A rise in COVID cases and unfortunate deaths. New variants. Travel bans. Things that we hoped we could leave behind for good at the end of 2020 and early 2021 are seemingly ready to greet us as we go into 2022. Additionally, we have high inflation, high gas prices, a broken supply chain, vaccine hesitancy and uncertainty, and a Fed that is certain to raise interest rates sooner rather than later. If ever there was a reason for financial planners to exist, you have to look no further than the past two years.
COVID has impacted everyone, but unfortunately some more than others. Some of the impacts have been painful and unimaginable. If you haven't done so already, then now is the time to start or re-focus on your financial plan. I am not just talking about investments, which I will get to, but I am talking about those "foundational" areas of the plan. My duty as a planner is to make sure your family is taken care of in the worst of times, and this is done in the foundation. Without the foundation, the plan crumbles, just like a house would.
I have not met many that LOVE this part of the plan. It frankly stinks to have to think and talk about this stuff. This is where you have your insurances: life, disability, health, supplemental, etc. The reward in this part is USUALLY one that will not personally benefit you - although your family will. This does not alleviate all the pain, but it hopefully creates one less worry.
In Mid-August, I asked many of my retired, or soon-to-be retired, clients to take a more conservative approach with their investments. This was based on the previous mentioned factors, as well as an uncertainty with the U.S. foreign policy after a botched Afghanistan withdrawal. Also, as of this writing, we have not had a market correction in 2021. You can see in the chart below how often we have such an occurrence. Is it a forgone conclusion? Not at all, but sometimes history tends to repeat itself when it comes to the market.
Sources: FactSet, Standard & Poor’s, J.P. Morgan Asset Management - Guide to the Markets. Data is as of September 20, 2021. Analysis is based on the J.P. Morgan Guide to the Markets – Principles for Successful Long-term Investing.
Although these times are not easy, and it is one I never imagined, it is why I chose this profession. Bring it on '22!