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Tech Sector Turmoil and the Bear Market

Jun 28, 2022 2:41:14 PM
written by The Retirement Group

During the intensely volatile first 100 trading days of 2022, the stocks of companies in the S&P 500 index delivered their worst performance since 1970.1 The S&P 500 continued to tumble, and the benchmark index descended into a bear market — typically defined as a sustained drop in stock prices of at least 20% — on June 13, 2022. When the market closed, the S&P 500 had dropped 21.8% from its January 3 peak, and the tech-heavy NASDAQ, already in bear territory, had plunged 32.7% from its November 19, 2021 peak.2


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posted in Financial Planning, Market Volatility, Bear Market

Don't Panic: A Bull Case for Equities

Jun 3, 2022 8:46:00 AM
written by The Retirement Group

DON’T PANIC

Both stocks and bonds are off to one of their worst starts to the year in history. The S&P 500 Index declined -12.92% through the end of April 2022, and other broad market indices were similarly down double digits.1

What’s worse, investors, like those living in Texas or New York, are losing nearly as much on the fixed income side of their portfolios as they are on the equity side. The Bloomberg U.S. Aggregate bond index, a broad measure of domestic fixed income, suffered its largest quarterly loss (-5.93%) since 1980 to start the year2 and is down -9.50% through the end of April. The current environment has left investors feeling like there is nowhere to hide, and even prompted some to exit markets or go to cash, which is why we find it important to discuss this with our clients from Fortune 500.

Such a rash response could lead investors to miss out on an eventual rebound since historical equity performance post-corrections, as well as strong underlying economic fundamentals, suggest a bounce back in stocks will occur sooner rather than later. If you are unsure about your specific situation, feel free to speak to one of our retirement-focused advisors today!


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posted in Stock Market, Market Volatility, Inflation, Economy

A Note Regarding Recent Performance

May 30, 2022 1:02:00 PM
written by The Retirement Group

We know the market has experienced some volatility lately, which may provoke some anxiety when you open your most recent statement. It can be hard to stomach seeing some red in your account! But don’t be alarmed – changes in value are typical and expected when investing in the market.

As investors, we find that maintaining a long-term perspective helps keep us grounded. We know that the market goes up more often than it goes down and that short-term fluctuations in price indicate a healthy market of buyers and sellers. It can feel counterintuitive, but the current environment may be a buying opportunity! In fact, there’s Nobel Prize-winning research into the effect that losses have on our behavior. We encourage you to take a moment to review the linked article! If you still feel uncertain about your specific situation, feel free to give us a call and one of our retirement-focused advisors in your area can speak with you.


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posted in Market Volatility, Inflation, Economy, Performance

Global Finance: Kicking Russia Out of SWIFT

Mar 13, 2022 7:17:47 PM
written by The Retirement Group

Over the past days, the United States and other countries have imposed various sanctions on Russia for its invasion of Ukraine. One sanction that was discussed initially but not implemented immediately was blocking Russia from the SWIFT global banking network. However, the United States and European allies eventually agreed to remove selected Russian banks from SWIFT. What does this mean?

What is the SWIFT financial system?

SWIFT, which stands for the Society for Worldwide Interbank Financial Telecommunication, is a cooperative of financial institutions formed in 1973. Headquartered in Belgium, SWIFT is overseen by the National Bank of Belgium along with other major central banks, including the U.S. Federal Reserve System, the Bank of England, and the European Central Bank.1


SWIFT isn't a traditional bank and doesn't move money like a traditional bank. Rather, it moves information about money, acting as a secure global messaging system that connects more than 11,000 financial institutions in over 200 countries and territories around the world, alerting banks when transactions are about to take place and facilitating cross-border financial activity.2


SWIFT communications are important to the global banking system. In 2021, SWIFT recorded an average of 42 million messages per day, an 11.4% increase over 2020.3


Blocking selected Russian banks from SWIFT is a drastic measure that could potentially result in significant economic pain for Russia, both immediately and over the long term. It essentially cuts Russia off from the global financial system.4

What was behind the initial delay in expelling Russia from SWIFT?

The United States favored blocking Russia from SWIFT at the outset, but couldn't do so unilaterally. Such a move required the support of other European nations, and some of the 27-member nations in the European Union (EU) were initially hesitant. Because Russia is a key energy supplier to Europe, some European nations worried that expelling Russia from SWIFT could potentially disrupt natural gas supplies and make it more costly and complicated to send payments for energy and other goods.5 Another reason for hesitancy was the fear of jeopardizing a fragile post-COVID economic recovery in Europe.6


Additionally, there were concerns that blocking Russia from SWIFT would cause it to find alternative ways to participate in the global economy by forging stronger ties with China, developing its own financial messaging system, and/or creating its own digital currency. There was also the risk that Russia could attempt to disrupt the global economy through ransomware attacks.7


While the United States waited for buy-in from all 27-member EU nations to block Russia from SWIFT, it focused on targeting Russian banks directly in an effort to limit their ability to raise capital and access U.S. dollars. Russia's financial services sector is heavily dominated by state-owned entities that rely on the U.S. financial system to conduct their business activities, both within Russia and internationally. By targeting Russian banks directly with sanctions, the United States attempted to isolate Russia from international finance and commerce.8


