March Madness is here. They should probably change the name this year. I think we’ve had our fill of Market Madness this March. But UNC and Duke are coming to town, and the Bon Secours Wellness Arena should be bumping with trumpets blasting fight songs this weekend. Perhaps it can take our minds off the spectacle of current events in the Middle East and the resulting drama playing out on the S&P 500 and markets across the world.
The situation has undoubtedly escalated. I’m not breaking news to anyone that Israel struck a very important natural gas facility in Iran, and the Iranians retaliated swiftly attacking energy infrastructure in Qatar and other countries. The S&P 500, Nasdaq and the Dow Jones dropped a lot yesterday and the futures this morning as I write this don’t look promising. Oil prices are up of course. Natural gas prices are up more as it was the LNG (Liquid Natural Gas) facility in Qatar that was hit. There’s some wide divergence in global prices as Europe’s natural gas price is up 16% while it’s only up 3% here in the States. Brent crude futures (which are used for the international pricing of gas) are up to $113 a barrel whereas West Texas Intermediate is only $97.23.1
Gold and silver have been pummeled lately. Gold is now down around $1,000 an ounce from its all-time high and silver has been hit as well with inflation numbers slightly hotter than expected yesterday and the dollar gaining in strength2. (There’s a saying I found somewhere on the Internet this week. I’ve been looking at too much and can’t locate it now, but it goes like this: “You buy gold when you’re worried about the future. You sell gold when you’re worried about the present.” We don’t really buy into that saying, as cutesy as it is, as we’re making long-term decisions. If you want to swing trade gold, then maybe that applies, but that’s not what we do. If you own it, position-size accordingly so you can hold for the long-term; that’s the approach we take.)
The speed of information equals the speed of market volatility. You don’t have to doom scroll on X or on other social media apps long to find the video of the Qatari’s yelling as they watch 2 large explosions from Iranian missiles hitting their LNG facility. Each overnight missile strike seems to light up a corresponding red number on the S&P 500 futures.
This will not be a long market commentary today. It’s not my intention to rehash every financial or especially political talking point as all it serves is to raise the FUD – the fear, uncertainty and doubt. My best advice? Divert your attention elsewhere, like your long-term plan. Looking at every pain point leads to an increasing chance that short-term pain can overwhelm your senses and lead to bad outcomes.
I only have one lesson to go over today and that’s a reminder of another year of fear for the American public and the stock market. It was 2020. The drop in the markets upon realization that Covid-19 was headed for our shores began on February 12th, 2020. The Dow lost 37% between that day and March 23rd, a very brutal stretch of time. But with crises come relief efforts. Interest rates were slashed to almost nothing and there was over a $2 trillion rescue package implemented. Things turned around. Looking back at 2020 at the numbers you might be shocked to realize that the S&P 500 was up for 2020 by 18.4%! That was a year of fear. But if you didn’t tune into every pain point and spent the year at the International Space Station minding your space experiments, you might have landed back on Earth on Jan. 1, 2021, thinking the stock market had a pretty good year! (Past performance is no guarantee of future results, and current conditions may not resemble 2020 or any other year – so call us for a discussion of your exact risk profile. ~The Compliance Department)
You come to us for risk management. Let us play that role. We evaluate your exact asset mix as advisors, and our Investment Committee is monitoring and hedging when appropriate inside our growth strategies. We have a deep toolbox of strategies: stock portfolios, buffered ETFs, fixed indexed annuities, tax strategies, and trust strategies to name a few.
So go watch the NCAA Tourney and get swept up into that. Check out the 10-Day Weather Forecast for Greenville. It looks pretty good (except Sunday’s a little hot)! Go walk around the lake at Paris Mountain or for a stroll downtown. Go for a bike ride on the Swamp Rabbit Trail and have a beverage by the Swamp Rabbit Café. Let us handle this financial consternation. We’ve here for you. If you do need to talk, please give us a call. If you listen to us, we’ll change your financial world …
Sincerely,
Scott Wright
Portfolio Manager
The Wealth Training Academy
(Marketing Disclaimer: Past performance is never a guarantee of future results. We offer a lot of services. Our planning, tax, and insurance strategies are designed to improve financial outcomes when implemented as recommended. We’re confident in these strategies, but results will vary based on individual circumstances. Investment results cannot be guaranteed. Unless otherwise indicated, no third party individuals mentioned in this article are clients of our firm, nor have they been compensated for appearing. This article is for educational purposes only – we do not recommend anyone buy or sell any security discussed here. Instead, we recommend readers call our office for personal advice about your circumstances! ~The Compliance Department.)
Sources:
1Oil and gas prices soar after energy facility attacks in Qatar, Iran
2Gold and silver sell off as inflation fears grip global markets
3S&P 500 Total Returns by Year Since 1926
410-Day Weather Forecast for Greenville, South Carolina – The Weather Channel | weather.com
