A Rough Start!
Let’s face it, 2022 has had a rough start with the stock market. In fact, this is one of the worst starts of the year ever for a diversified portfolio! Things are scary—there are geopolitical concerns, inflation is high, and the economy is slowing (when compared to an unprecedented 2020 and 2021 growth from COVID lows).
However, one thing to keep in mind is that midterm years are historically volatile and as shown in the chart below, we typically don’t see the market hit a bottom until August.
The good news is, once those lows have been made, stocks are up an average of 30% one year later! So rest assured, history shows us that with pain comes some later gain.
Some other good news is that US consumers have record amounts of cash in the bank, labor force participation is rapidly increasing, we are starting to see some inflation come down (used car prices and shipping costs decreasing) and the majority of corporations are showing their resilience with good earnings so far this year.
In closing, with all the noise out there and this rough start to the year, remember to keep your focus on what’s important—your values, your family, the great companies you own, and your financial plan. Financial planning can help provide stability in an otherwise unstable environment.
At Long Planning, one of the biggest jobs we do for our clients is to draw out their values. From there we develop foundational goals and build a Biblically Responsible Investment strategy and financial plan that supports them. That’s our focus and what we come back to, not the ups and downs of the market. That’s how we help bring some peace to the chaos.
Did You Get a Large Refund?
Or maybe you had to write a larger check than expected? Now is a great time to start on 2022 tax planning! There is plenty of time to begin tax-smart strategies so you are not surprised come April ‘23.