Welcome to the second quarter of 2022!

Reflecting back on the first quarter, it could have been much worse for the investment markets. Earlier this month, Fortune Magazine ran an article stating that if your portfolio was only down 5% this year that you are an investing genius. We are happy to report that most client portfolios are clustered around that performance number of being down around 5%. That being said, we are not geniuses. We just continued to apply our diversified approach and did not panic when Putin invaded Ukraine.

The investment markets were shaped by two primary forces in the first quarter of 2022. These forces are high and persistent inflation and rising interest rates. What we know from prior periods when these two forces were present is that stocks and commodity investments are the best hope for generating positive returns. Bonds remain essential in portfolios for security and volatility minimizing purposes even though their ability to generate positive returns will be under pressure. The complementary strategies we have implemented in portfolios also play an important role. While they also lost money during the first quarter of 2022, they lost less than either stocks or bonds.

In this current economic climate, it is tempting to try to time the markets to avoid some of the impact of the rising interest rates and high inflation. Fortunately, we have been reminded recently that it is impossible to profitably time the market on a consistent basis. The invasion of Ukraine was followed by improvements in the stock markets around the world. Market timers sold stock investments following the invasion and their portfolios have suffered.

We will continue our patient and diligent approach to growing your wealth based on your specific goals as outlined in your investment policy. We appreciate your continued confidence in our investment management and financial planning services.

Oak Wealth Advisors

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