A long-term perspective helps us deal with these dramatic short-term declines.
We wanted to briefly address the current market volatility and put today’s markets in perspective.
Let’s begin by taking a quick look at 2021 year ending numbers. The Dow Jones ended +18.7%, S&P500 +26.9%, and Nasdaq +21.4% This was a continuation of a very resilient economy and continued spending.
On the other hand, we enter 2022 experiencing labor shortages, COVID variants (ebbs and flows of cases/news), supply chain bottlenecks, historically high inflation, and international tensions with Russia.
Markets and investors fear uncertainty and change more than anything else. The combination of challenges previously mentioned have done exactly that… ushered in some uncertainty and necessary changes. The most significant variable right now is inflation and the Fed’s impending fiscal policy changes/actions (the change piece). Specific to our Storen portfolios, we have made minor adjustments to assist with protecting the downside of the portfolio as well as continue to look for buying opportunities. Keep in mind that it’s perfectly healthy, even in strong bull markets, to have an occasional 10% correction.
Short-term declines in the markets can be jarring and scary, but they are a normal and healthy aspect of markets. Having a long-term perspective helps us deal with these dramatic short-term declines and allows you to focus on the bigger picture and overall goals.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Blog by Greg Storen, MBA – Advisory Services Director, Senior Tax Accountant
Learn more about Greg and the rest of the Storen Financial team here.