Through the first three quarters of 2022, the performance of the market has been difficult to watch. The S&P 500 is down over 20%, and bonds* have declined over 11%. We have seen an increase in volatility, and inflation has risen to levels not seen in decades. It feels like it will never end.
Now is the time to take a step back and look at the bigger picture. As a long-haul investor, it is in times like these that it is important to hold tight (perhaps look away!) and to not react. Don’t lose sight of the long-term nature of your investment plan and make emotional investing decisions.
Your portfolio is comprised of businesses that adapt to changing economic environments. They have been facing, and will continue to face, our current economic challenges.
Many compare today’s economic conditions to what happened in the 70’s and early 80’s. While we could be headed for an iteration of the Great Inflation period of 1965-1982, the world is very different than it was then. Unique variables led to the Great Inflation, just like unique variables have led us to where we are now. As Mark Twain is reputed to have said, “history doesn’t repeat itself, but it often rhymes”.
Recessions and bear markets come and go. It’s part of the ebb and flow of our financial system and enduring them is a natural part of investing. Remember the old adage: this too shall pass. Are you concerned your financial plan won’t stand up to today’s economic stresses? We are here to discuss your concerns and answer your questions.
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*The Bloomberg US Aggregate Bond Index
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