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Keep Off The Emotional Roller Coaster

Keep Off The Emotional Roller Coaster

May 05, 2022

There's a lot of FUD (Fear, Uncertainty and Doubt) regarding the recent fluctuations in the stock markets. And, at first glance, anyone would be concerned. But let me share a couple of things with you:

1. SHORT TERM vs. LONG-TERM – Yes, the S&P 500 lost 8.7% (total return) during April 2022, which was its worst month since March 2020. However, over the long-term, through 04/30/2022, the S&P 500:

  • Gained +12.3% per year (total return) for the last 100 months
  • Gained +9.8% per year (total return) for the last 200 months
  • Gained +8.8% per year (total return) for the last 300 months
  • Gained +10.8% per year (total return) for the last 400 months.

The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).


2. INCREASED SAVINGS – Families and individuals are also increasing their “Emergency Funds”. From the end of 2019 (pre-pandemic) to the end of 2021, American households increased their “readily available cash” from $10.6 trillion to $14.7 trillion, an increase of $4.1 trillion of cash accumulated over the 24-month period.
(source: Federal Reserve).

Remember, you’re investing for the long haul. As we’ve discussed, you know the markets constantly go up and down, and this can be disconcerting. But when you look at the big picture, historically, the markets have rebounded back and grow even higher than where they were before. You’re invested based on our discussions of your risk tolerance and time thresholds. 

So what do you do now?

  • First, don’t panic. That is the worst thing you can do. If you have concerns, let’s have a conversation and make sure your investments are still appropriate for your goals.

  • Secondly, turn off and tune out the gloom and doom news that heralds “it’s the end of the world”. Their job is to make you feel insecure and worried. Nobody has the magic crystal ball to know what’s going to happen.

So, sit back. Take a deep breath. Have a cup of coffee (or tea, or wine, or water). Keep focused. Stay off the “Emotional Roller Coaster”. And feel free to contact us if you have questions or concerns.