Summer home maintenance
The major U.S. equity and bond markets started May with increased volatility and new 2022 lows as investors grapple with the Fed’s interest rate hikes, high inflation, low unemployment, Ukraine’s ongoing conflict, and lockdowns in China. While we cannot predict the future, we would not be surprised if volatility remained high through the summer months. We want to fully acknowledge that living through these seasons of volatility and market decline is difficult and can produce fear. Even after many years in this industry, it remains challenging for us at times as advisors! It can be easy to react based on these fears and sell assets at the exact wrong moment (when prices are falling) or think we can “time” the markets. History has repeatedly proven those to be losing strategies.
Below are a couple of helpful graphs that give us some long-term perspective on market volatility. In the last 70 years, there have been 33 declines of more than 15% in the S&P index (that index is currently down about 15% year to date). However, in each of these declines, the markets recovered and moved to new highs. At some point, we will hit the bottom of this current market cycle, and when we do, history has shown that there tends to be a few days where the returns go up significantly, and the second attached chart shows the cost of being on the sidelines when that happens.
Since we are passionate about seeing our clients achieve their financial goals with peace, clarity, and confidence, we continue to rely on time-tested wisdom:
Covid, the Russia-Ukraine war, and high inflation are daunting, yet we’ve been through these seasons of volatility many times before. A solid financial plan will help guide us as we make it through.
Please reach out to us with any questions or if you would like to schedule a time to chat about your portfolio in more detail.
The IFS Team
The average intra-year decline in the S&P has been -13.7% since 1952, yet annual price returns have been positive in 51 of those 70 calendar years. Coincidentally, the S&P is down roughly 13% this year. Covid, Russia/Ukraine, and high inflation might be new, but we’ve been through volatility before.
Summer home maintenance
Schwab/TD Ameritrade merger
2022 market commentary
2023 perspectives to consider
Last year’s market predictions
RMD and contribution changes
Valentine date ideas
Encouragement in hard times
Markets in perspective
Be healthier and live longer
Pumpkin patches in Portland area