“The markets – whether investors like to believe so or not – have always been unpredictable.”
– Ronald W. Rogé, Founder of R.W. Rogé & Company, Inc.
By Steven Rogé, MBA, CFP®, AIF®
Chief Investment Officer and CEO
The recent stock market volatility has been a topic of significant concern, and it’s completely understandable for investors to feel uneasy when things take a sudden dip. As a fee-only financial planning and investment management firm in business for over 35 years, we have witnessed many such fluctuations. This is not the first decline we’ve seen, and it certainly won’t be the last. With that in mind, let’s take a moment to put the current market movements into perspective.
Understanding Market Corrections and Their Impact
Market corrections are pretty common in the world of investing. Historically, the stock market tends to see corrections of 10% or more roughly every 12 to 18 months. While these shifts can be a bit nerve-wracking, they’re a normal part of the market cycle. In fact, they often help reset valuations and create new opportunities for long-term investors. Additionally, despite periodic corrections, the stock market’s long-term trend has been upward. Over the past 50 years, the S&P 500 has delivered an average annual return of about 8-10%.
Recent Market Volatility and Interest Rate Changes
The recent market decline is likely due to the concern that the Federal Reserve may have held interest rates too high for too long, which could impact the economy. However, we anticipate that interest rates will decrease in the coming months. This adjustment should positively influence our clients’ bond investments, offering potential gains as bond prices typically rise when interest rates fall.
Key Reflections During Market Volatility
During periods of market volatility, we often recommend that our clients reflect on the following three questions:
- “Do I have a financial plan with specific goals and a long-term perspective for my investments?”
If yes, and your goals are unchanged, it’s best to remain patient and avoid any immediate action. - “Do I have an emergency fund for short-term unexpected expenses?”
If yes, rely on this fund rather than selling investments during a market downturn. - “Do I need any of my portfolio’s money in the immediate future (tomorrow, next week, next month, or next year)?”
If no, consider turning off financial news channels to reduce anxiety. Remember, markets historically recover, rising approximately 66% of the time, which presents opportunities for long-term investors.
Staying Focused on Long-Term Goals During Volatility
Although market volatility can be concerning, remaining focused on your long-term financial goals, and avoiding impulsive decisions based on short-term market movements is important. Our investment strategy is designed to withstand market fluctuations, and we continue to monitor the situation closely to make informed decisions that align with your best interests. We encourage you to maintain a long-term perspective and trust in the diversified investment plan we have developed for you.
For additional support and strategies, download our free guide “Adjust Your Sails: 4 Tips for Navigating Market Volatility,” which includes a comprehensive market volatility checklist.
If you have any concerns or would like to discuss your investment strategy further, please contact our team of Certified Financial Planner® (CFP®) professionals at 631-218-0077 or at info@rwroge.com. We are here to support you and provide guidance to help you Plan, Achieve, and Live® the life you desire.
R.W. Rogé & Company, Inc. is an independent, fee-only financial planning and investment management firm serving clients locally and virtually across the country, with Long Island, New York, Beverly, Massachusetts, and Naples, Florida office locations. R.W. Rogé & Company, Inc. was founded on a “client first” culture and proudly commits to acting in your best interest as a fiduciary. We have helped clients Plan, Achieve, and Live® the life they want since 1986. To learn more about how we do this, click here.
