“The great earthquake shall be in the month of May; Saturn, Capricorn, Jupiter, Mercury in Taurus; Venus, also Cancer, Mars in zero”
— Nostradamus
Every year is different from what you expect and that is particularly true in financial markets. It is easier to say over the first five months of 2022 which investment areas have lost you money, especially if you also factor in the enhanced inflationary backdrop. There is always going to be some element of volatility in financial market investment, but it still plays the most essential role in any pension fund portfolio or medium-term financial target. What really matters is maintaining confidence during times of uncertainty.
Maybe some global investors sold in May and went elsewhere, but the fifth month of 2022 showed more gains than losses for the average investor. Whilst the sad events in Ukraine continue and a number of important global central banks raised their interest rates, a good proportion of both equity and bond investments made money, and even the pound managed – for the first time in a number of months – to hold its value against the dollar.
“…the investment markets of the 2020s are behaving differently from the (typically profitable) 2010s.”
The economic backdrop for all global citizens remains complex as evidenced by higher costs of living. Meanwhile the average company is facing a range of supply and demand issues, in a world with heightened geopolitical concerns. Whilst year-to-date challenges are always of huge importance, the key for any investor is to focus on what will happen next. After all, it is not what you predicted, it is how you react to both and identifying the opportunities.
“It is easier to say over the first five months of 2022 which investment areas have lost you money, especially if you also factor in the enhanced inflationary backdrop.”
As we all learnt during the COVID-19 challenges – which fortunately the world continues to move away from (including a number of key cities in China which were materially closed down during the first few weeks of May) – the investment markets of the 2020s are behaving differently from the (typically profitable) 2010s. However – as all investors saw over the last couple of years – this does not mean there are no opportunities, even if there is more volatility and uncertainty. Big challenges after all can lead to big changes too, as seen over many recent decades. And as the investment history always tells us, the biggest risk of not benefiting from something is not being involved at all.
It is not controversial to say that the weather across the Northern Hemisphere should get better over the next few months. Similarly it is easy to be pessimistic about prospects for financial markets currently. So a bit like a rainy day during the height of summer, the world has had plenty of emerging challenges over recent years, but it has not been without opportunities too. Nostradamus after all has been calling for his great earthquake during the month of May for some time. Every year there is a small one somewhere in the world and maybe one day the great earthquake will occur. But it still remains wise to be involved in the investment markets.
After all we will all be hoping one day that it is time to enjoy a comfortable retirement. As for the investment world, stay thoughtful and be happy.
““…it still remains wise to be involved in the investment markets. After all, we will all be hoping one day that it is time to enjoy a comfortable retirement.””
The information contained in this article is for general consideration only and any opinion or forecast reflects the judgment of the Research Department of Raymond James & Associates, Inc. as at the date of issue and is subject to change without notice. Past performance is not a reliable indicator of future results.
You should not take, or refrain from taking, action based on its content and no part of this article should be relied upon or construed as any form of advice or personal recommendation. The research and analysis in this article have been procured, and may have been acted upon, by Raymond James and connected companies for their own purposes, and the results are being made available to you on this understanding.
Neither Raymond James nor any connected company accepts responsibility for any direct or indirect or consequential loss suffered by you or any other person as a result of your acting, or deciding not to act, in reliance upon such research and analysis. If you are unsure or need clarity upon any of the information covered in this article, please contact your wealth manager.
Black MondayOn 19 October 1987, the stock markets experienced a dramatic plunge that prompted many firms to shut down their trading desks and turn off their phones to minimize internal losses. Raymond James refused to do the same. Our desks stayed open to help meet clients’ needs, resulting in our first and only unprofitable quarter since the firm went public in 1983. |
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Who was Raymond James?The Raymond in our name is actually from Edward Raymond, owner of a 15-employee mutual fund sales group, Raymond and Associates, along Florida’s west coast. He sold his company to Bob James on 15 July 1964, on condition that the surviving firm be called Raymond, James & Associates. Three days after the sale, Ed Raymond was involved in a near-fatal automobile accident and never joined the firm. Nonetheless, even after Raymond had passed away, Bob James insisted that his name remain on the door – ahead of James’ own. That was a promise he made to Ed Raymond three days before the accident, and Bob James was a man who kept his promises. |
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Bear Market of 1974The severe bear market of 1974 threatened the existence of Raymond James, which was bleeding capital by the day. Tom James, his father and other leaders took extreme measures to keep the firm afloat, slashing costs, foregoing paychecks and even attempting to sell the firm for just enough capital to protect client assets and retain as many associates as possible. The story could have ended very differently if not for a sharp upturn and continued rebound in the stock markets late in the year. |
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Taking Raymond James PublicWhen consideration was being given to taking Raymond James public, Tom James penned a letter to shareholders (largely employees at the time). ” … the public offering should be considered as a statement of our independence. While this is a psychological rather than an economic rationale, it is nonetheless very important. We have asserted for some time that we are not interested in becoming a small part of a very large corporation. That assertion results mainly from the inclinations of management rather than the economic benefits associated with either alternative. The public stock offering affords us the opportunity to enjoy a little bit of the best of both worlds. While shareholders will be given liquidity at fair market value, we will still have the ability to control our own destiny.” After 40+ years of Tom’s leadership, upon becoming CEO, Paul Reilly was often questioned about whether the company might ultimately surrender its cherished independence and be acquired by some larger entity. His response: “Not while I’m around.” It’s a theme that continues today. |
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