Below are a couple of my thoughts on the market.
- Volatility is from the market trying to find the price bottom (aka the floor).
- Panic sellers and speculators (thinking they can eventually buy back lower) are being met with investors with excess cash trying to find bargains.
- This time everything feels different - because it is. We’ve haven't had inflation like this for 40 years, and one of two things can happen:
1. Inflation is transitory, the supply chains is fixed, and the markets recover. This is what the markets predict will happen based on bond market activity.
2. Inflation continues long term, putting additional downward pressure on valuations. Right now, the probability of this is higher than in the past, but the markets do not expect this to happen.
- From the start, our portfolios were always built to weather the storm and for long-term appreciation via ultra-low cost, well-diversified, high-quality investments. Our documented history of performance with these investments show they have served us well in up markets, and year-to-date figures show they continue to serve us well in the down markets.