Staying the Course in the Face of Volatility

When markets move, particularly down, there can be many emotions that begin to take hold. While it feels somewhat far removed now, it’s only been two years since the last officially declared recession in the US. Volatility may create strong emotions when one sees the impact on our personal investments and can often lead to more questions about business cycles and what this means for our future goals. While it’s always important, it’s especially crucial during times of volatility to take a step back and try to see the big picture and overall goals. Taking a macro view of your lifetime needs and viewing the market long-term will help put the current volatility into a more appropriate perspective.

1. When markets have a sharp decline, they have historically performed well for those who stay invested.

2. Staying disciplined is a winning strategy. Trying to time typically isn’t.

3. Market downturns are not the time to sell.

While no one can predict the future, history has taught and continues to teach the lesson of true investment and not short-term speculation. As one example of a long-term view: according to historical Bloomberg data on Bear Markets going back to World War II, investing after the S&P 500 has declined 20%, regardless of how much more it’s fallen, has delivered an average cumulative return of 17.5% 1 year later, 38% 3 years later and 79% 6 years later. Keeping our perspective through downturns and swings in the market can lead to rewards over the long-term. Through the ups and the downs lean on your advisor for strategies for your unique financial picture.

Disclaimers:

Diversification neither assures a profit nor guarantees against loss in a declining market. Past performance is not a guarantee of future results.

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Risks
Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.

© 2022 BlackRock, Inc. All rights reserved.

¹ Source: BlackRock. On the day of the initial attack on February 24, iShares Global Clean Energy ETF, which seeks exposure to companies that produce solar, wind, and other renewable sources of energy went up 7.6%. Index performance is mentioned for illustrative purposes only. It is not possible to invest directly in an index.
² Source: BlackRock, 3/2/22, based on holdings in the iShares MSCI ACWI ETF. Index performance is for illustrative purposes only. It is not possible to invest directly in an index.

Investing involves risks including possible loss of principal.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.

This material contains general information only and does not take into account an individual's financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial professional before making an investment decision.

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Sources:

https://my.dimensional.com/three-crucial-lessons-for-weathering-the-stock-markets-storm

https://www.blackrock.com/us/financial-professionals/literature/investor-education/invest-long-term.pdf