expect the equal weighted index to continue to outperform. It’s a good place to be if the market sours on AI. Make sure you have some international stocks as well.

Investors approaching and in retirement should aim to have at least half of their stock portfolio outside of the S&P 500. Continue reading the full story…

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