I’m often asked, “What should we make of the market?”
Here are some important reminders…
📉 Corrections like this one are actually normal. The S&P 500 declines ~14% intra-year annually.
⏳ Volatility is a normal part of long-term investing. “Time in the market” is way more important than trying to “time the market.”
💡 Stay diversified and focus on your goals, not daily fluctuations.
💰 Buy low and invest for the long-term. Cash on the sidelines? There’s a sale going on!
⚠️ Already invested? Hold because this is not the time to lock in losses—patience and discipline are key.
📝 ”The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.” Warren Buffett
And remember, we’ve been through some stuff together…
✅ Y2K
✅ Post-9/11
✅ Great Financial Crisis
✅ COVID-19
✅ Bear Market of 2022
“That’s all well and good, but this time is different…”
Maybe so. But here’s what we know…
The United States is the largest economy in the world, by far.
📈The S&P is still up over 117% on a trailing 5-year basis.
📊 Going back to 1970, whenever the market has hit a 1-year high and then closed down more than -5% in one month (as it did recently), the S&P 500 was up 87% of the time three months later, and 100% of the time 6-12 months later.
💲When the S&P 500 drops 10% in two days (as it did to end last week), 6 months later it’s up on average +15% and 12 months later it’s up on average +32%, since 1950. (See chart below.)
🌎 International equities have led the way, generating positive returns so far this year. Plus, bonds have been relatively calm and stable, mostly up 1-5%…neither true in 2022.
📞 If you’re feeling uncertain or want to talk strategy—that’s what we’re here for!
📆 Get a second opinion! This is a great time to receive our complimentary analysis of your financial situation. Complete our Discovery Form today and let’s grab a cup of coffee!
For additional reading, please see this Guide to Tariffs from our partners at American Funds.
Sources: LPL Research, Subdu Trade, YCharts
Disclosure: This material is for general information only and is not intended to provide specific advice or recommendations for any individual. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Certain call or special redemption features may exist which could impact yield. Securities and investment products and services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.