Following a profitable 2021, the year 2022 started out with a thud. Fears about a Russian invasion of Ukraine combined with the Federal Reserve taking their foot off the gas pedal scared the markets. The tech-heavy Nasdaq dropped 8.98%, the Russell 2000 dropped 9.66%, the bond index AGG lost 2.0%, and the S&P 500 dropped 5.3%.
Sources: NASDAQ – Yahoo Finance | Russell – Yahoo Finance | AGG – Yahoo Finance | S&P – Yahoo Finance
Unpacking Recent Market Results
Our Conservative, Moderate, and Aggressive portfolios were negative. Still, all three performed well comparatively because we invested a portion of our portfolios in Gold, sold some bonds high, and bought stocks at the bottom before the rebound at month-end. The Stock Rotation showed its volatility potential with a heavy investment in technology companies. We encourage you to look at your statements and then give us a call to discuss them if you have questions or want to discuss your returns.
Looking Towards the Future
Our outlook for the markets is mixed depending upon your time frame. It seems like almost every year, the market drops at least 10% once, and at the low points of January, that occurred, so perhaps we got it out of the way early in the year. However, we believe that by year-end, stocks will rebound for many reasons, including low unemployment, the reduction of COVID restrictions and shutdowns, a very robust housing market, and consumer spending from Millennials who have hit their peak spending years.
More Market Considerations
In the very short term, we believe February has the potential to be a positive month. In March, the Federal Reserve is planning to increase interest rates, which may lead to a drop in the stock markets, which we believe will be temporary. This is why we manage our active portfolios daily, and if that seems likely, we will adjust the portfolios to help reduce risk. We made some adjustments at the beginning of February, which we believe have the potential to help performance.
Tax Preparation Updates
A reminder that you can contribute to an IRA or Roth IRA for 2021 until April of 2022. If you’d like to make a deposit for last year, please let us know ASAP.
At Summit Tax Services (in association with Heemer Klein and Company, CPA), we can help you prepare your income taxes. Many of our clients enjoy having us gather all their investment tax documents for them rather than having to worry about it themselves. If you’d like a quote, just let us know. We can have you drop off, upload, or we can even send you an envelope to mail us your tax documents.
Have More Questions?
We would love to meet with you to discuss investments, retirement planning, college planning for kids and grandkids, tax preparation, health insurance, and other financial planning topics. To schedule an appointment, don’t hesitate to get in touch with our office by calling (586) 226-2100!
If you’ve had any changes to your income, job status, marital status, 401K options, address, or any other financial changes, please get in touch with us right away. We hope you and your family have an excellent, safe, healthy start to the year!
Bob, Ken, Jim, Zach, and James
Investment advisory services are offered through Summit Financial Consulting, LLC, a MI registered investment advisor. Summit Financial Consulting Investment Advisor Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Note: Please update Summit Financial Consulting LLC if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting’s investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an additional copy.
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