With the downward volatility this past week, concern in the financial markets over inflation, interest rates, and the upcoming Presidential election you may be nervous about your own investment strategy. We at JAG want to reassure you that your individual financial plan drives your personal investment strategy. Now is NOT the time to change investment strategies. We have all seen where investors get nervous – go to cash or start selling – and they never have the appetite to get back into the “market”. The most important benefit of investing is time and compounding. Over the long-term, which is how JAG invests, the compounding effect of positive returns changes an individual/family’s legacy. As you can see from the chart below, staying the course with the Equity Market (S&P 500) has generated strong returns over the last 10 years (source: FactSet). The S&P 500 has generated a +14% total return over the last 10 years, even with the Fed Rate crisis of 2018, Covid-19 crisis in 2020, and the market sell-off in October of 2022.
We at JAG focus on the long-term. We focus on the HighestQuality investments available whether in equities or bonds. High Quality investments help to reduce the downside volatility in your portfolios. We focus on income generation – using our JAG Equity Strategies and bonds (whether through bond funds/ETFs or bond ladders) to generate income and create a diversified investment strategy.
Just to re-assure everyone: Earnings for the 2nd Quarter 2024 are almost completed and it was a strong report for corporate earnings, cash flow, and revenue. According to FactSet, “the S&P 500 earnings growth rate (year-over-year) for the 2nd Quarter 2024 is up so far 11.5%. This is up from the original forecast of up 9%+ and would be the best growth rate since 4Q 2021.” For 2024, we at JAG still see a good backdrop for corporate earnings (even with all the recent volatility and headlines) and a US GDP forecast of 2% (not a
Recession). At the end of the day, Earnings drive stock prices! We are still looking for better than consensus FactSet estimate earnings for 2024 for the S&P 500 and with the Equity Market prices coming down we are continuing to rebalance back to assigned equity weights based on your investment strategy. We will all get through this. The S&P 500 is back to the levels of April of 2024, and we see opportunities to purchase High Quality equities and bonds in this environment. The key is to STAY THE COURSE based on your financial plan.
We welcome a discussion with you and your family around your financial plan and investment strategy.