Hello Friends,

We really need to stop meeting like this… but here I am again to share some perspective and ease some fears. We are yet again feeling the pain of the market sell-offs right now. For 2022, the Dow is down 14%, Nasdaq is down 27% and the S&P is down 18%. That’s never fun, however, we believe that despite volatility through the end of the year, we will be okay. Here’s why:

Historically speaking, since World War II, the S&P 500 has fallen, from its market high to its market low, by a median of 24%, and the average decline is 30%. Current fears that are being calculated into this market are fear of inflation and recession. We would need to fall another 18% for us to be in a recessionary environment, and with the Feds recent comments that they would not hesitate to combat inflation, I do not see this happening.

We believe the market is factoring in inflation and even recession now, but the fears of recession are, in my opinion, misjudged, or at the very least, premature. Sure, we have rising rates, and a are now seeing a slow down on spending with consumers being more discretionary. However, we have a strong job market right now, consumers have very strong balance sheets and are cash rich, people that are eager to travel, and the reopening of our economy post-covid is still very much underway.

Despite the doom and gloom news stating that we are headed toward a bear market/recession, we believe we are simply in the middle of a mid-cycle correction. This growth slow down is only setting us up for larger economic expansion and higher highs. If this seems hard to believe, I urge you to look back at our history. I have attached a chart at the top of this article that shows, historically, our market downturns versus the subsequent market recoveries. I don’t know about you, but those down markets look like an opportunity that I don’t want to miss out on.

Selling in the red, especially at the bottom, is the worst choice we can make right now. As I mentioned in my last market commentary, now is the best time to be investing, and if you’re not in a position to add funds, then the least you can do is sit tight and let this ride. I repeat, now is the time to get any extra dollar that is lying round, and dump it in this market, with the exception of your emergency funds, or at a minimum, sit tight and do not sell!

I know this seems scary, I know the news is saying the sky is falling, but I cannot emphasize this enough…we always recover after down markets/bear markets, and we always come back stronger and higher than before.

I’ll close it with this, it is hard to not let fear drive our emotions and decisions, we know that. However, that’s why we are here, to remind you that fear in and of itself is not reason enough to sell. We love you all so much and are so grateful to have such a wonderful group of clients. Thank you for being so understanding, supportive and patient. We will get through this. This too shall pass.

God Bless you all.

Warm Regards,

Anna Brockschmidt