To our valued clients,
It has been a crushing start to the year, with North American and Global Equity and Fixed Income Indices all suffering.
In fact, the S&P 500 is off to the worst start since 1939. Here’s a great article with some good perspective: https://www.marketwatch.com/story/a-rough-4-months-for-stocks-s-p-500-at-risk-of-booking-the-worst-start-to-a-year-since-1942-heres-what-pros-say-you-should-do-now-11651250525
Our friends at Fidelity Investments recently sent us the following summary to further help understand the current sell-off:
What’s Plaguing Markets in 2022?
- Inflation is surging and Interest Rates are Going Up……..Fast
- Markets have corrected substantially — YTD the S&P 500 and NASDAQ are in correction territory (NASDAQ was in bear market territory before yesterday)
- Conflict between Russia and Ukraine has serious implications for the rest of the world
- Global Supply Chains remain strained and products aren’t getting to where they need to be.
What Happens When the Bloodbath is Over?
According to data from Dimensional Fund Advisors based on the Fama/French Total US Market Research Index, between 1926 – 2020, the average annualized returns for the five-year period after a correction (10% decline) was +9.5%; after a bear market (20% decline) was +9.7%; and after a 30% decline, +7.2%. (https://www.forbes.com/sites/kristinmckenna/2022/03/03/3-biggest-mistakes-investors-make-in-volatile-markets/?sh=4e64b1c14a86)
If you’re concerned about your investments or if your investment goals have changed, we need to know. Reach out to us anytime to arrange a conversation.
On a much lighter note – Happy Mother’s Day! Enjoy your weekend with loved ones.