Market Update: Is the Trend Changing?

Video Transcript:

Greetings from sunny Sarasota, Florida. We are at an important time in the investment markets as trends are changing quickly. We want to update you about what we see and what we are doing to help guide you through these times. Since the pandemic hit two years ago, there has been massive stimulus in the economy. The federal reserve dropped interest rates to all-time lows. The results have been predictable. Real estate and stock prices have moved up significantly through 2021. But now, it looks like trends are changing. Mortgage rates have gone up very quickly, doubling the cost of mortgage interest in just a few months. This usually results in a slowdown in the real estate industry.

Gasoline prices have also risen rapidly. Another drag on the economy. The first quarter of 2022 has not been good for stocks or bonds as you can see from this chart. All categories of stocks, S&P 500, Dow Jones, and NASDAQ are all down for the quarter. So what's the right investment strategy for prudent investors now. We have been recommending that our clients keep more money than usual in short-term, low-risk funds. That strategy has paid off for us in the last few months.

We don't expect to stay in money markets for a long time, but ultra-safe funds have been a good haven. We think we could have a few more months of turbulence before it's time to put some of this money to work at better prices. We will keep you posted. Please let us know if you have any questions or changes in your financial world. See you soon.