Broker Check

Monday Money Report

| March 14, 2022

Is anyone else feeling dizzy? The markets were seesawing up and down last week, closing down just under 3% for the week.  I’m going to repeat myself again this week.  The economic fundamentals are not driving this volatility.  Emotions are driving this volatility.

I understand. I spent my youth fully expecting the Cold War to turn into nuclear armageddon, and I thought the falling of the Berlin Wall, glasnost, and perestroika had changed all that. And now we’re all wondering if we’re looking at the start of World War III.

But as horrible as this invasion is, and as much as the people of Ukraine are suffering, people everywhere else are still shopping, going out to eat, traveling.  Consumer spending makes up 70% of our economy, and with the amount of cash still out there from all the stimulus, consumers are still spending.

If you’re worried and considering selling out and holding your investments in cash, that’s the absolute worst thing you can do. Remember that you haven’t actually lost anything until you sell.  You still own the same number of shares of stocks, mutual funds, and bonds that you did at the beginning of the year. Probably more if you’ve been investing in your retirement plan at work. Those shares haven’t gone away. When the market recovers, the values will rise and you’ll be back where you were, then further ahead.

The same goes even if you’re in retirement. Depending on how your portfolio is structured, you may want to talk with your advisor about lowering income temporarily.  But you don’t want to sell. This is a time when a bucket strategy comes to the rescue.  You can spend from the “safe” bucket while your “risky” bucket is down.

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 figure out your fuel plan.  Almost every gas station has a discount club.  You can get gas discounts for grocery shopping, joining a gas station’s rewards program, or using certain credit cards.  Sometimes you can stack these discounts, earning higher cash back on your credit card for gas purchases at the same time you receive a discount through the oil company’s rewards program. Even when gas isn’t $4 a gallon, it’s still a place where savings add up in your budget.

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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.