Broker Check

1st Quarter 2022 Market Review

April 14, 2022


View the Full Q1 2022 Market Review´╗┐


The Cycle of Wins and Losses

No one enjoys losing.

By nature, we'll do almost anything to avoid it.

This instinct has a name: Loss Aversion. Especially common in financial decisions, it describes why the pain of losing is psychologically twice as powerful as the joy of gaining that same thing.

To some, seeing a decline of -10% to their investments feels dire. Meanwhile a gain of +10% elicits more of a 'not too shabby' reaction. As you'd expect, this directly impacts decision-making.


View a History of Market Ups and Downs


The Power of Perspective

I'm not saying emotions should be equally opposite for these mirrored wins and losses. We invest because we expect a return, eventually, for our risk taken. If our baseline were 0%... well, frankly, why are we investing?

Investors often find themselves asking these questions when markets are volatile. Our natural aversion to losing kicks in and drives us to look for reasons to validate our fear.

We turn to the news to find out what recent market events are causing this pain.
(A worthy thought: How often do you tune in to find out what market events are causing the joy of gains?)

There has surely been no shortage of world economic events lately. Inflation-gone-wild, Russia/Ukraine, interest rate hikes... With so much uncertainty in the world, the question for many is should I invest right now?

But the truth is, there is always a reason not to invest in the markets. No matter what time frame you look at, there is always something going on that could present a danger to financial markets (our investments).

Really think about it...
2019... a lingering sting from the end of '18, a US-China trade war, Brexit, an upcoming election.
2020... COVID (where did that go?) and the strangest election of our times.
2021... market values are too high, crypto-mania, Gamestop, and inflation?
2022... inflation!, WWIII?

Point is, the last reason only faded from our minds, and tv screens, because a new one arrived to take its place. The cycle will continue in perpetuity as long as capitalism does.

Thus, the real questions are: What information matters to me, given ever-changing uncertainty? What can I control?

Your money. Your needs. Your dreams. Your life.

When your financial plans are constructed with the right tools for the jobs you need done, you will find yourself feeling far less pain and far more gain.

A few reminders for the road ahead...

Stock markets1 have been up 75% of all years since 1926.
That's 72 positive years out of 96. Markets are for long-term money. Looking to stock markets for quick wins is gambling, not investing.

If you're within 5 years of retirement and don't have a written Income Plan, stop everything you are doing and get a plan in place!
Work with a fiduciary Advisor. If you have an Advisor and they aren't expressing how important this is, you need a new Advisor. 


News and Updates

New "Secure Act 2.0" passes nearly unanimously in the House
What you need to know

  • Would increase RMD age (again), gradually to 75. Increase from 72 to 73 in 2023, to 74 in 2030, and to 75 in 2033.
  • Mandatory automatic enrollment in 401(k) & 403(b) plans at 3% of employee's pay, escalating 1% per year until 10%-15%. (New plans)
  • Could allow employer plan to invest up to 50% into annuities as a default investment, with proper notice and no liquidity restrictions for 180 days.

Portfolio Down? Here's a few moves to consider:

  • Rebalance to realize some capital losses to offset against future capital gains.
  • Convert some investment shares from IRA to Roth IRA at lower taxable values. When share prices rebound, enjoy tax-free growth in your retirement account instead of tax-deferred.
  • Up your contributions. "Be greedy when others are fearful." -Warren Buffett

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Calculate the Cost of Care in Your Area

Long-Term Care: What You Need to Know´╗┐

Advisory services are offered through Rise Private Wealth Advisors LLC, a Registered Investment Advisor in the State of Arizona. Insurance products and services are offered through Independent Agents. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Arizona or where otherwise legally permitted. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. The information contained in this material has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed.