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Market Volatility in 2022
Growing up in the late 80’s early 90’s I would sit with my grandpa, and he would tell me story after story of the Good Old Days – days that you would walk to school, play with friends till dusk, and trade baseball cards for bubble gum. Everything seemed a lot simpler back then and almost romanticized. Housing was affordable, cost of living was much less, and the day-to-day rat race wasn’t as heightened as today. I often wondered if I would ever be able to tell my kids stories of the Good Old Days as per my experiences. Now I can tell you I’ve seen gas prices at $0.29/litre, detached homes UNDER $400k, bought real cheeseburgers for 59 cents, and used a flip phone… I’m learning that each generation will get to experience their own version of the Good Old Days in this ever-changing economy.
Where does that leave us today? The volatility in the markets has added pressure to cost of living, interest rates, and inflation. The market as of today has been on quite the roller coaster, and unfortunately, it is not going the direction we were hoping for. Over the last year, the market has had one of the top 10 worst quarters in the history of the S&P 500… Yup, 2022 ranks #3, right behind the second quarter market crash of 2008.
|10 WORST SEMESTERS||PRICE CHANGE||FOLLOWING QUARTER||FOLLOWING YEAR||FOLLOWING 2 YEARS (ANNUALIZED)||FOLLOWING 5 YEARS (ANNUALIZED)|
The information and data supplied, including those supplied by third parties, are considered accurate at the time of their publication and were obtained from sources which we considered reliable. This information and data are supplies as informative content only.
Time will tell what the markets will do in the future, but it is important to have a macro viewpoint and think big picture instead of the short-term effects of today. Even though interest rates are rising and our groceries seems to be giving us LESS bang for our buck, it is important to think of these 3 questions.
Barring something material happening to your employment, it is crucial to keep the big picture in mind and stay the course. Remember, it is not timing the market but time in the market. Adopting a consistent dollar cost average strategy will give you the ability to consistently contribute through bull and bear markets and keep you on track for where you want to go. As government policies change and our economy varies, this will pave the way for new markets and opportunities. Worry about what you can control and stay the course.
Connect Wealth is an independent financial planning firm that offers holistic advice to clients based on their current goals and future aspirations. We use well-established workflows and cutting-edge technology to maximize planning efficiencies while simplifying the process for clients. Learn how you can maximize your financial opportunities at www.connectwealth.com
Watch our July 2022 Money Minute, a new Vlog from Connect Wealth. In this video, Mike Erickson and Dallas Clemyck discuss our July blog post and the impact of shrinkflation and inflation on financial planning.