Staying the Course in the Face of Volatility

June 28, 2022 Austin Bryan, CFP®, Wealth Manager

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.

The information in this material is intended for the recipient’s background information and use only. It is provided in good faith and without any warranty or representation as to accuracy or completeness. Information and opinions presented in this material have been obtained or derived from sources believed by Dimensional to be reliable and Dimensional has reasonable grounds to believe that all factual information herein is true as at the date of this material. It does not constitute investment advice, recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. Before acting on any information in this document, you should consider whether it is suitable for your particular circumstances and, if appropriate, seek professional advice. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Unauthorized reproduction or transmitting of this material is strictly prohibited. Dimensional accepts no responsibility for loss arising from the use of the information contained herein.

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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.

© 2022 BlackRock, Inc. All Rights Reserved. BLACKROCK and iSHARES are trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

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

HoganTaylor Wealth

HoganTaylor Wealth provides an integrated approach to investment and financial planning and is a registered investment advisor and subsidiary of HoganTaylor LLP. HoganTaylor Wealth takes its fiduciary responsibility seriously. Without commission, referral or soft-dollar arrangements, they operate on a fee-only basis to ensure everyone’s interests are aligned with those of the client.

INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.

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