Patience of a Snail
One of my daily rhythms includes a morning walk. After some time of reading and prayer bright and early, I lace up my shoes and head outside. While it is a time for “me” to delight in some music or podcasts while I walk, I do enjoy seeing my “walking friends” out on the path as well. We now know each other by name and send warm greetings each day.
There is a point of the path where I am greeted by tons of snails. You have to be careful not to smoosh the little buddies. Several weeks ago, I wondered to myself just how long it takes for them to get from one side to another. Research shows the average life of a snail ranges from 3-10 years. Snails are certainly in no rush, susceptible to short lives due to an accidental foot smash, or, getting harmed by a child doing a scientific “experiment”. I’d say of all the interesting things about snails, I personally admire their pace of life! In a world that moves so quickly, providing information at rapid speed, it’s hard for humans to adopt such a radical “snail-like” lifestyle and take things slowly.
Sometimes in life, it takes an injury or health condition to put us into a snail-like lifestyle. Trials & tribulation, suffering and pain are part of life. While I appreciate the idea of people striving for “happiness” 24/7, to me that is simply an idea in and of itself. Don’t get me wrong, happiness is a beautiful thing. While the trials that come and go in life are unpleasant, they certainly afford us the opportunity to grow. As the Apostle Paul wrote to the church in Rome nearly 2000 years ago: “ And not only that, but we also glory in tribulations, knowing that tribulation produces perseverance; and perseverance, character; and character, hope.”
There is a phrase in the investment world that “Investing is a Marathon, not a Sprint”. I have been reminded of this several times over my nearly 20-year career as a Financial Advisor. There is always “something” that causes investments to rise and fall. Over the long-term, though, keeping a long-term “snail-like” vision will get you to your finish line. I’ve found, working with wonderful clients over the years, “finish lines” are different for everyone. Regardless of one’s timing, same principles apply.
So as we have endured difficult market conditions thus far in 2022, I encourage you to have patience like a snail. Take it slow from one side, to the other. As we usher in the 2nd quarter, please be sure to reach out when anxious about your investments. Enjoy all that life brings and don’t forget to say “hello” to your friends on the trail. Have a wonderful spring season and God bless.
Positive Quote:
"Be not angry that you cannot make others as you wish them to be, since you cannot make yourself as you wish to be."
- Thomas Kempis
Fun Fact:
Cass boys are officially basketball fanatics!
The Markets
First Quarter through March 31, 2022
Wall Street dealt with several major issues in the first quarter of 2022. Investors had to evaluate the impact of rising inflation, higher interest rates, ongoing coronavirus concerns, and the Russia-Ukraine war. Each of the benchmark indexes listed here lost value by the end of the quarter. However, Treasury yields, the dollar, gold, and crude oil prices ended the first quarter higher. Among the market sectors, energy increased nearly 40.0%, while utilities climbed about 5.0%. The remaining sectors ended the quarter in the red, with consumer services (-12.0%) and information technology (-8.0%) losing the most.
The yield on 10-year Treasuries rose nearly 80 basis points. Crude oil prices increased nearly $28.00 per barrel, or 38.0%, in the first quarter. The dollar gained nearly 2.8%, while gold prices advanced more than 6.0%. The national average price for regular gasoline was $4.231 per gallon on March 28, $0.950 higher than the January 3 price of $3.281 and $1.379 higher than a year ago.
January began the quarter with stocks reaching new all-time highs. Unfortunately, that was the high point of the month for Wall Street. The first month of the year turned out to be a pretty rough one for investors. The Russell 2000 lost 9.7%, the Nasdaq slid 9.0%, the S&P 500 dipped 5.3%, the Dow fell 3.3%, and the Global Dow slipped 0.6%. In all, January produced the worst first-month performance since 2009, and that includes a notable rally over the last two days of the month. Investors dealt with concerns over rising inflation, the prospects of higher interest rates, and the pace of global economic recovery, despite the fourth-quarter U.S. GDP advancing at an annualized rate of 6.9%, while nearly 200,000 new jobs were added. On the other hand, industrial production slowed and new orders for durable goods declined. Prices at the pump increased, closing the month at about $3.323 per gallon for regular gasoline. Ten-year Treasury yields, the dollar, and crude oil prices climbed higher, while gold prices fell.
February also opened the month on a high note, but stocks tumbled into the red by the end of the month. The S&P 500 fell to its lowest level since June 2021. Not only were investors still coping with rising inflation and interest-rate hikes, but a new crisis emerged in February — Russia's invasion of Ukraine. The United States and several other nations imposed sanctions against Russia, some of which were aimed at curtailing Russian oil and natural gas exports, which resulted in a surge in energy prices. Initially, the conflict in Ukraine shook global financial markets as stocks fell, and concerns grew that heating bills and food prices would skyrocket. By the close of the month, the Dow, the S&P 500, and the Nasdaq fell more than 3.0%. Ten-year Treasury prices initially fell on inflation worries, although yields later advanced as bond prices receded. The dollar and gold prices rose. Crude oil prices jumped more than 8.0% from the previous month, reaching $95.62 per barrel on the last day of February.
Despite attempts at peace talks, the war in Ukraine intensified in March, prompting the imposition of more economic sanctions against Russia. Inflationary pressures continued to mount, which led the Federal Reserve to raise interest rates 25 basis points with additional rate hikes anticipated. Nevertheless, stocks showed resilience. Each of the benchmark indexes posted gains from February. The S&P 500 rose 5.0%, the Nasdaq gained 4.7%, the Dow added 3.6%, the Russell 2000 climbed 2.1%, and the Global Dow increased 1.9%. Although crude oil prices were trending lower by the end of March, they were still $8.00 per barrel higher than where they began the month. The yield on 10-year Treasuries advanced nearly 50 basis points. The dollar gained 1.5%, and gold prices climbed 1.9% to $1,945.70 per ounce.
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Eye on the Month Ahead
Despite accelerating inflation, the war in Ukraine, and rising interest rates, most economic indicators are still demonstrating varying degrees of strength. However, March data may begin to show some economic slowing. Gross domestic product, which ran at an annualized rate of nearly 7.0% in February, is likely to recede, while the pace of job growth may decelerate. While the Federal Open Market Committee does not meet in April, it is expected to push interest rates up by 50 basis points in May. Hopefully, a resolution to the Russia-Ukraine conflict is near.
Data sources: Contribution provided by Forefield. Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.
I look forward to continuing to guide clients through 2022 and beyond. If you have a friend or family member that you think would benefit from working with me, please don’t hesitate to make the introduction. Thank you for your trust and business.
