Stock Market Volatility

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Putin's invasion is a tragedy for 40 million+ Ukrainian people. I fear there will be much, much more bloodshed.

For most of us, our problems are trivial in comparison. I hope there is increased recognition that we must nurture and protect our freedom and democracy to keep it that way.

On top of war in eastern Europe, we have escalating inflation including energy prices, projections of rising interest rates and seemingly daily headlines of stocks tanking. Naturally, many investors are anxious about stock holdings and their retirement savings.

I can't predict where stocks will go in the short term (I expect lots of volatility). But, absent unprecedented calamity, I believe stocks will do what they have always have done: move higher over time. Long term investors who have stuck it out and ignored panicky markets have always been handsomely rewarded. I do not see why this time will be different. Living with market volatility is the price we must pay to have the opportunity to earn a good return over time.

As measured by the S&P 500 index, stocks are about 10% below the all-time highs reached in early January but are 13% higher that one year ago.

As always, make sure you are comfortable with your overall mix of stocks vs. bonds (Chapter 9) and don't get reactive to the daily headlines.

If you have any questions or comments, just email me at larry@larrybates.ca.
 
Larry

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