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Market Update from Stewardship Advisory Group

Market Update from Stewardship Advisory Group

June 15, 2022

What is happening in the Investment Markets…and what should we do about it?

When I was growing up, I loved riding roller coasters. The faster the ride, the higher the highs and then…the drop that makes your stomach feel like it's separated from the rest of your body. Most people either love or hate roller coasters; not a lot of in-between. But, like roller coasters, when it comes to their investments most people don’t like the “drop”. However, “drops” in the stock market (or bonds, or gold or real estate, or cryptocurrencies) are inevitable. The value of stocks or other asset classes is always going up and down. This is called volatility.
So, what is going on that is causing the stock market volatility and decline this year? Well, there are a number of things that are catalysts for what’s going on in our economy and the stock, bond, and other investment markets.
Last year inflation averaged 4.7% for the year but it was rising as the year went on reaching 7.0% in December and currently it’s at 8.3%.
The Equity/Stock Market
I recently did some research and found some interesting statistics. 330 of the 500 S&P 500 Stocks have had Negative Returns YTD; ranging from .10% to – 68.70% (Netflix). Even Starbucks is down 36% and Intuit is down 35%.
Apple is down almost 12%, Microsoft almost 16%, Tesla down almost 17%, Amazon over 17%, and Google/Alphabet down over 20%.
Only 170 have had positive returns. 

  • Most of the positive returns have come from Oil & Gas companies (because of the increase in the price of oil which we are paying for at the gas station!).
  • These have had huge returns that make the Index “look” like it’s doing better than the overall market really is. 67% of the S&P 500 component companies have had negative returns this year.

The Indexes
S&P 500:   -17.68%
Dow:          -12.84%
Nasdaq:     -27.31%
(as of 6-13-22)
War between Russia & Ukraine
In addition to inflation here in the U.S. and around the world, the Russian invasion of Ukraine has added uncertainty to the investment markets as well as increasing inflation because of its impact on food, oil & gas, and other commodity prices. The war has also disrupted the supply chains and flow of goods into and out of Europe…including to America; and that has caused inflation and higher prices; as well as global tensions and uncertainty.
Growth vs Value Stocks
Often during market uncertainty or corrections, there is a proverbial “flight to safety”. Because of this, investors often will sell out of “growth” stocks (think technology, health care & biotech) and will reallocate to the more conservative “value” stocks (blue chip, higher dividend-paying stocks). That is certainly happening in this current market cycle as evidenced by the fact that the NASDAQ (more growth-oriented) is down more than the S&P 500, which is down more than the Dow Jones Industrial Average, and made up of more of the “value” blue-chip stocks. Portfolios with a greater allocation to “growth” stocks have typically gone down further this year than those with a greater allocation to “value” stocks (even though the “growth” stocks have outperformed most of the last 20 years…they often don’t during a correction).
Industry Sectors
As mentioned above, some industry sectors get hurt more during market corrections.  Technology, health care, and biotech have been hit especially hard during this correction while industries such as oil & gas and commodities have done well. This is why it’s important to be diversified and, as grandma used to say, “Don’t put all your eggs in one basket”.
Our Stewardship Models & Managers
Like most stock or equity managers and funds, virtually all the models and managers we utilize here at Stewardship Advisory Group are also down this year. Some less and some more depending on the model. Many of our managers & models have a higher allocation to “growth” stocks, including technology, health care, and biotech; so, they are down similar to most “growth” stocks. Keep in mind that our models and managers have had significant outperformance in previous years and over the long term, but they tend to not do as well during stock market corrections.
The Fixed Income/Bond Market
The biggest driver of the decline in the fixed income & bond markets has been rising interest rates and inflation. What many people don’t understand is that when interest rates go down, bond prices go up. Though the corollary is also true that when interest rates go up, bond prices go down…and that’s what we’ve been experiencing over part of last year and this year. 
Because of rising inflation, the Federal Reserve has been raising interest rates (and has stated they plan to continue to do so); which has and will continue to hurt bond prices, causing a decline in values. This is why it’s so important to have a Tactical Fixed Income manager who can play Defense as well as Offense.