Treasury Secretary Janet Yellen stated, "Treasury is taking serious and unprecedented action to deliver swift and severe consequences to the Kremlin and significantly impair their ability to use the Russian economy and financial system to further their malign activity."9

The road to SWIFT sanctions

Then on February 26, 2022, after intense international diplomacy and an impassioned plea by Ukraine President Volodymyr Zelensky that by all accounts moved world leaders to act, the United States, Canada, the European Union, and the United Kingdom agreed to kick selected Russian banks off the SWIFT financial network.10In making the announcement, European Commission President Ursula von der Leyen stated, "This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally."11


Not all Russian banks were cut off from SWIFT, though. As a compromise, some smaller banks were allowed to remain to allow European nations to pay for natural gas (the EU imports 40% of its natural gas from Russia) and to allow the United States to pay for oil.12


Along with blocking certain Russian banks from SWIFT, the United States, Canada, the European Union, and the United Kingdom also announced that they would take additional actions against Russia's central bank to prevent it from deploying its more than $600 billion in reserves in attempt to "sanction-proof" Russia's economy. Ms. von der Leyen stated, "We will paralyze the assets of Russia's central bank."13


This is a fluid situation, and ongoing diplomacy around sanctions is likely in the days and weeks ahead.

1-2, 4) nbcnews.com, February 24, 2022
3) SWIFT FIN Traffic & Figures, 2022
5) The New York Times, February 24, 2022
6) The New York Times, February 25, 2022
7) The New York Times, February 23, 2022
8-9) U.S. Department of the Treasury, February 24, 2022
10) The Washington Post, February 27, 2022
11-13) The Wall Street Journal, February 26, 2022

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posted in Market Volatility, Finances

Colliding Forces: Russia, Oil, Inflation, and Market Volatility

Mar 8, 2022 2:38:25 PM
written by The Retirement Group

The Russian invasion of Ukraine has drawn condemnation and punitive sanctions from the United States, Europe, and their allies. The humanitarian cost of war cannot be measured, and the long-term economic effects could take months or years to unfold. However, the early stages of the conflict pushed oil prices upward and sent the U.S. stock market plunging, only to see stocks bounce back and drop again — with more volatility likely.1

For now, it may be helpful to look at how the Russia-Ukraine conflict might affect the global oil market as well as U.S. consumers and investors.


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posted in Market Volatility, Inflation, Oil

Market Month: July 2021

Aug 5, 2021 8:15:00 AM
written by The Retirement Group

The Markets (as of market close July 30, 2021)

Stocks closed generally higher in July, despite a downturn at the end of the month. Second-quarter corporate earnings data was generally strong, although some megacap companies posted weaker-than-expected earnings results. Economic news was mostly favorable. The economy expanded at an annualized rate of 6.5%, 850,000 new jobs were added, while the number of new unemployment claims declined. Industrial production rose, as did new orders for durable goods.


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posted in Market Volatility, Market, July

Coping with Market Volatility: Could This Be a Chance to Rebalance at a Discount?

Apr 15, 2020 7:40:00 AM
written by The Retirement Group

In a volatile market, it's easy to allow your emotions to influence your investment decisions. But if you can keep your cool while those around you are losing theirs, you may be able to take advantage of potential opportunities.


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posted in Financial Planning, Lump Sum, Pension, Retirement Planning, Market Volatility

Coping with Market Volatility: Continuing to Invest May Help You Stay on Course

Apr 8, 2020 7:31:05 AM
written by The Retirement Group

In the current market environment, the value of your holdings may be fluctuating widely — and it's natural to feel tentative about further investment. But regularly adding to an account that's designed for a long-term goal may cushion the emotional impact of market swings. If losses are offset even in part by new savings, the bottom-line number on your statement might not be quite so discouraging. And a basic principle of investing is that buying during a down market may help your portfolio grow when the market turns upward again.


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posted in Financial Planning, Lump Sum, Pension, Retirement Planning, Market Volatility

Coping with Market Volatility: Avoid Rash Decisions

Mar 31, 2020 7:29:17 AM
written by The Retirement Group

If you've been watching the market lately, perhaps the first question on your mind is, "Should I make a big change in my investments?" In reality, a volatile market isn't the best time to do a complete makeover of your portfolio, especially if you have long-term financial goals you're trying to address. Even if you feel that your portfolio needs adjusting, maintaining a firm grasp on your fundamental investment strategy can help you be more thoughtful about making any changes.


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posted in Financial Planning, Lump Sum, Pension, Retirement Planning, Market Volatility

6 Steps To Take In This Volatile Environment

Mar 19, 2020 11:07:21 AM
written by The Retirement Group

When the market is in a state of turbulence, it is important to have an investment strategy and stick to it. Taking the following steps may help you stay calm in a turbulent market:


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posted in Financial Planning, Lump Sum, Pension, Retirement Planning, Market Volatility

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