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Rainy Days and Market Fluctuations

Rainy Days and Market Fluctuations

| April 18, 2022

In New England, April weather is often full of rain showers. While we know the rain is a necessary part of the seasons changing, everyone here at AZTEC Financial Group is looking forward to warmer days, greenery, flowers in full bloom, and some serious sunshine!

We all know that the rainy days of April will come to an end. The showers will stop. The mud will dry up. The sun will come out and the trees will fill with leaves and flowers once again. We know this because we see it happen every year.

Similarly, there are patterns that occur in the stock markets which are out of our control, much like the weather. We know that stock prices will fluctuate depending on a variety of factors and that sometimes our portfolios won’t look the way we want them to. However, we also know that short-term fluctuations are just that–short-term

The Numbers Don’t Lie

You may be familiar with the S&P 500 (short for the Standard & Poor's 500 Index), an index comprised of 500 leading publicly traded companies in the U.S. This index is used to analyze how the markets are doing on average over a set period of time. And according to Investopedia, “The average annualized return since its inception in 1926 through Dec. 31, 2021, is 10.49%.”

So, what does that mean to you, as an investor? On any given day, the value of a particular stock is not necessarily something to worry about. The markets are constantly going through periods of ups and downs. It’s better to look at stock patterns over a period of time vs. looking at the price on just one day. While the down periods can be scary to see, chances are they will come back and continue to trend upward.

Of course, it’s important to have a portfolio that matches the level of risk you’re comfortable with based on your financial goals because we can’t always predict when stocks will go up or down. But rest assured; if you look at past data, you can be fairly confident there are sunny days ahead for the markets. 

The sun always comes back out after the rain.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.