Market Share Newsletter Vol 4 Issue 7

 

March 29, 2022

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We are approaching the end of a challenging quarter for investors; inflation reached multi-decade highs, Russia invaded Ukraine, consumer sentiment fell to a decade low, and the Federal Reserve began raising their Target Rate. Although we have a growing economy with good corporate profits, shrinking unemployment, excess savings and plentiful job openings, the challenges produced negative returns for stocks and bonds.
 
Account statements will be arriving soon, and you will likely feel some frustration after reviewing the information, and that is expected. One of the five tenets of our investment philosophy is to invest for the long-term. That includes knowing that investors will experience quarters like this. According to our partners at The Leuthold Group, over the last 96 years, both stocks and bonds have produced negative returns about once every eleven quarters. One of the benefits of investing for the long-term is that we have built investments into portfolios that can be used to meet your cashflow needs. This limits the need to sell assets that are down the most. Cash and short-term bonds are two examples of assets that serve that purpose. The interest from bonds and dividends from stocks also help meet those cashflow needs–all part of a long-term strategy.
 
A vast majority of our clients invest in three broad asset classes–cash, bonds, and stocks. These asset classes and their weightings are based on our clients' Investment Policy Statement (IPS) that is constructed to reflect their unique situation, risk tolerance level and investment objectives. The investment group actively reviews and manages those percentages as market conditions warrant within our long-term philosophy. Throughout most of 2021, we were modestly selling stocks, and began accumulating more cash to meet client needs and to reflect our expectations for more volatile markets. In 2022, we continue to accumulate cash and look for opportunities during these challenging markets to add investments that have become more attractive.
 
Part of investing for the long-term is having a team of professionals that understands your situation, particularly during difficult times. The Wealth Advisory team is accessible by phone, email, video and in-person meetings to discuss any of your concerns.
 
Thank you for the opportunity to serve you and your family.
 
Paul Gifford, CFA
Chief Investment Officer
Wealth Advisory Services
Investment Management Group
GiffordP@1stsource.com
Erik Clapsaddle, CFA, CFP®
V.P. and Sr. Fixed Income Portfolio Manager
Wealth Advisory Services
Investment Management Group
ClapsaddleE@1stsource.com
DISCLOSURES
The information in this email was prepared from sources believed to be reliable; it is for informational purposes only and does not provide recommendations based on the investment objectives, financial situation, or needs of any individual or entity. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets. The information in this email is not a comprehensive statement of the matters discussed. Unless specifically indicated otherwise, this email is not an offer to sell or a solicitation of any investment products or other financial product or service or a confirmation of any transaction. If you have questions about the information in this email, please contact your trust administrator at 1st Source Bank Wealth Advisory Services or call 800 882-6935. Investment and Insurance products are:
  • Not insured by the FDIC or any Federal Government Agency
  • Not a deposit or other obligation of, or guaranteed by, the Bank or any bank affiliate
  • Subject to investment risks, including possible loss of the principal amount invested

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.