Broker Check

Market Volatility

May 22, 2022

To all of our clients and friends,

With so much going on in the world, there is no shortage of things to be worried about.  High inflation, rising interest rates, the war in Ukraine, mid term elections, and of course don’t forget Covid.  One does not have to look far to find reason to be pessimistic.  Markets have responded to this as well.  As I write, the S&P 500 is down 18% since the start of the year.

The strategies that we use have largely performed well in this environment, having positioned more defensively earlier in the year to dampen the effect of the market pull back.  They are down, but in comparison to their peers and the broad market in general, the strategies are performing quite well.  Most of the strategies are maintaining a higher level of cash and short term bonds, and are now looking for opportunities to begin buying back in at lower prices.  Even now, we are seeing some of the signs that begin to appear during the formation of a bottom, such as low investor sentiment and double digit drops in major indexes from previous highs.  The futures market also appears to have already priced in a significant amount of additional fed rate hikes, suggesting a fair amount of the pain may already be priced in.  I am not suggesting we have found a bottom, but that a patient investor today will likely be rewarded over the course of the next year or two.

We are constantly reviewing our clients plans and we monitor the investment strategies on a daily basis.  I am happy to be able to report that we find the vast majority of those plans continue to stay on course, even when accounting for the recent dip.  Market volatility, as you know, is normal, and is something we have accounted for in our retirement income plans.

We know that times like this can play on our nerves.  We invite you to contact us if you would like to talk or review the status of your plan.