Prevail Strategies
- Today, a quick overview of what’s going on in the financial and economic world.
- (Plus a discussion of the hunt for beauty in the mundane.)
- Stocks seem to be caught in a volatile pattern as Q1 earnings season heats up.
- Something surprising could trigger a big move, but it’s hard to predict anything with certainty.
A potentially bigger concern: Several economists think that a recession may be on the horizon.1
- The latest forecast by the International Monetary Fund predicts that Russia’s invasion of Ukraine is going to take a chunk out of global growth this year and next.2
- Fannie Mae is forecasting slowing growth in 2022 and a recession in 2023.3
- When multiple forecasts start pointing in the same general direction, it’s worth paying attention.
- So, what do we do with that information right now?
Do we panic and freak out? Bail on our investment strategies to head off losses?
- Nope.
- We wait and see. We sharpen our tools. We look for opportunities.
- It’s natural to get uneasy when markets get dicey, but knee-jerk reactions can be costly.
- An old proverb of disputed origin says: “Predictions are difficult, especially about the future.”
Forecasts are usually wrong in at least one way and relying too much on what “might” happen is a recipe for mistakes.
- So, we keep our eyes open, our wits about us, and live our lives as we usually would.
- A recession (or bear market) is not inevitable, so we shouldn’t act as though it is.
Bottom line: We are watching and digesting the analysis as it comes in, and we will be in touch with recommendations as needed.
- Have questions or concerns? Reach out. That’s why we are here.
- Now, I have a big-picture question for you…
- Where do you find beauty in the world around you?
This is not an idle question, by the way.
Humans are driven to want more, whatever we have already accomplished.
That’s not a bad thing but having the ability to take a step back and appreciate what’s in front of us right now is powerful. Especially in an uncertain world.
It puts us in the driver’s seat of our wants and trains our brain not to go into worry mode.
That search for beauty is why we go to the beach.
It’s why we go to the mountains.
It’s why we listen to music and look at art.
We’re looking for something to take us out of the everyday and show us something deep.
But beauty doesn’t need to be big and spectacular. It’s hidden in plain sight around us, waiting to be encountered.
It’s in the joy of a child. A dog zooming around the yard. A small act of kindness at the grocery store.
Knowing how to find beauty in the mundane is a powerful tonic to uncertainty and worry.
Where have you found it lately? Can you hit “reply” and let me know?
Looking for the best,
Your Prevail Family
P.S. Interesting fact: did you know there’s a theory of the stock market called the “Keynes beauty contest”? In the 1930s, famed British economist John Maynard Keynes was searching for a way to explain short-term stock market movements and theorized that it was similar to a newspaper contest choosing the most beautiful face.
To win the contest, readers had to choose the face that was the most popular choice among all contestants, meaning they had to guess what others would find attractive. Keynes compared this to how stock prices seemed to change not based on their fundamental value, but by anticipating what everyone else thought their value was (and what others anticipated the average investor opinion would be, and so on).
2 – https://www.cnbc.com/2022/04/19/imf-cuts-global-growth-forecasts-on-russia-ukraine-war.html
Frequently Asked Questions
Some economists believe a recession is possible, and several forecasts point to slowing growth. That’s worth paying attention to—but forecasts are not outcomes. Recessions are not inevitable, and timing them accurately is extremely difficult.
Global pressures are stacking up: geopolitical conflict, tightening financial conditions, inflation, and slowing growth expectations. When multiple indicators lean in the same direction, it raises caution—but not certainty.
No. Making major portfolio decisions based on forecasts alone often leads to costly mistakes. Predictions are frequently wrong, incomplete, or mistimed. Long-term strategies are designed to weather periods like this.
Waiting and watching does not mean doing nothing. It means avoiding emotional reactions, monitoring data carefully, and being ready to act if conditions truly change. Panic-driven moves are far riskier than patience.
They sell after declines, miss recoveries, chase headlines, and lock in losses. Volatile markets punish impatience more than uncertainty itself.
Not necessarily. Markets often anticipate recessions well in advance. Some downturns are mild, some are brief, and some are already partially priced in by the time headlines peak.
Preparation means disciplined allocation, diversification, liquidity awareness, and risk management—not prediction. It means sharpening tools, not swinging wildly.
Because “just in case” decisions often turn into permanent damage. Acting as though the worst outcome is guaranteed usually leads to overcorrection and regret.
Uncertainty is not a signal to retreat—it’s a permanent feature of markets. The goal is not to eliminate uncertainty but to function effectively within it.
Because fear narrows thinking. The ability to step back, stay grounded, and appreciate the present reduces emotional decision-making. That mindset is not soft—it’s strategic.
We are paying attention, not panicking. Monitoring data, evaluating risks, and staying disciplined matters more than reacting to headlines. When adjustments are warranted, they’ll be made deliberately—not impulsively.
