Economic and Political Uncertainty Are Impacting Today's Markets

This year’s market volatility is creating growing, ongoing concern among investors. And tailoring investment strategies to accommodate rising interest rates and inflation, the lingering effects of the pandemic on the workplace, and the upcoming mid-term elections may sound like a challenge. Thankfully, Oppenheimer financial professionals are here to help guide investors through turbulent times.

But First, Why has the Market Been Volatile in 2022?

Market volatility has been high, thanks to a number of the following factors:

1. Inflation and the U.S. Federal Reserve’s rate hikes to help quell it.
2. The potential for high-profile companies releasing low earnings reports.
3. Supply chain constraints, especially for fuel, semiconductors, and certain foods like wheat – much of which is related to the Russia-Ukraine conflict.

Fluctuations May Continue Before and After the Midterm Elections

Historically, stock markets have experienced wild swings in midterm election years. In fact, stocks have been most volatile in the second and third quarters of a midterm election year. However, while investors will be keeping a close watch of the potential movements in stocks and bonds during the midterm election season, it is advisable that investors should avoid making rash decisions.

A Word to the Wise: Remain Calm

Market volatility can be upsetting for investors as they witness their portfolio values fluctuate. Even if your investment choices are sound, this volatility can be a significant source of stress. Here are some tips on how to cope with market volatility:

• Know Your Investment Time Horizon
• Short-term market declines are difficult. But market ups-and-downs can be made a little less stressful when you know your time horizon for achieving your financial goals.
• Defining your preferred time horizon is important when it comes to choosing investment philosophies and vehicles, as well as an overall asset allocation.

• Re-Assess Your Risk
  • Your time horizon, along with other factors, like income, goals, debt, and even age can impact the amount of risk you are willing take when investing. While all of these may influence your tolerance for risk, it’s important to keep in mind that high risk investments could lead to short-term losses. But, low risk investments could put long-term goals in jeopardy.
• When the market is volatile, it’s a good time to revisit your risk tolerance. As circumstances change, your capacity for risk might change with it.

• Diversify Your Portfolio
  • Owning a variety of stock and bond asset classes, also known as asset allocation, can help manage your portfolio’s risk. This can also help ensure your portfolio is aligned with your comfort with your risk tolerance and unique goals.

Check in with your Oppenheimer financial professional who can help assess your time horizon, risk tolerance, and asset allocation. If you don’t have an Oppenheimer financial professional, you can locate one near you by clicking here.