Market Volatility: Taken in Perspective


 

Global turmoil and rising inflation have presented today’s investors with some pretty daunting risks.

But remember, this is the situation for which you built a long-term asset allocation strategy. If you haven’t developed such a strategy yet, we are happy to help you do so. We can help identify your long-term goals, particularly with regard to retirement planning and multiple streams of income to help mitigate the risks of outliving your savings. An all-weather portfolio is designed to withstand the types of challenges we have encountered in recent years – and position your assets for growth in the future. Contact us if you would like a portfolio review.

It is important to appreciate where we live and how well the United States has fared recent misfortunes. The U.S. post-virus economic recovery has done fairly well. Of course, different new policy choices would have been much better but we have this current sampling:

  •  Businesses are eager to hire and have increased wages to attract new workers.(1)
  • 74% of U.S. counties reported more businesses in their area than before the virus.(2)
  • New businesses are launching at the fastest pace on record.(3)
  • The Great Resignation is a marker for worker confidence in the labor market.
  • In just one year, the S&P 500 gained 75% after its crash in March 2020.(4)
  • In 2021, the median sales price of existing homes increased by 15% in one year, and the typical home value rose by about $50,000.(5)

In short, the way to keep recent volatility in perspective is to recognize how good things are and America’s potential to get much better. While investing abroad is a viable means to diversify your portfolio, also remember that there’s a reason our nation is still a place of safe-haven. Our companies are consistent performers. When it comes to investing, remember some basic principles, such as solid management, knowing what to buy, and the most reliable path to wealth accumulation is a slow one.

A diversified allocation in domestic equities that align with your ethical and moral beliefs is a good way to build wealth and confidently stay ahead of long-term inflation. After all, since the S&P 500 Index was conceptualized in 1957 through the year 2021, the average annual return was 10.5%.(6)

Believing in our nation’s capabilities, new, better and common sense leadership along with strategic allocation can help you progress toward a successful future.

 

 

 

 

(1) Ian Thomas. CNBC. March 4, 2022. “Big February job growth for economy, but on Main Street it’s still a struggle to find worker.”

(2) Sylvan Lane. The Hill. April 5, 2022. “Nearly three-quarters of U.S. counties have more businesses than before pandemic:analysis.”

(3) Andrea Hsu. January 12, 2022. “New businesses soared to record highs in 2021. Here’s a taste of one of them.”

(4) Bob Pisani. CNBC. March 23, 2021. “What investors have learned one year since the stock market bottomed.”

(5) J.B. Maverick. Investopedia. January 13, 2022.”What is the Average Annual Return for the S&P 500?

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