1 “US Stocks Close at Record Highs As Stimulus Optimism Continues,” Business Insider, Feb. 8, 2021.
2 BofA Global Research, “Quick RIC: 2021 Portfolio Reviews: Everything You Need to Know,” January 12, 2021. [Cited in Chief Investment Office February 2021 Investment Insights: “Investing at Stock Market Highs.”]
3 Source: BofA Global Research. Data as of December 31, 2020. Past performance is no guarantee of future results. [Cited in Chief Investment Office February 2021 Investment Insights: “Investing at Stock Market Highs.”]
Opinions are as of the date of this article and are subject to change.
Investing involves risk including possible loss of principal. Past performance is no guarantee of future results.
Forecasts are hypothetical and may change due to market conditions.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Keep in mind that dollar cost averaging cannot guarantee a profit or prevent a loss. Since such an investment plan involves continual investment in securities regardless of fluctuating price levels, you should consider your willingness to continue purchasing during periods of high or low price levels.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Stocks of small- and mid-cap companies pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. Bonds are subject to interest rate, inflation and credit risks. Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are magnified for investments made in emerging markets. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration.