We Remain Optimistic

jaycoulter |

“The stock market is designed to transfer money from the active to the patient.”

- Warren Buffett

 

During the first six months of 2022 the S&P 500 declined 20.58% from its all-time high of 4,796.56 on January 3rd to a closing low of 3,666.77 on June 16th. It closed at 3,758.38 on June 30th. This has not been your garden variety decline. In mid-June there were five out of seven trading days on which 90% of the S&P 500 closed lower.

This is pessimism on a historic scale. Selling into a market with this level of negative sentiment seems highly imprudent.

What do we gather from all of this? The same as always. Selling stocks during market corrections stunts long-term investment success.

Nothing has changed regarding our investment philosophy. We are long-term, goal focused, plan driven equity investors. We invest in diversified portfolios of companies that have increased earnings (and in many cases dividends) over time.

With every new crisis, perceived or real, it is easy to lose sight of the fact that the market is a compounding mechanism that creates wealth over time. The only reliable way to realize the benefits of compounding is to remain steadfast during periodic but historically temporary market declines.

Investors waiting for a panacea that eliminates stock market volatility will have to keep waiting. We believe stocks and the dividends they pay continue to be a viable and necessary investment option for most. The compounding effects of both their prices and income stream have created untold levels of wealth. We know of nothing that suggests this is about to change.

We remain optimistic.

 

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. 

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.