Market Update – September 2022

Todd's Blog

Is anyone out there enjoying 2022 so far? Probably not! Well, not financially-speaking anyways. Now is probably a good time to remember that our faith and security isn’t in our wealth. Our company name is a constant reminder of that fact. That said, we all want to be wise stewards of the finances that have been entrusted to us. I hope this post will be helpful to you as we navigate a challenging year so far on the markets.

Some context

What has happened so far in 2022? A lot! The market drops began January 1 of 2022. We had been spoiled with a spectacular run-up in the markets in previous years, which is fortunate. The previous market rises helped to offset some of these drops of 2022.

Why the drop in 2022?

Take a look at the graph below which shows what an S&P 500 Index investment (SPY) has done year-to-date. The rockiness began with war breaking out between Russia and Ukraine. There was also plenty of tension between the US and China to add instability to the mix. The supply chain has not been improving since Covid-related issues which has impacted inflation. Gas prices have soared which also have added to inflation woes. Our government fell in love with printing money, which also added to the inflation problem. The fed also seemed slow to raise interest rates to battle inflation, which causes even more issues. See that big drop in June and again in August-September? That was mostly due to inflation. The interest rate hikes haven’t curbed inflation as expected, which sent people into a panic.

Yep, 2022 sure has been fun so far…

How big has this drop been?

Thus far, the bottom of the market appears to have been June 16th with a total drop in value of 22.57% as measured by SPY. We had a short rally, but the recent drops has us extremely close to the June low that we had seen. It is possible that June 16th will be the bottom… or things could still be dicey in the months ahead. To be fair, if the markets drop at all as I write this, we might dip below that June 16th low. Only time will tell.

Beware of the media! Don’t believe all those talking heads on TV. The doom and gloom stories always make the headlines and are rarely backed up by objectivity. Sadly, the media seems to be out there to sell stories, not provide you with balanced, objective perspectives. I hope to share some info with you that will help bring it all into context.

First, I want you to consider the size of this drop. A 22.57% drop is sizable, but not as devastating as we have seen in many times in the past. Objectively speaking, the drop in 2020 was more severe as well as 2008. In 2020, the S&P 500 dropped 31.7%. Ouch! That particular drop was super-fast and was followed up with a quick rebound. Still, the current drop has been much smaller in depth. In the financial crisis, the S&P 500 dropped an astonishing 54.37% from 10/12/2007 through 3/6/2009. Wow! I REALLY don’t want to relive those years. Yet, even with that drop, the markets fired back up tremendously in the years afterwards.

Again, my goal here is to give context. Yes, 2022 has been painful. Yet, when we look back objectively in history, we’ve been through much worse. We all feel the pain when we think about our “high water marks” in our account balances, but these kinds of market declines are common and expected to occur. It is the price to be paid as we seek better long-term gains.

It can also help to look at a longer history. Showing just the year-to-date returns is depressing. Notice though that the S&P 500 index is still at a 59.47% total gain over the past 5 years even with the market drops this year.

What should we expect going forward?

This is an impossible question to answer, but let me give you some considerations. The stock market is trying to get positioned to a place that matches up with the earnings that companies will make in the future. Inflation and supply issues have altered what we once thought was feasible. The good news is that the markets have already adjusted by a large amount to take into consideration these factors. This is why it is possible that we will see rebounds soon if the inflation numbers start to ease up a bit.

That said, the volatility may hang around for awhile. People are fearful right now which can turn into erratic, emotional trading. So, buckle up just in case this rollercoaster isn’t done with us yet. While I’m not sure what will happen over the next few months, I do feel optimistic about the next few years. Sure, the days of 14% per year gains might be over, but slower growth should still be possible as people are still buying their mobile devices, going out to eat, and even buying homes and vehicles.

What Should You Do?

So, based on what has happened in 2022, what, if anything, should you be doing? Honestly, it depends on your situation. Let me speak to two categories of people right now…

1. You are still saving toward retirement

If you are like me and still saving towards your eventual future retirement, you probably don’t need to be overly-concerned about the market decline. If you’re still adding into your accounts, you are able to buy investments cheaper than what they were just 10 months ago. You have probably heard people talk about buying stocks that are “on sale” when the markets are low. This is what they are talking about. Right now might be a great time to buy! No, we don’t know where the bottom will be. Maybe we’ve already seen it. Maybe we still have more months to endure. There can still be opportunities to buy stocks that might be undervalued due to the recent sell-off.

2. You are already retired (or soon to be retired)

The people most affected by the recent market drops are those who retired in the past year or two. People who retired 3 or more years ago are less-affected because they had some nice gains leading up to the decline. Sometimes we just get unlucky with our timing. We try to build our retirement forecasts in a way to be conservative to allow for the risk of “bad timing”, so you might be just fine. It is wise in times like this to take a fresh look at your retirement forecast to see if adjustments might be necessary.

I remember that I had a couple of clients retire in 2007 just before the massive stock market crash in 2008. It was rough… Some were able to continue their monthly withdrawals and came out fine once the rebound occurred. Others decided to “tighten the belt” on their budget so they could lower their monthly withdrawals from their accounts. They were eventually able to go back to their original plans as things got better in over the following few years.

Here is what I do NOT want you to do… don’t be an ostrich. Don’t stick your head in the sand and pretend nothing happened. The reality is that the markets have taken a hit AND it also costs more to live these days. Much more! This is a tough combination, and it is our new reality in life. If you are able to lower withdrawals in tough markets like this, it will help your long-term goals by selling less of your investments while the markets are low to provide you with your monthly income. It puts you into a stronger position for the long haul. Also, don’t let emotions take over. To be a wise investor is to be an objective investor. I admit, this can be a challenging task, but it is important!

This is a case-by-case situation. If you stayed well within your “safe zone” on your retirement forecast, no adjustments may be necessary. If you were “pushing it” a bit, then you might need to pump the brakes on your monthly spending to help come out of this a bit stronger.

In Closing...

It’s a tough environment right now. Stocks are down, bonds are down, gold is down, and real estate is down. Diversification certainly helps, but it isn’t bulletproof. Let’s be wise and make objective adjustments if necessary.

Also, keep your head up. It is easy to get swept into an emotional pit if you listen to the media too much. As Christians, we have ultimate victory through a Savior who died on the cross for our sins. Our hope and joy doesn’t come from money or possessions. This life on Earth is temporary. Our security can come from only one place, which is where our company name is derived from. He is our StrongTower. Let us model to those that do not know Jesus that we are unshakeable in our faith because our souls have been redeemed by a loving God. If they see this, they will want to know where our hope comes from. We have a great winessing opportunity right now.

Hang in there, StrongTower family! We love you and we are here to help along the way!

The name of the LORD is a strong tower; the righteous man runs into it and is safe. - Proverbs 18:10


  • Thank you for this today, it has come at the perfect time. I was just laid off from my job. I don’t know what the future has to hold as far as going back to work at my age. Please have Terry call me

  • Todd thanks for touching base with us. I feel like I have been that ostrich and just have not even looked at my account. I am so glad the company I choose to do business with puts my Lord and Savior at the forefront of everything!

    • Don’t you worry about it, Katie! We don’t expect you to look at your statements all the time. In fact, that can be depressing! We will keep watching things for you.

  • Becky Roddenberry
    September 28, 2022 3:52 pm

    Thanks so much for the update, Todd. I must confess, I , too, haven’t been looking at my statements. I trust you and pray things improve soon.