Three Questions I’d Ask About Downturns
Stock markets have sold off this year, from what primarily looks like the fear around Russia invading Ukraine. There is also news of higher inflation (after decades of low inflation), as well as interest rates and some other headlines. Recently, the driving force seems to be Russia, however.
So far, what we’re seeing is a very normal type of pullback. As long-term investors, we need to expect downturns from time to time, and this is nothing outside of normal.
However, if this is giving you worry in any way, here are three questions to ask yourself:
- Have we seen something like this before?(answer: yes)
- Have markets survived events like this before?(answer: yes, many times over. As investors realize that maybe the world isn’t coming to end, they begin to gain confidence and become buyers again)
- Is your own plan going to be okay, if we experience a downturn even worse than this?(answer: should be yes; everyone is different here, so please contact me if you’d like to review your plan sooner than later)
Most people who have planned, and who also have a long-term perspective, do not have much to worry about when it comes to short-term market-related events. Higher inflation, which could be longer term, is something that gives me pause right now. But it has always been the number one risk with most of our plans…this is why we invest with sound, time-tested principles!
If there’s anything we can do to help you with your financial/retirement plan, please don’t hesitate to contact us.
Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed in this newsletter.
Pete Dixon, CFP®
Partner and Advisor