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!


Kindest regards,

Bob, Ken, Jim, Zach, and James


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Notes & Disclaimer: Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, or correctness. This information is provided “AS IS” without any warranty of any kind. All historical returns data should be considered hypothetical. Past performance is no guarantee of future results.

This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. Investment advisory services are offered through Summit Financial Consulting, LLC, an SEC registered investment advisor. Registration does not imply a certain level of skill or training. 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 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. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. The Sherman Group, LLC is not associated with Summit Financial Consulting, LLC in any way, other than a research sharing partnership. Back testing is more heavily scrutinized than any other type of investment analysis because it can be updated to take advantage of past data. The algorithms and trading signals that we receive from the Sherman Group, LLC were created using back testing with the goal of creating a sustainable research process. We have reviewed data from the entire 20 year period which was mostly back tested, and have also personally reviewed the live data for the past 5 years and feel comfortable with it, but we encourage you to meet with us and ask questions so you are fully informed on what we plan to do with your investment assets at TD Ameritrade. It is important to look at fees, taxable repercussions, and trading frequency when looking at a rate of return number. There is no perfect system or research feed, and Sherman Group, LLC has had both longer term and short-term periods where they lost money. Investing involves risk, and these portfolios are no exception.