Chart(s) Worth a Thousand Words

As we addressed in our market volatility update yesterday, sometimes taking a break from all the news is good for our mental health and can be enough to give some perspective.   There is a lot of information being thrown out at us and that can be stressful and overwhelming – either causing us to do something we may later regret or not to do anything at all.

So rather than inundating everyone with more to read, I thought I’d share some charts that I have found to be informative, interesting, and providing some perspective.

 

Without stating the obvious, the returns for assets this year have been less than enthusing.  

 

And a lot of focus is being put on how much the Federal Reserve will raise rates, but historically rates are incredibly low.

Historically, after the worst days in the S&P 500, returns have been positive one-year later.


 

Within fixed income, valuations are starting to show signs of coming down which creates opportunities.

Subsector performance  within the S&P 500 since the burst of the Dot com bubble provides some perspective, showing that there investors don’t always have to be invested in the “shiniest”, “most cutting edge” sector to see positive returns over the long term.

Per Nathan’s blog from last week, companies that grow their dividends tend to do well during periods of rising inflation.

 

While we do not have a crystal ball and cannot predict the bottom, lower prices and a diligent approach presents opportunities.

Just a friendly reminder the impact “market timing” can have on a portfolio vs staying invested.

As well as the power of diversification, which provides a “smoother ride” over time.

Rebalancing can help take some of the emotion out of investing by ensuring risk always stays within certain parameters particularly within more volatile periods.

 

To sum it up, I thought this quote from the most recent blog from The Belle Curve, “A Time to Puke” written by Blair Duquesnay was spot on:

“Now is not the time for a weak constitution. Now is the time for bravery, for adherence to discipline, and a time to hug your children, pet your dog, or go for a hike. Because the markets are likely to be rocky for while, and the news will get worse before it gets better. I envision myself calm and floating gently above the madness of the crowds – the alarmist talking heads, the flashing red headlines, the hedge funds that are certainly blowing up, and the frantic Wall Street salespeople watching their commissions evaporate. The air is nice up here. Why don’t you join me?”

 

Not related at all, but even during the toughest times, I am grateful I have these two kids to hug and to remind me that I will never be as cool as they are.  

Chart(s) Worth a Thousand Words

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