Ingram's June 2022

Lynn Mayabb, managing director for FORVIS Wealth Advisors. “Where stocks and bonds could eventually recover value, those holding all cash will continue to lose purchasing pow er until rates on cash instruments in crease and inflation dips.” SHARED PAIN Of course, not every investor was hurt at the same level. Those who correctly anticipated that Washing ton’s aversion to domestic oil would start to squeeze supplies have been handsomely rewarded with soaring energy stocks. The problem is, you get over-weighted there, and those gains might, live inflation was sup posed to be, prove transitory. Those investors focused in the en ergy space have done extraordinarily well, especially with additional stress on the markets from the greatest con flict to ensnare Europe since World War II,” Battmer says. While those in vestors may enjoy a 63 percent surge in energy as a component of the S&P, he says, “that’s a perfect example of why the prudent long-term investor never tries to time the market.” Anyone attempting to do so now, managers say, risks a move off of the peak. At the individual-investor level, Battmer says, many would have off loaded those underperforming energy stocks long ago, then missed the run up. If they try to get back in now, they risk losing a second time. But even the winners out there might not end up in the black, giv en current conditions. Says Jim Wil liams, CIO for Creative Planning: “Very few investors have gone com pletely unscathed when you factor the impact of inflation.” For those more focused on bonds, Mariner Wealth Advisors’ Justin Richter says there are tools to ease the pain. “On the fixed-income side, the only area that has done well has been the more inflation-protected areas of the market,” he said. Instruments pegged to floating interest rates mean that un like traditional bonds, it doesn’t mat ter how many times the Fed moves, and structured versions are only mod estly down, compared to the broader aggregate bond index.

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June 2022

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