American Investment Services, Inc.

Disciplined, Diversified, & Cost Effective

Dec. 2021 – Omicron And Your Financial Health

The threat of the Covid virus has persisted stubbornly and has now mutated into the highly virulent Omicron strain. This development is both disheartening and frightening. But investors who follow our approach should, depending on their personal circumstances, stick to their designated allocation plan.

The market has grown more turbulent since late November, when Omicron first made the headlines. The chart below depicts the U.S. stock market volatility since January 2020. These very recent market swings (circled in red) have been distressing. But volatility in recent weeks has in fact not been exceptional compared with the several spikes that have occurred since the index reached a high in March 2020, when the magnitude of the Covid threat first became apparent.

More importantly, those who maintained discipline by maintaining steady exposure to equities throughout this “Covid era” have been rewarded. Over the past 23 months (January 2020 – November 2021) the U.S. market, measured by the Russell 3000, has provided an annualized return of 21.9 percent.

Unfortunately, the pandemic has affected many households directly, either through death, ill health or as a result of the economic upheaval that has ensued. Those faced with a severe, perhaps permanent reduction in household income have been forced to abandon or greatly revise their long-term financial goals. In those cases, investors should thoroughly review their circumstances and, if warranted, revise their allocation plan.

The past two years have been trying for investors large and small. But those who look for a silver lining might recognize that tales since the beginning of the pandemic have left us with valuable insights—stay patient and stay invested.

Also In This Issue

Retirement Contribution Limits For 2022
Everyday Price Index Posts Its 12th Consecutive Increase
On Price And Output Volatility: How Bad Is Bitcoin’s Flaw?
The High-Yield Dow Investment Strategy
Recent Market Statistics
The Dow Jones Industrials Ranked By Yield
Asset Class Investment Vehicles