by Ron Bare
The Equity (Stock) market by most gauges is now down well over 20% and has entered a bear market. We understand that times like this can be difficult as an investor, and we are here to help you make wise financial and investment decisions. Because we care about you and your financial plan, we want to provide you with some overall thoughts and perspectives on market volatility.
What is the cause of this bear market?
Inflation has surged, the federal reserve is raising interest rates (and reversing what is called QE or Quantitative Easing) and these actions are increasing the odds of a recession. Oil prices are at record highs (we all see this at the gas pump daily), and food prices are skyrocketing – not to mention the war in Ukraine. All these headlines and events may lead you to believe that “this time is different.”
Therein lies perhaps the most dangerous phrase of becoming a long-term successful investor. “This time is different.” If we believe this, then the next thought is, “I must pull my money out of the markets, or at least start preserving cash and stop investing my monthly amount into something that loses money each month.”
This time is NOT different. Recessions occur once every five years on average. While inflation is a problem right now, there have been times where it was much higher. Also, although the federal reserve is raising interest rates, they are still relatively low. Oil supply is still limited due to pandemic shutdowns (and other factors for another time) and demand has surged due to a full reopening of the economy. All of this will work its way out. In our opinion, more oil supply will come, demand will soften, inflation will cool, and the market will realize that the world is not ending. In time, this bear market will end.
This time is not different, if just FEELS different. It always does. In 2008 when banks were failing, housing was busting, and the market dropped over 50% (remember how that felt? I do!) – it certainly felt very different. However, those who stayed the course, added to their portfolios, and had faith in the future prevailed, and this time should be no different. During uncertain times it is good to reflect on time tested principles:
- Give more money away this year to a cause you care about (giving is a step of faith in a God who provides)
- Do not make financial decisions out of fear or worry.
- Think long term – we make better decisions when we think long term
- Add to your investment portfolio, assuming you have a few years until you need the money a drop in the market may be a good opportunity to invest with a long-term perspective.
- As we have talked about in the past, make decisions based on your holistic financial plan that is based on your goals, values, and timeframes – we are here to help review any of these details with you if that would be helpful.
Thank you for your continued partnership, and I wish to close with words from Paul in Philippians 4:6-7; “Do not be anxious about anything, but in every situation, by prayer and petition, with thanksgiving, present your requests to God. And the Peace of God, which transcends all understanding, will guard your heart and minds in Christ Jesus.”
by Jim Wahlberg
As we focus on our “Year of Intentionality” one of the most important areas where we can be intentional is with our family. Unfortunately, this can also be the area that is easiest to neglect. When I think of being intentional or deliberate with family, my mind immediately goes to my childhood and the example that was modeled to me. I think it is safe to say that each one of us was shaped by what we experienced in our childhood. When I think back on my upbringing, I’m thankful that I can reminisce on mostly fond memories and experiences.
A few things that my family did intentionally were:
- Eating dinner together as a family each night. I remember playing with friends in the evenings and being told I needed to be home by 5:00. Many times, I argued that it wasn’t fair that I had to be home while my other friends were still playing. My parents put a value on making sure we had a time each night that we were all together and we could talk about our day.
- Family vacations. These are one of my most cherished memories. My parents grew up in Minnesota and most of my extended family were still in that area, which meant we had to be intentional to see our grandparents, aunts, uncles, and cousins. Most summers, we would pile in the station wagon for a road trip to see family. I’d sit in the back with my two sisters and proceed to drive everyone crazy while I’d see how close I could get to the imaginary line dividing our seats without crossing it. When my dad’s “claw” would reach around the seat and latch onto my knee, I knew I’d crossed the line! The 20 or so hours each way that we’d spend in the car were all worth it when we had time away from our normal distractions at home and got to make incredible memories on those annual vacations.
Now that I have the responsibility as a parent of three young kids, I am tasked with being intentional with both my wife and our kids. James 4:14 says, “Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes.” As summer is about to begin, I’d encourage each of you to take a moment to identify what you are doing intentionally with your family, whether with a spouse, children, grandchildren, or maybe even friends whom you see as family. Eat ice cream, day trip to the beach, jump in the pool! Understand that our time on earth is a mist that will soon vanish…take time today to make an intentional moment!