Your Money

It's been a rough start to the markets this year. The NASDAQ experienced its correction (a 10%+ drop) last week and the S&P500 and Dow Jones joined in correction territory today. Understanding why a sell-off is happening can help investors decide if the turbulence is part of the “normal” course of investing or whether it is a sign of a bigger impending drawdown.

A few main factors are likely driving this current weakness. The main one is that the Federal Reserve has taken a much more aggressive stance toward fighting inflation. Investors are now expecting at least four 25 basis point interest rate hikes this year, which has sent interest rates across maturities materially higher than they were at the beginning of the year.

That's not all bad news for stocks as they tend to find their footing once they adjust to higher policy rates. In the last six hiking cycles, which lasted 18 months on average, the average S&P 500 return was over 13%. Rates are rising, and fast, but equities tend to rally during rate-hiking cycles because they tend to happen when the economy is strong.

There’s been a stock market sell-off—now what?
source: JP Morgan

Your Life

Isolation is a significant problem during the pandemic, and seniors feel its negative effects so much more—especially those living alone. Thanks to the ingenuity and kindness of strangers, there are programs that connect intergenerational people. Younger generations are stepping up to help meet the needs by connecting virtually and building community from a distance. Activities go beyond just conversation. They include music, games, talks over meals, exercise, dance, cooking together, and a multitude of other activities that can be and are done through live video. Both seniors and young adults have reported joy and learning from each other. If you don’t want to use an online program, why not create a standing weekly video call with your loved ones?

Teens Reach Out to Isolated Older Americans Through Online Programs
by Amy Goyer

Complexity Simplified

Trivia