Dear Investors,

The market volatility continues. The market's day-to-day movements can be stressful, especially when we over consume the media’s 24-hour coverage. Speculation around the future of inflation, interest rates, energy prices, economic data, politics, COVID, corporate earnings, and the war in Ukraine is everywhere.  What is missing from the conversation is perspectives for "main street" investors saving for things like retirement.   Let’s get some perspective.

Media coverage of the markets is largely short-term. A hedge fund manager’s take on stock A or stock B on the morning TV broadcast means very little to the average investor. Rather than focusing on predictions, focus on principles! Review the controllable things like quality, diversification, and risk management with your specific goals in mind. Visit with your advisor about current market conditions and what it means to you and your objectives. Your goals are the only benchmark that matter!

Every downturn is different, but some things are the same. If you’ve been investing for a while you know that the markets move in cycles. You’ve probably also noticed that pessimism seems to be greatest nearer to the bottom rather than the top.  Regardless of how confident a TV personality is about their prediction, nobody knows the market's future! Bear markets start and end without warning. Although the causes of downturns are different, your principles should be steady. Prudent moves during times of market volatility include reviewing your portfolio, liquidity needs, goals, risks, and objectives. Rebalancing your portfolio with those topics in mind can be effective. Talk with your advisor when you have questions or concerns. They know you and your goals and can advise accordingly.

The economy and the stock market are different! Remember that economic data looks backward while stock markets look forward. Economic information is compiled from last month, last quarter, and last year to discuss things like recessions, unemployment, inflation, trade, housing starts, inventories, etc. In comparison, stock markets are typically forward-looking. Markets care less about how businesses did in the past and more about their future. This is why stock markets can start to recover while economic news still seems negative.

Volatility often presents opportunities. During periods of market volatility, it’s easy to forget about the concept of “buying low”.  It never feels good to buy low but investing in quality at lower prices can reward investors down the road. Again, a focus on quality is key!  

The bottom line is that we are in this together!  We empathize with investors during volatile times.  Although we lack a crystal ball, we are confident that this storm will be weathered, just as countless others have been in the past.  We are here for you to discuss your plan, listen to your concerns, and chart a path forward.

See these links below for additional perspectives.

5 Lessons from Seasoned Investors – Capital Group

Investing with Composure – JP Morgan Asset Management

5 Things you need to know to ride out a volatile stock market. – Franklin Templeton

Sincerely,

Eric Jones & Sherman Tegtmeier, Financial Advisors

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