Do you ever feel like you’re in the first car of a never-ending roller coaster ride? This year’s Stock Market feels similarly tumultuous. Recently, there have been a lot of data points that complicate planning for retirement. For example, it was predicted at the May 4th Federal Open Market Committee meeting that there was a 100% chance that the Federal Reserve would raise the rate by a half-point. St. Louis Fed President James Bullard, the lone dissenter from the Fed’s quarter-point rate increase in March because he favored a half-point move, even said a 75-basis-point hike shouldn’t be ruled out (, although it wasn’t his base case). (1) Rates were ultimately raised by 50 basis points. The increases in interest rates may cause people to rethink their current portfolio and asset allocations. In my opinion, the Federal Reserve should have been raising rates by the end of last year instead of waiting until now because that’s putting tremendous pressure on the bond market. We’re also starting to see stocks caving beginning to cave in as well.

Additionally, we’ve seen corporate earnings beating estimates in the last few weeks. In fact, 79% of companies beat their estimated earnings. (2) Yet the markets are not following suit. Just over two weeks ago, the NASDAQ had the most significant drop since the COVID crisis of 2020. It was approximately 23% below its November 22, 2021 peak. When the index is more than 20% below its high point, we’re witnessing bear market territory. It has not affected the S&P 500 or Dow Jones Industrial Average yet. But there are a lot of stocks within the S&P 500 that are in bear market territory. We have bellwethers like Apple, who was down almost 12% year to date just this last week. So, there’s a lot of financial nervousness right now.

There are also many exogenous events going on that are adding to this market decline.The Russia and Ukraine conflict is on people’s minds, and anytime the word “nuclear” is brought into play, it creates fear of World War III. While I don’t believe that World War III will take place, people are talking about it, making us more nervous. 

I have been through these bear markets before. I’ve had this experience with some of Osiwala Financial Group’s clients. And, as of yet, our clients are not panicking. Adjustments may have to be made, but OFG clients can relate to what’s going on back to their retirement plan. If you don’t have a retirement plan, you may not understand the power behind the numbers that represent your retirement future. Therefore, I ask you to join us. Have a conversation with an OFG Advisor and talk to us about the importance of having a financial plan created by a Fiduciary to help you understand what’s happening and the real impact it might have on your future. (To schedule an appointment, click HERE.)

Market volatility is on many people’s minds, and for good reason. It’s uncomfortable. You can’t turn on the news without hearing what’s happening in the markets and fearing a recession. Pre-retirees and those who are already retired want to know what is truly going on, and how to protect themselves. Let me give you an example of the importance of a retirement plan. In this scenario, the individual has about 50% in equities and about 50% in fixed income. He is in his mid-60s and has enough money to last through retirement. The part of his assets that is s  is designed to be legacy money (That’s what his beneficiaries will inherit). The other 50% fixed income is what he will live off of for the next 25 years, and there’s plenty to do that. In that situation, I can have a simple conversation that his plan will work and he will be able to get all the income he needs. Now, if we hold equities at 50% of your portfolio, that part will be more volatile. But if this is for a longer-term legacy, we don’t need to be too concerned. However, if he would feel more comfortable with less volatility on the long-term legacy portion and he accepts the potentially lower returns over the long-term, we could certainly reduce the equity position. At that point, the individual leaves it alone or requests adjustments to the plan to get him to his end goals.

The point of that story is that the individual had a retirement plan. He was already protected when the world events started to go south. Again, that doesn’t mean that he doesn’t want adjustments made, but that’s the point of the plan. It’s been stress-tested to protect against certain world events but still has the flexibility to make some changes when needed. How do you know if you are at risk if you don’t have that plan? The solution? Call Osiwala Financial Group and let us create a financial plan to help you reach your retirement goals, no matter what volatility the markets go through. To schedule that appointment or to have a simple 20-minute conversation by phone with one of our Advisors, click HERE.