Continued Market Upheaval & You!

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Presented by The PensionmarkMeridien Team

The investment committee at PensionmarkMeridien has been keeping its finger on the pulse of the economy and markets and wished to share some additional thinking with you. As of Friday, May 6th we have seen a year-to-date drop in the overall stock and fixed income markets across major indices including the S&P 500 -15.60%, Nasdaq -24.95%, Dow Jones -9.39% and the Bloomberg US Aggregate Index -10.51%. 1

While this type of gloomy year-to-date chart can make all of us, as investors, feel overwhelmed and anxious as to where to allocate dollars, it is important to remember the longer term. Let’s take a look at these same four indices over the past three years, despite COVID-19! 2

While past performance is not a guarantee of future results, we believe in the markets and will remain invested across asset classes for you. That does not mean we will not adjust the portfolios, as there are headwinds that will require us to think more outside of the box.

Why are the markets so volatile?

The Fed has acted quickly signaling a fast rate hike cycle, which is a departure from its past decades gradual approach. Just last week the Fed increased rates by half a percentage point, which is the largest rate increase since the year 2000.3 While this move was likely necessary to combat tremendous inflation, it has caused market volatility.

Furthermore, the continuing Russian war on Ukraine has exacerbated an already impinged supply chain and impacted availability of many commodities including, energy, wheat, and fertilizer from both nations, further accelerating inflation.4 This in turn will further action to increase interest rates.5

These increases to interest rates have made 2022 the worst start to a year for bond market performance in many decades. But the good news is, with the increases to interest rates, we may finally see some better income from our bond holdings and bonds will provide more ballast at these levels if we continue to see a growth market slow-down.

What will PensionmarkMeridien’s Direction?

Fixed Income/Bonds: Across many portfolios, starting during COVID, our team has looked to shorter durations. We will continue to favor short and mid duration bond positions but have also implemented bank loan / floating rate strategies, which have also suffered, but have provided some enhanced performance over the past year. We feel such strategies should continue to prove beneficial to overall portfolio performance.

Equities: We continue to favor U.S. based equities and do not envision a change to that thinking. We acknowledge that there will be continued volatility for the growth sector, especially tech, given the rising interest environment and investor concerns about the future, which will way on valuations. We do have convictions for many of the growth and tech names that we hold individually or in mutual funds / ETFs, given many are global industry leaders with enduring business models. With that said, some positioning in the near term may include an allocation shift to consumer staples and dividend paying holdings. Given the rise to rates and inflation will affect the vast majority of US consumers and homeowners, we envision less discretionary spending for an extended period of time, with the possible exception of home improvements and leisure travel. 6 7

While we were all just starting to feel some normalcy though what we hope is the end of the pandemic, we now face the most bearish investor sentiment in many decades. While there will be continued market volatility, it is important to remember that proper asset allocation, not trying to over-time the market and a long-term view related to your financial goals is your and our best chance for a successful investment result.

Please reach out to us at any time. Thank you.

The PensionmarkMeridien Team may be reached at 866-871-9963 or


  1. YCharts,
  2. YCharts,
  3. CNBC,
  4. World Bank,
  5. New York Times,
  6. National Kitchen and Bath Association
  7. CNBC,

This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.

Pensionmark® Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark® is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).

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