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Monday Money Report

| March 07, 2022

Oh my. The markets continued to whipsaw last week. Down, up, and down again.  We flirted with a correction before fully entering one on Friday. A correction is a 10% or larger drop in the market. 

This comes on top of a stronger-than-expected labor report, meaning more jobs were created than expected.  And several companies posted higher-than-expected earnings. Which all points to the correction being a short-term reaction to geopolitical concerns.

While the Russian invasion of Ukraine has impacted oil prices, which will push inflation higher, several large retailers posted strong earnings.  Meaning people are still going about their lives, and buying goods and services from companies that are still doing well, and generating profits for their shareholders.

The absolute worst thing you can do right now is panic and sell.  While the value of what you own is temporarily lower, you still own the same number of shares that you did before the downturn started.  And if you’re contributing to your retirement accounts, you own even more shares than you did.  Which means that when the markets turn, which they will, the shares you owned and the ones you’ve bought will all come back to where they were, and go on to even higher levels. 

This doesn’t mean every single publicly traded company will always increase – just that the market as a whole has always bounced back, and gone on to new highs. The best thing you can do is hold tight.  Ignore the sinking feeling in the pit of your stomach.

In the Great Recession, the market fell 53% from its 2007 peak. If you had just held on, you would have watched your accounts fall in half, then fully rebound, and go on to reach new all-time highs in just a few years.  If you had continued investing during the downturn, at the bottom you were buying twice as many shares for the same investment as 2007.  Investing is, by definition, a long-term prospect.  If it worries you, stop looking at your statements.

And again, this is a good time to buy, harvest losses, or convert traditional retirement accounts to Roths.   

Your action item to take this week is to make up your budget for your summer vacation.  Planning now, and saving for the trip, can help prevent going into debt for your beach week. Make a game of it – put a picture on the refrigerator, and each time you eat in instead of going out, transfer that money to the trip account, and color part of your picture.

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Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. CovingtonAlsina and Great Valley Advisor Group are separate entities from LPL Financial.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. 

The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investment(s) may be appropriate for you, contact the appropriate qualified professional prior to making a decision.