Screen Shot 2021-02-15 at 6.15.26 AM

Market Commentary – Royal Fund Management

Share on facebook
Share on twitter
Share on linkedin
Share on email

Mark Sorenson | February 21, 2022

The market has weakened over the last few days based on two main uncertainties. This market commentary should provide some perspective during market corrections like we are experiencing right now.

It is interesting that the market historically goes up 80% of the time, but we tend to forget, this also means the market goes down 20% of the time. It is how we react during times of uncertainty that has the most significant impact on our longer-term performance. It has been said that human beings make lousy investors. This is because it is hard to ignore the heart pain felt during times like the present. This causes emotional decisions that often manifest regret in time. It becomes a battle over heart and mind. Even though you know the market always recovers, and often in a relatively short period of time, the emotions are hard to put aside. Hopefully this commentary will help.

The market always overdoes it during times like this which creates the typical V-bottom, when the recovery can nearly be as dramatic as the weakness itself. There is a lot of evidence that a bottom is near. Indicators we watch suggest there is a tremendous amount of pessimism, which usually means we are about to reach the turning point. Below is a chart of the market during 2020 when Coronavirus put us into a short-term tailspin. You will see the sharp V-bottom that typically occurs right at the time investors are the most concerned, and then the rally begins. Those that succumb to the emotions of the time may not ever recover. You need to endure some near-term risk so that you are there when the market turns. As I have already mentioned, the initial recovery that forms the V-bottom is often as violent to the upside as was the selling during the uncertainty.

 

 

The two drivers of the current fear are interest rate hikes and the Russia/Ukraine geopolitical issue. Let’s start with the uncertainty caused by Fed tightening. Higher interest rates and inflation do not have a major impact on the markets until they rise to the level that curtails economic activity. Interest rates are still very low by historical standards. I started in this business in 1982 when mortgage and CD rates were in the high teens. The Fed raised interest rates 8 times from 2016-2018 to a higher level than now, but the market still did well after the initial reaction to the policy shift. The chart below shows the minus 10.3% start to 2016, but the S&P500 finished the year up 12%.

 

 

Now let’s discuss the Russia/Ukraine geopolitical issue. The market simply does not like uncertainty, but geopolitical events usually create a relatively shallow pullback and recoveries are historically quite fast. For example, even during Pearl Harbor the market went down about 3% and recovered that within a week. The market recovered just two days after the assassination of JFK. I think you would agree that this event does not compare to either of these examples.

There has been a major rotation out of growth stocks and into stocks that are considered less volatile. We also believe this rotation is near the end. There are now many value stocks with earnings growth in the single digits, that are trading at the same valuation as growth stocks with earnings growth of over 20% a year. Again, the market always overdoes it, so if you are a longer-term growth investor, stay the course. Quality growth stocks are likely to recover even faster than the market itself.

In conclusion, we feel this is a normal market correction and recovery will come with patience. The market always overdoes it to the downside which creates a dramatic turn off the bottom. After the initial downturn which created the current low on January 24th, we saw the typical 50% retracement which gets back half the losses. The next step is usually a test of the recent bottom and so far, we have held above that level. Whether the market low is already in the charts or not, we encourage our clients to avoid decisions based on the emotions of the moment and believe patience will be reward in time. Enjoy those and the things you love and try to look six months or more down the road. The underlying fundamentals always win, and earning growth is sound and economic growth is still above trend.

Want To Learn More?

Financial education is at the heart of all we do.  Check out all of our financial education resources.

Want To Get Started?

Our goal is your happiness and success. We’ll be here to help you retire with purpose on time.

“Investment Adviser Representative of and advisory services offered through Royal Fund Management, LLC, a SEC registered investment adviser.”

You Did It!

Congratulations on taking the first steps towards your financial future!
We have received your information and will be in touch
to schedule your appointment soon.

TWFC Logo BW copy

Bear Market Money Moves, WOI, 06/28/2022

Get Started Today

Episode #11 Audio

Video

Play Video

Summer Vacation Season Kicks Off, WOI, 06/02/21

Get Started Today

Financial Literacy Month 2021, WHO, 04/23/21

Get Started Today

Small Business Stimulus Update 2021, KIMT, 03/16/21

Get Started Today

Third Stimulus Bill 2021, KCCI, 03/16/21

Get Started Today

Where is my Stimulus Check? 2021, KCCI, 01/14/21

Get Started Today

Second Stimulus Bill Approved 2020, WHO, 12/28/20

Get Started Today

COVID-19 Vaccine/Stimulus Latest, KCCI, 12/16/20

Get Started Today

Episode #16 Audio

Video

Play Video

Episode #15 Audio

Video

Play Video

Episode #14 Audio

Video

Play Video

Episode #13 Audio

Video

Play Video

Episode #12 Audio

Video

Play Video

Episode #10 Audio

Video

Play Video

Episode #17 Audio

Video

Play Video

Episode #9 Audio

Video

Play Video

Episode #8 Audio

Video

Play Video

Episode #7 Audio

Video

Play Video

Episode #6 Audio

Video

Play Video

Episode #5 Audio

Video

Play Video

Episode #4 Audio

Video

Play Video

Episode #3 Audio

Video

Play Video

Episode #2 Audio

Video

Play Video

Episode #1 Audio

Video

Play Video

When to Claim Social Security

Get Started Today

The Triplett-Westendorf Financial Group Difference

Commitment & Discipline

When you work with us...

we help you structure a retirement income plan that reduces stress and anxiety so you can enjoy life in retirement. Through your commitment and discipline and the Triplett-Westendorf Financial process, we’ll help you identify any weak areas, define priorities, and build a stronger, clearer, more precise plan to achieve financial success.

