AUGUST 2022
Investors recently had the benefit of taking part in one of the longest sustained bull markets in history. With the exception of a few short periods of market decline, equity markets have consistently trended upward since early 2009. As all bull markets do, this one has come to an end and we have now officially entered ‘bear market’ territory. With changing market dynamics in recent years, including the advent of high-frequency trading, widespread central bank easing, and the widespread rise of passive investing, market drawdowns such as this one can now occur faster than in years past and have become increasingly difficult to avoid as a result. Our first article below details why investors who remain committed to their financial goals in the face of short-term turbulence may experience advantages in the end.
We are living through a pivotal time in history, marked by geopolitical realignment, high inflation, volatile financial markets and the end of a 40-year period of declining interest rates. The title of this new era could be Brave New World or Back to the Future. But the title could be Revenge of the Boomers, because a lot of these events rhyme with the past, particularly the early 1960s. That’s when we saw interest rates bottom out after decades of decline, as well as the rise of the Cold War era, which is unfortunately rearing its head again in some respects. Despite these challenges, our second article details why the Capital Group's Rob Lovelace remains optimistic about the investing environment for several reasons.
This month's "What's Happening Now" section shares interesting stories on whether the U.S. can avert a recession, an interesting apartment in Madrid, and 13 beautiful Italian Islands.
|
|
Remaining Disciplined During Market Downturns
Investors who remain committed to their financial goals in the face of short-term turbulence may experience advantages in the end. Investors recently had the benefit of taking part in one of the longest sustained bull markets in history. With the exception of a few short periods of market decline, equity markets have consistently trended upward since early 2009.
|
|
Rob Lovelace on all-weather investing
The world has changed. We are living through a pivotal time in history, marked by geopolitical realignment, high inflation, volatile financial markets and the end of a 40-year period of declining interest rates. The title of this new era could be Brave New World or Back to the Future. But I think the title I would select is Revenge of the Boomers, because a lot of these events rhyme with the past, particularly the early 1960s. That’s when we saw interest rates bottom out after decades of decline, as well as the rise of the Cold War era, which is unfortunately rearing its head again in some respects.
|
|
Market Update
July saw the stock market ebb and flow throughout the month. Sometimes the market reacted in response to news of some sort. Other times, stocks moved in anticipation of something that may happen. For instance, the latest quarterly corporate earnings reports generally have been better than expected, with about 75% of the S&P 500 companies beating analysts' estimates. However, investors responded negatively following reports that a major retailer was slashing its profit outlook. On the other hand, traders moved to equities following a strong labor report early in the month. The latest Consumer Price Index rose higher than expected, indicating inflation was not close to retreating. Following that report, investors retreated from equities, anticipating that the Federal Reserve would accelerate its tightening policy and raise interest rates more than 75 basis points. In fact, at the end of the month, the Fed bumped up interest rates 75 basis points, as expected. Interestingly, the market jumped higher after the latest interest-rate hike. Investors replaced anticipation of an acceleration in rate increases with expectations that the Fed may not need to be as aggressive as some had feared. Nevertheless, rising inflation, which has led to multiple interest rate hikes, supply bottlenecks, decelerating gross domestic product, the emergence of new COVID strains, and the ongoing Russia/Ukraine war promoted fears of an economic recession. Yet, there is enough favorable economic data to offer some hope.
|
|
Chornyak & Associates Financial Planning Consultants
at Janney Montgomery Scott
716 Mt. Airyshire Boulevard, Suite 200, Columbus, Ohio 43235
Janney Montgomery Scott LLC Financial Advisors are available to discuss all considerations and risks involved with various products and strategies presented. We will be happy to provide a prospectus, when available, and other information upon request. Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. Market Update Prepared by Broadridge Advisor Solutions.
For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
Janney Montgomery Scott LLC • Member: FINRA, NYSE, SIPC
|
|
|
|
|
|
|
