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Planning on Market Volatility

February 22, 2022
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2022 has been one of the worst starts to a year ever for stocks, but should investors be worried or even surprised? In the latest LPL Street View, Ryan Detrick discusses why volatility is normal and why investors need to prepare for it.

Ryan notes that even in up years, stocks pullback 11% on average, and given the big rally over the past few years, maybe this early 2022 volatility shouldn’t be a surprise. In fact, the S&P 500 Index hasn’t had a 10% correction in nearly two years, again, suggesting some volatility is perfectly normal. Then adding in the fact the Fed is about to start hiking rates, the aging economic cycle, and it is a midterm year (the most volatile of the 4-year cycle), investors should be buckling up their seats belts, as volatility could continue. But the underlying fundamentals of the economy remain quite strong, led by a healthy consumer and strong corporate earnings backdrop. Suggesting any weakness will likely be an opportunity for longer-term investors.

 

 

 

 

 

 

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth in the podcast may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. All indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index data is from FactSet.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC. 

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