January 2022 - Quarterly investment update
We hope you had a relaxing time over the Christmas and New Year period and are looking forward to a happy and rewarding year ahead.
Stay the course and focus on the long-term
As you may have seen or read, equity markets have started on the back foot for 2022. This is partly because inflation in many parts of the world remains at decade-highs, the geopolitical situation in Ukraine, and Central Banks raising interest rates. All of this means that some investors believe that equities could underperform.
While it may be a little unnerving to see the value of your investments fluctuate, it’s important to take a step back and view the performance of equity markets over the long run.
A key barometer for global equity markets is the S&P 500 in the US, and over the past three years, it has delivered annual returns of more than 15%, with two of the three years seeing gains of more than 25% (ANZ, 2022). So, while instinct might tell you to switch to a more conservative investment option, staying the course, having patience, and sticking to a plan might be the best strategy in unsettling times.
It’s hard to predict when markets will change direction and trying to pick the best times to change funds comes with risk.
As a summary of what happened last year, enclosed is the Synergy Summer Update covering the reporting period from October to December 2021.
Although global economic growth was positive through the last quarter and looking relatively resilient, the environment remains replete with enough uncertainties (inflation, interest rates, Omicron) that investment returns are likely to remain volatile.
An overview of the broad economic environment is contained in the market commentary section of the update. A more detailed summary of the various market returns through the quarter is covered in the key market movements section.
The update concludes with a feature article titled ‘You can’t put a number on happiness’. Aiming to achieve a certain amount of money may well be a financial goal many of us have but, on its own, its unlikely to contribute strongly to our wellbeing. What contributes far more are the many different choices that money can enable us to pursue.
The reports compiled in this newsletter have been prepared by Consilium.
As always, we look forward to updating you with the progress of markets and investments throughout the year. Get in contact with us on 0800 NO STRESS (0800 667 873) if you have any questions or would like a second opinion on your current investment plan.