Normal, Not Normal.

This market decline has been going on for nine months, and by now, you might be wondering if this is normal or not normal.

Markets

Since the 1920s, the stock market has averaged about 10% yearly return, and about 75% of those years have had a positive return. That's about as normal as we can get.

However, in the ten years leading up to the start of 2022, the average was 15.8%. While good for investors, this is not normal.

Treasury

The one-year treasury bond started the year at about 0.40%. Now 4%. That's a big increase, and seeing a 4% level now may seem strange, but is it? Going back to the 1960s, there have been several periods of rising and falling rates, with an average of 4.9%.

CPI Inflation

When we look at the years leading up to his recent inflation spike, we've had a steady period of low inflation, which averaged about 1.7% per year. So seeing the CPI level of over 8% today has felt not normal, but only based on our experience from recent history.

What we are experiencing now is quite possibly a return to a longer-term norm. As a result, uncertainty in these times can be high, and so too can market volatility as financial markets adjust to these new variables.

If you have felt uncertain about markets, interest rates, or inflation over the last nine months. That is normal. For times like these, where uncertainty is high, we especially advocate having a plan and using a bucket-based approach to planning and investing.

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