Let's just acknowledge what we all see - investment markets are struggling right now. And, I'm not so sure they will get much better between now and when clients review their quarterly performance reports in July. It seems like there is nowhere to hide - bonds do not like rising interest rates, the purchasing power of cash is being consumed by inflation, stocks were overvalued and now are coming back down to reality, real estate is hard to find. And don't even get me started on crypto, NFT's, Gold or Tesla - I don't have the patience right now. I may tomorrow, just not today.
Market environments like these remind me that investing is simple, but it's hard. The concept is simple, buy low sell high. Implementing the concept is hard - is it low enough, is it high enough, and what is around the investing corner that I cannot see? Our emotional ties to the all-time high value of our portfolios make it a hard pill to swallow when we see Mr. Market take some of it back. Our desire for more and our fear of less cause us to react (often poorly) instead of plan and proactively manage. Investing is simply hard.
But, here is my encouragement to you now - we have planned for this. We have always known market environments like this were coming and will come again. We do not know what will cause them. We do not know when they are coming. Which is why we plan for their arrival through diversification, stress-tested retirement projections, setting long-term investment goals, accumulating an adequate emergency fund, following best practices in savings and investing strategies, managing other risks through insurance strategies, assessing tolerance for risk/volatility. We have planned for this market environment so that we can live to enjoy the eventual positive market environment down the road. Let's lean into that plan together.
My dad always tells the story about Baron Rothschild coining the investment phrase "buy when the blood is running in the streets....even when the blood is your own". I'm sure at least some of the story is true. Well, the streets are pretty bloody - maybe now is the time to reconsider what our investing hearts are telling us to do?
As always, we are hear to help. Please reach out with questions or if you need to review your portfolio in light of your financial plan.
Investing in securities involves risk, including the potential loss of principal invested. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss in periods of declining values.