So far, 2022 looks like it will go down in the history books as one of the worst years for stocks, bonds, and 60/40 portfolios ever. With nowhere to hide (except possibly in commodities), it is no wonder that people may feel despondent, at the very least. Yet, history tells us that staying invested is often the most rewarding course during periods of market turmoil. Let's review four points to keep in mind when talking about turbulent markets.
First, we want to acknowledge the tremendous damage and displacement caused by Hurricane Ian. Our thoughts are with those impacted by this devastating storm. This has clearly been a challenging year for households. Stocks and bonds are both down significantly. Elevated food and gas prices continue to stretch budgets, and higher interest rates have increased borrowing costs. But we continue to see signs that the worst may be behind us. Gas prices are falling. Inflation pressures stemming from supply chain disruptions are easing. And the Federal Reserve (Fed) has taken these price increases seriously and is doing its job by raising short-term interest rates. While the Fed may still gradually increase rates throughout this year, it has already done a lot even as asset prices have come under increasing pressure.
When it comes to stock market performance, August was “the best of times, and the worst of times.” The strong market rally that peaked in mid-August was viewed by many analysts as a transition from a bear to bull market, based on the surge in breadth that stocks enjoyed and the magnitude of the two-month rally that began in mid-June totaling 17%.
Make sure you think about potential disruptions and plan ahead of time.
With inflation continuing to grow, the Federal Reserve’s battle against it isn’t ending anytime soon. Higher interest rates make it harder for families and businesses to borrow money. Balancing inflation and interest rates is a complex issue and has a big influence on your wallet.
Markets rarely give us clear skies, and there are always threats to watch for on the horizon, but the right preparation, context, and support can help us navigate anything that may lie ahead. So far, this year hasn’t seen a full-blown crisis like 2008–2009 or 2020, but the ride has been very bumpy. We may not be flying into a storm, but there’s been plenty of turbulence the first part of 2022. How businesses, households, and central banks steer through the rough air will set the tone for markets over the second half of 2022.
Creating an estate plan is a key component of achieving financial wellness.
Under the influence of romance, it is easy to be distracted from practicalities. But couples that can’t agree on how to spend and save tend not to last very long. To maintain a healthy relationship, it’s important to address these problems early on.
Social Security is an important source of income for most retirees. According to the Social Security Administration (SSA), one in every six U.S. residents collected Social Security benefits last year.1 But understanding which Social Security benefits you qualify for and how they play into your financial future can be a challenge.
With its four distinct parts, Medicare can be an alphabet soup of complexity. We provide an overview of the various components and how they impact your healthcare costs.
As a veteran of the armed services, you have made a sacrifice for our country. A grateful nation has established myriad benefits to help you. Unfortunately, veterans risk missing out on a significant long-term care benefit in their retirement: Aid and Attendance.
I have seen my share of client-drafted wills. While most people opt to have a lawyer draft their last will and testament, there is no requirement that an attorney do so. If you do opt to draft your own will, make sure to avoid the following five mistakes that I repeatedly see in layman-drafted documents.
