Market Volatility and Untangling Facts from Noise 03.02.20

Market Volatility and Untangling Facts from Noise 03.02.20

Dear Valued Clients:

StratWealth is actively monitoring the recent developments in the market.

As of noon on Friday, the S&P 500 crossed the 10% (loss) threshold to officially define the movement as a ‘market correction’: defined as a 10% decline in one of the major U.S. stock indexes, typically the S&P 500 or Dow Jones Industrial Average, from a recent 52-week high close.

Like all market corrections, with the most recent correction occurring from September 2018 to December 2018, recoveries have taken on average four months. In fact, we bounced into and out of that correction territory throughout the autumn of 2018 before dropping again on Christmas Eve.

Did you know there have been 26 market corrections (not including last week) since World War II, with an average decline of 13.7%? With so many events like this, and knowing that a recovery is likely, you would think the media would be calmer and less emotional? Well, it seems being calm does not sell newspapers!

When investment markets behave poorly, it is natural to instantly consider the worst outcome and anchor emotions around the length of time it will last, and the amount of pain we will feel: a cognitive theory known as impact bias. At StratWealth, part of our role in the planning process is to manage and prepare you for events just like this. True quality of advice (for all clients) is attached to how well one ‘stays the course’ to their tailored financial plan, even when times get difficult. We never want to let emotions guide investment decisions.

Nevertheless, we are calm. As a firm, StratWealth is trusted by over 1,000 families – and yet we’ve taken only a handful of calls over the last few days! The media would have you think our phone is ringing off the hook. Why? We’ve already designed your portfolio with these types of events in mind – our aim being to help you achieve your overall financial goals and remain composed.

The media is calling this ‘the worst week’. And it may be so for those without a plan or without an Advisor who is prepared! Thank you for being part of StratWealth.

We will continue to monitor the situation and we are here to discuss any concern you may have. More information on markets, investments, or impact is always available from your Advisor – and you are encouraged to reach out with questions at any time.

Thank you for allowing StratWealth to serve you.

The StratWealth Team

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