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March 1, 2022
Transfer on Death Deeds to Real Estate
May 1, 2022
By Brett Freese
Market Highlights:
- The major stock and bond indices were all down this past quarter (see “Market Scorecard” below).
- Gold was up 5.88% price per ounce and the broad basket of commodities was up an amazing 26.22% for the last 90 days.
- Bitcoin was down 2.58% for the quarter.
Economic Notes:
- The world’s developed economies are still in a balancing act in wanting economic growth and low unemployment while increasingly concerned about inflation and supply chain issues.
- China continues to go through major growing pains as it struggles to manage a dictator-imposed communism vs the prosperity and trust of a capitalistic middle and upper class.
- Value stock investing led in the first quarter vs. Growth stocks
- Unemployment numbers continue to improve. In fact, businesses finding enough workers continues to be a major struggle in many industries this past quarter.
- The Federal Reserve moved the Federal Funds rate target range to 0.25 – 0.50%, they have continued to reduce their major bond purchases and there is now expectation by the markets for 5 or more rate hikes in 2022. Note: The Federal Reserve has a dual mandate to achieve both stable prices and maximum sustainable employment.
- Inflation now is very high and the debate over whether this a short-term concern or a long-term issue continues. This is the main concern for the Fed now with employment at record highs.
- The unprecedented spending in Washington will have long lasting effects on the borrowing cost of the US Government especially with interest rates going up.
- As we continue to pray for people in regards to the events in Ukraine, there are short-term and long-term political and economic concerns to watch.
- 2022 is an Election Year. 100% of the House of representatives and 33% of the Senate is up for elections. This will clearly impact the priorities and positioning of our Washington representatives.
Historical Stock Market Declines:
Market declines and inclines rarely look the same or even feel the same, but they do happen and the ups and downs are a part of the process – It is important to have a plan/strategy so emotions don’t dictate buying or selling.
A 5% or greater loss occurs about 3 times a year
A 10% or greater loss occurs about once a year
A 15% or greater loss occurs about once every 2 years
A 20% or greater loss occurs about once every 3.5 years
Please know that when stock prices go down the “market collapse gurus” receive the most air time. Likewise, when stock prices go up all the “bull market gurus” talk about how the market will continue to be up BIG. Please know that most “gurus” are great with hindsight to justify how important it is to have their voice heard.
Market Scorecard for the last 13 weeks ending 03/31/2022:
US Equities:
– 4.60% S&P 500 (Index of the largest US publicly traded companies)
– 7.53% Russell 2000 (Index of 2000 Small-cap US publicly traded companies)
Global Equities:
– 5.55% Foreign Large – Morningstar Category
– 9.47% World Small/Mid Stock – Morningstar Category
US Bonds:
– 7.19% Corporate Bond – Morningstar Category
– 2.70% Short Government – Morningstar Category
– 5.92% Muni National Bond Index – Morningstar Category
Other:
-5.08% World Bond – Morningstar Category
+5.88% LBMA Gold Price
-2.58% Bitcoin
+26.22 Commodities Broad Basket – Morningstar Category
Market Indicators:
Inflation:
7.87% as of 3/16/22 (Up 1.06% from 6.81% in December 2021)
Unemployment:
3.8% as of 03/04/22 (Down from 4.20% in November 2021)
Fed Funds Target Rate:
0.25 – 0.50% as of 03/29/22 (Up from 12/30/21 of 0.00 – 0.25%)
Suggested Next Steps:
- Understand that market cycles are normal. The markets go up and down in mostly unpredictable directions and amounts. The ups and downs of investments many times seem to make sense only after they happen, however, market prediction is very difficult. (i.e. the next stock market crash has been predicted every year since 2008).
- Your investments are just one factor in the success of your life, money, and purpose. Make sure that you are confident in your full financial plan, so you can successfully have an amazing ROL (Return on Life).
- Your investment allocation and diversification are important factors in both risk management and future returns. Therefore, if you have questions about your investment plan, please schedule a phone or in-person meeting with your TrustWell Financial Advisor(s).
