Worrying About the Market

1 Timothy 6:17-19

As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. 18 They are to do good, to be rich in good works, to be generous and ready to share, 19 thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life.

The market tends to “Climb the Wall of Worry” even though there always seems to be something out there to worry about.

Things To Worry About This Year

The News Media loves to announce when companies are laying off workers but news about job openings rarely makes the headlines.  Recently, we’ve heard about tens of thousands of layoffs but are you aware of the 10.5 million job openings, or the 1.8 jobs per unemployed person?*

Forecasters are predicting that corporate earnings will be down this year.  While I’ve mentioned this same idea in many of my conversations but I don’t mean to suggest that it’s a guarantee that stock prices will decline as well.  Some Analysts are making erroneous claims that stock prices must go down with reduced corporate earnings.  Historically speaking, there has been no correlation in the near term between falling earnings and falling stock prices.** Q1 has offered us surprises on both sides with companies missing on the earnings and companies beating their earnings estimates.

News outlets also love to talk about the dreaded “Debt-Ceiling” and the doomsday scenario if a default were to occur.  It’s incredible how quickly we forget that this has happened and happened recently.  Looking back at 2011, we see that the market fell a good bit as we got closer and closer to the default date, but once our government got its act together, the market rewarded those who stuck to their plan and stayed the course.

Predicting the Future

So what’s going to happen next?  Your guess is as good as mine. What I can tell you is that there are so many variables to consider.  There are tons of moving parts to the economies around the world as well as the markets as a whole.  We do know that there are always two sides to every story.  There are positives you can focus on as well as negatives.  I believe the best course of action is to ignore the noise and be sure that your investment decisions are based on your financial plan. 

Past performance is no guarantee of future results. 1. US Bureau of Labor Statistics. Latest available figure as of Nov 2022. 2. Bloomberg, NYU Stern/Prof. Damodaran, as of 12/2/22. S&P 500 Index price and earnings series from 1955 to 2022. All data points shown are for December 31 of each year, except for 2022 which is December 2 data. Correlation (R2) was 0.02

Investment advice offered through OneAscent Financial Services, LLC, d/b/a Provident Oak Financial, LLC, a Registered Investment Adviser with the United States Securities and Exchange Commission. Registration as an investment adviser does not imply any certain degree of skill or training.