“Well it’s Groundhog Day…again…” says Bill Murray’s character who is forced to relive the same day over and over again. Investors may feel the same way about the markets. Stocks are volatile once more and investors have been reminded that values can actually go down, after the steady climb in 2021. “It’s a stock picker’s market” makes its way across the airwaves. The last time inflation was this high was 1982 and the Cincinnati Bengals were in the Super Bowl. Back then they played the 49ers who barely missed a trip to the Big Game this year.
The S&P 500 is down about 5% and flirted with correction territory (a drop of 10%) to start the year. The S&P 500 gained 0.8% during the last week of the month, but had a swing of at least 2.25% during trading each of those days. Even though the market was positive on the week, the heightened volatility can be dangerous. It’s like a river with an average depth of 3 feet. Most of the water is shallow. It’s the small pockets of deep water where it’s tempting to panic and maintaining your poise is crucial.
For clients who have been with us for a while, it may feel like Groundhog Day, too. “Stick to your financial plan. Keep an eye on fees and taxes. Control what you can control. Don’t try to time the market.” It’s not exciting, especially when it can feel like the markets are moving so fast. However, these concepts have been proven time and time again to work to preserve and build wealth, and they don’t rely on the shadow of a groundhog to determine our success or failure.