Ingram's June 2022

Almost Unbearable Investors bitten by tough conditions in the first half of 2022 are well-advised to stay the course. This bear won’t be on the prowl forever . . . by Dennis Boone

Nearly halfway into 2022, inves tors have fidgeted as equities have tak en a pounding, and the Fed’s overdue move to stem inflation have produced more indigestion with their bond portfolios. Real estate values continue to rise, but in the world of traditional investment tools, it’s not been a pleas ant half-year. For younger investors especially, this climate is unprecedented. Jamie Battmer, chief investment officer for Creative Planning Retirement Ser vices, says that “for your standard bond portfolio to be down 10 percent year-to-date is uncharted territory. For stocks and bonds to both be down at the same time, that’s really only happened three times in the past 50 plus years. Usually, you don’t see the stress to market manifest itself on both sides of the ledger this dramat ically.” The S&P 500 is just one example. More than $7 trillion in market value evaporated from its blue-chip stocks before Memorial Day, and the index is down more than 14 percent since the

end of December. Even that, though, is something of a victory—just last month, it was flirting with bear-mar ket territory, defined as a 20 percent drop from a recent closing high. But consider those last threewords: Recent closing high. Then let Com merce Trust Co.’s Scott Boswell put that into perspective: “Yes, the mar kets down, but they’re down off all-time highs,” he says. “Although consumer net worth is down from a record high in 2021, it’s still way ahe ad of historic averages. … In gener- al, consumers are still in better shape than they were in recent history.” High energy prices, rising interest rates, inflation that has blown well past “transitory”—remember that one?—have all done much to erode consumer confidence. And the big gest sustained correction since the Great Recession (if you skip past the COVID-19 market anomaly of early 2020) has rattled investors at all lev els, from retired Baby Boomers to the newest members of the work force, Generation Z.

But as more than one sage wealth adviser has noted, all is far from lost. For in the long-term view of invest ing, particularly with equities, “the cure for low stock prices is . . . low stock prices.” As for bond prices, higher rates have raised some welts, but those with longer memories can recall an era when the percent prime interest rates reached 20.5 percent. At some point, things will turn, wealth managers note. Bargains will compel institutions to reload with stocks; supply chains will loosen and help ease consumer prices, oil prices will inspire more domestic produc tion while the getting is good. Heck, there’s even a chance that Vladimir Putin, as was said back during the Vietnam War, will determine it’s time to “declare victory and get the hell out” of the quagmire in Ukraine. Until then, remain buckled up. This bumpy ride isn’t quite over yet. “Given the higher-than-normal inflation being experienced current ly, even those investors holding cash are losing purchasing power,” says

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Ingrams.com

June 2022