Part 1 – Some thoughts on markets and current events in Europe

Planning for 2022, but first…

Several weeks ago, Tiffany and I met to discuss our business plan for 2022 and review the past year.  Businesses, just like families, are more successful at meeting their goals when they regularly update their financial plans.  During our meeting, we both agreed that our current financial planning environment was more complex than at any other time in our careers (17 and 24 years respectively).  We had markets reaching all-time highs, inflationary pressures, supply chain disruptions, a global pandemic, and the looming possibility of significant new tax legislation.

As I write this note on Wednesday evening there are reports of explosions near the city of Kyiv.  You may have been following the events in Eastern Europe closely, or not at all, but by tomorrow morning the media frenzy will likely be inescapable.  We live in a 24-hour news cycle.  (Thursday morning update – yes, there is now war on European soil.)

Before I get to our intended topic of the financial plans of our clients and New Dimensions in 2022, let me give you some context for today’s sad news regarding Russia and Ukraine.  My first adult memory of a stock market crash is standing on the visitor’s platform on the New York Stock Exchange on Black Monday, 11/19/1987, watching the worst percentage drop in US market history.  The S&P 500 ended up 5.23% that year.  My first adult memory of war is the first Gulf War, which started in August of 1990.   By December 1990 the US stock market had almost completely recovered, and the 3-year annualized return for the S&P 500 during that period was over 17%.  Markets are resilient.

Take a look at the graph below from Dimensional Funds. 

You’ll find times on this chart when the global economy faced significant challenges – a World War, Oil Embargo, Tech Bust, Financial Crisis, and a Global Pandemic, to name just a few.  These events were terrifying, and we can’t ever forget the human toll, but in each instance the markets continued upward.  

Please remember that you have a conservative financial plan in place that’s based on your individual goals.  We’re ready to update your plan and discuss your concerns whenever you need some reassurance that you’re still on track.  Tiffany and I do not believe the current market corrections or global events warrant a change to your plan unless something has changed regarding your specific financial situation.

We will follow up tomorrow with part II, the original article on business and personal financial planning for 2022.  

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