The markets have been doing some crazy things lately. And we are hearing plenty of crazy news. As a financial planner who is always focused on my clients’ best interests – a fiduciary advisor – I try at times like this, to keep things in context.
FIRST – I always advise clients to have an emergency fund in cash in case of the unexpected. This is not investment money. This is insurance money against a bad thing that is rare but could be really inconvenient. Money that you know you need to spend in the next 12 months should be in this bucket along with the emergency cushion. Keep it safe. Keep it handy.
SECOND – Money intended to meet goals three or more years down the road, should be invested. And, when money is invested, you shouldn’t worry too much about the day-to-day news. I know that’s easy for me to say, so here are some helpful facts that may make it easier for you to stay patient during these crazy times.
Since 1950 and up to the end of 2021 – 72 years. Here are some fun facts about the S&P 500:
- Total up DAYS = 54% and down days = 46%.
- Total up MONTHS = 61% and down months = 39%
- Total up QUARTERS = 67% and down quarters = 33%
- Total up YEARS = 74% and down years = 26%
- Total up 5-Year Rolling Periods = 79% up and down 5-year rolling periods = 21%
- Total up 10-Year Rolling Periods = 89% up and down 10-year rolling periods = 11%
The S&P 500 consists of stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).
SINCE THE WAR STARTED - The S&P 500 has gained +4.2% (total return) since Russia invaded Ukraine on Thursday 2/24/2022 through the close of trading last Friday 3/18/2022 (source: BTN Research).
Clearly, there is a lot to consider and plenty to think about. I suggest you take time to visit with a CERTIFIED FINANCIAL PLANNER™ professional. These folks have training, experience, and resources to help you sort out your options and make great choices.
Yes, I am a CFP® professional. I’m always a fiduciary and I work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice. If you would like to talk about your situation, follow his LINK to find a time for us to talk.
If this article has you thinking about your own circumstances, contact my office at rdunn@dunncreekadvisors.com. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.