2022 is off to a bad start (especially if you are a Dallas Cowboys fan). Truth be told, there doesn’t seem to be much good news at all these days. If you wake up feeling good about life, just take a look at recent headlines to remind you why you should just stay in your bunker and order your groceries from Amazon.

The U.S. surgeon general warns that Omicron has not yet peaked.
-NY Times 1/16/22
As the U.S. and Russia talk, Ukrainian troops brace for war, and they're "ready for battle"
-CBS News 1/10/22
A key inflation gauge rose 5.8% in 2021, most in 39 years
-Associated Press 1/28/22

Oh, and did I mention that the S&P 500 is down 9.22% year to date as of yesterday (1/27/22)? The losses are even more pronounced in the technology heavy NASDAQ Composite Index, which is down 14.65% so far this year. In the more volitile small company space, the Russell 2000 is actually in a bear market, down 20.7% from its peak.

It can be easy to convice ourselves that it will get worse before it gets better when you add in potential higher interest rates, less government spending, a slow down in China, and increasing regulatory burdens coming out of Washington DC. All of those potential headwinds could definitely develop in the near future, but the glass isn’t necessarily half empty.

First, it is always is helpful to remember that the press sells ads by getting you to visit their websites or watch them on TV. Aside from the occasional feel good story of someone overcoming adversity, good news seldom leads the headlines. There is good news however, and you don’t even have to look that far to find it.

Austin is 'hottest job market in the country' as jobless rate drops again
-Austin American Statesman 1/22/2022
Austin-area omicron surge likely at peak…
-Austin American Statesman 1/27/2022

When it comes to our investment portfolios, there is also good news to consider. Investing after declines in the stock market has historically led to good outcomes.

Exhibit 1. FAMA/FRENCH TOTAL US MARKET RESEARCH INDEX RETURNS

July 1, 1926—December 31, 2020

Market downturns can test even the most seasoned investors. But remembering that stock returns following sharp selloffs have, on average, been positive can help us keep perspective. Exhibit 1 illustrates that since 1926, US stocks have tended to deliver positive returns over one-year, three-year, and five-year periods following steep declines. Even more striking, when looking at cumulative returns five years after market declines of 10%, 20%, and 30%, the compounded returns all top 50%!

Will there be more losses in the coming days and weeks? Perhaps. But if you are waiting to make investments, such as making your IRA contribution, now is a better time than a month ago. If that isn’t enough good news to get you out of your bunker, then we should probably review your plan in more detail. Life is too short to live scared.