We introduce you to financial strategies...

that you need but may not have heard of from other firms. Then we show you how to use those strategies to effectively maximize your retirement savings because you deserve the clarity, transparency, and comfort of owning a guaranteed retirement income that lasts as long as you do.

Income You
Can Count On

Ways You Benefit

Get your arms around your financial life...

once and for all when you work with us. After we take an inventory of your resources and goals, you’ll have clearer picture of where you are, which is essential to achieving the retirement you’ve worked so hard for. Along the way, we’ll answer your questions, educate and empower you to take charge of your financial affairs. Together, we’ll take the worry out of your money.

We Always Place You, the Client, First.

Organization

With us, you’ll get your arms around your financial life. We’ll do this together by taking a detailed inventory of your resources and goals.

Partnership

Our team gets to know you, and you get to know us. We work together every step of the way to make sure that your future is financially sound.

Objectivity

Hope is not a strategy. We work to clearly understand your goals and craft a plan that focuses on realistically meeting those goals.

Education

We find that informed clients are successful clients. You get answers to your questions and an education that will empower you to take control.

Proactivity

We are always looking forward to find and implement new strategies for you. We feel the best results are when we are ahead of changes, not reacting to them.

Accountability

We give you the clarity and transparency you deserve. We build your plan with your goals in mind and keep you involved and informed at every step.

Inflation Concerns 2021, WOI, 06/23/21

Get Started Today

Episode #18 Audio

Video

Play Video

Un-Retirement, WOI, 06/14/22

Get Started Today

Early Holiday Shopping, WOI-DT, 11_16_21

Get Started Today

Recession, WOI, 05/31/2022

Get Started Today

Interest Rates 05/17/22

Get Started Today

Saving For College

Get Started Today

Credit Scores WOI 4/19/22

Get Started Today

Bond Alternatives

Get Started Today

Bad Social Media Financial Advice, WOI, 04/05/22

Get Started Today

Student Loan Pause, WHO, 04/06/22

Get Started Today

Russia Ukraine & Market Volatility, WOI, 03/08/2022

Get Started Today

Financial Aid Awareness Month, Student Loans, WOI, 02-22-2022

Get Started Today

Inflation, WOI, 01/24/22

Get Started Today

Christmas Movie Lessons 2021, WHO, 12_27_21

Get Started Today

Charitable Giving, WOI-DT, 11_30_21

Get Started Today

Sandwich Generation, WOI-DT, 11/02/2021

Get Started Today

Mid Year Money Moves, WOI-DT, 07/20/21

Get Started Today

Medicare Open Enrollment, WOI-DT, 10/19/21

Get Started Today

Episode #25 Audio

Episode #24 Audio

Work from Home, WOI-DT, 10/04/21

Get Started Today

Episode #23 Audio

Episode #21 Audio

Episode #21 Audio

Episode #20 Audio

Delta Variant Money Questions, WOI-DT, 09/14/21

Get Started Today

COVID-19 & Kids Moving Home, WOI-DT, 08/25/21

Get Started Today

Sales Tax Holiday 2021, WOI, 08/06/21

Get Started Today

Episode #19 Audio

Video

Play Video

You Should Know How
Triplett-Westendorf Financial Group Is Compensated

Folks seeking financial planning and investment advice from a fee-based client-first fiduciary advisor may choose to engage with Triplett Wealth Management*, a division of the Triplett-Westendorf Financial Group. These folks would pay an annual fee deducted quarterly from their accounts, and in return receive conflict-free investment advice about their securities investments like equities (stocks for example), and fixed income (bonds for example), and any other securities-related investments.

Folks who are a good fit for this engagement are those who might feel good knowing that their advisor receives no commission or financial incentive to recommend one investment over another and that our firm does well financially when they do well.

Folks seeking this type of relationship pay a fee based on the assets managed within their plan. The fee covers the fiduciary management of market-based investments within their portfolio, as well as the ongoing maintenance of their personalized PT5 Written Retirement Income Plan designed to guide them to and through their very own vision of a successful retirement.

PT 5 Retirement Income Plan Screening – $2,400 – One Time Initial Planning Fee

  • Initial Comprehensive Plan Design – Steeped in our 6 cores values
  • Listen to, and take a record of, the vision you have for your future Establish written goals & organize your retirement resources
  • Evaluate social security & pension claiming options
  • Produce a comprehensive analysis of your current path projected forward
  • Included: Customized Social Security Analysis, Comprehensive Investment Analysis, Personalized Retirement Income Plan Examination.

PT 5 Retirement Income Plan Screening – $2,400 – One Time Initial Planning Fee

Includes Investment Supervisory Services & Ongoing Financial Planning & Advice – We Become Your Financial First Responder

  • $100,000 – $499,999 = 1.5%
  • $500,000 – $999,999 = 1.25%
  • $1,000,000+ = 1.0%

*Royal Fund Management doing business as Triplett Wealth Management

We believe every financial product is a tool. Each tool was designed to perform a specific job. Some tools are better quality or perform their intended job better than others. Freedom to choose the appropriate tool based on quality and effectiveness at getting the job done is important to our team. Sometimes insurance products like life insurance, fixed annuities, or long-term care insurance may be the right tool for the job. However, they are not all created equal, and specific manufacturers of these contracts are better at certain things than others.

When we have determined that it is in our clients’ interest to use an insurance contract issued by an insurance company to transfer specific risks away from them and their family, to an insurance company specifically specializing in handling such risk, those companies who we do business with pay our representatives a commission. Our insurance licensed representatives are completely independent, and therefore capable of representing a broad spectrum of companies. That means that they are free to choose the tool that they believe will provide the most economic value to our clients, from a quality manufacture, based on a specific job that needs to be accomplished.