A Look At Market Volatility Thus Far In 2022

What a wild start to the year it’s been with inflation surging, the Russia-Ukraine war, and the Federal Reserve rising interest rates. When the world and country faces economic events such as these, the markets, just like the consumer, digest and respond. So, let’s take a look at how some of these economic events have impacted not only the consumer, but the stock market as well.

As you probably already know, inflation has skyrocketed this year, having a large impact on the cost of living and pretty much everything, as you can see in the YoY CPI report charted below.

As we’ve watched inflation take off, we’ve been thinking a great deal about the consumer and what they have been seeing and feeling. Have you been spending more recently? If so, what areas are you spending more money on? Have higher gas prices impacted your interest in travel? The chart below shows consumer sentiment near all time lows, really depicting the effects that inflationary prices are having on individuals’ financial picture.

Are rising prices beginning to alter the way you spend your money? If so, we are here to help, so let us know if you would like for us to revisit your budget and financial plan during this time. 

For those of you who have been investing in the stock market, you may be feeling a sense of anxiety as the market has been extremely volatile in response to earnings season, rising interest rates, inflation, and more.

However, we want to show a zoomed out picture of stock market returns and pullbacks over time. At Sherman Wealth, we always emphasize the importance of time in the market instead of timing the market. As you can see in the J.P. Morgan slide on the right, time is your best friend. Try to remember to stay calm and think about your reason for investing in the first place along with your time horizon. If you are a long-term investor saving for retirement, take a close look at the overall returns and drawbacks overtime, as you have many years ahead of you for your money to grow. 

We know the past few months have weighed heavily on the economy; however, we urge you to stay calm. If you have any questions about the current market environment or your own specific financial portfolio, please let us know and we are happy to help. Email us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here.