A Note on Recent Market Volatility
Dear Clients,
Recent market volatility has understandably created concern. In our view, recent market weakness is largely being driven by the conflict in the Middle East and the resulting jump in oil prices. Higher oil prices do not just affect what we pay at the pump. They ripple through much of the economy and can raise the cost of many goods and services, which adds to inflation concerns and puts pressure on financial markets.
While the recent market reaction has been uncomfortable, our view is that we may be approaching a peak in pessimism rather than the start of a prolonged downturn.
There are a few reasons for this:
High gas prices are felt quickly by households
Higher oil prices raise the cost of living more broadly
Ongoing conflict increases pressure for a resolution
Political pressure usually builds as public frustration grows
None of that means volatility disappears overnight, and markets may remain unsettled in the short term. But markets often feel the worst right before conditions begin to improve. The point of greatest discomfort is often also the point when the outlook starts to shift.
For that reason, our advice remains the same:
Stay disciplined. Stay invested. Avoid emotional decisions.
Selling during periods of fear rarely improves long-term outcomes. Well-built portfolios are designed with periods like this in mind, and short-term setbacks are a normal part of investing. For long term investors, the right response is usually patience, perspective, and discipline.
We continue to monitor conditions closely and will make changes where warranted by fundamentals, not by headlines. If your personal circumstances or income needs have changed, that is always worth a conversation. Otherwise, the most important thing is to remain focused on your long term plan.
Sincerely,
Steve & Quinn
