Coming to Terms With Uncertainty
In his recent quarterly update, Rana Chauhan, Counsel’s Chief Investment Strategist, reminds us how coming to terms with uncertainty is part of being a successful investor.
As Rana notes, in the past decade alone, we have experienced: a global pandemic, the deepest recession since 1929, global supply chain disruptions, a spike in inflation, an insurrection, political deadlock, and a land war in Europe. And now we have a regional banking crisis in the U.S. that has many market analysts warning of a domino effect that could lead to a global financial crisis. h
While the more immediate outcome of the current U.S. regional banking situation is unknown, Rana is very confident about what the outcome will be: a stronger banking system.
Rana points to the U.S. banking reforms that arose out of the Great Financial Crisis. Those reforms were instrumental in strengthening the banking system so that more current situation with Silicon Valley Bank and Signature Bank did not lead to a broader crisis.
Currently, the U.S. Federal Reserve, U.S. Treasury, and the U.S. Federal Deposit Insurance Corp are acting aggressively to prevent a contagion from developing. Rana believes that eventually, this will lead to policy decisions that will strengthen the system further.
He is confident this will occur because banking is the backbone of the U.S. economy. Without a stable banking system, no economy can function. Seen from this perspective, uncovering, and addressing the problems of Silicon Valley Bank and Signature Bank is improving the banking system. It will make it more resilient.
So, what should investors do? It will be important to accept near-term uncertainty by focusing on the long term and ignoring the dramatic headlines of the financial press.
We still believe we are on the road back to normal, we’re just not there yet. The financial markets never go up in a straight line and the near-term outlook does appear unclear.
At times like this, the best course of action then is sticking to the financial plan and allowing professional portfolio managers to use their experience to navigate market uncertainties on your behalf.
If you have questions or concerns, we invite you to discuss your current strategy with your Advisor.
