Broker Check

Market Perspective

October 26, 2022
Share |

The S&P has fallen 21% from December 31st, 2021, through Friday, October 21st, 2022. At first glance that decline is troubling. However, let’s look at some perspective on this. Over the past 5 years, the S&P has grown from 2569 on October 24, 2017, to 3752 on October 21st, 2022, or 46% (about 8% annualized). That number does not include dividends, adding another 1-2% to the total return. Not a bad five-year return even with the recent market decline. *

The S&P ended 2019 at 3230 ( a 28% increase for the year), dropped nearly 31% during Covid to 2237 in March of 2020, and ended the year at 3756 (a 16% increase for the year). Quite a roller coaster.

Then the market exploded upward from 3756 at the end of 2020 to finish 2021 at 4766 for a gain of 26%. This gain was primarily driven by the rise in the price of 10 stocks in the S&P. One could easily argue that these gains were not real, and the market might correct. And it did in 2022. It felt like an early Christmas in 2021 and then the Grinch took back all the presents in 2022.

Therefore, if one looks at the past five years, we have done very well in the market, even with the roller coaster ride. While giving back all the artificial market gains from 2021 does not feel good, the market longer term has been rewarding.

As corporate profits continue to rise over time, so should the market.

Yahoo! Finance 10/24/2022

You have been through these market declines in the past and we will get through this one too. We are committed to you and your financial future.

Please call us to discuss any market concerns.

 

*Yahoo! Finance October 24th, 2022

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. For more information on the risks associated with the strategies and product types discussed please visit https://lplresearch.com/Risks  

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

For a list of descriptions of the indexes and economic terms referenced in this publication, please visit our website at lplresearch.com/definitions.

For a complete list of descriptions of the indexes and economic terms referenced in this publication, please visit our website at lplresearch.com/definitions

The options voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and in no guarantee of future results. All indices are unmanaged and may not be invested into directly.

 Securities and advisory services offered through LPL Financial, a registered investment advisor and broker-dealer. Member FINRA/SIPC.