Global turmoil, federal election, and inflation have presented today’s investors with some pretty daunting risks.
But remember, this is the situation for which you built a long-term asset allocation strategy. If you haven’t developed such a strategy yet, we are happy to help you do so. We can help identify your long-term goals, particularly with regard to retirement planning and multiple streams of income to help mitigate the risks of outliving your savings. An all-weather portfolio is designed to withstand the types of challenges we have encountered in recent years — and position your assets for growth in the future. Contact us if you would like a portfolio review.
It is also important to appreciate where we live and how well the United States has fared recent misfortunes. The U.S. post-pandemic economic recovery is unlike any in recent history. Here’s a not-so-small sampling:
- Businesses are eager to hire and have increased wages to attract new workers.
- 74% of U.S. counties reported more businesses in their area than before the pandemic.1
- New businesses are launching at the fastest pace on record.2
- The Great Resignation is a marker for worker confidence in the labor market.
- In just one year, the S&P 500 gained 75% after its crash on March 23, 2020.3
- In 2022, the median price of existing homes is $392,000, which is set to decrease to $380,000 by end of 2023.4
- The U.S. was one of the quickest out the gate to vaccinate.5
- We are an energy-independent nation.6
In short, the way to keep recent volatility in perspective is to recognize how good things really are, especially given how much we’ve been through in recent years. While investing abroad is a viable means to diversify your portfolio, also remember that there’s a reason our nation is so strong. Our companies are consistent performers. When it comes to investing, remember some basic principles, such as brand loyalty, knowing what you buy, and that the most reliable path to wealth accumulation is a slow one.
A diversified allocation in domestic equities is good way to build wealth and confidently stay ahead of long-term inflation. After all, since the S&P 500 Index was conceptualized in 1957 through the year 2021, the average annual return was 10.15%.7
Believing in our nation’s capabilities and your own strategic asset allocation can help you progress toward a successful future.
1 Sylvan Lane. The Hill. April 5, 2022. “Nearly three-quarters of US counties have more businesses than before pandemic: analysis.” https://thehill.com/policy/finance/3259608-nearly-three-quarters-of-us-counties-have-more-businesses-than-before-pandemic-analysis/. Accessed April 13, 2022.
2 Andrea Hsu. NPR. Jan. 12, 2022. “New businesses soared to record highs in 2021. Here’s a taste of one of them.” https://www.npr.org/2022/01/12/1072057249/new-business-applications-record-high-great-resignation-pandemic-entrepreneur. Accessed April 13, 2022.
3 Isabel Wang. Market Watch. Mar. 23 2023. “The stock market hit a pandemic bottom 3 years ago. Here’s how it has performed since then.” https://www.marketwatch.com/story/the-stock-market-hit-a-pandemic-bottom-3-years-ago-heres-how-it-has-performed-since-then-e08d360. Accessed April 25, 2023.
4 Statista Research Department, Feb 14, 2023. “Median price of existing homes in the United States from 3rd quarter 2017 to 3rd quarter 2022 with forecast until 2023.” https://www.statista.com/statistics/272776/median-price-of-existing-homes-in-the-united-states-from-2011/. Accessed April 25, 2023.
5 Our World in Data. April 13, 2022. Coronavirus (COVID-19) Vaccinations.” https://ourworldindata.org/covid-vaccinations. Accessed April 13, 2022.
6 Neil Irwin. Axios. Feb. 19, 2022. “The U.S. is now energy independent.” https://www.axios.com/us-energy-independent-petroleum-2982ed18-9110-4c31-ad67-82abe643f661.html. Accessed April 13, 2022.
7 J.B. Maverick. Investopedia. April 5, 2023. S&P 500 Average Return. https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp Accessed April 25, 2022.
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