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May 2022 Markets in Focus – A Rare Year in Markets

Recent market shifts have many people scratching their heads, and inflation has everyone feeling the pinch of higher prices. If it feels more stressful than usual, you might be on to something.

To put things in perspective, OneDigital Chief Investment Officer Saumen Chattopadhyay and the team share what’s happening with the markets and what we should know and do when things “get cold,” so to speak. The clips are taken from OneDigital's recent Economic + Market Update Webinar for Retirement + Wealth clients.

Clip 1: A Rare Year in Markets

It’s very uncommon for both stocks and bonds to be down significantly simultaneously. A variety of factors during the pandemic—including supply chain disruptions, labor shortages, and rising inflation—meant that the Federal government had to take action in the form of stimulus payments. And so, the money supply in the economy went up when people were home. People spent less on services and more on goods (hence the inflation).

With these changes, the Fed has started to raise interest rates in order to curb inflation. Rising interest rates meant bond prices went down at the same time that stocks were dropping.

When stocks are down, people naturally think about the money they have invested and the risks they’re facing.

Clip 2: Reducing Risk in Your Portfolio

There is more than one way to reduce risk in your portfolio. You can diversify the investments in your portfolio or hold your investments for a longer period of time. As Saumen states, “time in the market is the best protection you can have."

Clip 3: Put on Layers When You Get Cold

Just like putting on a coat to protect yourself from a cold Chicago winter, there are ways to layer up and be ready to face the ups and downs of the market.

What about people who are concerned about their retirement savings? Here’s a bonus clip.

Bonus: Time Horizon for Those at or Nearing Retirement

For retirees and those soon to be retired, there is reassurance in understanding the true time horizon of your investments. Portfolio Manager Carey Morrison reminds us that even those newly retired may have years before they need to withdraw the money.

Want to listen in on the entire discussion? Watch the May 12 Markets in Focus webinar from the OneDigital Retirement + Wealth investment team, or revisit the Q2 Markets In Focus post to read more about the rocky start to the year.

Investment advice offered through OneDigital Investment Advisors, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.

The material and opinions provided in this post are meant for general illustration and/or informational purposes only and should not be construed as investment, tax, or legal advice for any individual. Although the information has been gathered from sources believed to be reliable, each reader must decide whether it is valid and applicable to his/her own unique circumstances. To determine which investment(s) may be appropriate for you, consult your financial adviser prior to investing. Diversification does not protect an investor from market risk and does not ensure a profit. Any economic forecasts made in this commentary are merely opinion, and any referenced performance data is historical. As a result, neither is a guarantee of future results, as all investments involve risk. All referenced indices are not managed and may not be invested into directly.

Some information has been obtained from sources we believe to be reliable. OneDigital Investment Advisors makes no representation as to the accuracy or validity of this information.

Investment advice offered through OneDigital Investment Advisors, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.