After a program of bountiful monetary stimulus to keep the economy afloat post-Covid, the resulting inflation prompted the Fed to turn the tide with an aggressive rate-hiking campaign.
On March 17, 2022 the campaign began and stocks and bonds simultaneously had a terrible year, both declining in value by double digit percentages.
Recessions were predicted, and no doubt many unguided investors took these forecasts as an implication that smart people were doing something about it, not unlike the folks you see in news reels boarding up their windows and clearing out grocery stores ahead of a hurricane.
I can’t think of any event that would require a plan-driven investor to make any change to their portfolio, much less abandon it entirely.
In March 2022 the S&P 500 was at 4,412. Here at the end of 2024 the S&P 500 recently passed the 6,000 mark.
This is the type of recovery and subsequent gains we expect will materialize at some point in a bear market cycle, and that we will certainly NOT participate in by sitting on the sidelines.
Advisors get the opportunity all too often to demonstrate the true value of what we do for clients- it isn’t because we know a secret magical investment that no one else knows about.
It isn’t even because from time to time we really are able to help clients save significant amounts of money through income, estate, and tax planning.
It is because you have hired an advisor for advice, and that advice will never be “blow up your financial plan and bury the smoking ruin in the backyard,” no matter how dire the news seems to be.
If there is any part of you that could ever be tempted to turn an occasional but temporary decline into a 10-20% loss of your liquid net worth, then maybe you realize that you employ an advisor primarily to stand firm between you and a consequential mistake.
In that light, it begins to look like quite a good deal. You deserve congratulations for investing in your own financial success by seeking out and using this valuable service.
As 2024 comes to an end, I’d like to thank you for another year that we walked together on your path to financial independence. It is an honor and I’m extremely grateful!
All my best- Rachel Kuss
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. Chart from the Charlie Bilello Blog.
Securities and Retirement Plan Consulting Program services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. Investment Advice offered through Western Wealth Management LLC, a Registered Investment Advisor. LPL Financial, Kennebec Wealth Management LLC and Western Wealth Management LLC are separate entities.