Our fixed income managers are actually doing very well this year compared to the overall bond market. For example, our favorite fixed income manager is down only -3.94% YTD whereas Barclay’s Aggregate Bond Index is down almost three times as much -10.53%.
Dealing with the Emotional Roller Coaster
What NOT to do:


  • Don’t Panic! Panic doesn’t help, in fact, it hurts. Don’t focus on what you can’t control…focus on what you can control (your behavior, spending, your allocation, etc.). 
  • Don’t “jump out”! People who jump off the roller coaster in the middle of the ride get killed!  You’re much better to ride out the markets knowing that what goes down will eventually come back up. As it relates to investments I call this the “Reverse Law of Gravity”!
  • Avoid what I call “Financial Pornography”! Don’t become preoccupied or obsessed with watching the “market”. Watching the market (or your account values) or financial news on TV or the Internet or reading most of the investment newsletters and emails does NOT lead to joy & peace. In fact, watching things too often and obsessing over what’s going on (the things you can’t control) will often steal your joy and your peace and it will cause you to worry. That is not God’s will for you (there are numerous Scriptures about worry and fear in the Bible) and, here at Stewardship Advisory Group, it’s not our wish for you, either.  As my friend and mentor Ron Blue has said, “We need to turn DOWN the static of this world and turn UP the volume of God’s word!” So, instead of watching or listening to more of the “static” of this world, spend more time reading God’s word and listening to uplifting music that will encourage your soul rather than depress you. Let me share one of the music videos that has been most encouraging to my soul over the last couple of years.  It’s entitled “Peace be Still” by Hope Darst. Click the thumbnail below to listen.

  • I had never heard of her until I heard this song on the radio back during the early stages of the COVID pandemic in 2020…and when I heard it my eyes welled up with tears and the hope, joy, and peace that God promises came rushing back into my heart. We need to focus more on the One who is in control (our Lord) instead of these transitory and temporary things that are out of our control.

What CAN we do?

  • Reevaluate your Investment Objectives—Maybe your investment objectives have changed since you/we originally assessed them, possibly years ago. Maybe you were more growth-oriented then but are a little more conservative now. If so, maybe you should talk with one of our Advisors here at Stewardship Advisory Group.
  • Reassess your Risk Tolerance—we have some tools and assessments that can help you (and us) to evaluate your current Risk Tolerance. Maybe it’s shifted over time.
  • If your investment objectives or risk tolerance have changed, contact us to discuss possible changes to your allocation
  • Stocks are selling at lower prices, so it’s a good time to buy! If you have cash on the sidelines now may be a good time to invest and take advantage of the current lower stock prices. The greatest investors of all time (Warren Buffett, Sir John Templeton, Peter Lynch, etc.) did NOT sell during market declines… they took advantage of the opportunity to buy high-quality companies (stocks) when they were selling for lower prices. Unfortunately, as I like to say, “Stocks are the only thing that people DON’T want to buy when they are selling at lower prices!” (Dollar Cost Averaging). Also, if you are still working and contributing to your 401k, don’t be so concerned about the decline that has already occurred, know that every paycheck when you contribute to your 401k you are automatically buying more shares of those investments while they are selling at lower prices!
  • During markets like this, it’s good to not only reassess our Investment Objectives and our Risk Tolerance but also our Investment Strategy. Please know that here at Stewardship Advisory Group we are continually researching the investment universe in our attempt to find top-tier managers in each asset class to help our clients, like you, to be Wise Stewards of the resources God has entrusted and blessed you with. In addition to our more “Strategic” (buy & hold” managers we also have several excellent Tactical managers, both for equities (stocks) and fixed income. Tactical managers play both Offense and Defense and tactically rotate between the two, endeavoring to help limit downside risk while still capturing upside opportunities. If your risk tolerance or investment objectives have changed, maybe we should consider adding a Tactical manager(s) to your investment strategy. FYI, we even have Tactical managers who can assist you with wisely managing your 401k, which for most people who are still working, is their largest account. If Tactical management strategies are of interest to you for your investments with us or your 401k, please reach out to us as we would be glad to educate and assist.
  • PRAY! One of the best things we can do when we don’t know what to do is…pray! Prayer moves the heart and hand of God, and it changes our hearts when we pray. Please join me in praying for our nation and our world. I personally pray on a regular basis for a Spiritual, Moral, Political, and Economic Revival in our nation (and our entire world).  Please join me in praying for America, including our economy and our culture (2 Chronicles 7:14).

One final word, if this letter has been a blessing and encouragement to you, please know that many of your friends, family members & co-workers are also probably dealing with the Emotional Rollercoaster caused by our current market volatility. Please feel free to forward this email to them as it will hopefully be an encouragement and word of wisdom for them as well and feel free to send them and us an introductory email. We are always looking to add good new clients (like you) here at Stewardship Advisory Group!
Praying for your Peace, Joy, Hope & Contentment,

Jeff Rogers

This is meant for educational purposes only. Information presented should not be considered investment advice or a recommendation to take a particular course of action. Past performance does not guarantee future results and investing during any market cycle poses risks including the loss of principal. Investors must consider their risk tolerance and investment objectives to stay invested during down markets. Dollar-cost averaging does not assure a profit nor protect against loss. Investors must consider their financial ability to continue purchases through periods of low price levels. Indexes referenced are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.