Finding Peace In Times of Turmoil
We wanted to take a moment to address recent current events.
By now, you’ve likely seen that Russia invaded neighboring Ukraine, and the world capital markets didn’t react kindly.
And amid these unsettling geopolitical tensions, an important life lesson comes glaringly into focus: actions have consequences.
The weight and gravity of those consequences vary dramatically, of course. Russia invading Ukraine comes with several heavy repercussions, not just for those two nations, but globally in terms of foreign relations, politics, and finances.
Why is the stock market reacting in this way?
Russia is one of the largest oil-producing nations in the world, and the global oil supply is already taut. Because of that imbalance, investors are concerned about rising prices, especially given the already bloated inflationary environment.
In fact, the national average price for a gallon of gas in the U.S. as of March 1, 2022, is $3.62, an 33% increase from this time last year.
And oil is a pretty important commodity for our economy. Sure, it powers many cars, but planes, ships, trains, trucks, and other vehicles rely on it, as well. If oil prices increase, it could have a domino effect on the cost of other consumer goods and services.
How does all of this impact you and your money?
We honestly don’t know what the market will do in the short term – nobody does. Gamblers, of course, like to bet on such things. But investors shouldn’t. This is one of the reasons we use dedicated portfolio theory and harp on time-segmentation. We aim to match your short-to intermediate-term liabilities with secure income producing assets like bonds, annuities, etc. Holding bonds to maturity is one of the few predictable financial investments available.
This protection against short term market fluctuations is a primary benefit of the dedicated portfolio strategy. Knowing your income stream is secure allows you to cope much more comfortably with the ups and downs of the market because you know your bonds/annuities will provide the income needed until the market recovers, which it always has. Ultimately, it gives you a much higher tolerance for the market’s inevitable variability.
We want to give you confidence and a reminder that we plan for market volatility events like this. If we need to make adjustments, we can, but ultimately this is why we plan upfront to stay the course in trying times and keep you on the path that will reap the rewards in prosperous times.
If you’d like to talk through any questions or concerns, know that we’re just a phone call away. Please feel free to reach out anytime.