Global markets have been volatile so far this year, increasing last week following Russia’s invasion of Ukraine, initially selling off deeply, only to rebound by the end of the day. While most people’s concern lies with the human toll in Ukraine, investors don’t like to see volatility when it comes to their investment portfolios.

However, sell-offs like the one we have experienced over the last few weeks are quite common.  As the chart below shows; looking back at all the years since 1980 the average sell-off per year was 14.2%.  Despite these large sell-offs the equity markets still posted positive year-end returns 27 out of the 35 periods studied. 

How to Read the Chart

Looking at 1980; the market ended the year up 26%; despite a mid-year fall of -17%, in 2003 the markets closed up 26% even though it experienced a mid-year decline of -14%.

Despite the conflict in Ukraine, high inflation, rising interest rates and transitioning to post-pandemic fiscal and monetary policies, Moody’s Investors Services says the global economy is transitioning to stable growth. In a recent report, the rating agency forecast 4.3% growth for the G20 in 2022, less than previous years, but still above the long-term trend.

Volatility is common; two steps forward one step back. 

If you would like to discuss how your portfolio has held up over the last few weeks; please don’t hesitate to give me a call.

Have a great weekend,

Tracey

Source:  Myles Zyblock, Chief Investment Strategist, Dynamic Funds, 2015=10-01, Investment Executive article, What advisors are telling clients about Russia-Ukraine conflict by Daniel Calabretta, posted 02-28-22, Investment Executive article Risks abound but global economy stabilizing: Moody’s, by James Langton posted 02-28-22, Edgepoint Wealth Management.

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