Towards the end of March and early April, the stock and bond markets experienced a sudden downturn, fueled by uncertainty of federal budgets, the threatened implementation of tariffs, their possible effects on the price of goods. People lost between 10% and 20% of their equity investments in a only a couple of weeks. In an unprecedented rebound, the markets not only recouped those losses within 60 days, but now show a net growth of 7% for the year.
In the past, market fluctuations of this magnitude took far longer to correct. In 2022, the Federal Reserve raised the interest rates significantly in an effort to prevent inflation; this sent the markets downward, and only over the course of a year did the markets reach their previous highs. In the recession of 2008, it took two years for the markets to register overall growth.
If the presidential administration follows through on its threat to implement broad tariffs again in August, there is no telling how the market will react or how quickly it will rebound. That’s the reason why Isakov Planning Group emphasizes a much longer-term view. It is far more useful to understand the root of the market decline, its breadth (does it affect everyone?), and the factors that may reverse it.
Taking this longer view is easy for us, because we know our clients individually, we know their needs, and we know what they are expecting from their investment strategy. That last point is exceedingly important: People need to know how they are invested and why they are invested in a particular way. In other words, don’t simply accept your financial advisor’s investment recommendations.
Our clients are active partners in determining investment strategy—they are active participants. That means we expect them to be intentional with their investment strategy. What types of technologies do you or do you not want to support? On another level, is your strategy geared towards quickly accumulating wealth for early retirement or to support a comfortable lifestyle after age 72?
It is extremely difficult to stay focused on your intentional investment strategy and your mid- and long-term financial goals if short-term market fluctuations get in the way of your vision. At Isakov Planning Group, we want to see your vision through, and help you reach your original objectives, through market upturns and downturns. Contact us today to learn how our financial advisors help you stay focused on the real, long-term goal.