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Over the weekend I stopped by a bakery to find the lights off and a handwritten sign taped to the window – “Due to staff shortages we have shortened our hours and will be closed…”  A visit to a drycleaner later that day delivered the same result.

While shopping for groceries several “We’re sorry, but we’re out of this item” signs were taped to the shelf where inventory once overflowed the space.

Scheduling a medical appointment, I reached a recording requesting that I leave a detailed message, and someone would call me back in a few days.  At a later appointment they apologized because a test wasn’t scheduled for my husband that should have been completed before his visit.

These are insignificant inconveniences.  In the news we see death and hardships caused by Russia’s invasion of Ukraine, while countries who rely on Ukraine’s grain exports struggle to feed their people and Russia cuts gas supplies to Europe in retaliation for its support of Kyiv.

Covid doesn’t seem to be through with us either.  We continue to hear from clients who have confirmed cases or are still recovering, and a client was recently hospitalized for several days to due Covid complications.  Supply chain issues and the Great Resignation wave that were set in motion by Covid became worse when they intersected with the Ukraine war, resulting in higher gas prices, historically high inflation, and Federal Reserve actions to try to get inflation under control.

The news of the world, its impact on financial markets, and the erosion of many things in our lives that we took for granted can weigh on us emotionally.  And those same feelings can affect our thinking about the future and influence our behavior in ways that are not helpful to our future selves.

When we are focused on negative news and the feelings they generate, it’s easy to have a bleak outlook.  It makes it difficult to believe that anything positive will happen in the financial markets, and we should be ‘doing something’ to protect ourselves and our money from harm.

In a recent meeting, a client commented on how many banner ads for gold and silver seemed to be popping up on his computer with promises of wealth protection.  Another said her son had been approached about investing in master limited partnerships.  A quick review of history shows that products like gold, silver, and structured investment products that proport to provide defense against falling markets are heavily promoted during times like these.  Based on our review of these solutions over the years, they are usually designed to benefit the seller, not investors.  Instead of trying to find a magic bullet investment, it’s better to step back and take a longer-term view of the situation and how it impacts you.

If you are saving for retirement, college expenses and other longer-term goals – celebrate!  This is your opportunity to invest in a diversified portfolio at lower prices.  History has shown that long-term investing has great rewards if you are disciplined enough to take advantage of times like these.

If you are close to retirement, newly retired or having a sense of deja-vu after experiencing the Great Recession of 2007 – 2009, take a deep breath.  As the chart below shows, in one, three and five-year periods after market downturns of 10% or more, average returns have been significantly positive since 1926.

Retirement is not a cash-in-all-at-once event, so a market downturn doesn’t represent a fatal blow to your retirement plan unless you allow it to influence you to make drastic changes to your investment allocation.  If you’ve prepared a financial plan with us and have been doing regular check-ins to make sure you’re on track, disciplined rebalancing and a review of your financial plan for any minor adjustments is probably all that’s needed.

Those of you who have been retired for a significant time may not be stressed over the news and its impact on the markets because you’ve been through this before and you know there will be a recovery.  But getting older can make us feel more vulnerable in times like these, and you may be wondering if your plan is still in good shape.  That’s why we encourage check-ins to review your situation, and why we reach out on a regular basis to schedule a time to review your plan.  If you’re feeling uncertain, please answer our invitation and meet with us to help put your mind at ease.

Things are different in our world these days, and the conveniences and routines we counted on have been disrupted.  But it doesn’t mean we have to feel afraid about our own financial security or bury our head in the sand.  Let’s talk about what this all means to you.



In USD. Market declines or downturns are defined as periods in which the cumulative return from a peak is –10%, –20%, or –30% or lower. Returns are calculated for the 1-, 3-, and 5-year look-ahead periods beginning the day after the respective downturn thresholds of –10%, –20%, or –30% are exceeded. The bar chart shows the average returns for the 1-, 3-, and 5-year periods following the 10%, 20%, and 30% thresholds. For the 10% threshold, there are 29 observations for 1-year look-ahead, 28 observations for 3-year look-ahead, and 27 observations for 5-year look-ahead. For the 20% threshold, there are 15 observations for 1-year look-ahead, 14 observations for 3-year look-ahead, and 13 observations for 5-year look-ahead. For the 30% threshold, there are 7 observations for 1-year look-ahead, 6 observations for 3-year look-ahead, and 6 observations for 5-year look-ahead. Peak is a new all-time high prior to a downturn. Data provided by Fama/French and available at mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html.

Eugene Fama and Ken French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP.

FAMA/FRENCH TOTAL US MARKET RESEARCH INDEX: 1926-present: Fama/French Total US Market Research Factor + One-Month US Treasury Bills. Source: Ken French website.

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