It is an ugly market. Last week the markets sold off about 5% and they are off to a rough start this week pushing us back to the lowest levels seen since early February 2021. The selloff is the result of more economic measurements confirming inflation is higher than it has been in over 40 years. The Federal Reserve meets this week and will most certainly increase interest rates by 50 basis points (half of one percent) as an attempt to tamp down inflation. Meanwhile, economists are trying to figure out if a recession is coming and, if so, when.
There are economic positives - the consumer remains healthy despite the savings rate declining, corporate earnings are strong despite earnings growth slowing and unemployment remains extremely low. For investors, the valuation of publicly traded companies' stocks have fallen to levels that have the attention of buyers looking for good values and long-term investments.
Bear markets and economic recessions are difficult and something none of us want to endure. They are also normal and are part of the business cycle. The key to weathering through difficult times and achieving financial success in the long-term is patience, not panic. Understanding the normality of the business cycle and having a long-term plan are necessities to overcoming the stress and concerns all of us experience when we see the balances in our accounts go the wrong way.
Our entire team remains ready to help you plan and invest to meet your longer-term financial goals and talk through any worries or concerns.
As always, we hope you find the Weekly Market Review and find it both informative and interesting. Have a good week!
Trevor N. Coe, CFP®