Financial markets dread uncertainty , and times of war certainly qualify — especially because it is currently unclear what the involvement of the U . S ., E . U . and other allies will be in the Russia-Ukraine conflict . Unfortunately , war is part of the world we live in and always will be . Combine this conflict with the high inflation we are currently experiencing in our economy , and the results have been significantly negative . As I write this on February 24 , 2022 , the S & P 500 is now down 11.34 % for the year , and the NASDAQ is -16.67%. ¹ Oil prices are skyrocketing as well , with WTI Crude reaching over $ 99 per barrel . While it is easy to focus on all the negatives and uncertainties and make knee-jerk reactions , that is not the prudent thing to do for most investors .

In the past six months , we were recommending to many clients to rebalance their portfolios back to the allocation percentages they had in the prior year if they had become too aggressive . ( See my article from last quarter ’ s magazine .) Rebalancing is key to keeping risk levels where they should be in portfolios , and the time to do that is when markets are up . If you did not do so at that time , all is not lost . It may be a bit more of a roller coaster ride , but the markets will recover .

Let ’ s take a bit of a look at history . The chart below illustrates the S & P 500 returns from 1926-2020 . ² As one can see , we have seen several downturns over this time frame , but the bullish markets have far outweighed the bear markets . Obviously , the worst period was during the Great Depression . However , World War II actually pulled us out of it quicker . The S & P companies were up 210 % in the 49-month period from 1942 to 1946 , after losing 19.8 % initially in 143 days . ³ If one looks at the Gulf War of 1990-91 , the S & P 500 performed well after losing 16.9 % over a 71-day period and recovered fully in 189 days . ⁴ There are many other examples of this initial drop and subsequent recovery in history .

Even without wars , markets are volatile historically . In fact , from 1928-2021 , 63 % of years have had a 10 % drop or more , and 26 % of years have had a 20 % drop or more . That equates to a 10 % drop every two years and a 20 % drop every seven years on average . ⁵ In 2020 , when we faced the pandemic , a frozen and plummeting economy , a contentious political climate , and social unrest , the S & P 500 took less than six months to recover all of the 34 % it dropped beginning in February .

So , what are the best steps to take now ? For people who have cash on hand , it might be a good time to start buying a bit now or in the near future . Things are on sale from the previous highs . It may not be the bottom , but the deals are significantly better than a few months ago . We are back to where the S & P was in April of 2021 currently . For people who are retired and taking distributions from portfolios , it is important to avoid selling investments with the biggest losses for distributions that are needed . For those who do not need money anytime soon , the best policy for most is to ride it out . Timing the markets rarely works , because it requires one to rebuy when prices are lower than they were when the investments were sold . Most people do not feel good about doing that because the news gets more negative as it drops , especially those who panic and sell in the first place . Remember , investing is a marathon and not a sprint , and a longterm focus will benefit investors the most .

1 . marketwatch . com 2 . Dimensional Fund Advisors 3 . LPL Research , S & P Dow Jones Indices , CFRA , 1 / 6 / 2020 4 . LPL Research , S & P Dow Jones Indices , CFRA , 1 / 6 / 2020 5 . awealthofcommonsense . com

Securities offered through Triad Advisors Member FINRA / SIPC . Advisory Services offered through Triad Hybrid Solutions LLC , a registered investment advisor . Justabout Wealth Management LLC and Triad Advisors , LLC are not affiliated . Past performance is not indicative of future results .

David Hoffmann has 24 + years of experience as a Financial Advisor and is the CEO of Justabout Wealth Management . As a CFP ® designee , he counsels clients on financial planning and investments . He also serves companies by providing retirement plans .

For further information , contact David at : Justabout Wealth Management , 375 Southpointe Blvd . Suite 360 , Canonsburg , PA 15317 Office : 724.754.1440 justaboutwealth . com

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IN Canon-Mac Spring 2022 | Page 15

YOUR FINANCES

DEALING WITH MARKET VOLATILITY IN TIMES OF WAR