Schwab’s Liz Ann Sonders On Key Market Drivers

Liz Ann Sonders, Chief Investment Strategist, Charles Schwab joined Julie Cooling, Founder & CEO, RIA Channel live from the 2022 Schwab IMPACT conference to discuss the state of the market and key allocation considerations heading into 2023.

“It’s really more Fed-focused now, than any other time in my 36-year career,” says Sonders on economic and market concerns. After six consecutive rate hikes in 2022 and another one likely before the end of the year, the Fed has delivered on its promise to raise rates until inflation slows, no matter the cost. Continued market choppiness, recession and a weaker job market may very well be side effects of the long battle against inflation, explains Sonders. While tightening financial conditions have somewhat already been baked into the market, Sonders points to declining earnings reports as another potential downturn trigger. Looking ahead, all eyes continue to be on the Fed. 

Even in today’s difficult market environment, the sentiment behind ‘stay the course’ still rings true, explains Sonders, clarifying that ‘staying the course’ doesn’t mean doing nothing. “When you’re in a volatile market and there are big asset class swings, your portfolio has got to change as a result. Stay the course on your financial plan, your time horizon, your disciplines and risk tolerance, but make asset allocation changes where needed,” says Sonders.

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