March continued February’s volatility. Any time the markets pull back, we tend to get a few more calls than normal asking our opinion on it. I know it’s not fun watching the markets swing up and down so much, but that’s just part of the process. You’ll have your highs and lows. The important thing to remember is to make sure you’re in the proper risk tolerance for your investments. If you’re ever wondering, feel free to give us a call. We’d be happy to go over it. Of course, we go over it during every investment annual review, but I know how easy it is to forget sometimes.
If you’re worried about your investments and are wondering how they’re doing, your portfolio might not even be as bad as you think it is. The US Aggregate Bond Index is having a great year so far! This is helping to offset some of the stock losses. It is also why the proper balance in your portfolio is important if you are not an aggressive investor. You’ll almost never hear the news talk about the bond indexes. It’s simply not a talking point that will get everyone to tune in.
So, what’s moving the markets so much???
- The Federal Reserve is STILL in the mix with their interest rate policy. Just remember, if their own board members can’t agree on interest rate policy knowing all they know, it will be nearly impossible for any of us to predict their future movements.
- Tariffs are making the rounds again. Any time something new hits the news cycle, it seems to be the only thing we talk about. However, it’s important to remember that tariffs are nothing new. They have a long history in government policy. Don’t forget that we talked about them in the February Commentary letter. They have an inflation effect but are definitionally not inflationary by nature.
- Speaking of inflation, the last couple of months have been as expected, which the Fed loves. That lets them signal their rate cut policy a little bit more clearly. The more those inflation numbers settle down, the more comfortable the Fed will be with lowering interest rates. This will help consumers with purchasing power while also helping our bond market jump a bit more!
It’s not easy sitting through a correction. Just remember that we’ve been through a bunch of these before. For investors that have additional cash ready to deploy, sometimes the best buy points are the most uncomfortable (times like these). LPL Research put out an interesting chart that you’ll notice at the top of the page. It shows the probability of gains over various time periods. You’ll notice that the long-term holders of 15 years had a 100% probability of gain. That’s a pretty good track record.
Thank you again for everything. We are not here without you! Have a Happy Easter!
Larry Mroczkowski
President
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risks, including the loss of principal.