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Simmons Insights

Financial Planning for Turbulent Times
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The decline in financial markets this year has impacted the portfolios of millions of Americans, and perhaps dampened plans for retirement. Below is a brief recap of the optimism with which 2022 began, followed by current conditions and ideas to consider to navigate to-and-through retirement in turbulent times.

U.S. Markets and Economy

At the start of 2022:

  • The S&P 500 was at record highs, up 28% for 2021, which stacked on top of an 18% gain the year prior, including dividends
  • The Bloomberg Barclays Aggregate Bond Index closed out 2021 down just -1.5%
  • Bitcoin had a market cap of around $1 trillion
  • Thirty-year mortgage rates were 3%
  • The short-term federal funds rate was at 0%-0.25%
  • Inflation, as measured by the Consumer Price Index (CPI), came in at 7.1% for 2021
  • Democrats controlled the House, Senate, and the White House

At the end of the year (through December 16, 2022)

  • The S&P 500 has shed over $10.2 trillion in market cap (-18%)
  • The Bloomberg Barclays Aggregate Bond Index is down -11%, one of the worst years on record
  • Bitcoin’s market cap has crumbled to $350 billion
  • Thirty-year mortgage rates have breached 7%
  • After seven rate hikes, the short-term Federal Funds rates is at 4.25-4.50%
  • The November CPI reading was an elevated 7.1%, down from the 9.1% June high. The Fed changed their passive stance on inflation from “transitory” at the start of the year, to a more aggressive “demand destruction” objective at year-end
  • Republicans have gained the required seats to take the House, ending the Democrat trifecta

You can read the full article by Senior Portfolio Manager, Director of ESG Strategies Andy Drennen in the Kansas City Star. Shared with permission from the Kansas City Star. 

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The views and opinions expressed in this article are those of Andy Drennen and are not endorsed by, and do not necessarily reflect the views of, Simmons Bank. Simmons Bank does not provide tax, accounting, or legal advice.