2/24/22
By Mark Sauer
Thanks, Putin. Here we go.
I am not a doomsday kind of guy. I’ve never been one to look at the glass half empty. We are, however, entering a time of great fear and panic and we really do need to look at the reality of the situation. Russia’s pursuit to recapture Ukraine is a travesty – lives will be lost, homes will be destroyed and God knows what else. My heart goes out to all the people of Ukraine and Russia that will be affected by this travesty.
Russia’s invasion of Ukraine, in addition to inflation being out of control, earnings coming in a little lackluster and the fear of interest rate hikes by the Fed has caused a perfect storm for a major market correction.
I expect we’ll continue to see a steep and rather intense correction in the market over the next several days. To be frank, I am inclined to think the S&P will pull back to the 3,800 range. And the NasDaq could reach the 11,700 range. If momentum keeps up that’s where we’re headed – an additional 12-15% decline in market value in addition to the recent volatility. From the market’s high in December that’s a nearly 30% decline in market value.
I’m not here to frighten you. I do, however, think it’s important to be realistic about where things are headed and plan accordingly. Let’s try to look at this as an opportunity to reallocate and ride the wave back up when the time is right. That’s what we’re doing at AllOne.
Having said that, let’s discuss the positive. The market has always recovered and, more often than not, it has ended up positive in a matter of 12-months. Keith Lerner, an economist, said “in 9 of the last 12 geopolitical shock events, the S&P 500 Index was higher 12 months later, with an average 12-month return of 8.6%.” (SEE CHART BELOW)
I’ve also inserted a good article on the recovery of the market’s throughout the history of geopolitical crisis. I suggest taking a look at it as it does paint a more positive, long-term picture (for the market at least).
Article found HERE
Please reach out to me if you have any questions or concerns. I’d be grateful to connect.
Schedule a call with me HERE
Warmly,
Mark Sauer
info@AllOneWealth.com
+1(310)355-8286
