Out with January, on to February – Shreveport Times

You remember March of 2020. It was the beginning of the Pandemic the lockdown Lysol wipes, toilet paper, and masks were at a premium. The stock market as measured by the Standard & Poor 500 fell almost 32% from mid-February to mid-March that year. As you know the market, for the most part, has been very kind to us since that time until it wasnt. January 2022 is now in the books, and you likely remember it more clearly than any month in 2020. You know, that recency bias thing. It was the worst month since the beginning of the Pandemic down 11.4% at one point and finishing the month down a little less than 6%. But we dont let a little volatility bother us, do we? It helped to start February on a positive note.

If we were really smart, we would time the market. Cash out at high points and load up at the bottom. However, if we were all that smart it wouldnt work at all. Remember, to have a market there must be a buyer and a seller thus creating a winner and a loser. My dear friend and colleague Rick Wedell, the Chief Investment Officer over in Birmingham has a descriptive word picture of the market timing game. He says its like catching a falling knife. It looks really cool if you can do it but hurts really badly if you get it wrong! Makes sense to me.

Ive also noted a piece of human nature that tends to skew the way all the above appears to most of us. With the exception of a few clever self-deprecating characters I know, most everyone brags about their winning transactions. Somehow, we dont hear about the losers. There is no law in the world of finance and investing that says we have to tell the truth about such things in casual conversation. Of course, the more successful one tends to be, the less he/she tends to talk about it (again with the exception of a few obnoxious braggards). All that to say, if one had a crystal ball granting them the predictive power to successfully time the market, they would likely be very quiet about it. Broadcasting that gift could put a person on the hit list for every nonprofit fund raiser in the community (along with requests for financial support from everyone around them).

One more observation about the really good tips on how to make a windfall: My experience has been the best deals typically are handed out to close associates of the deal maker. Im generally very skeptical when I hear of really good opportunities in an advertisement. If a deal was that good, wouldnt they tend to share it with close friends, associates, and family? Sharing it with the public, though perhaps altruistic, is not the way I historically have seen the really good opportunities offered to prospective investors.

Meanwhile, back on planet earth and off of my human nature soapbox, I did check in via a weekly commentary with Linda Duessel, Senior Equity Strategist at Federated Hermes. She puts it simply: The Golden Rule If theres no recession in sight, stay bullish (optimistic). She cites that signs are mounting that inflation is starting to subside. The supply chain issue is slowly, but steadily improving and inventories are moving back toward normality. There are reports that the Omicron variant is peaking (and decreasing) in the parts of the country where it was first identified. Perhaps we are about to get a long-awaited break from the Pandemic. Also, corporate America is returning a lot of money to shareholders in the form of healthy dividends. Finally, in somewhat of a counterintuitive twist you know markets love gridlock. Replacing retiring Supreme Court Justice Stephen Breyer with another liberal Justice will eat up scarce Senate time. This further endangers the odds of President Biden getting his scaled down Build Back Better agenda to the finish line. The markets simply love it when government interference is at a minimum.Nothing like one more time-consuming distraction.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk including loss of principal.

RFG Advisory and its Investment Advisor Representatives do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. Please consult your own tax, legal, and accounting professional for guidance on such matters.

Visit us at http://www.planinvestinspire.com. Tommy Williams is a CERTIFIED FINANCIAL PLANNER Professional with Williams Financial Advisors, LLC. Securities offered by Registered Representatives through Private Client Services, member FINRA/SIPC. Advisory products and services offered by Investment Advisory Representatives through RFG Advisory, a Registered Investment Advisor. RFG Advisory, Williams Financial Advisors, LLC and Private Client Services are unaffiliated entities. Branch office is located at 6425 Youree Drive, Suite 180, Shreveport, LA 71105.

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Out with January, on to February - Shreveport Times