Q1 2022 Client Commentary
Obviously 2022 got off to a rocky start for investors as a result of several negative political, economic and market-driven forces:
- Inflation surged to 40-year highs, Russia’s military invasion of Ukraine, and a Federal Reserve intent upon raising interest rates faster than most Wall Street analysts thought.
- Every major index was negative for the first quarter of 2022.
- S&P 500: (4.57%)
- DJIA: (4.10%)
- Nasdaq Composite: (9.10%)
- Russell 2000: (7.80%)
- US Agg.Bond: (5.93)
- Market volatility was increased further when certain widely held tech stocks posted disappointing results.
- Higher commodity prices were adding pressure to the market after the Russia invasion and ultimately meant higher prices for the consumer.
- Stocks did mount a decent comeback in March, but the volatility of the market and the questions of geopolitics, the Fed, and monetary policy question marks still cloud the second quarter of 2022.
What to Do Now?
- We firmly believe that this is the time to stick to your investment strategy. The U.S. economy is predominantly consumer-driven, and fundamentally, the U.S. consumer generally remains strong.
- At this unpredictable time, investors should not diverge from their planned investment discipline. The reason we own investments of superior quality is because of the way they can weather periods of market volatility.
- We ultimately remain confident that conditions will improve longer term, but experience tells us that we cannot time the market, and therefore must be prepared to tolerate some volatility along the way.
- Finally, we also believe that a major advantage to being able to weather periods of market volatility is the confidence in having a solid Financial Plan in place, as well as ensuring you have sufficient near-term liquidity.
As always, we remain available to speak, and we’re happy to help address any concerns related to your overall financial well-being.