Since the start of 2022, the news and social media have been filled with concerning headlines. Increased market uncertainty, soaring inflation, rising interest rates, geopolitical conflict, and deepening political divisions all against the constant backdrop of a world still coping with COVID-19. These headlines are overwhelming and come at us from all directions 24/7. When we face a barrage of bad news and hyped-up market opinions, the best thing to do is focus on what we know.
While the latest global event or news out of Washington D.C. may seem consequential for the near term, what the media doesn’t tell you is that most of the headlines will have little impact on us over the long term. The chaos in the economy may impact our day-to-day decisions now; however, over a 10-year or 20-year time horizon, market volatility looks like a minor blip in the overall market performance. Social media and news channel anchors won’t tell you that!
When we face turbulent markets, the best thing to do is focus on what we know and what is important. I cannot tell you definitively what inflation will be next year, nor precisely what GDP growth will look like for 2023. While these are important statistics, future variables make these figures unknowable. A steep decline in the stock market is nerve-wracking, but is it important? Historically the answer is no, not in the long-term scheme of things.
So, what do we know and what is important? We know we are invested for the future. We know, despite some slight interruptions, economic progress continues to deliver greater wealth to most investors who stay invested for the long run. What is important is that we focus on our goals and stick to an investment plan.
Be like a baseball player batting at the plate. Don’t be distracted by where the outfielders are standing. Focus on hitting the ball right when it enters the strike zone. If you spend your time worrying about where the defense will be, you’ll miss your chance to hit the ball.
Thank you for your continued trust and business. If you want to discuss your financial future or make updates to your plan, please call our office. We look forward to hearing from you.
The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.